jump to navigation

Trend Watch 2008 Wrap-Up January 8, 2008

Posted by Bruce Temkin in 2008 trend watch, Customer experience, Gen Y.
add a comment

Hopefully you’ve found my Trend Watch series interesting. I enjoyed looking at how these different articles positioned the future:

Those five posts referenced 52 different predictions; highlighting 32 that I thought were the most interesting. That’s a lot to digest, even for the most avid readers of this blog. So I decided to collect the 14 predictions/trends that capture the collective wisdom of these articles in four areas: 1) Consumer Needs, 2) Online Opportunities, 3) Required Skills, and 4) Strategy & Culture.

1. Consumer Needs

Snack Culture (Trendwatch.com). Excerpt: “SNACK CULTURE represents the catering to consumers’ insatiable craving for instant gratification. SNACK CULTURE thus embodies the phenomenon of products, services and experiences becoming more temporary and transient; products that are being deconstructed in easier to digest, easier to afford bits, making it possible to collect even more experiences, as often as possible, in an even shorter timeframe.”

  • My take: Look at iTunes; you can get a song instantly — who wants to wait until they can get to a store and then buy an entire CD?!? I even find myself watching the clips from shows and movies that I like, never mind sitting through an entire movie (I can’t tell you how many times I’ve watched the McLovin seen from Superbad). Firms should definitely think about how they can break apart their offerings into bite-sized pieces.

Eco-Iconic (Trendwatch.com). Excerpt: “Over the past few years, the ECO trend has moved from ECO-UGLY (ugly, over-priced, low performance alternatives to shiny ‘traditional sphere’ products and services) to ECO-CHIC (eco-friendly stuff that actually looks as nice and cool as the less responsible version) to ECO-ICONIC in 2008: “Eco-friendly goods and services sporting bold, iconic design and markers, that help their eco-conscious owners to visibly tout their eco-credentials to peers.”

  • My take: Thanks in large part to Al Gore and his movie An Inconvenient Truth, Eco is cool (who would have ever thought that “Al Gore” would be mentioned in the same sentence with “cool?”). Our world is facing a crisis, so hopefully this eco-iconic trend in 2008 (which highlights the actions of a few people) sparks an “eco-uprising” in the near future where people around the world band together and force all governments to make issues like global warming a top priority.

Privacy, Privacy, Privacy (Advertising Age). Excerpt: “In 2008, marketers will become increasingly sensitive to privacy issues. With “digital-intrusion” and identity-theft issues as paramount consumer concerns, marketers must be extraordinarily careful to respect worries of access to private information.”

  • My take: Let me add a fourth word to this theme: Privacy. Expect consumers to be hyper-sensitive to anything that looks like a breech to their privacy. So there are three key steps for marketers: 1) protect consumers’ privacy; 2) make it clear to consumers that you are protecting their privacy; and 3) keep protecting consumers’ privacy.

Unfriend Me (Business Week). Excerpt: “People move to gated networks from Facebook and MySpace (NWS), fleeing the commercialization of their personal information and relationships.“

  • My take: Social computing has so much buzz (or should we call it a ”friending frenzy”) that a backlash is highly likely. I know that I  get barraged with invitations to join this network or that network. I think Woody Allen got it right in Annie Hall: “I would never want to belong to any club that would have someone like me for a member.”

2. Online Opportunities

Freeconomics: Online, there really is such a thing as a free lunch (The Economist). Excerpt: “Because it is so cheap to offer digital services online, it doesn’t matter if 99% of your customers are using the free version of your services so long as 1% are paying for the “premium version.” After all, 1% of a big number can also be a big number.”

  • My take:What’s the online component of your offering? You need to answer that question in 2008. And given the “freeness” of the online world, you should think about classes of customers — the masses that get value for free and the cherished ones that pay for additional value. Take a look at an earlier post where I described “online infusion” as a key disruptive customer experience strategy.

Lightening up: Leave the laptop behind (The Economist). Excerpt: “As smart phones take over chores that trusty old laptops used to perform, road warriors are stuffing their overnight bags with other tools of the trade instead-and the trend will increase in 2008 as gadget prices fall.”

  • My take: Mobile computing is now officially “real.” It’s not yet mainstream, but there will be many niche opportunities for adding mobile components to your current offerings. Think about what can be done on the growing number of iPhones and target applications at repeat transactions (banking, travel, movies, etc.) especially for younger and affluent consumers. See my post about designing experiences for Gen Y.   

Using Consumers As Innovators (McKinsey Quarterly). . Excerpt: “As the Internet has evolved - an evolution prompted in part by new Web 2.0 technologies - it has become a more widespread platform for interaction, communication, and activism. Consumers increasingly want to engage online with one another and with organizations of all kinds.”

  • My take: What’s a trends doc without a reference to Web 2.0?!? I’m not sure that online consumers will become the core innovative force for companies in 2008, but firms definitely need to tap into the online voice of customers — as they blog, write customer reviews, and connect with each other in new ways on the Internet. This is particularly true if you’re going after younger consumers.

3. Required Skills

Putting More Science Into Management (McKinsey Quarterly). Excerpt: “Just as the Internet and productivity tools extend the reach of and provide leverage to desk-based workers, technology is helping managers exploit ever-greater amounts of data to make smarter decisions and develop the insights that create competitive advantages and new business models… The holy grail of deep customer insight-more granular segmentation, low-cost experimentation, and mass customization-becomes increasingly accessible through technological innovations in data collection and processing.”

  • My take: No doubt; there’s more data than ever. So make sure you’ve got some strong left-brainers around to look at Web analytics and customer analytics; there’s a lot of valuable insights to be mined. But don’t get caught over-focusing on analysis — it’s only one part of the equation. Your organization needs to treat customers differently based on the insights and this often takes more ”art” than “science.”  
Emergence Of The “Renaissance Marketer” (Advertising Age). Excerpt: “These “renaissance marketers” will be part humanist, part psychologist, part anthropologist and part technologist… Cookie-cutter marketing will no longer survive as marketers must take a broader view of the consumer and customer. This includes the need to be socially responsible and to embrace key trends such as green.”

Crowd Mining (Trendwatch.com). Excerpt: “CROWD MINING: when co-creating, co-funding, co-buying, co-designing, co-managing *anything* with ‘crowds’, the emphasis in 2008 will move from just getting the masses in, to mining those crowds for the rough and polished diamonds. How to do that? Shower them with love, respect and heaps of money, of course.”

  • My take: This trend flows from a combination of two concepts: The Wisdom Of Crowds and The Tipping Point. Companies need to understand who their customers are, how those customers relate to their brand, and how customers relate to each other. This last item is a new skill for most companies. Let me throw out a company that might be a player in this area: Google. Why? Think of customers as a set of diverse, yet somewhat interconnected Web pages. Google already knows how to sort and prioritize that type of information.

4. Strategy & Culture 

The Customer Is King (Business Week). Excerpt: “Consumers replace competitors as the key reference point for corporate strategy. Reason? Disruptive innovation now often takes places outside the normal competitive environment..“

  • My take: This is music to my ears; and, as many of you know, my mantra. There’s no better strategy than knowing your customers better than your competitors. So I agree, I agree, and I agree. Take a look at the post: “My Manifesto: Great Customer Experience Is Free.”  

The responsible company: Performing with purpose is the new challenge (The Economist). Excerpt: “The tendency to manage for quarterly results will yield to a new mindset where short-term performance metrics are complemented by measures capturing the long-term health, vitality and thus sustainability of the enterprise.”

  • My take: This is good news; businesses need more purpose. That’s been a theme across several of my earlier posts like ”Don’t Let Profits Replace Purpose,” “Firms Need Some Soul Searching,” and “Words Of Wisdom: Gandhi On Sustainability.” I think this will improve long-term productivity and competitiveness for US corporations. But it also means that organizations that don’t develop a stronger sense of purpose in 2008 will fall behind. Why? Because their organizations will not operate with the same degree of internal alignment as their competitors. And they’ll find it harder to recruit employees who will be looking to join organizations with a clear long-term purpose.  

Tapping Into A World Of Talent (McKinsey Quarterly). Excerpt: “As more and more sophisticated work takes place interactively online and new collaboration and communications tools emerge, companies can outsource increasingly specialized aspects of their work and still maintain organizational coherence… The best person for a task may be a free agent in India or an employee of a small company in Italy.”

  • My take: The Net definitely makes it easier to tap into a variety of workers in new ways. But it’s hard enough to keep a centralized workforce aligned; think about how hard it is when the talent is ultra-dispersed. In this environment, it is even more important that companies have a clear sense of purpose and a well defined and internally-communicated brand (see principle #2 of Experience-Based Differentiation). These items will help maintain consistency across the myriad of activities and decisions that go one across your company. 

Not enough people in China: A shortage of staff means employers will take more risks in 2008 (The Economist). Excerpt: “A new wave of investment will create lots of new jobs in 2008 as Chinese firms expand… Thanks to the one-child policy introduced in 1979, the number of workers in their late 20s will shrink further in 2008… China’s universities and many schools were closed for ten years during the Cultural Revolution. This means that most people in their late 50s and early 60s have had little or no formal education.”

  • My take: If you’re doing business in China — watch out. The shortage of employees and trained senior managers raises the risk for more problems like the lead found in children’s toys earlier this year. So make sure to establish clear emergency response processes like product recall plans. If you’re not doing business in China, that actually might become a marketing differentiator.

The bottom line: These trends represent both opportunities and threats in 2008; good luck taking advantage of them.

Trend Watch #5: Trendwatch.com “8 Important Consumer Trends For 2008″ January 4, 2008

Posted by Bruce Temkin in 2008 trend watch, Customer experience, Gen Y.
3 comments

This post examines the fifth (and final) article in this Trend Watch series. Hopefully you’ve appreciated the different points of view from The Economist, The McKinsey Quarterly, Advertising Age, and Business Week.

I decided to end the series by looking at a much less traditional source, Trendwatching.com: “8 Important Consumer Trends For 2008.” The article is rich with examples that you’ll want to read. Unlike the other posts where I commented on a subset of the trends, I’ll touch on all eight mentioned in this article:

#1) Status Spheres. Excerpt: “As mature consumer societies are increasingly dominated by (physical) abundance, by saturation, by experiences, by virtual worlds, by individualism, by participation, by feelings of guilt and concern about the side effects of unbridled consumption, status is to be had in many more ways than leading a lifestyle centered on hoarding as many branded, luxury goods as possible. We’ve dubbed the above phenomenon STATUS SPHERES: a variety of lifestyles, activities and persuasions, which can be mixed and matched by consumers looking for recognition from various crowds and scenes.”

  • My take: Whether it’s online social networks or local book groups, consumers definitely seek out “affiliation.” So there will be a growing opportunity for firms to tap into those needs. Think of the travel industry, there’s an opportunity to offer different sets of vacation packages like ultra luxury, eco-friendly, and socially-oriented. You need to figure out if your customers are more likely to sip champagne by the beach at a Four Seasons or rebuild hospitals in rural Afghanistan.

#2) Premiumization. Excerpt: “Basically, with more wealth burning holes in (saturated and experienced) consumers’ pockets than ever before, quick status fixes derived from premium products and premium experiences will continue in full force next year. What’s new then? How about 2008 being about the PREMIUMIZATION of everything and anything. In other words, no industry, no sector, no product will escape a premium version in the next 12 months.“

  • My take: It will be fun to see what new things come out in 2008. If product managers are listening, here are two of the premium offerings that I’d like to see: VIP entrances at crowded areas (like Disneyland, baseball games, and concerts) and reserved seats at hot movies. But I’m not sure how much I’d be willing to pay for these (pricing is a key issue to deal with). Make sure that any new offering satisfies the three questions that I learned while working at GE: Is the opportunity real? Can you win? Will it be worth it in the end? (the mantra: real-win-worth it).

#3) Snack Culture. Excerpt: “SNACK CULTURE represents the catering to consumers’ insatiable craving for instant gratification. SNACK CULTURE thus embodies the phenomenon of products, services and experiences becoming more temporary and transient; products that are being deconstructed in easier to digest, easier to afford bits, making it possible to collect even more experiences, as often as possible, in an even shorter timeframe.”

  • My take: Look at iTunes; you can get a song instantly — who wants to wait until they can get to a store and then buy an entire CD?!? I even find myself watching the clips from shows and movies that I like, never mind sitting through an entire movie (I can’t tell you how many times I’ve watched the McLovin seen from Superbad). Firms should definitely think about how they can break apart their offerings into bite-sized pieces.

#4) Online Oxygen. Excerpt: “2008 should be a goldmine for smart e-tailers, who, if they get their act together, could make billions and billions of dollars, euros, pounds, yen, kroner, lira and rand that are impatiently waiting to be spent by web-savvy consumers around the world. So in the next 12 months, spend blood, sweat and tears on improving your ecommerce presence; the pay-off will be immediate, and far more substantial than investing in Web 2.0 me-toos!“

  • My take: More consumers are getting more comfortable doing more things online with more access to high-speed connections, on PCs as well as on more and more mobile devices. That’s a clear formula for an increasing level of demand for online everything. In the big scheme of things, the online channel is still fairly young, so there remains enormous opportunities for companies to build online experiences that satisfy consumers’ unmet needs.

#5) Eco-Iconic. Excerpt: “Over the past few years, the ECO trend has moved from ECO-UGLY (ugly, over-priced, low performance alternatives to shiny ‘traditional sphere’ products and services) to ECO-CHIC (eco-friendly stuff that actually looks as nice and cool as the less responsible version) to ECO-ICONIC in 2008: “Eco-friendly goods and services sporting bold, iconic design and markers, that help their eco-conscious owners to visibly tout their eco-credentials to peers.”

  • My take: Thanks in large part to Al Gore and his movie An Inconvenient Truth, Eco is cool (who would have ever thought that “Al Gore” would be mentioned in the same sentence with “cool?”). Our world is facing a crisis, so hopefully this eco-iconic trend in 2008 (which highlights the actions of a few people) sparks an “eco-uprising” in the near future where people around the world band together and force all governments to make issues like global warming a top priority.

#6) Brand Butlers. Excerpt: “Instead of stalking potential and existing customers (which is not very 2008), why not assist them in smart, relevant ways, making the most of your products and whatever it is your brand stands for? Remember, giving is the new taking ;-) Think baby food or diaper brands opening a lounge area, including diaper-changing facilities and microwaves, for parents and their offspring at a major airport or in malls. Or a bank installing secure, high-tech lockers next to the beach, so beachgoers can safely store their belongings when going for a swim or walk.“

  • My take: Apple’s Genius Bar is also an excellent example of this trend. These items fit into a strategy I call “service amplification,” which is one of five disruptive customer experience strategies that I’ve highlighted in previous posts. But this can be a dangerous strategy. Why? First of all, it can require a significant investment. In many cases there’s no direct revenue stream for the service, so firms need to understand how these efforts improve other parts of their business. Another possible problem is brand dilution if the offerings miss the mark.

#7) MIY | Make It Yourself. Excerpt: “With (in particular younger) consumers having come to expect to be able to create anything they want as long as it is digital, and to customize and personalize many physical goods, the next frontier will be digitally designing products from scratch, then having them turned into real physical goods as well. In fact, expect MIY | MAKE IT YOURSELF (and then SIY | SELL IT YOURSELF) ventures to become increasingly sophisticated in the next 12 months.“

  • My take: Consumers are getting more comfortable with configuring their products. That’s why we’re likely to see more things like Capital One’s Credit Card Lab that allows consumers to built their own credit cards. This will be particularly important for targeting younger consumers who are particularly interested in personalizing their experiences (just look at MySpace pages). Doing this well will require multi-domain design skills; so look for some mistakes in this area as companies overstep their capabilities. 

#8) Crowd Mining. Excerpt: “CROWD MINING: when co-creating, co-funding, co-buying, co-designing, co-managing *anything* with ‘crowds’, the emphasis in 2008 will move from just getting the masses in, to mining those crowds for the rough and polished diamonds. How to do that? Shower them with love, respect and heaps of money, of course. “

  • My take: This trend flows from a combination of two concepts: The Wisdom Of Crowds and The Tipping Point. Companies need to understand who their customers are, how those customers relate to their brand, and how customers relate to each other. This last item is a new skill for most companies. Let me throw out a company that might be a player in this area: Google. Why? Think of customers as a set of diverse, yet somewhat interconnected Web pages. Google already knows how to sort and prioritize that type of information.

Take a look at the other posts in this series: Trend Watch #1: The Economist “The World In 2008 (Business), Trend Watch #2: The McKinsey Quarterly “Eight Business Technology Trends To Watch,” Trend Watch #3: Advertising Age “Trends To Watch In 2008,” and ”Trend Watch #4: Business Week “Innovation Predictions 2008“

The bottom line: A lot will change in 2008, but some things stay the same: firms need better customer insight, there are many online opportunities, and all roads lead to Google :-)

Trend Watch #4: Business Week “Innovation Predictions 2008” January 1, 2008

Posted by Bruce Temkin in 2008 trend watch, Customer experience, Innovation.
1 comment so far

In this Trend Watch, I’m taking a closer look at the following article from Business Week: “Innovation Predictions 2008” While you can see the full list of 14 predictions at the bottom of this post, here are the 7 items that I think are most important for customer experience:

#1) Innovation Consolidation. Excerpt: “One of the big, established consulting firms such as McKinsey, Bain or BCG makes a pass at one of the small design-turned-innovation consultancies-Jump, Continuum, IDEO, or ZIBA-to bolster its innovation practice.”

  • My take: Many of these “innovation consultancies” are going beyond product design and deeper into overall customer experience design — which needs to be a core part of any business strategy (from my point of view anyway). So it makes sense to see the strategy titans trying to expand their offerings in these areas. But I’m not sure if these design firms can survive the post-acquisition culture clash.

#2) B-School Goes D-School. Excerpt: “Business administration focuses on making existing business processes and products better and more efficient. Business design focuses on creating new options for new forms of enterprise.”

  • My take: Design is a loaded word. In some cases it is viewed as a narrow domain. In others, like here, it’s referring to an overhaul of business strategy. However the word is used, keep the three questions of Scenario Design front-and-center: Who are your users?; what are their goals?; and how can you help them accomplish their goals? 

#3) Creative Growth. Excerpt: “As the traditional, cost-cutting workout fails, the private equity firm brings in innovation consultants to shape a growth strategy.”

  • My take: I hope that the private equity firms find creative ways to develop long-term value and not just package the firms up to flip them. A good place to look for creative growth is by applying one or more of the five disruptive customer experience strategies: Ultrasimplicity, online infusion, service infusion, service amplification, and value repositioning.

#5) One Laptop Boomerangs.” Excerpt: “OLPC is criticized as “Western high-tech imperialism.” Governments in Asia and Africa reject the beautifully designed children’s computer because of high costs for installation, repair, and electricity as well as limited local educational content.”

  • My take: I hope that this doesn’t happen. I’m a big fan of the OLPC (One Laptop Per Child) program. But any new and radical effort like OLPC will always find some bumps along the way. Hopefully the OLPC organization can respond to, and correct, any of these potential issues.

#8) Unfriend Me. Excerpt: “People move to gated networks from Facebook and MySpace (NWS), fleeing the commercialization of their personal information and relationships.“

  • My take: Social computing has so much buzz (or should we call it a ”friending frenzy”) that a backlash is highly likely. I know that I  get barraged with invitations to join this network or that network. I think Woody Allen got it right in Annie Hall: “I would never want to belong to any club that would have someone like me for a member.”

#9) Mobile Explosion. Excerpt: “A flood of new applications for the iPhone (AAPL), the newly opened Verizon (VZ) network, and Google’s (GOOG) Android platform generate an explosion of great cell-phone experiences.“

  • My take: I’m not sure that we’ll see a ton of ”great experiences” on cell phones in 2008, but we’ll see some good ones. Companies are recognizing the right types of applications and target audiences for mobile apps. And, the iPhone opens up many new opportunities; I only wish that it was available on Verizon.

#13) The Customer Is King. Excerpt: “Consumers replace competitors as the key reference point for corporate strategy. Reason? Disruptive innovation now often takes places outside the normal competitive environment..“

  • My take: This is music to my ears; and, as many of you know, my mantra. There’s no better strategy than knowing your customers better than your competitors. So I agree, I agree, and I agree. Take a look at the post: “My Manifesto: Great Customer Experience Is Free.”  

14 Trends To Watch from Business Week

Here are all of the trends listed in the Business Week article:

  1. Innovation Consolidation
  2. B-School Goes To D-School
  3. Creative Growth
  4. Presidential Policy
  5. One Laptop Boomerangs
  6. Our Urban Planet
  7. Fly WiFi
  8. Unfriend Me
  9. Mobile Explosion
  10. Kindle Catches Fire
  11. It’s All About Me
  12. Hang On To The Good Stuff
  13. The Customer Is King
  14. Shape-Shifting Enterprises.

Also see: Trend Watch #1: The Economist “The World In 2008 (Business), Trend Watch #2: The McKinsey Quarterly “Eight Business Technology Trends To Watch,” and Trend Watch #3: Advertising Age “Trends To Watch In 2008.”  

The bottom line: Innovation, design, mobile, and customers are hot, but friending and OLPC hit a few speed bumps.

Trend Watch #3: Advertising Age “Trends To Watch In 2008” December 28, 2007

Posted by Bruce Temkin in 2008 trend watch, Customer experience.
add a comment

In this Trend Watch, I’m taking a closer look at the following article from Advertising Age: “Trends To Watch In 2008” While you can see the full list of ten trends at the bottom of this post, here are the six items that I think are most important for customer experience:

#2) Innovation And Creativity Rule. Excerpt: “Marketers’ ingenuity will continue to expand as the competitive marketplace challenges brands to devise ways to reach their audiences online and via other “out-of-the-box” avenues… Marketers won’t run away from traditional media — but will leverage technology and new media to accentuate message delivery to consumers and customers.”

  • My take: Look for cross-channel marketing to flourish in 2008; infusing traditional campaigns with online, mobile, and social networking interactions. And, since a critical mass of US households have broadband, we’ll also see more video and rich Internet applications making the online experiences more immersive. All of these possibilities will make for a year of the good, the bad, and the ugly.

#3) Digital, Digital, Digital (And Portable Too). Excerpt: “As Steve Ballmer proclaimed at the 2007 ANA Annual Conference, all media ultimately will be created and delivered digitally. Can anyone legitimately argue with that? Naahhh..”

  • My take: Who wants to argue with Steve Ballmer? Not me. Firms can no longer just tack on some online capabilities, they need to integrate digital dimensions within their core offerings. So marketers need to master online infusion, which is one of five disruptive customer experience strategies that I outlined earlier this year.

#4) The Brand Swarm. Excerpt: “Marketers will move decidedly in the direction of DDB CEO Chuck Brymer’s “swarm theory… Marketers that embrace this trend can form consumer brand “advocates” and drive brand loyalty and trust to new heights.”

  • My take: There is definitely a lot of buzz around social networking — and it will continue to grow next year. People, especially younger consumers, want to connect with each other. While it will be tempting to concentrate on the swarm, don’t lose sight of what sparks a swarm — experiences. Make sure that you’re delivering good experiences and quickly recovering from bad ones.

#8) Emergence Of The “Renaissance Marketer.” Excerpt: “These “renaissance marketers” will be part humanist, part psychologist, part anthropologist and part technologist… Cookie-cutter marketing will no longer survive as marketers must take a broader view of the consumer and customer. This includes the need to be socially responsible and to embrace key trends such as green.”

#9) The Power Of Strategic Alignment. Excerpt: “Marketers succeed when brand messages are fully integrated and synchronized across all media channels. That requires strategic alignment — leadership that ties everything together — particularly when the forces of change can potentially pull them apart… In 2008 more CMOs will ensure organizations are strategically aligned.“

  • My take: Alignment can’t be limited to media channels. Brands aren’t just the domain of marketing; they need to be “owned” by the entire company. There are two sides to a brand: making promises and keeping promises. All too often firms focus on making promises, which is why they need to focus on this principle of Experience-Based Differentiation: Reinforce brands with every interaction, not just communications.

#10) Privacy, Privacy, Privacy. Excerpt: “In 2008, marketers will become increasingly sensitive to privacy issues. With “digital-intrusion” and identity-theft issues as paramount consumer concerns, marketers must be extraordinarily careful to respect worries of access to private information.“

  • My take: Let me add a fourth word to this theme: Privacy. Expect consumers to be hyper-sensitive to anything that looks like a breech to their privacy. So there are three key steps for marketers: 1) protect consumers’ privacy; 2) make it clear to consumers that you are protecting their privacy; and 3) keep protecting consumers’ privacy.

10 Trends To Watch from Advertising Age

Here are all of the trends listed in the Advertising Age article:

  1. Marketers Hit A Rough Patch
  2. Innovation And Creativity Rule
  3. Get Serious About Accountability
  4. Digital, Digital, Digital (And Portable Too)
  5. The Brand “Swarm”
  6. Getting Compensation Right (Please)
  7. Neurological Market Research
  8. Emergence Of The “Renaissance Marketer”
  9. The Power Of Strategic Alignment
  10. Privacy, Privacy, Privacy. 

Also see: Trend Watch #1: The Economist “The World In 2008 (Business) and Trend Watch #2: The McKinsey Quarterly “Eight Business Technology Trends To Watch.” 

The bottom line: Marketers’ formula for success in 2008: Creativity + Customer Insight + Brand Consistency.

Trend Watch #2: The McKinsey Quarterly “Eight Business Technology Trends To Watch” December 27, 2007

Posted by Bruce Temkin in 2008 trend watch, Branding, Customer experience, Marketing to Gen Y, Online strategy.
2 comments

In this Trend Watch, I’m taking a closer look at the following article from The McKinsey Quarterly: “Eight Business Technology Trends To Watch.” While you can see the full list of trends at the bottom of this post, here are the five items that I think are most important for customer experience:

#2) Using Consumers As Innovators. Excerpt: “As the Internet has evolved - an evolution prompted in part by new Web 2.0 technologies - it has become a more widespread platform for interaction, communication, and activism. Consumers increasingly want to engage online with one another and with organizations of all kinds.”

  • My take: What’s a trends doc without a reference to Web 2.0?!? I’m not sure that online consumers will become the core innovative force for companies in 2008, but firms definitely need to tap into the online voice of customers — as they blog, write customer reviews, and connect with each other in new ways on the Internet. This is particularly true if you’re going after younger consumers.

#3) Tapping Into A World Of Talent. Excerpt: “As more and more sophisticated work takes place interactively online and new collaboration and communications tools emerge, companies can outsource increasingly specialized aspects of their work and still maintain organizational coherence… The best person for a task may be a free agent in India or an employee of a small company in Italy.”

  • My take: The Net definitely makes it easier to tap into a variety of workers in new ways. But it’s hard enough to keep a centralized workforce aligned; think about how hard it is when the talent is ultra-dispersed. In this environment, it is even more important that companies have a clear sense of purpose and a well defined and internally-communicated brand (see principle #2 of Experience-Based Differentiation). These items will help maintain consistency across the myriad of activities and decisions that go one across your company.

#5) Expanding The Frontiers Of Automation. Excerpt: “Companies, governments, and other organizations have put in place systems to automate tasks and processes: forecasting and supply chain technologies; systems for enterprise resource planning, customer relationship management, and HR; product and customer databases; and Web sites. Now these systems are becoming interconnected through common standards for exchanging data and representing business processes in bits and bytes. What’s more, this information can be combined in new ways to automate an increasing array of broader activities.”

  • My take: The combination of service-oriented architecture (which connects disparate applications) and business process management systems (which can flexibly control processes) opens up the opportunity to automate many processes. Firms will squeeze inefficiencies out of customer-facing processes like applications, problem resolution, and credit approval. But don’t just automate processes; redesign them to better meet the needs of customers.

#6) Unbundling Production From Delivery. Excerpt: “Technology helps companies to utilize fixed assets more efficiently by disaggregating monolithic systems into reusable components, measuring and metering the use of each, and billing for that use in ever-smaller increments cost effectively… Unbundling is attractive from the supply side because it lets asset-intensive businesses raise their utilization rates and therefore their returns on invested capital. On the demand side, unbundling offers access to resources and assets that might otherwise require a large fixed investment”

  • My take: Interestingly, in 2000 we wrote a report called eBusiness Networks in which we predicted that: “Processes like customer care that span manufacturer, distributor, and retailer can be shared in eBusiness networks. Rather than design captive business processes, companies will plug into shared systems.”So I’m bought into this unbundling trend. Every firm needs to ask themselves: “How can my product/service be delivered as a metered service?”

#7) Putting More Science Into Management. Excerpt: “Just as the Internet and productivity tools extend the reach of and provide leverage to desk-based workers, technology is helping managers exploit ever-greater amounts of data to make smarter decisions and develop the insights that create competitive advantages and new business models… The holy grail of deep customer insight-more granular segmentation, low-cost experimentation, and mass customization-becomes increasingly accessible through technological innovations in data collection and processing.”

  • My take: No doubt; there’s more data than ever. So make sure you’ve got some strong left-brainers around to look at Web analytics and customer analytics; there’s a lot of valuable insights to be mined. But don’t get caught over-focusing on analysis — it’s only one part of the equation. Your organization needs to treat customers differently based on the insights and this often takes more ”art” than “science.”  

8 Business Technology Trends To Watch from McKinsey

Here are all of the items listed in The McKinsey Quarterly:

  1. Distribution co-creation
  2. Using Consumers As Innovators
  3. Tapping Into A World Of Talent
  4. Extracting More Value From Interactions
  5. Expanding The Frontiers Of Automation
  6. Unbundling Production From Delivery
  7. Putting More Science Into Management
  8. Making Businesses From Information.

Also see: Trend Watch #1: The Economist “The World In 2008 (Business) 

The bottom line: Look for a lot more connectivity; but temper it with common sense.

Trend Watch #1: The Economist “The World In 2008 (Business)” December 26, 2007

Posted by Bruce Temkin in 2008 trend watch, Customer experience.
4 comments

What’s in store for customer experience in 2008? To help answer this question, I examined five sources of trends/predictions that provide an interesting and diverse set of views of 2008. I will interpret what these mean for customer experience in a series of Trend Watch posts.

In Trend Watch #1, I’m taking a closer look at the following article with 12 trends from The Economist: “The World In 2008 (Business).” While you can see the full list at the bottom of this post, here are the five items that I think are most important for customer experience:

#1) Freeconomics: Online, there really is such a thing as a free lunch. Excerpt: “Because it is so cheap to offer digital services online, it doesn’t matter if 99% of your customers are using the free version of your services so long as 1% are paying for the “premium version.” After all, 1% of a big number can also be a big number.”

  • My take: What’s the online component of your offering? You need to answer that question in 2008. And given the “freeness” of the online world, you should think about classes of customers — the masses that get value for free and the cherished ones that pay for additional value. Take a look at an earlier post where I described “online infusion” as a key disruptive customer experience strategy.

#3) Lightening up: Leave the laptop behind. Excerpt: “As smart phones take over chores that trusty old laptops used to perform, road warriors are stuffing their overnight bags with other tools of the trade instead-and the trend will increase in 2008 as gadget prices fall.”

  • My take: Mobile computing is now officially “real.” It’s not yet mainstream, but there will be many niche opportunities for adding mobile components to your current offerings. Think about what can be done on the growing number of iPhones and target applications at repeat transactions (banking, travel, movies, etc.) especially for younger and affluent consumers. See my post about designing experiences for Gen Y.  

#6) Not enough people in China: A shortage of staff means employers will take more risks in 2008. Excerpt: “A new wave of investment will create lots of new jobs in 2008 as Chinese firms expand… Thanks to the one-child policy introduced in 1979, the number of workers in their late 20s will shrink further in 2008… China’s universities and many schools were closed for ten years during the Cultural Revolution. This means that most people in their late 50s and early 60s have had little or no formal education.”

  • My take: If you’re doing business in China — watch out. The shortage of employees and trained senior managers raises the risk for more problems like the lead found in children’s toys earlier this year. So make sure to establish clear emergency response processes like product recall plans. If you’re not doing business in China, that actually might become a marketing differentiator.

#9) The responsible company: Performing with purpose is the new challenge. Excerpt: “The tendency to manage for quarterly results will yield to a new mindset where short-term performance metrics are complemented by measures capturing the long-term health, vitality and thus sustainability of the enterprise.”

  • My take: This is good news; businesses need more purpose. That’s been a theme across several of my earlier posts like ”Don’t Let Profits Replace Purpose,” “Firms Need Some Soul Searching,” and “Words Of Wisdom: Gandhi On Sustainability.” I think this will improve long-term productivity and competitiveness for US corporations. But it also means that organizations that don’t develop a stronger sense of purpose in 2008 will fall behind. Why? Because their organizations will not operate with the same degree of internal alignment as their competitors. And they’ll find it harder to recruit employees who will be looking to join organizations with a clear long-term purpose. 

#11) For the love of mankind: A big year for big giving. Excerpt: “On June 30th 2008, Bill Gates will leave his day job at the software giant he co-founded in 1975. The following morning he will begin to work full-time at his charitable organisation, the Bill & Melinda Gates Foundation… As the foundation fights against disease, ignorance and poverty, his plan is to be giving away $3 billion a year by 2009… The business mantra for 2008 will be “doing well by doing good.”

  • My take: Philanthropy will become very cool in 2008. With the infusion of money and attention by Bill Gates, there will be a lot of highly visible activities — raising the public’s awareness for many causes. This will draw top-notch talent away from for-profits and into the world of non-profits. And, it will also open up opportunities for marketing corporate philanthropy. So make sure that there’s a philanthropy line item in your 2008 marketing plans. 

12 World Business Trends From The Economist

Here are all of the items listed in The Economist article:

  1. Freeconomics: Online, there really is such a thing as a free lunch
  2. Movers and shakers: European businessmen (and one woman) who will make the headlines
  3. Lightening up: Leave the laptop behind
  4. Buying and celling: Pay with a wave of your mobile phone
  5. Cash on call: Mobile payments in the developing world
  6. Not enough people in China: A shortage of staff means employers will take more risks in 2008
  7. Cheap but not so cheerful: The launch of the world’s lowest-priced car
  8. OPEC rules again: The oil cartel is riding high, at least for now
  9. The responsible company: Performing with purpose is the new challenge
  10. The good jargon guide: Has the perfect storm reached a tipping point? Does the black swan have a long tail?
  11. For the love of mankind: A big year for big giving
  12. Sustainable maths: Environmental reporting for companies needs teeth

The bottom line: Online, mobile, purpose, and philanthropy are “in,” but China may be “out.”