Businesses Should Embrace Data-driven Innovations to Appeal to the Market

By Edward Ihaji

The fast rate at which new innovations are being churned out every day has intensified the competitiveness of the business environment to unprecedented levels.

Kenya occupies an enviable place in Africa as a leading innovations hub. The 2019 Global Innovation Index (GII) by the World Intellectual Property Organisation (WIPO) ranking her as the most innovative country in the Sub-Saharan Africa. It is ranked 77th behind South Africa (68) and followed by Mauritius (93), globally.

Sectors that are witnessing a flurry of new innovations include agriculture, manufacturing, financial, transport and logistics, and mobile telecommunications. These innovations are being driven by the digital revolution that is sweeping across as well as the ever-changing needs of consumers.

For businesses innovation is a must. If you want to remain relevant and profitable you need to make innovation a key pillar of your business strategy. Businesses that are not re-inventing themselves are falling and leaving the way for those that are leading through innovations.

Companies often rely on business innovation to help reduce expenditures, develop new processes and increase their appeal to consumers.

By creating a new product or service, redesigning a product or service by adding features, discovering a new material or process or creating better systems for business organization and function, a business can increase its market share and customer base.
Innovation is an effective strategy for a business to differentiate itself from its competitors, thereby creating a more niche market for its products and services. Its end goal is always to boost revenues and earn the company industry accolades.

Product innovation is the most popular and assumed to sum up business innovation. It involves either of the following three cases– developing a new product, enhancing an already existing product, or optimizing features of a product. Innovation however goes beyond the product.

We have process innovation which considers a combination of resources, technologies, and skills being consumed by an organization to generate a product or service of value. Its results may not be openly evident to customers, but it leads to long-term benefits in terms of faster time to market, reduced costs, minimal wastage, and enhanced productivity and efficiency.

The fast-changing consumer landscape that is being driven by advancement in digital technologies and global challenges such as COVID-19 pandemic and climate change has also given rise to various innovations on business models. These issues have herald new challenges and unlocked new opportunities, making it imperative for organizations to come up new business models to confront present realities.
While in the past decades any company that wanted to innovate would simply go around and ask customers what they want and implement it.  But that era is long done gone.

In today’s world we are faced with situations where more than 72 percent of product launches and innovations fail to get traction in the market, hence fail to meet their financial targets. In Kenya, a study conducted by researchers from Karatina University and the Cooperatives University of Kenya involving 101 manufacturing firms revealed that some businesses had as many as 13 new products but ended up patenting only five. The study was published in 2020 in the International Journal of Innovation Studies.

The ability to innovate in an agile and sustainable manner has never been more essential to survive. We are living in a volatile business era constantly disrupted by technological shifts, new “out of the box” business models, and a rapidly changing consumer culture. Furthermore, 90% of corporate innovations fail, according to Mark Payne in “How to Kill a Unicorn”.

Understanding the root cause of failure has always been challenging. But one critical aspect is certainly the systematic issue of large corporations tending to base their innovation efforts on past successes.

Instead of solving emerging real-world consumer problems, many innovation strategies are designed to focus on delivering efficiency, scalability, and profitability. And while the overarching goal is to develop true breakthrough innovations, “the next big thing”, most innovations result in minor improvements to existing products.

Other reasons preferred for the high rate of business innovations failure include misalignment of the innovation focus and the business, especially where the is a failure to integrate innovative projects into basic company operations; lack of innovation culture in the company, failure to track success indicators, choice of wrong problems to solve, and weak leadership at the head of corporate innovation.

In their book on monetizing innovations, monetization consultants Madhavan Ramanujam and Georg Tacke note that guesswork results into businesses launching products that no one is willing to buy, and that is where the monster lies!

When innovation is based on guesswork, it means that a business did not go deep enough in the beginning phases of the process, which is gaining insights to better understand customers, competition, and market dynamics.

With data, businesses are well positioned to better understand these issues and bring more appealing and successful innovations. Data can play a crucial role in maximizing the appeal of various business innovations, be they product, process or model oriented. It has the power to help organizations create new opportunities, new services and products, and fosters innovations.

Data analytics, for instance, can help businesses gather insights into customer preferences, pain points, and unmet needs. By analyzing customer data, surveys, feedback, and market trends.

Data can be used to analyze and understanding different customer segments in terms of characteristics and demographics. This will enable businesses to tailor their innovations to meet the specific needs and desires of each group, thereby increasing the appeal of their offerings.

Data-driven innovations have succeeded in the market because they allow for constant iteration and improvement. By collecting feedback and performance data on new innovations, businesses can make data-backed adjustments and enhancements, leading to more appealing products and services over time.

Online reviews and customer feedback data can be invaluable for understanding how customers perceive new innovations. Positive reviews can be leveraged for marketing and promotion, while negative feedback can be used to make necessary improvements.

By leveraging data, business can offer personalized experiences can significantly enhance the appeal of innovations. Personalization can be applied to product recommendations, marketing messages, user interfaces, and customer support, creating a more engaging and relevant experience for users.

By using historical data and predictive analytics, businesses can anticipate future trends, demands, and challenges. This foresight allows them to proactively create innovations that address upcoming market needs, gaining a competitive edge.

Data can help in optimizing the innovation process by identifying cost-effective strategies, minimizing risks, and ensuring a higher return on investment for the business.

Accurate data analysis can aid in forecasting demand for new products or services, helping businesses prepare for scaling up operations or managing inventory levels effectively.

The power of data in maximizing the appeal of business innovations is even more apparent with the convergence of data points about operations, productivity, and socio-economic factors. This convergence is a critical cog for streamlining and for developing data driven innovations.
Innovation helps businesses thrive, but their success comes with a price. According to a recent article on www.acceptmission.com blog, the success of business innovations come with a price. It requires hard work, perseverance, energy, resources, effort, and time that its very concept must be established within the organization’s culture.

At Ipsos in Kenya, we are aware that pressure to increase the innovation success rate will intensify for the foreseeable future. That is why we have developed solutions that make it practical for businesses to acquire insights that helps to reduce uncertainty, increase efficiency, and ultimately enhance the chances of innovation success in a competitive business landscape.

“This means our clients can now continuously use data to decode innovation opportunities as they arise and effectively come up with consumer-centric business innovations”.

When businesses embrace data-driven decision-making they are well positioned to better understand their customers, competition, and market dynamics, leading to more appealing and successful innovations.

As experts in innovation, our passion lies in assisting clients with the identification, evaluation, improvement, and prediction of the business potential of their innovative ideas, products, and packaging. We offer efficient and validated end-to-end solutions that cover the entire process from ideation at the fuzzy front end, to concept and product development to forecasting success potential and finally to track performance of new launches. This approach empowers our clients to act swiftly in capitalizing on opportunities and become more agile when launching their products into the market.

Here we showcase one of our many agile solutions in our Innovation suite. Ipsos PT GO. PT GO is an agile product testing solution that delivers many benefits of a traditional product test, but with significant cost and timing efficiencies. PT GO covers KPIs found in a standard test, but offers flexibility based on our clients’ unique testing needs. It provides actionable insights for making informed decisions about product performance. PT GO's comprehensive summary report equips you better than ever for crucial but quick go/no-go decisions and/or product optimization guidelines, furnishing all necessary insights briefly.

***The author is the Director MSU & Innovation, Ipsos in Kenya