Jan 29, 2021 | Change, Customers
Technology is not disruptive: it is customers that are doing the disruption, technology is just the tool.
Just like matches disrupted the flint and steel manufacturing industry, Josiah Wedgewood disrupted the pottery industry, and the motor car disrupted the horse transport industry. These three, and many others you can think of, were driven by customers preferring the new offering, as it better met their needs. It is customers who are driving the disruption of shopping, communicating, travelling, and all the rest.
Once you accept technology is just the tool, you can start thinking about customers.
The best place to start is with the customer journey.
What are your customers trying to achieve when they buy a product? Do they want a drill bit, or do they want a hole? Do they want a luxury central city hotel, or do they want somewhere comfortable to sleep with a café nearby for their breakfast?
Understand the customer journey, what it is they are looking for, and the means by which they currently get there is key.
Once you have that figured out, you might be able to see places where the current value chain that serves customers can be re-engineered.
Technology is one way, but there are others.
A business I worked for years ago replaced a network of distributors with direct salespeople backed up by a very friendly telephone process. This was pre internet, so no tech beyond the phone and a hand recorded version of a CRM on customer cards was used. The results were spectacular.
Considering any sort of reengineering of the existing value chain means that there will be an element of risk, However, the risk can these days be mitigated by using the Lean Startup methodology, simply, placing a version of the chain in front of customers and seeing if, and how they use it. If the product is entirely new, it is not much use asking them, as they have little frame of reference. Henry Fords dictum of the faster horse still holds true, but seeing how customers use a new product in its minimum viable form is the best way to gather insight. We used to call it test marketing, so this idea is not really new, but the technology that enables it more easily than ever before is.
Alongside technology enabling customers to make different choices, there comes the second baseball bat to the head of incumbents: the business model.
Again, business models are simply the manner in which you deliver value to your customers. The manner in which this value delivery happens can change, enabled by technology, which changes the business model.
They go hand in hand.
Let’s take retail. I was in a large format general retail store a few weeks ago, and there were customers all over the place playing with their phones. Some were just amusing themselves, but many were price checking, seeking product specifications, availability, and looking at product comparison websites. I am sure some bought products, but equally sure that many walked out, either delaying the purchase or making it elsewhere.
Opportunity lost.
The huge untapped competitive advantage bricks and mortar retailers have, is that they have the potential for human interaction. We are a social species, so seek to commune with others. Yet, this retail store, typically, had cut down on staff on the floor, saving costs presumably in the face of online competition. A few added sales staff who were product experts, there not to sell product but to assist potential customers make the right choice, even if that choice was not available immediately, would have made a huge difference,
Back to the customer journey.
In the old days, customers travelled almost the whole journey in the one place, a retail store. Once they determined they needed a product, they went to a store they trusted, and were given information by the salespeople, made a choice and paid, had it delivered. All in the one place.
That has changed,
Now the power of the retailer that came from controlling the information has been lost, the information is available everywhere, so the customer can make their choices while nowhere near a retail outlet. However, often they will go and have a look at the physical product, in a store, just to make sure, or just to get a better sense of the physicality of the product. They then can check price and availability and make a decision on the supplier. Showrooming is the term often used, and it is a powerful new force, underutilised by retailers. The customer journey doesn’t finish with the product delivery. Now there are tech tools that will follow up, ensure service is delivered, ask for referrals and ratings, all designed to offer information to the next customer who may be showrooming.
Technology is the enabler of changed customer behaviour, not the driver. The driver is customers looking for increased value by seeking and accepting the removal of commercial friction.
Header cartoon courtesy of Hugh McLeod at gapingvoid.com
Jul 22, 2020 | Change, Leadership, Strategy
As we hesitantly, with stumbles, come out of this lockdown, we will see the landscape has changed. For some, it will be a land of opportunity, for others, a wasteland.
Rather than seeing it as a calamity, those who choose to see it as an opportunity, will be able to look and see that what has actually happened is that the lockdown has dramatically accelerated many trends that were already slowly impacting on our lives. They were all evident before to those who were looking, now they are in ample evidence to everyone who is not completely blind.
The more obvious ones, are:
‘Digitisation’.
So called digitisation has taken off, whatever digitisation means in your context. Suddenly ‘digital’ is the new normal. From remote control of factories to grannies interacting with their grandchildren via Zoom, nobody has been immune.
Remote work
Working from home, cafes, the car, has been developing for a decade. Suddenly, it has been accepted as an alternative to expensive office space in central locations. What will probably evolve is some combination of decentralised ‘meeting places’ and working from home, serviced offices, and cafes. The trend has been pushed along a decade in 5 months.
Retail delivery services.
Similarly have been pushed ahead a decade. Everything from the local restaurant to the supermarket, and department store now have to be geared up to deliver, or lose the sale. This will change the nature of retail from transactional to more ‘showrooming’, a trend harnessed by Apple a decade ago while everyone else was cutting retail prices and locations in order to save money. However, retail shop fronts will become more important than ever as a means to communicate with customers, rather than just being a point of sale.
The end of ‘purpose’ marketing.
The focus of marketing, at least by corporate marketers, will have pivoted from the banality of the ‘purpose driven’ marketing of the last few years. In the absence of a compelling idea, marketers deluded themselves that people really cared about their empty statements of ‘purpose’. Your potential and current customers will be demanding evidence that the statements carry weight in the behaviour of those seeking their money.
Politics.
Politicians have had a huge wakeup call. We voters really hate the division and spite of the practise of politics as usual pre corona. We long for some evidence that those elected to lead, actually do so, rather than just taking the trappings of office for their own benefits. The pressures on politicians and the political orthodoxy that has dominated to date will have to be revised. The basic assumptions about what services government provides, and from who and how, the necessary funds are raised to pay for them, have moved.
Not since 1939 have our politicians been confronted with the profoundly difficult choices that now face. I wonder if they are up to the challenge?
The economy.
The economy has suffered a major stroke, one for which substantial rehab over a long period will be required. It would be naive to believe it will recover to look much like the pre stroke version, but recover it will, over time. For those willing and able to push the boundaries, there will be opportunity everywhere, from the remaking of supply chains, to the potential of rebirth of sophisticated niche manufacturing, and new export markets. Digitisation of just about everything that has been accelerated massively, will demand investment and different business models and enterprise capabilities. These will offer great opportunity as well as what for many will be a terminal challenge. None of this will be easy, but it will happen.
As we ‘wake up’ from the corona coma, there will be an inclination to revert back to the known, and comfortable. Succumbing to that urge will be a mistake, as we have all been forced to move on, to push the edges of our comfort zones. The economic and social climate has changed dramatically, and those that seek the comfort of the Pre Corona status quo will find themselves isolated, and falling behind their competitors.
Picking your way through all this will take effort, experience and careful planning. When you need the injection of those skills, give me a call.
Mar 27, 2020 | Change, Leadership
As we hesitantly, with stumbles, come out of this lockdown, we will see the landscape has changed. For some, it will be a land of opportunity, for others, a wasteland.
Rather than seeing it as a calamity, those who choose to see it as an opportunity, will be able to look and see that what has actually happened is that the lockdown has dramatically accelerated many trends that were already slowly impacting on our lives. They were all evident before to those who were looking, now they are in ample evidence to everyone who is not completely blind.
The more obvious ones, are:
‘Digitisation’.
So called digitisation has taken off, whatever digitisation means in your context. Suddenly ‘digital’ is the new normal. From remote control of factories to grannies interacting with their grandchildren via Zoom, nobody has been immune.
Remote work
Working from home, cafes, the car, has been developing for a decade. Suddenly, it has been accepted as an alternative to expensive office space in central locations. What will probably evolve is some combination of decentralised ‘meeting places’ and working from home, serviced offices, and cafes. The trend has been pushed along a decade in 5 months.
Retail delivery services.
Similarly, delivery services have been pushed ahead a decade. Everything from the local restaurant to the supermarket, and department store now must be geared up to deliver or lose the sale. This will change the nature of retail from transactional to more ‘showrooming’, a trend harnessed by Apple a decade ago while everyone else was cutting retail prices and locations to save money.
The end of ‘purpose’ marketing.
The focus of marketing, at least by corporate marketers, will have pivoted from the banality of the ‘purpose driven’ marketing of the last few years. In the absence of a compelling idea, marketers deluded themselves that people really cared about their empty statements of ‘purpose’. Your potential and current customers will be demanding evidence that the statements carry weight in the behaviour of those seeking their money.
Politics.
Politicians have had a huge wakeup call. We voters really hate the division and spite of the practise of politics as usual pre corona. We long for some evidence that those elected to lead, do so, rather than just taking the trappings of office for their own benefits. The pressures on politicians and the political orthodoxy that has dominated to date will have to be revised. The basic assumptions about what services government provides, and from who and how, the necessary funds are raised to pay for them, have moved.
Not since 1939 have our politicians been confronted with the profoundly difficult choices that now face. I wonder if they are up to the challenge?
The economy.
The economy has suffered a major stroke, one for which substantial rehab over a long period will be required. It would be naive to believe it will recover to look much like the pre stroke version, but recover it will, over time. For those willing and able to push the boundaries, there will be opportunity everywhere, from the remaking of supply chains, to the potential of rebirth of sophisticated niche manufacturing, and new export markets. Digitisation of just about everything that has been accelerated massively, will demand investment and different business models and enterprise capabilities. These will offer great opportunity as well as what for many will be a terminal challenge. None of this will be easy, but it will happen.
As we ‘wake up’ from the corona coma, there will be an inclination to revert to the known, and comfortable. Succumbing to that urge will be a mistake, as we have all been forced to move on, to push the edges of our comfort zones. The economic and social climate has changed dramatically, and those that seek the comfort of the Pre-Corona status quo will find themselves isolated and falling behind their competitors.
Picking your way through all this will take effort, experience, and careful planning. When you need the injection of those skills, give me a call.
Aug 1, 2013 | Change, Governance, Marketing
The first post on this “StrategyAudit” blog was on March 30, 2009, and I wondered at the time if there would be a second.
Where were the ideas going to come from?
Would I have the discipline to just keep at it?
Would anyone care?
Now, a thousand posts, and four and a half years later, at least one of those questions has been answered, and much to my surprise, I have stuck at it. The ideas still come, mainly because I see things, read things, make connections that previously I was unaware of, but now I write down, and sometimes they turn into posts.
Does anyone care? Well, a few do. Several hundred subscribers get an email every time I post, and a good proportion get opened, although the rate varies with the headline. (you can always tell an interesting headline) and more are open via twitter, LinkedIn, and other social media. Thanks to you all, and more reposting, and retweeting would be appreciated.
So, What has changed over the life of StrategyAudit?.
Marketing has changed, absolutely. The world is now digital, and the practice of marketing. has been radically transformed, and by observation, many of Australia’s enterprises have missed the boat, so far.
Mobile has not just arrived, but now dominates many net usage categories, particularly social media. Overall mobile now delivers 25% of web traffic, and growing at warp speed.
Marketing ROI. You can now calculate the ROI of most marketing investments based on data, where previously it simply was not a reliable calculation. For the first time, the old adage of “50% of my marketing budget is wasted, just wish I knew which 50%” has become nonsense. It can now be calculated with considerable accuracy using free web analytics. Given that data is free, there is no excuse not to use it.
Crowdsourcing. Creative input, money, advice, as well as crowdsourcing routine clerical jobs. No longer is Intellectual Property king, Intellectual Capital has taken over, as it is what you have between your ears that can influence tomorrow that really counts. It is now much less about what you did yesterday, and are protecting in the hope that it can be a win again tomorrow, than what you can do now that counts.
Visual has arrived, from the growth of YouTube, to Vimeo, slideshare, visual podcasts, instagram, Vine, the list goes on. Content is now visual, a picture replacing a thousand words writ large.
Fragmentation has overcome social media as it has matured, just as the manner in which we get news fragmented a decade ago when suddenly the newspapers, radio and evening TV news became almost redundant. There are choices you now make about which social media for which purpose, the way you use it, the content, et.al. Social is now part of our commercial world, not the habitat for our teenage children, and smart organizations are starting to understand the nuances, and use it well, rather than just chasing “Friends”.
Marketing automation is upon us. Everything from consumer CRM, to social media posts and content bait is combining to disrupt the sales and marketing processes that evolved over last century. It is particularly potent in B2B sales and marketing, removing the demarcation that is the base of so many organisation structures and cultures.
Transparency has evolved from operational and logistical environments into marketing. There is now huge volumes of great info on the net aimed at helping people to think about and measure the impact of their marketing. It is the age of helping, in the hope of gaining a customer for life, rather than just creating a transaction. Jay Baer has just written a second book, “Youtility” on the topic, and last week put up a long post that includes slideshare presentation on “how to” publish, doing exactly what he advocates in the book.
“Big Data” has arrived, although most have no idea what it is, and so are missing the opportunities that evolve from the mass of data now available to those with the capabilities and tools. Apart from the academic interest driven by the challenges of analysing zettabytes of information, enterprises across many categories are looking at ways to leverage the potential. It has also spawned a new job description,” Data Scientist” those who do this mining. Wonder how our universities are coping with teaching something only 3 years old, that is rapidly becoming a defining discipline of the 21st century?
Mortar to virtual retailing has arrived, along with the “Showrooming” whereby people use bricks retailers to touch, feel, test and size products they then buy on line a bit, sometimes a lot, cheaper. However, the research still evolving tends to suggest that the “showrooms” that get visited are first “webroomed”, increasingly from mobile, social media connected devices, and the total of sales is increasing, stimulated by the available information and marketing, while bricks retailers are missing substantial opportunities by concentrating on price as a competitive tactic. In effect, to be successful retailers need to be “Omni-channel” retailers. However, as noted below, we still go to the local store for much of what we buy.
Local. This is an emerging trend that leverages technology to disrupt at a local level by providing services specifically tailored to the individual. Airbnb, just a couple of years old is busily disrupting the hotel business, and from nowhere Uber, disrupting taxi and limo services is now a billion dollar baby. (Just how the absurdly regulated taxi industry in Sydney reacts will be an interesting exercise in the status quo Vs common sense). Nowhere is this trend more visible than in the growth of local growers markets in urban areas. Web strategist Jeremiah Owyang is calling it the Collaborative economy, and it is just getting started, but what a huge baby, at a current estimate of $26 billion.
Empowered consumers. Consumers now have enormous amounts of information at their fingertips, and this has removed from sellers much of the power they used to have in the selling process, weather it is paperclips or power stations that are being bought. This means that an ordinary value proposition is simply not good enough any longer!
Bullshitting the boss. Marketing was always a balance between art and science, but the pendulum has swung decisively in favor of the boss. The “black art” component has been removed, senior management have been around this stuff long enough, and are smart enough, to now be able to discriminate between the real marketers and those who just know the jargon. Baffling the boss with marketing bullshit no longer works, Full stop!
And, what has not changed.
The net has not turned all of us into wise, super informed consumers, and few of us are hyper connected, yet, and most of us are just a bit confused at the array of choice. However, if the pace of change continues, and I expect it will only accelerate, another decade will see us living in something akin to a sci-fi movie as Gen Y takes over.
Our behavior has not changed all that much, just because the tools have changed. We just have a bigger choice of tools, many of which most of us cannot, or choose not, to use. What we like and dislike, the people we choose to share a meal with, and how we spend out time have not changed all that much, human behavior is too hard wired for rapid evolution. The exception to this sweeping generality is social media, which has been adopted in the manner of a starving man being presented with a feast.
The web has not replaced our old buying ways completely, despite the hype. Most of our shopping (95% depending on whose numbers you use) is still with bricks and mortar retail, and much of the so called lost 5%, the B&M’s would not have made anyway, as the demand is a creation of the information and choice available via the new tools.
The web is not a cure for the disease of crap advertising and communication we suffered last century. If anything, it has multiplied the opportunity for us to be bored, turned off, and just plain aggravated. Were it not for our innate ability to ignore that which does not interest us, we would all be bonkers by now.
I’m glad you stuck with me this far, thanks, I hope I have scratched your brain. And so, on to the next thousand.
Jul 20, 2012 | Branding, Customers, Marketing, retail, Sales
Amidst the moans being heard from bricks and mortar retailers, you can still see in almost any store you choose to enter, opportunities to make the experience of shopping easier.
If it was more social, friendly, service oriented in stores, it follows that shoppers would find it easier to part with their money. Human beings are social animals, we herd, and congregate around things that interest and engage us, so it seems possible to dream up strategies that enable that behavior in a store, to make it an attractive occasion to go there, even if it is to your local supermarket, there are opportunities to reconstruct the experience.
Many consumers in high value categories, from furniture to electronics and whitegoods, are “showrooming”, doing some research on-line, then going into showrooms to have a look at the short list in the physical state, then go out and buy on line. Notice the disconnect there, sales people let them out of the showroom not just without a sale, but without permission to continue the nascent relationship.
On the other hand, I wandered into the Apple store last week, seeking information for a client, went back the next day for an information session targeted at the specific questions I had, and yesterday got a targeted email offering solutions to the problems I outlined in the session.
No wonder the Apple retail stores are breaking all retail records, and they are bricks and mortar, with a huge difference, they work at creating a relationship, recognising that it is the precursor to a sale.
