Companies have faced a year of considerable disruption. The global spread of COVID-19 has altered how customers act, which therefore called for businesses to make big changes to their tactics and money put into digital advancements. It appears that the problems associated with racial justice and the unpredictable 2020 presidential election, as well as what followed, have left numerous business leaders feeling uncertain and helpless. How can and should companies effectively manage their brands to be able to adapt to the changing environment?
Why is disruption so hard to see?
We usually can’t identify a disruption until it’s already happened and it’s too late. Just ask Encyclopaedia Britannica. Viewing the situation from the modern perspective of a time when Wikipedia is almost always one of the top three online search results, the costly, bulky set of heavily proofread hardcover books seems outdated. It is impressively authoritative, yet at the same time it is hopelessly fixed and out of touch before it is even printed. What did the landscape resemble in 1993 when Microsoft first launched the Encarta Encyclopedia for PCs, or in 2001 when Wikipedia started drawing in contributors? Envision yourself as a hotel manager and listen to whispers of an opportunity to provide accommodation through renting out a spare room or sofa bed. Is Airbnb a potential danger to the survival of your business? And if it does, what constitutes an effective response?
It is evident that a component of the issue is knowing that dominance in the market is slipping away. Newcomers with fresh methods can displace incumbents in five different ways, some of which emerge over a longer period of time; because the process can be so slow, there’s a tendency for the existing authority to feel secure.
In its most recognizable shape, displacement can be as obvious as Amazon stealing customers and sales from Borders in the American book industry. The current holder of the position has been losing customers due to their inability to provide enough value in order to gain a foothold in the market. In this circumstance, as most businesses are mainly concentrated on short-term objectives such as profits and revenue growth, the present company acknowledged the arrival of the new rival as a threatening adversary.
The present leader will likely recognize a decrease in shares in comparison to numerous new contenders, although a prominent company used to one or two primary competitors may not effectively estimate or comprehend the danger of a multitude of weaker participants as a collective. When independent music artists made use of advanced digital technology to start getting attention in the early 2000s, the top four major companies in the record industry still endeavored to find popular artists while a number of smaller labels specializing in distinct genres were able to claim nearly 30 percent of their entire market.
What happens when the introduction of a different method increases the market considerably and the business already in the field does not go up or down by a large amount? The incumbent might not consider itself displaced. In the end, if an established company fails to benefit from growth in their industry, they will be negatively impacted by a lack of investor interest, departures of talented staff, and less chances to stay up to date and stay ahead of industry changes. Once more, the existing holder of the position may be blind to the opposing forces because of market short-sightedness: meaning that it perceives its market and enemies too stringently. The reigning employee has no motivation to contemplate the market in any other manner, particularly when experts declare they are the top leader in that market.
Relying too heavily on market trends remaining the same as they have been in the past can leave an entity vulnerable to being taken by surprise if the market undergoes a sudden decrease or collapses completely. This can occur when a different tactic draws a considerable amount of worth out of an industry, either by de-monetizing it or terminating the need for an entire kind of item. Traditional examples include refrigerators making it unnecessary to hire for ice delivery services, and more recently the invention of smartphones eliminating a significant portion of the requirement for point-and-shoot cameras, calculators, flashlights, and travel watches.
In the end, it is not an enormous worry for large companies, but fragmented existing market players can be taken over and brought together under one business entity. The larger firms have an increased advantage as scale has now become a major factor for competition where before it wasn’t. The other smaller, divided participants are not capable of competing in the general market, which means they either have to merge together or focus on niche markets.
Acknowledging the risks requires determining the possibilities of how the applicable market could be reconfigured. Grasping the different kinds of displacement is essential. It is simple for in-place head honchos, investing their energy in the regular activities of keeping up a current position of authority, to ignore possible issues from an area outside of the restricted domain in which they are like the mythical kids from Lake Wobegon, “better than average.”
The issue is further compounded by the fact that the world is unpredictable and full of commotion. Many reports and conferences typically group together cases of disruption that look alike on the outside but may be distinct from one another under the names of “sharing economy” and “collaborative consumption”. Although they appear similar on the face of it, there are also many differences which can be difficult to explain clearly. For instance, many pioneers of disruption like Amazon, Salesforce, and Uber use platform principles, yet most of them are a danger to traditional companies by developing a new type of value. It wasn’t the specific technology aspect of the app that caused a stir as much as the cost structure of Salesforce or the availability of personal resources for Uber. Amazon had the advantage of a wide range of customers as a result of its collective platform, giving it a powerful disruptive edge.
By 2012, when Encyclopedia Britannica ceased producing its printed version, it had sold less than 8,000 copies in the preceding three years. In almost all areas, newspapers experienced decreases in the quantity of their printed issues as free web platforms such as Reddit provided competition against journalism found in newspapers. The heads of those industries likely never could have fathomed a scenario where people would prefer the opinions of unknown, untested peers to the opinions of an acclaimed institution. It appeared that the general public was more apt to rely on nameless peers instead of any particular individual or entity, when given systems that permit many of these individuals to interact and make contributions regarding editing and moderation of each other’s work.
A radical method is successful when the environment is suitable. And the conditions, it turns out, are always changing.
What visible steps can marketers take to increase the value of the brand? We offer 7 strategies marketers can put to work to maintain or grow business in this era of disruption:
1. Interrogate Beliefs About Brand Trust
The majority of marketers are of the opinion that customers have strong faith in their brands. On a 10-point scale, with 1 signifying significantly below the industry norm and 10 standing for significantly exceeding it, the mean is 7.9. It appears that the figures are exaggerated due to the fact that 90% of participants had a score higher than the midpoint while only 10% scored five or below. It appears that the phenomenon of the “Lake Wobegon Effect” is happening here. This phrase refers to the idea taken from Garrison Keillor’s fictious town in Minnesota, where it is suggested that everyone is exceptional in some way. It is a representation of people’s tendency to think that they are superior than others.
Marketers should take some time and pour resources into researching their consumers to assess their progress compared to their competitors, though according to research only a little over a quarter of companies utilized this technique during the pandemic. By examining customer feedback, it is possible to uncover customer requirements and worries that must be attended to, like troubles with goods, services and the customer experience. Firms which earn greater revenues from web-based sales should consider pumping more money into their businesses, as research has revealed that people are less apt to trust digital businesses compared to those operating from physical locations. Analysis of customers can bring to light both unknown wants and needs and what initiatives your business can take to establish its place in their life or workplace. Retailers reacted rapidly to the surging popularity of products by readying or enlarging their BOPIS (buy online, pick up in store or curbside) services. They gave shoppers the option of purchasing items with the agreement that payment for them could be made in the future, for example by offering a buy now-pay later deal. It is critical that brands guarantee that the pledges they are making are in agreement with their capability to fulfill them (Deloitte Global Marketing Trends 2020).
2. Invest in a Strong Customer Experience
Nearly three-quarters of businesses have invested in developing digital interfaces that customers can use within the last twelve months, which was a marked rise from the 60.8% reported in June 2020. There has been a significant rise of 11.5% in digital marketing expenses over the last year, even though there was an overall drop of 3.9% in total marketing expenditures during the same time frame.
It appears that digital technology is mainly how marketers are optimizing the customer experience, as three-fourths of them agree that customers are more appreciative of digital experiences over the past 12 months. The emphasis on a great customer experience is projected to bring in rewards for marketers, who consider it the most significant customer priority—outweighing product excellence, superior service, a dependable relationship, creativity and cost. Marketers now devote 14.4% of their marketing finances to providing customers with a satisfying experience.
3. Improve Transparency
It is increasingly important, particularly for millennials, to be open and honest. Customers desire straightforward information from businesses on matters they are passionate about. When posed with the inquiry of assessing how transparent their company is with customers when it comes to different topics, fewer than half of marketers indicated that they are completely open with customers about these areas. Marketers revealed a lot about data collection (42%) and data usage (39.8%), but less about employee wellbeing (28.8%), business alliances to supply and offer products/services (26.1%), the means by which their company earns money (21.2%), the impact of their activities on the environment (17.4%), and backing of social and political causes (10.2%).
We think it is possible to be distinct from other businesses by being completely open with clients. Everlane’s success in differentiating themselves from their competitors is the result of their commitment to “radical transparency”, which includes divulging information surrounding their sourcing, materials, and pricing.
4. Seek a Lift From Influencers
In June, the amount of money companies spent on social media rose sharply from 13.3% of marketing budgets to 23.2%, a jump of 74% in just a three-month period during the coronavirus pandemic. The latest survey finds that the percentage is currently 14.9%, but is predicted to rise to 24.5% within the next five years. It is also essential to note that 84.2% of marketers stated they employed social media to assist in the promotion of their brands while dealing with the pandemic.
Brands are trying to establish a closer relationship using social media platforms, and influencers can play a large role in the plan. Marketers have declared that 7.5% of their marketing funds are invested in digital influencers, particularly LinkedIn, corporate websites, Instagram, and Facebook, and they forecast that usage of influencers will rise notably (from 7.5% up to 12.7%) in the next three years. Developing and/or recognizing people who have influence within the digital world and showcase the brand’s signature character in a noticeable and relatable fashion can be difficult.
5. Do Good in Brand-Relevant Ways
It is believed by marketers that customers have been paying attention to the efforts of businesses to help during the coronavirus outbreak, with 79.1% believing that this is the case. 48% of marketers agree that customers appreciate companies’ efforts to have a positive impact on society during this period. In accordance with this, the most significant share of respondents on a survey ever swears that it is the proper thing for their brands to make a declaration about controversial political topics. Notably, an increase of marketers have joined in with the figure now reaching 27.7%, instead of staying on the sidelines.
6. Don’t Fret About Price
When queried about the customer practices that they had seen over the course of the pandemic, only 43.3% of marketers reported detecting a reluctance to pay the customary price. It is thought by marketers that people will be going back to buying things at their original prices over the next half year to one year. This survey reveals that purchasers are putting less importance on the cost of items, which has decreased by 43% since 2009, when cost was the main worry for shoppers.
7. Get the Word Out
When it came to the pandemic period, 67% of marketers said that they were inspiring their personnel to be more engaged online to boost their business and its products and services, and 66% were concentrating on establishing fresh advertising and marketing methods. This implies that rivalry for consumer attention on the web has increased, especially in a time when people are inundated with highly intense digital undertakings relating to their professions, distant schooling, and personal lives — or some fusion of those three elements. Marketers should consider how they can engage with their customers in unique ways that don’t cause digital burnout. The approach likely varies depending on the target audience. It is essential to comprehend how the customer interacts and to interface with them at the place that they presently occupy.
Brands can be used to assist businesses in persevering and flourishing during this period of continued pandemic. These seven advice points can help foster belief in your brand and use it to foster business advancement during this period of unpredictability.
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