Why You Need a Brand Innovation Strategy
Brand innovation is critical for companies looking to stay relevant, profitable, and poised for growth in an ever-changing market landscape. As a brand manager or marketing leader, developing a compelling brand innovation strategy is one of the most critical things you can do to future-proof your business. But what exactly does an impactful brand innovation strategy entail? Let's break it down step-by-step.
Understanding Brand Innovation
Before diving into the nitty gritty of crafting a strategy, we need to level-set what brand innovation means.
Brand innovation refers to creating new or improving existing products, services, messaging, experiences, and more under an established brand name. The goal is to find new ways to solve customer problems, meet emerging needs, tap into cultural shifts and market trends, and perpetuate the brand's relevance and growth trajectory.
Some examples of successful brand innovations over the years include:
- 1924: Coca-Cola launched Fanta as an alternative soft drink option when inputs for Coke were in short supply
- 1935: Nintendo pivoted from playing cards to toys and games
- 1946: Toyota expanded from textile manufacturing into automobiles
- 1957: Nintendo again reinvented itself with arcade games and patented game consoles
- 1976: Microsoft adapted from programming language software to home computing
- 1996: Nintendo released the Nintendo 64 console with 3D graphics, an innovative leap forward in gaming
- 2001: Apple unveiled the groundbreaking iPod and, eventually, the iPhone, entering the consumer electronics sphere
- 2003: Amazon expanded from selling books online to offering web services like cloud computing tools
As we fast forward, brand innovation remains as crucial as ever amid rapidly evolving consumer behaviours, economic shifts, emerging technologies, increased competition, and the growing omnichannel marketplace.
Why Brand Innovation Matters More Than Ever
Here's the hard truth: brands that don't innovate don't last. More than half of the Fortune 500 companies from 2000 were replaced by 2021.
So why such staggering turnover at the highest corporate echelons? Failure to continuously reinvent and reinvigorate the brand in strategically sound ways.
Seismic economic, technological, and social shifts make standing still a non-option. Consumer behaviours, needs, values, and preferences – all fluctuate rapidly. Market dynamics careen in unexpected directions. Competitors nip at your heels with agility.
Underpinning it all, innovation unease sinks in – that tension and uncertainty around “What's next? How do we keep evolving? Are we changing fast enough?”
Bottom line: Brand innovation = long-term business viability. The companies realising this and doing it well are positioning themselves to thrive amid chaos.
Crafting a Winning Brand Innovation Strategy
We've established why regularly reimagining your brand is non-negotiable. Now, let's map out what an effective innovation strategy entails.
Research emerging trends and market gaps
The first step is researching to spot emerging trends, shifts, and gaps in your market(s). Consumer needs and economic landscapes don't stand still – they fluctuate constantly. Ongoing market intelligence allows you to anticipate where white space opportunities might exist to capitalise on them.
Some key areas to research:
- Customer pain points – What problems are emerging that your brand can help solve? What current customer pain points still need to be fully addressed?
- Market trends – What rising trends open exciting opportunities? Think of shifts in shopping habits, economic forces, competitive fronts, channel disruption, and tech breakthroughs.
- Competitor approaches – How are competitors tackling innovation? Can their strategies provide inspiration or areas where you can differentiate?
Brainstorm innovative ideas
Next, leverage market insights to brainstorm ideas for improving different aspects of your brand – products, services, experiences, business models, and more.
This phase explores a wide range of possibilities before narrowing to viable options. Wild, creative ideas are encouraged. Build on others' suggestions through riffing and connections. Capture all ideas without initial judgment.
Then, review possibilities through critical, objective lenses, assessing elements like feasibility, customer value-add, uniqueness, cost, timing, risk, and strategic alignment.
Prioritise game-changing concepts
With a robust idea pool, prioritise 3-5 innovation concepts with game-changing potential to pursue testing and eventual implementation.
Factors to weigh when deciding which ideas to advance include:
- Strategic fit – Aligns to business goals? Supports brand vision?
- Market viability – Solves customer needs? Distinct from the competition? Strong ROI potential?
- Feasibility – Attainable technically and financially? Appropriate resourcing?
- “Wow” factor – Breakthrough nature? Uniqueness? Cultural relevance?
The aim is to identify promising, differentiated ideas that align strategically and fill market gaps in buzzworthy ways.
Test concepts small
So you've pinpointed some big innovation ideas to pursue – excellent!
Next, test out concepts on a small scale through minimum viable products (MVPs), crowdsourcing input, controlled launches, and the like before going all in.
This phase is about gathering real-world feedback to validate and improve concepts and confirm they warrant broader rollout.
Some possible testing approaches include:
- Customer surveys – Gauge interest levels and anticipated value-add through survey questions
- Focus groups – Discuss ideas with existing customers and non-customers to gather reactions and suggestions
- Beta launches – Release a basic MVP version to a limited test group to trial and refine before full development
- Crowdsourcing – Solicit ideas from a broader community to democratise innovation
- In-market trials – Test out an offering in a small setting like a single store or geographic area
Testing reveals flaws to fix and areas to modify and sharpen, confirming you're headed in the right direction before primary resource outlays.
Scale concepts that demonstrate traction
Once testing yields promising indicators like strong customer reception, positive usage metrics, and supportive qualitative feedback, you can scale successful concepts!
This entails rolling out innovations widely across markets, channels, and customer groups. Back them fully with comprehensive product/service development, branding, marketing, operations, and distribution support.
Keep gathering consumer and performance data post-launch to realise additional improvement opportunities. But core offerings showing initial success deserve expanded reach to maximise impact and ROI.
Keep the innovation engine running.
Innovation is more than just a one-and-done effort or episodic initiative. True brand innovators bake constant innovation into their culture, processes, and teams.
Ongoing innovation requires establishing methods for continuing the cycle – researching markets, ideating concepts, testing possibilities, and scaling winners.
Some best practices to keep momentum include:
- Innovation training – Equip teams with creative thinking tools through workshops on design thinking, agile approaches, ideation techniques, and the like
- Dedicated teams – Develop distinct innovation teams, leaders, and roadmaps to maintain focus
- Innovation days – Hold regular brainstorming sessions to generate ideas.
- Process integration – Integrate research, ideation, and testing into processes across the organisation
- Customer council – Create a customer advisory panel for brand and product enhancements input.
The goal is to build repeatable muscle memory for bringing impactful innovations continuously to market.
Brand Innovation Strategy In Action
Let's explore a real-world case study on brand innovation excellence propelling astronomical growth – streaming pioneer Netflix.
Once just a fledgling DVD-by-mail rental upstart, Netflix followed a prescient brand innovation strategy to become the undisputed leader of streaming subscriptions and one of the world's most valuable brands.
1997-2007: DVD Rentals Take Off
Netflix's original DVD rental subscriptions disrupted Blockbuster and others with unbeatable convenience and an expanding catalogue.
However, leaders saw streaming's promise and began innovating despite market dominance.
2007-2012: Transition to Streaming Begins
In 2007, Netflix debuted online streaming. Viewership exploded but was still supplementary to the booming DVD rental business.
Seeing online videos soaring in popularity, Netflix began aggressively expanding content and device support.
The brand also kept improving the core DVD offering to fund streaming R&D.
Innovations setting streaming's stage included:
- Streaming tech platform investments
- Streaming content licenses
- Laptop streaming capability
- Partnerships expanding device access
2012 Onward: Streaming Takes Over
With streaming capabilities maturing in 2012, management made the call – online streaming first.
Though still profitable, Netflix purposefully cannibalised its cash cow DVD rental base to embrace the future wholeheartedly.
Since then, relentless streaming and content innovations have brought stratospheric success:
- Content: Must-see original hits like Stranger Things, genre-spanning licensed shows, local content globally
- Format: Interactive stories like Black Mirror: Bandersnatch
- Access: Mobile downloads for offline viewing introduced
- Plans: Lower-priced basic plan, sharing crackdown
The innovation cycle continues – as Netflix explores ideas like gaming, sports rights, livestream shopping, and more.
Results
Netflix's brand innovation zeal brought:
- 230+ million global subscribers – from under a million DVD subscribers pre-2007
- $30B+ annual revenue – compared to $1B in 2007
- Continued growth – despite increasing competition
Plus, consistently strong consumer loyalty, cultural relevance, talent attraction, and Wall Street performance.
Through a commitment to constant innovation and evolution, Netflix built one of today's most prolific global brands.
Key Takeaways
The biggest brand innovation takeaways to drive growth include:
- Innovate consistently – Reinvention ensures resilience amid market shifts
- Identify white space – Spot unsolved customer problems and emerging trends
- Explore ideas widely – Brainstorm varied possibilities before refining
- Test small – Validate at a small scale before going all in
- Keep cycling – Embed innovation into ongoing processes
Brand innovation necessitates bravely moving past legacy successes to create value and meaning for customers in new ways repeatedly. It's challenging yet hugely rewarding work for companies with the vision, guts, and grit to fearlessly build their futures.
Frequently Asked Questions
Still, have some brand innovation questions? Here are answers to a few common FAQs:
What are some key areas to innovate?
Areas ripe for innovation include products, services, pricing models, brand messaging, customer/shopping experiences, business models, partnerships, and more. Identify wide-ranging possibilities before focusing on the emerging concepts as viable and impactful.
How much should we budget for innovation?
While testing concepts small first minimises risk, allocating adequate funding enables exploring ideas fully and scaling what demonstrates traction. Leading companies invest 15-20% of their budgets to fuel innovation.
How do we balance innovating our core business while expanding into new spaces?
Don't abandon profitable core offerings prematurely when chasing “shiny objects” in new spaces. But simultaneously build future-ready capabilities before economic shifts force reactive pivots. Netflix bankrolled streaming investments through DVD subscription revenue until the technology and content libraries sufficiently matured.
What key metrics should we track?
From concept testing through scaling, track customer reception, product/service usage and performance metrics, revenue impact, customer lifetime value, and real-world feedback to guide iterations and resource allocation.
How can we foster an innovative culture?
From hiring innovators to giving employees innovation resources and training and dedicating time to encouraging bold thinking and normalising failure, creating a culture welcoming relentless creativity is step one. Consistently walk the walk in processes and leadership messaging, too.
