Calibrating an innovation portfolio during an economic downturn generally means more carefully managing long-term initiatives to ensure you are well-positioned for the next business cycle. Smart organizations consolidate smaller teams around fewer big ideas that are aligned with predicted new market conditions. Confirming that initiatives in the pipeline are well developed and thoroughly vetted reduces risk and helps to ensure that new offers ramp up in sync with similarly forward thinking customers. Call it the first recoverer advantage.
In the business of innovation, helping clients keep revenue streams flowing while markets slow and as they recover is an ideal complement to a company's edgier turnaround bets. Business innovation teams or consultants should be willing to look at existing products or brands with a 'fresh eye' to identify business opportunities that are within reach but "hidden in plain sight."
Like all innovation, this pursuit works different muscles than more narrowly focused efforts to simply optimize processes or reduce costs. It rewards the capacity for lateral thinking, a willingness to suspend disbelief about what's possible (or permitted), and a practical perspective about building sharper or different stories between portfolios and markets.
After twenty years of consulting with manufacturers about their customers' unmet needs and how to transcend them, we believe that interdisciplinary design teams -- our innovation catalysts -- are particularly attuned to spotting these opportunities for organic growth. We call this skill "peripheral envisioning" and the offer Opportunity Design.
Ideally, first-generation Opportunity Design initiatives require little to no change in the product itself as that would defeat the purpose. The goal is "found money" where smaller investments in customer experience-led research around existing products replace more capital-intensive NPD expenditures like prototypes, tooling or certification. Repositioning current products for new buyers, ("channel transfer" in our lexicon), is like a pilot test where the products are all real. They just haven't been envisioned before in this new way, in this new place, or for these new buyers.
Here are three different examples from the music instrument industry where we reframed an existing offer to create a compelling new value proposition from the whole cloth of the back catalog.
Shift the Channel
Shure E Series Sound Isolating Earphones
From "in-ear stage monitors" to "sound isolating earphones"
Shure is a music industry (MI) leader that had developed an earphone designed to be worn by musicians monitoring their performance "in ear," in lieu of dedicated speakers on the stage. These monitors include a "fit kit" with interchangeable sleeves of different sizes and densities so musicians can customize the degree of ambient sound they hear on stage and determine what feels most comfortable in their ears. Noting that sales of earphones were well outpacing monitoring electronics at MI retail, Shure discovered a new user ecology for these products on the tour bus, where sealing out local noise while playing MP3s and games was equally valued. Research conducted with consumer electronics channel retailers -- from big box to audiophile specialty stores -- explored opportunities for the Shure brand to effect a channel transfer for two on-stage products. Although the story of stage-to-street resonated universally, the $149 and $499 price points matched up specifically with mid-fi and hi-fi dealers respectively.
Based on the channel research, the Shure story was re-imagined and the products repackaged with a convenient, zippered case to appeal to pro audio enthusiasts. The E Series sound-isolating earphone program helped Shure grow their in-ear earphone sales in consumer electronics channels 800% over 3 years. In rapidly expanding their sell-in from specialty audio retailers in year one to mass and specialty stores in year two, the program established a critical beachhead for the Shure brand across consumer electronics channels.
Shift the Experience
From an ask-for-it specialty purchase to a do-it-yourself impulse buy
Bigsby manufactures vibratos, the cast metal tailpieces for electric guitars that allow players to physically "bend" the strings, thereby altering their instrument's sound. Historically sold behind the counter as a store-installed specialty item, Bigsby products were out of sight and out of mind, and sales had flattened as a result. Research revealed that the process of installing a Bigsby was simpler than many Do-It-Yourself projects that we had packaged for other enthusiast and homeowner product categories. In fact, Bigsby offered a very engaging, non-digital way for guitarists, accustomed to tinkering with gear, to personalize their sound and change the expression of their instrument. By re-framing the product from a complex specialty item to a kit that could be sold from a shelf at the front of the store, new guitarists were introduced to this iconic guitar accessory and the Bigsby brand experienced unprecedented retail visibility.
Shift the Presentation
Fishman Acoustic Amplification Pick-ups
From box as afterthought to box as primary brand platform
Fishman is the category leader in pick-ups for the amplification of acoustic guitars, but their reputation for acoustic electronics innovation wasn't representative in their retail presentation. Packaging structures and graphics had changed inconsistently from product to product, year after year, muddying the larger Fishman brand story. Engaged to fix the packaging problem, we seized the opportunity to also clarify the organization of the pick-up product portfolio and refine the presentation of the Fishman brand identity. The new design consolidated 40 separate packages into one package system which now supports over 100 SKUs. The new solution generated operational savings (in packaging alone) during the first month that exceeded the project development cost. At the retail level, the new packaging has achieved its goals of better visibility, unique self-merchandising, and a clean, uniform Fishman brand presentation - all of which have contributed to an increase in sales and market share of 18% over the past two years.
The takeaways here are simple but profound: a fresh perspective on existing offers during a slow economy can keep existing customers engaged and cultivate opportunities for buyers new to the brand -- without the capital expenditures of a full-blown product launch. Beyond new revenue streams, marketing initiatives that showcase legacy products also keep channel partners enthused about your brand and products -- and your staff stoked -- until the needle-moving NPD arrives and markets reset.
Mike Mooney is a Partner of Catapult Thinking, an innovation consultancy firm. www.catapultthinking.com