Building a compelling value proposition for a new product idea is like snorkeling

Above the water’s surface all may seem uncomplicated … a familiar beach lined with palm trees … fluffy white clouds in the sky. Put on a snorkel mask and look below the surface. Your view will be different. Brightly colored fish dart this way and that amid murky currents and craggy reefs with niches that may hold safety or danger.

It’s similar when a development team builds a compelling value proposition for a new product idea. Above a familiar market’s surface, all seems serene and certain. Looking below the surface, however, sometimes shows significant changes in customers’ needs.

 It’s easy to fooled by what customers say they want

All seems certain when one is sitting in an office chair and data-mining call reports on purchasing agents. However, the main facts about marketplace acceptance of a new product idea are outside the office, inside customers’ heads.

Customers’ purchasing agents are not the main decision-makers for adopting new product ideas. Key decision-makers may be engineers in a customer’s plant or members of their R&D department. Here is where skill in asking questions of people you don’t know will help elicit what is going on below the surface.

Going below a market’s surface can help discover hidden competitive moves

A dozen years ago, Theo, director-general of a European specialty materials company was concerned about a puzzling move a USA-based competitor had made. Looking at an USA import database, Theo noticed the competitor had bought a small amount of a possible precursor to one of the competitor’s specialty materials. This specialty material of the competitor and one of Theo’s products performed a similar function.

Theo’s sales representatives and R&D staff were indifferent to his concern “we know our USA customers for that product and they would have told us if anything was up”. He decided to employ a consultant to gather information that would reduce his uncertainty about the competitor’s move.

The consultant interviewed forty customers in the USA and Europe. By the twenty-seventh interview he found that both Theo’s and the competitor’s specialty materials had industry supporters. When the consultant asked about future needs the supporters responded with general versions of “faster, better, cheaper”.

On the twenty-eighth interview the consultant caught a glimpse of new information. This customer hinted he knew something special about “faster, better, cheaper”, but was reticent about the details. Next the consultant discovered and interviewed two engineers working inside this customer’s plants. Both said the company was working with the competitor to develop an on-site unit to produce the specialty material.

Going to on-site production would result in major cuts in the cost to the customer of either the competitor’s or Theo’s specialty material. An interview with the building approval officer in the county where the plant is located, gained a copy of the competitor’s on-site unit’s plans. Theo’s plant engineers quickly piloted and developed an on-site process for their specialty material. After introducing their lower cost specialty material, Theo’s company kept market share in the industry.

Reducing uncertainty in the front end of development

There are many ways to gather information for reducing uncertainty in development of a new idea and building a compelling value proposition. I prefer elicitation through phone interviews for its speed and global reach.