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The Big Rebuild: making digital disruption work for you
What if tomorrow, you could reshape your entire organisation, with your customer as the boss?
It’s a question that Philip Otley, Partner at The Experience Centre, PwC Digital Services, spends his time considering, as he helps businesses to locate customers in a crowded and noisy market place.
“Let’s start and design this organisation from the customer back,” says Otley. “What would we do differently if we didn’t have 50 years of history?” Indeed, his message is somewhat ominous: for those unable to put the customer first, it’s time to deal with the reality that they might already be talking to a business that does.
Who’s the savviest one of all?
The first thing to understand is that today’s customers are more digitally savvy than most organisations. When you compare the world you operate in as a private citizen to the one your business is operating in, there’s a sharp contrast, resulting in the conclusion that businesses are far behind where consumers are.
There are two things we know for certain: that mobile is the primary platform for operating in the virtual, social and physical space, and customer expectations are going through the roof. Take service expectations: Uber’s entry has meant a fundamental shift in the expectation of what a transport service could be, while Amazon’s imminent arrival and disruptive technology will radically alter expectations in regards to package deliveries.
“The Amazon guys will deliver the package to your front door by whatever means, and if it gets nicked, they will ship it again. Why? Because your value as a customer far exceeds the value of that individual transaction,” adds Otley. And that builds trust.
Customers refuse to fit into any plan a company might have about the way they will interact; there is no linear path. They can’t be pushed onto a particular journey or directed towards a specific channel. And to see digital as a separate channel? That’s no longer acceptable. Digital is interwoven and must complement every other channel.
Loyal to no one
It’s common knowledge that people will trust their circle of friends for advice more so than any brand, which leads us to the question of brand loyalty. The term “polygamous loyalty”, coined by Byron Sharp from Ehrenberg-Bass, refers to the idea that a consumer might, at any point in time, cycle through two or three brands depending on performance, last interaction, price point and so on.
“The battle for engagement is a 24/7, minute-to-minute engagement battle, and loyalty is something that is a dynamic construct rather than something you can just expect,” explains Otley.
Consider the three generations of consumer a brand currently has to engage with: the traditional consumer or non-digital, those in transition and the digital natives. As Otley adds, knowing who your consumers are and knowing what state they’re in at that point in time, “is a little bit of a secret sauce.”
Silver surfers and time thieves
A recent study showed that over 90 percent of today’s digital over-60s believe that Australian companies are not listening to them. Ignore this key market segment at your peril, because their uptake of various forms of digital has grown exponentially. Five years ago, this group of digitally savvy over 60’s numbered around two or three out of ten; now it’s more like eight out of ten.
Another interesting statistic by Conversion Voodoo showed that revenue reduced by 1.8 percent after a 1-second delay in mobile page load time, and by 4.3 percent if that delay was two seconds. “You’re battling for people’s time and you’re battling for their attention,” says Otley.
The only way is down
What you’re also battling against is the perception by consumers in Australia that price is the only consideration. “We have been trained to look for promotions, to look for coupons. We’ve trained our consumers to look for price as the first determinant, and the behavioral science says the crowding out effect pushes other considerations out,” says Otley.
Let’s take it back to a discussion on mobile. When a consumer carries their life in their pocket, there’s a battle for real estate on that device and it’s not getting easier. As Otley notes, “over the next 12-24 months, you’ll see a lot of brands putting focus on to conversational commerce and platforms and engaging via messaging, because it’s all too hard to grab your attention in an app or website.”
A customer walks into a store…
Speaking of engagement, there’s something to be said about arming your employee with the same level of insights about a customer that said customer would have of your brand. For example, if a high value customer crosses that geo-threshold into your store and you’re the store manager, what could you find out about her and the value she holds for you? Her frequency of shopping there, the items she’s bought, her total fashion spend. How would your conversation with this customer then look like?
“There really is little excuse now not to have a tremendously rounded view of your customer…not just when they’re engaging with you, but when they’re engaging with your competitors,” says Otley.
So what can you take away from all this? That expectations will rise, particularly around delivery, where a radical shift in consumer expectations means having to execute on orders a lot faster; that Australian companies are going to have to adopt bold moves in order to thrive in the world of Facebook, Google, Apple, Alibaba and Amazon, whose markets aren’t local, but global; and that with the possibility of a price war, companies should prepare to look at what it would take to still turn a profit at 30 percent price reductions.
Finally, brands must consider the possibility of developing frenemies – joining up with other companies to deliver an experience to your customer that you may not have worked with before.
Engage, engage, engage!
How then, do you manage engagement at scale?
You create teams that have the requisite characteristics; technology, business, strategy, creative – what Vijay Sondhi of Visa refers to as full-stack businesspeople, but in a team construct. “It’s around creating these teams who bring the power of different perspectives in real times, because a lot of it is about breaking the rules around pace,” explains Otley.
“Go and invest in having that cranky, artistic type person in your organisation – they’re hugely valuable. Have your crazy scientists who will be as creative but with very different tools…but don’t try to top-down manage that sort of diversity of thought because the wheels will fall off very quickly,” he adds.
There’s no silver bullet to getting an organisation ready for this radical change, but having leadership with the courage to lead from the front is essential. Secondly, digital should no longer be a separate entity. “If we’re not natively digital, we’re rapidly irrelevant and I’d say that’s where most organisations are,” says Otley.
It’s a brave new world. Embrace it.
Keen to get started on that new organisational framework? Speak to a Michael Page consultant today to see how we can help you fill your digital jobs.
How can organisations adapt to the current digital landscape and take advantage of the radical changes taking place? Here are a few things to keep in mind:
- The average customer is savvier than most organisations;
- Loyalty is polygamous and customers may cycle through several brands at the same time;
- Ignore the silver surfers at your peril;
- Price is the major factor for Australian consumers, pushing out all other considerations;
- Arm employees with knowledge of their customers to increase engagement
- Engagement at scale can occur with leadership that has the courage to make change