By James B. Fisher
BIG changes mean (by their very nature) major revolution. In baseball, home runs (while powerful and defining) are infrequent. They are not the greatest producers of total runs scored; those are achieved by the consistency of individual hits, i.e., singles, doubles, and some triples.
How often in a mature industry such as ours do we really witness a true home run: an industry-shattering breakthrough that radically or dramatically changes the way industry members respond and/or perform? One such example of an industry-shattering event would be represented by the actions taken by both Toyota and Nissan when (in 1990) they introduced the Lexus and Infinity (respectively) brands. This indeed was a radical change that struck right at the soul of an extremely mature automotive industry: one action that put wheels in motion turning faster with each ensuing year.
From a market share perspective during the past 17 years, Lexus has achieved a superior market position when compared to Infinity. However, the mere presence and unparalleled success of Toyota and Nissan has required significant actions to be taken by other industry members in response. During that same period these two premiere manufacturers have continually refined and evolved their luxury brands by constant incremental innovations leading to greater brand value.
Incremental Innovations simply refine, adapt, and/or enhance the products/services we offer our customers. They are important to a company’s competitive strategy and long-term outlook, while at the same time playing a multitude of important roles:
- Capture customer support from those currently not being served by our organization
- Change the existing shopping environment, thereby creating a new relationship with our customer
- Enhance the EXPERIENCE that is being realized by our customer
- Establish/preempt potential competitive action (new entry or renewed development) that could negatively impact us
- Create interim fixes to solve industry-wide long-term problems
- Create operational variations that allow direct response to the market served
Incremental Innovations are becoming necessities in today’s operational environment. Retailers have an improved ability to measure actual results, i.e., select product sales performance, revenue improvement, etc. resulting from small, specific actions taken. An example of such a defined improvement occurred when one of our customers was shown the opportunities he was missing for additional sales growth. These opportunities for sales growth could be achieved by simply expanding his self-service beverage bar/center in all categories, i.e., hot, cold, carbonated, and frozen. The subsequent actions taken at specific store locations resulted in a tremendous improvement brought directly to the bottom line.
Incremental Innovations can provide the ability to gain new customers while increasing the income generated by existing customers. A good example is how a recent analysis performed for a corporate client revealed significant lost sales opportunities by not offering a new generation brushless/touchless automatic car wash. The renewed strategy of a car wash installation resulted in NEW revenue to the site of approximately $16,770 per month.
Incremental Innovation offers the ability to capture customers by offering a broad array of differentiated brands within important core categories. A project in which we were involved for a mid-western company assisted that organization in identifying the potential sales revenue that would be realized by the development of a “wine cellar” within an existing facility.
Incremental Innovations can assist companies in responding to industry-wide radical changes. A good example here would be the industry entry of what are called “non-traditional” retailers (supermarkets, price clubs, HVR’s, etc.) during the mid and late 1990’s. Traditional retailers began to take small, innovative, but lasting, changes to their marketing strategies to not only maintain their core customers, but also, to continue to grow and achieve.
In a recent Wall Street Journal article, the term “Perpetual Maturity” was used in describing any industry that shows slow growth, but has only a small chance of significant decline. It can certainly be said that ours is just such an industry. Whereas changes are taking place on a monthly basis in terms of the marketing actions within, decline in performance does not occur. AND many of those actions we are part of or read about are exactly Incremental Innovations that are being specifically applied to individualistic circumstances
To contact Jim:
IMST Corp.
16360 Park Ten Place, Suite 102
Houston, Texas 77084
281.398.0321 – Phone
800.231.4678 – Toll Free
281.398.0679 – Fax
mfisher@imstcorp.com