Why Concept Testing Is Essential in Market Research

Marketing textbooks are filled with examples of products or services that flopped when they hit the market.

Take Juicero, for instance. Investors pumped a staggering $120 million into a Wi-Fi-connected juice maker that nobody indicated they wanted or needed. Unsurprisingly, it was scrapped within two years.

Or consider ESPN’s mobile phone service, priced at $400 and lacking handset choice for the target audience. The service was swiftly shut down, and ESPN opted to provide content to Verizon instead.

And who could forget New Coke? Launched in 1985, it remains a major marketing misstep. After only a few weeks, Coca-Cola abandoned the product and reverted to its old formula.

Even some of the world’s most innovative companies have failed to foresee the impact of new launches on their target market. Google, for example, arguably launched its wearable Google Glass concept too soon. Its high price did not help, and it failed to connect with consumers.

Fortunately, there is a way to avoid such failures. By conducting product concept testing as part of your market research process, businesses can develop their ideas in a safe and controlled space with the target audience.

What is Concept Testing?

Concept testing involves presenting potential product concepts or ideas to a target audience and collecting feedback to assess market potential. The concept can be a new set of product ideas, a redesign, or a rebrand.

Let’s look at a product concept example. A fintech company developing a new budgeting app might present mockups or a basic prototype to test the product’s perceived usefulness, ease of use, and willingness to pay. This sample of product concept allows businesses to fine-tune messaging, pricing, or functionality.

Testing methods can be online, such as quantitative surveys or online communities focused on qualitative insights, or face-to-face, such as focus groups or in-depth interviews. This combination ensures you hear both the “what” and the “why” from your target audience.

In market research, concept testing helps avoid the trap of internal bias. It allows businesses to validate assumptions, test resonance, and measure purchase intent in a realistic, low-risk environment.

The Role of UX Designers

UX designers play a crucial role in concept testing by employing user-centered design principles. They create interactive prototypes that simulate the user experience, allowing participants to engage with and provide feedback on proposed concepts. UX designers ensure that concepts are intuitive, usable, and aligned with the target audience’s needs. They facilitate user testing sessions, observe interactions, and gather valuable insights to refine the concepts.

The Importance of Concept Testing

1. Concept Testing Helps Filter Ideas

Concept testing helps you move beyond blue-sky thinking and determine which ideas will be a hit. It provides data that can bring the whole team on board by providing consensus on which projects to develop and which to shelve.

Great concept testing unites teams behind ideas with real potential, eliminating the need for office politics or frustrating ‘design by committee.’ With concept testing, you hear directly from consumers about what will work and what won’t.

Using a range of qualitative and quantitative techniques, you can understand the consumer view of different concepts and explore whether the types of products or services you want to develop will resonate. Employing a range of testing tools enables you to identify the product concepts with the highest appeal and understand how these can be refined. This allows you to move to the next stage of development with confidence.

It’s no overstatement to say that a well-designed, concept-testing survey or a skillfully moderated online community can pave the way to success. But any survey template or discussion guide needs to be designed to ensure that the overall package, as well as individual features or attributes, are each assessed and fed back on.

This is something that needs to happen in the early stages of decision-making. It cannot be left too late, as concept testing aims to help you iterate your ideas and tweak them ahead of launch so that they are primed for success.

2. Concept Testing Prevents Bad Decision-Making

Testing concepts in detail before launch may seem like it delays your go-to-market strategy, but it saves significant time and financial losses in the long run. Failed products or services are costly, but concept testing helps you avoid bad ideas and uncover those with untapped potential.

This is especially true in financial services. Consider the launch of a new digital insurance product. If consumers don’t understand the value or find the interface confusing, the product fails before it begins. Through concept testing, businesses can refine design, copy, and pricing for greater appeal.

Concept testing helps you find the strongest option to take forward or improve underperforming concepts, ensuring your plans have a solid chance of success. In this way, concept testing can help you avoid an embarrassing failure and take your product development processes from good to great, thanks to that all-important feedback from those who matter most—your customers.

3. Concept Testing Identifies Key Elements

Even if you gauge that your product ideas will fly, there are additional considerations, such as positioning, packaging, branding, and pricing. Concept testing optimizes your innovation, reducing the risk of project failure and limiting excessive costs.

It can shed light on blind spots, inefficiencies, misinterpretations, or problems that can lead to failure. Using concept testing methods like surveys as well as qualitative research via a focus group, in-depth interview, or online community can all help to tease out your target audience’s wants or needs.

4. Concept Testing Fixes Problems Early

The sooner concept testing is undertaken, the more flexibility you have to optimize your initial idea. Concept testing helps you understand what elements don’t work, allowing you to refine ideas swiftly based on consumer feedback.

With an online community, for instance, it’s possible to develop concepts based on consumer feedback and then upload them for further feedback, allowing you to improve iteratively. This flexibility is especially useful in crowded markets, where subtle changes can shift market perception significantly.

5. Concept Testing Ensures Market Fit

Concept testing puts the consumer voice at the heart of product development, ensuring new products resonate with customers and increase business performance. It helps you identify pain points or delights relating to new ideas, establish how your product fits into the lives of your target audience, and determine which concepts they would be willing to pay for.

Good concept testing means getting under the skin of your customer and letting their feelings and needs guide you toward the solutions with the most potential. By putting consumers central to product development, you can develop products and services that outperform the competition.

Concept Testing in Financial Services: Real-World Examples

Financial services may not seem like an obvious space for product innovation, but concept testing has played a pivotal role in the development of successful offerings in fintech, banking, and insurance. When consumers are asked to trust a company with their money, market research concept testing becomes even more critical.

Monzo’s Early Concept Testing with a Waitlist Model

UK-based neobank Monzo began testing its digital banking concept by launching a beta version with limited functionality in 2015. Rather than building out the full platform, Monzo focused on a single-use case—spending via a prepaid debit card—while capturing feedback from early adopters through in-app surveys and community forums.

This deliberate form of concept testing in market research allowed Monzo to validate demand for a mobile-first banking experience before securing a full banking license. By the time of its official launch, over 200,000 users were already on the waitlist—proof that the product concept had strong market appeal.

Fidelity’s Robo-Advisory Rollout

In the US, Fidelity Investments conducted detailed concept testing before launching its robo-advisory platform, Fidelity Go. Rather than assuming that younger investors would adopt automated financial advice tools, Fidelity ran qualitative research to explore trust levels, perceived value, and platform usability.

Their findings led to changes in onboarding language, interface design, and fee structures before rollout. This research-first approach to business concept development helped Fidelity Go gain traction without cannibalizing their core advisory business.

AXA’s On-Demand Insurance Pilot

In Southeast Asia, AXA Affin piloted on-demand travel insurance that could be activated for short periods via mobile app. This product concept example was tested through user panels in Malaysia and Singapore to understand feature appeal, pricing preferences, and willingness to buy micro-coverage.

The concept testing revealed that consumers wanted automatic trip detection linked to travel bookings and simplified claims processes. These insights led to a refined offering that better aligned with digital-native expectations in the region.

FAQs About Concept Testing

What is a product concept example?

A product concept example might be a rough sketch, prototype, or idea for a new service—such as a wearable payment device or a subscription-based investment platform—presented to users for feedback before full development.

How do you test a product concept?

Product concept testing can be done through online surveys, one-on-one interviews, focus groups, or moderated online communities. These methods assess appeal, clarity, usability, and purchase intent.

What are the best methods for concept testing?

The best methods combine both qualitative and quantitative approaches. Surveys offer measurable data, while interviews and communities explore the “why” behind reactions, offering richer insight.

Why is concept testing important?

Concept testing validates your idea early, prevents costly mistakes, and helps refine features or messaging to better align with market needs. It increases your chances of product success.

What’s the difference between qualitative and quantitative testing?

Qualitative testing explores opinions, motivations, and behaviors through open-ended questions. Quantitative testing measures attitudes or preferences at scale, often using structured surveys for statistical insights.

Ready to Test Your Next Product Idea?

Concept testing gives businesses a structured and powerful way to reduce risk, prioritize investment, and bring to market ideas that align with consumer needs. If you’re looking to integrate concept testing into your product development process, our team can help you design and implement a research program that delivers actionable insight.

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