New product development is a crucial component of future business success. By some estimates 30% of corporate revenues come from products that have been launched within the past 5 years.
Developing a steady stream of successful new products is not an easy task. With only 1 in 4 products launched into the market achieving commercial success, new products fail at an alarming rate.
In business-to-business markets, the adoption of new products is a far more complicated process than in consumer markets, due to the impact that the switch to a new product or service may have on the organization. Furthermore, incorporating a new product could necessitate a change in existing operational processes to accommodate the switch.
Marketing and sales personnel must therefore approach prospective customers with a compelling and defensible argument in order to convince them that making the switch is worth the cost and the effort. One of the most effective ways of proving a new product’s value to an organization is by providing examples of how it has enabled similar organizations to operate more efficiently and/or enhanced their output. Survey data generated by B2B International and corroborated in publications by McKinsey, Harvard Business Review, and many others, show that case studies and user testimonials have the greatest impact on new product consideration of all communication methods employed.
But before one is able to generate case studies and testimonials, marketers have to identify those companies most likely to use the new product – the “lowest hanging fruit” – and go after them first with the offer.
Everett Rogers, in his book “Diffusion of Innovations”, pioneered the idea that the adoption of new innovations varies across a population. When a new innovation is presented, there will be a segment of the population that welcomes the change and will be the earliest users of the product, service or technique. These early innovators are followed by four other groups of users that will adopt the innovation at later points in time over the course of the product lifecycle, as shown in the Rogers’ Diffusion Model shown below.
Market research can be a useful tool for identifying the early innovators. In our concept/product development research, B2B International typically looks at how various types of organizations respond to a number of key survey questions relating to the concept or new product/service. Examples include initial reactions to the product concept, the extent to which they are challenged by current processes that the concept is designed to overcome, and a number of other key variables which can indicate which types of companies fall in to each of the categories in Rogers’ Diffusion Model.
By identifying which types of organizations may fall within the early adopter or innovator segments, our Clients can be more efficient in targeting early promotion efforts to those organizations most likely to adopt the product. By generating case studies and testimonials among these innovators, companies can increase their chances of convincing others that making the switch is well worth the cost and effort of doing so.