Concept Testing: Turning Consumer Insights into Better Products and Services

Some new products and services are groundbreaking, successful and quickly become integral parts of our lives. Others aren’t. Numerous studies have shown that as many as 80% of new product launches fail each year. If you or your clients have an idea for a new product or service, make sure there is market demand before you get in too deep. A small investment in quantitative research early in your exploration could save significant expense in the future.

In this blog post, we highlight the basics of concept testing – including what it is, study design and best practices. To learn more about Lab42’s approach to concept testing, you can download our full whitepaper below.

WHAT IS CONCEPT TESTING?

A Concept Test is a research strategy designed to assess the market viability of a new product or service. It will help you determine how appealing the concept is, how likely consumers are to buy or use it, and to identify areas for further optimization.

STUDY DESIGN

Lab42 uses a very straightforward process for testing concepts. After screening for the appropriate audience, qualified respondents are exposed to the un-priced concept and asked a battery of questions to assess its appeal, effectiveness and potential customer motivation. In addition to our standard set of concept test questions, we can also add additional modules that will allow you to understand the appeal of specific features of the concept and determine the acceptable price ranges for the product or service. We finish the survey by asking respondents for their demographic information, which will allow us to analyze the aggregate data along these demographic points.

BEST PRACTICES FOR CONCEPT TESTING

There are 4 main elements to consider when doing quantitative concept tests:

  1. Target audience: think about who will be buying or using this product or service. Is this product/service meant to be targeted just to them, or do you need to think broadly about potential users as well?
  2. Recommended product description/depiction to be used in the test: We recommend exposing respondents to a clear depiction of the concept, either with text or an image accompanied by text. The image should portray the concept as close to reality as possible, and the text description should be no longer than three short paragraphs.
  3. Monadic v. sequential design: You may have a few variations of each concept that you want to test. If this is the case, there are two primary options for evaluating and comparing the variations.
    • Monadic: In a monadic design, each concept is tested in isolation of the other concepts, and each respondent only evaluates one concept.
    • Sequential: In a sequential design, a respondent is exposed to and evaluates all concepts, generally in a random order all within the same survey.
  4. Recommended sample size: When testing once concept, Lab42 recommends a sample size of at least 300 respondents. However, before deciding on the final sample size, consider the following factors:
    • Size of target population
    • Acceptable margin of error
    • Confidence level desired
    • Methodology: monadic or sequential
    • Budget and time limitations
    • Subgroups required for analysis

Concept testing is a critical step before launching any idea, product or service – better decisions begin with better data. By gaining insights from potential customers on the appeal of the broad concept, as well as identifying areas for improvement, you are able to alleviate some of the inherent risks of launching new concepts.


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