Though change is a slow process, it is
Marketing Week; London (Apr 18, 2002): P. 30.
Five years ago I was a bookshop freak, forever browsing and buying. Today, Amazon's one-click
shopping process has me hooked. The only time I ever visit a bookshop is when I'm going on
holiday and looking for something completely different.
Five years ago, I used plastic for special transactions and cash and cheques for everything else. I
was always in and out of bank branches. Today I hardly write any cheques, use plastic and direct
debit for everything I can, regard cash as a nuisance and avoid bank branches like the plague.
Five years ago, I communicated mainly by phone, fax and post. Today, mobile and e-mail
dominates. Five years ago, I did my grocery shopping the traditional way, in a physical store - I
still do. Even though I resent the time it takes to do, queues drive me crazy and out-of-stocks
infuriate me, I still find it offers more value than the online alternative.
So while new technologies and channels have transformed some of the things I do, they've left
other things untouched. Like everyone else, I'm becoming what Jerry Wind and Vijay Mahajan
call in their new book Convergence Marketing a "centaur" consumer: half cyber, half traditional.
I pick, choose and combine the best of both worlds, on- and offline, according to personal
preference, mood, mode and occasion.
Wind (a US digital marketing guru) and Mahajan (a traditionalist) wrote this book because they
were fed up with either/or marketing debates - either "all change" or "no change". In reality, they
say, it's the mixture that matters. An obvious point, of course. But the devil is in the detail. And
what a devil it's turning out to be.
Four details seem to have become particularly important for marketers. Firstly, as Professor
Susan Baker at Cranfield Management School points out, the right segmentation is vital. But the
critical parameters of segmentation are in flux - is it to do with lifestyle, income, attitudes
towards time, or ways of accessing information? How I behave has changed in one particular
way. But millions of other people are changing too - in very different ways. So we need fresh
approaches to segmentation.
Second, when changing a value equation, neglect unarticulated, previously met needs at your
peril. Yes, previously met needs, not unmet needs. Divining and anticipating unarticulated unmet
needs - the stuff I didn't know I wanted till I was offered it - has long been a Holy Grail of
marketing. But the other side to this coin is just as important: the stuff that's become so familiar
that we don't see it any more; the needs we didn't know we had because they were already being
met without our having to think about it.
I never thought grocery shopping was a stimulating experience, for instance, until the online
alternative came along and offered me what I thought I wanted. At the same time, however, it
took away something I had taken for granted - stimulation. Like stopping to see if there's
something really enticing on the deli counter. Or getting an idea for tonight's dinner. I also
discovered that the forward planning demanded by online grocery shopping is more of a hassle
than I expected. As a result, I haven't changed. So "killer apps" - the to-die-for benefits that have
people flocking out to buy things - are very important. But "killer disapps" - the benefits you take
for granted that you only notice when they disappear - are even more so, especially when they're
so easy to overlook.
What's more "killer apps", no matter how wonderful, can never create successful brands or
businesses by themselves. Every successful brand juggles a complex mix of elements - plus
points, negative points, related costs and revenue streams - to create a viable balance across them
The effect of revolutionary new technologies - from the railroads, through the telegraph, to motor
cars and electricity, to the Internet - is always to "unglue" such finely honed, carefully crafted
balancing acts. They simultaneously create sources of value, potential revenue streams, new
negative points and costs. They therefore demand completely new balancing acts.
While online grocery shopping adds convenience, for instance, it often costs retailers more than
consumers are willing to pay. Making online grocery shopping work requires the invention of a
completely new business model, even when it rides on the coat-tails of an established brand.
Now add a fourth ingredient to the cauldron. It is the most important and overlooked force in
marketing: habit and inertia. It takes years to change deeply ingrained habits, even when "better"
alternatives come along. My shift from physical to virtual banking unfolded at a snail's pace, for
instance. I got used to new ways of doing things slowly: first the post, then the phone, now the
Net. Slowly, but only slowly, did these experiences make the negative points of the old approach
seem increasingly irksome.
Habits are, by definition, deeply conservative. But the crucial point is more subtle. Even though
habits change very slowly, they do change. Like the tectonic shifts that move entire continents",
the accumulated effect of slow shifts in day-to-day behaviour, across millions of people, is truly
elemental. This is what moves market mountains. As Wind and Mahajan suggest, the critical
digital marketing challenge is not to understand transformations in the technology itself - in
Internet time - but the "transformations deep inside the consumer" - in the only timescale that
matters: people time.
Wind and Mahajan pinpoint five ways in which Internet-triggers are transforming consumer
habits, expectations, and how they view their relationships with companies and brands. The five
pinch points are customisation (of products and communication), community, channel choice",
value and pricing mechanisms - auctions, name-your- own-price - and decision support and
choice tools - price and product comparisons. The challenge is to navigate these rivers of change
with the right mix of new and old approaches.
Understanding changing customer segments and unarticulated wants (both met and unmet)",
constructing viable value equations and business models, while staying in tune with subterranean
shifts in daily purchasing and consumption habits. That's the challenge posed by new channels
today. Is your company rising to it yet?
Copyright: Centaur Communications Ltd. and licensors
(Copyright (c) 2002. Centaur Communications Limited. Reproduced withpermission of the