Sometimes the biggest resistance to innovation comes from the person who should benefit most from it – the customer. Customers can be very conservative. When you come along with an unorthodox new product or service they are often initially unimpressed. Why should the buyer take a risk with your unproven new gismo? He knows that new products often have bugs and he does not want to be the guinea pig on which you experiment. He is familiar with the current method – why should he change? Who would want to be the first customer for a fax machine or indeed for a telephone? It seems ridiculous now but selling the first few telephones must have been really difficult. And how about laser eye treatment? How would you find the first person to try it when there was a safe alternative in a pair of spectacles? This is understandable and needs careful handling. Your sales people will doubtless be adept at explaining the benefits of your new products but the customer is right to be sceptical. You need to find ways to reassure him and to mitigate his risk. At the same time you need early adopters so that you can get some traction in the market, customer feedback and positive references for your innovation. So acknowledge the client's concerns and put offers in place to allay them. You cannot just use your standard terms and conditions for a radical new product. You have to be innovative in your sales approach too. For example you could: Above all you must choose the right early customers. Some people love new technology and others hate it. Select the best early adopters from among your top clients. Appeal to their sense of pioneering adventure. Stress the prestige that goes with early success – for both of you. Make sure that they share in the recognition of a successful launch. If all goes well then ask them for a testimonial. You can help them be seen as an industry leader in trade journal stories and at conferences. You are in it together and it must be a win/win for both parties. Significance to our readers: No World Borders specializes in unlocking the value in your organization by facilitating change and maximizing innovation that develops value. We have helped early stage ventures launch new products, and enterprise companies transform process. Paul Sloan, our advisor is available for speaking engagements. Contact us for more details. Paul Sloane is the founder of Destination Innovation. He writes and speaks on lateral thinking and innovation. His book, The Innovative Leader, is published by Kogan-Page.
Monday, March 3, 2008
Overcoming Customer Resistance to Innovation, by Paul Sloane
Ten Digital Media Issues to Watch in 2008
The digital media business is no longer simply about buying ad space. It's a discipline focused on distributing experiences—through social networks, videos, widgets and applications, branded content, and, yes, ad placements. Make no mistake; the traditional practice of media buying is still a critical component of online marketing. However, to view ads as the only way to promote a brand or product is to ensure that the brand is seen as stiff, commercial, and inward-looking. 1. Accountable Marketing Channels are Best Insulated from Recession In difficult economic conditions, the most accountable marketing channels will be best insulated from cuts in spending. This clearly bodes well for online advertising relative to other channels. However, there will be an impact, even in the most efficient digital channel—search marketing. Search has become a powerful tool for shoppers, and in a recessionary environment, consumers will search, shop, and buy less frequently. Revenue derived from the cost-per-click ad model is driven by the volume of clicks and the cost a marketer is willing to pay for each of those clicks. While a marketer may keep the same cost-per-click during a recession, it's quite likely that a difficult economic environment will lead to fewer commerce-driven searches, which leads to fewer clicks. The end result is less money being spent in search. 2. Apple opens the iPhone to third party developers – a big year for mobile innovation The mobile industry is poised for tremendous growth. Mobile search and location-based services are growing in importance. Apple is opening the iPhone to third-party developers. Carriers are becoming more flexible—maybe. With all of these developments, mobile advertising is sure to gain momentum in 2008, but we are still a year away from seeing it break out and become a staple for marketers.
Distributing Experiences
Semantic web tools have long been predicted to shape the next wave of online innovation but many are predicting that 2008 will be the year that they finally take off. While such tools have traditionally been confined to research purposes, mainstream applications such as StumbleUpon and del.icio.us are allowing marketers to leverage a wealth of user data.
In addition, companies such as TrueKnowledge, Twine, and Spock will allow semantic web to continue to make progress in 2008.
4. Beyond clicks - improvements in effectiveness measurement
With the proliferation of publisher sites and advertising models has come the challenge of measuring and tracking user activity. As more advertisers launch online branding campaigns, the metrics need to extend beyond clicks. Advertisers increasingly want more detailed feedback on the effectiveness of their online marketing efforts, both to justify spending on the web and to help guide their future media allocations.
5. A limited increase in advertising rates
With an ever-increasing number of advertising choices, it will be difficult for publishers to raise advertising rates substantially. In a January survey of media planners, 37% forecasted a pricing increase of 1% to 5% in 2008, while 38% expected a rise of 5% to 10%. Nearly 20% of the media staff felt prices would fall year over year.
6. The Internet's impact on the 2008 presidential election and U.S. Olympics
The Web will be the most impactful and influential medium in the 2008 presidential race, not only for presidential hopefuls but for voter self-education and self-expression. Much like radio for Roosevelt and TV for JFK, the 2008 race for the White House will be determined by candidates' abilities to connect with and galvanize supporters online. The Internet has changed the political environment. Despite the importance of digital channels in the elections, online ad spending by campaigns will continue to lag well behind television spending. The importance of digital in the 2008 elections is rooted in connecting with and motivating communities, but online advertising is likely to play a secondary role in doing so. Similarly, more people will watch events on the Internet for the Olympics this year than ever before.
7. Behavioral targeting expands, and brings new focus on privacy
Behavioral targeting is expected to increase ten-fold over the next five years, according to eMarketer. Behavioural targeting allows marketers to offer more personalised customer experiences, whilst consumers gain from more relevant advertising and content as they have been targeted based on their online footprint (e.g. what sites they have visited).
Last year saw the formation of an alliance enabling large publishers to share behavioral information on their users, facilitated by Revenue Science. There was also the launch of Wunderloop Connect, a self-service ad exchange for behavioural-based online advertising. This should be the year that it becomes something that advertisers and publishers want to embrace automatically, or expect as part of their ad serving technology, rather than still needing to be convinced that this is a no-brainer.
We will be looking out for more case studies and research to show how effectively behavioral targeting works.
8. Emergence of vertical ad networks
With spending on ad networks increasingly concentrated with the largest players, it will become increasingly difficult for small ad networks to break through. Ad network efficiency is largely a matter of matching the right advertiser to the right placement, and the likelihood of being able to do so increases as a network increases its ad inventory and number of advertisers. This means the largest players should be able to best monetize ad space for publishers (and provide the most relevant inventory for advertisers). T he bigger and more efficient the large networks get, the more ad dollars will be directed to them. It will become more difficult for second-tier players to earn ad budgets, and therefore less necessary for the larger players to acquire them. One related area to watch closely is the growth of vertical ad networks. Martha Stewart Living's lifestyle network and Forbes' Audience Network are two recent examples of strong brands extending their reach by building out ad networks. It's a reasonable extension for brands and helps the smaller sites and blogs within a vertical network gain needed exposure with large advertisers. Look for more vertical ad networks in the year ahead.
9. Nokia's emergence as a player in the digital marketing industry as it expands to software & services
Nokia made two important moves in 2007 that will impact digital marketing in the coming year. It acquired both Enpocket, a leading mobile advertising and marketing services firm, and Navteq, a leader in navigation data and systems software. While there have been no formal announcements from Nokia about how its assets will fit together, it is clearly going to be a company to watch in the coming year. Nokia appears to be vying to expand its own business outside of consumer mobile devices and into the software and services that consumers are able to use on those devices. Nokia now has assets that may accelerate the use of smart devices that use location-based services that know where we are. The potential benefit for marketers is the ability to deliver relevant, geographically contextual advertising opportunities to customers. Accomplishing this feat in the U.S. today, while not impossible, often involve orchestrating a small army of carriers, devices, marketing services providers, and agencies whose interests are not always aligned.
Local search platforms will cross over to the mainstream, with US companies such as Yelp, Yoono, and Outside.in becoming more popular.
Local search platforms will become more niche with vertical search playing an important role. Additionally, companies who focus on enhancing user experience and gaining repeat users will succeed in this space.
Watch new UK players such as Welovelocal and Tipped, and the recently revamped Yell.com. And let's not forget Google, which has the power to crush search startups that are reliant on Google referrals for the majority of their traffic.
This is a competitive market and we should also expect continued consolidation in 2008.
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