Innovation, The Down-Side – Post I
4 Comments Published by Frank Lane April 28th, 2007 in Differentiation, Execution, Focus, Innovation, Way OffThis is one of several posts on the subject of whether a category or brand can be guilty of too much innovation.
Let’s take golf balls as a first example. Every major company introduces at least one new golf ball each new season. And almost always the new balls replace the previous season’s balls. I found a ball that I really liked a couple of years ago. I was loyal to it for only one year, because it was never made again, or if it was, it was re-labeled in ways beyond my deciphering.
There are multiple issues with this much innovation. First, no ball can develop loyalty in this way. You can be loyal for a few months, but not for a few years. Second, no ball can build enough trial in the first season to maximize its potential. Third, as a result of the first two points, no ball can afford to payout a real introductory spending program. (If you cannot convert trial to regular usage, you cannot investment spend to build trial.) Lastly, this category practice forces all golfers including heavy users into trial and experimentation mode every new season.
This effectively transfers power from the golf ball marketers to the golf ball retailers, which is a huge mistake if you are trying to build a Killer Brand. “Let’s develop something really cool, then replace it before our target audience can all try it, and before any of them can become loyal to it.” How much sense does this make?
As a consumer, I despise when they play the “let’s replace it ASAP” game–and it happens much too often today. Every time I find a product I love, it disappears soon after. It makes me want to stay away from the brand/company instead of remain a customer.
I understand, but remember that both the brand/company and the retail trade are complicit in this game of not musical, but marketing chairs.
F
True. But there’s one aspect on the “let’s discontinue it” game that I don’t quite understand. Take, for example, your reference to Chico’s in your book. They formed their brand around a certain niche. But Chico’s ended up selling out to the same mass-made clothes you can find everywhere else.
A lot of the products that I love (which disappear) are niche-type things. Not insignificant niche things; just not something a large percentage of the market wants or needs. But, that doesn’t mean that there isn’t a significant market for it. The Chico’s customers wanted what the company orginially offered, and were thus fierecely loyal. (And as you stated in your book, the line was catching the attention of other women.) So even though Chico’s wasn’t reaching out to the majority of women, their customers were far less likely to shop anywhere else.
Thus, my confusion. My business side gets why a company wants to reach the majority of the market (as it’s all about making money). But, at the same time, I don’t understand why they’re willing to give up such a base of fierce customer loyalty. If you want to reach the greater market, why not just keep what you have and start another brand? Look at the company that owns Gap, Banana Republic, and Old Navy. Different markets, but under the same umbrella. Gap even takes it one step further and has several markets under one roof: Gap, Gap Body, Gap Baby, etc.
Jenn,
I am in total agreement with you. Fierce loyalty is too rare to forsake.