Those who work in marketing and strategy today deal with a completely differently reality than that of ten years ago. The ways we once approached these activities have changed dramatically, largely as a result of the digitisation of our society.
The game changers in our digital economy
Those who work in marketing and strategy today deal with a completely differently reality than that of ten years ago. The ways we once approached these activities have changed dramatically, largely as a result of the digitisation of our society. Now, the choice of the customer has become much more powerful in this new digital economy. As a result of these changes, we have seen a series of well-established companies meet difficulties or even disappear altogether. All this begs a few vital questions: how is it that consumer behaviour has changed so quickly in recent years? And what exactly are the game changers in our new digital economy?
The drivers of change
The first fundamental change lies in the fact that information in our society has become real-time. For the first time, the difference between impulse, action and reaction is nil with the “I want it and I want it now” being the starting point. In many ways, this can be attributed to the availability of information. In the ‘old world’ the time frame between momentum, action and reaction was much wider. Today, everything we do economically is real-time and everyone is active 24/7. All this means that there is now fierce competition between existing and new players.
The second driver is the rapid rise of mobile Internet. In 2008, we were still connected to the Internet through a laptop on our kitchen table. This device often served multiple users and played a generally different role. The advent of mobile Internet put us in constant and ubiquitous contact with essentially anything – music, video, photos, services and social networks. It gave us a sense of independence that we had not experienced in years before. Many companies have underestimated the advent of being ‘connected everywhere’.
The third major change is the growing influence of data in our society. Our trillions of digital interactions provide an unlimited flood of available data. Those who are able to properly handle this data enter a new world where n = 1 is applicable. Based on profiles the personal aspect (n = 1) for businesses is suddenly scalable to millions of people at once. Data-driven service and customer experience are the distinguishing factors where companies create a lead.
It’s important to understand that the technology that surrounds us makes customers more independent. This is especially so for millennials (aged 18-34) who make their own choices and often come to those decisions with input from technology. More than anything, millennials feel autonomous with all the digital tools they have. This means that loyalty to brands can no longer be taken for granted. It also means that companies must adjust their approach to this new outlook or risk losing business. At present, 61% of companies are not able to discover where each customer is on the customer journey. Sometimes, this means it’s already too late. The bankruptcy of retailer V&D is a pressing example of this, showing how a generation of companies could not find new connections to changing consumer behaviour in our new digital society.
Forward thinking organisations see that today’s consumers have self-organising capacity. Through social media, a new ‘recommendation economy’ has emerged where people share their experiences and opinions. Companies can participate in this recommendation economy by focusing more on offering content than traditional product advertising. Poignant examples of this are companies like Red Bull and Starbucks who are more concerned with communicating the values of adventure and independence rather than advertising their core product – energy drinks and coffee. In an economy where everyone chooses his or her own channel at any time, holding onto the ‘customer journey’ is crucial for companies. Those who draw the attention of the customer at the right time will be the winner.
Anticipating the changing environment
Organisations that want to participate in this extreme competitive landscape should take to heart a number of principles.
Market the mind-set
Approach people from the situation in which they think. This means saying goodbye to traditional segmentations such as age, generation or social class. Today, everything is intertwined. Use the APT principle, which stands for Age People Think. This enables a company to discover new behaviours and new market segments.
Invest in data
Those who do not invest in data capture and data quality are likely to be replaced by new competitors in the digital economy. A better and deeper understanding of the customer is crucial for the competitive ability of organisations. That said, data is only useful when customer behaviour is studied and analysed. Only then can an organisation know which data is really relevant in which specific customer journey.
Focus on new generations
The new generation represents an enormous economic power. They think differently, communicate differently and act differently. They often think of access before possession and independence rather than security. Those who want to be successful must, therefore, find the right ‘tone of voice’ to reach this new generation and understand the subcultures they inhabit.
Innovate through experimentation
Discover and invent logical things to do in a world of infinite possibilities. Experimentation is essential. The short-cycle development of innovation leads to the best results and the greatest chances of success. Focus on innovative models that work bottom up and encourage young talent to give their opinion.
Build your ecosystem
Any organisation can create its own digital ecosystem to support the connection with customers, partners and fans. This ecosystem is built with intelligent marketing technology. Everything is accessible via the cloud. This makes the cost of entry into the digital economy lower than ever before. Realise that every organisation stands on the shoulders of software giants.
Written by Peter Sprenger, CEO Techonomy, supporting organisations on how to deal with rapid changes in the digital world.