06 Aug 13 Competitive intelligence for product development
Continuous product innovation is critical for growth and success, particularly when industry growth is flat and competition is intensifying. But innovation also has risks attached to it – the risk that after investing in its development, customers will not warm up to the new product/service.
Competitive intelligence can help organisations reduce the costs and risks of new product development, by giving regular and deep insights into the needs and the psyche of the customers.
Are there any unmet customer needs? What unmet need will the new product meet? Do we need different offerings for different market segments? What price points will work? How should the product be positioned? How should it be marketed? And many other answers needed to ensure the success of the new launch must be found before fully committing resources to it.
CI has a few tools that help answer the above questions, not just as a one-time exercise, but on a regular basis. Here are some key CI tools that enable successful product development.
Voice of Customer: Listening to the customers is paramount for improving business growth and performance. Customer satisfaction surveys, feedback forms, customer analytics, inputs from sales teams and full-fledged VoC studies are the various ways by which companies try to listen to their customers. In addition to feedback on your product/service, customers can tell you about their business needs and key pain areas – critical inputs for product development. Additionally, they can also tell you about the direction your competitors are taking.
Unfortunately, customers are generally under-utilized as sources of intelligence. In a recent survey conducted by ValueNotes, we found that although most companies undertake at least some of the above activities, by and large they are not happy with the inputs they get. With appropriate design, VoC studies can uncover unmet needs and give high quality actionable inputs for product development.
Win loss analysis: An analysis of the sales performance can provide significant inputs to a company’s product development team. Win-loss analysis is a tool that helps a company understand its strengths and weaknesses vis-à-vis its competitors. The process involves talking to the customers won and the prospects lost, to understand the reasons for the outcome. It enables the company to uncover the real needs of the customers and understand why they are (or are not) met by the company’s current offering. The company can fine tune its offering, positioning, pricing, sales process, etc. using this analysis.
Competitor intelligence: Analysing the history of your competitors’ product development initiatives is of immense value to a company. A company does not need to repeat the experiments that have already been tried by its competitors and reinvent the wheel. Others’ successes and failures offer valuable insights into what the market needs and wants.
Have you used any other CI tools for product development?