Not every innovation has to be a new tech gadget. Here are three we’d love to see more of in the marketplace.
Companies have two functions, said Peter Drucker: Marketing and innovation. But he didn’t say just what that marketing and innovation should look like, leaving it up to our creativity to help us discover new opportunities. If you’re truly focused on creating new value and getting the word out in your marketplace, then there’s an opportunity to make a break with the group-think that has been forcing all innovation into one very tiny, flat box for more than a decade:
It’s time to take the “i” out of innovation.
By that I mean, it’s time to stop thinking that every innovation has to be a technology tool or app. Smart companies will always invest in more automation – which rightfully includes leveraging smartphones, tablets, mobile marketing and social media. At this stage of the game, we can rightfully call that the marketing function of the company.
Which still leaves us with Drucker’s innovation imperative.
Taking technology out of the question, is your business plan experimenting with innovations in the customer business cycle? Three key areas that remain ripe for innovation, are:
- Price. Other than technology tweaks, have you found ways to increase the value of your product or service? Innovating in price doesn’t always mean lowering it, although it can. The goal of innovation is to make your price more valuable than the nominal cost. That means sharpening its ability to fulfill customer needs, increasing their satisfaction with your product or service, and demonstrating that your price is the best use of their money. Consider companies that have experimented with price: ZipCar makes it possible to drive a BMW for an hour without owning it or visiting a rental office; Amazon makes it possible to enjoy a book by renting it over the air; LegalZoom used price to expand access to basic legal consultations by charging $25 a month, establishing a price for short consultations rather than baking the cost into other services people used infrequently.
- Payment. After nearly a decade of recession, people are more budget-centric than ever. Predictable, managed costs are the key to keeping their debt low and their sense of security high. So explore new ideas on how customers can pay. Customers are very interested in alternatives, since they have already accepted a variety of payment models in their lives. Customers happily accept advertising for lower movie costs on Hulu and free software. Alternately, try breaking down large cost items into smaller budget-bites, like insurance plans and annuities do, while leaving your service available to customers at any point in the cycle.
- Speed. If you’ve ever purchased a product at an Apple store, you’ve experienced a major retail innovation. Customers hate lines. So Apple’s check-out-where-you-stand approach greatly increased the pleasure customers experience at a store. It also directly contradicted the end-of-bricks-and-mortar Cassandras of the last two decades. As much as possible, companies that shorten the “anticipation-to-enjoyment” cycle for their products and services win. Car dealers have shortened the pick-up time for your new car. Real estate companies in Australia use auctions to sell their clients’ homes in mere days, not months or years. It’s not just the speed of your online documents or payment systems that matters: getting customers to their goals faster matters just as much.
Few people are spending time innovating on the essential structures of their industry or business. It’s more glamorous for your marketing department to announce a “new, shiny object” every three months than it is to adjust deep-seated assumptions and processes about your customers and company. Still, it must happen, because if your company only focuses on the marketing part of Peter Drucker’s equation, you can be sure someone else will come along – one without any legacy blinders, either – and perform the innovation function that will catch customers attention.
And their business.