From innovative new product ideas to new flavor variants, service offerings, packaging, and more, idea validation is a critical step in the development lifecycle that, if done correctly, helps accurately identify the ideas that are most likely to succeed in-market. Using the right screening tools, companies can determine which ideas are the most viable, while failing fast on those that aren’t, directing their resources toward ideas that are more likely to deliver a robust ROI.
In this article, we take a closer look at the idea validation process, exploring what it is and why it matters for businesses looking to save time and money when assessing a new product or service for market potential.
What is idea validation?
Idea validation is a form of market research in which new products and services are tested within an ideal target market to determine which are most likely to be successful on launch. The idea validation process allows businesses to make data-based decisions as to which new products or services should be progressed to the next stage of development, and which should be discarded. Using advanced screening tools, idea validation helps companies collect data on the viability and market potential of new products or services under consideration, allowing for more accurate decision-making and strategically sound allocation of resources.
Why validating an idea matters
Bringing a new product or service to market is a time- and resource-intensive process, involving significant business risk. To mitigate this risk, companies need a way to increase the chances that the new product or service they choose to launch will be successful. Validating potential products and services early on in the development process by testing them within your targeted audience gives you the data you need to determine which product or service is most likely to bring you the desired return.
The best idea testing methodologies gather both quantitative and qualitative data during screening. This gives you access to verbatim feedback from potential customers about your idea, helping you refine and improve the strongest contenders, and giving you insight into why weaker ideas are failing with consumers.
The result? Streamlined processes, less risk, lower development costs, and more accurate, confident decision-making.
How to validate your idea in 4 steps using a screening tool
So, how does the idea validation process work? With CRG Predictive intelligence’s HUUNU prediction market platform, for example, the idea validation process works as follows:
Step 1. Define your criteria
To accurately assess the viability of a new product or service, you need to determine its success metrics. As such, the first step in the idea validation process is to define the criteria that will be important for your idea’s success. This could include metrics like market potential, feasibility, alignment with organizational goals, or customer needs. In a prediction market, you can test against metrics like “purchase likelihood”, “significant advantage”, “solves a problem”, “meets a need”, “occasion”, and “volume potential”, among others.
Step 2: Select an idea screening tool
The next step is to choose a screening tool that suits your organization’s needs. Screening tools vary in complexity, from a simple scoring system or ranking to more sophisticated and accurate predictive market research tools like CRG’s HUUNU platform. The tool you choose will be determined by a number of factors, including your budget, the level of detail you need from target audience feedback, required turnaround times, and the required scope of your test audience.
Step 3: Submit recommended questions to the prediction market
Time to put your idea to the test! Once you’ve refined your criteria, CRG’s experts will furnish you with a list of recommended questions to include in the prediction market. These questions are carefully designed to extract high-quality qualitative and quantitative data from prediction market participants. CRG’s prediction market methodology, for example, enters your ideas into a gamified prediction market, in which participants are asked to bet virtual currency on ideas they think will be successful in a betting game environment. For example, participants will be asked questions like, “Do you think this pack size will appeal to families with children?”. How quickly they bet on their answer tells us their initial implicit reaction to the idea, and how much they bet tells us how sure they are about their answer. For each question, participants are asked to defend their bets with a rationale, which provides important qualitative data.
Step 4: Collate and interpret your results
The data gathered during this process represents the collective judgment of participants and can be compared to thousands of predictive questions in the CRG Global Normative Database. Once interpreted by CRG’s validated behavior-based algorithm, the results indicate the likelihood of an idea’s success, how competitive it is, and, conversely, when it’s time to take the idea back to the drawing board. Qualitative feedback gathered during the survey provides valuable insight into how your idea may be improved, or why it’s not working as well as it should among consumers.
