Back then, I really wasn’t sure CDs would ever replace cassettes
Two of the most overused clichés in marketing involve customers and/or digital being at the heart of a company’s strategy. Yet the reality can often be just an app or social-media initiative bolted onto a business model that fundamentally hasn’t changed for generations, and really hasn’t adapted to be customer- or digital-centric at all.
The banking, insurance, mobile phone and utility sectors, in particular, should be blushing. These are among the sectors where it’s quite easy to see which brands have digital and customer thinking driving change at board level and which keep it restricted to the innovation team somewhere down the food chain. I know which business type I’d invest in for the future, if history is anything to go by.
Lessons from the 80s
I’m old enough (sadly) to have seen five generations of music technology. I remember thinking cassettes were a radical move on from LPs. Back then, I really wasn’t sure CDs would ever replace cassettes – you’d have to buy a new player! And really, who would want to compromise on their music’s sound quality by downloading an MP3? Now people are increasingly happy to not even own the music they listen to, with Spotify leading the way in streaming.
Some of the digital customer initiatives I see coming through are the equivalent of record companies in the 80s issuing coloured-vinyl 12-inch singles to try to stop people moving on to newer, better formats.
Apps, social-media plug-ins and slick, customer-focused ads involving lost scarves don’t transform businesses to be customer- or digital-centric. They actually prevent fundamental change by using digital window-dressing to maintain outdated models.
Bring on the boardroom revolutionaries
We need more revolutionaries in boardrooms, and here are some things they might want to think about for their manifestos.
First, customer needs are definitely not all equal and you have to work out which ones matter. If some are greater than others, which are they? The other overused ‘D’ word, data, is critical here. Most companies have no lack of it, but do they have the people and systems to make sense of it – to know what is useful and what isn’t? Do they have the structures and permissions to allow insight to genuinely change how the business operates at the most fundamental level?
Second, can you use digital to actually make it easier to create need? To use my music comparison again, is the content the main need, or is it, actually, easily obtainable content? I saw Pitbull at the brilliant Capital FM Summertime Ball recently and downloaded some of his music as he walked offstage. Not waiting for the weekend to buy it, or even to get home: there, in the moment. If I hadn’t been able to do it instantly, would I have done it at all? Did the technology create the need?
Digital window-dressing allows businesses to maintain outdated models rather than truly change.
Are you prepared to challenge sacred cows?
Sometimes change can be seen coming down the line, but if a business makes its money from a certain way of doing things, it can be very hard to embrace change.
My own industry is a great example. It’s only 20 years since Sir Stelios ripped up the legacy way of doing European air travel. We forget that when he said he wanted flying to be as cheap as a pair of jeans, it resonated with customers because a trip into Europe cost hundreds of pounds. It was a mad and impossible idea that flag-carriers could never follow. It wasn’t just that they couldn’t understand the changed ways of working to keep costs low, but just as important, they couldn’t get their heads around the new business model. It took losing the market to make them change. My granny used to call it learning the hard way.
Rip up the old ways
If there is one thing to take from this, it’s that digital isn’t just a new channel to market – it changes the customer need fundamentally. History tells us businesses that don’t react to this may end up learning the hard way. I bet banks that sell us accounts then slash the interest rates after a year don’t believe that what happened to music will happen to them: "Of course not," they’ll cry, "the barriers to entry are too high." The insurance companies enticing us with low premiums that get racked up on renewal: "That’s just how the industry works." Energy companies with tariffs that penalise rather than reward behaviour: "We do digital now; you can key your meter reading into an app."
Apps, new functions and social-media fluff that digitise legacy processes are fine, but won’t help in the long run. It’s the new models that technology facilitates that will make us live a different, more convenient life tomorrow. That’s the biggest threat to the grand old companies in the sectors most scared of change.
Digital can turbo-charge marketing into a golden era for the customer if we think of meeting their genuine needs in a new, easy and convenient way. The most exciting wins will be when new ideas break down the old models and unsustainable profit pools. It took 20 years for easyJet to do what it has to air travel. I’m sure Uber will be much quicker with taxis. When it works, it’s getting faster and the rewards are getting bigger.
As marketers, we need to work with our CEOs and boardrooms, to take the customer and digital revolutions more seriously and not just adapt to, but embrace, change and actively look for ways to break and revise the existing models.
Let’s use digital to rip up the old ways of doing things for the benefit of customers, our staff and our shareholders. Viva the revolution, marketers!
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