So you think you can Innovate?
Then just look at the enormous evolution of the marketing mix. Do you still remember the marketing mix? The 5 Ps! A catchy model that helps to plan your business strategy in a structured way. What’s interesting about this model from the 1950s is that the 5 categories – the Ps – are rock-solid, while the content that they represent continuously and radically changes. Let’s look at the impact of digitalization and cloud computing (the connecting of people and machines) and the considerable upheaval caused in the marketing mix.
The P for Product
More and more things (products) are – in the cloud – connected to each other. We refer to this as the Internet Of Things. Besides your mobile phone, watch, shoes, baby monitor, thermostat and your car, the example of the smart refrigerator is often mentioned. I have not seen this smart fridge in production, but the smart vending machine is already here. However, this is child’s play when compared to having you own drone. Talking of child’s play, what do you make of this: anti-conception via Wi-Fi? Or, let’s take it a step further: Raymond Kurzweil predicts that in 20 years’ time we will have nanobots in our brain that will be able to connect to a synthetic neocortex in de cloud. New connected devices are developed every minute. Morgan Stanley predicts 75,000,000,000 connected devices in 2020. This all leads to one question: are you embracing the technological possibilities in order to continuously innovate new products and ensure your products stay relevant?
The P for Place
Place was a crucial success factor in the analogue world. If you did not have a prime location, you could just as well close up shop. This is different in the digital world, where everyone can offer everything online. Everywhere. Anytime. Worldwide. And everybody can find everything. We no longer have to go to a product to have a look at it, fit it, listen to it, or to try it on. We can check out the product online, and if we want it, it will be sent to us. Physical shops and store windows are no longer requirements. Even your own warehouse or office is not always necessary anymore. Many organizations optimize their supply chain under the motto of “cut the middleman”. However, if the supply chain is as short as possible, then another new technological development that will turn this P further on its head: the 3D-printer. Are you still with me?
And then? The need of Place can be further reduced in the world of Virtual Reality. This world has no physical products in a physical place. And this virtual world is closer than you might think. Facebook is acquiring Oculus VR. Google is introducing the Cardboard, making Virtual Reality affordable for just a couple of Euros. This will give us access to every conceivable virtual world. A world without a supply chain. How will you get your products to your customers in this world? What products will you offer?
The P for Promotion
Promotion, stimulating the sale, has completely revolutionized now that the entire world is ‘connected’. The ‘net’ has become a bigger than big marketing tool. A powerful interaction medium that connects supplier and buyer. Cloud allows you to reach more people, to get your products and services out there with laser accuracy, and to offer an ultimate personalized experience. That is why the P for promotion has become the P for Personalization for some marketers. Traditional word-of-mouth advertising is still the most important promotion you can get, right? With an increasing percentage of worldwide internet usage via social media (from 8% in 2005 to 72% in 2013) the principle of word-of-mouth advertising is amplified via internet. So how do you make sure that people on the ‘net’ are ‘talking’ about your product positively? I believe the secret is in optimizing the customer satisfaction through personalization.
The P for Price
An observation: I roughly see two movements. One movement, known as the Disrupters (I prefer to call them Innovators. I feel disrupting has such negative sound to it). This group studies the most modern business models and applies technology and principles of the sharing economy to innovate. With this, they are – sometimes intentionally, sometimes unintentionally – competing hard and fast with the other group: the Disrupted. The Disrupted do not like risks and prefer to stick with existing models. Disrupters make products and services more accessible and often cheaper and this in turn puts pressure on the Disrupted to review their cost price. A beautiful game that unfolds itself in our modern society viewed by knowledgeable consumers that enjoy price transparency.
Automation via the cloud is an important mechanism for reducing the cost price for both parties. Sharing best practices is cheaper than building something yourself. Simplifying processes equates to reducing the TCO (Total Cost of Ownership). Are you already optimally applying modern means of technology to reduce your cost price?
The P for Personnel
Personnel is the most stable category. This was added as the fifth P to the 65-year old marketing model at a later stage. It is the human race that creates all these technological developments. It is the personnel of an organization that is responsible for personalized and optimized customer satisfaction. And we have technology at our disposal to do this; the challenge is to optimize the symbiosis with technology to such an extent that – where it concerns company processes – we support the other 4 Ps as optimally as possible. For many organizations this boils down to good Customer Relation Management (CRM), and this leads me to a very interesting group within the category Personnel: Sales. Because I think that cloud will produce a sales representative 2.0. Do you already have a sales representative 2.0? Well, my following blog in January will have more on this. January is the month where the counter is back to ‘zero’ for many sales, and they will have time to read my blogs againJ.
The M for Moral
In this series of blogs “Impact of innovations” (read also: impact on HR & impact on IT partners), I try to express the impact of technological innovations and how this affects our society and company processes. Missions, strategies and products change and innovation is more important than ever before. The question how you shape this innovation and evolution within your company and your life is THE question that will also occupy our minds in 2015. Thank you for reading my blogs throughout 2014. I would like to wish you all happy festive holidays and a fantastic start of 2015.
And remember: Nothing is impossible.