More of the same is no longer an option. Whether it is emergent technology, rivals offering ever-newer and better propositions, or just the rising expectations of today’s consumers, no business can sit secure in the knowledge that what worked yesterday will work tomorrow.
Whether you embrace it or resist it, change is the new normal, and success increasingly depends on how well you respond to it. Today’s business leaders are – or should be – focused on creating cultures of relentless improvement and developing new model propositions that deliver commercial success.
The drivers of change
The beginning must always be to understand the nature of the change around you. In every market it is different, and it varies over time, but in most cases, it is driven by new technology, new consumer experiences and new competitors.
As consumers, we are becoming far more demanding than we have ever been. A quick glance at our phones shows us all the incredible life experiences our friends are enjoying, and we’re adjusting our own expectations accordingly.
Logically, we know these are carefully selected moments – no one shares their dull commute into work, the tedious homework disputes with their children, or the seventh bowl of virtuous cereal they’ve munched through that week – but emotionally we ignore that fact, and start to feel our lives should be more exciting.
Added to this is the actual improvement in customer experience that a new breed of brands are offering. Ocado, Uber, Netflix and so on are all giving consumers improved performance and value for money. Those consumers now expect similar wherever they spend their hard-earned money. If you don’t offer it someone else will devise a new proposition that does.
So how do you get ahead of the market? How do you adapt your proposition or create an entirely new one so that you keep existing customers and attract new ones? Begin with a thorough reappraisal of what your customers need. Don’t limit your perspective to your own sector – look outside of it for inspiration and ideas.
You need to gain a clear understanding of what you want to ‘mean’ to your target consumers. How is the meaning of your brand’s key associations, its perceived qualities, changing? Is ‘healthy’ or ‘luxurious’ or ‘convenient’ still the same thing in your consumers’ minds? If you’re in charge of a brand, what are you doing to keep up to date with the trends affecting people’s perceptions of it?
As you map out the strategic shifts you need to make, don’t feel you have to transform everything. Focus instead on embedding a culture of relentless improvements so that everyone in your organisation is always focussed on responding quickly to consumer needs.
It is not easy to do. Few businesses are set up to respond to changes in the world around them. They lack the skills in-house, their processes are typically geared to efficiency in what they’re doing as opposed to questioning whether what they’re doing is what consumers need, and there is rarely the sort of 360-degree support that these change projects need.
However, there are many examples of brands that are beginning to do it well. Look at how O2 did this. It was suffering from a churn rate of nearly 40% and was unable to outspend its competitors to keep acquiring new customers to replace those it lost – instead it had to outthink its competitors. So it shifted the focus to retention and emotional loyalty. It introduced emotional platforms such as the ‘random acts of kindness’ initiative or the O2 Long Weekend, and created emotional attachments through sponsorship of the O2 Arena and the England rugby team. This new proposition worked and retention rates improved.
Or look at the Virgin Trains app that tells me how far away my train is and which platform it will arrive on, or the housekeepers at Disneyland who ‘magically’ move the room’s teddy bear each day, prompting wide eyes and smiles from enthralled children.
There are many more examples out there. This is not blue-sky thinking; it is already happening. It is important not to get carried away, though. People will still be people in ten years’ time. They’ll still be motivated by the same core desires and needs. They’ll still be using brands as a shortcut for many things, including value, quality and social status.
What is new is that those core desires and needs are evolving faster than ever before. The challenge for business leaders today is to recognise this fact and to start rethinking their offers, creating new propositions, and offering ever greater value to customers. In a world of continual change it is the brands that are set up for relentless improvement that will thrive.
Robin Gadsby is the CEO of Forever Beta.