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Innovation – Better is Always New; New Isn’t Always Better

New? You bet! Who (except marketing gurus and analytical chemists) would think changing Coke’s hundred-year formula for success would be sound strategy? And then give the new product the flagship brand name? New Coke? Was old Coke bad?

Was New Coke better? The market passed a harsh verdict on that.

Why did this “innovation” happen? Did the Coke brand people forget their product had a very loyal following -- more than caramel colored water with fizz? Certainly they thought Pepsi was just fizz water. Did they never eat in a restaurant that only served Pepsi products?

(Next time you’re in a Pepsi-only restaurant, ask for Coke and check the response: “Is Pepsi OK?” It immediately says we’re second best. Is it OK? IS IT OK?!?)

Any brand with an “is this OK?“ competitor should be working on so many other things than copying that competitor’s formula.

OK, we learn from mistakes and Coke has done a lot of things right – other flavors (cherry, vanilla, diet versions of each), juices and bottled water (natural and with additives). They defined themselves not as a cola company, but a beverage company – a broader mission that encourages product innovation.

Speaking of bottled water (which some call “dead” water because it has no trace nutrients like tap water), how did it become so successful? My grandmother would hoot at the idea of paying $8 a gallon for water ($1 for 16 oz.) when it’s free at any drinking fountain. (Gasoline’s “only” around $4 a gallon.) This IS innovative thinking.

It’s not the product; it’s the convenience. It meets a customer’s needs. Buy a bottle and take it with you. Sip it in class, on a bus, while you drive, in a meeting. Hydration is important to health, right? Bottled water makes hydration convenient.

As a small business person you have a need to define your business in the broadest benefit terms possible, and make sure you look at the non-tangible aspects of your product (package, delivery, timing, everything you can’t touch).

You may not have a separate marketing team and an engineering staff devoted to new product development – and that may be a plus as well as a minus. But you do have customers more than happy to tell you what they’d like to see added to (or subtracted from) your product. The good customers will tell you directly if you ask.

I once presented a pretty solid marketing plan (I thought) to a very honest client and then expectantly asked his reaction. “It’s a pretty good plan, but you didn’t put a bow on it,” took a lot of air out of my balloon. Then I realized he wanted my plan to look like I was proud of the work, that I cared enough to polish the format. The hurt changed to appreciation and a change in the way we presented future plans.

A word of caution in researching customers; don’t just say, “What do you want?” Henry Ford once said, “If I had asked people what they wanted, they would have said a faster horse.” Ask them what problems they face in your area of their operation. What takes too much time or materials? What’s unused? What would they like the product to do that it doesn’t? What does it do now that it shouldn’t?

Look especially closely at the intangibles you provide that may not be appreciated – particularly the “everybody does that” feature. If none of your competitors offers or is highlighting it, then promoting that feature first makes you “the inventor.”

Back when beer first began to be delivered in bottles, Schlitz had the foresight to claim their bottles were cleaned with “live steam.” (Is there “dead steam”? Hot water?) The brewers said “everybody does that,” but the marketers recognized it as a “secret” and one that would overcome the public’s fear of getting beer in a dirty bottle. “Live steam” earned Schlitz a market share second only to Budweiser for years, because other brands wouldn’t use Schlitz’s claim. (Later Schlitz shot themselves in the foot with an idiotic marketing decision and lost their market share, but that’s another column.)

Define your company mission by the total benefits you provide, including the important intangibles. See if you have a strong “everybody does that” feature that no one has claimed. And innovate in the prospects’ mind to keep your business competitive. Just remember, better is always new, but new isn’t always better.

Perry Ballard, starting in his home, built a firm of 28 professionals with a $1+ million payroll. Now he consults, teaches and writes on business topics. Contact him at perry@ManagePerceivedValue.com.
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