market research

Passikoff: Innovation in Today’s New Normal

We had the normal, the new normal, the pandemic, and, as we move toward the next normal, brands will need to focus on innovation and innovating.

We’re due to issue our Most Innovative Brands survey in the next couple of weeks. It will be our 11th annual survey. And while the 21st century has not yet delivered on the promise of flying cars, once we were into the first decade it was clear some brands were meeting their innovation potential by better meeting consumers’ expectations. So we decided to ask consumers which? Which brands had a better handle on what consumers really expected when it came to innovation. Those expectations turned out to be the gateway to innovation. And yeah, I know that sounds like a Led Zeppelin song, but it’s not. Consumer expectations are constantly on the rise and, it turns out, the best innovation takes place within that particular framework.

So, we had the normal, the new normal, the pandemic, and, as we move toward the next normal, brands will need to focus on innovation and innovating. The thing is, though, that you hear a lot of advice to brands regarding innovation about “focusing on targeted consumer needs,” which sounds good until you realize you actually need to identify those “targeted consumer needs.” Innovation is hard enough without having to rely on identifying a need important enough to warrant the investment based on, well, just asking them.

You can’t just ask consumers because consumers can’t really articulate what they need. Oh, sure, generally they can. But those mostly fall someplace in Maslow’s Hierarchy of Needs. And if that “need” is so damned glaring, don’t you think your competitors have identified it too? There’s a big difference between “innovation” and “imitation,” and consumers know it. And while consumers can’t always articulate what form they want innovation to take, if a brand can accurately measure what consumers expect and identify the gap between that expectation and brand delivery, they’ll have a map into “white space” (that’s the technical research term for that) and a really big advantage over the competition.

Here’s a blast-from-the-past example, but it will give you an idea of what brands are up against and, I think, personalize, the whole innovation thing for you. Get into the Way-Back Machine with me and let’s revisit 1973. “Why go back to the olden days?” I hear you ask. Because that’s when the first hand-held cellular phone was introduced. The Motorola Dyna TAC 8000X. Yeah, that’s how they named stuff back then, The Motorola Dyna TAC 8000X. It was 9” X 5” X 2” and weighed 2.4 pounds (1.1 kg for my readers fluent in the metric system). You got a talk-time of 30 minutes. It took 10 hours to recharge. Oh, and it cost $3,995. That’s $26,285 in 2022-dollars.

Now, I know what you’re thinking. You’re thinking, “HAVE YOU LOST YOUR MIND!? ARE YOU CRAZY!!! Do you expect me to schlep around a phone that weighs as much as a steam iron that costs nearly $30,000, with a battery that only lasts 30 minutes and takes half a day to recharge!!” And you’d be right to think that. Today. But 50 years ago the Motorola Dyna TAC 8000X exceeded consumers’ expectations. There was nothing quite like it. More precisely, there was nothing like it!

By the new century, however, all cell phone brands were better at meeting the expectations customers held for a mobile phone and pretty much the same, clamshell cases and antennas notwithstanding. Some of that was due to, of course, technological advances, but mostly it was driven by what consumers expected and what “new” design configurations and qwerty keyboards brands could come up with.

We had this client back then. Sanyo. They started out making bicycle generator lamps, then radios, then washing machine. And at some point in the latish 20th century they got into cellphones. Which were pretty much like the other brands out there. They wanted to differentiate via some form of innovation. So we did some drill-down research looking for the engagement driver that had the largest unfulfilled expectations. That gap, the white space, between what consumers desired and what they saw brands delivering.

What we found was the category engagement driver, “Connectivity,” – essentially dial-and-connect – had changed. Because of vastly increased expectations it was now “Personal Connectivity.” Which you may think is trivial now, but back then it wasn’t. It turned out to be monumental. We noodled it around (the technical research term for that) and came up with what we felt was a leveragable insight: There was nothing more personal than a picture. Maybe the company could do something with that. After all, Dick Tracy (comic strip character in the 1950’s) had a two-Way Wrist Radio and later a camera phone! So it wasn’t so dumb an idea as it sounded back then. Just saying.

When we told that to the client, they said, “Well, sure, we could add a camera.” After some stunned silence on our part, they ended up doing just that. Sanyo was the first brand to incorporate a camera into a cellphone. OK, it only had 0.3-megapixles and cost $400 ($648 in today’s money). But now you expect your phone to have a camera. Who doesn’t!? Actually, what you expect is that your phone has a really, really good camera. But that’s expectations for you! BTW, the iPhone 14 Pro Max is going to cost nearly twice what the Sanyo camera-phone cost (in 2022 dollars). But that was 20 years ago, and your expectations have, well, increased again. So, it’ll have a 48-megapixle camera. And you’re probably copacetic with that.

Anyway, our list of the brands consumers feel are most innovative will be released in a couple of weeks. These are the brands consumers identified as better meeting their innovation expectations than others. And meeting consumer expectations that results in brand innovation contributes to engagement and profitability. Upwards of 60% in some categories. So a win-win for consumers and brands. Happier, more contented consumers and brands that appear smarter, more differentiated, and more profitable. For now.

Because, as it turned out, innovation is today’s “next normal.” Tomorrow? Stay tuned.

Robert PassikoffRobert Passikoff is founder and CEO of Brand Keys. He has received several awards for market research innovation including the prestigious Gold Ogilvy Award and is the author of 3 marketing and branding books including the best-seller, Predicting Market Success.  Robert is also a frequent contributor to TheCustomer.

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