Soft innovation is nice, big innovation is necessary

A recent report by Yankelovich, the US market researchers, provides the most compelling evidence to date of a consumer backlash to the increasingly interruptive and intrusive practices of marketers. Published in April, 2004, the report contains some very powerful insights into not only what is wrong with marketing but also what it can do to put things right.

I quote:

Consumer resistance to marketing is a growing phenomenon. During 2003, dissatisfaction with the most egregious marketing intrusions and annoyances boiled over. In the period of a few months, the Federal Do-Not-Call Registry was opened, the HIPAA Privacy Rule took effect, the CAN-SPAM act was passed, and the Attorney Generals of New York, Missouri and Virginia undertook widely publicized legal actions against spammers.

But consumer resistance is not confined to spam and telemarketing. Marketing resistance has gone mainstream. Response to all forms of marketing is declining at precipitous rates. The market for products to block, skip or opt out of marketing and advertising is growing rapidly. Some marketers have even begun tapping into the theme of marketing resistance to promote their products.

Marketing is a significant percentage of the cost of doing business for many companies, so the return on marketing investments is coming under intense scrutiny. Yet, clutter, competition and fragmentation have steadily chipped away at the productivity of marketing. In response, marketers have redoubled their efforts, flooding the marketplace with a deluge of more marketing in the hope that some message somewhere will break through to consumers. This creates a marketing-saturated environment that consumers are resisting with increasing sophistication and skill. As a result, marketing resistance has become another major factor in the continuing declines in marketing productivity.

The overall consumer attitude about marketing is not wholly negative. Consumers have long had a love-hate relationship with marketing. And consumers still love great ads. But the negative elements of a marketplace that is increasingly intrusive, pushy, loud and extreme are unwelcome. So, negative attitudes are up substantially notwithstanding continuing positive attitudes. Unsurprisingly, then, the consumer response to much marketing, even traditional marketing, now looks exactly like the response to spam – avoidance.

Marketing resistance is not a desire to stop shopping altogether. Consumers are certainly not going to drop out of the marketplace. But they do want to shop in a different way. Consumers are smarter with more access to technology, information and products than ever before. Busy, time-starved consumers want marketing that shows more respect for their time and attention. Consumers are more interested in experiences, service and authenticity.

Intrusive marketing rides roughshod over these new competencies, needs and expectations. It is harder than ever to differentiate brands. Parity rules in most categories, and not commodity parity but luxury parity in which all brands are able to deliver the highest levels of quality, reliability, convenience, power and performance. This makes good marketing practice much more important. Consumers expect as much quality from the marketing practices of a brand as from the brand itself. Not to mention that marketing practices can be the source of competitive differentiation when brands are indistinguishable on other key
features and attributes.

And the facts?

The overwhelming majority of consumers express a negative opinion about the marketing and advertising they encounter today.

• 60% agree that their opinion of marketing and advertising has become much more negative than it was just a few years ago.
• 61% feel that the amount of marketing and advertising has gotten out of control.
• 70% say they tune out advertising more than they did just a few years ago.

For many consumers, marketing and advertising is a detriment to their quality of life. While it is not a majority of consumers who express this opinion, it is by no means an insubstantial percentage.

• 45% say that the amount of marketing and advertising they are exposed to detracts from their experience of everyday life.
• 46% say that their shopping experiences are less enjoyable because of all the pressure to buy.

These attitudes concern marketing and advertising as a whole. Certainly, spam and telemarketing generate the most negative reactions, but the depth and breadth of concerns extend to all forms of marketing. Indeed, every form of marketing is affected by the broader marketing environment. For example, 53% of consumers say that spam has turned them off to all forms of marketing and advertising

And perhaps most damning:

The fervor with which consumers are resisting marketing suggests that the impact on marketing productivity is considerable.

• 60% describe themselves as a person who tries to resist or avoid being exposed to marketing and advertising.
• 69% say that they are interested in products and services that enable them to block, skip or opt out of being exposed to marketing and advertising.

The report goes on to suggest that there are opportunities for a new marketing as well. This has been perhaps less publicised than the top-line figures. It then recommends four aspects of a new marketing business model, two of which are old, and two are new. These are:

Precision - Talking to the right people.
This seems obvious, but feedback from consumers suggests that despite best efforts, marketing targeting remains so imprecise that it contributes to clutter.
– 52% wish for less marketing and advertising than today; only 7% wish for more.

• Relevance in marketing. Delivering a message that resonates.
Again, this seems obvious, but consumer feedback suggests that relevance is often lacking. Irrelevant messages add to clutter.
– 59% say that most marketing and advertising has very little relevance to me.

• Power for consumers. Putting consumers in control.
This means regaining control of the business by giving up control to consumers. This is counter-intuitive, but consumers now expect to be able to dictate the terms of any transactional relationship. And if they don’t get it, they just exercise the ultimate control – total resistance.
– 53% complain that nothing has changed because consumers are still at the
mercy of marketers and advertisers.

• Reciprocity for consumers. Providing value in all interactions.
This means paying consumers for their time and attention. Consumers want immediate value from the ad or marketing itself, not the promise of value in a product to buy. This value can be information, entertainment or compensation, but something to demonstrate appreciation and respect.
– 61% say that marketers and advertisers don’t treat consumers with respect.

When reading all this, I got to thinking about Free Prize Inside and Seth Godin's recommendation for large organisations to focus on soft innovation, those small things that anyone can achieve to make a big difference for consumers.

I still disagree with Seth. He incorrectly perceives big innovations as being all about product breakthroughs achieved by technology and science. Unfortunately such a view is in danger of blinding us to the opportunities to make breakthrough customer innovation in marketing itself as the Yankelovich survey suggests. For me, these are the fundamental imperatives for marketers today, these are the essential concerns and opportunities we need to be talking about in any organisation, not just the nice, soft innovations at the edges of a dying discipline.

Comments

[Chris Lawer]

Graham

Thanks for your comments and for pointing me in the direction of Donald Lehmanns' research. Their conclusion on the failures of inside-out marketing and R&D are certainly illuminating. I think that one of the ways to improve the chances of marketers succeeding at innovation is to refocus away from product and process innovation and onto business concept/model innovation.

Equally, marketers sometimes forget that there is plenty of scope to innovate marketing, especially the kinds of interaction that take place between firms and their customers. If they did, they may discover new opportunities to create breakthrough value both with and for customers.

But like you say, it is getting the balance or the ambidextrousness (is that a word?!) of incremental and radicial innovation that is key - and that may only come from the CEO or from outsiders.

[Graham Hill]

Chris

Donald Lehmann and others recently published an interesting paper on the origins of successful and unsuccessful product innovations.

They make interesting reading for your thesis on small or big innovation.

Suprisingly, the most effective source of successful innovation was 'taking advantage of random events' which generated 13 times more successes than failures.

The next most effective were 'solution spotting' with seven times more successes than failures, 'market research' with four times more and 'need spotting' with twice as many.

The least effective sources of successful innovation were 'trend spotting' and 'mental inventions' which both generated two times more failures than successes.

Lehmann has developed a simple model that predicts success in innovation with over 95% accuracy.

What this study suggests is that rapidly responding to changes in the market environment (what you might call evolving on the marketing fitness landscape) is a more effective strategy for innovation than traditional R&D-style innovation. Far too often this is driven by the inside-out needs of marketing rather the needs of the market. And as Lehmann's study clearly show, this sort of innovation fails far too often.

That doesn't mean innovation cannot be done that way, just that a careful balance needs to be struck between continuous, market-driven, adaptive innovation by individuals in contact with the market, and discontinuous, internally-driven, disruptive innovation by groups some steps removed from it.

Graham Hill
Independent Management Consultant

[johnmoore (from Brand Autopsy))]

Chris ... have you thought about how soft innovations (i.e. small ideas) can lead to big ideas?

Alan Robinson and Dean Schroeder have and in their book, Ideas Are Free, they detail how small ideas can lead to big ideas.

Notable passages include ...

"Small ideas are the best source of big ideas. A big problem or opportunity frequently manifests itself through a host of smaller signs or symptoms, each of which might be seen individually by different people in different places at different times. What might seem to be a small idea could in fact be addressing a facet of this larger issue. This bigger issue can often be discovered by probing with the right questions."

"Many small ideas are the germs of bigger ideas, although the connections are not always obvious. What might seem to be a small idea could in fact be addressing a single facet of this larger issue."

"A major problem or opportunity often cuts across organizational lines and manifests itself through multiple symptoms, many of which can be quite subtle. Consequently, the smallest idea might well be a partial reaction to something much bigger."

"Using the small idea as a stepping stone, a larger problem or opportunity can sometimes be unmasked."