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Disruptive Innovations: Attract New Consumers

Posted by Joe Antle on August 8, 2018 9:45 AM EDT
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One of the key attributes of successful disruptive innovations is that they drive consumption from "non-consumers"....

....whether those "non-consumers" are people, organizations or other entities.  The disruptive innovation meets a need in a way that enables those who don't have a satisfactory solution to have a "good enough" solution-sometimes one that is non-traditional or "not good enough" at first for the traditional "consumers".  But one that in time will become better and more acceptable even to those who currently demand more expensive, sophisticated, inconvenient and hard to use solutions a smaller group of today's consumers.

Typically, this disruptive innovation would have very little appeal to the consumers who value the "incumbent" or existing solution, service or product.  And thus, incumbent solutions providers would have little incentive to embrace or adopt the disruptive innovation for it would not appeal to their key customers and may even hurt their profits and their "brand identity" as high-quality, top performance "solution providers".  In essence, the never-ending quest to win the race to the top of the category leaves behind a mare that is ten times larger for potential consumers who cannot justify the prices or utilize the complex features that the prices demand.

Making the same point in a different way, the key finding in the research according to Dr. Clayton Christensen is that the focus on the needs and expectations of larger, better-resourced clients is to overshoot the market in terms of creating ever-increasing features and complexity/sophistication to meet the competitive set with better and more elaborate capabilities at higher prices.  This then creates an enormous void whereby the majority of potential customers (consumers) are left without a suitable option because they don't have the need for the increased functionality and cannot afford to pay the price that the increased functionality commands.  The only traditional strategic option for competitors is to reduce their pricing, while maintaining the advanced functionality and this ultimately creates a "red ocean" of competition where competitors are driven to spend more resources on a "better than good enough" solution while reducing prices and profit margins to do so.

The idea of disruptive innovation is to develop and introduce as conveniently, affordably and simply as possible a "good enough" solution that is dramatically better on the points that matter for the non-consumer (effectiveness, affordability, simplicity, efficiency -in time and money-and convenience).  So, in the early stages it seems that the focus of the disruptive innovator is not on the established market but on the much larger market of non-consumers who have been displaced by the complex, unaffordable, difficult to use and inconvenient solutions of the incumbent providers.

In the series of blogs to follow, we'll look at other consistent aspects of disruptive innovation.  But the most compelling and yet daunting aspect of disruptive innovation is the ability to create more consumers as a result of being "easier" for non-consumers to justify becoming consumers based on a new offer's effectiveness, affordability, simplicity, intuitiveness, efficiency and resilience.

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