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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

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Further Discussion
Download here The 6 Disciplines of Innovation, Dr. Phil Hendrix, immr

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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

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Disruptive Innovations are
Typically “Very New Products” –
What’s Different About Them?

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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= =

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Disruptive Innovations are Typically New9to9Market

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The More “New and Unfamiliar,” the More Challenging

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What Drives Demand and
Speed of Adoption for
Disruptive Innovations?

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4 Key Factors Drive Demand for an Innovation

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Customer Needs Include Frictions, Shoulds and Wants

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Successful Innovations Solve Pressing Unmet Needs

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Disruptive Innovations – “Indispensable,” not just “Useful”

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Eager Customers Seeking Alternatives Unleash Demand

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Value Propositions

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Value Proposition – Clear, Compelling and Complete

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Click here to
Download
Template
Four
Key
Elements

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Most Innovations Fail for One of the Following ReasonsF

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Conversion Funnel,
Customer Acquisition
and
The Role of Marketing

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Innovation Adopters Must Advance Past 10 Key Hurdles

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Most Prospects Drop Out at 1 of 4 Key Hurdles

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Marketing Focuses on 4 Key Objectives

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Customer Experience,
House of Loyalty,
and
PEER Strategies

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Opportunities Exist Across the Entire Customer Experience

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Delivering on the Value Proposition Creates a Virtuous Spiral

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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

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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

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Examples of PEER Strategies

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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

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Predicting Demand
and Sizing the Market
for Disruptive Innovations

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Validating Market Opportunities is Challenging

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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

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Realistic Prototypes Required for Valid Estimates

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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

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6 Disciplines
Of
Innovation

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The 6 Disciplines of Innovation – Overview

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Innovation Teams Must Be Skilled on all 6 Disciplines

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More in Whitepaper
Download here The 6 Disciplines of Innovation, Dr. Phil Hendrix, immr

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About
Us

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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

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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

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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)

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We Help Clients Capitalize on Disruptive Market Opportunities