"Thank you VERY much for pulling together the summary for my new Home Décor business. The information provided was very detailed and insightful. Your efforts on our behalf will certainly help us as we enter a new business category.”
Given the cost of product development today – design, development, tooling, initial production, shipping, support materials, sales and admin expense and the potential cost for taking and liquidating returns on failed products – how can you afford not to spend $1000 to prevent a product failure? Market research is cheap insurance and it’s the only insurance that you want to see a return on!
When is the last time you heard that the cost of insurance – any insurance – has declined? Probably not any time recently. But there is good news regarding the cost of new product success insurance, that is to say the cost of consumer research to ensure new product success. The continued decline in the cost to test new concepts, designs and products has fallen dramatically in the past few years. Today, when testing multiple products, the cost is less than $1000 each.
Nearly all of the product testing we do today – be it concept testing (verbal descriptions sometimes accompanied by mocked up digital images), preliminary or final design testing or testing of completed products, is done online. The only exceptions are cases where consumers need to touch, smell, or taste the real product. (In repeated A/B testing, we’ve found no significant differences in results between online and mall intercept tests.) Today our average price to test new products online, regardless of format falls between $500 and $1000 per item tested (when testing 10 or more items – which most situations call for).
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A special thanks to one of our long-time clients, Peter Goldberger, Executive Vice President of Noritake, who provided the impetus for this blog post. Peter’s comments about the falling cost of research appeared in the October 10th issue of HFN Daily. To quote Peter: “use of the internet has brought down the cost of product testing and market research dramatically.” Peter went on to say “it is a great way to provide products that have a greater chance of retail success…. a failure on the selling floor or e-commerce platform can cost many times more. It’s not just a win/win, it’s a win/win/win with the final win going to the consumer getting what he or she wants…and that’s what this is all about.” |
Peter, we couldn’t have said it better! We thank you for your friendship and support over the years and we wish you well in your retirement!
All the best,
Janine and Rick