Being Frugal with Resources for Micro Marketing Innovation
Frugal innovation is a process of stripping away all unnecessary features of a product or service. The idea? To do more with less.
how does frugal innovation apply to micro businesses?
The idea of doing more with less is something that all micro businesses will have to deal with if they want to compete and win against larger businesses. This doesn’t necessarily mean that micro businesses are at a disadvantage, if anything, it can be a strength when applying the principles of frugal innovation.
what are the principles of frugal innovation?
engage and iterate
This principle looks at R+D and how involved your customers are at the development stage. One of the ways to do this is by crowdsourcing ideas on social media through polls, surveys and open ended questions.
flex your assets
This principle is about making the most of what you have. This applies to your supply chain and how you create your products and services. Ways you can do this is by empowering employees, sharing resources with others and taking advantage of technologies available (cloud services and 3D printing for example).
create sustainable solutions
This is about creating products and services that are quality, affordable and sustainable. Business models that involve collaborating and sharing, create multi beneficial relationships that last. You can do this by setting BHAG (big hairy audacious goals) and putting KPIs (key performance indicators) in place to monitor your progress.
shape customer behaviour
To do this you must understand the journeys your customers take before, during and after when using your product or service. Ways you can do this is by segmenting your customers by their motivations. It’s also worth considering being flexible with your pricing and positioning. Persona mapping can help with understanding customer journeys, experiences and motivations.
co-create value with prosumers
Prosumers are those who take part in the design, production and marketing of your product or service. Proactive consumers help with identifying new ideas, validating and developing them and also commercialising them. Prosumers are a type of local influencer.
make innovative friends
By pivoting your business to collaborate and share with others (including competitors) will help you to achieve your BHAG. Look to enter joint ventures and share risk with others to help with cost savings. Ways to achieve this can be through hackathons (events designed to solve problems with technology) or host sector specific meetups/events.
why would I want to apply frugal innovation to my micro business?
If you’re looking to develop new products and services, you can use the frugal innovation principles to create so much value for customers, it makes competition irrelevant. This way of thinking leads to the creation of completely new market segments and is known as the blue ocean strategy. This strategy offers numerous financial benefits as well as intangible benefits such as brand recognition, customer loyalty and higher employee engagement.
how do I find out more about frugal innovation?
The thinking and principles behind frugal innovation are Navi Radjou and Jaideep Prabhu who studied the way emerging economies make the most out of their resources. Their principles have been applied to many of the world’s biggest companies and now in full swing in many developed economies worldwide.
Originally published at bmicro.co on January 24, 2016.