Service innovation leads the way

Using innovation as a way to gain competitive advantage was the subject of last month's Memorabilia.  This month we continue with the theme, but focusing on how innovating services can work for small businesses.

Why services

Product innovation is hard and very often expensive.  Retooling manufacturing plant, redeveloping business software, managing the cutover from old stock to 'new & improved' stock all carry large financial risks.  And should you be successful with a new version of a product it can be relatively easy for competitors to copy or imitate.

Improving a service offer through innovation is a much better bet.  It carries less upfront financial risk (mostly) as it can be introduced incrementally and tends to come in units of single people (rather than a production run of hundreds or thousands of units). Also, if the first version of a new or changed service doesn't 'grab' the customers as you'd hoped, it's much easier to fine tune it until it does.

Ultimately though, because services are delivered person-to-person with your customers they are often better remembered for their differences than specific product features.  And that's the whole reason for the innovation - to create a difference between your offer and your competitors that the customer's value as a benefit.

Picking the right idea

There are three 'tests' that a service innovation must pass before it worth pursuing from idea to reality.

Suitability - the innovative change must be suitable to address a genuine need that the customer's will recognise as a benefit.  It could address a new need or improve the way that you address a current need.  But just adding an extra service component into a service package because it's something that you can do is not good enough. In fact it might be seen by the customer's as reducing the attractiveness of the overall service.

Acceptability - is the innovation acceptable to your business and your staff.  This covers both the financial implications as well as the time and convenience implications of delivering the new service components.  For example, adding a free at-home check-up on a computer system a month after you've sold and configured it might sound really innovative, but to be useful to the customer it could need to take place in the evenings or at weekends.  How would your staff react to that?

Feasibility - can the innovation actually be delivered by your organisation, given its financial position, its headcount and skill levels, it's other commitments to customers and so on.  'Biting off more than you can chew' is quite a common situation when small companies add service innovations.  Best to introduce a series of smaller innovations that you can easily deliver than a larger one that ends up upsetting more customers than it delights.

Don't forget that it's the customers that decide if your innovation makes the service better or not.  If they tell you that it doesn't then don't be afraid to change it or even drop it.

Memorable marketing

Thinking and working pragmatically like this will help you to make your marketing work better for you in a more memorable way. This means that your target customers will be able to differentiate your products and services from those of your competitors and clearly see the value in buying from you.

If you would like some advice on memorable marketing techniques for your own business, or you know someone at another business who might need help, then please contact us. The sooner you start, the sooner you will benefit.

The Creative Dilemma (Update)

Download this update to last month's handy guide which explained some of the latest thinking on how to get the best from your marketing in order to improve business effectiveness.

Written by the Chartered Institute of Marketing as part of their Shape The Agenda series, this document makes easy reading for business people of all experience levels.

Marketing Effectiveness Assessment

A free service to small businesses in the Buckinghamshire, Berkshire and Oxfordshire area, the Marketing Effectiveness Assessment delivers a professional audit of how a business is using the tools of marketing to communicate to existing and potential customers. It also includes a series of simple and cost-effective marketing activities that the business can implement immediately and at low cost.

Download the factsheet now.

Useful Links ...

Adduce Marketing

Chartered Institute of Marketing

Marketing UK (information portal)