ETH Denver was the place to be at the start of March. At least if you’re a crypto enthusiast worried about the direction of the industry. The event began with a five-person band singing a protest song. They belted out rude lyrics about Sam Bankman-Fried and Do Kwon, and promised “not to use centralized exchanges run by these toxic dudes.”
It’s a far cry from the days when the crypto industry thought their were about to reinvent the financial industry, destroy fiat currency, and usher in a new world order. As the prices of crypto assets sink under the weight of fraud and theft, the public grows increasingly bored with yachting apes, and wallets filled with non-fungible tokens appear to have all the value of a garage load of beanie babies, the industry is looking for a way to rebrand itself.
Some people are calling for the industry to drop the term “crypto” and to avoid any mention of blockchain. Riot Blockchain now calls itself Riot Platforms, notes The New York Times. Other people are trying to hitch crypto to a new bandwagon, adding terms related to artificial intelligence to their offerings.
What those firms—and the entire crypto industry—is doing is engaging in marketing innovation. The old message isn’t selling any more so to find customers, firms are going to have find a new story and deliver it in a whole new way.
A market crash that sinks consumer confidence can be one spur for marketing innovation but it’s not the only one. A recent study looked at the different drivers of marketing innovation in small and medium-sized businesses.
Abhishek Dwivedi and Nicholas Pawsey, senior lecturers in marketing and accounting respectively at the School of Business at Charles Sturt University in New South Wales, Australia, wanted to understand the consequences and antecedents of marketing innovation.
They define marketing innovation as “as the implementation of new tools and techniques relating to the design or packaging of goods and services, media or techniques for promotion, methods of product placement or sales channels, new methods of pricing, and other forms of marketing innovation.”
Rebranding could count as marketing innovation, as could a new social media campaign, a special offer or a sale. Whenever a business looks at its sales figures and comes up with a new plan to boost them, it’s engaging in marketing innovation.
The Seven Drivers of Marketing Innovation
The researchers expected to find no fewer than seven drivers of marketing innovation, covering institutional determinants, resources, and innovation and strategy.
First, they assumed that the degree of competition a business faces will affect its willingness to juice up its marketing. Companies face pressures that can be coercive, normative, and mimetic. Other organizations, such as the law or their investors, might require them to take particular courses of action. But they can also feel pressure to follow particular codes of conduct and behavior, and they can be afraid of feeling left out.
“In conditions of environmental uncertainty, organizations may model themselves on other organizations, thereby gaining legitimacy through imitative practices,” say the researchers.
Or to put it another way, when all your competitors are on Instagram, you’re going to feel a lot of pressure to be on Instagram too.
Also, affecting the institution itself is the adoption of new marketing skills. When companies learn a new way of selling, perhaps through a new hire or by being forced to adopt new regulatory standards, their marketing changes.
Resource pressures on marketing innovation include finance. “Marketing activities such as networking, database marketing, content marketing, new distribution arrangements, and consumer/customer incentivization require funds,” note the researchers. “We expect that finance-seeking behavior will likely drive the adoption of marketing innovation.”
Pick up some cash and a business is likely to put it to good use, and that includes in developing new ways to land sales.
The same should happen as companies adopt new information and communication technology, the researchers hypothesize. That could be something as simple as website-building and search engine optimization used by small wine and gaming companies. But the researchers also cited studies into the use of augmented and virtual reality to help B2B SMEs introduce marketing innovations.
And inter-organization collaboration should also help to spur marketing innovation. The more one organization works with others, the more it’s likely to learn, helping to promote new ways of bringing goods to market and reaching new customers.
The change in a product can spur marketing innovation as well. “SMEs in the food sector, for instance, may introduce new food items,” note the researchers. “Equivalently, tourism SMEs may introduce new tour packages.”
Dwivedi and Pawsey define product or service innovation as the introduction of new or significantly improved products or services—the kind that force the company to look for new ways to sell.
And finally, tracking the figures can prompt people to get more creative too. The researchers suggest that strategic or financial performance measures can both increase the chances of marketing innovation.
To test their theories, the researchers analyzed a survey from the Australian Bureau of Statistics: the Business Longitudinal Analysis Data Environment (BLADE). The BLADE combines economic and survey data relating to active businesses in Australia.
Questions on the survey asked SMEs whether they’ve introduced new or significantly improved marketing methods in the current year, such as changes to the design or packaging of a good or service; new media or techniques for production promotion; new methods of product placement or sales channels; new methods of pricing goods or services; and any other new marketing methods.
The sample covered some 4,378 firm-year observations, allowing the researchers to analyze SME marketing innovation over time.
What they found was that almost a quarter of the firms surveyed engage in marketing innovation. Companies working in the services industry were more likely to be innovative, and young companies were more innovative than those that had been in business for more than sixteen years.
They also found that they were mostly right in their prediction of marketing innovation drivers. There was a correlation between an increase in marketing innovation and six of the seven drivers they’d identified. Businesses did copy their competitors, put new funding into new marketing campaigns, roll out new ideas when their products, technology or skills changed. And they worked harder when they thought they were being watched.
A few exceptions stood out, though.
The utilization of marketing skills didn’t explain marketing innovation, a failure that the researchers put down to the lack of specialized marketing available and accessible to small and medium-sized businesses. And collaboration didn’t spur marketing innovation either.
“Inter-organizational collaborations in our sample may be unproductive for the parties involved; for example, collaborating partners may not have met mutual expectations,” the researchers suggest. “Second, inter-organizational collaborations can be resource intensive, and resource constrained SMEs simply cannot nurture deep relationships with other organizations.”
More notably, the researchers also found that companies that had experienced a recent fall in profits were also less likely to engage in marketing innovation.
How to Innovate Your Marketing
So what does all this mean for managers hoping to spur some innovation in their marketing campaigns?
The first advice is probably not to sweat it. Innovation in marketing should happen naturally as a result of being in a business environment. Managers will copy what their competitors are doing, if only to avoid being the only business in their field without a TikTok account. If you gain new funding, you’ll always find yourself looking for new ways to spend those funds, and one obvious route is to develop a new marketing campaign or test a new marketing strategy. Implement processes to track performance and you’ll find that employees are thinking about ways to improve that performance, outdo their rivals, and be first in line to a bonus and a promotion.
But as you engage with other organizations, make sure you learn from them. Dwivedi and Pawsey’s assertion that inter-organization co-operation doesn’t spur marketing innovation because the interaction failed or because the companies didn’t have enough resources to invest in a deep relationship sounds less than convincing. Every interaction should bring new ideas and exposure to new ways of working. Even if your partners aren’t in the same industry, their marketing methods may still have something to teach—and those are lessons you competitors are probably missing.
And if you see your profits are dropping, that isn’t the time to drop the marketing innovation. It’s the time to increase it. The old methods are no longer working so you should be looking to do something new. Resources might be thin, but that’s exactly the time to be searching for low-cost ways of spicing up the campaigns.
Not all marketing innovation has to come from the spectacular collapse of an over-hyped industry. Sometimes a quick look at the success of a competitor’s social media account or a sudden injection of new cash—or the loss of an old customer—can be all the motivation you need to innovate.
Recent Comments