FEATURE11 July 2011

Nielsen’s blueprint for successful products


Nielsen believes its new approach to product development research can give products a three-in-four chance of success. We spoke to the agency’s North American product innovation chief Vicki Gardner to learn more.

Nielsen recently announced a new twelve-step approach that will inform its Bases suite of new product development research services.

The new approach breaks down the factors that influence a product’s success into twelve points, including things like how distinct the proposition is, how persuasively the message is conveyed, how well the product performs and the cost-benefit trade-off for the buyer.

The firm believes that, with its new approach, it can dramatically reduce the likelihood of a flop, with a success rate of about three in four. That’s compared to less than one in four for all new products, and just under half for products tested using the old approach. It’s a bold claim. We spoke to Vicki Gardner, the company’s senior vice president for product innovation, North America, to find out more.

Research: How was this new approach developed?
Gardner: We created a framework a few years ago around how consumers adopt new products. It took into account things like: a new product first needs to stand out to the consumer, it needs to communicate something, they need to be interested, find it in the store etc. But we knew it was a theoretical framework we built – it made a lot of sense but it wasn’t empirical yet.

So we looked at hundreds of different ways of asking the questions and we fell upon these twelve key areas. We tested this with over 20,000 initiatives and then we followed about 600 of them in-market over the course of a few years. Of those 600, we already saw that about half of those were successful. So through the Bases system you’re already significantly increasing the odds of success, and there’s probably lots of reasons why that is – some of it I think is going to be due to our advisory, and some of it is going to be due to the types of initiatives or companies we work with. But [we asked ourselves], how can we get this to be better?

So we met with our clients and said, at what point would you say you’re willing to take a bet? And our clients said, we feel like if an item has a 2:1 chance to succeed, we’re generally comfortable making that bet in-market.

What we’d previously done is thought of everything in a database sense, so the higher you are in the database, the better. And that’s good, but you don’t always need to do equally well among everything. What we essentially saw is, you’re only as strong as your weakest link. So for each of these factors we said, what is the threshold for success? And they vary, so for product delivery you want to be in the top third, credibility you might want to be in the 30th percentile, and maybe ‘meet desire’ you need to be about average.

Have you defined these attributes in a standardised way that can be measured before the product goes to market?
We have. These are tested among people who’ve usually seen a concept board, and then they’re asked about that. There are a couple of factors that we’re talking about – product delivery and long-term product loyalty – that people would have had to try the product in order to evaluate, but for ten [of the twelve] they’re prior to trying the product. And we’ll give [clients] a conditional probability of success without those two.

How do you define success?
Success is defined as maintaining stable distribution over a couple of years, overall volume potential in-market and incrementality [stable sales growth] in-market.

Will you hold yourselves to this 75% success figure?
We’ll continue to do R&D on this to see how we can continue to improve on the thresholds that we’ve set, and the advice we’re giving clients. We continually do R&D on that, and we validate our forecasts. We all know there are things out of our control but I think we’ll want to understand how well our advice worked, and then also how are we able to work with our clients to help improve the decision making process if needed.

Your clients will certainly be watching out for that 75% figure.
Yes, we’re starting with nearly half [of 600 products tested with Bases that were successful] and yes, we’ll absolutely be examining how close we do versus that number.

Some research tools designed to weed out bad ideas are criticised for getting in the way of really innovative ideas too. Are you concerned that your measures of success might lead to products that are OK but not great?
I don’t have that concern. In fact, one of our key questions that we ask is, how many alternatives do you have in market for this [product]? Because what Nielsen wants, what the manufacturer wants, what the retailer wants and what the consumer wants, is innovation that is truly new and fulfilling a need for the consumer. So I think this actually will help point to where true innovation lies.