Innovation to In-Market Success: Maximising Product Strategy for Commercial Gain
In the past year, we’ve witnessed the emergence of numerous product innovations, from Tiffany blue Nike shoes to Barbie pink Heinz sauce. While such innovations often grab marketing headlines, how do they truly perform in the market?
Each year, around $6.7 billion is poured into innovation and new product development as brands strive to stay ahead and drive business growth. Yet, despite this hefty investment, it’s alarming to learn that 95% of these product innovations fail, as noted by Professor Clayton Christensen. This staggering figure amounts to a potential waste of $6.4 billion. Yikes!
Several factors can contribute to a product flop: Is it competitively priced? Is it effectively cueing the right brand? Are timing and marketing execution on point? The good news is that nearly all these factors can be controlled. While there will always be variables beyond a brand’s control, there’s one thing brands can readily do to safeguard their innovation investment from going down the drain: test the product with real consumers before launch.
Becoming the 5% of Successful Innovators
Fortunately, history is brimming with successful innovations—after all, it’s innovation that enables me to write this on a laptop today! While there’s no shortage of fantastic ideas brought to life every day, the process of ideation and execution is an entirely different beast.
Just like crafting a great recipe, bringing new ideas to life often requires trial, error, and refinement. As brands and innovators, our own perceptions of what constitutes a good idea may hold little value, as we’re not the target market—the true connoisseurs are the consumers we ultimately aim to reach.
However, predicting success isn’t as straightforward as asking consumers whether they’d buy your product. As Daniel Kahneman’s work has shown, humans are inherently biased when it comes to rationalising our decisions—in other words, we don’t always do what we say or say what we do. The key to unlocking predictive insights into consumer behaviour lies in understanding people’s emotional responses.
“The answer to a simple question – how do I feel about it? – is an excellent proxy for the answer to a far more complex question – what do I think about it?”
Daniel Kahneman
Leveraging the predictive power of emotion, System1 analysed over 200 concepts across 5 countries. The findings revealed that products evoking more Happiness held the greatest commercial potential. While Surprise or excitement is often believed to drive innovation success, it was discovered that the most successful innovations skew 80% towards Happiness and 20% towards Surprise.
Coined as ‘Fluent Innovation’ by John Kearon in his book System1: Unlocking Profitable Growth, this term denotes that the most successful innovations in-market tend to be more familiar than new. In a recent webinar titled “The Greenprint USA,” behavioural science consultant and author of The Choice Factory alluded to this idea in relation to the evolution of electric cars, stating that “the most advanced, yet most acceptable” route is often the most successful—rather than launching futuristic, hovering electric vehicles, manufacturers created something that looked and felt familiar but operated differently.
There are plenty of other examples of this in practise. Like Hostess launching its mashup of Ding Dongs and Twinkies, Taco Bell releasing its Doritos Locos Taco or Heinz and Cathedral City launching a British favourite, cheesy beans. They’re mainly familiar, taking something people know and like, then adding a dash of innovation to excite consumers.
Becoming the top 5% of successful innovators doesn’t have to be left to luck. By understanding the emotional resonance a new product has, brands can benchmark and refine ideas to maximise in-market success.
Create with Confidence
At System1, we understand that Happiness holds the key to unlocking in-market potential. That’s why we’ve developed a platform that harnesses the predictive power of emotion.
Test Your Innovation integrates three core measures to generate an overall Star-Rating, validated against in-market performance. These are:
- Emotional Pull – how does your idea make people feel? The happier people feel, the greater your commercial success. In addition to capturing the emotions people feel and the intensity of these emotions, Test Your Innovation also provides Reasons for Emotion, or verbatims, that can help you improve your ideas.
- Share Trading – which idea will attract the most investment? We ask people whether they would buy or sell shares in your ideas to accurately predict the potential for commercial success.
- Speed of Trading – how quickly will people decide whether to buy or sell? Fast decision-making means that an idea is easy to understand and more likely to be chosen.
With a database of over 54,000 innovations to benchmark against, Test Your Innovation empowers brands to Create with Confidence and launch new innovations. So, which idea will be your next star? Use Test Your Innovation to predict your winner from an early stage and finetune it throughout the innovation process. We can’t wait to help you bring it to market!