The Keys to New Product success (Part - 1) - Collecting unarticulated & invisible customer-needs

 New product success rates are rare: The success rates of new products are less than 10% & consume significant portion of financial, management & technical resources of companies. Though definition of success is a relative term, there is no doubt that survival of many companies depends upon the success of their new products. There may be many reasons for failure like discontinuous macro-economic, industrial, technological, customer & competitive changes; there is consistency with few companies who routinely come on top with significantly higher success rates.

          The 80:20 Rule applies here. More than 90% of overall successes comes from few handful of companies & large number of companies together contributes to less than 10% of new product success. The successful companies are approaching new product development differently from others. Strategic & technology choices based on customer’s current needs as well as future evolution of needs is an important factor for new product success. 

Customer Need Identification - Traditional Approach: Traditionally companies depend upon the sales, distribution channels, customer support & current customers for data collection. The data & ratings are then aggregated, mapped & prioritized. During formal & informal interactions with end users, buyers, decision makers & beneficiaries, these teams make efforts to understand problems, see if some thing is inefficiently managed that existing offerings can improve, assess gaps in existing offerings etc. The data typically collected are through reactions from current customers & focused exclusively on current offerings.

Such VOC is inadequate & some times irrelevant: That brings us back the basic question, that is, what is the most important & fundamental driver for collection of VOC?

Let us ask few questions?

• Does VOC helping the organization in prioritizing the technologies that have solid grounding in customer needs?
• Does the data give necessary information about future product/technology strategy that requires long term prioritization decisions?
• Does it help in predicting the customer need evolution over next 3-5 years with reasonable assumptions on technology trajectory?
• Can we understand customer’s organizational & financial constraints with the data?
• Have we understood what makes the customer win in his business? What functions & features help?

          Traditional VOC is about current products, today’s problems, about gaps in current offerings. It fails to give insight into customer’s unarticulated needs. The products & solutions that are conceptualized based on problems/opportunities of today fails to address the same 2-3 years later when products actually makes it to market. Existing customers are good at telling what next generation features the current products should have. This will only sustain current offerings better with no significant revenue benefits.

          Ultimately, what separates successful ones is the ability to see the underlying customer needs that competition could not see. Rules & success factors for tomorrow would be different than today.  Challenge is to do VOC in a way to prodict what it would be tomorrow. In next couple of parts, I intend to write about VOC collection for technology companies that can help in making strategic choices for technology prioritization with solid grounding on customer needs …… Regards, Narendra Rao