Digital disruption is an opportunity, not a threat. But only brands that build customer relationships will prosper from digital disruption, according to Shar VanBoskirk, vice president and principal analyst at Forrester Research. The power of digital disruption was the key theme of VanBoskirk’s presentation, A Look Ahead: Forrester’s Interactive Marketing Forecast, delivered September 24 at the SIM Partners annual SIMposium event.
SIMposium explores the tools and techniques that brands need to drive customer acquisition with always-on consumers, especially at the local level. VanBoskirk kicked off the event to deliver Forrester’s forecast for how brands are investing their 2015 marketing budgets. But she also provided a broad context for the numbers by discussing the key driver for marketing spend: digital disruption.
“Digital disruption changes the way companies not only market themselves but also operate their businesses,” she said. For instance, Walgreens has adapted to the disruptive power of mobile to create a photo app that enables customers to print photos in-store via their mobile device. Rolls Royce relies on digital to act as a software-as-a-service (SaaS) for the airlines industry, thus leasing its engines for air travel, not just automotive use.
The New Face of Disruption
Disruption itself is not new, according to VanBoskirk. What’s new is the impact of digital. Thanks to digital, disruption comes from 10 times the number of innovators, and from companies outside your industry. Digital disruption comes at one-tenth the cost and delivers 100 times the power of other disruptive forces. As a result, brands are reeling from competition that arises from unexpected sources. Weight Watchers’s earnings and stock prices have been on the decline because competitors like MyFitnessPal are stealing customers. Netflix has 44 million subscribers — twice as many as Comcast has.
“Disruption is not about changing a function but changing a business,” she said.
So what determines whether a company will be a disruptor instead of being disrupted? Answer: a focus on customer relationships. “Your only differentiator in the age of digital disruption consists of customer relationship,” she said. “We have moved from an age in which giants like Ford and GE dominated via mass manufacturing to the age of the customer, when brands like USAA and Amazon rely on customer insight to satisfy empowered customers.”
But simply “building customer relationships” is not enough to differentiate a brand. Creating better relationships by being aware of customer context is the key to success.
“Marketing has a new remit: context,” she said.
Context means adapting your content and style to how and where customers interact with your brand. Context means adapting your customer experience depending on whether your customer is using a smartphone or a laptop to interact with your brand. Context means being aware of your customer’s location — for instance, nimbly localizing the content you share with a customer when she travels from Boston to Chicago.
“When you are context-aware, marketing shifts from being a creator of message to being an entity that stimulates value-based interactions between your brand and customer,” she said. “In the age of the customer, savvy marketers are guided by constructs such as the customer lifecycle, as opposed to marketing campaigns. In the age of the customer, interactions between customers and brands are continuous.”
According to VanBoskirk, context-aware brands focus on interactions, not campaigns. They focus on customer recognition, not customer segmentation. They focus customer moments, not on media schedules. Context-aware brands invest in tools that build customer insight, such as journey maps and customer personas. They create content that is shareable and trackable in context of customer behaviors, and less on mass advertising. And at the center of context-aware customer relationship building: strong technology, which is the contextual marketing engine that fuels customer insight.
What Should Marketers Do Next?
VanBoskirk concluded the talk by challenging brands to jump-start their businesses in a number of fundamental ways. She offered these next steps:
- Embrace agile tools and processes. For instance, Deloitte uses nimble technologies such as Yammer to manage its business more effectively and bring new ideas to market faster.
- Go local. Have global business stories, but make them local in order to be more context-aware. U.S. Bank, for instance, works with SIM Partners to improve its local presence via social media, mobile, and search.
- Take measured risks. Dedicate resources, time, and budget to try different approaches to business. For instance, adidas piloted a prototype interactive sneaker wall that was then rolled out into retail stores — all because of a measured approach to taking a risk in the way the brand interacts with customers.
- Use customer knowledge to stretch your business model. For instance, Haier, an appliance manufacturer, created a combined washer/dryer unit used in rural Chinese households. The company received an inordinate number of service calls from units that were breaking because customers were using the washer/dryers to wash vegetables. Conventional product strategy would have been to blame customers for misusing the machines. But instead, Haier acted on the customer feedback and created a unit that also washes and peels vegetables.
VanBoskirk’s presentation reflects a more tempered approach to discussing digital disruption than I have experienced with other thought leaders. Many pundits have discussed disruption as a scary cataclysm. VanBoskirk’s discussion did not minimalize the impact of digital disruption. But she took the conversation about disruption from a place of dread and fear to acceptance.