Digital
has profoundly changed the landscape. Empowered customers are
disrupting every sector. How we communicate, shop, bank is profoundly
different to as little as 5 or 10 years ago. There are more media
channels, more customer touchpoints, more paths to purchase. In
short, there is more choice and this means more consumer power.
In
today’s world, traditional strengths (like the scale of your media
budgets or distribution) are no longer enough to guarantee survival
and this creates a need to refresh your brand identity, fully
integrate your marketing campaigns and provide a customer experience
that is consistent across all channels.
But
it’s not all doom and gloom. We now have the opportunity to involve
customers in the design our marketing campaigns, products and
customer experience - as well as the opportunity to assess Brand
sentiment and gain feedback in real-time on how their last
interaction made them feel - delivering genuine customer
intelligence.
Background
The
number of digital users is still growing.
People are spending more time online.
Social
Media usage is still growing
We have entered a new era that Forrester calls the ‘age of the customer’
So what’s different in the age of the customer?
The
media landscape and consumption are very different. 9 out of 10
adults go online every day. The job of planning media and deploying
campaign budget is much more complicated with ‘digital’ now
accounting for 27% of all advertising spend.
There
is increasingly a move away from 'push' campaigning to a more
dialogue-based approach. This also creates the challenge of richer
content development and increasingly brands are buying into
sponsorship properties to engage their target audiences.
Interestingly,
social networks and blogs now account for around half of all time
spent online in the UK. Consumer habits have changed and the digital
age has empowered them.
The balance of power has shifted
It’s
no exaggeration to say that empowered consumers have eroded previous
sources of dominance. A focus on the customer must now be the key
strategic imperative for any brand manager. Why? Because, according
to Forrester Research, 76% of world's population are connected to
each other on Social media and a wealth of information is at their
fingertips through the mobile devices in their pockets (2011). They
“want things faster, better, cheaper and with a higher degree of
service; technology makes it possible for them to get what they
want”.
In
fact, technology is now so thoroughly integrated into our lives that
42% find it “hard to be without my phone/mobile device” (Euro
RSCG 2012). Consumers can find what they want anywhere in the world.
Let’s not forget that 100 years of brand equity and significant
High Street presence weren’t enough to save Woolworths. Large scale
brand campaigns are also no longer guaranteed to provide competitive
advantage.
Traditional
sources of strength no longer apply. Only 15% of consumers trust ads
to inform purchase decisions, whilst 76% trust consumer
recommendations for purchase decisions. Consumer purchase behaviour
is changing with a greater reliance on networks, blogs and wider
information gathering before providers are actively evaluated and
‘considered’.
So what needs to be done?
It
has been said many times before, but the Marketing agenda now needs
to be focused on ‘customer insight’ and ‘engagement’ at the
expense of the traditional focus on ‘awareness’ and
‘consideration’. In addition, we all need to build richer content
and interactivity into our campaigns.
Many
brands that have traditionally spent big on TV have shifted to making
significant investments in sponsorship properties. For example,
Sharp's sponsorship of UEFA Euro 2012, while McDonalds, Coke and
Lloyds TSB have all invested heavily in London 2012. Indeed, the
sponsorship revenue associated with the 2016 Rio Games is already
expected to exceed the London 2012 total. Some brands, such as Coors
with their relationship with the Mexico national football team, are
targeting their future customer based on the insight that the
Hispanic community amongst the US population is rapidly growing.
Procter
& Gamble, the FMCG giant, is pursuing a more "balanced"
growth strategy, reflecting the increasingly challenging trading
conditions and implementing a change in approach that would enable it
to "win" with shoppers and investors. P&G believe that
their affiliation with the Winter Olympics in Vancouver “generated
up to $100 million in incremental sales [in the US]” and they “feel
comfortable on building that on an international basis”. At the
same time, they are taking a "brand agnostic" approach to
digital marketing and cutting $1bn from their marketing expenditure
by 2016 across the Tide and Pampers brands by leveraging the cost
advantages of new media.
This
is serving to bring about a shift in the position ‘sponsorship’
has traditionally held at the periphery of the comms mix – bringing
it into centre stage. Digital technologies and social media are the
key enablers here. Johnnie Walker is a good example of a brand which
has harnessed the power of both sponsorship and social media with
great success. Needing to tackle the trend of waning interest in
scotch in the U.S and introduce younger drinkers to its brand,
Johnnie Walker created buzz around a trendy event where young people
could come to learn more about scotch. An integrated social media
platform allowed participants to share their experiences with Johnnie
Walker and each other. The ‘Striding Man Society’ exceeded its
membership targets by 23% and demand was up 34% among new members.
A
new, aligned set of KPIs is now required to ensure a robust framework
is in place to measure success. Internal structures also need to be
aligned to ensure an integrated approach to Social Media / digital
touchpoints across Marketing, eCommerce, PR and Customer Service
teams.
Concluding thoughts
The
change brought about by digital technologies is inevitable and needs
to be properly planned for. The proliferation of choice means that
the USP remains a critical marketing principle. However,
communicating it via traditional media means a real likelihood that
the message won’t be believed and your customers expect more from
you than a 30 second spot on ITV. Thought needs to be given to
evaluating the shifts in your audiences’ perceptions, attitudes and
behaviour, rather than simply in shifts in their awareness and the
resultant uplift in sales. And finally the growth in ‘earned’
channels must be leveraged to compliment efforts in the ‘paid’
and ‘owned’.
