Some companies have innovation targets to reach each year: a third of sales must come from new launches; a fifth of the portfolio needs to be renovated annually.
Whatever these targets may be, however easy or difficult to meet, they are missing the true point of innovation; increased customer satisfaction!
Identifying the need for Innovation
In a customer centric organisation, every process, plan and budget starts from the customer’s perspective. Are they happy with your product, brand or the category in which you are competing, or are they being “forced” to compensate for pain points that they have identified?
- Are they using the product as it was intended, or are they amending your suggestions?
- Do more of your customers only buy on promotion?
- Are they transferring the product into another pack or container for serving purposes?
- Are they splitting loyalty between your brand and one or more competitive brands?
These and many more similar observations suggest that your customers are compensating and it is your job to find a solution to their pain.
Where to aim on the Innovation scale?
Today’s customers are highly demanding, expecting constant novelty and stimulation. As a result, innovation has become one of the most important ways to grow a business. However, as Jan-Benedict Steenkamp, a marketing professor at UNC Kenan-Flagler showed a few years ago, innovation, at least for packaged goods companies, should be on one of the two extremes of “innovativeness”:
- either a minor improvement, or renovation, such as a new flavour, size, colour, packaging, content …
- or a radically new product that is significantly different from anything else on the market. These are more breakthrough, more difficult to develop, but have included microwave meals, Sony Walkman, Nespresso capsules, iPad …
The interesting and perhaps disturbing thing about breakthrough innovation, is that timing is everything; too early and people won’t understand or see the need: too late and competition are quite likely ready to launch a similar product. This is one of the reasons software companies offer “beta versions” for free before launching and selling it to everyone.
The hurdles of Innovation
As if timing wasn’t a big enough hurdle, another challenge is to get internal support, as they may involve new skills or technologies not currently available within the organisation. Today, some companies are facing this challenge by going into joint agreements where the manufacturer who has such skills or technology agrees to prepare the basis of the new product for the other organisation, which perhaps has the marketing knowledge or creative idea.
Despite these challenges most companies look to both ends of the innovation scale; renovations for keeping their customers satisfied and true innovations, which will be less frequent, to upgrade their current customers and hopefully attract new ones.
Some ideas to meet the challenges of making innovation more customer-centric, for you to consider:
- R&D: many companies develop new products based only upon their skills and technologies; a better place would be in understanding their customers intimately and making products they need or desire
- Senses: with increased demand for novelty, one way to respond is by adding poly-sensoriality to products. This means that customers become attached to your product or service through the stimulation of multiple senses, which have the added benefit of further reasons to buy, such as odour, sound, smell, music, packaging …
- Co-creation: customer centric organisations consider how to incorporate their customers’ thoughts, ideas, needs and desires into each product and service offered. Co-creation or co-elaboration has become popular in recent years, partly because of the ease of getting input over the Intranet, but also because it just makes good business sense.
- With customers’ demands more likely to increase rather than decrease, what else can you do to reinvent your own innovation? Share your ideas here.
Need help in updating your own innovation process? Check our website http://www.c3centricity.com/home/vision/ or contact us here.
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