Marketing and Innovation: A Tale of Two Companies

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When most people talk about innovation, they are often referring to the development of new or improved products, a la the iPad.   However, innovation with regard to processes and entirely new business  models are often much more impactful.  Famous examples of this are the lean manufacturing techniques pioneered by Japanese companies, the supply chain revolutions led by Dell and Wal-Mart, offshore support and development driven by Indian oursourcing companies such as Infosys and online retail shopping experiences from Amazon, e-Bay and myriad smaller online retailers.    Innovation in marketing can likewise help to transform businesses.  

While a great deal has been written about the transformation of marketing in a multi-channel world that includes social networks and consumer driven content, much of this still assumes that marketing extrapolates from current practices.   This was brought home to me in recent conversations with two very different clients.



The first client is a large gaming company that has historically been at the forefront of direct marketing and loyalty practices.  They were truly innovative when they designed their programs more than a decade ago.  However, success has become a barrier to innovation, as can often be the case.   They are very reluctant to change and embrace new ways of connecting with and relating to their customers, despite the fact that their traditional programs are no longer working to drive incremental revenue and are increasingly expensive.    Most of the marketing management within the company grew up learning the old way of doing things and are afraid of change, even to contemplate a shift from direct mail to email, leave alone developing a more comprehensive strategy to adopt digital marketing and build online user communities.   This is a case where the impetus for change probably has to come from outside marketing, perhaps in the form of drastic budget reductions or a mandate from top management, once the realization finally sets in that the traditional approaches will simply not yield the required business results nor even pay off in terms of return on investment.

The second client is a large B2B company that actually dispensed with their marketing department a few years ago in a misguided frenzy of cost cutting.   As a result there is not an established marketing process that has to be changed.   This is a company that has a number of innovative new products but does not have the ability to bring them to market, because they lack marketing capabilities.    The challenge here is to convince top management to resume spending on marketing but do it in a way that is truly innovative, cost effective and fully takes advantage of new paradigms in marketing.    This  company has a very large, established user base.   Building a strong, vibrant user community is  one of the first steps in building a natural constituency that is going to help spread the word about new products and adopt them.   This does not obviate the need for traditional product positioning,  customer segmentation and messaging but it does suggest a very different go-to-market approach on a somewhat limited budget.     This requires skills the company does not currently possess, but at least it does not involve fighting an entrenched marketing process and management.    



Most outside observers, if they knew these two companies, would bet on the first company, known for its prowess in marketing to be the one to innovate.   My money is on the second.   Sometimes it is easier to write on a blank page.   Necessity is often the mother of innovation.       

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