Modern merchandise can result in elevated market share, higher buyer loyalty, and diversified income streams. Most innovation efforts, nonetheless, include important danger of failure. Inserting the client on the heart of the product innovation course of is essential, however many product managers wrestle to shift their mindset from designing services to designing buyer experiences.

I’ve spent greater than twenty years researching and making use of innovation strategies to create consumer experiences that promote sustainable and significant development. I first discovered concerning the following framework within the Innovation Dash enterprise training course provided by Part. This adaptation, which will be utilized in nearly any business, has allowed me to take a realistic method to the improvement course of. By making use of this product innovation technique, you may be well-positioned to:

• Uncover latent alternatives for your small business inside your goal market.
• Reframe buyer issues to design the best answer.
• Higher perceive your prospects.
• De-risk and prioritize innovation concepts.

Figuring out Product Growth Danger

You might be accustomed to the Ansoff matrix, a grid-style planning instrument that plots out the varieties of development that come up from new and current product improvement and growth into new and current markets.

I additionally discover the matrix useful for visualizing innovation methods and evaluating danger degree. Right here’s what every quadrant represents:

• Market Penetration = Low Danger
  Enhance by optimizing an current product for an current market.
• Product Growth = Medium Danger
  Improve by providing a brand new product to an current market.
• Market Growth = Medium Danger
  Broaden by launching an current product in a brand new market.
• Diversification = Excessive Danger
  Diversify by creating a brand new product for a brand new market.

The Product Innovation Framework in Motion

Upon getting reviewed the potential development paths along with your staff, use this four-stage framework to information your product innovation course of:

1. Perceive buyer issues.
2. Design an answer.
3. Prioritize new concepts.
4. Experiment and check.

These steps will provide help to and your staff establish new alternatives and create new experiences whereas avoiding the pitfalls that may lead innovation tasks astray. To see the framework in motion, we’re going to look at how fictitious airline firm InnovateAir may leverage it to drive innovation as a part of a development technique.

Perceive Buyer Issues

InnovateAir’s product managers started by segmenting the market primarily based on traveler sorts: leisure vs. enterprise. A sound segmentation technique should seize key variations in buyer habits and desires.

InnovateAir’s product managers decided that enterprise vacationers are prepared to pay extra as a result of they’re usually time-pressed (and utilizing the corporate bank card)—so this phase has one of the best potential for development. Additional market analysis signifies that enterprise vacationers are most involved about flight delays, incomes loyalty factors, seat availability, ease of journey to and from the airport, and the velocity of airport safety.

Curiosity is a product supervisor’s greatest ally: It is very important attain out and discuss to as many potential prospects as potential to know their views, what they’re attempting to attain, and the limitations they wish to overcome. InnovateAir’s product managers performed a number of interviews with enterprise vacationers and recognized the totally different jobs-to-be-done (JTBD) utilizing a net of abstraction method. They then analyzed the first JTBD, which is flying from Metropolis A to Metropolis B.

By delving deeper and asking “Why,” product managers can perceive the practical, social, and emotional outcomes of the consumer expertise. This train pinpointed three essential the explanation why enterprise vacationers wish to fly: Flying is environment friendly, protected, and often nice. It discovered the 4 essential limitations for enterprise vacationers to be price, stress, lack of productiveness, and flight delays or cancellations.

Based mostly on this train, InnovateAir’s product managers can hypothesize that the first JBTD for a enterprise traveler is to fly from Metropolis A to Metropolis B in essentially the most hassle-free, environment friendly, and productive method potential. 

Design a Answer 

Step one in designing an answer is to know how your present providing suits within the general consumer journey. Typically, your services or products is just half of the general consumer expertise. For InnovateAir, the traveler’s journey contains the flying expertise in addition to related actions comparable to reserving, attending to the airport, and clearing airport safety. Audit your buyer’s wider journey to seek out gaps that present alternatives for innovation that notice clear advantages.

For InnovateAir, the journey audit recognized that totally different suppliers serve the consumer throughout their journey however there may be restricted information-sharing amongst them, so alternative exists to combine floor and flight transportation extra intently. This may provide the client a extra seamless end-to-end journey expertise that may optimize productiveness and scale back stress.

Carry out a competency audit to take inventory of your group’s capabilities and belongings. Consider methods you’ll be able to repurpose these to develop new options or experiences. That is what it appeared like for InnovateAir:

this by the Ansoff matrix lens, these concepts every fall into a unique quadrant. Journey-share app integration can be market penetration (low danger); the Loyalty community can be product improvement (medium danger); curated journey packages can be diversification (excessive danger).

Prioritize New Concepts

Prioritize the expansion alternatives by performing an evaluation utilizing the RIME (attain, affect, monetization, and energy) framework. For InnovateAir, all three concepts have broad attain and affect when it comes to the buyer worth proposition. The variations are within the monetization potential and the hassle required.

A buyer loyalty community may very well be an incredible characteristic, however implementing a social media platform can be difficult as a consequence of knowledge privateness rules and the engineering experience wanted. Curated journey packages are additionally a compelling thought, and the switching prices to assemble InnovateAir-recommended packages on aggregator websites comparable to Expedia or Hotwire are low; nonetheless, vacationers would then have alternatives to seek out even decrease costs for a similar packages on aggregator websites, and this is able to dilute the income potential and affect general monetization.

The very best thought seems to be ride-share app integration, as a consequence of its broad attain, affect, capacity to monetize, and the average effort and value required to develop and launch. It’s also the bottom danger. That is the expertise that InnovateAir’s product managers determined to prioritize and check first.

InnovateAir’s product managers analyzed the assumptions and proof for this expertise utilizing the RIME framework:

Utilizing the outcomes, InnovateAir product managers developed a speculation that when integrating ride-share apps with reside airport data through the app, prospects can be prepared to pay an additional 5%, with a present common spend of round $62 per trip. The product managers thought of this to be an affordable assumption that may very well be examined by working with ride-sharing corporations and conducting an A/B check in a goal market. The elevated spend per trip was a pretty proposition that may very well be shared between InnovateAir and the respective ride-sharing corporations. The general income alternative primarily based on the present penetration of airport ride-share journeys made by InnovateAir’s enterprise vacationers translated right into a wholesome approximation of $1.5 billion over 5 years.

Experiment and Check

An ideal instrument for de-risking innovation is testing. Product groups can run easy, low-cost experiments to check their hypotheses with clear and goal standards.

The InnovateAir product staff designed a check concentrating on InnovateAir Loyalty enterprise vacationers within the US with an intra-state vacation spot to see if they’d guide their airport ride-shares utilizing the InnovateAir app fairly than Uber or Lyft. They created the power to guide a ride-share on the level of check-in for departing and arriving flights, and built-in this with reside flight, airport, and visitors data. A profitable end result can be 25% of vacationers utilizing the characteristic, and greater than 50% utilizing it for all their floor transportation wants.

Deal with the Buyer Expertise

To unlock new development alternatives, as we speak’s most modern corporations don’t focus solely on the merchandise they promote, however fairly on the client expertise. By following the product innovation framework laid out right here, your product staff can establish a solution to deal with key ache factors to your current market that may drive extra income, bettering your general choices. Leveraging this framework mitigates the danger concerned with modern product improvement, making certain new merchandise are aligned with enterprise wants and capabilities and have robust ROI potential, all whereas providing a brand new, useful buyer expertise.

Be aware: Any references to Uber and Lyft are made purely within the context of this fictitious case research for instance a degree. The writer has no data of any such industrial initiatives on the a part of these ride-sharing corporations.