When a team develops a new product, they often fall into the trap up making assumptions of two broad types: customer needs and competitive capabilities. And these are not independent. Here’s why:
It’s a pointless question to ask, “What can my competitor do?” unless we put the question in the context of what customers need. Too often, new product development teams spend little effort understanding competitive capabilities… and when they do, the analysis revolves around test procedures and measurements that compare these competitors to their own products.
Big mistake! To properly understand competitive questions, a team needs to first ask these fundamental questions: 1) Of all the possible outcomes we could deliver to a customer, which are the most important and least satisfied (and therefore most eagerly sought), 2) How does the customer measure whether or not these outcomes are being delivered, and 3) How good is “good enough” and how bad is “barely acceptable” for the customer?
Example: Suppose you produced resins that your customers use in paint formulations. And it turns out that “scrub resistance” is one of the most important, least satisfied outcomes. Then, suppose you learned that they use the Acme Scrub-O-Meter to measure scrub resistance. Finally, you learn from customers that 100 scrub cycles (before wear-through) would be barely acceptable, but that they would have no use for anything above 300 scrub cycles.
Now—and only now—are you prepared to truly measure competitive capabilities in a meaningful way. But note that it takes some effort on your part to gather this information. There’s a good chance your competitors are not doing this, providing you with a competitive edge. In the next blog, we’ll look at three really good things that happen when you do this.