In today's economic climate, innovation has become a need, yet defining what it entails remains challenging.
According to Gartner's CMO Spend Survey 2021, 72% of CMOs increased marketing innovation expenditure in the preceding year. Despite this, 91% of respondents feel it is difficult to measure the impact of innovation, and 83% believe it has not reached management's expectations.
What is the true problem? Many marketing teams are unsure of what innovation is and what it includes.
Defining Marketing Innovation
Marketing innovation is comprised of three components:
- Novelty: Innovation is the consequence of an original idea.
- Execution: The process of putting new ideas into action is known as innovation.
- A positive outcome: The goal of innovation is to provide ideas that bring value to a company's bottom line.
According to this concept, novelty is essential to marketing innovation. Even the concept of new is not as clear as it may appear, given the current employment of phrases such as new-to-the-world, new-to-industry, new-to-customers, and new-to-organization.
What is considered new and innovative in one set of market conditions may not be in another. Because mobile contactless payment usage is significantly larger in Asia/Pacific than in North America or Europe, a conventional consumer mobile payment activity in China may still be considered emerging in France.
Avoiding Using “Innovation” as a Sales Cliché
The overuse of the phrase "innovation" might lead to confusion.
This has the unintended consequence of identifying projects and activities that aren't innovative. The following are some instances of frequent marketing innovation blunders:
- "We should do that as well to be innovative," one person adds (the CMO saw [a direct competitor] running a campaign on TikTok).
- "We need to improve our CRM software in order to come up with a more innovative solution," says the upgrade cycle pioneer.
- The hygiene factor claims that "our replatformed corporate website will revolutionize the user experience."
These are instances of applications or solutions that, while helpful and noteworthy in their own right, fall short of marketing's specific innovation mandate. As a result of this mismatch, the following risks arise:
- Resource - The budget given to innovation has been diverted, putting future investment in jeopardy.
- Strategic - When efforts fail to produce the desired return on investment, innovation-based strategies are endangered.
- Credibility - CMOs that promise innovation but fail to deliver lose their personal credibility as well as the credibility of the marketing department.
To ensure that marketing innovation investments are not threatened by risks linked to resources, strategy, or credibility, CMOs should take the following steps:
- Create a shared understanding of marketing innovation by explicitly describing it. This will remove uncertainty from innovation initiatives, decreasing the potential of innovation only for the sake of innovation.
- Make the line between new-to-the-world, new-to-industry, and new-to-organization clear to the company's appetite for "new." This will help determine the number of feasible concepts that can be examined realistically, as well as the resources required.
- Educate the marketing team and stakeholders on the differences between the various types of innovation in terms of risk and return. On average, marketing transformation includes greater risk and has a larger potential for return than marketing optimization.
Real innovation means being able to create value adding and engaging digital products for your customers. If you need assistance in creating, implementing, and delivering real digital experiences, feel free to contact us here for a FREE consultation.