Brand Innovation: The underestimated power – Digital Leadership

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Brand Strategy

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Brand Innovation counts as one of the most powerful assets of your business. But why? In times of Tesla, Amazon, and Co. we know one thing: strong brands are a key success factor, then as now. Almost every brand innovation from these companies is hyped in its infancy. But how does this happen? And what role does brand innovation play in corporate strategy? All answers are in the following article.

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Brand Innovation: what is the current situation?

Over 30,000 new products are launched every year and 95 percent of them fail. So, only a few companies are successful with their innovations. This is a huge problem because innovations are essential for the continued existence and competitiveness of the brands. This is true especially nowadays when markets and industries are constantly changing and consumers constantly have new needs. Nonetheless, this change is hard-fought and not all former frontrunners are at the top anymore.

And the situation is no better in other countries around the world. If we turn our gaze away from the USA and look at a European country like Germany, we see that things are not necessarily any better.

To this end, YouGov conducted a study in Germany on the topic of innovation. Only eight percent of the surveyed agreed with the statement that Germany is an innovative location. By an innovative brand, most mean that it is future-oriented: the company develops new ideas and acts sustainably. Do we have a weak point when it comes to innovation in Europe?

There is also another perspective, according to which if a company wants to be considered innovative, it needs to be solution-oriented and technically up-to-date at the same time. The big hit is not necessarily expected.

The fact that there is a similarity between German brands and brand innovation in America is very rarely mentioned. Some still mention Mercedes or other car manufacturers, but they do not see them as leaders in terms of brand innovation. In comparison with countries such as China, Europe generally performs rather averagely.

The interplay between brand innovation and customer opinion

Many companies rely on innovation-driven competitive advantages. Most have also anchored it deeply in their corporate identity. However, those who promise innovation face a real challenge – they must also deliver!

Innovation is not an end in itself. It is not the number of patents registered that counts. What counts is the added value that innovation offers. Successful companies succeed in creating unique customer benefits with genuine innovations. The greater the added value of a new solution and the more relevant the fulfilled customer need, the more innovative the company is rated.

Related: The UNITE Value Proposition Canvas: The Beating Heart of the Business Model

The brand is the interface between the company and its customers. On the one hand, it helps to develop innovations that are exactly right for the customer’s needs and that are successful in the long term, on the other hand, the brand ensures that innovations fit in with the company’s own identity and strengthen its reputation. The synchronization of brands and innovations will be even more crucial to success in the future.

Brand innovation: what counts is speed and agility?

If you want to seize an innovation opportunity before your competitors, you need to act fast. Brands can only do this with an agile, flexible, and collaborative innovation process. The key elements, that help you significantly accelerate product development and brand innovation are technologies and strategies.

One of the critical stages in the innovation process is to ensure that your concept resonates with your target audience and promotes incremental growth before committing large development budgets.

A good concept test should quickly compare competing ideas using validated methods and identify the long-term potential of a concept. This is done by measuring the predictors of initial purchase, sales growth, and incremental sales for your portfolio. Pay attention to a meaningful innovation process. However, one important question remains unanswered: does the innovation fit your brand, and does it contribute to building brand equity?

Innovation and brand must go together!

People are attracted to brands that they believe are clearly different from the competition. This perception is an important factor for higher brand values. In many companies, however, innovation development is still too often separate from brand development. Simply developing a new product and instructing the brand team to sell it is not a recipe for success.

Not all innovations are good for a brand, and not all brands are credible for a promising innovation opportunity. When one thinks of innovation, companies like Tesla, Airbnb, or TikTok immediately come to mind. However, most new products are launched by or in conjunction with established brands. So what are these brands doing wrong? Is there a reason why they are not associated in the same way as the big names of our time?

Measure the power of your brand innovation!

With regard to the impact on brand equity, some key aspects come to the fore:

  • Does the innovation make the brand more meaningful by improving the perception that the brand meets people’s needs and increasing brand affinity?
  • What influence do they expect the corresponding brand innovation measures to have in sales?
  • Does the innovation help differentiate the brand by making it appear unique and increasing the perception that it is a trendsetter?
  • What potential does brand innovation offer for aggressive communication?

Meaning and differentiation help predict whether an innovation will increase brand strength and improve consumers’ propensity to choose the brand over the longer term. And because brand equity plays such an important role in the long-term success of an innovation,

If you’re not sure, look around. Learn from the greats and their ideas. Take Jeff Bezos as an example. We can learn so much not only from his companies but also from his patents. What do all these patents have in common? They are pure customer-centric brand innovations. This points to a clear direction for the future development of powerful products. It is not only about products anymore. It is now about being understood as an innovative brand by using customer-centric approaches to “prove” this skill to innovate.

Establish brand innovation processes in your company

Engineering-anchored companies often have too many good ideas. They find it difficult to identify and prioritize the projects that are most likely to succeed. As a result, many ideas get stuck halfway because their quantity consumes too many resources and technological know-how.

This is because customer acceptance of an innovation depends on whether it is credible for the company. Furthermore, an innovation must differentiate in order to be successful. Brand fit ensures exactly that. A good brand bundles the uniqueness, long-term goals, and identity of the company in clear differentiation from the competition. An innovation selected via brand innovation approaches proves and supports the positioning of a company and asserts itself more easily.

Don’t make the same mistake as so many others! Ideas grow with the people in your company. Find and establish ways to let the ideas mature in your company. You have a decisive advantage: The people in your company know the business and the brand. They can judge well which ideas are suitable for brand innovation and which are not!


The concept of innovation has been expanded in recent years. Innovations have left the research and development department: service can be an innovation today, as can a new business model. Innovation starts with a thought for improvement. This thought can arise from contact with customers, partners, or control.

For a good idea to grow into innovation and be perceived as such, it must be articulated, shaped into a performance, and ultimately communicated as innovative. Today’s innovation processes are therefore complex and have much in common with branding. It is not surprising that corporate brands are increasingly involved in these processes and prove themselves there.

Brand innovation is not easy, but it also offers an enormous opportunity. It is no longer solely about a product or a service, but also about how the brand behind it is perceived. Brand innovation can come from within, but it can also be driven by customers. Never underestimate the potential that can lie in both streams. Both sides – your customers and your employees – have the ability to empower your brand. Brand Innovation acts as an incubator for this, use this power!

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