innovation It is very important to differentiate yourself from the competition. But innovating involves investments and precise calculations that compromise the business risks undertaken. Cesar ValencosoMarket research specialist at the company Weighbridgepublished a book that reveals and measures the advantages of innovative companies over others. The result is striking: Mass consumer brands that innovate successfully grow six times faster than those that do not.
According to this ‘The ten commandments of successful innovation’, There is no doubt about Valencoso. The study is based on an analysis of 600 real innovations that were introduced specifically in the last decade. But great packaging or a flashy christening is not innovation. This expert identifies the characteristics of successful innovations that are new, focused, well distributed in the market, and provide clear differentiated value to consumers. The topic gets complicated and shows that innovation is not easy at all.
According to the book’s conclusions, only 20% of launches can be considered successful; which means that they are gradually decreasing, and that commercial prudence is triumphing more than surprise competition. According to Valencoso, this high-low success rate drags brands into a dangerous cycle full of dire consequences. The polarization between innovative brands and others is increasing. The former achieves 8.2% higher average prices and higher average penetration for its products.
Three months to determine success
But Valencoso warns that it is not worth insisting on an innovation, even if it has the full trust of its creators. According to their data, in 80% of cases it is possible to determine whether the innovation will be successful or not in just three months. The aim should always be the profitability and economic viability of innovations. “Brands forget that the purpose of a strategic plan cannot be to innovate in itself, but this is only a means to achieve the set goals. It is a very powerful tool but also very complex and expensive. Therefore, successful innovation must be efficient; This means a small number of initiatives, but well thought out, well planned and well supported from the start,” says Valencoso.
Valencoso invites brands to innovate and proposes a total of eight golden rules to achieve success. These recommendations apply not just to consumer products, but arguably to any business that thrives on competition and where differentiation is key to survival or growth.
These are the eight golden rules:
1. Contributing to something new. Innovation is the basic requirement of innovation. There is a need for a unique product that provides a solution to the problem.
2. Being focused. The best innovations are those that are bought by all audiences, but created with a clear message or specific benefit to a group of consumers. Examples such as lactose-free milk or vegetable drinks confirm this.
3. Let it be found. It is important that the product is distributed well from launch. In fact, there is a direct correlation between the distribution percentage of the innovative product and the probability of success, which is clearly higher than a distribution percentage of 60%. The challenge with this proposition is that the first moments of a new product are the most complex in terms of getting the distribution that will give them that valuable shelf space.
4.Let it be seen. All launch efforts will be of no use if the consumer cannot see our innovation on the shelves. Leveraging in-store packaging and communications is essential before launching larger campaigns.
5. Let it be syncretic. The most successful innovations combine different growth elements, for example being healthy and delicious or being practical and healthy.
6. It is supported. In order for innovations to enter homes, investments must be made to support the product through advertising or promotion from the very beginning.
7. Make it incremental. Generating sales is not enough, but they need to grow in addition to the parent brand’s sales. Otherwise there is a danger of cannibalism and therefore the final result will be unprofitable.
8. Re-evaluate the offer. Innovation requires a high degree of investment, and the only way to make it profitable is at a higher price than already established products. Of course, consumers will only be willing to pay this extra if the innovation is real and provides them with added value.