Search Waypoint Resources
New Research: What do the Best companies do to increase New Product Success?
Fresh research from Product Development and Management Association (PDMA) discusses what contributes to New Product Success. I can share a few key quotes, and the research is available for purchase on PDMA’s website and sections are also available at lower cost from Wiley online.
The study compared data from 453 companies (56% were B2B) and compared practices from the “Best” firms against the “Rest,” where “Best” is defined as
- in the top third in their industry for New Product Development (NPD) success,
- being above the mean for their new product program success, and
- being above the mean for sales and profit success from NPD.
The study found that the Best firms are nearly TWICE as likely to have a successful product. And in world where research finds that success rates are generally below 25%, anything that can improve the odds of success should be heeded.
Although there are many factors that go into successfully bringing a product to market, two items stood out:
- The Best firms spend significantly more effort than the Rest in all areas to understand customer needs
- There has been a marked change in product research tools since the initial research. And guess what: “The Best use all the market research tools significantly more than the Rest…” Back in 2004, the leading research tool was the beta testing process, while in this most recent study we find that customer interaction (voice of customer programs and site visits) are used far more frequently.
This is certainly good news, as we’ve asserted (one fun example is here), and the research confirms that
- the most valuable learning comes from engaging customers
- the sooner you can engage customers in your project, the higher the chance of success.
Note this chart highlights an emphasis by the Best on “unarticulated needs.” Engaging customers in dialogs to understand their challenges is critical to success. Effective voice-of-customer programs should be accelerating this process (does yours?).
While many companies tend to wait for a beta or even (heaven forbid!) the public launch to start engaging customers, we can move that critical learning to earlier (read: less expensive and more effective) in the product development process. How well are product teams engaged in the “voice of the customer” in your company?