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Marketing Innovation: Diverge Early, Converge Later

 

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In video 9, Marketing Innovation: Diverge Early, Converge Later, we answer the question, “Why is it important to innovate the way your brand markets itself?”

There’s a really unfortunate reality that 80% of new products in the consumer package goods world fail. And this is probably the most over-researched sector in all of business. This really tells us something is wrong with how we do innovation. So, what’s the solution?

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Hi, I’m John McGarr. I’m the Co-Founder and Managing Partner of Fresh Squeezed Ideas, and we help progressive marketers engineer breakout brands. So, we’ve created this series, The Future of Marketing and How to Win, to not only share ideas on where the future of marketing is headed, but to also provoke some new ways of thinking about brand strategy and marketing.

Why is it important to innovate the way your brand markets itself?

You know, when it comes to innovation, few organizations actually invest the time, the money, the human resources required to really drive a productive process. The Technology sector of course, learned what it takes to be successful at innovation. They’ve been able to embrace the fail fast principle, and it seems that it’s making the same kind of commitment to innovation in the CPG industry or banking, or insurance, or pharmaceuticals is much more difficult, and there’s a variety of legitimate reasons, but more often than not, we observe the innovation process being under resourced and over constrained, simply due to a very short term focus. There are some realities with that, but it really does make us take a look at the innovation process, and think maybe, you know, it doesn’t need to be as painful, and that would get it going again. There are some very inconvenient truths when it comes to innovation inside large organizations. Well, I’m 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. It’s 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 because we can intercept using people using mobile phones right when they’re in the middle of a purchase, but it can’t explain their motivations behind their behaviour. 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. If you think about it as you’re surfing a say, hotel website. You get a pop up window survey, even before you’ve had the chance to actually experience the website. You know, if you’re looking for information, it comes up so quickly. And your only options are either you complete the survey, or you can close the box. And it makes me think you know, for the people who actually complete the survey, are their answers based on their actual experience that they haven’t experienced yet, or is it really what they think they’re going to get. I’m not so sure that’s 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. And they only pursue so called high potential areas all in the name of being efficient, and being focused. But, that actually impedes innovation. There’s a really unfortunate reality that 80% of new products in the consumer package goods world fail. And this is probably the most over researched sector in all of business. This really tells us something is wrong with how we do innovation. 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. We use customer journey, which is an ethnographic technique that can really drill deep into their experience. Second is engaging anthropologists to understand the social values driving the behaviour 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. Second step, is to ideate 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. Break the rules. There’s no reason to be constrained. Certainly, there’s a rather famous taxi company online that is breaking the rules and winning big as a result. And of course, your organization needs to actually develop this skill offline. So even when there’s no active innovation program, we suggest that marketers play games that force them to use innovation skills. The third step is to prototype. Build your ideas in the full concept so you can expose to your customer, and if that needs to be experiential, then I guess you’re going to need some form of a laboratory. 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, which is conducting safe fail testing to identify where those high potential innovations are. And this is really the most important part. Safe fail testing is really what’s used in Silicon Valley. It’s a model we’ve developed for testing brand innovations and communication innovations, and product service innovations, tat really leverages those same principles. Behavioural economics tools can simulate a marketplace in which your customers use behaviour, their own behaviour with a nominal currency to reveal the best ideas from those that are poor ideas, and tats fully leverage-able to any scale. So, the five keys to successful customer centric innovation, right customer insights, inspiration from culture because that’s the stuff they can’t tell you, a robust ideation process, the safe fail behavioural approach to selection of idea, and then, it is time to converge on the few winning ideas for commercial development.