Report: Innovation Equity Quotient

We just published a new Temkin Group report, Innovation Equity Quotient. Here’s the executive summary:

Companies focus on innovating new products and services, but how willing are consumers to accept these offerings? The Innovation Equity Quotient measures the readiness of consumers to try something new from a company. Led by Hershey and Kraft Foods, six consumer packaged goods (CPG) firms came out at the top of the ratings. In some head-to-head comparisons, Google leads technology companies, Coke beats Pepsi, and Walgreen’s beats CVS. We also examined the data across age, income, gender, and ethnic groups. Income levels appear to have the least impact on the Innovation Equity Quotient, but there were considerable gaps in the other areas. Nintendo and Google have the largest age gaps, Revlon and L’Oreal have the largest gender gaps, Apple has the largest income gap, and Nike has the largest ethnicity gap.

Download report for $195

To understand this demand-side component of innovation, we created the Innovation Equity Quotient (IEQ) that gauges consumers’ openness to trying new products and services. IEQ is based on a simple question: “If <COMPANY> announced a new product or service, how likely would you be try it right away?” We asked this question to 5,000 US consumers and calculated IEQ for Forbes 50 most valuable brands. Here’s how they fared:

The report includes data charts that highlight the 25 brands with the largest IEQ gaps across age groups, ethnic groups, gender, and income levels.

Download report for $195

The bottom line: Innovation is more successful when customers want to try new offerings

Customer Experiences Need Work Across Channels

Earlier this year, we published a report called Best And Worst Of Cross-Channel Design, 2009 that examined results from our expert review of 16 companies across four industries: Online travel agencies, auto insurers, footwear manufacturers, and discount retailers. We examined scenarios that included interactions online, with call centers, via email, and through IVR systems. The evaluations also looked at transitions across channels.

Here are the overall results from that analysis.


As you can see, none of the 16 firms ended up with a passing score. Here were the highest scoring firm in each area:

  • Web site: Expedia
  • IVR: Nike
  • Phone agents: Orbitz and
  • Email: Nike
  • Channel transitions: Expedia, Geico, and New Balance 

The cross-channel reviews graded experience across 57 criteria. More than 12 of the 16 companies failed these nine criteria:

  • Is text legible? (Web Site)
  • Is the task flow efficient (Web Site)
  • Is essential content available where needed? (Web Site)
  • Can the user complete her goals in all required channels? (Channel Transitions)
  • Are keyword-based searches comprehensive and precise? (Web Site)
  • Does the system provide essential content? (IVR)
  • Does the site help users avoid and recover from errors? (Web Site)
  • Does the site present privacy and security policies in context? (Web Site)
  • Do menu categories immediately expose or describe their subcategories? (Web Site)

The bottom line: There’s a lot of room for improvement

The Satisfaction Quarterly Report, Q3 2008

The American Customer Satisfaction Index (ACSI) just released its Q3 2008 report that covers the following sectors: Apparel, athletic shoes, breweries, cigarettes, food manufacturing, personal care & cleaning products, pet food, and soft drinks. Here are some highlights of the new data:

Ratings Of Firms

  • Top rated: HJ Heinz
  • Top rated relative to industry average: HJ Heinz
  • Largest improvement (since last year): Colgate-Palmolive and Nike
  • Lowest rated: Nike, adidas, Levi Straus & Company
  • Lowest rated relative to industry average: The Iams Company, Hill’s Pet Nutrition
  • Largest decline (since last year): Hill’s Pet Nutrition

Ratings Of Industries

  • Top rated: Personal care & cleaning products
  • Largest improvement (since last year): Food manufacturing
  • Lowest rated: Cigarettes
  • Largest decline (since last year): Apparel

While it’s interesting to look at the data, I also like to read the commentary by Professor Claes Fornell who puts the customer satisfaction results in context of the overall economy. Here’s an excerpt from his Q3 2008 comments:

There is no meaningful pattern of past data to statistically forecast in an environment of great uncertainty and market volatility… When household resources are lacking, changes in customer satisfaction do not matter much for aggregate demand. At the micro level, on the other hand, it matters more. For individual companies, now is the time to hold on to present customers. Making sure that they are satisfied usually provides some degree of insulation from competitive challenges and price wars, as the challenger must be able to provide better value than the incumbent – and, depending on the risk the buyer takes in switching suppliers, sometimes significantly so.

The bottom line: Recession => Retention is critical => Customer Experience is critical!

Apple, Not Obama, Is My Marketer Of The Year

Obama’s campaign just won “Marketer of the Year” from the Association of National Advertisers. Here’s how the group voted:

  1. Obama: 36.1%
  2. Apple: 27.3%
  3. Zappos: 14.1%
  4. Nike: 9.4%
  5. Coors: 8.7%
  6. McCain: 4.5%

You have to give Obama a lot of credit for successfully using social media and digital marketing techniques to reach the grass roots constituents and raise a ridiculous amount of money: $150 million in September!!! I outlined several good the things in the Obama campaign in my post Five Lessons From Clinton/Obama Battle.

But even with all of that cash flowing into the Obama campaign, it wouldn’t have been my first pick on the list. Who would have been my number 1? Apple.

Apple has done an amazing job with Mac and iPhone marketing. The Mac ads are fantastic; delivering clear, on-brand messages (Mac is fun, Vista is broken) in a fun and memorable way. The iPhone marketing campaign has created enormous buzz around the iPhone experience, pushing people to actually switch wireless carriers. In addition to the product-specific campaigns, Apple does a great job of blending its product design, store experience, and Genius service into the marketing mix.

And, we can’t forget that Apple is successfully outmarketing companies like Microsoft, HP, Dell, Verizon, and RIM (Blackberry). These are major consumer brands. Obama, on the other hand, is only out-marketing McCain who has significantly less resources.

The bottom line: Apple is my marketer of the year (P.S. I’m also a huge fan of Zappos)

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