There are eight ways to innovate an existing product. The most common one is Function Innovation, that is, the product performs a task or has a capability that is new and unique. Generally, these functions are close-in to the product–your MP3-player allows you to create a playlist, or your blender has a pulse feature. But sometimes Function Innovation can be further removed from the existing product fundamentals, like when Texas International Airlines introduced the first frequent flyer program in 1979 (quickly copied by American, United and Delta). The idea being that you’re not getting any added features on your flight, but rather an entirely new benefit–bonus travel that can be used personally.
This type of Function Innovation lays the groundwork for new competitors to push the idea even further. For instance, one recent Function Innovation we at SagePoint really like is part of the point reward program for Starwoods Hotels, called SPG Moments. SPG Moments allows you to redeem your Starwood points for special and private “once-in-a-lifetime” events which cannot be purchased elsewhere; for instance, backstage passes and premium seats to Broadway plays, or clinics with tennis legends, or a private meet and greet with performing artists.
What a great statement for the Starwoods brand. What a way to make a frequent guest feel special. And what a way to grow your business by attracting (and keeping) high-volume travelers.
Function Innovation is one of the Eight Ways to Innovate and can take many, many forms. And while brands will typically stay close to their knitting when looking for Function Innovations, it’s often a better pay-off to make a significant, meaningful innovation that distinguishes the product and surprises the consumer.