As per research conducted by a Harvard professor, over 3,000 products are launched into the market every year and over 95% of these products fail.
Developing a product - such as a mobile or web application - requires significant investment in research and development. So when the product does not cut in the market, it must have hurt the entire product development team.
And though there can be countless factors behind the failure of a product, often, it is the lack of adequate market research.
And that’s where concept validation comes into the picture.
Testing out your product ideas in the early stages of development can help improve the odds of success for your product.
Concept validation or product testing is crucial these days when customers seem to have lost all their patience for a product or service that does not meet or exceed their expectations.
In this blog, we will learn about concept or product validation, why it matters, and how you can do it to ensure your products do not end up in the category of ‘95% failed products.’
What is concept validation?
Concept validation is a process of getting customers and other stakeholders on board early on to see whether your product idea makes any sense.
Concept validation is also called concept testing and requires communication and collaboration with those who will use the product once it is built and introduced in the market.
When you connect with your target audience with your idea, you can discover so much about your product, about the aspects you did not think about. More importantly, the interactions help you decide whether the product has a market fit or not.
The process of concept validation comprises:
- Gathering data and feedback from customers and other stakeholders
- Asking and answering questions about the product
- Using research methods like A/B testing, surveys, questionnaires, etc.
When done strategically and with the right group, concept validation practices can help improve revenue and return on investment (ROI) by mitigating risks and optimizing execution time. By testing product ideas early through methods like surveys, prototypes, and market trials, businesses can identify and address potential issues before full-scale development.
This reduces the financial risk of investing in products that may not resonate with customers. Additionally, validating concepts early streamlines the development process, allowing companies to allocate resources more efficiently and accelerate time-to-market, thereby maximizing revenue potential and ROI.
Why is concept testing important?
By putting your product idea on the table for everyone to have a look at can help unlock a range of benefits
- You significantly reduce the risk of failure: You have read about the product failure rates right in the first sentence of this blog. It’s 95%, in case you forgot. And a 95% failure rate is so heart-breaking and mind-numbing too! Testing out your ideas before you put in money, energy and effort into the development and launch can help reduce your chances of failure.
- You save time, energy, and money: We just talked about it. By not investing in a product idea that does not excite or tend to provide any value to the target market, your team can save massively in terms of time, energy, and money that is required in the development lifecycle of a product.
Think about it: Your development team will put a few months to over a year into the development of a product that fails to impress its users. You can save all of this by first validating your app or any other product ideas with a small customer group. - You build confidence around your product: Concept validation empowers you with data and insights that can help you build a product or product feature that truly impacts the way your customers use your product or perceive your brand. By generating evidence and excitement around your product idea, you also stand to gain investor confidence that helps accelerate the entire product development and launch process.
What are the benefits of idea validation?
Testing your assumptions with customers who are most likely to use your product can unlock a range of benefits:
- Understand your product better: Strategic interactions with your customers, partners, investors, and teams will help you explore sides of your product that you did not think about before. You will be able to look at your product idea in a new light and get in a better position to decide whether the idea deserves to be turned into a product and shared with the customers out there.
- Identify potential pitfalls: The concept validation process enables you to identify potential risks associated with the product and ways to address them beforehand.
- Save time and money: Developing a product - such as a native mobile app - demands significant up-front capital investment. There are a lot of things to do, especially if you decide to outsource the development project to someone else who is more experienced and has more resources than you have. By implementing a concept validation step in the early stages of product development, you can easily weed out ideas that are just not worth the effort - and thus you can save a lot of time and money. All these resources can then be used to build something that your audience needs or cares for.
- Increase your chances of success: Testing your assumptions also helps improve the odds of success for your potential product or product feature. By gaining a deep understanding of the product and what customers think about the product that you plan to build, you can always develop a better product. Also, when you make concept validation a continuous process rather than a one-time thing, you set the product on a ‘bit-by-bit improvement constantly’ journey. This mindset or this approach skyrockets your customer experience (CX) and helps you generate increased business revenue.
- Impactful marketing around the product: Understanding what resonated the most with the customers during the validation phase provides enough ammunition to use during the marketing of the product. Marketers or businesses can weave all the key features or benefits in their marketing communications that stand to make it to the hearts and minds of the customers, thus generating increased ROI on marketing efforts.
Concept testing examples
- Tesla: Tesla captured the true power of concept testing back in 2017, when it invited participants to try its concept car. It not only won customers’ hearts with its product but was also able to raise around $400 million for its project. Clearly, they also used the opportunity to gain new insights from their participants.
- LEGO: LEGO is another brand that used concept testing to see if they could expand their market and sell more toys to girls. Through extensive market and customer research, they created a new product, more aligned with what girls were more likely to buy and play with, such as building environments and interior layouts. In a matter of two years, the market for such new toys almost tripled and contributed significantly to the bottom line of the company.
- Starbucks: Starbucks is another world-renowned brand that puts customer-experience at the heart of their product development strategies. The brand leveraged concept testing and customer feedback while introducing non-dairy drinks in its outlets. By testing concepts in select stores, such as their dairy-free drinks featuring coconut milk in Cleveland, Los Angeles, and Oregon, Starbucks validates trends and consumer preferences. This approach ensures successful launches that meet the demands of health-conscious consumers, driving increased sales.
Practical steps to conduct a concept test and validate your ideas
1. Define your concept:
- Clearly articulate your idea and its value proposition.
- Who is your target audience? What problem are you solving for them?
- What are the key features and benefits of your concept?
2. Conduct market research:
- Understand the existing market landscape for similar products or services.
- Identify your potential competitors and their strengths and weaknesses.
- Analyze the market size, growth potential, and trends.
3. Select the method:
- Focus groups: Facilitate group discussions to explore perceptions and reactions.
- Surveys: Gather quantitative data about interest and willingness to use your concept.
- Landing page testing: Gauge interest through simulated purchase options and sign-ups.Interviews: Gain qualitative insights and feedback from potential users.
- Close observation: Generate valuable and actionable insights using deep observation methods. By closely examining your potential or existing users when they interact with your tools or services or some other offerings, you can uncover lots of unmet needs or customer pain points. And these insights or experiences can help ensure that the product you plan to build is likely to be aligned with real-world usage scenarios.
- Prototype testing: You can use a lo-fi (low-fidelity) or hi-fi (high fidelity) format. Lo-fi prototypes are quick to create and often require paper sketches or wireframes. Hi-fi prototypes, on the other hand, are far more advanced than paper sketches and thus closely resemble the final product in terms of functionality and design. Prototypes serve as a great tool to gather customer feedback before substantial investments in the development can be made. Smaller groups (around 5-8 participants) are ideal for qualitative insights, while larger samples (30 or more) are better for statistical validity in quantitative analysis. Balancing these factors ensures your testing provides meaningful insights within your project's constraints.
4. Analyze the data:
- Implement your chosen validation method and collect feedback.
- Analyze the data to identify key trends and insights.
- Look for both positive and negative feedback to understand strengths and weaknesses.
5. Iterate, iterate, and iterate:
- Based on the feedback, refine your concept to address identified issues.
- Don't be afraid to pivot based on new insights.
- Repeat the validation process with your improved concept.
6. Make informed decisions:
- Use the validation results to decide whether to proceed with your concept.
- If yes, you have a stronger foundation for development and launch.
- If not, you'll have saved time and resources by identifying early challenges.
Additional Tips:
- Start with low-cost, quick validation methods before investing heavily.
- Be objective and interpret the data without bias.
- Be prepared to adapt your concept based on the feedback.
- Remember, validation is an iterative process, not a one-time event.
Final thoughts
Ideas that survive after a concept validation stage are worth their weight in gold. When they come out of the assumptions-testing stage, they are not just some figments of imagination floating within your brain - they are real opportunities.
Concept validation makes your product ideas more valuable and viable. Testing out ideas ensures that the team is on something that has value or can help customers improve their personal or professional lives.
Thankfully, we have a diverse range of concept validation tools and platforms that can enhance the effectiveness of your concept testing efforts. Some of these tools are:
- Codigital: An idea generation and validation tool
- Exago: An idea generation and validation toolIdeaScore: A simple tool that measures the strength of a business idea and determines if it's a good opportunity
- Kindling: An idea generation and validation tool
- Ideawake: An idea generation and validation tool
- MindMeister: An idea generation and validation tool
To further explore the concept of idea testing or validation or see how we can help you succeed with a digital product, such as a mobile or web application or a new-age content management system, please feel free to reach out to Team Kellton.
