Product concept testing: a deep dive

Product concept testing is the process of evaluating a new product idea before it goes to market. It helps organizations make sure there’s a need for their product or service before time and effort go into making the idea a reality. 

There’s more to this type of testing than just asking groups of people in your target audience to sign off on a concept, though. 

In a paper published in the academic journal, Industrial Marketing Management, researcher Robert G. Cooper identifies 20 key drivers of a successful new product. Two of them are particularly relevant to our topic today: “building in voice-of-customer” and “doing the front-end homework.”

With product concept testing, you can cross these two hurdles with one big leap. 

In this guide, we’ll tell you why product concept testing is important and how to do it for your own organization. 

Why is product concept testing important? 

Product concept testing reduces the risk inherent in bringing a new product to market. According to a study published in the journal Marketing Letters in 2021, about 25% of new products fail to earn any sales after one year. The number rises to 40% after two years. 

But why do these products ultimately fail to find a secure foothold?

Researcher Garmt Dijksterhuis argues that there are five driving factors behind new product failure:

• Lack of communication between marketing research pillars

• Upper management focused more on releasing new products than launching long-lasting ones

• Tendency of upper management to follow popular science fads vs. data-driven consumer insights

• Rusty definitions of what it means to produce quality products

• Failure to understand consumer behavior

After carefully combing through evidence supporting each of these five factors, Dijksterhuis concludes that “the main research problem behind the high fail rate of new products lies in a lack of understanding of consumer motivation and consumer choice.” 

Product concept testing—and actually listening to what your consumers say—is one of the most important ways to combat new product failure. 

With early feedback from your target market, you can:

• Reduce risks: Pinpoint potential flaws and address them before investing too much into product development

• Ensure market fit: Understand customer preferences and pain points—and whether your new product solves them

• Inform product development: Collect insights for refining the product and prioritizing the features your customers want most

• Builds confidence: Gather data that helps stakeholders and investors gain confidence in the project

• Improve marketing strategies: Learn which segments of the market are most receptive to the idea—and how to create effective messaging

A case study: how L’Oréal has won consistent customers since 1909

L’Oréal was founded in 1909 as the Société Française de Teintures Inoffensives pour Cheveux—aka, the Safe Hair Dye Company of France. Over a century later, it’s the leading beauty manufacturer in the world, generating $44 billion in revenue in 2023 alone. It owns practically half the beauty and skincare brands on shelves today, from Maybelline and NYX Professional Makeup to Dark & Lovely and CeraVe. 

Celebrities and activists like Viola Davis, Eva Longoria, Soo Joo Park, and Jaha Dukureh act as ambassadors for the company’s popular L’Oréal Paris brand. 

How does this multi-national company continue to stay relevant? 

In 2017, two L’Oréal marketing executives, Nadine McHugh and Axel Adida, sat for an interview with Google’s Kim Larson. 

Here’s the secret to their company’s ongoing success: constantly testing product and marketing ideas with their consumers and paying attention to the results. 

Specifically, when Larson asked Adida for the brand’s “secret sauce,” he said, “As marketers, it’s on us to maintain relationships with consumers as their appetites change.” He later added that innovation is only possible “if you have a deep understanding of your customers.”

Speaking about the consistent and interactive testing the company does for its products and ad campaigns, McHugh added, “We don’t always get the results we were hoping for, but even in those cases, there are usually important lessons that can help us decide which direction to move in next.”

In other words, product concept testing is a core driver of the company’s success—and so is ignoring confirmation bias when it comes to the results. 

How do companies conduct product concept testing?

Companies test product concepts by sharing prototypes or detailed descriptions with potential customers through surveys, focus groups, and interviews. They then use the feedback to improve the idea based on what they learn.

Different organizations may prefer different methods for conducting this type of testing. But there’s a core group of steps you can follow to get the feedback you need.

A step-by-step guide to product concept testing

1. Set clear goals and hypotheses

Start by figuring out exactly what you want to learn from your concept test. Are you trying to see if people like the product idea? Do you want to understand how it might fit the market? Or do you want to identify areas where you can improve an existing concept or product? 

All three of these goals might sound good to you, but try to focus on one at a time. Many marketers start with the goal of seeing if there’s demand for the product. If the feedback suggests there is, the next step is to identify the target market—aka, to find out more about who needs and wants it. 

As you move past early prototypes, you’ll want to figure out how to improve the concept into the best possible product it can be.

To help guide your research, come up with some educated guesses—hypotheses—about your concept. These can include: 

• Customer interest hypothesis: Potential customers will find the product concept appealing and express a desire to purchase it.

• Market demand hypothesis: There is a significant market demand for the product within the target demographic.

• Competitive advantage hypothesis: The product concept will be seen as having a competitive advantage over existing solutions in the market.

• Pain point solution hypothesis: The product effectively addresses a common pain point or need identified within the target market.

• Pricing hypothesis: The proposed price point for the product will be considered fair and acceptable by potential customers.

The point of these hypotheses is not to confirm them but to test your results against them. Each hypothesis acts as a hard line the test results either support or don’t support. 

2. Choose the right audience

You might not know right away who will find your new product appealing. But you can start broadly with an educated guess. Think about age, location, gender identity, and other key factors. 

When you get your feedback, you’ll want to dig into the demographics of your respondents to identify narrower segments. 

Let's say you have an idea for a new type of water bottle that keeps water cold for 24 hours and is 100% made from recycled material. You might not know right away who will find your new eco-friendly water bottle appealing. But you can start broadly with an educated guess. You might guess that your target audience includes:

• Environmentally conscious buyers, between the ages of 18-45, who live in urban areas, and who identify across all genders

Once you gather feedback, your results might show that your idea's biggest supporters are actually:

• Women aged 25-35 who live in coastal cities and are fitness enthusiasts

With these insights, you can refine your product features and marketing strategy to better target this specific group.

3. Make realistic prototypes

Now it's time to create something your survey, focus group, and interview respondents can look at or interact with. Depending on your product idea, this could mean developing digital mockups, crafting physical models, or producing detailed drawings.

The key is to ensure that these prototypes are as realistic and comprehensive as possible. For digital products, use tools like InVision or Figma to create interactive prototypes that users can navigate. For physical products, consider 3D printing or handcrafted models to represent the actual product's look and feel.

The closer your prototype is to the final product, the more accurate and useful the feedback will be. Include all essential features, design elements, and functionalities that will be present in the final version. This realism helps testers understand the product and provide insightful feedback.

It can be tempting to skip this step and ask users a simple question like, "Would you buy a machine that folds laundry and puts it away for you?"

I mean, who wouldn't say yes? Concept testing complete, right? Time to make bank.

But in building a prototype, you might discover that a laundry-folding machine is extremely cost-prohibitive. Both for you and for the consumer. 

Let the story of FoldiMate be a cautionary tale. The now-defunct company developed a prototype for a laundry-folding machine. Despite huge consumer interest in such a machine, it had a lot of problems, including a nearly-$1,000 price tag and an inability to fold socks, sheets, and underwear. 

Plus, it couldn’t even put the clothes away for you.

FoldiMate never ironed out its many wrinkles and officially went out of business in August of 2022. 

Even its AI-driven competitor, Laundroid—which was planning to sell its machines for a whopping $16,000—went out of business. Production costs proved too prohibitive, and the company couldn’t claw its way out of the $20 million debt it incurred trying to bring the product to market.

Running product concept testing on prototypes doesn’t just give your target audience a better understanding of your concept. It also helps you understand the cost of manufacturing a product to see if it’s even viable for your company to produce. 

If it’s too costly and doesn’t work quite right, it might not be worth the trouble. No matter how much everyone thinks they want it. 

4. Test across multiple channels

To get a well-rounded view of your product concept, use different methods to gather feedback.

Online surveys are perfect for reaching a large audience and spotting trends in how people feel about your idea. 

Focus groups let you dive deeper into discussions, giving you rich insights into what potential customers think and feel. 

In-person interviews provide a personal touch and let you explore individual opinions in detail. 

Social media polls are a quick and easy way to gauge interest and get immediate reactions from a wide audience.

Use tools like Qualtrics, SurveyMonkey, Typeform, and Dovetail to help you gather qualitative data from a variety of sources.

You should also let people experience your concept firsthand for the best insights. 

Virtual demos can showcase your product to people no matter where they are, giving them a taste of what it’s like to use it. Beta tests, where users try out a nearly finished version, can help uncover any last-minute tweaks needed. Live try-out sessions, like demos at events or pop-up shops, allow you to see real-time reactions and gather spontaneous feedback.

5. Gather and organize feedback

After running your product concept tests, the most important thing you can do is pay careful attention to the feedback.

Start by collecting all the feedback from your various testing methods. This could include survey results, notes from focus groups, recordings of interviews, and comments from social media polls. Organize this data into a comprehensive report. Consider using graphs and charts to make it easier to review. Look for common themes and suggestions that come up repeatedly.

These patterns can show you what your potential customers like and dislike—and what they believe could be improved.

Once you have your feedback organized, it’s time to analyze it. Use qualitative methods to understand the nuanced opinions of your respondents. This might involve coding and categorizing comments to identify key themes. 

On the quantitative side, look at the numbers to see which aspects of your concept are most and least popular. Pay special attention to feedback that appears frequently or seems particularly significant.

6. Refine your concept

Finally, remember to incorporate the things you've learned. Use your analysis of the feedback to make necessary adjustments to your product concept.

This might mean tweaking certain features, redesigning aspects of the user interface, or even rethinking your overall approach. Develop new prototypes that incorporate these changes and prepare to test them again.

With this iterative process, each round of feedback brings you closer to a final product that meets customer needs and expectations.

Testing and refining in cycles allows you to perfect your concept before it goes to market. This, in turn, significantly increases your chances of success.

Key takeaways

Ready to start testing your most exciting product concepts? Keep these three key takeaways in mind: 

• Product concept testing is essential to the success of a new product. In a market where an estimated 25-40% of products fail to earn sales after two years, there’s a lot at stake. The longest-lasting companies keep their consumers’ opinions and experiences front and center throughout the concepting phase. 

• You can test concepts in just six steps. To test a product concept, follow these six steps: 

• Set clear goals and hypotheses

• Choose the right audience

• Make realistic prototypes

• Test across multiple channels

• Gather and organize feedback

• Refine your concept

• Testing doesn’t stop after the first cycle. The best way to make sure you create a viable product is to perform more than one round of product concept testing. Each time, the concept should be improved based on past feedback. You’ll eventually get as close to perfect as you possibly can. Only then should you invest in full-scale product development and launch.

The heart of any product concept test is the people who give their feedback. With Tremendous, you can reward respondents for their valuable insights in exactly the way they want. Our service is free to use, and we offer 2,000+ redemption options in over 200 countries. 

Sign up now to send your first reward in minutes, or talk to our sales team to learn more.