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INNOVATION: Change the delivery to improve the experience

02.05.2010

By Steve Epner

       This is part three in a series of articles on how to innovate. Too many people think you have to start a new business or invent a new product to be innovative and entrepreneurial. Nothing could be further from the truth.

       Innovation can encompass many different ways if creating change. Some will be incremental, some may be disruptive. In some cases, there will be inventions, but in the five most common forms of innovation, there is no new product.

       An innovation may be as simple as changing the way people order. Look at Amazon. It created a new industry by proving that online ordering could work. No longer did you have to go to a book store to find what you were looking for. It was all available from the comfort of your home.

       Amazon found that the delivery could change the experience. New ideas like reviews by customers, suggesting other books by author or genre. Offering free shipping if the order was large enough. All of these delivery ideas have been picked up and used to sell just about anything.

       Still, it did not signal the end of bookstores (although it has taken a BIG bite out of the marketplace). While many of the smaller stores have closed, the largest chains have changed their delivery as well. They now offer coffee bars, Wi Fi, in store computers to find what you are looking for, and an ability to order online if you want.

       Delivery can also be just that. There are many businesses that deliver product to their customers. It used to be a free service. For many, the cost can no longer be absorbed. Some business owners fret they will lose business if they start charging, but the reality is everyone knows the reality of fuel price increases. It is only our personal fear of changing something that stops us from acting.

       What if you provide a discount with a local delivery service? Find a good one and set up a contract. Then let your customers pay for the delivery on a fixed cost basis using your newly negotiated rates. The service is still being provided, but now it is a break even service. A good delivery service will use the new activity to better advertise their capabilities to many new customers. Plus, by using a “deliver within 4 hours” service, the cost is kept low to the customer.

       Not all changes in delivery are accepted easily. In the mid nineties, I tried to publish industrial catalogs on CD-ROMs. Good idea, but it was too early for the market. At the time, a CD drive was an option on most systems. While the concept was proved, it would take about three more years before the public was ready.

       There is an important lesson here. Test your new delivery on a segment of the market in which you are interested. Try it out and prove that it works. Then do some market research to see if people are ready to use it. Customer become your key variable. How will they act or react? That will spell the difference between success and failure.

        Right now, there is a major change starting to unfold in the delivery of news and entertainment. Look carefully at what is happening. Movies come out on DVD within a month of when they are released in the theaters. Television shows on the traditional networks arebeing produced as cheaply as possible. With few exceptions, the “reality” show format has taken over. Whether it is American Idol or Survivor, the production cost is a fraction of what a story-based show would cost.

       News is another area where the answer is still unknown. How can a paper charge sufficient amounts of money to support their operation? The “newspaper” you are reading right now is a prime example. There is no hardcopy. Anyone can access it for free. Advertisers are experimenting to see if they get a return on their investment.

       Other papers are looking at charging “micro payments” when you read an article. It might only be a couple of pennies each, but it can add up. Still, if it ends up costing you no more than you paid for home delivery (maybe 50 cents to a dollar) why not just pay for the sections/authors you want. That could support the operation and would provide very quick feedback about which columnists are the most popular.

       If you remember what a broken record was, I may sound like one. Keep your eyes and ears open to the possibilities. There are lots of opportunities out there. Consider how you might change the delivery of an existing product or service and maybe you too can change an industry.

Steve Epner is founder and president of the Brown Smith Wallace Consulting Group. The company assists clients with the integration of strategic business planning, information systems and tactical requirements. Epner currently is an Innovator in Residence at Saint Louis University. www.bswllc.com

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