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Tuesday, October 20, 2009

Procter & Gamble and the Beauty of Small Wins

Yesterday I facilitated a discussion at the Magazine Publishers Association annual Innovation Conference with Melanie Healey, the Group President of North America for Procter & Gamble. She told a story with some important innovation implications.

The story dates back to the 1990s, when Healey was a brand manager in Brazil. She was responsible for growing P&G's Hipoglos brand of diaper rash ointments. The problem? The product already had 99 percent household penetration. A tough challenge, right?

Healey did what good P&G people do — she went out to talk to consumers to find out what they thought about the product, the problem it addressed, and so on.

People claimed they used the product regularly to prevent diaper rash. If that were true, however, Healey knew consumers would buy much more Hipoglos than they did today.

So, she dug deeper. By probing when consumers used the product, she found that parents applied it when early signs of rash began to appear. Of course, that's too late if you truly want to use a product for preventive purposes.
Healey had a critical insight. Consumers weren't actually realizing all of the benefits of the product, resulting in cranky babies and sleepless nights. P&G began running advertisements showing how applying the cream to an already emerging rash was too late to prevent the rash from occurring. Not surprisingly, sales soared.
Innovation doesn't always involve new features, functions, services, or business models. Sometimes it can be as seemingly simple as a new marketing message.

Of course, I'm a fan of big bang disruptive innovations that create categories and land entrepreneurs on the cover of magazines. But the Hipoglos story shows how a disciplined approach — coupling a point of customer frustration with an innovative approach to address that frustration — can lead to small wins. And enough small wins can combine to create major impact.