What’s new product innovation and how does it happen?

You’ve probably heard this Henry Ford quote regarding new product innovation in business: “If I had asked people what they wanted, they would have said faster horses.” Many have used this as an example of why not to talk to consumers to decide how to be innovative in business. People don’t know what they want, is the argument. So we might as well not talk to them. But what if that’s the wrong argument?

“They would say horses because they didn’t know cars existed,” said Nick Graham, global head of insights and analytics at Mondelez International, on “Reel Talk: The Customer Insights Show.”. “But they could tell you they wanted to go faster. They could tell you some of the things they were comfortable with or not comfortable with. And you could have built the idea of a car from that.”

To think consumers will just hand you, ready-made, the innovation idea is a bit crazy to me.

The quote is not a reason not to talk to consumers. The insight is absolutely there, Nick said. And that’s what we need to be innovative: Find insights based on what consumers do and say and then evolve our products and services from there.

“You are not asking consumers to tell you what to make,” said Jenn Vogel, CRO at Voxpopme. “You are asking them what problems they have. What are they trying to solve? Or you are watching them and see something is a problem, and they don’t even know it’s a problem.”

In this article, we discuss what you can do to be innovative in business by asking consumers the right questions and moving toward an iterative process to determine how to evolve products and services over time. Specifically, we discuss:

What’s the definition of product innovation?

Being innovative means creating experiences and products for consumers that help them, that are useful, and that they look forward to buying. Take Apple products for me.  The products have made my life easier and, in many instances more enjoyable. I can watch NFL games on my iPad Pro at a youth softball tournament. My AirPod Pros make it even easy to listen. My iPhone has made travel and other things – like livestreaming – much easier. I genuinely look forward to seeing updates to the products.

Can companies be innovative without change? Probably not. Products evolve. How we communicate evolves. And even successful products need to ride that wave in one form or another.

Read next: How market research can help determine the future of communications

The journey to understand changing behaviors, possibilities, and consumer interests, in reality, is never-ending.
"One reason I get up every morning is the challenge of learning something new."

Sherwette Mansour, author of “Why no one is buying your product,” said that sometimes product innovation could just be a little tweak to the product that makes it different from others and can make a big difference.

“Just always be on the looking at what’s happening and what customers are saying,” she said on “Reel Talk.”

Read next: Advantages of focus groups when they are virtual

Consumers expect product innovation

As author Rebecca Brooks has said, consumers expect product innovation. But what is product innovation, and how do we know whatever it is that we are creating is innovative?

Product innovation happens when a change to a product has an impact on consumers. Jason Alleger, formerly consumer insights and strategy at Traeger, said that doesn’t always mean it has to be a huge change or an expensive one.

“There’s what we normally think of as innovation, and then there’s step-change innovation that can unlock something,” he said.

And product innovation doesn’t necessarily mean we have to add something to a product. Sometimes, as Karen Mangia of Salesforce said on “Reel Talk,” it could mean taking something away.

Subtraction can be product innovation

Karen told the story of a cake that used to have frosting now being sold without frosting, and it was a hit and built a multi-million dollar business.

“It’s an underutilized muscle,” Karen said. “What could you do with less or with what you have?”

The line between successful product innovations and product flops can be narrow. Something might take off, or the timing was wrong, or perhaps the message about the update wasn’t clear to consumers.

The packaging

Product innovations can even come in just a different type of packaging. Take Go-Gurts.

“It’s not a new product, but it’s a new delivery system,” Jason said. “That’s been a massive innovation.”

And sometimes, the product makes it to market but not in its expected form. Take the Segway. Jason said the product was supposed to revolutionize how people in cities get to work. You can certainly see Segways around cities, but it’s not like most commuters have moved to segwaying their way to work.

“It can really only be successful if we rebuild cities,” Jason said.

“You should be re-inventing yourself,” said Jason. “Netflix has re-invented itself three times. DVDs, streaming, and now media production. And they stayed relevant.”

What’s the role of insights in product innovation?

“My role with innovation is really helping the team to understand how can we bring things to consumers from brands that have been around for so long but in a way they haven’t heard us in the past,” said Marnie Steffe, insights and innovation director at Elida Beauty and a member of the Voxpopme Advisory Board. “In some cases, that may be a new product; in some ways, that may be a new way of talking to people.”

Insights can be involved in all stages of the customer journey.

That could include understanding:

  • the market landscape.
  • adjacent categories
  • where there are opportunities.
  • what current consumer sentiment is.
  • trends in the brand’s category and other categories that might affect the business.
  • the history of product innovation successes and failures.
  • what’s the best messaging.

“With trends, we want to look at generally what’s going on in the category but also some niche areas that haven’t exploded yet,” Marnie said. “What are some things people are doing in a more macro space?”

Product innovation process

The product innovation process includes several steps and areas that are worth considering. Let’s discuss them here.

"You want to go into an innovation with as much knowledge as you can." - Marnie Steffe of Elida Beauty

Internal and external balance

Insights professionals need to balance the internal and external views to actually make innovation happen, said Mondelez’s Nick Graham.

“There’s obviously a large part of the insights team to bring the outside perspective – outside our mental silos – in,” he said. “Having said that, remember that you work for a business. It has constraints. It has internal goals and parameters. The most successful use of insights is finding that balance.”

To find that balance and move closer to product innovation, it’s important to understand the problem the business or brand faces.

“What are we really trying to do here, and what are the constraints we need to work within?” Nick said.

It’s important to understand what can be executed, what profitability looks like, and other business metrics. For example, a consumer might say they really want a specific packaging, but there’s no way to create that experience and be profitable, it likely shouldn’t be implemented. On the flip side, you also don’t want to create something that people want internally but that consumers have no appetite for.

“That’s where insights can be used to create that competitive advantage,” Nick said. “If you can honor both pieces of that that’s the critical part there.”

It’s okay and necessary to understand that this is an iterative process, Nick said.

“That push and pull between the inside and outside is normal,” he said.

Marnie said it’s also good to remember the audience size for specific innovations. Some are for more niche audiences, and some are for wider audiences.

Product innovation in new spaces

Finding that balance also carries through into entering new spaces. Sometimes, internal teams would ask:

If we were to enter that space, what would that look like?

Turn that into:

“What is the consumer or shopper problem to solve?” Nick said.

It’s very tempting, he said, to launch in a new area, but ask: “What actually is the consumer missing? What role could this brand fulfill and then, of course, find the balance between those two.”

"It's really about translating it into the consumer mindset."

Understand the best ways to reach consumers

“The other key in all of this is is how you use the blend of different sources and approaches,” Nick said. “Gone are the days of ‘let’s just go and do qualitative research’ or ‘let’s go and do quantitative research.’ We have such an array of data at our disposal.

Read more about the different approaches and how to recruit consumers for them.

Then blend all the different areas, including:

  • What consumers are saying
  • The behaviors you are observing
  • Other data sources

“That’s the key to unlocking what the opportunity could be,” he said.

Nick remembered the story of a mid-tier calorie Soda drink. The company asked focus group participants if they thought the product was a good idea.

Learn about the design thinking process here. 

They said “yes,” but it wasn’t that believable or was an “I really need this drink.”

“They were like ‘yea, yea, it’s a great idea,'” he said. “But I just didn’t believe it. And it wasn’t like they were lying. It felt like something they should like, but there was no real enthusiasm.”

Nick and the team could only gather these insights because they saw the reactions – something that they wouldn’t have been able to do in this case with a quant survey.

“Of course, don’t make decisions based on meeting just one consumer,” Nick added.

When to observe and when to ask questions

Sometimes, it can be better to observe customer behavior, ask them about it, and make product updates. For example, Jason Alleger said they saw consumers use their phone’s light as a flashlight while grilling. So Traeger added light into the grill, he said.

And it seems to be a no-brainer that we should be looking for unmet customer needs, but people’s brains are wired to look for the solutions, said Teresa Torres, author of the best-selling book “Continuous Discovery Habits.”

“People are not that great at abstract thinking,” she said. “So when we say ‘this customer has that problem we want to solve,’ that’s actually really hard to think about in the abstract. We want to jump to the solution.”

Read next: What are some leadership listening skills?

Looking at adjacent areas

Marnie said that it’s also important to look at adjacent areas for inspiration. 

“Not just what’s happening in your immediate world, but zoom out a layer or two,” she said on the market research podcast “Reel Talk.” “If I don’t know what’s happening in some of those adjacent areas, I might miss the chance for an easy innovation.”

The power of partnerships

Consider what internal and external partnerships can help you be innovative in business. For example. Mondelez has a Startup Engagement Colab Program that works with early-stage snack food startups.

“It brings the best of big and small together, and it truly is a partnership,” Nick said. “Yes, Mondelez is helping these 12 startups, but we are also learning from them.”

That includes:

  • Thought process
  • Go-to-market strategy
  • Iterative thinking

“If you can take some of that and apply it at scale that’s a really powerful opportunity,” Nick said. “But it’s a mindset shift. It’s not how big CPG companies have traditionally operated.”

"The innovation process is this constant iterative cycle."

Product innovation process needs focus

Distractions are everywhere. I couldn’t even finish this sentence without a Slack message trying to get my attention. But we have to focus our time on the things that matter, or else they’ll never get done.

Turn notifications off, add a Slack message saying you are knee-deep in research, and check in later that day. Focus your energy on the task at hand.

In this clip, Nick shares how the team developed a new cereal flavor and moved quickly in just two weeks.

“In two weeks, what you can accomplish, just because you are focusing on it,” he said. “And you learn as you go.”

Focus can also mean building insights and innovation in the day-to-day. Nick breaks that down into figuring out what to focus on.

Figure out what to focus on

Having good insights can help companies focus their resources and time on where they should actually focus. What are consumers doing today, what’s changing and what’s happening in adjacent categories?

"If you can just focus, it can get you so much further, so much faster."

“What do consumers need today, and what do they possibly need in the future,” he said.

Read next: How to be successful with corporate foresight

At times, successful product innovations are subtle. A new color, or an updated design, for example, can at times go a long way.

“Finding those subtle changes that can have a really big impact,” Jenn said.

But what if it didn’t work?

I won’t bore you with the typical “fail fast” tip here. But understanding why something didn’t work is also part of innovation.

“Some great innovative ideas didn’t work, and people throw them in the trash and go, ‘well, that was a dumb idea,'” Nick said. “But sometimes the best ideas just didn’t quite nail it the first time around. It’s quite important that we learn from that so we can reapply those learnings to that innovation or another innovation.”

Of course, there’s always a certain level of uncertainty with the future.

“What you can get to is good probabilities, hypotheses, and good scenarios that you can play out,” Nick said, adding that he sees foresight being the future. “What is possible, what are we seeing that’s trending, and what do we think is going to stick?”

Read next: How to spot and use new trends with consumer insights

Marnie said that it’s also useful to understand the level of risk tolerance of an organization.

“Some companies are more risk-averse and want to do a lot of knowledge gathering along the way,” she said. “It also depends on the resources, budget, risk profile, and risk tolerance that a company has.”

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What’s a question you’d like to ask consumers?