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ticalc2This is a story about the little things. The little things that solve little problems that give customers what they want and bring success to the little thing innovator. Hewlett-Packard had great success with the handheld calculator but they did NOT invent the handheld calculator. That honor belongs to Texas Instruments. The first calculator was big and bulky and cost $2500.

What makes ours special? Nothing. Except…

Screen Shot 2014-12-14 at 10.07.00 AMThat was 1967. By the 70’s, Hewlett-Packard and others had knocked off the idea and the price had dropped to about $75. Bill Hewlett was talking with the ad team of Dick Orkin and Bert Berdis about an ad campaign to sell more calculators. They asked “What makes your product special?” He replied, “Nothing. They all perform the same functions. They all cost about the same. Nothing.” And then he said, “…we do have one little thing. The problem with other calculators is that they are slick on the bottom and slide across your desk when you punch the keys. We added four little rubber feet to keep ours from sliding.”

Orkin and Berdis sat down on the curb outside Hewlett’s office and created a radio commercial that focused on the sliding problem and the little rubber feet. Sales of H-P calculators went through the roof. Those little rubber feet didn’t add 2 cents to the cost of the product but solved a serious problem that mattered to customers. The little innovation, and the marketing that went with it, made the difference for H-P.

Every problem is an opportunity for innovation. Solve the problem, tell people about it, and you’ll be a star.

innovation3Simon Sinek in Start With Why  says innovation is revolutionary. It changes industries, changes the way we do things. According to Sinek, innovation is a BIG DEAL. He is right. And he is wrong.

Innovation is a big deal about 2 percent of the time. 98 percent of the time though, innovation goes unnoticed by most of the world. Most innovations are small, simple ideas that by themselves, don’t make a big difference. (more…)

aosstoreI was in Grand Rapids, Michigan, recently and “discovered” The Art of Shaving. It’s an upscale mall store that is dedicated to one thing and one thing only…the perfect shave for men. As it turns out, I could have discovered it in any one of dozens of malls nationwide. The company has been around since 1996 and its history is the perfect example of the power of innovation.

 

“There’s got to be a better way.”

That’s how good innovation starts. Co-founder Eric Malka said to his wife, “There’s got to be a better way to shave,” and the two of them set about finding it. Over time, they developed a four step system that lubricates, lathers, shaves, moisturizes, and turns the entire shaving ritual into something a man can actually look forward to. When I am finished shaving, my face feels so good I wish I could shave again. Sometimes I do.

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Innovation is Worth More

People are willing to pay more for real solutions, especially one-of-a-kind solutions. AoS virtually owns the high-end shaving market and they get a premium for their products. This is the real value of innovation. Higher margins, better sales, and loyal customers. In 2009, Procter and Gamble (owners of Gillette) bought The Art of Shaving and the company continues to grow.

Like I said, innovation is worth more.

Innovation guru Doug Hall says that every business, every product, every service is on a continuum somewhere between Monopoly and Commodity. At one end, you own the market (for the moment) and at the other, you compete with the rest of the commodities. I think it is the difference between Distinction and Extinction. At the Distinction end of the spectrum, sales, margins, profits, market share and brand recognition are all high. At the other end, the opposite is true and when you compete on price, you never win long term. For the record, WalMart does NOT compete on price.* But that’s another post for another day.

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Innovation is the difference.

Companies that offer true innovation offer unique solutions to customer problems, provide real value, and raise the bar for their industry. Innovation comes in all shapes and sizes. Some are stepping stones to larger innovations. Some (like the mouse, the mp3 player, and the touch screen) go unrealized until someone like Steve Jobs comes along. It’s not the size of the innovation that matters, it’s the relentless pursuit of innovation and the marketing of that innovation that yields results.

 

* A 2012 study by Bloomberg Industries showed that Target, Aldi, even Kroger, had better prices on many products.

dgthinkerThought Leadership may be the fastest growing “sub-industry” in the world. There are over 150 million blogs covering every subject under the sun. Everyone is clamoring to be THE Thought Leader in their respective fields. (Including yours truly, of course.)

While thought leadership is good, it can also be a trap.

In a popular 1960’s TV show “The Many Loves of Dobie Gillis” the hapless hero, Dobie would find himself in the shadow of The Thinker statue while he contemplated his life. Week after week, he “thought”. Week after week, his life, his love, his troubles remained the same. He never changed. This happens a lot in business. We think, we study, we assign committees, we study some more…..

Be a Change Leader.

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Companies that are change leaders are as much about doing as thinking. They actively search for problems to solve…their problems and their customers’ problems. When they solve one problem, they quickly move on to the next. Like a shark, they never stop moving. They never stop changing and innovating. Never. Companies that look for stability or equilibrium soon find themselves falling behind the change leaders. They start to look for ways to “save” rather than ways to “make”. And as my friend Chuck Verrett often says, “you can’t cut your way to success”. Once they start down the path of cost cutting and price cutting, they soon become a commodity, margins shrink, sales shrink, customers leave. Ironically, they stop providing the quality and service that made them successful in the first place.

Opportunity is everywhere.

Whether your business is young and fresh or old and mature, there is opportunity for innovation and change. We’ve seen it with mop manufacturers, banks, industrial contractors, and oil heating products. You just have to look for it. Start by looking for problems. Solve them creatively and you’re on your way to being a change leader.

I spend a lot of time on a sailboat so I’ve seen my share of sunsets. Glorious sunsets. Average sunsets. Lots of sunsets. It occurred to me recently that innovation is a lot like a sunset.

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1. Sunsets can surprise you.
You know the sunset is coming but you never know how it will appear until it happens. You have to always be on the lookout for innovation.

2. Sunsets appear and then they are gone.
If you aren’t paying attention, you’ll miss the insight that leads to innovation.

3. Sunsets can be average. They can be spectacular.
Innovation is not always earth shattering. Small innovations can be valuable, too.

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4. No two sunsets are alike.
Save all your innovation ideas. Compare and contrast them. Build upon them.

5. Sometimes the best view is behind you.

Often the view 180 degrees away from the sunset is even better than the sunset itself. Look for innovation in non-traditional places. Be prepared to be surprised.

6. Sometimes a sunset can distract and take you off course.
A flashy idea can sometimes obscure an even better idea or solution. Don’t let a pretty or easy idea distract you from your primary problem.

7. Sunsets are a lot like sunrises. Just different.
Sunsets mark the end of the day. Sunrises mark the beginning. Some innovations solve problems. Some cause problems. Make sure your innovation fits your overall vision and mission and adds value to your offering.

Innovation opportunities exist in every business, in every product or service. If you look for it, you will find it and you’ll have something to market that will really matter to your customers. When you market innovation, it’s like a beautiful sunset. Everyone that sees it likes it and wants more of it.

It was a couple of years ago that I began to suspect things were changing at Southwest. The esprit de corps was missing. No singing during landing or jokes on take-off. Uniforms replaced shorts and golf shirts. Southwest didn’t feel like Southwest. With the introduction of their latest ad campaign, my suspicions have been confirmed. The bean counters have taken over.

A sure sign that the marketing people have lost control of the ship is when the advertising starts to focus on the company instead of the customer. Sadly, it has happened at Southwest Airlines. The great ads that used to feel my pain when I really needed to “get away” have been replaced with images of employees talking about how much they care. They have “heart”. You can tell, it’s painted on the bottom of the planes.

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Southwest became great by demonstrating how much they care, not by talking about it.

When you are really good at something, you don’t have to tell anyone. Everyone who matters knows. Can Peyton Manning throw a football? Can Eric Clapton tear up a guitar? The day Adam Levine puts his face on a poster with the caption “I can sing and I’m a really good songwriter, too” is the day he starts playing casinos in the midwest. Of course it applies to great companies, too.

It’s the bean counters, stupid.

Customer-focused innovation separates great companies from the competition. When the bean counters take over, the focus moves to the company and the bottom line. Short term, short-sighted thinking. The real Bottom line. This new campaign does not pass the “So what?” test. “Our people have a lot of heart. We love to fly. We really care about flying around the country.”

So what?

Here’s some insight: We, the customers, fly because we have to. Not because we want to or because it is fun. We like(d) Southwest because you made it fun, or at least tolerable. If you’re going to make it boring, we might as well take the bus.

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One of the best ad campaigns of all time was unveiled the day Avis declared “We’re number two, we try harder.” Avis was immediately propelled from the back lot of the airport parking deck to the “front row” in the minds of the car renting public. It was brilliant. Hertz dominated the market and, until that campaign, was the only brand that most people could recall without help. As good a campaign as it was though, Avis never advanced past that number two slot.

Innovation gets the prize

Enterprise looked at the rental car market and saw an opportunity. They opened offices away from the airports and offered to “pick us up.” With all the money they saved from lower real estate costs, they were able to invest heavily in a simple, not-so-clever ad campaign that resonated with an unmet need in the market. “My car is in the shop and I need a ride, and I don’t really want to go to the airport to get a car.” So simple, yet so innovative that Enterprise quickly passed Hertz to become the largest car rental company in America. They now own National and Alamo and they are still growing. Avis, meanwhile, is  a solid number three… and slipping. Maybe they should try harder to innovate.

Wherever Steve Jobs is perched as he watches the latest twists and turns at Apple, you know he has to be laughing. The idea that people are upset when they sit on their very thin, very light phone and it bends is too funny for words. It’s almost as good as the countless people who have dropped their phones in the toilet and act like it’s someone else’s fault that they are trying to multi-task in the john. Seriously, people. Don’t mess with your phone when you are messing with your mess. It’s just not kosher.

While Steve may be laughing, he is definitely not smiling.

Yosemite

PC users might be used to sloppy product introductions and instructions that don’t make sense. Mac users, on the other hand, do not suffer fools lightly.  So, when we open an iWork document and we get a message that says to upgrade to Yosemite, we expect Yosemite to actually be available for download. When it’s not, we start to miss Steve. It’s this kind of insane attention to detail that made the Apple brand synonymous with user-friendly, common sense, plug ‘n play operation.

Sure, we have now downloaded Yosemite and it’s working beautifully, just as we expect. Meanwhile, the damage is done. A tiny spec of rust on an otherwise shiny brand. It will not be the end of Apple any more than a bent iPhone will be the end of Apple. All it means for now is some of Apple’s raving fans aren’t smiling. And that means Steve isn’t smiling.

It’s a simple fact: Your customers have to pay for your marketing…and they don’t mind at all.

When you market innovation, you are offering a unique solution to your customer’s problems. You are making their lives easier, better, faster, more comfortable and they are happy to pay for that. So, not only do you have to put the cost of marketing into your product, you have to make sure you put enough in there to do the job right.

Companies like Lexus, Apple, Sonos, and Marriott get this. They work with margins that allow for aggressive product develop, exceptional customer service, and (of course) brilliant marketing. It’s the philosophy that “I have to charge you enough to give you the product or service that you deserve.” When you subscribe to this philosophy, you are focused on the customer and the customer experience and not the bottom line. You know that the bottom line will take care of itself.

And there’s more!

The added bonus to all this customer-focused innovation marketing is that the brand is automatically elevated in the marketplace and your customer is even MORE satisfied with her purchase. It’s further confirmation that she made the right decision and confidence that the product and brand will continue to provide value in the future.

So, put enough margin into your product to expand your offering and tell your story completely. We’ll gladly pay for it.