Mitigate Danger With a Product Innovation Technique

Progressive merchandise can result in elevated market share, better buyer loyalty, and diversified income streams. Most innovation efforts, nonetheless, include important threat of failure. Putting the client on the heart of the product innovation course of is vital, however many product managers battle to shift their mindset from designing services to designing buyer experiences.

I’ve spent greater than twenty years researching and making use of innovation methods to create consumer experiences that promote sustainable and significant progress. I first realized concerning the following framework within the Innovation Dash enterprise training course supplied by Part. This adaptation, which will be utilized in nearly any trade, has allowed me to take a practical method to the growth course of. By making use of this product innovation technique, you may be well-positioned to:

  • Uncover latent alternatives for your small business inside your goal market.
  • Reframe buyer issues to design the best answer.
  • Higher perceive your prospects.
  • De-risk and prioritize innovation concepts.

Figuring out Product Improvement Danger

You might be conversant in the Ansoff matrix, a grid-style planning software that plots out the sorts of progress that come up from new and present product growth and growth into new and present markets.

An Ansoff matrix showing types of growth that arise from product development and market expansion.

I additionally discover the matrix useful for visualizing innovation methods and evaluating threat stage. Right here’s what every quadrant represents:

  • Market Penetration = Low Danger
    Enhance by optimizing an present product for an present market.
  • Product Improvement = Medium Danger
    Improve by providing a brand new product to an present market.
  • Market Improvement = Medium Danger
    Broaden by launching an present product in a brand new market.
  • Diversification = Excessive Danger
    Diversify by creating a brand new product for a brand new market.

The Product Innovation Framework in Motion

Upon getting reviewed the potential progress paths together with your workforce, use this four-stage framework to information your product innovation course of:

  1. Perceive buyer issues.
  2. Design an answer.
  3. Prioritize new concepts.
  4. Experiment and take a look at.

These steps will make it easier to and your workforce determine new alternatives and create new experiences whereas avoiding the pitfalls that may lead innovation initiatives astray. To see the framework in motion, we’re going to look at how fictitious airline firm InnovateAir may leverage it to drive innovation as a part of a progress technique.

Perceive Buyer Issues

InnovateAir’s product managers started by segmenting the market based mostly on traveler varieties: leisure vs. enterprise. A sound segmentation technique should seize key variations in buyer conduct and wishes.

Leisure Traveler

Enterprise Traveler

  • Represents 88% of vacationers and 25% of revenue
  • Extra price-sensitive
  • Much less time-pressed
  • Represents 12% of vacationers and 75% of revenue
  • Much less price-sensitive
  • Extra time-pressed

InnovateAir’s product managers decided that enterprise vacationers are prepared to pay extra as a result of they’re typically time-pressed (and utilizing the corporate bank card)—so this phase has the perfect potential for progress. Additional market analysis signifies that enterprise vacationers are most involved about flight delays, incomes loyalty factors, seat availability, ease of journey to and from the airport, and the velocity of airport safety.

Curiosity is a product supervisor’s finest ally: It is very important attain out and speak to as many potential prospects as potential to know their views, what they’re attempting to attain, and the limitations they want to overcome. InnovateAir’s product managers performed a number of interviews with enterprise vacationers and recognized the completely different jobs-to-be-done (JTBD) utilizing a net of abstraction method. They then analyzed the first JTBD, which is flying from Metropolis A to Metropolis B.

Business travelers want to fly because it is efficient, safe, and pleasant. Barriers are the other flight activities, cost, and delays/cancellations.

By delving deeper and asking “Why,” product managers can perceive the purposeful, social, and emotional outcomes of the consumer expertise. This train pinpointed three most important the reason why enterprise vacationers need to fly: Flying is environment friendly, secure, and normally nice. It discovered the 4 most important limitations for enterprise vacationers to be price, stress, lack of productiveness, and flight delays or cancellations.

Primarily based on this train, InnovateAir’s product managers can hypothesize that the first JBTD for a enterprise traveler is to fly from Metropolis A to Metropolis B in essentially the most hassle-free, environment friendly, and productive method potential. 

Design a Resolution 

Step one in designing an answer is to know how your present providing suits within the general consumer journey. Typically, your services or products is simply half of the general consumer expertise. For InnovateAir, the traveler’s journey consists of the flying expertise in addition to related actions similar to reserving, attending to the airport, and clearing airport safety. Audit your buyer’s wider journey to seek out gaps that present alternatives for innovation that notice clear advantages.

The user journey spans booking, travel to the airport, check-in, navigating the airport, waiting to board, flying, arrival, and leaving the airport.

For InnovateAir, the journey audit recognized that completely different suppliers serve the consumer throughout their journey however there’s restricted information-sharing amongst them, so alternative exists to combine floor and flight transportation extra carefully. This might provide the client a extra seamless end-to-end journey expertise that may optimize productiveness and cut back stress.

Carry out a competency audit to take inventory of your group’s capabilities and property. Consider methods you may repurpose these to develop new options or experiences. That is what it regarded like for InnovateAir:



  • Sturdy logistics capabilities and entry to real-time flight data
  • Observe report of creating partnerships with complementary suppliers (rental automobile corporations, lodges, and so forth.)
  • Rising InnovateAir Loyalty community buyer base (100 million+)
  • Digital platform (app and web site) and engineering expertise
  • Ride-share app integration: Share real-time flight data to streamline attending to and from the airport.
  • InnovateAir Loyalty community: Allow prospects to be taught from each other and maximize journey effectivity by sharing their experiences.
  • Curated journey packages: Leverage AI methods similar to collaborative filtering to permit enterprise vacationers to get essentially the most out of their journey finances.

Taking a look at this by way of the Ansoff matrix lens, these concepts every fall into a distinct quadrant. Journey-share app integration can be market penetration (low threat); the Loyalty community can be product growth (medium threat); curated journey packages can be diversification (excessive threat).

Prioritize New Concepts

Prioritize the expansion alternatives by performing an evaluation utilizing the RIME (attain, affect, monetization, and energy) framework. For InnovateAir, all three concepts have broad attain and affect by way of the buyer worth proposition. The variations are within the monetization potential and the trouble required.

A buyer loyalty community could possibly be an important function, however implementing a social media platform can be difficult as a consequence of information privateness rules and the engineering experience wanted. Curated journey packages are additionally a compelling concept, and the switching prices to assemble InnovateAir-recommended packages on aggregator websites similar to Expedia or Hotwire are low; nonetheless, vacationers would then have alternatives to seek out even decrease costs for a similar packages on aggregator websites, and this could dilute the income potential and affect general monetization.

The perfect concept seems to be ride-share app integration, as a consequence of its broad attain, affect, capacity to monetize, and the average effort and price required to develop and launch. Additionally it is the bottom threat. That is the expertise that InnovateAir’s product managers determined to prioritize and take a look at first.

InnovateAir’s product managers analyzed the assumptions and proof for this expertise utilizing the RIME framework:


Key Assumptions and Sizing


InnovateAir enterprise vacationers: 16.8 million per 12 months
Complete journeys: 230 million per 12 months
Present ride-share uptake: 70%
Complete addressable market: 160 million journeys per 12 months


Higher enterprise traveler satisfaction with a extra optimized end-to-end expertise
Count on 75% uptake from enterprise vacationers by 12 months 5


Common value per journey: $62
Complete potential yearly spend by InnovateAir enterprise vacationers on ride-sharing journeys: $10 billion
Willingness to pay for ride-sharing is obvious
5% extra fare for the built-in expertise is an inexpensive speculation


Value = growth prices + advertising prices + partnership allowance prices
Key threat: Uber/Lyft willingness to companion

Utilizing the outcomes, InnovateAir product managers developed a speculation that when integrating ride-share apps with dwell airport data by way of the app, prospects can be prepared to pay an additional 5%, with a present common spend of round $62 per trip. The product managers thought of this to be an inexpensive assumption that could possibly be examined by working with ride-sharing corporations and conducting an A/B take a look at in a goal market. The elevated spend per trip was a lovely proposition that could possibly be shared between InnovateAir and the respective ride-sharing corporations. The general income alternative based mostly on the present penetration of airport ride-share journeys made by InnovateAir’s enterprise vacationers translated right into a wholesome approximation of $1.5 billion over 5 years.

Experiment and Check

An awesome software for de-risking innovation is testing. Product groups can run easy, low-cost experiments to take a look at their hypotheses with clear and goal standards.

The InnovateAir product workforce designed a take a look at concentrating on InnovateAir Loyalty enterprise vacationers within the US with an intra-state vacation spot to see if they’d guide their airport ride-shares utilizing the InnovateAir app somewhat than Uber or Lyft. They created the flexibility to guide a ride-share on the level of check-in for departing and arriving flights, and built-in this with dwell flight, airport, and site visitors data. A profitable final result can be 25% of vacationers utilizing the function, and greater than 50% utilizing it for all their floor transportation wants.

Give attention to the Buyer Expertise

To unlock new progress alternatives, right this moment’s most revolutionary corporations don’t focus solely on the merchandise they promote, however somewhat on the client expertise. By following the product innovation framework laid out right here, your product workforce can determine a approach to handle key ache factors to your present market that can drive extra income, enhancing your general choices. Leveraging this framework mitigates the danger concerned with revolutionary product growth, guaranteeing new merchandise are aligned with enterprise wants and capabilities and have robust ROI potential, all whereas providing a brand new, helpful buyer expertise.

Word: Any references to Uber and Lyft are made purely within the context of this fictitious case research for instance a degree. The writer has no information of any such business initiatives on the a part of these ride-sharing corporations.

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