Change Essay

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

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