When I talk to marketing executives about the Smart Body, Smart World paradigm — how sensor-laden devices like wearables give us access to new domains of information and what we can do with that information — they always bring up the movie Minority Report.
The 2002 sci-fi crime thriller has become the reference point people imagine when they think about the future of advertising: specifically, the scene in which Jon Anderton (Tom Cruise) walks through the mall and billboards show him ads based on his mental state (stressed out) and context (on a journey).
This depiction of the future makes sense if you take the status quo of advertising in 2002 — delivering messages via screens to acquire new customers and persuade them to try your product — and bolt on new technology like biometric scanning. There are multiple examples of marketers today doing simplified versions of this, using billboards that adapt content based on gender and age.
A Dumb Vision Of The Smart Future
But this is a pretty dumb vision of the “smart” future. Smarter marketing goes far beyond advertising.
Lots of organizations I speak with are undertaking rationalization and simplification of application portfolios - some successfully, some less so. I think that the key difference between successful and less successful rationalization is the order in which organizations go about it. Organizations that rationalize their applications successfully start with (1) business drivers that define the need for change, then (2) they define the characteristics of the application portfolio that will enable those business changes. They then (3) outline a program of phased activities that will deliver the portfolio changes and finally (4) undertake a series of projects that make the functional, technical or process changes. Less successful programs take a different sequence - it typically goes in a 4-2-1-3 sequence, starting with projects, then portfolio changes, which deliver some business change that are wrapped up in a program.
This week I had a chance to catch up with Peter Horst, Senior Vice President of Brand Marketing at Capital One, in advance of his keynote later this month at Forrester’s Marketing Forum in LA. Peter will be speaking about how Capital One approached the integration and brand conversion of ING Direct, after the 2011 acquisition of the retail bank. Check out a preview of Peter’s session in the below Q&A, or join me in Los Angeles, April 18-19, to hear Capital One’s full story.
Q. What was the biggest challenge around the ING Direct integration strategy?
The biggest overall challenge was what we called “protecting the butterfly.” It became obvious to us that the magic of ING Direct did not lie in something as simple as a piece of technology, or a specific body of expertise, or some financial asset. What made ING Direct such a unique franchise was a complete ecosystem whose parts all worked together to create an exceptional customer experience. These parts included a powerful sense of mission, a culture of simplicity, a passion for serving customers, products that were offered straightforward value, a brand voice that was friendly and humorous, and much more. We realized that we had to be very careful not to disturb this ecosystem as we integrated the business, and remained on high alert to any risk that we might be undermining the interaction of the parts. One area in particular that we were very focused on was ensuring that the associates remained engaged and excited for this next leg of their journey.
Q. How did you approach this integration differently from past brand conversions?
To borrow from McCann Truth Central, most of us have owned mobile devices (not to mention smartphones) for, on average, 12 years — and we’re still figuring out mobile phone behaviors and the impact of mobile on our relationships. We have distinct mobile personalities.
This means we’re all mobile teens, trying to envision our futures and figuring out our relationships with others and with brands. If mobile marketing is entering the teenage years, then needless to say, tablet marketing is in its infancy.
To draw the analogy a step further, let’s consider marketers as parents. What does this mean? It implies that marketing leaders should help their kids grow and develop, play to their strengths, accept their differences, and reinforce their identities without forcing them to become what they are not. It means that the future will be full of surprises, with unknown territories and new use cases to come for not only smartphones and tablets but also reinvented laptops and personal computers. A lot of the attention will be paid to the new baby (the tablet), certainly creating some conflicts with the older sibling (the smartphone), which is particularly keen to become independent despite its relative immaturity.
Mature markets thrive because of specialization, not in spite of it. Think of shoes. How many pairs do you own? How many do you really need? Or kitchen pots. How many pots do you own? How many do you need? Or cars. How many different types are out there? How many do we really need?
The answer is, as many as they want to make. We want specialty shoes because there's a real difference between road biking shoes and mountain biking shoes. Between brown shoes and cordovan shoes and black shoes. Between dress shoes and party shoes. And those differences matter. Riding 35 miles in your dress shoes makes no sense.
And we want the best pot for the polenta or risotto or Bolognese we're making. We want the car that best suits the way we drive and live and schlep stuff. We want the right tool for the job. The same is true for computers or tablets or smartphones. We want the right tool for the job.
When you show me a spork or a rubber soled dress shoe or an El Camino, I think, "that's neither spoon nor fork, neither practical nor dressy, neither car nor truck." So when you show me Windows 8 on the new Dell XPS 12, I think spork, not specialized. It's a straddle. And straddles don't win.
The future of devices (call it post-PC if you like; I just think of it as the right tool for the job) is specialized: the right tool for the job, and a steady evolution to the right tool. The logic is simple:
At the end of 2012, Forrester and the ITAM Review, an IT asset management community site, ran a software asset management (SAM) survey to help understand where SAM is going in 2013. The resulting infographic* and commentary is available to Forrester clients here. For non- (hopefully future-) clients I’ve extracted some content to create this blog.
The focus and drivers for SAM have changed
Since the early 2000s, risk-focused IT professionals have voiced their concern over software compliance and the potential for vendor audits, large financial fines, damage to corporate reputation, and even the imprisonment of company directors. But these concerns weren't necessarily shared by the rest of the organization, which also viewed the SAM technology available as too difficult and complex to justify. As a result, SAM was a low priority on the IT management to-do list.
But this is starting to change as IT organizations realize that their software estates and procurement and provisioning processes are in a state of under-management, if not mismanagement. As a result, these organizations are wasting a significant amount of their IT funding each year on license procurement when they don't need to, maintenance agreement costs for more licenses than they actually use, and supporting and hosting software that should have been decommissioned.
Smart meters provide consumers with granular data on how they are consuming energy — when is the meter spinning fastest, which appliances are the energy guzzlers, how much energy are those idling appliances consuming? Programs to increase consumer awareness and shift demand to off-peak times abound. I delay the start of my dishwasher to after 11pm here in France to take advantage of off-peak tariffs. Most consumers, however, are not highly motivated by just knowing their own consumption. Good news: Opower, a provider of really smart energy solutions, has cracked the code.
The Opower solution draws on a study of how messages influence consumption. Turns out, if you tell people that they will save money by turning off their air conditioning and turning on a fan during peak hours they likely won’t. Those are typically the times when it is really hot. Messages of “civic responsibility” and “saving the environment” also don’t really register. However, when consumers are told that 75% of their neighbors will turn off their air conditioning and turn on a fan, behavior changes. That message had a 6% drop in consumption. Opower now uses these types of comparisons in all of their offerings.
The Renaissance was possible because of dissemination of ideas from the later 15th century. The availability of paper and the subsequent invention of the printing press in 1445 forever changed the lives of people in Europe and, eventually, all over the world. Previously, bookmaking entailed copying all the words and illustrations by hand, often onto parchment or animal skin. The labor that went into creating books made each one very expensive to make and acquire. The advent of the printing press helped produce books better, faster, and cheaper and led to disruptive cultural revolution.
We are experiencing a very similar phenomenon today. We are in the midst of digital disruption. The printing press of our time is platforms such as social, mobile, cloud and analytics that help propagate value to our customers better, faster and more cheaply than previously available options. So whether you are on board or not, this disruption is taking place; the two choices you have are: become a disruptive CIO or be disrupted.
As more signs point to strengthening economic activity in the US and selected regions of other parts of the world, corporate austerity is fading and growth is back in the spotlight. Acquiring customers, improving the customer experience, and growing revenues have returned to center stage.
Forrester asked more than 2,000 global business decision-makers at large organizations what their “critical” and “high” priorities are for the next 12 months. We found that:
Their top priority is acquiring and retaining customers (73%).
Tied for the top spot is growing overall company revenue (73%).
The third most important priority is addressing the rising expectations of customers and improving customer satisfaction (68%).
Lowering operating costs now only takes sixth place on the priority list (63%).