Product innovation

What is product innovation?

In general, product innovation refers to the process of realizing new products — or new product features — that create added value for customers and employees. 

This can range from a major innovation that entirely disrupts the market to gradual improvements that result in new models that are so fundamentally different from the original that they cannot be compared.

However, for some organizations, product innovation is limited to the creation of entirely new, breakthrough, or never-before-seen products and services only.

Such is the case for organizations who only decide to expand their existing product portfolio by introducing another product or service.

But then, for product innovation, that’s not the case — as product innovation can happen in two ways:

  1. By improving the products that you already have
  2. By offering a completely new one on top of what you are already known for

Why is it important?

Product innovation is vital because it allows businesses to grow and meet client demands.

Furthermore, it enables organizations to enjoy other benefits such as:

  • Taking advantage of trends and opportunities. When a new inclination in a specific market rises, product innovation is what allows companies to remain relevant.
  • Generating higher business revenue gains. According to studies, the introduction of new products accounts for one-fourth of a company’s overall sales profit.
  • Improving customer satisfaction
  • Attracting new markets
  • Developing a competitive advantage

  Examples

  • Collect ideas for new products

  • Define ideas for new services
  • Users add new feature requests (ideas)

  • Users help select the best features

  • Customers score the best new products or services

  • Trend analysis based on user input

  • Build future product roadmap

  • Stimulate and measure the progress of development roadmap

Experience Accept Mission
Use case – Product innovation development
Use case – Product innovation development
Use case – Product innovation development
Use case – Product innovation development
Use case – Product innovation development
Use case – Product innovation development
Use case – Product innovation development
Use case – Product innovation development
Use case – Product innovation development
Use case – Product innovation development
Use case – Product innovation development
Use case – Product innovation development
Use case – Product innovation development
Use case – Product innovation development

Four Types of Innovation

Most of the time, when people talk about innovation, they usually speak of a new product or technology in the market. However, innovation is so much more than that. In fact, it can be implemented in a wide range of interests, fields, and disciplines.

Take this as our definition of innovation:

“Innovation is the process of realizing new products, processes, propositions, or business models to create added value for customers and/or employees.”

This means that true innovation can be about anything that provides value for your clients and organization. Hence, product innovation is only one of them.

Here are the four types of innovation:

Use case – Product innovation development

1. Financial Innovation

This form of innovation is primarily concerned with how you generate money, particularly with the business formats and payment methods you use for your customers.

This form of innovation is found in companies that have begun to use various monetization strategies such as flexible pricing, subscription, membership, and others. Case in point, Netflix.

Netflix is a great example of financial innovation. It is a streaming service that operates on a subscription basis.

Means, you only pay for your subscription monthly or yearly, depending on your time of preference, instead of paying per movie, tv show, or game you want to watch and play.

You can also choose the plan that’s right for you — mobile, basic, standard, or premium — depending on the price, video quality, resolution, and devices that you want to use it with.

2. Process Innovation

This type of innovation focuses on the processes utilized to create or sell a product. In process innovation, the product is not modified in any way, but the overall methods for generating or selling it are updated or enhanced for the better.

Process innovation is typically conducted to reduce time and money, or to better satisfy customers by introducing new technologies, software, equipment, and other improved methods. In addition, it may also necessitate a philosophical or institutional shift.

One of the best examples of process innovation is how you can order McDonalds and pay for it via food delivery apps like FoodPanda. Note that in this example, the product is not modified in any way, but the way of selling it can now be done online instead of the usual in-person setup.

3. Product Innovation

Product innovation is primarily concerned with the product, the product line, and the service. The purpose of product innovation is to increase or preserve the company’s present market share and make it relevant even in the future.

Most individuals are aware of what product innovation is. In fact, among all types of innovation, this is probably the most popular and concentrated on. But again, as what is written above, product innovation is not only limited to the development of new products per se.

Product innovation may also refer to any improvements in design, materials, feel, appearance, capacity, usefulness, and overall user experience.

However, the most common type of product innovation is the introduction of new products in a product line, just like what Google did a couple of years back.

Google used to be a search engine only. In fact, it has been the long-standing rival of Yahoo in the growing years of the internet.

However, unlike Yahoo, Google made itself future-proof by eventually making other products that would lead into what we know now as the tech giant’s ecosystem  — Google Drive, Google Calendar, Google Docs, etc.

This product innovation helped establish Google into the industry leader that it is today.

4. Delivery Innovation

Delivery innovation deals with three things — channel, brand, and customer engagement. The focus of this innovation is on delivering the product to a certain market or to a new channel and optimizing customer satisfaction. Case in point, Sephora.

Sephora is a good example of delivery innovation. Overtime, the brand had successfully built an omnichannel strategy.

When you shop at their physical store, you will be guided by beauty advisors who will gather cosmetic-related data about you (acidity, oiliness, and many others), and will help you purchase the best products for your face.

Virtually, beauty tutorials, consultations, and advice are done via AI chatbots. Plus, its mobile app also has the ability to help customers learn more about various products.

Users can also utilize interactive features that resemble their in-shop experience, such as Color IQ and Sephora Virtual Artist, that could help them find the perfect foundation shade and makeover essentials.

Examples of Product Innovations

To understand product innovation more, here are some other examples:

1. Spotify

We may have used Spotify’s subscription service as an example of financial innovation above. However, Spotify has also done product innovation, which means that one company is capable of doing various innovations when given the right time and resources to do so.

Not so long ago, Spotify disrupted the market by offering a freemium-based music streaming service. But now, Spotify has added podcasts into their product line, which are audio programs or a series of audio episodes centred on a specific topic.

Today, the most popular influencers, celebrities, and public figures use podcasts as a method of reaching out to their audiences.

2. Uber

Uber used to be a taxi service alone. However, 5 years after its operations, the company introduced Uber Eats into its list of services.

Uber Eats is a food delivery app where people can order their favourite dishes and cravings from their desired local restaurants and have it delivered right into their homes.

Now, Uber Eats has grown into one of the most popular food delivery platforms. According to statistics, Uber Eats has 81 million users in its 6,000 serviceable cities throughout the world. And gross bookings increased to $51.6 billion in 2021, up from $30.2 billion in 2020.

3. HubSpot

Hubspot started in 2006 as a marketing platform. But in 2014, it expanded as a CRM and Sales tool with an intent to offer a new suite of mechanisms that could help their clients expand their businesses quicker.

However, noticing that their clients’ businesses have grown, they decided to update their sales software HubSpot’s Sales Professional, providing the capabilities that expanding sales teams require to build stronger relationships and complete more deals.

The improved HubSpot Sales Professional adds extra functionality to the HubSpot Sales Hub, enabling sales leaders and managers to:

  • Work smarter via sophisticated email templates, document monitoring, and scheduling
  • Engage with ideal prospects by leveraging web chat, automated lead scoring, and email sequencing
  • Effectively handle their organization’s sales process through a series of extensive deal and task automation capabilities, with elements for comprehensive team management
  • Determine sales methods that work via bespoke dashboards and reporting options that monitor and evaluate sales success

4. Microsoft

From its emergence in 1975, Microsoft has come a long way from its first product — an interpreter for basic programming language — to the creation of operating systems, software, and in 2016, Microsoft Teams, a cloud-based collaboration tool for organizations.

Then, from its launching of Microsoft Teams in 2016, Microsoft went further by integrating various products into what was once known as just a collaboration tool.

Other than its latest product features, MS Teams is now integrated with LinkedIn, a collaboration that allows its users to see someone else’s LinkedIn profiles in one-on-one chats. You can also share audio systems now over calls, or enable live transcription during conversations.

5. Apple

Of course, we can never talk about product innovation without Apple, which is known for its high-class products and premium ecosystem. In terms of product innovation, the good thing about Apple is this:

For years, Apple has taken the lead in the tech industry by gradually introducing new products and making them work together through a seamless ecosystem.

It’s not even just the iPhone, or the iPad, or the iWatch — it’s the fact that in comparison to its rivals, Apple devices frequently have additional functions when linked with other Apple items, a system that’s clearly designed to keep its users from leaving.

With Apple, each of its products is good on its own. But when used together, new experiences unfold, like transferring of large files via Airdrop, airpods synching on all apple devices with one-time pairing, Safari syncing passwords on all devices, and many more.

How to Collect Ideas for New Products

The first step in product innovation is idea generation. This is where you can come up with new ideas for products.

Generally, ideas can come from anywhere – a problem that needs solving, a gap in the market, or simply a flash of inspiration. It can also be obtained from many different sources, including brainstorming sessions, customer feedback, market research, and employees.

You can do this via brainstorming, conducting hackathons, or creating innovation challenges and campaigns.

How to Score and Select Ideas

An idea should be verified before investing substantial time and money in building the product or concept to avoid the risk of developing something that no one wants. To make sure that ideas are founded on real demand, scoring and selection tools can be applied.

How to Follow Progress of an Innovation

To be more effective with innovation, companies need to have an overview of all innovation initiatives that are proposed, in progress, or concluded.

All innovative efforts should be examined on whether they are helping one or more strategic areas of the business, what specific domains these are, and how they are being carried out.

Hence, innovation managers need to assess the organization’s innovation performance. They need to keep track of all progress and results to drive innovation efforts in the right direction.

This is where automated reports of calculated success and insights come in.

The Stages of Innovation

There are six stages to successful innovation:

1. Discovery

The discovery stage entails knowing what the scope of the campaign is. Or in particular, knowing what the problem is all about. Spending the right amount of time in this stage is important because you cannot innovate successfully without knowing what needs to be solved.

2. Ideation

Ideation involves collecting ideas from both internal and external parties, like clients, users, partners, and even employees. This is where you generate as many ideas as possible with as diverse a group of people.

Remember, you need to explore all the possible options and choose the best strategy to move forward with. Also, note that you should generate a minimum of 300 to 1000 ideas within a few hours to develop the best results.

3. Selection

After collecting plenty of ideas, it’s time to choose the best one by scoring and selecting all the proposed concepts. To make this stage effective, innovation managers need to set specific criteria first before deploying all concepts for people to rate and comment about.

4. Decision

Once everyone has cued in their scores, review every suggestion and decide according to the concept that has garnered the most support.

5. Implementation

Execute the concept decided on in the fourth step and keep track of the project’s progress.

6. Reporting

Keep track of your progress and celebrate your accomplishments. Share useful innovative insights and immediately measure and improve performance.

Our Solution to New Product Innovation

Collection and Management of Ideas

Within Accept Mission’s idea and innovation software, we offer the ability for innovators, product managers, and owners to set up idea boxes for the collection and management of all ideas for both new and existing products.

Scoring, Selection of Ideas, Decision Making

Development teams, stakeholders, customers, and other participants can:

  • Score ideas based on criteria set by the company’s innovation manager
  • Select the best concepts according to the scores and insights gathered from various parties
  • Keep track of selected concepts’ progress until implementation

As the administrator, you can also:

  • Configure selection rounds
  • Allow expert scoring with defined categories
  • Define a reusable list of selection criteria

Overall, Accept Mission is capable of generating the scores given by different people in various locations and timezones – making it ideal anytime, anywhere.

Stage-Gate Process

Accept Mission follows the stage-gate process, where the commercial value of the project is assessed throughout the innovation lifecycle to determine whether or not the project should continue.

Manual and Automatic Tagging of Ideas

We also deliver a powerful tag system that provides insights into trends and better analysis of ideas.

Users and admins can manually add these tags to selected ideas. Moreover, it is also possible to automate and add tags based on the description of an idea. This way, you can easily visualize ideas and analyze trends at the same time.

Reports and Dashboards

Accept Mission can help you with reports and dashboards via:

  • Innovation dashboards with KPI’s and graphs
  • Live data connection (BI software like Power BI)
  • Kanban boards, bubble charts, Gantt charts, graphs, etc.

Engaging People Internally and Externally

With Accept Mission, you can increase engagement among your desired ideation participants by having them join fun missions, share and enrich ideas, collect points, and win leaderboards through many gamification elements and undercover modes to:

  • Stimulate creativity
  • Promote inclusiveness
  • Foster participation
  • Make innovation fun, rewarding, and exciting

Here are other powerful features we offer that you can use within your business:

  • Launching innovation campaigns for new product ideas
  • Engaging customers to come up with new ideas for new product features
  • Following the progress of ideas in funnels
  • Managing product life cycles
  • Customer scoring for new products or services
  • Creating trend analytics based on user input
  • Building future product roadmaps
  • Stimulating and measuring the progress of development roadmaps

Start a free trial to explore Accept Mission yourself or book a demo and kickstart this exploration with a personal demonstration.

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Use case – Product innovation development

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ONLINE BRAINSTORMING

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COLLECT IDEAS FROM DIFFERENT SOURCES

Capture and further develop ideas

COLLABORATE ON IDEAS

Help users work together to generate new ideas and improve them