What Is Incremental Innovation?
Incremental innovation refers to a series of small-scale improvements made to an existing product or service to add or sustain value. Rather than introducing a potentially risky brand-new product, this product strategy entails modifying a current product to improve retention, relevance, and longevity, among many other benefits.
Any size company can benefit from bringing incremental innovations to market, which range from adding a new feature to an existing product or developing a line extension. When done well, these low-risk, low-cost modifications can play a powerful role in helping differentiate a company or product from the competition.
By contrast, radical innovation, also called disruptive innovation, refers to introducing a brand-new product or service to replace an existing one. This type of game-changing innovation can significantly impact a market but is more expensive and carries much higher risks.
What Are the 8 Key Benefits of Incremental Innovation?
Incremental innovations enable companies to more quickly and easily differentiate from competitors and maintain— or even improve—their market position.
1. Less Risk
Because incremental innovation tends to carry lower costs and lower risks than bringing a brand-new product or service to market, it
2. Customer Retention
More frequent improvements can improve a product’s visibility and sustain interest with customers.
3. Stronger Customer Relationships
A continued focus on customers’ needs and product use builds trust and cultivates a long view.
4. Continued Relevance
Small product improvements help companies retain market share and stay relevant in a crowded market.
A product or service’s prolonged life creates greater diversity in a company’s product portfolio and helps ensure company longevity.
6. A Quick Win
Because the product is already on the market, familiarity and trust pave the way to easier acceptance and adoption.
7. Better Products and Services
Small, strategic improvements to an existing product result in better functionality, productivity, development efficiency–and ultimately a better product.
8. Potential for Radical Innovation
Companies can create a lower-cost, lower-risk revenue stream to fund riskier, more expensive radical innovations.
Examples of Incremental Innovation
“Companies that spend less on research and development and more on marginal improvements to existing products tend to be more successful than those focusing on groundbreaking innovations.” Northeastern University Graduate Blog
Companies of all sizes can benefit from incremental innovation. Here are a few examples :
Sony: Sony built a rock-solid reputation for incremental innovation within its existing product line. The company developed approximately 160 slightly different versions of the iconic Sony Walkman in just a ten-year span. In doing so, Sony maintained a firm grip on its market share and reputation for product leadership.
Apple: While the company has cultivated a reputation of radical innovation and market disruption, its popular iPhone serves as a great example of incremental innovation. Apple co-founder and former CEO Steve Jobs called the iPhone “an iPod, a phone, and an internet communicator,” all in one. Since the iPhone’s unveiling in 2007, Apple has maintained a regular cadence in releasing upgraded versions that offer small-scale improvements (e.g., improved cameras, graphics, etc.) that don’t depart its basic design.
Toyota: Toyota, widely recognized as the world’s most efficient vehicle producer, has also built a strong reputation for incremental innovation in manufacturing and assembly. Other companies often replicate its Kaisan approach.
Why Product Managers Should Consider Incremental Innovation
Incremental innovation enables product managers to continue innovating and improving by making small-scale changes to existing products or services. When strategically prioritized, these small modifications can greatly impact customer retention, competitive differentiation, and market position.
“Innovation—the process through which companies think of and create novel products and services—doesn’t have to result in huge departures from business or product norms to make an impact.” Northeastern University Graduate Blog
For improvements to deliver the greatest outcome, they must be prioritized. Product managers should ask these 3 questions about any potential product features.
PMs must also continue to nurture a deep understanding of customers and their evolving needs.
Read more about product management’s role in promoting innovation.