Consumer Goods Innovation Pipeline

For every process, there is a pipeline. Whether the process is product innovation, sales and marketing, or hiring, I've found over the years that the best way to approach these processes is the pipline approach. Do you need 10 new customers each month? Start at the end of the pipeline and work your way backwards to discover how many campaigns to create. For example, if your win rate is 25%, then you need to propose to 40 prospects in order to win 10 new customers. And if your campaign response rate is 5%, then you need to reach out to 800 leads in order to get the 40 prospects that you make the proposals to that will turn into the 10 new customers you need.

Want to create the next best mousetrap for your customers? The same thing works in product innovation. Take this data from Accenture on the consumer goods innovation pipeline:

A 2008 study of 100 consumer goods companies conducted by AMR Research for Accenture showed that only half of the new-product ideas that companies fund and seek to develop make it to market. Of 553 new-product ideas generated in a year, 74 went into development, and just 38 were eventually launched. The ratio of ideas to launch is higher in the home and personal care category (21:1) than in the food/beverage/alcohol (13:1) and apparel (9:1) categories.

Source: Harvard Business Publishing

The Accenture study showed that very few new product ideas ever make it (see graphic below.) For entrepreneurs trying to create a new product, take note: it took Thomas Edison 10,000 tries to get the light bulb right, so don't give up.