Marketing Innovation: Diverge Early, Converge Later

When it comes to innovation, few organizations actually invest the time, money and, human resources required to really drive a productive process. The Technology sector learned what it takes to be successful at innovation, embracing the fail-fast principle, and it seems they’re also making the same kind of commitment to innovation. In other sectors like CPG, banking, insurance, or pharmaceutical, it's much more difficult to fail-fast, for a variety of legitimate reasons. But, more often than not, we’ve observed the innovation process being under-resourced and over-constrained, simply due to a very short term focus. There are some very inconvenient truths when it comes to innovation inside large organizations but we’re just going to focus on three and share some solutions.

Number one is consumers can’t often tell you what you need to know, when you need to know it. See, knowledge is highly contextual. Our brains are really great at compartmentalizing some knowledge and accessing it only when we need it. We can’t keep everything in our heads all at once. Conventional market research often asks customers for knowledge out of context which makes it difficult to recall. We’ve probably all had that experience; when someone asks you a question out of the blue, and you know you know the answer, but you can’t quite get there. The alternative, of course, is big data analytics, and that can get you in-context information, but it can’t explain motivations behind the behavior. It can’t tell you why they’re doing what they’re doing.

The second inconvenient truth is that marketing savvy customers are prone to telling you want they think you want to hear, rather than reveal what you’re trying to find out. There are no marketing naïve people. For example, as you’re surfing a hotel website you might get a pop-up survey, even before you’ve had the chance to actually experience the website. Your only options are to complete the survey or close the box. For the people who actually complete the survey, their answers are either based what they think their experience will be or what they think you want to hear because of the reward offered or a potential reward. Neither is helpful.

And of course, one of the most dangerous F words in innovation is focus. Innovation programs tend to focus so much, they actually impede success, pursuing only so-called “high potential” areas all in the name of being efficient and focused. But, that actually impedes innovation. The unfortunate reality is that 80% of new products in the consumer package goods world fail. This is probably the most over-researched sector in all of business which means something is really wrong with how we innovate.

So, what’s the solution?

Well, it’s a four-step process to customer-centric innovation. First, you have to learn their pain points, and there’s several means of insight collection here. One method we use is customer journeys, which is an ethnographic technique that can really drill deep into their experience. Second is engaging anthropologists to understand the social values driving the behavior in the first place. They have a wonderful perspective on things that most marketers wouldn’t even think of. And of course, you should work with partners that understand how to take insights and move them into ideation and strategy.

The second step is ideating enthusiastically. The reality is that innovation is a numbers game. The more ideas you consider, the greater your chances of finding a pearl among the shells. Make sure you’re break the rules during this step. There’s no reason to be constrained—it’s just an idea! Your organization needs to develop this skill. So, even when there’s no active innovation program we suggest that you play games that force them to use innovation skills.

The third step is prototyping. Build your ideas into full concept. If it needs to be experiential engage a partner as needed but, often a written or video concept can suffice because you’re still at this stage looking for a volume of ideas.

Which leads to the fourth step conducting safe-fail testing to identify where those high potential innovations are. This is really the most important part. Safe-fail testing is method we have developed for testing brand, product service and, communication innovations based on behavioral economics. This tools simulates a marketplace in which respondents behave as close to allowing us to separate the best ideas from the worst. And it’s fully leverage-able to any scale.

In summary, the key to successful customer-centric innovation is the right customer insights, inspiration from culture, a robust ideation process and a safe-fail behavioral approach to selecting the bests ideas. Then, it is time to converge on the few winning ideas for commercial development.