Two-Sided Innovation: When Consumers And Businesses Win
Marketers work for two constituencies: the customer and the business. The only innovations that thrive are the ones that deliver value to both.
Innovation can be the key differentiator for modern marketing leaders who need to ensure their brands “do” as much as they need to “say.” But with innovation comes a feeling of risk. Does that have to be the case?
Anyone who has worked in innovation has felt the hollow heartbreak that kicks in when a promising innovation project unravels before it ever gets to market. It’s a sinking sensation of unrealised potential, and a missed opportunity to boost your career.
The causes of these derailments may be a loss of funding before the finish line, the business favouring another program over yours, or something suddenly being viewed as risky in a risk-averse environment. In reality, the underlying reason this happens is usually that the project is “one-sided.”
The answer lies in running a two-sided innovation project.
As a marketer, you work for two separate constituencies: the customer, and the business itself. For all the fledgling innovation efforts going on across a company, the only innovations that actually make it to market and thrive are those that marry up transformational wins for your customers with big wins for your own company.
A successful innovation programme means winning over both sets of stakeholders and presenting the business with a case that includes profitability and competitive advantage as well as consumer engagement. Working this way, those tough questions that slow down or derail your projects in the approval process won’t be tough for you at all.
Here are five helpful hints on how to increase the success and impact of two-sided innovation on the challenges you’re working on:
1. Two-Sided Starts On Day One
You won’t get to two-sided solutions by running a conventional one-sided programme that’s dominated by either a consumer perspective or a commercial one. From day one, explore the consumer problems and the business problems and look for connections.
2. Pick Big Problems, Not Just Interesting Ones
The value of an innovation is usually proportional to the size of the problems it solves. As you scan across those arrays of consumer and company problems, pick out the biggest on each side and start there. You will be amazed at what you discover.
3. Build Win-Win Ideas At The Crossroads
Go in with the explicit intent of finding ideas that deliver significant value to both sides of the equation. As you shape, filter, and hone ideas, know that anything that fails to solve both sides of the equation probably won’t make it to market.
4. Sweat More At The Front End, Less At The Back
Taking a two-sided approach means more work at the front end than just getting straight to ideas; I call this innovation strategy. It involves using a simple framework to help define what success looks like and it makes life much easier at the back end when decisions get made on what goes to market.
5. Nail Your Two-Sided Elevator Pitch
A two-sided approach sows the seeds of the most clean and compelling elevator pitch you’ll ever deliver. Be sure you can answer those business and consumer questions with ease.
Companies that have adopted this approach have helped their business’s profitability. Here are a handful of inspiring examples:
Two-Sided Delivery Win: Amazon Click & Collect
With Amazon’s Click & Collect service, orders are simply delivered to a central location from which the customer can collect, using a secure code. For the customer, the clear benefit is the convenience of not having to be at home to sign for a parcel, and knowing that it is kept securely in a place near their work or home.
But the benefit to Amazon was also immense and immediate. As delivery was to a single location, a huge number of orders were consolidated. This is a clear example of how two-sided solutions can often be remarkably simple.
Attracting Millennials: Marriott Canvas
Marriott International’s Canvas programme is the first of its kind in the hotel sector. The global incubator initiative helps entrepreneurs realise their vision for food and drink concepts in the company’s hotels. Through Canvas, Marriott invited its own employees, entrepreneurs, chefs, bartenders, and artisans around the world to pitch a food or drink concept for a select group of its hotels.
The key ingredient of Canvas is to marry the best ideas of local entrepreneurs with Marriott’s resources, space and capital. The opportunity to bring new thinking to a core part of Marriott’s offering—from how it was sourced, staffed, executed, and run—goes hand-in-hand with transforming Marriott’s appeal as a brand to millennials. In London, for example, a Marriott restaurant manager came up with the concept of a roof picnic–a “Roofnic”–which had people queueing for eight hours for the experience. Projects have run in 14 locations globally.
Restaurant Service: McDonald’s Self-Serve Kiosks
McDonald’s customers can now place their orders at a self-serve kiosk rather than from a server in McDonald’s restaurants. As there are often more machines available than the usual staff numbers, it reduces queuing time for the customer and gives them an opportunity to personalise any order quickly and easily. In the UK, McDonald’s is also testing ordering through the kiosks and delivering the food via table service.
And for McDonald’s, apart from the obvious benefit of less cost sunk into counter staff to take orders, a highly valuable outcome was that they found order sizes actually increased during the trial.
What these examples and the hints above demonstrate is a new way of thinking for a CMO, but an incredibly modern one. You’re operating in a global market where a company can become a global force in just six years of operating (do I need to write the word Uber?) and define a completely new sector. Don’t think it’s someone else’s job to worry about the business case. It’s everyone’s.
Marry up a big win for the consumer and the business. And leave the heartbreak of disappointment to your rivals who only work one side of the equation.