Redefining innovation to beat the credit crunch

The recession needn’t necessarily mean the death of innovation; rather it is innovation that will define the eventual winners, as Adobe System’s Mark Greenaway, explains.

With its associations to credit derivatives, innovation is something of a dirty word at the moment. Many see innovation as at odds with the ‘managing the fundamentals’ business mantra that the credit crunch has imposed. In the resulting spending cutbacks, R&D and innovation teams risk reduced budgets if their efforts are seen to be straying too far from business fundamentals. Yet, I would argue that organisations need innovation now, more than ever.

Consumers are feeling the pinch, re-evaluating the way they bank, shop, travel, communicate and entertain themselves and their relationships with related organisations. The upshot is that suppliers need to work harder than ever to retain their customers and maintain the revenue flows that will enable them to ride out the recession.

Strategies
Good products and keen pricing are important but research has shown that delivering great customer experiences is the key to loyal customers. A recent Forrester Research report entitled ‘Customer Experience Correlates to Loyalty’ showed that there was at least a medium level of correlation between customer experience and loyalty in each of the 12 industry sectors surveyed; in most cases the correlation was much higher. Further, the correlation has increased over the last year in every industry.

This is where innovation comes back into the equation. Not necessarily innovation for speculative, future gains but rather innovation around the business fundamentals that delivers immediate and incremental improvements in the customer experience, differentiates the company from its competitors and breeds loyal customers. An approach often referred to as ‘incremental innovation’. Compare that to the other option – stop innovating until the economic climate improves and it’s clear that the ‘incremental innovators’ stand a better chance of retaining their customers and associated revenues.

Incremental innovation is not about replacing existing processes and systems, but instead finding ways of driving greater value from them. Finding technologies, for example, that can co-exist with and extend existing investments, and drive more value from those processes and systems.

Rich Internet Applications (RIAs) offer great potential to add incremental value to existing systems and processes by improving the customer experience. RIAs are a simple way of converting the data-driven processes of back-end IT systems into a multimedia presentation layer. RIAs dynamically combine data from existing systems, providing easy-to-understand information and easy-to-use services for the consumer.

The growing usage of interactive simulation calculators on banking websites and product configurators in retail shows that many industries have already seen the value of RIAs. Volkswagen UK re-launched its website last year as a RIA to provide customers with a virtual car showroom. Alongside interactive brochures and videos, customers now have a graphical and intuitive interface for searching the Volkswagen range by price, engine, CO2 emissions and performance. A 3D configurator allows them to customise their chosen car (there’s over one million unique combinations) and then find a local retailer and book a test-drive. All from the same web page. The web is an important stepping stone for new car purchasers and Volkswagen is now delivering an engaging customer experience from day one.

Intelligent
A further use of RIAs lies in their ability to deliver intelligent forms. Almost all organisations rely on online forms at some point in the customer engagement process. Yet, the problems with existing online forms should surprise no-one. Typically, the paper form is transferred to a series of web pages with little consideration for the user experience. An eBookers/Datamonitor survey showed that a typical on-line application form is between 8 and 11 pages and that five percent of customers will be lost for every page.
 
Rebuilding online forms as intelligent forms can provide a far more engaging customer experience. Basic information can be pre-populated by back-end systems. The form will then dynamically build on one page, while interactive guidance can be offered via integrated tutorials or dynamic links to company representatives. Intelligent forms not only increase the completion rate of applications but also enable the integration of cross- and up-sell opportunities.

The credit crunch has not killed innovation but is has put the emphasis on innovation around the business fundamentals. Even at a time of constrained budgets, it is clear that RIAs have significant potential to maximise return on existing investments in IT by creating more engaging customer experiences.

Mark Greenaway is Director at Adobe Systems, UK and Ireland. With over 14 years’ business experience, Mark has held senior sales and consulting leadership roles in the technology industry.