Innovation success without big investment
Innovation is still the lifeblood of continuous growth creation. BUT how can you innovate for growth without investing far more than you can afford in this economy?
The answer is in “concept” innovation, and the results are typically greater than product improvement innovation… both short-term and long-term. Here’s why…
Concept innovation is innovating the concept of what people are buying so they aspire to own or use your product or service. In Alpha terminology, it is redefining your category in terms of a higher level of personal experience or fulfillment a customer can get buying from you. That means, they feel better about themselves and they believe others also see them as better than they were before they purchased or used your product.
To some, this may sound too superficial, because they are limited in their experience of such “innovation” as being clever phrases or pandering to base human desires (sex, material wealth, power, etc). Successful concept innovation, however, is much, much deeper than that, and its ramifications go to the core emotional and functional needs a person desires to fulfill.
As I cover in The Alpha Factor (Westlyn Publishing, 2008), the most influential brands in the world have this trait in common. The real secret to their success is and has been in their concept innovation. They are not all the largest in their respective categories, but they are the most profitable and the most influential in driving and managing customer decisions.
For instance, Apple was using this principle for decades before it finally became the Alpha in the personal computing industry, driving competitors to follow their lead in technological innovation and customer experience. To own an Apple made you part of a cult of passionate “believers.” Apple owners were evangelists for the experience of owning an Apple product. That made customers of non-Apple products envious to the point that an anti-Apple movement even started amongst persons who perceived themselves as more technologically savvy and who could manipulate the weaknesses of DOS-based PC products.
Apple remains my favorite Alpha company, because it still completely “owns” the customer experience people aspire to receive… and they do it in a way that allows them to ask far more for their product than competitors can demand.
Ben and Jerry’s ice cream is another. Although no longer the Alpha they were even a decade ago, Ben and Jerry’s ice cream accomplished much the same thing. Yes, they innovated by adding more “stuff” to their ice cream, but that product improvement was only successful because they created a new concept for ice cream eating that people aspired to experience. For instance, my research in the ice cream category back in the mid- and late 1990s showed that 80+% of persons who claimed they “only” bought whatever ice cream was on sale actually regularly purchased Ben and Jerry’s ice cream for themselves. They just hid it from the rest of the family. That’s an immense level of influence created, and it is why almost every other ice cream brand began to copy B&J’s product approach.
On a smaller level, I worked with a small regional bank that was already doing a great job with customer service. They had among the most competitive rates around. They only had two branches, so they could not compete with “regular” banks on convenience – the most common criteria for picking a bank. The concept innovation we discovered would be most successful for them was to change the focus of what they sold from bank services to “personal financial success.” We created a “Personal Success” club. We defined services that would make this bank the go-to bank for almost anything that would help their target audience feel that they could take charge of their personal financial future.
The result was more than $1 million in new deposits in the first week and dramatic growth in number of customers defining the bank as their “primary” bank. The bank only had to do a small amount of internal work to pay off the concept so that customers actually felt that the inherent promise of the concept was fulfilled. But the results were more than almost any new product development process could have generated for them. Best of all, they did not even have to open one additional branch to accomplish that growth.
Although I have facilitated plenty of new product innovation, seldom have I seen that investment pay off as well or as quickly as concept innovation consistently does.
Concept innovation doesn’t cost much to accomplish. But the return on investment is immense, if it uses the Alpha model to innovate to fulfill a person’s experiential needs, as well as his practical product function needs.
I know many companies have tried some version of “concept innovation.” Some with success. Some without.
Have you seen this work? Or have you seen it fail, and, if so, why do you think it failed? I would love to hear your experiences.
Wes Ball is president and founder of The Ball Group, a strategic innovation and new market development company. He is also author of The Alpha Factor – a revolutionary new look at what really creates self-sustaining success and market dominance. He can be reached at www.ballgroup.com or www.thealphafactor.com.