The New Prescription for Marketers: Subscription

The New Prescription for Marketers: Subscription
Saying that we are in the ” The Age of the Customer ” would be stating the obvious. Here’s how Forrester Research describes the new consumer mindset: “ The expectation that any desired information or service is available, on any appropriate device, in context, at your moment of need.” Customers have new expectations (and yes, those expectations have certainly been driven by millennials, but at this point, almost everyone shares them). They want the ride, not the car. The milk, not the cow. The new Kanye music, not the new Kanye record.
 
Welcome to the Subscription Economy. The term refers to the growing number of businesses that use subscription or membership models and rely on recurring revenues rather than one-time purchases. And aside from transportation and retail, they are entering diverse businesses including Fashion, Personal Hygiene, Furniture etc.
Apple is a subscription business with Apple Music. And so is Google with Google Express. And all the binge watchers out there know that Netflix is one. Dollar Shave Club that sends razors home every month to subscribers is one(they got acquired by Unilever for USbillion). Salesforce, Amazon, Volvo(yes cars), Adobe..the list is growing across business verticals.
 
The Begining of a New Era
 
Before anything else, lets talk about the flavour of the season: ‘ digital transformation ‘- a vague term definitely, the kind of smart-sounding phrase that gets thrown around a lot in conferences and McKinsey reports and Harvard Business Review articles. The kind of expression that lots of people instinctively nod their head at, whether they know what it means or not. It could mean everything, it could mean nothing. Let’s try to define what it means.
 
You have read or know about this statistic already: more than half of the companies that appeared on the Fortune 500 list in the year 2000 are now gone. Poof. Vanished off the list as a result of mergers, acquisitions, bankruptcies.The life expectancy of a Fortune 500 company in 1975 was seventy-five years- today you have fifteen years to enjoy your time on the list before it’s lights out. Why is this happening? Instead of dwelling on failure and looking at all the companies that went away, let’s look at the companies that have stayed. Let’s play victor, not victim.
 
Begining with the usual suspects: Giants like GE and IBM that were on the first list in 1955-and are still on it today-but they don’t talk about their mainframes and refrigerators and washing machines anymore. They talk about “providing digital solutions,” which is an admittedly jargony way of saying RIP Hardware . In other words, these companies now focus  on achieving outcomes for their clients, rather than just selling them equipment. GE ran commercials during the Oscars with the tagline “The digital company. That’s also an industrial company.” Notice the switch there.
 
More companies from that list of 1955 have transformed including Xerox(from manufacturing photographic paper and equipment to information services). McGraw-Hill(from printing textbooks and magazines to offering financial services and adaptive learning systems)..
 
Next on the list, let’s look at some ‘ new establishment ‘ brands like Amazon, Apple, Google, Netflix, Facebook. All very every day to us but new to the list.They’ve rocketed to the top of the list and show no signs of going anywhere. They never thought of themselves as product companies-so no transformation was needed. From the start, these companies were relentlessly focused on building direct digital relationships with their customers.
 
And, finally the third category in the list are the upstarts, the ‘ anti establishment brands ‘ like Uber, Spotify, Box: They haven’t just gone beyond selling products, they’ve invented completely new markets, new services, new business models, and new technology platforms, leaving many established companies trying to play catch-up. As consumers, we love these brands, we love these services, and we love the value they provide us-a value that goes way beyond what a single product could ever offer.
 
What are the common threads among these three groups of companies? Whether it’s GE, Amazon, or Uber, they are all succeeding because they recognised that we now live in a digital world, and in this new world, customers are different. The way people buy has changed for good. We have new expectations as consumers. We prefer outcomes over ownership. We prefer customisation, not standardisation. And we want constant improvement, not planned obsolescence. We want a new way to engage with business. We want services, not products. The one-size-fits-all approach isn’t going to cut it anymore. And to succeed in this new digital world, companies have to transform.
 
The Customer is Always Right?
 
A nineteenth century phrase that was doing the rounds. The jury is still out on that question- Fortune 500 Companies built prescriptive strategies around customer focus, but they lacked a descriptive understanding of the mindset of the customer herself. And to no one’s surprise, there were certainly no sweeping changes in public sentiment toward big enterprises. It just wasn’t enough. The winds just weren’t blowing in the right direction.
 
And then it happened- like a breath of fresh air, digital disrupters like Salesforce and Amazon took the Customer First concept several notches upstream. They began by waving goodbye to the ‘ one to many ‘ approach.(What we call in marketing as the ‘ Spray and Pray ‘ route). They didn’t have customer segments anymore- they had individual subscribers. And every one of those individual subscribers had their own home page, their own activity history, their own red flags, their own algorithmically derived suggestions, their own unique experiences. And thanks to subscriber IDs, all the boring transactional point-of-sale processes disappeared. Ten years ago there was no Spotify, and Netflix was a DVD company. Today both those brands own a significant percentage of the total revenue of their respective industries! Now businesses are asking themselves a whole new set of questions: What do we need to do to build long-term relationships? What do we need to do to focus on outcomes and not ownership? To invent new business models? To grow recurring revenue, and to deliver ongoing value?
 
The New Marketing Mix
 
We are seeing a massive shift from the 4Ps( Peace Be Upon It) towards the 4Esthe new approach to customer value proposition, which embodies Engagement, Experience, Exclusivity and Emotion. The the truth is people don’t buy products anymore. They buy experiences and emotions instead. You should change your “what should I sell” or “how should I sell” into “WHY should I sell it?”.
 
The glory days of the soulless, all-powerful corporation are long gone. Today’s customers are more informed by an order of magnitude. Most of them have researched, assessed, and categorised you before you can even say hello. And to most of them, especially younger ones, ownership just isn’t that important anymore. People increasingly view the prospect of buying something as unnecessary baggage. Today people expect services to provide immediate, ongoing fulfilment, from ride shares to streaming services to subscription boxes. They want to be happily surprised on a regular basis. And if you don’t meet those expectations, you get dropped, not to mention trashed on social media. It’s that simple.
The Shift is On
 
So, on the one hand you have the old business model, where brands used to focus on “getting a product to market” and selling as many units of that product as possible: more cars, more pens, more razors, more lipsticks, more laptops, more credit cards. They did this by getting their products and services into as many sales and distribution channels as possible. Of course there must be a customer on the other end buying all this stuff, but often you didn’t really care who they were, as long as more units flew off the shelves.
 
That’s not how the modern company thinks. Today successful brands start with the customer. They recognise that customers spend their time across many channels, and wherever those customers are, that’s where they should be meeting their customers’ needs. Their arc stretches across multiple axis. And the more information you can learn about the customer, the better you can serve their needs, and the more valuable the relationship becomes. That’s digital transformation: from linear transactional channels to a circular, dynamic relationship with your subscriber. A circular economy is a trigger for the subscription model- Long term, engaging, evolving, value enhancing. So, get ready to subscribe to the thought!
 
 

ENDS

Suresh Dinakaran is Chief Storyteller at ISD Global, Dubai and Managing Editor, BrandKnew.

https://www.groupisd.com/story
https://www.brandknew.groupisd.com
https://www.brandknewmag.com
https://www.weeklileaks.com

Comfortably numb inside the Golden Cage?

The Golden Cage? Probably yes.

Intrusion capitalism paves the way for what has been called the ‘ convenience economy ‘. And like billions around the world, we are almost comatosed into not only acceptance but to dig deep and stay there. The numbness of convenience, shall we say? And apart from the occasional murmur or a sporadic protest, life goes on.

We don’t have to go very far but look at a few examples. Let’s begin with one of the usual suspects-brands like Amazon, Amazon Prime and their accompanying eco system that touches the lives of millions of customers around the world every day. For about US$ 10 a month( if you are in the US), you get a vast pool of content, priority door step delivery at the most economical value for zillions of products. And with Alexa(another Amazon wonder) taking root as a serious tool for search and e commerce, the cesspool of dependence has only gone deeper and broader. Since there is no better reason( or a better alternative by far), we as customers are happy to be remain comfortably domiciled.

With 2.2 billion users every day around the world, Facebook is a monster drug(combining its repertoire of Whats App, Instagram users) and there is no saturation in sight as the time spent on these platforms seem to be only increasing. Data theft, brand safety, privacy intrusions etc have not stopped the eccentric growth of this juggernaut. Sometime back, the powers that be at Facebook actually mentioned that they are addressing the privacy and data theft concerns and they are prepared for a 95% success. Very recently, under pressure from several quarters, the commitment went up to 99%!!! It’s akin to an airline saying that we are 99% sure of our landings. 1% can be seriously debilitating and you don’t have to look further than the New Zealand shooting which went live to understand what I am trying to say. But, just like the case of Amazon, there is no mass exodus. On the contrary, the clamour to get in is only increasing. The absence of a viable, palatable alternative definitely helps the cause. People are staying put!


As Steven Van Belleghem espouses in his book Automation, AI and the Customer Experience , just as there is a mandatory audit of all corporations’ financial statements both internally & externally, there has to be a regulation in place calling for ‘ algorithm transparency ‘. Because, presently only the outcomes are understandable while there is no clarity on the inputs- especially the bias and the prejudice that gets fed into the codes to manipulate outcomes. I think this is a clarion call for a basic ‘ code of conduct ‘ and the earlier it gets put into place, surveillance capitalism will have some guard rails.

Till then, the (algo)rithm is going to get you! And it’s quite possible that you go blue in the Face(book).

ENDS

https://www.groupisd.com/story

https://www.brandknewmag.com

https://www.weeklileaks.com

Marketing is having a Listening Problem!

Is Marketing having a Listening Problem?
Yes, you heard that right. Marketing has a listening problem…definitely looks like- but the problem isn’t a matter of not hearing the voice of the customer. The problem is understanding what all the noise actually means.
An unintentional tone-deafness has led marketers to realise that they are not just struggling to aggregate the right data or struggling to identify the moments of opportunity to deliver exceptional experiences to their customers. Marketers admit that the biggest challenge the organisation faces while working to develop lasting customer relationships is actually remembering the relationship itself and not solely focusing on getting campaigns out the door.
 
Organisations have settled for passive hearing instead of active listening.
When it comes to aggregating the true voice of the customer, many marketers continue to rely on passive channels bringing in reactionary signals intentionally sent to the organisation. This leaves little opportunity to aggregate, let alone understand, real-time behaviours and cues being left behind by the customer across the omni-channel landscape. Consider where marketers believe insights, cues and indicators are being left: Email, Social, Sales Rep Interactions, Forms, Service & Support. While this list seems reasonable and an appropriate collection of customer signal sources, when sorted into categories of active, realtime, customer-driven signals versus post-engagement, reactionary or company-controlled environments, the picture of where marketers listen for signals begins to point to channels of known, structured comfort.
Where do customers actually leave cues?
Not in the known, structured comfort but in places like Social Media, User Generated Content, IoT Sensors, Chatbot sessions, Mobile Device detection etc
Data doubts are holding back advancement of the omni-channel experience. 
Without question, marketing has spent the past decade (or more) actively investing in expanding the omni-channel toolkit, identifying new ways to reach and engage with the connected customer. Each experience advancement heightens the need for actionable insights and a clear signal based on customer voice and data. But few marketers feel they are able to unlock the opportunity in the channels and the data already in use. This doubt is contributing to a hesitancy to expand and further explore what is new in omni-channel engagement.
Getting small could get us back to the customer.
 
The criticality of small data sits with the insights that reveal the “why” – why is the customer here today, why are they searching, why are the buying, why are they NOT buying? 
Marketers are waiting for complaints or opportunities to improve experiences through answering issues or questions rather than leveraging more complex data to proactively meet the customer with experiences that add value and delight. But marketers are also looking to get a better view of what the customer actually wants. Marketers need to understand the “why.”
Are they most prepared to take advantage of small data to turn noise into signals from the customer. Marketers are also confident they will finally reach the “why” behind customer’s actions and behaviours.
“Why” is also fuelling the marketer’s aspirations. When you try to identify brands across any industry that customers admired for their ability to deliver on real-time, personalised customer engagements, some key brands consistently rose to the top: Amazon, Apple, Google, Starbucks and Nike. 
What these brands also do well is connect with people and engage with customers like individuals, not just transact with campaigns.The biggest differentiator of these leading brands is their ability to treat every individual like a friend or confidante.The ability to initiate conversations in a manner that reflects the customers needs helps differentiate the brand. In essence, these brands never loose sight of the fact that their customers are core to their business…and that their customers are people first, buyers second.
It is time for marketing to lead the charge to treat people like people. It is time for marketing to champion being human. It sounds fundamental…that our customers are people. But as we have already seen, marketers admit that remembering that the organisation is engaging with people and not just data sets or individual records can be challenging.
The tools and technology are available. The data is abundant. The missing piece has been the voice of the customer. It is time for Marketing to champion the shift back to human…driving profit and opportunity along the way.
ENDS
 
www.groupisd.com/story
 
www.brandknewmag.com

POVer Shift:From POV(Point of View) to POV( Power of Vulnerability)

Moving the Needle from From POV(Point of View) to POV(Power of Vulnerability)!
In today’s context, to say that social( in the sense of the term social media) has gained significant currency would be a gross understatement.It’s all pervasive, inescapable and deep rooted, one can safely assume.
Once upon a time the theory(espoused by Kevin Bacon) that was floating around was about ‘ The Six Degrees of Separation ‘ where one individual could connect with any other individual in the world irrespective of level, status or complexity through a chain of six human connections. That seemed a feat in itself. The advent of social media networks like Facebook apparently brought that number down to 3.57.
Now add another theory to the above. We are the average of the five people that we spend maximum time with is what we are being given to understand for some time now.That was in a physical world. Now, move that to a virtual scenario wherein our social media contacts run into hundreds if not thousands of connections and we are all observing, contributing, silently following one another and not always for the right reason because the swell of opinions and information is just too over powering for one individual to withstand. Distilling the wheat from the chaff is easier said than done. There is ‘ status anxiety ‘. There is the FOMO at play(Fear of Missing Out) as well. In the relentless avalanche that straddles social media platforms, where is the real ‘ you ‘, the individual? Is your POV(Point of View) actually your point of view? Or conditioned(by AI/Machine Learning etc), pulverised, calibrated, engineered, manipulated to suitably conform, comply, stand in? Or are we falling constant prey to the supposed ‘ wisdom of the crowds ‘?
Have we moved our butt so much from but naturally to bot artificially?
We seem to be in a sordid vortex of an ‘ authenticity drought ‘. Trying to project a chimera that is certainly not a wilful representation of our true self. The power of ‘ onlyness ‘ that creates the distinct individuality the world so badly needs from you is just a fleeting mirage.
Given the context, a huge opportunity looms large. That is embedded in another similar acronym POV but with a radically different meaning. Power of Vulnerability. The true you, with all it’s mortal encumbrances. With the courage ‘to stand naked in your own truth’. No excess baggage of trying to be whom you are not. The YOU that only you can be and WANT to be.Where failings and weaknesses are welcomed as normal just as all the super Machiavellian in us. Where the human is permitted and motivated to be humane. Can we circle back to leverage the opportunity that is unfolding?
For organisations, brands, marketers, behavioural economists and all of those involved in ‘ social listening ‘, data science and analytics, what option would you prefer? An ambiguous amalgam of over, untrue or misrepresentation or a predictably irrational version of what we humans normally are. The jury is out!
Tribe mentality‘ is absolutely fine. That is the way we have evolved over the centuries.  But don’t let that scuttle the ‘ onlyness ‘ in you. As you move ahead in life, don’t forget to take yourself along with you in the journey! That is the only baggage you may need. And there won’t be anything ‘ excess ‘ about it. It will be all ‘ access ‘.
ENDS
 
www.groupisd.com/story
 
www.brandknewmag.com