perspectives on disruptive innovation

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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 | [email protected]

1 (770) 61291488

https://twitter.com/phil_hendrix


Further Discussion

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

http://www.immr.org/6-disciplines-of-innovation.pdf


� 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


Disruptive Innovations are

Typically “Very New Products” –

What’s Different About Them?


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

DisruptiveInnovationsDisruptive

InnovationsRadical

InnovationsRadical

InnovationsGame9

ChangingGame9

Changing= =


Disruptive Innovations are Typically New9to9Market


The More “New and Unfamiliar,” the More Challenging


What Drives Demand and

Speed of Adoption for

Disruptive Innovations?


4 Key Factors Drive Demand for an Innovation


Customer Needs Include Frictions, Shoulds and Wants


Successful Innovations Solve Pressing Unmet Needs


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


Eager Customers Seeking Alternatives Unleash Demand


Value Propositions


Value Proposition – Clear, Compelling and Complete


Click here to Download Template

Four

Key

Elements

http://www.immr.org/value-proposition.png

http://www.immr.org/value-proposition.png


Most Innovations Fail for One of the Following ReasonsF


Conversion Funnel,

Customer Acquisition

and

The Role of Marketing


Innovation Adopters Must Advance Past 10 Key Hurdles


Most Prospects Drop Out at 1 of 4 Key Hurdles


Marketing Focuses on 4 Key Objectives


Customer Experience,

House of Loyalty,

and

PEER Strategies


Opportunities Exist Across the Entire Customer Experience


Delivering on the Value Proposition Creates a Virtuous Spiral


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


PEER Strategies Defined

Source: Raising the Bar – How Leading Companies are Leveraging Mobile and PEER Strategies to Boost Customer Loyalty, Dr. Phil Hendrix, immr

PersonalizeLeverage data about consumers and their context

to increase the relevance, timeliness and value of

communications, offers and customer experiences

EnableHelp customers complete tasks and accomplish

their goals by minimizing the risk, time, and effort as

they shop, compare, purchase and use products

EnhanceSurprise and delight customers by anticipating and

helping them fulfill functional requirements,

emotional needs and aspirations

RewardUsing feedback, encouragement, rewards and

social influence, reinforce customers as they

engage in behaviors that are mutually beneficial


Examples of PEER Strategies


Transforming Customer Experience – A Strategic Framework

Consumer

Journey

Consumer Needs

Find

Choose

Buy

Consume

MinimizeFrictionsMinimizeFrictions

EnableShouldsEnable

ShouldsMaximize

WantsMaximize

Wants

Roles for Innovators


Predicting Demand

and Sizing the Market

for Disruptive Innovations


Validating Market Opportunities is Challenging


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


Realistic Prototypes Required for Valid Estimates


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

4Data 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


6 Disciplines

Of

Innovation


The 6 Disciplines of Innovation – Overview


Innovation Teams Must Be Skilled on all 6 Disciplines


More in Whitepaper

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

http://www.immr.org/6-disciplines-of-innovation.pdf


About

Us


About the Author – Dr. Phil Hendrix

� Research ConsultantResearch�based Strategy forVery New Products and Markets

� Advisor – Startups• Product�Market Fit• Value Proposition• Growth strategy

� Catalyst• Innovation• Strategy

� Analyst• Emerging Technologies• Mobile/M�Commerce• Location, Context

PreviouslyMercer Diamond Cluster

m-ize.com

pugmarks.me

thinkinc.com


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 launchdozens 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.orgSlideshare Presentations on SlideshareSocial media Twitter Archive; Tweets organized by topicLinkedIn LinkedIn ProfileTwitter @phil_hendrixContact [email protected] | +1.770.612.1488

Click here to Download reports

http://www.immr.org/

http://research.gigaom.com/analyst/phil-hendrix/

http://streetfightmag.com/

http://www.ad-tech.com/

http://www.imediaconnection.com/summits/30400.asp

http://socialloco.net/

http://pugmarks.me/

http://m-ize.com/

http://whispercomm.com/

http://yoshinc.com/

http://www.diamondconsultants.com/

http://www.pwc.com/

http://www.oliverwyman.com/

https://www.src.isr.umich.edu/

http://immr.org/Viewpoints/viewpoints.html

http://www.slideshare/pehendrix

http://research.gigaom.com/

http://www.immr.org/

http://www.slideshare.net/pehendrix

https://www.rebelmouse.com/phil_hendrix/

https://pinboard.in/u:phil_hendrix

http://www.linkedin.com/in/philhendrix

https://twitter.com/phil_hendrix

mailto:[email protected]

http://www.immr.org/reports.html


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)

http://www.immr.org/reports.html


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