Why do You Need Product Innovation Consulting?
New products can be a significant contributor to the shape of the demand curve. When that curve bends downward, bringing price with it, it is a sign that you either need to create new products, upgrade old ones, or simply exit that market and put your resources elsewhere.
It should come as no surprise that by far the preferred approach is to make incremental improvements to existing products. After all, you’ve made significant investments to achieve recognition, market share and competitive advantage. Why throw all that away on something brand new? Introducing the new version of a recognizable brand into an existing market is a far easier sell. It’s also less expensive.
But incremental has its own risks. Is it too incremental to be noticed? Is your competition making similar improvements? Will the effort generate enough of a return to justify the expense?
What about more radical product innovation? It can deliver a much bigger return on innovation. It may be so innovative that it creates a whole new market that you can own until someone comes along to challenge you. That ownability will help you maintain a solid lead as your competitors struggle to gain a toehold.
It is of course far riskier. The new products or services may require new technology, which can represent a substantial investment. Enter the market too early and your customer may not be ready for your wildly innovative product. They may not understand its value or where it fits into their need set. And while you’re busy solving those problems, you’re giving your competitors runway to create their own. Pioneers are easy to spot – they’re the ones with the arrows in their backs.
Most companies have product development teams that churn out incremental improvements. There are exceptions. Companies like Dyson, 3M and Apple all have internal development teams capable of radical innovation. But these are rare.
If you’re not a Dyson, your best innovation strategy might be to bring in some outside help. Product innovation consulting succeeds on the strength of its innovation process. An innovation consultant’s business model is built on it.
But the best innovation consulting firms do one more thing: customer development. It’s one thing to have a radically innovative product to sell. It’s another to have a customer who will see enough value to pay for it.
This is the most important consideration, whether you are doing incremental or radical innovation: always start with a customer need. Most product ideas never reveal themselves until they launch. By then they may have wasted time and money solving a problem that no one cares about.
To drive innovation into the market, customers need to understand the value proposition, and it’s always better to find that out well before your idea is ready to ship. Effective consulting for product innovation understands that good product development means good customer development. It also means fewer arrows in your back.