Big Marketing Industry Problem #7: How San Diego leaders are addressing the issue
The American Marketing Association’s (AMA) “Big Marketing Industry Problem #7” is “Balancing Incremental and Radical Innovation.” To be a viable player in the marketplace, brands must be competitive in two time periods: the present and the future.
Not only must firms fuel innovation in the future but they must also set the course for the future by investing in disruptive technologies, business models, partnerships, and customer experiences. Should companies try to balance incremental and radical innovation, or should they switch focus between the two?
Incremental innovation involves building and improving on what you already have and is based in the short term. Radical innovation is when a company decides it wants to disrupt the industry and creates a completely diversified product, marketing practice, or organizational structure.
Companies need both types of innovation to thrive. However, marketers struggle to compartmentalize and think in terms of both incremental and radical innovation. Some companies interviewed in the 2017 AMA San Diego State of Marketing Report – The San Diego Perspective have mitigated this problem by splitting marketing into corporate level and business unit marketing departments. This allows corporate marketing to focus on the long-term direction of the company (radical innovation), and the business units to focus on marketing the product specifications (incremental innovation).
The AMA reports that design thinking is being used by many companies to redesign products, systems, processes and workflows to address the challenge of balancing incremental and radical innovation. Others do not just focus on products but rather create an ecosystem of products.
In this article in our Seven Big Problems in Marketing Series, we outline the solutions to the seventh big problem articulated by leaders in the 2017 State of Marketing Report – The San Diego Perspective.
Incremental innovation in the marketing world includes day-to-day common practices that keep brand awareness strong and assist in moving customers through the sales funnel.
Radical innovation includes marketing practices that can change the direction and structure of the organization entirely.
In the 2017 State of Marketing Report – The San Diego Perspective, there was one example of what might be described as truly radical innovation.
One technology company went outside regular marketing practice by producing an entire movie, disguising its product as an essential part of the plot. Granted, this obviously requires a high budget, but it is a notable example of radical innovation in marketing.
PRACTICES THAT ARE LIKELY TO LEAD TO RADICAL INNOVATION
Radical innovation is a process that takes time and for companies to be successful, they must take the right steps to get there. Although the following practices are not radical in themselves, they are definitely practices that have been exploited to the maximum to discover unique insights that will ultimately lead to radical change.
Customer Journey Development
Customer journey mapping is used as a proxy for understanding and improving customer experience. It is normal practice to detect and study each of the touchpoints where organizations interact with their customers in the customer journey.
However, the sports industry goes far beyond mapping the touchpoints with fans while they are at the stadium. They consider the entire customer experience from the moment they see or hear their first advertisement and decide they want to attend the game. They study details like what transportation fans use to attend the game and any interactions that take place outside the stadium. Through this intense customer journey mapping practice, the brand is able to make improvements to the customer’s experience with their brand that might not normally be considered.
Many are embracing consumer created content rather than fighting it. Platforms are being created for consumers to share their stories and create their own content. Beyond being free advertising for the company, consumers find content coming from other consumers more relevant than content coming from a corporation. Although use of content is common practice for most, some B2B companies are starting to create content for the first time, which would be considered radical practice by many in the industry.
In the past, marketers would attempt to cover up any negative company traits. However, modern companies are trying to become more transparent and appeal to consumers that value more honesty and approachable corporations.
Thought leadership by nature is when a company differentiates itself by producing outstanding content or research that has not been seen before within an industry. Participants in the 2017 State of Marketing Report – The San Diego Perspective explained how thought leadership is being used as a strategic marketing tool to increase trust in the brand and attract new customers.
It is a common misconception that the Hispanic and Latino market wish to be included by brands through exclusively Spanish speaking events, products or services. The Arts & Culture industry has discovered that the Spanish community feels truly included when they are invited to attend regular English speaking events. Attendance is most effective when the campaigns and promotions are in Spanish, to attract attention, but the actual event is in English.
Most companies try to have a presence on different marketing channels, but it is those who manage to coordinate all the different campaigns simultaneously to build anticipation for a major company event that see the true benefit. One of the companies in the 2017 State of Marketing Report – The San Diego Perspective used direct mail, publications, product placement, promotional products and website redesign leading to a final event. Stakeholders were influenced by the continuous buzz and were eager to find out more during the event.
A relatively new concept in marketing, Design Thinking is promoted by the AMA in the “Seven Big Problems in the Marketing Industry” as a powerful way to redesign products, systems, processes and workflow for both radical and incremental change. For the most part, marketing leaders interviewed in the 2017 State of Marketing Report – The San Diego Perspective are not familiar with the process and there were no examples of Design Thinking being applied to marketing.
Design Thinking is a form of solution-based thinking and it offers marketers the ideal path for repeatedly creating innovative solutions to brand building and customer experience challenges. Design Thinking is also used in innovation-focused customer research.
Solution-based thinking involves evaluating a problem or situation and determining a reasonable, practical plan to attack that problem or situation. While some may consider it to be a form of brainstorming, it is actually a well-defined process that assists not only in fully identifying the problems but also implementing solutions.
Some define Design Thinking as a process with seven stages: define, research, ideate, prototype, choose, implement, and learn. Within these seven steps, problems are framed, the right questions are asked, more ideas are created, and the best answers are chosen. The steps are not necessarily linear and can occur simultaneously and may be repeated.
INCREMENTAL AND RADICAL INNOVATION ARE NOT MUTUALLY EXCLUSIVE
Radical innovation does not necessarily require the use of unique tools that other companies have never used. Instead, the radical innovation can be a simple incremental tool that all companies use but one company chooses to exploit in a way that returns exceptional results. It all comes down to the level of sophistication that companies use to convert from incremental to radical innovation. As shown in our radical examples above, brands are using simple tools like customer journey mapping and content creation at a more advanced level from their counterparts to attain revolutionary gains.
Marketing is changing. The mindset of your customer is changing. The most successful companies understand and embrace change.
Today’s marketing leader must be more agile, data-focused, and customer-obsessed than ever before. We spoke to CMOs, VPs, and Director-level marketers from a variety of B2B and B2C businesses to learn how this shift in marketing is impacting San Diego.
Our 2017 State of Marketing Report – The San Diego Perspective is available now at no cost!
Stephanos Trokoudes is a Research Analyst at Q2 Insights, Inc. a research and innovation consulting firm with offices in San Diego and New Orleans. He can be reached at (760) 230-2950 ext. 5 or [email protected]