Reading GE CMO Beth Comstock’s HBR blog, Innovation Is Marketing’s Job, Too, some of Dr. Seuss’ advice that ran through my mind. Paraphrased, the good Doctor said, “Look at me! Look at me! Look at me NOW! It is fun to innovate, but you have to know how.” Ms. Comstock’s mandate was to make GE marketing a vital operating function, including innovation, something that would drive organic growth – beyond just helping to craft advertising and external marketing. Her shared her 4-part formula about how to innovate. She suggested:
- Go to new places
- Shape the market early
- Incubate new business and models
- Invite others in
We are big fans of innovation. Going into the black hole of (YOUR CATEGORY GOES HERE) can be an exciting and rewarding exercise. But you really do have to know how. To be perfectly transparent, our own philosophy and practice centers around Ms. Comstock’s #2, “Shape the market early,” which is a lot easier said than done for many brands. The best way to shape the market, of course, is to have a deep understanding of what the consumer wants and what they expect before even they know what they want or expect.
Want to know what consumers want and expect? The easy-answer is “everything.” In virtually every category you can imagine expectations have risen, 20-25% (more if you’re talking ‘tech’), while brands have only managed to keep up by 5-6%. That gap is called, the “expectation gap.” It’s the space between what people really want and what brand actually delivers, and is a fertile place to dig if you’re looking for areas where your brand can innovate. That corresponds with Ms. Comstock’s point #1, and while her “new places” were of the more tangible kind, and ours more notional, it’s a “new place” for a brand to study nonetheless.
The thing is, from a marketing and/or research perspective, you can’t just ask consumers what they want. Consumer decision-making is more emotional than ever before, and often those emotional values turn out to be things consumers don’t articulate. Or don’t want to articulate to an interviewer. Or just can’t articulate. So you can ask, but if a brand doesn’t know how to accurately capture those emotional expectations, they usually end up talking about or thinking about rational aspects of the category. And these days, rational doesn’t usually translate to something innovative and differentiating. By the time the rational bits of the category are articulated by consumers as something they expect, they’re more likely “table stakes,” basic things you need to have in order to play in the brand’s market arena, but something everyone has, and definitely not something innovative.
Brand Keys fuses emotional and rational aspects of the category to identify how consumers really view a category and what they really expect from their Ideal. We capture predictive lead-time insights of 12-18 months as regards expectations. How well your brand matches up to the Ideal identifies expectation gaps, valuable areas (or a new place to go) worth a drill-down exercise or, at the very least, a once-over, and typically results in innovation.
Do that, and your brand – to borrow Ms. Comstock’s phrase – gets “to shape the market early,” with the added benefit of getting a jump on the competition. In the last century, and depending upon the category, that “jump” à la traditional marketing and research might have been worth a 2 or 3 year lead. Today if you get 6 months, it’s a gift. You need something that will give you a real head start on meaningful and competitive innovation. Here’s a real-life example in the Automotive category from the Customer Loyalty Engagement Index.
Over the past two years, values related to personal connectivity and entertainment has grown at nearly double anything else as regards a positive contribution to auto brand engagement and customer loyalty and, therefore, profitability. (FYI, “fuel efficiency” grew too, just not as fast). But the gap between what consumers really want, and what the best of 22 automotive brands we track delivers, leaves an emotional engagement expectation gap of 23%, a gap large enough to drive a truck through. So if innovation is marketing’s job too, the opportunity these engagement metrics identified was a perfect place to drill down and uncover something your brand could have innovated, owned, and used to shape the rest of the market.
Sure, consumers are tech-conscious, and connectivity and technology have been slowly driving their way into the automotive category. Various brands have been using ”technology” as a differentiator to one degree or another, but the fact is that consumers have wanted this increased level of car-connectivity for what’s going on 4 years, and had some bright brand been able to identify it, they could have taken ownership of it, vrooming ahead of the competition instead of having to tailgate rivals.
Last week, a 2-page ad ran in the Wall Street Journal, with the headline on page 1, reading “The Connected Car Is Here,” and on page 2 the announcement “Chevrolet Is The First And Only Car Company to Bring Built-in 4G LTE Wi-Fi to Cars, Trucks and Crossovers,” which seems pretty innovative. Right now. But we’ll have to see how long that particular innovation window remains open, and how long it is before all cars have to offer it just to keep up. What was “innovation” will turn into “table-stakes.” What once delighted consumers, now has become obligatory.
It was Steve Jobs who famously pointed out that “innovation is the difference between a leader and a follower.” We would add to Ms. Comstock’s praise of innovation that innovation is the best way to ensure consumer engagement, brand growth, and corporate profitability, and it can fall easily within the purview of the Marketing and Research Departments, if you know how.
Harvard Business Review has pointed out that it’s tough when markets change and your people within the company don’t. But these days it’s even tougher when consumer category values change, and companies don’t change the research tools or marketing metrics they use to measure them.
Sticking with our automotive theme, it’s worth remembering that when it comes to innovation there are no old roads to new directions.