Innovation: Debunking the Myths (Part III)

Over the past 20 years, Ipsos Vantis has evaluated over 12,000 new product ideas across a wide variety of sectors...specifically: durable goods, financial services, consumer electronics, technology and communications, health, alcoholic beverages, and automotive. The innovation is critical to success, but some misconceptions do get in the way. Our research exposes the myths for what they are.

After testing thousands of ideas and concepts across the span of two decades, we've had an opportunity to observe and analyze the level of in-market success of these ideas. Working throughout the process, Ipsos Vantis has encountered a number of myths that permeate the innovation processes and identified sound methods for predicting success. In the second article of our series, we demonstrated that despite the myths stating otherwise, 'inferior' products can win and mitigating risk trumps market appeal. We round out the series now by popping three more myths.

Myth 5: Consumer Research Does Not Work When Assessing Truly Innovative Ideas

Arguments such as "it's too futuristic," "only a certain type of consumer will get it," or "people have to experience it" may indicate that the idea is not commercially viable, but it does not mean that it cannot be researched and tested fairly.

There is, in fact, a classical profile for product ideas that are just before their time (Figure 5). Moreover, testing research works just as well as it does in established categories if the education process and analytic standards are correct and work in concert. If you educate people "correctly," you can obtain a reliable answer regarding interest in a highly innovative idea (Figure 6).

Myth 6: Appealing To Early Adopters Is Critical To Longer Term Success

For years, the accepted paradigm of innovation diffusion was usually depicted as Figure 7. It was thought that early adopters played a key role in influencing the shape of the curve as time progressed. This implicitly assumes a two step marketing communication process whereby the marketer appeals to the right consumers and the right consumers spread word of mouth. More recent academic learning challenges the traditional two-step marketing communications process. Big information cascades (i.e., lots of word of mouth activity) are more likely to be network effects versus individual effects (Duncan Watts, A Simple Model of Global Cascades on Random Networks, PNAS 2002). The practical implication of this is that while marketers often target evangelists, this academic research is challenged to demonstrate that one group of evangelists can generate enough word-of-mouth to make a difference and create a "network cascade." The chain of influence breaks at the second person told or the third, etc., because eventually the chain runs into people who are not compelled to spread the word.

Empirically, we know that early adopters indeed exist, but they are not homogenous and are category independent - meaning they are difficult to find. We also know that early adopters are not the same thing as evangelists or "connectors"- in the lexicon of The Tipping Point - and that higher penetration among early adopters is not a consistent predictor of longer term success.

Thus, targeting evangelists and opinion leaders, in some situations, is probably not as important as facilitating communication among large groups (networks or communities) of potential buyers who have a chance of communicating with each other about a product. The bigger the audience pool, the truer this is. We do not dismiss the notion of early adopters or buzz marketing. It obviously works sometimes. However, it is important to look at characteristics of your product (e.g., how unique it is...really) and of the market you are targeting (e.g., are there already some logical, existing "connections"), before concluding that a buzz approach will work.

Myth 7: It Is Useful To Benchmark Consumer Reactions To Your New Idea To The Market Leader

Benchmarking to existing products can be useful, but only if it is done correctly - and it is rarely done correctly! Normally in research, this is done as an extra or "control" concept, and the problem is that this implicitly asks the "wrong" question, which is usually, "How do we compare on appeal?" The question should be framed as "How do we grow and prosper while co-existing with these other products?" If not framed properly, results of benchmarking often erroneously lead to merely cloning the market leader. Competitive benchmarking can be useful, but it requires questioning beyond the notion of relative appeal.

Figure 8 illustrates the systematic differences inherent in comparisons made between "control" (existing) and "test" (new) products. Even when those who claim awareness for the existing product are removed, clear, unattributable inconsistencies become apparent. This flawed comparison logic is often seen in direct mail models, where thousands of "control" pieces and thousands of "test" pieces are sent and then results compared. Be extremely careful with benchmarks for the purpose of assessing appeal. If you choose to use them, make certain that you choose appropriate ones, that you understand the limitations, and that you are well-versed in interpreting inherent biases. You may choose, instead, to focus on the exploitable gaps like weaknesses in the competitive value proposition or marketing execution - especially among the different market segments.

Research That Wins

It is good research - not mythology or conjecture - that improves your commercial success rates and leads to winning ideas. Figure 9 summarizes our series of articles... the seven myths we exposed and their implications. If you'd like to learn more about these and other innovation myths or other insights from the Ipsos Vantis database, contact us to discuss.