(By James L. McQuivey)
“Marketers constantly tell me that they’re the stewards of the brand and while that sounds good at marketing conferences, it won’t matter at all in a world where customers can have a real relationship with a company through the expanded experience of using its actual products and services. Customers have learned in a very short period of time that thanks to digital tools and platforms they can get more from companies than they used to, easily. And if they don’t they can guiltlessly switch to whatever company is willing to deliver enhanced digital benefits rather than sticking with companies that rely on their brand equity to vaguely promise that benefits will someday arrive.“
The term “digital disruption” sounds painful. The word disruption implies that things are going to get broken up. But for companies that take advantage of what digital can do, disruption will have the opposite effect. Even if business models, traditional processes, and long-standing industry practices are about to be broken up — and they are — when the dust settles one part of your business can and should be stronger than ever: the relationship you have with your customer.
Unfortunately, most organizations don’t know what it means to have a relationship with a customer, even though they have a customer list, an email database, or even a loyalty program. Sometimes these trappings of a customer relationship often mislead companies into thinking that they have the relationship thing down and that they don’t have to digitally disrupt their customer relationship.
But they do. If they fail to digitally rethink their customer relationship, it will be bad, possibly irreparably bad, for the business, and it will be the CMO’s fault. And it’s really a shame because the CMO holds the keys to the customer relationship and should know better.
But instead of thinking about reinventing the customer relationship, the CMO has been busy trying to make CMO a credible and necessary role in the C-suite. Many CMOs have worked hard to establish themselves as serious contributors to the business. They control costs, they oversee the social media team, they’ve built a fiefdom of IT systems to build the customer relationship, and, most of all, they obsess about the brand.
Marketers constantly tell me that they’re the stewards of the brand and while that sounds good at marketing conferences, it won’t matter at all in a world where customers can have a real relationship with a company through the expanded experience of using its actual products and services. Customers have learned in a very short period of time that thanks to digital tools and platforms they can get more from companies than they used to, easily. And if they don’t they can guiltlessly switch to whatever company is willing to deliver enhanced digital benefits rather than sticking with companies that rely on their brand equity to vaguely promise that benefits will someday arrive.
This is how a no-name company like Rovio was able to enter the mobile gaming business with Angry Birds and swiftly become the dominant player, building a base of millions of users around the globe who download game updates as soon as they are offered. All while Disney and Nickelodeon struggled to earn a paltry tens of thousands of downloads with their games built on their awesome brands like Cars and Spongebob.
This is also how an Sony fell, as it stuck to its engineering-based brand and watched as LG and Samsung created products that delivered clear benefits to digital customers in the smartphone business, eventually expanding to take over rising digital categories like tablets and Smart TVs. Today, LG and Samsung are using the digital customer relationship they have through those Smart TVs to provide targeted advertising based on actual knowledge of their customers, creating better experiences while generating new revenue streams.
If brand isn’t enough, what’s a CMO to do? Simple: Insist on building a direct relationship with the customer. It’s not enough to have a name and an email in the database. Thanks to digital tools that your customer has invested in, you have 24/7 access to that customer. But only if you can make it worth their while to engage with you digitally. An auto insurer, for example, that only touches customers at renewal time or in the event of an accident, has a terrible relationship with customers because it’s never positive. But what if that insurer offered a mobile app that rides along with you as you drive, noticing that you are making complete stops and accelerating responsibly. Thanks to such an app, the insurer could offer points or partner promotions to reward drivers. This would create a positive, near-continuous relationship with the customer while potentially reducing accidents which would make everybody happier in the long run. Sure, only the best drivers would be willing to use the app, but aren’t those precisely the customers that the insurer wants to build a digital bridge to connect with?
The cost to build this kind of digital bridge or relationship with customers is at an all-time low and will only keep falling. It is exactly this bridge that smart CMOs will use to capture more data about the customer while simultaneously pushing the company to deliver enhanced experiences. It will require thinking beyond the marketing box, of course, because the people responsible for product innovation and IT operations will have to add their expertise or the digital bridge will crumble under the weight of the customer’s increasing expectations. But it’s the CMO who should have the vision of what the customer relationship could mean for all involved.
The CMO that ignores disruption’s opportunity will watch it turn into a threat. Spending more time thinking about branding or even social media — itself only a proxy for a customer relationship — rather than focusing on building a digital relationship with the customer will make the negative aspect of digital disruption a self-fulfilling prophecy. But the CMO that turns his or her energy and budget toward the customer will find that digital disruption creates more than it destroys, for the customer, for the company, and for them personally.
(Source: Harvard Business Review)
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