Come on, Take a Risk
Are you risk averse? Consider whether you would have done this: Chevrolet entered the Great Depression not by hunkering down, but by increasing its marketing spending - including inventing billboard advertising. The result was an increase in sales that catapulted the Chevy 6 to the number one seller for several years running.
During her keynote presentation this morning at Forrester's Marketing Forum 2009, Vice President and Principal Analyst Shar VanBoskirk told that story to make a point: Don't think that it's too risky a time to innovate. Innovation can pay off in a big way. "Now is the time to innovate," she said, "despite the perceived risk."
Still concerned? VanBoskirk offered advice on how to reduce the risk of marketing innovation.
"We take risks when they feel familiar, are within our control, or are thrilling," she said. "How can you do this with marketing?" The answer: Accessible innovation, which Forrester defines as a "marketing program development that you can pursue from within your own role to solve problems or improve business results."
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According to VanBoskirk, there are four fundamentals of accessible innovation: enhance, include, empathize, iterate.
Enhance: You don't have to invent something new. Build on something existing to create new value. Sovereign Bank, for example, switched from direct mail to email to reach college-age prospects. Based on VanBoskirk's estimates, the bank could save nearly $174,000 per campaign as a result, spending only $4 per lead for email versus $26 per lead for direct mail.
Include: Ideas for innovation should incorporate many disparate perspectives. This is where social channels excel. VanBoskirk cited Adidas as an example. The athletic apparel company included customers in creating its "New School of Thought" campaign by asking for input on everything from font size to tagline. Customers loved it, and the company was able to build a standard process for gathering feedback from the community.
Empathize: An organization should relate to its community and bring it value; this helps to build relationships. Zappos.com, for example uses Twitter to empathize with customers, VanBoskirk said. More than 400 Zappos employees, including CEO Tony Hsieh, "tweet" regularly; the company aggregates the posts on its own website. People relate better to other people than institutions, the reasoning goes, so Zappos is giving its brand a voice - and giving its bottom line a boost in the process. Sales have grown to $1 billion; 75 percent of those sales were from repeat customers.
Iterate: Make continuous improvements. Gaming site Shockwave's subscription service, Shockwave Unlimited, delivers varied websites based on customer profiles. The company realized a 150 percent increase in annual subscriptions as a result.
Best Buy Remix uses all four fundamentals VanBoskirk said. Remix is an open API to Best Buy's product catalog. Anyone can use it build applications, sites, and the like using the catalog data. The risk is letting anyone use its brand assets, but rewards are evident: Remix enhances flexibility for affiliates; includes by furthering the Best Buy brand; empathizes with customers by engaging in new relationships (applications created by the community for community); iterates by continually looking to improve Remix and the Best Buy experience.
How get started with accessible innovation? VanBoskirk offered a two-phased approach. First, determine whether the risk is accessible; in other words, will it improve business processes and drive business results? Consider such issues as whether it will increase the margins of an existing program, incorporate community perspectives, relate to a user need, or allow for ongoing enhancements. Then assess the real risk, not perceived the risk, to determine whether to move ahead. Examine such areas as whether you have the necessary skills, staffing, and budget to move forward; whether the innovation could alter channel relationships, disrupt production, or challenge distribution; or whether it might increase prices, threaten competitive differentiation, or disregard customer needs. Less real risk means a higher chance for successful marketing innovation.
"In the end the view we want is from on top of market change and on top of competitors," VanBoskirk said, "but it takes innovation and well-managed risk to get there."
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