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New Product Development Hypothesis Validation Toolkit CX-TK-105
| Date post: | 19-Jan-2017 |
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New Product Development Hypothesis Validation Toolkit CX-TK-105
Copyright CX NPD
WWW.CXNPD.COM
Problem: . . .
Solution: . . .
Unique Value proposition: . . .
Company Strengths: . . .
Customer segments: . . .
Key Partners: . . .
Key Resources / Activities: . . .
Channels: . . .
Cost Structure: . . .
Key Metrics: . . .
Revenue Streams: . . .
The Concept Capture and Customer Experience Definition phases are particularly critical in determining product success.
Customer Experience
Build Launch Concept Capture
Design Test Assess Innovation
Therefore validation of hypothesis is essential
Copyright CX NPD
WWW.CXNPD.COM
Purpose
1. Validate the assumptions made in the Concept Capture and CE definition phases
2. Describe the hypothesis we want to test
3. Determine how we will test it
4. Establish what we will be measuring and whether we have met a target threshold
5. Record the results
How to use this toolkit
A product development usually starts out with making educated guesses and assumptions of what you think the customer segment wants. However, you are not the customer. It is vital you test the hypotheses in the market. Only validation will ensure a robust foundation of the NPD before going into the design and build phase.
Interaction with potential customers should take place throughout the NPD process. However especially in the first few phases of the development this is of vital importance. Mistakes made in these phases can send a development in a completely wrong direction. Furthermore, changes made to the product later in the development are often more costly as it might require a significant amount of rework. Therefore, it is essential that assumptions made during the early NPD phases are validated thoroughly.
This toolkit focusses on two main validation activities. One at Concept Capture phase and one during the Customer Experience Definition phase. The validation goal in these phases is to answer: Will we create something my customers will truly value? Keep in mind: do not sell the proposition but to listen to what the customers and the market is telling you.
Based on the answers you improve the proposition or continue to the next phase of the NPD in which more validation with the customers will take place.
This toolkit shows how to validate in the CC & CE phases
WWW.CXNPD.COM
Concept Capture phase validation CE definition phase validation
Customer Experience Definition
A Problem / Solution fit (for the complete CX wheel)
An understanding of the sales process and channels to the customer
Knowledge how to reach the customer with marketing messages
Customer input on getting, setting-up and using the product
Customer feedback on the billing methods and the customer care process proposed
Feedback from key internal and external partners in the provision of the proposition
Notional allocation of key resources and/or securing of key activities
Realistic estimation of cost and revenue streams
Assurance that the key metrics can actually be measured and reported on
Proof that a compelling unique value proposition can be delivered
What should be validated and evidenced?
Concept Capture
Is there a problem to be solved?
Would the proposed solution solve the problem?
Is the customer interested in having this problem solved by a new solution?
Do you understand the customer’s needs, wants, jobs, pains, gains....
Does the customer show a willingness to pay or use this product?
Can you create a compelling differentiated value proposition?
Are there any show stoppers in the other boxes of the concept canvas?
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How to validate? Types of customer research
Testing is often categorised as quantitative or qualitative customer research.
Both methods will be used in a new product development process but at the start of an NPD qualitative research will be leading the way. This because in the initial development phases you want to create deep insights into the customers.
A word of caution on Big Data; Big Data will provide reams of quantitative data but this is all based on past actions. This data is useful to discover trends in behaviour of existing customers and improve an existing product. However, it is of limited use for creating new products for new customer segments. For these you have to use qualitative research.
* Adapted from sources: www.bl.uk & snapsurveys.com
Quantitative research Is a more logical and data-led approach which provides a measure of what people think from a statistical and numerical point of view. It aims to objectively measure. It seeks to explain.*
Uses larger population samples; Often focused on past behaviour or actions; Mostly examines what, where and when it happened; Generalises the results to create statistics.
Qualitative Research Is primarily exploratory research. It is used to gain an understanding of underlying reasons, opinions and motivations. It seeks to understand why and how. *
Uses just enough as sample size; Focused on how people feel, what they think and why they make certain choices; Dives deep into a specific problem or area.
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The starting point for validation is qualitative research. Here are some of the more common techniques:
Qualitative research is difficult as it requires good interviewing and observational skills. The interviewer should be fully focussed on what the customer says and does. Analysing the results and drawing conclusions from qualitative research is hard since most of the data is unstructured. Ideally the interviewer has no stake in the product development so that personal bias can be minimised.
This initial research could lead to quantitative research and Customer Participative Design further down in the NPD.
Validation using Qualitative Research
Types of qualitative research
Customer conversation - unstructured
1 on 1 interviews – structured or semi structured
Customer diary accounts
Customer observation / participation in task
Customer shadowing
Document analysis (e.g. social media)
Focus groups
Contextual inquiry (as part of User Centred Design)
Artifacts used:
Story Boards
Product sketches & Wireframes
Mock-up & Prototypes
Many techniques but the main message is:
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▪ Start by getting input to your hypothesis and work your way around the circle
▪ Validation with qualitative research is an iterative process
▪ Expect the original assumption and hypothesis to change
▪ Expect several rounds before a hypothesis can be validated
▪ You are not the customer! Talk to real potential customers
▪ Only validation will ensure a robust foundation of the NPD
The validation process...
Capture learning for NPD process
Execute &
Collect Data
Analyse Data
Select Research Method
Validate or Update
Hypothesis
Create Hypothesis
Get data, Interview, Assume...
Copyright CX NPD
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▪ In the NPD process, a hypothesis is an educated guess how the customer would like something to function in the product or proposition. It is a testable prediction of something the customer would like or value.
▪ The purpose of a hypothesis is to actually test if the guess is true.
▪ Unfortunately many Marketing Requirement Documents are full of untested hypotheses. This is a key driver in many product failures.
To create a good hypothesis keep in mind:
The hypothesis is a statement or a prediction, not a question
The hypothesis should be written in clear and simple language
The hypothesis makes it clear what specific variable is being tested
The hypothesis is testable, that is the expected impact is specific enough to be measured and tested
How to write a good NPD hypothesis?
Adapted from sources: www.sciencebuddies.org/blog/2010/02/a-strong-hypothesis.php www.producttalk.org/2014/11/the-5-components-of-a-good-hypothesis
A good NPD hypothesis syntax is
If .............(we develop/ build/ design) this..............................then................ ............(this)................will happen (expected impact in a given time frame)
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▪ Concept validation will entail several hypotheses going through several rounds of research. Therefore, it is important to track the learning points
▪ This can be captured in a simple spreadsheet or through the use of specific test & learning cards*
You need to track the validation to:
Keep this validation research process on track – there will be many moving parts and much data generated
Serve as starting point for UX design – this research is either the start of UX design or will be a valuable resource
Provide input for further product releases – a good product is delivered in multiple releases, so this data is important
Capturing the validation learnings for the NPD process
* Source for Test & Learning cards see Strategyzer.com
Validation Learning
Learning points from validation:
I. What was the Hypothesis tested? Use the exact hypothesis statement
II. What data did you gather?
III. What was the conclusion from the analysis? What are the main learning points?
IV. Does this conclusion prove the hypothesis?
If yes, what will be the next step
If no, will you update the hypothesis / create a new one or stop this line of enquiry?
Capture:
1. What is the hypothesis? List the exact hypothesis statement
2. How will you test the hypothesis – What research method have you selected?
3. How are you measuring the results?
4. How and when will you analyse the data?
5. What are the criteria to prove or reject the hypothesis?
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▪ Early in the NPD process many assumptions are made. These assumptions are based on educated guesses and a gut feel of what you think the customer segment wants. However, you are not the customer!
▪ Unfortunately, many product development hypotheses are not validated. The assumptions are turned into a Marketing Requirement Document on which the development is based. This is a sure way to product failure.
▪ It is vital you test the hypotheses in the market. Only validation will ensure a robust foundation of the NPD. Gather the facts and before continuing the NPD ensure you can answer the following question with a resounding YES:
Increase your chances of NPD success by validating. This CX NPD toolkit showed you:
What needs to be validated early in the NPD process
Why qualitative research is the leading method in this part of the NPD
What the common methods of qualitative research are
What process can be used for validation
How to write a good hypothesis
How to capture the validation learnings to keep the research on track
▪ For more information contact us on [email protected] or visit our website on www.cxnpd.com
Summary of Validation
Will we create something my customers will truly value?
Copyright CX NPD
WWW.CXNPD.COM
Think
Build
Launch
Improve Customer
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Copyright CX NPD
WWW.CXNPD.COM
If you have any questions or would like additional information please contact:
www.cxnpd.com
Copyright: Customer Experience New Product Development Ltd. 2016
Customer Experience New Product Development Ltd.
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