Innovation doesn’t always mean pouring money into research and development for new products. This is an aspect of risk that tends to slow growing companies down when the financial flow is slow. One product or service could fail, and all the money invested into it could go down the drain. So many companies with little cash flow tend to make the mistake of cutting innovation dollars when they should be simply using them in other ways. Fortunately, there are many ways to innovate that don’t require the budget of new product R&D.
A long, hard look at your current offerings can allow you to innovate in the way you bring these items to the customers. Sometimes increasing sales has more to do with innovative marketing that inventing new things to sell. Look at what you have, and find hidden features or features that have not been stressed to the customers, and make the public aware of them.
For instance, an electric shaver may have been marketed numerous ways. It gives a close shave, it’s quiet, it doesn’t pinch or pull, it’s fast, you don’t need water—look at it carefully, and you may realize that you can now point out that it’s a green solution, because you won’t be throwing disposable plastic razors into landfills. Innovate with what you’ve got when R&D money is tight, and you might surprise yourself.
Radical innovations certainly get lots of buzz. They’re what get people talking and create the biggest stir.
But low-cost, “disruptive” strategies can also address a niche need that can be innovative and profitable. Cutting down on some features in order to offer a product at a lower price is a tried strategy of innovation, but one that requires careful planning and forethought.
Thinking in innovative ways about altering a current product or service to offer it at a lower price does work for many businesses – think about Dell and Nucor. Scott Anthony, suggests that there are three questions a company attempting this kind of innovation needs to ask themselves before launching such a venture.
1. Is it still “Good Enough?” If you must strip so many features from a product that it no longer delivers what customers need, then the lower cost won’t have enough of an appeal. If the cell phone can’t be heard, it’s not “good enough.”
2. Will this product be different from the market leader’s next innovation? If a large company with years of experience in the market is in the process of making high featured, lower cost alternatives, then an upstart will have little success.
3. Is there a feature to the lower cost product that utilizes a new process? If so, there’s a greater chance of success.