Five ideas to help with Marketing Innovation and Value Migration

Companies that realize CMOs will control more technology spending than CIOs, should think of how they are going to spend those dollars to ensure maximum benefit. Most likely the company already has principals and guidelines for making IT and R&D investments that could be useful for making investments in marketing innovation. Companies should avoid reinventing the wheel and build upon some of the lessons they have already learned about making technology investments. Here are five ideas that will help make the dollars spent on innovating your marketing more effective.

First, make sure you have a strategy or context in which to make those decisions. Don’t make decisions in an ad hoc manner, going technology by technology. We have discussed in prior posts the importance of having a marketing innovation strategy. What objective are you trying to achieve with your marketing innovation program? Do you want to be a first mover, fast followers or something else? Do you have key performance indicators or critical success factors you want to improve? You need to know what aspect of your marketing you are trying to improve, e.g. communications, research, analysis, life time value, customer service, etc. You need a framework for thinking through and evaluating your choices.

Second, there is no need to reinvent the wheel. If you already have criteria for making IT decisions, review them and see if they apply for making investments in marketing innovation. You may have to modify them, but it is a great place to start. Is there a certain way IT measures ROI, or builds business cases, that you could apply to your marketing investments? Is there a set of criteria IT uses for selecting technology, or guiding the development of technology either internally or contracted externally?  Talk to the subject matter expert in IT to get the lessons learned, that may not have been written down or codified in a set of principles or guidelines.

Third, build capacity either internally, externally or both so this important function of developing and managing the marketing innovation strategy doesn’t just get added to someone’s already long list of responsibilities. This is not simply a matter of scaling the existing budget process, say going from an annual campaign budget of $10 million to $15 million. These are very different types of investments and should be thought about, evaluated and managed differently.

Fourth, review your product development principles, what guides your product development decisions? How does R&D evaluate product development opportunities and can any of that insight be used to help formulate a process for evaluating marketing innovation opportunities and investments? As previously mentioned, products and services are starting to merge e.g. wearable devices which are products, combined with services for example to provide important health or exercise services.  The online community formed as part of providing that service is also part of the marketing strategy. Now how we market; the marketing process is becoming as important as what we market and our marketing strategy. An online community may yield new product development ideas, campaign suggestions, user-generated content as well as be a great place to launch and promote new products.

Fifth, if you have a competitive intelligence function, make sure it is looking at competitive alternatives as well as substitutes, particularly from new competitors with emerging technologies. It is fairly easy to see when established competitors start making investments to enhance their value proposition. Using the example of the record store, you could see how competitors were adding features and benefits in the store to make it a better place to shop, such as listening stations and the ability to order a CD that was not in stock, online from an in-store kiosk or from home. In other words, the record store used new technology to naturally evolve through its life cycle. While a competitor may be focused on those new features, it might miss that technology has enabled an entirely new way to sell and distribute music, e.g. iTunes. You need to have a basis for broadly considering industry threats enabled by new technologies, when considering making investments in marketing innovation.

Value migration provides a real opportunity and a real threat in terms of marketing innovation. Taking advantage of the shift of dollars from IT to Marketing will require more than the five suggestions above. It requires a combination of vision, strategy and analytical discipline. Will value migrations be an opportunity or threat for your company?