Smartphones have ushered in an unprecedented level of closeness between customers and companies. This continuous connection has increased our time spent online exponentially and has broadened the number of devices we use through which brands can connect with us. This means companies can suddenly reach us at anytime and pretty much anywhere. Combined with the considerable amount of consumer data available, it seems as though the line in the sand between our selves and the companies who want access has all but disappeared.
This provides both a flood of opportunities to improve customer relationships and refine touchpoints, but also to misunderstand customer need or, worst of all, ignore their need that’s staring you in the face. An all-access pass to your target customer doesn’t mean they are going to find a need in every innovation you push forward. Companies need to find targeted ways to connect innovative tech to need.
Let’s look at SnapChat as an example: SnapChat understood that the performance of their Android app was causing frustrations for users in emerging markets who were operating less expensive devices with less processing, memory, etc. These emerging markets also held their largest growth potential. Their solution? Project Mushroom: a back-end overhaul to make the Android app 25 percent smaller and, most notably for end users, 20 percent faster.
And the world responded with a boom in app usage and a flood of positive press coverage.
This was a targeted innovation, driven by an assessment and determination of what customer motivators might be, and how an advancement in technology might help to tap into consumer behavior.
In a similarly consumer-driven move, Domino’s chose to attack from a position of power against their competition. Within their mobile platform, they have launched a scan-a-pizza function to earn points towards free pizza, but the app is indiscriminate as to the pizzas being scanned. Which means that you can order a competitor’s pizza and still earn points towards a free Domino’s pizza. Their new program requires users to be part of their loyalty program (Domino’s has more than 20 million active users in its rewards program, while number two, Pizza Hut, has around 12 million).
Again, press coverage was plentiful and positive, showcasing the future potential of an ever-improving AI component that allows the Domino’s brand to integrate further into the experiences of their customers.
Another data-driven organization, Nike has become adept at using digital tools to drill down on their shoppers’ habits, including returns. Ecommerce has changed the way people buy and return. Remember that old shoe measuring device that would be in brick-and-mortar shoe stores? It might seem like a lifetime ago, but it was how retailers used to help customers know they were buying the right shoe size. Through e-commerce, this helpful tool is no longer in play. According to CNBC, this means that “at any given time, 3 out of 5 people are wearing the wrong size shoe, and it’s the biggest reason for returns.” To remedy this, Nike is launching Nike Fit in its mobile app, driving their strategy to sell direct to consumers (which was up 12% in 2018). NikeFit will measure shoe fit down to the millimeter. Early beta tests proved that the strategy will help retailers manage inventory, cut down on returns, and entice shoppers to buy more shoes.
Customer data and insights must be wielded carefully if brands hope to become part of consumers’ reality through these digital experiences. The data must have context, a why, if they are to lead to disruptive changes that leave a lasting impact on consumers.
So, what do brands looking to stay competitive need to understand?
1. The Challenge Of Competing With A Profit
Traditional brands are expected to profit because that’s what makes them a leading brand. However, with the startup landscape and speed of growth in digital, it has become a major challenge. Startups are getting to IPOs with hundreds of millions of dollars raised and no profit.
This means that traditional brands are finding themselves competing for market share with companies with vastly different mindsets and methodologies. Essentially, the game is changing. Established brands looking to innovative will need to do some course correcting for how technology is integrated into their growth strategy in order to keep pace without negatively impacting their bottomline.
2. Knowledge, Creativity, and People Win
In order to get to tap into some of these types of innovative concepts, you have to have a wide view on the world, trends, and user behaviors. You have to get your mind to push into areas where there may be risks, unknowns, etc. Ultimately, this is a people-driven sport: the best teams that operate with trust and chemistry win.
Innovative companies hire the right people, and then empower them. This inherently fosters a culture of growth where great ideas can be actualized and decision making can be autonomous across the organization.
3. Have A Playbook And Know The Tools
This aggregation of great ideas will of course need to go through rigorous tests to understand viability, product market fit, and user segments and behavior to ensure its success. There may well be hundreds of ideas that do not see the light of day as not every idea can be a competitor-friendly free pizza program or a performance-focused app overhaul.
This means brands need to be lean, leverage tools to increase knowledge and speed, and must be scrappy with their approach. No small feat!
4. It’s Business, Numbers Matter
Both SnapChat and Domino’s used data to support their decisions, to highlight the opportunity and to demonstrate the results. If you can’t get to the numbers, your idea will not hold water. This is why testing and experimentation are key to honing into what specifically fits your customers and prospective customers. The numbers will let you know if you’ve struck gold or may be missing the mark.
We live in an experience-driven world, and needs of all kinds play a huge part in consumer behavior. Understanding this and harnessing it to your advantage is the only way to gain the customer buy-in necessary for your idea to gain traction. Gather the insights, gather the facts, and test, test, test. Get into the mind of your customers and you will find your unique dynamic that keeps you there.