A Marketer’s Imperative: Structured Evolution

There’s no getting around it. We live in a complex and increasingly fragmented world that is changing constantly. For marketers, ever-changing complexity and fragmentation create many challenges. Due to changes in consumer behavior, many marketers are increasingly finding it difficult to:

  • Generate awareness — cutting through all the noise of media is getting harder.
  • Influence preference – for the most part, consumers don’t trust marketers, they trust other consumers.
  • Drive transaction — making sure they’re relevant and present at the precise time when a consumer expresses a need.
  • Reinforce loyalty — with so many options out there to choose from, reinforcing loyalty is becoming harder and harder. Some marketers have referred to this as consumer promiscuity.
  • Energize advocacy — energizing consumers to become advocates and publicly support and recommend your brand or service is no simple tasks.

Charles Darwin recognized the fundamental nature of change and the necessity of responding to it. He noted, “It is not the strongest of species that survives, not the most intelligent, but the ones most responsive to change.” Marketers and the brands and they represent, are no different than any species. They must learn how to respond to, and adapt to, their environment and challenges, or face extinction.

In marketing, the mainstay has always been advertising. But the very nature of advertising is changing with the continued rapid growth of digital. For the last decade, digital has been breaking down the silos of traditional advertising and media buying. And most recently, programmatic advertising has totally disrupted the tried and true digital models. With programmatic advertising, marketers are no longer targeting specific media properties to reach their audience, but instead, they’re buying the audience directly, wherever they are. Programmatic systems don’t care what media the ad is placed in, they only care about placing the ad in front of an individual that’s best suited to hear from and receive the message from the marketer at a given moment. This represents a fundamental shift in marketing; we’re evolving from Mad Men to Math Men.

Change isn’t just impacting advertising either, it’s having a massive effect on content, social engagement commerce and digital alike. In just six years, digital has evolved from being mostly about the desktop to now being about mobile. Today, nearly 50% of YouTube traffic and 60% of Facebook traffic is mobile. Nine percent of all commerce is digital, and much of this is gong mobile. Dominos generates 50% of its digital sales through mobile devices. QVC reports that mobile accounts for 41% of all orders placed on QVC.com and 39% of the company’s global net revenue. The Coca-Cola Company is impacted by consumer digital-mobile behavior as well. On Nov. 12th, the company released a video Enabling Desire: Mobile as Coke ‘s ‘6th sense’, to show us how mobile is impacting consumer behavior and that it, along with its partners, must embrace mobile in order to continue to engage consumers and maintain relevance. Digital is evolving quickly and its evolution is unrestrained. In fact, Digital’s evolution is impacting all aspects of consumer behavior, even consumer’s physical actions.

Ninety-one percent of retail transactions still occur in physical retail stores, yet nearly every transaction at some point in the customer journey is influenced by digital-mobile. People use digital-mobile to help inform their decisions, to find and call stores, research products, gather friendly opinions and recommendations, look for deals, etc. Just look at Whole Foods, which reports that in just seven weeks since the launch of ApplePay, 1% of its sales are going through ApplePay. Now that is rapid change to say the least.

Recently, one of my brand-marketing clients asked me, “How do we address change?” “Can we easily cut through the clutter and complexity? Can we create a sustainable a competitive advantage with digital-mobile marketing?” These are great questions and extremely important ones, yet their answers are no.

Looking for a sustainable competitive advantage through digital-mobile marketing alone is a quixotic endeavor. Marketers, all marketers (digital, mobile, direct, email, print, direct mail, out-of-home, shopper), need to not simply focus on their own role in engaging and fulfilling the needs of consumers, but instead, to start proactively helping other groups within their organizations break down silos and develop an adaptive, learning environment where the entire organization can align with and to respond consumer needs in a reasonable amount of time (the time frame of reasonable will vary by industry, sector, situation and context).

To accomplish this, marketers need to work with their executive team to start applying a three -horizon model. The three-horizon model is a framework for aligning the organizations capabilities (people, products, technology, budgets) to their customers (and their customer’s consumers in a multi-tiered model) needs:

  • Horizon 1: 70% of an organization’s effort should be allocated to leveraging existing capabilities to service existing customers.
  • Horizon 2: 20% of an organization’s effort should be allocated to leveraging existing capabilities to service new customers.
  • Horizon 3: 10% of an organization’s effort should be allocated to developing new capabilities to service new customers.

To be clear, what this means is an organization must allocate its resources and organizational accountability in three tiers. The 10% cannot be held accountable for today’s revenue targets, they must be given the space to dream about the needs of future customers and experiment and innovate new capabilities (i.e. company differentiators). The 20% must be held accountable from driving efficiency from existing capabilities (effectively reducing costs) while being on the hunt for new customers. The 70% is the work horse of the organization, it is accountable to the current mission of the business and expected achieve the majority of the organizations revenue targets by fulfilling the needs of existing customer with existing capabilities. By following this model organizations can evolved in a structured way to capture the two factors that influence the development of a competitive advantage, as first envisioned by Michael Porter in 1985, cost leadership and differentiation.

Marketers are an organization’s customer stewards. The only constant in this world is change. We don’t need to be afraid of change, we need to embrace, it. Structured evolution, servicing the market of today, while keeping an eye on the future by experimenting and innovating is the only way to hope that your organization will be here tomorrow.

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