Embedding new behaviours usually takes time and focused, ongoing effort.
Yet in just a few short months we have uprooted our routines both personally and professionally. Deeply ingrained habits have radically changed to remote ways of working and living, propelling the digitisation and transformation efforts of organisations and industries globally.
McKinsey estimated, back in June, that the USA had experienced 10 years’ e-commerce growth in just three months, a trend mirrored throughout Asia Pacific.
High-performers will refocus and accelerate their transformations – functionally, technically, operationally and culturally – to meet and exceed the evolving needs of their customers.
The next generation of consumers
We are seeing a pandemic-induced acceleration of digital commerce and quickly changing consumer behaviours. At the same time, Australia has just confirmed a recession, with a June quarter GDP contraction of seven per cent – more than three times the size of the previous greatest fall on record. This will deepen existing socioeconomic divides, including those between older and younger generations.
The generations aged 40+ have been blessed with booming economies, low housing prices, free education and decent wage growth, and are likely to have benefited from intergenerational wealth. They have substantially greater wealth and income, higher living standards than their younger counterparts, and a debt profile that largely sits in home ownership, with the ability to grow home equity while paying off their loans.
By contrast, the generations 39 years and younger have been burdened with limited opportunities, sluggish wage growth, under employment, out-of-reach housing prices and toxic debt stemming from student loans and credit cards. The pandemic has further increased the national debt for the majority of nations around the world, a burden the younger generations will shoulder. Their struggles have not been caused by too many avocado-on-toast brunches. These generations are fighting a constant and steady uphill battle, with the odds of a comfortable life stacked against them.
As the difference in socioeconomic outlooks becomes more pronounced, cultural divides will increase – with very different tastes, expectations, needs and priorities.
The new ‘4Ps’: Guiding principles for growth
To capitalise on the socioeconomic trends for how businesses engage, attract and retain their customers needs to evolve from the outdated ‘4Ps’ of marketing: product, price, promotion and place – developed in and fit for guiding the marketing strategies of the 1960s.
Recognising the world around us has changed, leading futurist Anneliese Kjaer proposes the idea that people globally are living by new guiding principles: People, Planet, Pleasure and – last – Profit. The real value of businesses, then, will be measured by how they reorient themselves to these new guiding principles.
“These new guiding principles are not comfortable bedfellows though,” says my colleague Jackie Cook, “for example, many of our pleasures can destroy the planet.”
Not only do we see a generational divide in tastes and values, but within each generation we see opposing consumer tensions and spending patterns – for example consumers may want the best bang for their buck but at the same time want to see their values reflected in the products and services they buy.
Recognising that consumer habits, wants and needs have evolved substantially – and will continue to do so at an accelerated pace – is an important starting point in designing the future of marketing. Consumer path-to-purchase is no longer simple, nor linear. As marketing channels continue to expand and desires evolve, consumer journeys will increase in complexity and variation.
Nuanced and personalised experiences in the moment
The importance of experience is not a new idea – more than 20 years ago The Experience Economy told us the highest economic value a business can provide is an experience. In response high performing businesses have listened, prioritising customer satisfaction over any other metric.
The customer experience stakes have never been more relevant, last year 84% of customers stated the experience a company provides is as important as it’s products and services, up from 80% in 2018. Customers are willing to pay more for great experiences, and its now easier than ever to switch to a different brand if needs are not being fulfilled. Yet the majority of companies are still not delivering experiences which meet their customers expectations.
The ‘delivery gap’ is immense. Modern customer engagement happens in real time and is effortless, with outcomes delivered in fewer than three clicks. Businesses not delivering on their brand promise by overlooking the needs, wants and expectations of the consumers they are trying to attract and retain will risk their survival.
The poor delivery of experiences is largely due to businesses not accelerating at the pace of their customers, held back by siloed teams with misaligned KPIs, disparate and legacy technology platforms, and disengaged and unempowered employees.
Customer demand requires evolving capability and expanded scope
In response to changing customer expectations, to maintain business growth marketing has had to adapt.
Pre-2000s – the Analogue One-to-Many Era: Where television commercials, radio, press and magazine advertisements reigned supreme.
Creative skills and right-brained thinking were critical to ideate broadcast messages with no personalisation. Annual planning used historical data to direct the approach for the coming year. Marketing strategy was somewhat static and deviation from the plan was rare.Large strategic campaigns would take approximately six months from ideation to in-market. Investment into building awareness and brand recall was significant, with little ability to measure path to conversion.Organisations were hierarchical, with siloed functions and conflicting KPIs. Authoritarian cultures and values impeded creativity and agility.2000-2020 – the Digital One-to-One Era: Introduced touch screens, websites, digital media, social media, email and wearables in addition to traditional marketing channels of TV, outdoor and press advertising.
Customer experiences became personalised through preferences, digital browsing and buying habits.
To bring the digital experiences to life new technical, digital and data specialists were added into the Marketing function. Traditional marketers needed to become digital and data natives, while learning to work with new technologies, new teams and external partners to deliver varied and personalised customer experiences.
In a bid to streamline ways of working, organisations flattened their hierarchies and introduced agile and journey thinking. Yet for many organisations, agility and acceleration in line with customer expectations was hamstrung by legacy mindsets and behaviours maintaining the status quo and siloed ways of working.
2020 onwards – the Infinite Experience Era: Today we find ourselves at the beginning of a new marketing chapter, with customers expecting two-way engagement with brands delivered via human-to-human relationships, or assisted human relationships.
Customer expectations now demand contextual and personalised experiences across the lifecycle, in all channels and touchpoints. To deliver increasingly complex and nuanced experiences requires integrated data and lean technology stacks to connect the dots across marketing, sales and service.
Raising the bar and delivering extraordinary experiences, whilst simultaneously reducing costs will require digitally fluent ambidextrous Marketing cultures. Marketers once concerned with driving new leads will champion customer experience initiatives across their entire companies. Experience led cross functional teams formed based on individual strengths, aligned to a united purpose, will provide the step change in delivering delightful and effortless customer experiences.
Looking forward, as data and marketing technology platforms explode, innovation will be fuelled by AI and machine learning, creating new opportunities for competition and further increasing customer expectations. In response Marketing will must continue its evolution on two fronts and in parallel:
- Functional capability: Across strategy, planning, customer preferences, data and analytics, campaign and lead management, journey management, audience management, content management, and social.
- Transformational capability: Lean governance, customer-centric business processes and experiences, human-centred design and change, and a team united around the customer and enabled by the leanest possible technology stack will activate agility, feedback loops, shared insights and a culture of learning.
Driving company performance and delighting customers will require rapid innovation and improved operational efficiency. Technology plays an important role here of course, but enabling self-sustaining capabilities will require cultural and operational focus to empower cross-functional teams with company-wide interests.
Executives must buy into a marketing that is human-centred and digitally enabled. Delivering excellence further expands marketing scope, requiring executive buy in, focus and increased investment as well as acceptance that marketing is no longer about catchy headlines and television commercials.
As Peter Schwartz, our Senior Vice President Strategic Planning, has told us many times over “our lives will never be this slow again”. The world around us is accelerating, customers are changing at an incredible pace and marketing must transform to keep up with their expectations.
Concepts presented in this article were developed in collaboration with Jackie Cook, Senior Director, Transformation Advisor at Salesforce. Follow her on LinkedIn.
Salesforce Transformation Services helps organisations turn their transformation strategies into execution. We accelerate time to value using human-centred design and outcome-based thinking to co-create our customers’ digital future. The result is the lasting transformation of employee hearts, minds and hands to maximise Salesforce investment.