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Measuring Return on Innovation

Toyota Collaborator
Investing in innovation is not like investing in sales, and should not be measured by the same yardstick. Investments in innovation rarely shows short term returns, and their eventual returns are rarely trackable to all the little investments along the way.

But without an investment in innovation, there is little hope for the future. So how should we measure our returns on innovation?

Investments in innovation must be measured by the strides forward they represent, by the new opportunities they expose for the future, not by the returns they deliver today.

Many years ago, I was involved in a promotion for Pontiac, whereby a Pontiac owner could earn a large cash prize if they sold a Pontiac to a friend on MySpace. It was a reach, but it was 2007-2008, the early days of social media. By traditional measures, this wasn't a successful effort. Nor was Pontiac's virtual dealership in Second Life. But that doesn't mean that Pontiac wouldn't have seen a return had they continued investing in rich, social engagement.

Toyota recently kicked off a campaign that encourages friends to collaborate on designing a new car using a Google Hangout. This is a great example of agency-driven innovation - delivering an interesting if not deeply compelling way to shop, powered by a major ad-partner, Google. While I don't see this tool generating thousands of car sales, that doesn't mean that Toyota won't see a return.

 

Toyota's Many Returns

Toyota is associating themselves with Google, a strong tech brand. And their promotions will drive lots of exposure to and engagement with Toyota's vehicles. Vehicles have incredibly long purchase cycles, and while this may not drive thousands sales today, it will introduce a number of long-term prospects to Toyota vehicles. The integration with local dealers is brilliant, positioning local dealerships as places that are always available to help. AND, this creates a new channels for Toyota buyer - dealership engagement - through hangouts.

I doubt Toyota will be able to show a dollars and cents return on this investment in innovation. But over time, further investments like this campaign will drive deeper and stronger engagement with the brand, their products and ultimatley, sales conversions.

 

Kudos to BL Ochman for sharing.

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