How to do product concept testing in B2B
September 1, 2023
The earlier you start testing something, the sooner you identify potential opportunities for improvements – or errors in judgment that need correcting.
The same is true of concept testing for products and services. Sometimes it’s a small tweak that can unlock additional revenue and market share, other times it’s a design or positioning flaw that will harm its uptake.
Either way, oversights in new product development can be costly the longer they take to find and fix.
One study run by NASA suggests that fixing hardware or software errors while manufacturing is 7-16 times more expensive than during scoping. Addressing them when it’s gone live is 29-1500 times more costly!
On the flip side, an in-demand and well-designed product can fuel your company’s growth. According to McKinsey, over 25% of total revenue and profits are attributable to new product launches.
First things first, new concepts should aim to fulfill unmet needs. Alternatively, they should create better experiences or outcomes to target imperfectly met needs.
Otherwise, products are more likely to merely add to the noise, rather than cutting through it. If that’s the case, their commercial performance will likely be underwhelming.
Researching customers’ objectives or jobs-to-be-done and how they’re currently doing those jobs is a reliable way to find better solutions to their challenges. This framework has formed the basis of many successful B2B product and service launches.
And when you have business-focused product concept ideas that are ready to test, there are also differences to factor in for a target audience that is B2B and not B2C.
For instance, you need to work out who is best placed to provide feedback on your product – the purchase decision approver, the product researcher, or the end-user? Then there’s IT and Finance – there are often several influencers involved in the B2B buying process.
Done the right way, product concept testing methods provide valuable insights. Given the time and resources required for a product development process, concept testing helps ensure ROI – identifying risks to address and rewards to capitalize on, well in advance of the launch.
Benefits of concept testing market research include:
- Evaluating several competing concepts
- Getting internal stakeholder support for a new concept
- Checking your preferred concept is commercially viable
- Changing or refining features
- Developing the product iteratively
- Informing your go-to-market strategy
- Testing updates or add-ons after launching
Best practices for product concept testing in B2B
You can use quantitative and qualitative research for this type of project. Qualitative research is more exploratory and helps you understand the reasons why concepts are likely, or unlikely, to resonate with buyers.
It’s a very useful methodology for concept testing, whereas quant provides the robust evidence you need for concept validation.
Whichever methodology you use, product concept testing research needs to cover several key areas including:
- Needs met
- Use cases
- Areas for improvement
- Likelihood to adopt
- Likelihood to buy
Insights around these areas can inform how you refine and improve concepts, or different versions of a core concept.
With this information, you could also eliminate any poorly performing concepts from consideration. Alternatively, respondent feedback might unveil some scope for another concept altogether.
Iterative research allows for further rounds of testing, if you want to make changes based on the initial feedback, before moving on from concept testing to a concept validation stage.
Is the concept clear to understand? Why / why not?
Customers or prospects should easily understand what the product’s purpose is and what it does. It shouldn’t take long or require much explanation.
If the feedback from concept testing shows this isn’t the case, probe deeper to find out why. It could be simply poor positioning – a good product presented badly.
That’s useful insight for your sales and marcomms strategy. But a bigger problem is if respondents clearly understand the concept but aren’t sure why they need it, suggesting the product isn’t targeting unmet or imperfectly met needs.
#2 Needs met
What needs does the product meet? What needs doesn’t it meet?
The research should get prospective buyers thinking about their business challenges that need solving. Also, to what extent they have or don’t have good solutions for them.
Then, explore to what extent this concept would meet their needs. If there’s a key need that buyers don’t think the product meets, you may have to rethink the concept or how you’re presenting it.
#3 Use cases
How and when would customers use the product? When wouldn’t they want to use it?
This is particularly important in industries where loyalty is preferential, not exclusive. In this case, ideally your product or service will be appealing enough to get the majority of their spend or usage time.
If it’s only going to get backup or second-choice status, its impact will be limited. This is also why often NPS isn’t the right metric to track for B2B product advocacy.
What are the product’s strengths? The benefits and useful features should be quick to recognize during concept testing.
But different influencers in the decision-making unit may have varying priorities. Some strengths may appeal more to some buyers than others – if so, that’s valuable insight for marketing and sales.
Does the product have any weaknesses?
There may be some features or benefits that buyers would expect to see, but seem to be missing during concept testing.
If they are there, then you may need to promote or draw more attention to them. If they aren’t there, you’ll need to weigh up whether these are significant omissions or not.
#6 Areas for improvement
Do customers recommend any changes or improvements?
Even if the concept receives positive feedback, prospective buyers may see some areas for improvement.
They may not be essential, but if they have the potential to add significant value then they’re worth exploring.
Is there anything else like this available elsewhere?
Ideally, competitor research during the concept creation phase would have identified how unique the new product will be in advance.
In most cases, to consider a product, customers need to see clear points of differentiation compared to similar offerings from competitors.
If it’s not doing anything different, or better, then they probably won’t think it’s worth their time and effort switching away from their current solution.
But if the product is genuinely unique and respondents don’t see this, you may need to alter how you position it.
#8 Likelihood to adopt
How likely are customers and prospects to use the product?
Ultimately there’s little value in customers or prospects thinking a product is great if they won’t actually use it.
Questions around likelihood to use must get respondents thinking about the steps involved to bring the solution into their business. If they need more information or need answers to some queries and concerns, the research should identify this.
#9 Likelihood to buy
How likely are they to buy the product?
This isn’t the same as likelihood to adopt. To answer this question properly, prospective buyers need a sense of the cost and/or pricing model.
You can research pricing strategies too as part of a new product development process.
For more robust insights, you can also validate buyers’ likelihood to adopt or buy your final product with quantitative research.
Quantitative research will statistically assess market interest in the concept so far. What proportion of your customer base is likely to buy it?
If the concept testing stage produced several candidates, you can also use this validation stage to see which one to take further and which ones to reject.
Bear in mind that you usually need to be comfortable with smaller sample sizes in B2B compared to B2C research.
That’s because senior business decision-makers are time-poor and hard to reach for a wide range of reasons. Only a careful and thorough approach to recruitment will yield valuable insights in B2B.
In addition to statistically validating a concept, quantitative research is the most robust way to do pricing research. This reveals how much customers are willing to pay for a product or service, by providing insights around three core components:
- Tactics e.g. anchoring, decoys, trials, or bundling pricing
- Approaches e.g. marginal cost, cost-plus, or tailored pricing
- Models e.g. flat rate, tiered, usage-based, or per-user pricing
Finally, with a validated product concept and pricing strategy, you can complete a market assessment.
Quantitative research can estimate your serviceable addressable market (SAM). This is the proportion of the total addressable market (TAM) within your product’s scope.
Going further, you can estimate your potential market share by calculating the serviceable obtainable market (SOM). This is based on key factors including your likelihood to adopt or buy statistics.
Combining this with insights from pricing research, while deducting the costs you’ll incur, you can work out an approximate dollar value of the opportunity.
Want to know if your research objectives need a concept testing survey?
Best practices for product concept testing in B2B
#1 Randomize the order you show concepts to respondents
Techniques such as sequential monadic testing involve showing respondents the concepts in a random order. For example, 50% should see Concept 1 first and 50% should see Concept 2 first.
Otherwise, there is a risk of biasing the results. If 100% see Concept 1 first, they have a chance to evaluate it without any other concept to compare it with.
When seeing Concept 2, they’ll start comparing it to Concept 1, for better or worse. There may also be a recency bias from seeing Concept 2 last.
After all, there are several cognitive biases and other emotions that affect B2B buying behavior – but randomizing the order removes recency bias from the equation.
#2 Seek feedback from different key buyer groups
Of course, if you operate in several markets, it’s important to conduct international market research in case a concept that appeals in one country, doesn’t in others.
And if you service different types of customers, businesses of different sizes, or buyers with varying budgets, it’s worth getting their range of views during the concept tests.
Some benefits or features may appeal strongly to one group, while other buyers may have an interest in aspects you were planning to deprioritize.
Pricing research conducted with several segments lets you identify the cost at which you can maximize market share, revenue, and other success metrics.
If you haven’t done it already, then segmentation research identifies your high-priority groups.
#3 Explore your ‘hidden’ results from concept testing or validation
What customers think and say doesn’t always tell the full story. Sometimes, they may over-rationalize their answers, overstating the importance of some product benefits or understating others.
Regression analysis is a more scientific way to identify the derived importance of criteria involved in decision-making. It is an advanced statistical technique for quantitative datasets, analyzing connections between answers to different questions in rigorous detail.
It can evaluate the trade-off analysis a customer would make for real purchases. It can also provide insights into subconscious thinking, rather than claimed.
And there are also options for qualitative research, to identify the subconscious factors behind what respondents are saying during concept testing. A skilled moderator’s projective interview techniques can dig deeper to identify these.
Looking to run some B2B concept testing market research?
Benefits of concept testing research include: evaluating several competing concepts; getting internal stakeholder support for a new concept; checking if your preferred concept is commercially viable; changing or refining features; developing the product iteratively; informing your go-to-market strategy; and testing updates or add-ons after launching.
Concept testing methods need to cover several key areas. A concept test survey or study should include: comprehension; needs met; use cases; strengths; weaknesses; areas for improvement; uniqueness; likelihood to adopt; likelihood to buy.
Quantitative research statistically assesses market interest in the concept so far. If the concept testing stage produces multiple concepts to take forward, you can determine which ones to reject at the validation stage.
Quantitative research is also the most robust way to do pricing research. It reveals how much customers are willing to pay for a product or service, by providing insights into: tactics; approaches; and models.
You can complete a market assessment with a validated product concept and pricing strategy. Combining this with insights from pricing research, you can work out an approximate dollar value of the opportunity.
Best practices for product concept testing in B2B
To run an effective concept testing survey, we recommend that you: randomize the order you show concepts to respondents; seek feedback from different key buyer groups; and explore your ‘hidden’ results from concept testing or validation.