The Keys to Marketing Innovation by Ken Bernhardt Regents' Professor of Marketing and Assistant Dean for Corporate Relations  Robinson College of Business, Georgia State University Atlanta Business Chronicle - February 1, 2008 I recently participated in the judging for the 16th Annual Marketing Awards for Excellence (MAX Awards) program, a joint venture between Atlanta Business Chronicle and Georgia State's Robinson College of Business Department of Marketing.  The MAX Awards honor the outstanding marketing innovations developed in Georgia during the previous year.  Entries are judged by the members of the GSU Marketing RoundTable, a group of senior marketing executives from Atlanta's major companies.  The finalists were reported in Giannina Smith's Marketing and Media column in last week's Business Chronicle.   The finalists range from small, family-owned companies to giant corporations and compete in industries as diverse as financial services, technology, health care, durable goods, media, hospitality, packaging, and nonprofit organizations. The innovations are as diverse as the industries represented.  Yet, there were a set of characteristics that differentiated these entries from the non-finalists. These included the following:   True Understanding of the Market's Needs is critical: None of the finalists were simple line extensions of existing products.  Instead, the organizations invested considerable energy in identifying true customer problems that needed solving.  This typically involved carefully studying how consumers used the products or services, what they were trying to accomplish, and the impediments to achieving their goals.  These were uncovered by a variety of research methods, some very formal, quantitative and extensive and others very informal and qualitative.  But the key was listening to the voice of the consumer, uncovering problems that consumers had that could be solved through innovation.  The focus was on innovation directed at solving important, real problems, something not very many companies do well.   Have a clear target market: It's difficult to successfully meet consumer needs if you don't have a clear concept of  the target market. Each of the finalists had a razor sharp view of the target market, enabling them to focus on their needs and reach them efficiently and effectively with communications that informed them of the innovative solutions now available.   Provide value for the customer: All of the organizations created value for customers, although this was done in many different ways.  Some did it by giving customers greater control and flexibility.  Others did it by lowering the customers' costs, enabling them to compete effectively with much larger competitors.  Others created value by finding ways to make their products easy to use, or more effective than competitors' offerings. Two of the finalists created value through making their products more environmentally friendly. In each of the 10 cases, the benefit to consumers was important, clear, and added value.    Innovations must be effectively communicated to the market: Each of the finalists used multiple communication vehicles to educate the market about their innovation.  These included traditional methods such as print advertising, public relations, direct mail, trade shows, and word of mouth, but included new techniques such as personalized URL and micro websites, social media sites, webinars, cause related marketing, discussion forums, and Second Life were also used. The key is the integration of the sales support, web marketing, PR, media advertising, and other communication vehicles. In several cases, white papers and case studies were used to position the company as a thought leader, bringing increased attention to their innovative product or service.   Testing and failure are part of the innovation process: Many of the innovations were not successful right away.  A key to successful innovation is repeated testing.  As Thomas Edison said of his many failures, "I am not discouraged, because every wrong attempt discarded is another step forward." A good friend of mine who was a senior executive at a very fast growing, highly innovative company, was told in a performance review after a super year that they wanted him to make more mistakes during the coming year.  Failures lead to learning which leads to future successes.   Metrics are important: Innovation without results is worthless.  A clear set of goals with metrics in alignment with the goals is necessary.  These include many things beyond just sales and profits.   Measuring the customer experience, differentiation vs. competitive alternatives, satisfaction, retention and loyalty, and awareness and perception attributes also need to be taken into account.   Partnerships can extend your capabilities: Several of these organizations made creative use of partnership relationships to maximize their success.  The partnerships were with lead customers, channel intermediaries, and companies bringing added technology to the table.    There are lots of ways to innovate: Several of the innovations relied on technology to enable innovative new products or services.  Others found ways to improve the customer experience or to give the customer greater control and flexibility.  Still others used packaging innovations, pricing innovations, or marketing channel innovations.   Peter Drucker once said that "marketing has only two purposes, marketing and innovation."  He also said the "best way to predict the future is to create it."  The MAX Award finalists are using both marketing and innovation to create the future. Learn more about how they are doing it by attending the MAX Awards Breakfast on February 29th (see Maxawards.com for details). Stories on each of the winners and finalists will also appear in that day's issue of Atlanta Business Chronicle.  You've got 11 months left to develop your own marketing innovations for next year's competition.  As the tag line for this year's awards states, "Never Stop Thinking."