95% of product innovations fail. Whether it’s because the project takes too long, is poorly coordinated, or starts out with the wrong idea in the first place, the fact remains that despite the best intentions, most companies struggle with making product innovation provide them with actual results that can benefit the business.
However, most leaders understand that even though it’s difficult, product innovation can’t be ignored or neglected.
80% of executives believe that their current business model is at risk of being disrupted by innovation in other companies, so finding ways to improve is always a race against time for companies that want to maintain their positions or grow.
But how can you develop an effective product innovation process? And why is it important?
Let’s answer these questions below. But first, let’s look at the product innovation business definition.
What is Product Innovation?
Product innovation is the process of solving a common problem that your audience is facing in a new and more effective way.
It can either be a completely new product for solving that problem or an upgraded or re-defined version of a product that changes how the problem is solved, making many alternatives obsolete or at least less desirable.
There are a few key considerations when defining whether a new product is innovative or not.
First, you must evaluate if demand for it exists. Even if your new product doesn’t have alternatives in the market, that won’t make any difference if no one needs it or wants it.
Another consideration is whether the innovation actually makes the product better. It’s essential to look at what the competition is offering and identify how your product is better. It can be things like a breakthrough design, unique features, better effectiveness, or anything else that the audience you’re selling to cares about.
Finally, consider whether you can communicate the unique benefits of your product to your audience. How easily will you be able to sell your market on the benefits your product can bring? Or how long would it take to convince people to give your product a shot?
Sometimes, even breakthrough products can take time to be recognized for what they are. Truly disruptive technology takes time to be adopted and become more widely accepted, and that can be an essential factor when you need to develop a product that can disrupt the market today.
Because product innovation needs to consider so many different aspects of a business, it should encompass every department or team you have available. Only then can you expect the product to match up with audience needs and be a true disruptor in the market you are operating in.
Why is Product Innovation Important?
Most markets today are very crowded. You probably have dozens of competitors vying for a bigger share of the audience and sales. In this type of environment, even a little advantage can have a massive impact on your bottom line.
This type of competition is one of the main driving forces of innovation because companies are forced to find better ways to cater to their buyers or risk being pushed out by someone who does.
So, the importance of innovation doesn’t just relate to seizing growth opportunities; it can also mean simply maintaining the status quo and not falling behind.
At the same time, innovation is the driving force behind making your customer happy.
No matter how crowded and sophisticated a market might be, there will always be gaps and opportunities for forward-thinking companies to bring something new to the table, which could have dramatic consequences on how the market operates and even how the target audience solves a particular problem.
And sometimes, even a relatively small change can make a big difference.
Through product innovation, you may discover a seemingly simple feature that, when added, completely changes the user experience, revolutionizing your marketplace in an instant.
As a brand, you always want to be the one who came up with an innovative solution and not the one that copied someone else’s idea.
Companies that get a reputation as innovators usually end up dominating their markets because consumers trust companies that are at the forefront of innovation and are willing to pay a premium for their products. And that’s a position that you should definitely want to find yourself in.
Examples of Product Innovation
In the previous section, I’ve talked about various scenarios where product innovation could be immensely powerful. But they don’t carry as much weight when they’re not backed up with specific product innovation strategy examples.
So, let’s look at a couple of examples of how innovation has looked in real life.
One of the easiest to understand examples is Apple’s release of the smartphone. It completely changed the way people use cell phones, opening up opportunities for entire new software industries to develop.
The curious thing about the iPhone is that it wasn’t even the first smartphone to be developed. Yet despite that, Apple was the first company to recognize the true potential of the design and use the full capabilities of the technology that was available at the time.
After the initial release, Apple also didn’t try to reinvent the wheel, sticking with what was working and instead focusing on product innovation of the iPhone itself, building in new features that continue to push the smartphone industry forward.
Another example of product innovation is LG’s release of a flexible screen that can be rolled up. Even though the technology is far from perfect and hasn’t become widely available yet, it holds enormous potential and has caught the imagination of an entire market.
This shows that while not all product innovation brings immediate results, some advances might become building blocks of products that can revolutionize a market in the future.
Today, it has become one of the better product innovation examples in 2020, with LG using its curved technology to develop cutting-edge displays that offer a unique experience to the viewer.
Keys to Product Innovation
Product innovation is essential for your success, but only if you know how to use it the right way. Let’s look at some of the most critical aspects of product innovation you should consider.
Put Your Team in a Position to Succeed
Product innovation is a complex process that involves countless considerations. And that’s why many companies struggle with identifying the best opportunities and putting the team on the right path.
Today’s markets can change rapidly, so you must have a process for coordination between departments and react to your audience’s emerging needs.
Growth hacking for product managers is becoming an increasingly popular approach, allowing to make more informed decisions about which direction to take the efforts, making communication between departments easier using teams with specialized tasks, and employing analytics and data to better understand how changes might impact performance and sales.
While there are many growth hacks you could focus on, few will bring as many benefits as improving the product you are trying to sell.
If you put your employees in a position where they don’t have to operate in silos and work in a team-oriented business culture setting, that alone can make a big difference in the types of innovations you can expect.
And if you actively encourage employees to take on ambitious projects and experiment with what new products could offer, you may find yourself with a new product or feature that completely changes the entire industry you’re operating in.
Keep Learning More About Your Audience
Your product is only as strong as its ability to solve the problems of your audience. It’s a relatively simple concept that’s easy to agree with, but many companies aren’t able to fully internalize this fact into their processes.
Every time you have a new idea for a product or a feature, it should be evaluated in terms of how it would fit with what your audience wants and expects.
Sure, it’s good to be bold and be willing to bring forth products that might not be a safe bet, but at the same time, you shouldn’t sink resources into a project that doesn’t have a lot of hope for succeeding.
The best way to learn more about your audience is to get insights directly from the source. You can conduct interviews, run surveys, or even add polls to your site to gain insights about what your buyers care about, their overall satisfaction, learning answers to specific questions that allow you to move forward with more confidence.
Aim for Gradual Improvements
When innovating products, it’s always a good idea to think big. But at the same time, you shouldn’t ignore smaller innovation opportunities even if they aren’t as exciting.
Sometimes, a few smaller improvements can have a much more significant impact than one big one, as they can have an accumulative effect and can make your product better in multiple aspects.
Instead of being superior in one area and inferior in others, you can be excellent in multiple areas, which can be as good when attracting the biggest audience share possible.
Identify Your Biggest Flaw
No products are perfect. Even if you have a market-leading solution, chances are that there are things even your most loyal customers would love to see improved.
Now, you could be content with what you currently have, but that puts you at risk of someone else addressing the issues and getting ahead of you.
Therefore, it’s best to be proactive and use the data you collect through customer reviews, interviews, and surveys to figure out the most pressing issues you should deal with right now.
After all, innovation is not just about breaking through barriers; it’s primarily about making your customers happy. And if they love your product but find something annoying or inconvenient, it’s your job to put that at the top of the priority list and fix it in the best way possible.
Develop a Marketing Strategy for Product Innovation
When you develop a new product or a new feature, the job is almost finished. But without this last crucial part of the equation, even the best innovations may go unnoticed or even generate backlash.
Once you have something exciting, you need to figure out – how will you promote this product or feature?
And that requires a solid marketing plan that helps you reach the people that will find it the most interesting with the best message possible.
After you put in all that effort into developing the product, don’t waste it with a mediocre launch; think about how to get your market buzzing with the news, and you’ll have a much easier time getting people to line up to buy from you.
Product innovation doesn’t have to be complicated or require millions in R&D investment. If you understand the fundamental principles of successful product innovation and know what to focus on, companies of all sizes can make gradual improvements to their offerings and increase market share in the process.
How does your company approach product innovation? And what are some of the most exciting product innovation examples you’ve encountered? Share in the comments below!