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Perspectives on Disruptive Innovation

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42pp. deck with links to download related reports, summarizes drivers of successful Disruptive Innovations, including (i) significant unmet customer needs; (ii) compelling value proposition; (iii) solution materially better than the status quo; and others. Introduces frameworks, including 6 Disciplines of Innovation, Conversion Funnel, Customer Experience, and others. Outlines reasons why innovations fail. Discusses methods for predicting demand and sizing markets.

Published in: Technology

Perspectives on Disruptive Innovation

  1. 1. 1 Permission granted to cite, copy and distribute with attribution Perspectives on Disruptive Innovation Disruptive Innovations and Very New Products Customer Needs, Readiness to Adopt and Other Drivers of Demand Value Propositions and the Conversion Funnel Why Innovations Fail Customer Experience, the House of Loyalty and PEER Strategies Estimating Demand and Sizing Markets for Disruptive Innovations 6 Disciplines of Innovation Links to Download Recent Reports Dr. Phil Hendrix July 2014 Founder and Director, immr and Gigaom Research Analyst www.immr.org | @phil_hendrix | phil.hendrix@immr.org 1 (770) 61291488
  2. 2. 2 Permission granted to cite, copy and distribute with attribution Further Discussion Download here The 6 Disciplines of Innovation, Dr. Phil Hendrix, immr
  3. 3. 3 Permission granted to cite, copy and distribute with attribution Disruptive Innovations and Very New Products 4 Customer Needs and Other Drivers of Demand 8 Value Propositions 14 Customer Acquisition and the Role of Marketing 18 Customer Experience, House of Loyalty, and PEER Strategies 22 Predicting Demand and Sizing Markets for Very New Products 29 6 Disciplines of Innovation 34 About the Author 38 Links to download reports referenced 42 Topics
  4. 4. 4 Permission granted to cite, copy and distribute with attribution Disruptive Innovations are Typically “Very New Products” – What’s Different About Them?
  5. 5. 5 Permission granted to cite, copy and distribute with attribution Disruptive Innovations Differ in Important Ways Characteristics of Disruptive Innovations Need Solved Significant Challenge Daunting Solution New, untried Risk of Failure Extremely high Skepticism Abundant Benefits of Disruptive Innovations Customer Value Indispensable Disruption Game-changing Advantage “Blue Ocean” Growth Rapid Payoff Enormous Disruptive Innovations Disruptive Innovations Radical Innovations Radical Innovations Game9 Changing Game9 Changing= =
  6. 6. 6 Permission granted to cite, copy and distribute with attribution Disruptive Innovations are Typically New9to9Market
  7. 7. 7 Permission granted to cite, copy and distribute with attribution The More “New and Unfamiliar,” the More Challenging
  8. 8. 8 Permission granted to cite, copy and distribute with attribution What Drives Demand and Speed of Adoption for Disruptive Innovations?
  9. 9. 9 Permission granted to cite, copy and distribute with attribution 4 Key Factors Drive Demand for an Innovation
  10. 10. 10 Permission granted to cite, copy and distribute with attribution Customer Needs Include Frictions, Shoulds and Wants
  11. 11. 11 Permission granted to cite, copy and distribute with attribution Successful Innovations Solve Pressing Unmet Needs
  12. 12. 12 Permission granted to cite, copy and distribute with attribution Disruptive Innovations – “Indispensable,” not just “Useful”
  13. 13. 13 Permission granted to cite, copy and distribute with attribution Eager Customers Seeking Alternatives Unleash Demand
  14. 14. 14 Permission granted to cite, copy and distribute with attribution Value Propositions
  15. 15. 15 Permission granted to cite, copy and distribute with attribution Value Proposition – Clear, Compelling and Complete
  16. 16. 16 Permission granted to cite, copy and distribute with attribution Click here to Download Template Four Key Elements
  17. 17. 17 Permission granted to cite, copy and distribute with attribution Most Innovations Fail for One of the Following ReasonsF
  18. 18. 18 Permission granted to cite, copy and distribute with attribution Conversion Funnel, Customer Acquisition and The Role of Marketing
  19. 19. 19 Permission granted to cite, copy and distribute with attribution Innovation Adopters Must Advance Past 10 Key Hurdles
  20. 20. 20 Permission granted to cite, copy and distribute with attribution Most Prospects Drop Out at 1 of 4 Key Hurdles
  21. 21. 21 Permission granted to cite, copy and distribute with attribution Marketing Focuses on 4 Key Objectives
  22. 22. 22 Permission granted to cite, copy and distribute with attribution Customer Experience, House of Loyalty, and PEER Strategies
  23. 23. 23 Permission granted to cite, copy and distribute with attribution Opportunities Exist Across the Entire Customer Experience
  24. 24. 24 Permission granted to cite, copy and distribute with attribution Delivering on the Value Proposition Creates a Virtuous Spiral
  25. 25. 25 Permission granted to cite, copy and distribute with attribution PEER Strategies – Key to Innovating Customer Experiences Learn† & Adapt Remove Frictions Surprise/ Delight Reinforce Source: Raising the Bar – How Leading Companies are Boosting Customer Loyalty with Mobile and PEER Strategies, Dr. Phil Hendrix, immr † Securely, with full transparency
  26. 26. 26 Permission granted to cite, copy and distribute with attribution PEER Strategies Defined Source: Raising the Bar – How Leading Companies are Leveraging Mobile and PEER Strategies to Boost Customer Loyalty, Dr. Phil Hendrix, immr Personalize Leverage data about consumers and their context to increase the relevance, timeliness and value of communications, offers and customer experiences Enable Help customers complete tasks and accomplish their goals by minimizing the risk, time, and effort as they shop, compare, purchase and use products Enhance Surprise and delight customers by anticipating and helping them fulfill functional requirements, emotional needs and aspirations Reward Using feedback, encouragement, rewards and social influence, reinforce customers as they engage in behaviors that are mutually beneficial
  27. 27. 27 Permission granted to cite, copy and distribute with attribution Examples of PEER Strategies
  28. 28. 28 Permission granted to cite, copy and distribute with attribution Transforming Customer Experience – A Strategic Framework Consumer Journey Consumer Needs Find Choose Buy Consume Minimize Frictions Minimize Frictions Enable Shoulds Enable Shoulds Maximize Wants Maximize Wants Roles for Innovators
  29. 29. 29 Permission granted to cite, copy and distribute with attribution Predicting Demand and Sizing the Market for Disruptive Innovations
  30. 30. 30 Permission granted to cite, copy and distribute with attribution Validating Market Opportunities is Challenging
  31. 31. 31 Permission granted to cite, copy and distribute with attribution Key Approach/Tool Description Present Concepts Clearly, Adequately Concept Elaboration* Adequately describe and explain concept, features so that respondents understand, can evaluate, and reliably decide Multimedia presentations* Use multimedia to show concept, explain features, highlight benefits Interactive prototypes Especially when usability is “suspect,” develop virtual prototypes that allow consumers to interact with, “use,” experience product FAQFind™ Make additional information about concept readily accessible, track how consumers access and use as they “shop” and decide Qualitative Pretest* Verify “usability” of concept descriptions, materials, tasks Obtain Valid, Robust Measures Incentive Compatible Motivate respondents to be “truthful” in answering “will you buy?” Contextualization Prompt respondents to visualize whether, when, how they might use Robust Choice Models* Match choice methodology to objectives, task, competitive realities User9friendly Choice Tasks* Create “highly usable” choice tasks using IA (Information Architecture) principles (navigation, iconography, format, colors, etc.) Timing measures Measure when respondents are most likely to adopt Adoption Barriers Uncover barriers to adoption (e.g., contract, switching costs, etc.) Calibrate Models Correct for bias* Correct for bias in Choice, Diffusion modeling Disaggregate models Estimate models at segment level (a priori and derived) Validate Findings IQ (Insights from Qualitative)* Conduct qualitative research to answer “why?” more fully Track behavior Track measures, update model as competitive conditions change Keys to Achieving Valid, Robust, Actionable Findings
  32. 32. 32 Permission granted to cite, copy and distribute with attribution Realistic Prototypes Required for Valid Estimates
  33. 33. 33 Permission granted to cite, copy and distribute with attribution Estimating Market Size and Optimizing Features, Pricing Origins How it works Uses Conjoint analysis introduced in the mid770’s1 Choice modeling extended to marketing in the late 80’s2 Market researchers refine, apply to wide range of issues MIT professor who developed discrete choice awarded Nobel prize in economics in 20003 1 Administered via computer/internet Calibrate demand for various configurations of products Estimate/prioritize feature value Determine elasticities for price, other features Identify inflection points (“tipping points”) Quantify brand equity 2 “Choice sets” formed by combining features according to experimental design 3 Respondents evaluate choice sets, indicating which (if any) option they would purchase in each 4 Data are analyzed using advanced statistical methods Features Tested Design, Presentation Considerations Outputs Any (but not all) of the following: Robust models: Demand model, calibrated for exogenous factors (time, feature/technology evolution, etc.) Simulation model for “what7if” analyses Parameter estimates for feature, brand equity Segment profiles Form factor Size Display quality Interface Brand Bundled apps, services Price (levels, structure) etc. Integrate levels of customer knowledge Distinguish between consideration and purchase Present options in a realistic fashion (closely mirroring the “marketplace”) Account for brand and channel effects Use the results to create and distinguish segments (based on needs, price sensitivity, etc.) Sources: 1Paul Green, Wharton; 2Jordan Louviere, UTS (Australia); 3Daniel McFadden, MIT Choice9based Conjoint calibrates demand, elasticities
  34. 34. 34 Permission granted to cite, copy and distribute with attribution 6 Disciplines Of Innovation
  35. 35. 35 Permission granted to cite, copy and distribute with attribution The 6 Disciplines of Innovation – Overview
  36. 36. 36 Permission granted to cite, copy and distribute with attribution Innovation Teams Must Be Skilled on all 6 Disciplines
  37. 37. 37 Permission granted to cite, copy and distribute with attribution More in Whitepaper Download here The 6 Disciplines of Innovation, Dr. Phil Hendrix, immr
  38. 38. 38 Permission granted to cite, copy and distribute with attribution About Us
  39. 39. 39 Permission granted to cite, copy and distribute with attribution About the Author – Dr. Phil Hendrix Research Consultant Research based Strategy for Very New Products and Markets Advisor – Startups • Product Market Fit • Value Proposition • Growth strategy Catalyst • Innovation • Strategy Analyst • Emerging Technologies • Mobile/M Commerce • Location, Context Previously Mercer Diamond Cluster
  40. 40. 40 Permission granted to cite, copy and distribute with attribution Bio – Dr. Phil Hendrix Dr. Phil Hendrix wears three hats – he is the founder and director of immr, an analyst with Gigaom Research, and advisor to startups in digital and mobile. Focusing on market opportunities for disruptive new products and services, Dr. Hendrix helps clients validate product-market fit, develop compelling value propositions, and spur growth and adoption. Within the digital landscape, much of Phil’s work is at the intersection of mobile, location and social (SoLoMo), M-commerce and mobile payments. As an analyst, Phil focuses on mobile innovation and the implications for companies across industries. He is a regular contributor at leading industry conferences, including GigaOm’s Mobilize, Structure:Data, Street Fight (hyperlocal), ad:tech, iMedia Summit, Social- Loco, the World Summit Awards (Abu Dhabi), and others. His current work focuses on mobile and its impact on consumer behavior, especially shopping, M-commerce and mobile payment. As a consultant and advisor, Phil has led significant engagements with startups and Fortune 100 clients in mobile, consumer electronics, and related categories, including financial services, transportation, insurance and others. He works closely with senior management and project teams on key issues, including market sizing, segmentation, positioning, and branding as well as innovation, user experience, and customer retention. Over the course of his career, Phil has helped clients conceive and successfully launch dozens of new products, services and businesses. Startups Phil is currently advising include Pugmarks (content discovery), m-ize (customer engagement platform), Whisper (mobile security) and Yosh (Beacons). Before founding immr, Phil was a partner with DiamondCluster (strategy and technology consultancy, now part of PwC), founder and head of IMS (Integrated Measurement Systems), and a principal with Mercer Management Consulting (now Oliver Wyman). He has held faculty positions at Emory University and the University of Michigan, where he taught courses in marketing, research, and buyer behavior for MBAs and executives. While at Michigan Dr. Hendrix also held a joint appointment as a research scientist in the Survey Research Center, Institute for Social Research. Additional information on immr perspectives and reports prepared by Dr. Hendrix is available at immr and Slideshare, with additional information available at Gigaom Research. More at: Website www.immr.org Slideshare Presentations on Slideshare Social media Twitter Archive; Tweets organized by topic LinkedIn LinkedIn Profile Twitter @phil_hendrix Contact phil.hendrix@immr.org | +1.770.612.1488 Click here to Download reports
  41. 41. 41 Permission granted to cite, copy and distribute with attribution Recent Reports The 6 Disciplines of Innovation Democratizing the Shoppable Web Why the Digital Shelf is Vital for Brands and Retailers Which Mobile Shopping Apps Do Consumers Value Most? If Shopping is Broken, Can Mobile Fix it? Drive Revenue and Customer Loyalty by Engaging Mobile and Social Consumers Engaging Connected Consumers – Strategies for Brands, Retailers and Local Businesses† Raising the Bar – Mobile and Customer Loyalty Social + Location + Mobile: SoLoMo Analytics and the Transformation of Shopping How Consumers Are Using Local Search Mobilizing the Enterprise with Custom Mobile Solutions: Pt. 1 and 2 The Promise of Hyperlocal: Opportunities for Publishers and Developers Tuning into Consumers’ Digital Signals How SoLoMo is Empowering Consumers, Transforming Shopping, and Disrupting Advertising and Retailing Location – the Epicenter of Mobile Innovation Click here to Download (links open in new window)
  42. 42. 42 Permission granted to cite, copy and distribute with attribution We Help Clients Capitalize on Disruptive Market Opportunities

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