Innovation has fast become the nation’s favorite buzzword. From businesses to politics to technology and education, it seems the world is hooked on the concept of creating or investing in something new.
Everywhere you turn, an abundance of well-meaning books, articles, whitepapers and videos hail innovation as the holy grail to commercial success. Even Steve Jobs, co-founder of Apple, once defined innovation as the marker that “distinguishes between a leader and a follower”.
While the hype surrounding this term has grown from the success stories of start-ups turned multi-nationals and the excitement born from new technology, innovation is increasingly dubbed as the silver bullet for growing businesses. But does new technology truly hold the key to more clients?
According to figures from Reputation Institute, it’s a dangerous approach. Figures from their recent study suggest that 19.7% of consumers most value a brand’s products and services, though this is closely followed by its governance (17%) and citizenship (15.8%). These perceptions of corporate reputation far outweighed the value of innovation (12.7%), workplace (11.9%) and performance (10.6%).
The research further showed the key role that reputation plays in purchasing decisions: while just 23% of consumers would buy products from companies with an average reputation, this figure rises to 38% when the company has a strong reputation and 77% if their reputation is excellent.
Of course, the importance of innovation is not up for debate: just as product designs must evolve to stay competitive, businesses must be willing to adapt, experiment and learn in order to remain relevant with their target audience. However, the deep infatuation for innovation is so pervasive in some companies that their entire marketing strategies focus primarily on promoting the perception that they are an innovative entity, regularly “disrupting the industry” with their new products or services.
Just about any new idea can win management’s attention, and companies often invest heavily in emerging technology – just to be recognized as “market-leading.”
A prime example of this is the blockchain system. The potential that this technology has to reshape society and transform the way we work is unquestionable, and many businesses are beginning to adopt blockchain technology to track their supply chain more efficiently – but this doesn’t necessarily mean investing in blockchain technology or cryptocurrencies are a golden ticket to the top.
Similarly, key players in the Virtual Reality market may enjoy a lucrative return on their investment, but VR alone is not a sure-fire way to win the hearts and minds of new clients. Why? Generally speaking, companies who thrive from innovation and investment in new technologies have a well-established client-base who trust their business decisions. The key word here is trust.
If you have garnered a strong reputation within an industry or marketplace for an exceptional product or service, you’ll be in a much better position to experiment with your offering than you would be without one. Of course, it could still be unsuccessful – in fact, the majority of iPhone users will regularly critique any innovation the tech giant implements to its line of products. However, most of these individuals will still purchase the product regardless due to brand loyalty.
While innovation may be paramount to keeping ahead of the curve, consumer trust remains the key component to a successful venture. Though it will take time, an active commitment towards building a first-class reputation will always be a smart investment.
Director / Co-Founder • San Francisco