Keeping up with the rapidly changing world and the latest digital marketing trends isn’t easy. Leading change and reshaping your industry with innovation is all the more challenging. It requires vision, guts, rapid experimentation, a multidisciplinary approach and an entrepreneurial attitude. Merely chasing the latest social media platforms and tools without a solid strategy will not result in sustainable success. In order to be a successful innovator it is important to really tune-in to consumer trends, overcome ‘innovation killing management routines’ and take advantage of the opportunities that arise from digital marketing.
Consumer trends are important drivers for innovation. Research shows that transparency is crucial in an era where trust is under severe pressure. Choice and information overload drive the call for simplicity and consumers are increasingly self-directed: they want to be in control and to be empowered. Consumers rely on the wisdom of crowds rather than on biased, beautifully wrapped opinions of companies. Consumers are also revaluing values and looking for institutions that genuinely care and are honest, open and fair. Last but not least they prefer to feel close across channels and devices like the smart phone [Source: Reinventing Financial Services, 5th print, December 2011]. Companies that manage to heed these trends are among the future winners.
Internal innovation killers are primarily caused by management:
- Indecisive decision-making is a major threat resulting in rejection of great ideas, excessively long time-to-market and unsuccessful product introductions.
- Unlucky internal timing refers to the limited window of opportunity due to business planning and yearly budget allocation.
- Unfavorable risk perception – management is reluctant to invest in innovation while the current portfolio is still generating a lot of revenue (Innovator’s Dilemma).
- Misused market research to discard ideas as a failure based on the opinion of a few managers rather than on real consumer insight and genuine curiosity.
- Uncreative business models using cost-up calculations within the existing value chain, rather than focusing on customer value and innovating the business model.
External innovation killers are economic crisis, focus on short-term shareholder value creation, external funding for (risky) innovations, excessive ‘anti-entrepreneurial’ bureaucracy and unstable government policies. These are generally considered innovation killers although they also provide opportunities for innovation when competitors are slowed down as they become more defensive, paralyzed by uncertainty.
Digital marketing provides a lot of opportunities to enhance innovation:
- Social intelligence helps to tap in to consumer trends and insights, differentiated by regions, cultures and customer segments.
- Idea management can easily be boosted both within the company and with partners or communities.
- Social co-creation goes a step further unleashing creativity and joint ownership, responsibility and marketing.
- Digital influence aims to identify individuals who are both connected and relevant to help expand reach into new media and markets (Source: “The Rise of Digital Influence”, Altimeter Group, March 2012).
- ‘Fail Fast Forward’ by considering your product to be a permanent beta-version. It is crucial to react quickly and honestly and fix problems instead of denying them.
Example of using Digital Marketing as Catalyst for innovation: the Insurance Australia Group (IAG) noticed that consumers wanted a new way to buy, claim and manage their car insurance. They created a business unit and brand called ‘The Buzz Insurance’ focusing on co-creating with customers. The ideas that derived from thousands of conversations where called ‘My Insurance Ideas’. Most of all they wanted appreciation and recognition for their loyalty, to be treated as an individual and 70% of customers wanted “more time to enjoy their lives”. The Buzz Insurance focused on a program that recognizes their loyalty with rewards that save time or make their time more enjoyable and safe (gifts of time in exchange for your loyalty points). The Buzz Insurance used social intelligence, idea management, social co-creation and digital influence to shape their new product. Not surprisingly, a lot of people that were involved became customers and active brand ambassadors (Source: www.genroe.com – The Buzz Insurance launch an innovative new customer loyalty program).
About the Author
Guido Kerkhof is a marketing consultant and an entrepreneur with a passion for innovation. He has co-created numerous products and services with his customers and is co-founder of several startups. This summer he will launch a new app (based on the current beta-version of www.PrioBook.com) that helps people to improve personal goal setting and motivates them to change their behavior in order to ‘Get more out of Life’.