Before Netflix, there was Blockbuster, the world’s best-know video store. Before YouTube, people looked for life hacks (then called life lessons) in Reader’s Digest. And before the digital camera became the most used feature on your smartphone, there was Kodak.
These are all organisations that went into bankruptcy despite once owning their respective worlds. And we’re not even talking about the last few years, in which the frenzied pace of disruption has threatened thousands more businesses.
The bottom line is this: It doesn’t matter how big a company is today; if it doesn’t meet the needs of its customers, it may not exist a few years down the line. And those needs go beyond merely the features or direct benefits offered by a product.
A new study by Accenture shows that consumers want more than relevance.
“Nearly three quarters of consumer switching is driven by a lack of relevance, putting R438-billion of potential annual revenue in jeopardy,” Accenture reports. “In the era of relevance, brands can regain the high ground by expanding their marketing frameworks and re-aligning their activities to a new set of principles— beyond their comfort zones.”
At the launch of the study in Johannesburg last week, Wayne Hill, head of Accenture Digital, summed up the meaning of hyper-relevance from his own encounters with brands: “Nespresso knows who I am and it knows what I like. From an experience point of view, I walk into shop and I can smell the coffee. On the shelves, the merchandise looks like beauty products. When they package it, it’s like buying Louis Vuitton.
“Recently I received a box of from Nespresso that included a brand linked to my place of birth. That is hyper-relevance.”
Hull gave examples like Woolworths using algorithms to predict consumer consumption, Discovery converting health insurance into wellness and health care, First National Bank creating a digital banking platform, and Cape Town drone analytics start-up Aerobotics “hyper-personalising crops”.
“Aerobotics don’t want to know what crop is doing. They want to know what each stem is doing, and from analysis of the stem they can predict per stem what the product will look like.”
Not surprisingly, new technology is at the heart of hyper-personalisation.
(Click here or below to read on about hyper-personalisation) More about hyper-personalisation)
“New technology is not an IT activity,” said Hull. “It has to be embedded in the customer experience.”
Michael Jordaan, founder of the wireless Internet service provider Rain and the new bank due to be launched soon, Zero, spoke at the event about the lessons he had learned while CEO of FNB.
“One of our best ad campaigns was when I said we’ll give customers an iPad at a lower price than anyone else. We didn’t want to make money from it, we just wanted people to bank on it. We sold one every 30 seconds. That changed the electronics market.”
The Accenture study, titled Welcome to the Hyper-Relevance Era, emphasises the need for executives to develop a deeper understanding of what differentiates each era. It divides the old and the new approach between the loyalty era and the relevance era. There are five key differences, according to the report:
- The objective of the loyalty era was to create incentives for customers to become loyal members and keep making purchases. The objective of the relevance era is to create a gravitational field that attracts customers into orbit around the brand by serving their every relevant need in every possible moment across every possible channel.
- In the loyalty era, customers were dissuaded from re-evaluating
their options. In the relevance era, mobile-enabled and digitally savvy customers are constantly re- evaluating their options.
- The loyalty era was backward- looking and time-lagged; the relevance era is forward-looking and real-time.
- The loyalty era focused on the “what” economy, which is linked to a purchase, while the relevance era focuses on the “why” economy, which is linked to evaluation.
- Even the technology enablers are different: in the loyalty era it was Customer Relationship Management (CRM) software; in the relevance era its digitisation of everything.
Hull pointed out that the definition of hyper-relevance will evolve along with customer needs and habits. In the meantime, though, companies must strive to be meaningful, dynamic, dedicated, transparent, inspirational, standard-setting, omnipresent and accountable .
“Of course, these are just some of the attributes that customers have come to expect from their provider of choice in the relevance era. Relevance is and will always be a moving target.
“For established companies in South Africa, striving for hyper-relevance might seem an insurmountable challenge, especially in an economy that has barely grown in the past decade, with fiscal missteps and corruption contributing to weak business and consumer confidence. But now is the time for leaders to make the shift to the relevance era, to lay the groundwork for major changes to their processes, organisations, and mindsets.”
(Click here or below to read Accenture’s Framework for Hyper-relevance) Framework for Hyper-relevance)