Incremental Innovation

What is incremental innovation?

Incremental innovation is the process of improving existing products, services, or experiences to add or maintain value. Most product companies today operate incremental innovation processes by continuously releasing software and firmware updates to their product lines.

Why is incremental innovation important?

Apple's iOS releases many updates in a year. While most of these updates are providing fixes and improvements, every once in a while there is a significant new feature being added. Your smart TV also likely has updates. Sometimes new streaming services are added, but sometimes it’s quality-of-life improvements.

In some cases, incremental innovation even opens up new revenue streams in the form of subscriptions and/or hardware upgrades. Consumers want their devices to work with new services and technologies, even if they didn’t exist at the launch of your product. Annual device replacement isn’t a customer-centric solution.

In short, Incremental innovation provides benefits both to the customers and to the company. Here are a few of those benefits:

• Customer acquisition: You have opportunities to acquire new customers that were waiting for a new feature or compatibility.
• Customer satisfaction: Customers are more likely to be satisfied with the solution that continues to evolve and add new value.
• Customer retention: While customers might buy another one of your products to satisfy an unmet need, that also creates an opening to consider another company’s products.‍
• Competitive edge: By evolving and introducing new value and improvements, you can grow or close gaps to your competitors.

Incremental innovation and delta testing

As companies continuously add new features and improvements to create value, they need to remember that testing and validation are critical to actually delivering that value to customers. Releasing new features and updates that fail to meet users expectations or don’t work properly are a major source of waste in product development. They require additional labor in the form of rework, as well as the opportunity cost of not producing new work during that time.

That’s why many companies invest in ongoing interactions or co-development with customers through delta testing, specifically leveraging the product growth use case of delta testing. This method allows product teams to engage regularly with a group of customers to validate fixes, test new features, and provide feedback on what their perceptions of the improvement are.