Product Testing: Overview, Benefits, & Methods

95% of 30,000 products launched each year fail brutally in the market. So what sets apart the 5% of products that fly off the shelves? Two words: Product. Testing.

 Inadequate consumer testing and market research leads to:

• Lack of understanding of the target audience and their needs
• Misaligned pricing and value
• Poor product-market-fit
• Poor product design and quality

If you want your product to be successful, it might be time to re-think your product testing strategies. Here’s how experts approach product testing to achieve successful results.

What is Product Testing?

Product testing is the process of determining if a product works as expected, is safe, and meets customer needs before it's released. It compares metrics like performance, market demand, customer satisfaction to answer questions like:

• How well is your product developed?
• Is it a good fit for your target market?
• Does the product meet consumer expectations and needs?
• How does it compare to your competitors' offerings?
• Are there any unexpected issues or flaws in design or functionality?
• What improvements or modifications are needed before launch?

Ultimately, product testing leads to better products, loyal customers, and significant cost savings.

Let's take a look at Tree Top, a fruit processing company. In 2024, Tree Top wanted to learn which applesauce flavors would perform best for their new kids' product line. They requested product testing from Highlight.

75 children and parents were paired up to test 5 different flavors. With 97% of the survey completion rate , Top Tree identified most promising product variations (SKUs) and developed data-driven marketing campaigns to reduce the risk of product failure. 

How to use product testing to refine your launch strategy

See, product testing is a broader term it has multiple types based on environment, testing goals, budgets, etc. factors. Let’s see how you can choose the most efficient method based on testing goals you want to achieve. 

Determine Product-Market Fit

If you want to validate whether your product will meet market needs— go for concept testing. This method answers real questions like “will customers buy this?" and "does it solve a real problem?", “which packaging design resonates the most with consumers?”.  

Test Functionality in Real Settings

If you want to gather insights on your product's efficacy, we suggest using the IHUT (In-Home Usage Testing) method. This approach lets real consumers experience your product in their natural environment, giving you the most reliable insight into how consumers interact with it in their daily lives, and actionable feedback for further adjustment in the product.

Validate What Matters Most

If your goal is to know whether your product’s messaging and features align with your consumer’s actual desires and pain points, you should conduct claim testing. It will provide you the in-context data you need for the most relevant, effective, and consumer-endorsed claims for a successful go-to-market launch. 

Top 5 product testing methods, ranked 

Now that you understand how each product testing method fulfills a different testing goal, let’s talk about the top 5 types of product testing. Most of your product testing goals can be achieved through these types, let’s see how. 

In-home usage testing provides the most accurate results as consumers test your product at their homes, where it’s originally intended to be used. With IHUT you get:

• accurate insights on consumer interaction.
• meaningful data from real-world use.
• discover unexpected usage occasions or applications
• test product packaging in actual storage conditions

When King's Hawaiian planned their new product line in 2021, they needed to validate their line extensions. So they opted for IHUT. Through this testing method, 180 buns were distributed nationwide to their target consumers. 

The survey received a 94% completion rate in just 4 days. Provided King’s Hawaiian with clear insights into consumer usage patterns and product acceptance. Ideal for: Pre-launch, Post-launch

Evaluate the viability of your product idea with its target audience to

• identify market demand
• gauge consumer interest
• save time and investment

For example, the Country Luau team conducted concept testing for branding, pricing, flavor, and appeal of their new product. Gained data from 120 testers within 48 hours to make product adjustments before hitting the market. 

Ideal for: Early development stage

Analyzes a product’s composition—taste, texture, aroma, flavor, and appearance to offer

• feedback on formulations
• comparative insights with competitors
• identify pre-launch tweaks

Ideal for: Mid to late product development

Analyzes product’s packaging to evaluate the effectiveness, functionality and appeal of a product’s packaging. It is conducted to

• get feedback on design and then optimize it accordingly
• boost brand’s appeal
• stand out among other competitor

Ideal for:  Prototype phase, Pre & Post launch

Test product claims to determine which is the most appealing and persuasive for your brand and the product category. It’s done to 

• ensure consumer resonance
• verify regulatory compliance
• test accurate brand representation

Ideal for: Prototype phase, Pre launch

Why you can’t afford to skip product testing

Early product testing is more than just a way to test your product - it's about knowing your customers and building the exact product they’d buy.

Here’s how product testing can impact your customer acquisition and retention:

Customer Acquisition

• With 72% of Americans making purchase decisions based on packaging, package testing helps you get it right.

• 46% of product development budgets are wasted on failed products, concept testing helps validate market demand before heavy investment.
• With 35-40% of products being pulled from shelves shortly after launch, claims testing ensures your messages resonate with your market.
  

Customer Retention

• More than 60% of new products fail to succeed in the market due to misalignment with customer needs.
• Research shows 82% of consumers never return after unmet product claims or bad experience. 
  

What’s the ROI of product testing?

ROI is a huge determining factor in the success of any product development initiative. So let’s see how it worked out for two most popular brands.

P&G spent $230M investment in launching Febreze, an odor-eliminator spray, that resulted in near-zero sales initially. Later, when they conducted IHUT to see consumer’s actual usage patterns, it revealed consumers wanted freshness, not odorlessness. Based on IHUT findings, Febreze repositioned itself as “Air freshener” and the sales went from 0 to $230M and it became a 1B$ brand by 2011. 

Similarly, when Starbucks wanted to reach their health conscious consumers, they used CLT to test out their dairy-free alternatives during 2012-2017. Testing insights was used to launch dairy alternatives in all Starbucks stores, surging  sales by 33% contributing around $2B annual revenue.

How to conduct a product test

Follow these steps to ensure your product testing efforts deliver valuable insights and drive meaningful business impact.

  1. Choose products or concepts to test

When managing multiple products, select a product that has

• highest potential market demand
• unique competitive edge
• direct alignment to your company goals

Checkout how BloxSnacks tested their new product— FruitBlox, to gather 10+ key metrics like market validation, package appeal, etc. These metrics influenced their line expansion decisions.

  2. Define your testing goals clearly

Clearly outline what objectives you need to achieve by the end of product testing. Ask yourself: Is it comparing your product's intuitiveness against competitors? Or Is it finding the most appealing or hated features/attributes of the product?

This step is going to set the direction of the entire process, so be specific and set goals in real metrics.

  3. Establish key testing metrics

Key metrics are the testing objectives turned into measurable targets. These targets allow you to track progress and determine success more objectively.

Convert goals into measurable targets to evaluate success more objectively.

Let's say your goal is to develop a makeup remover that takes off the makeup in one go. The key metric would be product usefulness. Based on testing insights, ask yourself: does it solve the problem as intended?

Use this framework for developing key metrics for your brand:

4. Identify and reach your target audience.

Define your audience's age, gender, income, geography, and lifestyle factors. Then, reach them through platforms like Highlight, focus groups, and industry communities.

  5. Select the appropriate testing environment.

It doesn't make sense to test dish soap in an office environment or a face cream in a factory or manufacturing plant, right? That’s why selecting the right environment has to be done strategically for accurate results.

Consider asking these questions before finalizing the testing environment:

• What is it? And how is it meant to be used in the real world?
• How do environmental factors affect product performance?
• Which environment is more suitable: controlled conditions vs. real-world?
  
  

  6. Choose your product testing method

Next up, decide which testing method is suitable based on the environment where your product is intended to be used.

Let’s look at a few e.g.,

• If you're developing a new line of ready-to-cook meal kits, you can test them in actual home kitchens using IHUT.
• If you’re testing a new ice cream flavor, CLT works well in a controlled environment where sensory feedback on taste and texture is critical.

  7. Iterate and refine the product.

Now convert the gathered data into actionable data for product refinement and iterations. Here’s how brands like Nestle use Highlight’s Agile Innovation strategy to turn data into impactful results like

• Reduced development cycles— 3 to 6 months!
• Faster time to market — up to 60%
• Continuous feedback integration and validation
• Quality control with <1% error rates
  

Achieve 90% completion rate on your product testing surveys with Highlight

Did you know you can skip all these steps and get better even results by investing in Highlight? 

From comprehensive logistics to a 90% survey completion rate, we simplify testing so you can focus on what matters—creating products consumers love. Our consumers approve these claims, happily! 

So if you’re frustrated by slow, unreliable product feedback, choose our end-to-end testing platform that delivers fast, consistent, and real-world insights. With Highlight you get

• Fastest Results: Highlight testing results in just 3 weeks.
• Quality Data: Offers a 90% completion rate for reliable, unbiased insights with precise demographic targeting.
• Full Transparency: Provides detailed updates on progress to allow you manage bottlenecks early.
• Real-Time Dashboard: Track tests with live updates, customizable data views, and in-depth visuals.
• Integrated Video Insights: Deeper insights with video integration in both qualitative and quantitative studies.
  

Own each step of your product testing initiative with Highlight-from community to logistics.