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Innovating to fulfill unmet customer needs


BOSTON — There’s no other aspect in business that would tolerate an 85% failure rate. So why should it be tolerated in new product development? That’s one of the key questions addressed by Taddy Hall, SVP of the Nielsen Innovation Practice and leader of the Breakthrough Innovation Project, at the NACDS Insight Session titled “Breakthrough Innovation: From 85% Misses to 85% Hits” on Sunday. 

“We believe that [innovation] is somewhere between magic and art, and it’s [in] this unknowable, unpredictable realm — it’s simply not true,” Hall said. Flopping the innovation success rates so that 85% of new launches are hits is definitely achievable, across industries and across categories, Hall added. 

Another fallacy associated with innovation is that in order to aspire to higher rates of return, you need to embrace higher levels of risk. “There is no relationship between risk and return,” Hall said, suggesting that a routinely well-vetted innovation pipeline represents the ideal — low risk and high return. 

The truth is, if you produce a solution that resolves a previously unmet customer need or fulfills an unmet aspiration, as defined by the customer (not the marketer), the product launch has a high chance of succeeding. “If you can embrace and operationalize the definition of innovation, that emerges from consumer’s actual behavior, the implications can be transformational,” Hall said. 

Winners in innovation do a few things right, Hall said. “One [is] you can see the insight brought to life in the creative execution. Second is the in-store activation; it’s hugely important. With many brands, the in-store activation and the package design are the [leading sources] of awareness and obviously critical in driving trial,” he said. “Finally, what we found from these winners is that 40% of all trial occurs in the first 100 days. So make sure you are on top of launches because there are inevitable surprises in launches.”

“Breakthrough innovation is not random,” Hall said. “There’s a very disciplined process by which these breakthrough winners are generated. Much better innovation outcomes are absolutely a choice.”

There are three criteria with which Nielsen identifies breakthrough innovators. The product needs to be distinct; the product needs to be relevant with at least $50 million in year-one revenue; and the product needs to have endurance by maintaining at least 90% of its sales volume through year two. 

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