For Consumers, ”Being Online” Is Becoming A Fluid Concept

Consumer behavior is changing even more rapidly than you might think. In the past couple of weeks, my colleague Samantha Jaddou and I have been analyzing the data for the US version of our annual global series, “Understanding The Changing Needs Of Consumers.” We are seeing not only a decline in the number of US consumers with a computing device (a PC, laptop, or netbook) but also a drop in the amount of time that consumers spend on traditional media like watching TV (on a TV) or reading newspapers or magazines.

One of the biggest revelations in this year’s data was the change in attitude of consumers — particularly younger ones — toward the Internet. Since we started tracking this information in 1997, we have only seen the amount of time spent online increasing. But Forrester’s 2012 data shows that US online adults are now reporting a decline in the amount of time they spend using the Internet compared with 2011 and 2010.

What’s going on? Our analysis revealed that “being online” is becoming a fluid concept. Consumers no longer consider some of the online activities they perform to be activities related to “using the Internet.” In fact, given the various types of connected devices that US consumers own, many people are connected and logged on (automatically) at all times. The Internet has become such a normal part of their lives that consumers don’t register that they are using the Internet when they’re on Facebook, for example. It’s only when they are actively doing a specific task, like search, that they consider this to be time that they’re spending online.

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Smart Body, Smart World: The Next Phase of Personal Computing

Clients frequently ask me about the big picture: How is consumer computing changing, and what’s coming next? My new Forrester report, published today, takes on that question. It’s called “Smart Body, Smart World,” and it describes the paradigm shift in computing that we see happening now. Computing has evolved from the mainframe to the desktop to the shoulder bag to the pocket, and now computing is taking over new frontiers: Our physical bodies and the physical environments we inhabit.

When we look at new, sensor-laden devices (SLDs) like the larklife or Progressive Snapshot,we see the beginnings of a new phase of personal computing that will transform the way we live and work. Sensor-collected data, when combined with intelligence and advice, will influence our decision-making and self-expression in domains as diverse as health, finance, shopping, navigation, relationships, work, and communication. SLDs could take any shape; in this report, we talk about them in two broad categories:

  • Wearables. “Wearables”—devices worn in or on the body—include accessories like Google Glass or the Nike+ FuelBand, but can also include electronics actually enmeshed in our skin and organs like the “electronic tattoos” developed by Nanshu Lu at the University of Texas at Austin, or the heads-up display contact lenses developed by researchers at Washington University (one of whom, Babak Parviz, is now leading Project Glass at Google). 
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Microsoft Surface RT: $499, On A Slippery Slope

Today, Microsoft announced pricing and availability for the Windows RT version of the Microsoft Surface ($499 for 32GB, not including the “Touch Cover,” available for preorder today, shipping 10/26). This product is intended to be a pure consumer play; Microsoft also plans to launch a Windows 8 version of the Surface, aimed at enterprises, for which it has not yet announced pricing. Yesterday, I spent the day with the Surface team led by Steven Sinofsky and Panos Panay, and I learned many things: Sinofsky is from Florida, for example, and when he stands on a Surface that’s attached to skateboard wheels, it doesn’t break. I learned about the importance of optically bonded displays, saw nifty 3D printers making plastic models, and heard about the many trips to China required to perfect the Surface manufacturing process. I was told many examples of the Surface team’s attention to detail, down to the sound design of the kickstand closure.

I did not hear, however, the answers to the most pertinent questions asked by our clients, many of whom are product strategists in Microsoft’s partner ecosystem (OEMs, ISVs, and potential app developers like media companies, banks, and retailers). Will Surface expand distribution beyond Microsoft’s stores and website? If Microsoft believes it’s making the “best hardware for Windows,” as Sinofsky told us, how does it expect its OEM partners to respond? No comment on both fronts.

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Q&A with Mike Boush, VP, eBusiness, Discover Financial Services

Earlier this week I caught up with Discover’s Mike Boush to talk about his keynote at the upcoming eBusiness Forum, where he’ll explore innovations in eBusiness at Discover. Here’s a snippet of our conversation, and a sneak peak of Mike’s session at the event:

Q: What digital initiative have you undertaken in the last 12 months that you're most excited about?

A: I love what we're doing with partnerships online. It's creating a whole lot of value for customers and, frankly, getting us out of the "must be built at Discover" mentality. It started with an integration with PayPal in order to deliver peer-to-peer payment services. The program leverages PayPal’s huge delivery platform, and customers love it. Then we introduced an integration with Amazon that lets customers pay for their Amazon.com purchases with the cash they earned through our Cashback Bonus rewards program. This really highlights the difference between competitors' "points" programs and our straightforward cash, and the transparency shows just how great our program is. And recently, Google announced our integration of Discover card enrollment into the Google Wallet from our website, which is convenient for customers and helps position us in the mobile payments space. These integrations are just a sample of what we've done, but they become powerful illustration of what we can do when we team up and innovate with other great companies. 

Q: What gets in the way of delivering the right experience to your customers?

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New Analyst With A Passion For Shopper Marketing

For the past couple of years, I’ve been serving CMO and marketing leadership professionals here at Forrester in a supporting role and, in particular, researching shopper marketing and the path to purchase (P2P). I'm excited to share that, going forward, I will be an analyst on the CMO and marketing leadership team. As an analyst, I will have the opportunity to focus my time and research agenda on helping marketers better understand the true potential and business implications of shopper marketing and P2P initiatives, and I am fired up to get started!

Over the next few months, look for reports about:

  • What the future of shopper marketing looks like.
  • The impact of digital on customers’ path to purchase.
  • How to organize and hire for engagement-based marketing.
  • Key criteria to self-assess and benchmark performance.
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European Brands are Embracing the Cross-Touchpoint Reality

I had the pleasure of presenting an evolution of our Agile Commerce research last week at the Internet Retailing conference in London. It was an interesting event on a number of fronts, but my key take-away from the event was a very positive one.

eBusiness executives in Europe have definitely woken up to the Agile Commerce message.

We can’t claim all the credit at Forrester, but I definitely got the feeling from listening to my fellow panelists on the Customer track present their stories that they were in the same place as we are now, at least in terms of strategic intent, if not yet in execution:

  • Simon Smith, Head of Multichannel Experience at O2 Telefonica described how he is bringing a service design ethos to delivering both consumer and employee experiences. Telefonica aims to design service experiences that are Individual, Relevant, Thoughtful, Reassuring and Amazing (SUPER, anyone?), and what was the most interesting piece about their story was that these experiences are designed from an outside in, customer first perspective before any of the individual touchpoints are designed. By basing these experiences on common personas and a wealth of analytical data, Telefonica then overlay touchpoints as appropriate, enabling them to step out of the discussion about “should we or shouldn’t we develop this or that functionality on this or that platform?” and into the more relevant discussion about “what touchpoints and experiences most make sense for our customers?”
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Softbank Acquisition Of Sprint Will Shake Up Customer Experience In The Wireless Industry

Softbank, which owns Japan's third-largest mobile carrier, just announced that it will buy a 70% stake in Sprint Nextel. What exactly will that mean for wireless customers?

First, a little background . . .

In our new book, Outside In, my co-author Kerry Bodine and I describe the customer experience turnaround that CEO Dan Hesse engineered at Sprint. By relentlessly identifying the top problems that customers called to complain about and then systematically eliminating those problems, he took the company from having the lowest customer satisfaction rating of any major US carrier to having the highest customer satisfaction rating. Fewer unhappy customers meant fewer calls to Sprint's contact centers. As a result, Hesse recently reported that Sprint saves $1.7 billion a year from averted call center contacts.

Hesse’s current challenges have centered around shareholder displeasure with the cost of licensing the iPhone and the cost of building out Sprint’s high-speed network capabilities. As I said in a previous blog post, that lack of shareholder support seems strange to me. Isn't it obvious that it's critical to offer customers the smartphone they want and a fast network with a lot of capacity to support that phone — especially in a world where they have so many choices? It should be.

In contrast to current Sprint investors, Softbank President Masayoshi Son understands that smartphones and the networks that fuel them are essential: Not only is Softbank already building a high-speed network to help it compete in the smartphone war in Japan, but also Son said that the iPhone 5 was a trigger for the Sprint deal.

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It’s Time To Prioritize Market Insights Evolution

Market insights professionals typically have to make a lot of decisions around how to optimize a limited budget with high (and ever increasing) demands for insights. Which stakeholders? Which projects? Which methodologies? Which vendors? Which tools? The decisions facing market insights leaders are tough ones, and prioritization is an imperative.

Unfortunately, what often doesn’t get prioritized is the evaluation and development of the market insights organization’s own capabilities! Without investing in itself, market insights runs the risk of getting stuck in a vicious cycle:

In the past months, Forrester has researched and analyzed how market insights professionals can turn this around. We have just published the first six chapters — and an executive overview — of the Market Insights Optimization Playbook. What steps and guidance are shared in these reports? They will help you:

  • See where you need to be. Forrester provides you with a vision of what market insights can become, and what it needs to become, in order to keep its stakeholders customer-aligned and ahead of competitive disruptions.
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How Do You Transform Marketing From A Cost To A Profit Driver?

These days, the CMO’s job is more challenging than ever. With the explosion of marketing channels and the rise of the empowered consumers, marketers are under more pressure than ever to spend their budgets optimally and track ROI across the entire marketing mix. The wealth of data available for digital media has also raised accountability expectations for all marketing channels to a point where CEOs and CFOs now expect all marketing investments (not just in digital) to be measurable and accountable.

How can senior marketers navigate this complex landscape and embrace a data-driven approach to investment decision-making and measurement? 

Powerful tools — like marketing mix modeling — are now available to help marketers harness the power of data to concretely tie marketing to business outcomes. The field of marketing mix modeling vendors is rapidly maturing to help give marketers powerful tools to protect their budgets and reestablish the credibility and power that marketing has on the bottom line.

But how do marketers successfully build and implement a mix model? It’s not enough to merely hire a vendor; marketing mix modeling requires a dramatic internal shift in decision-making processes, measurement frameworks, and cross-functional collaboration. How should marketers engage their IT, finance, and analytics teams to make them partners in the success marketing mix modeling can unlock, as opposed to detractors and obstacles?

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Why Some Companies Succeed — For Now — Despite Their Poor Customer Experience

Last week I got a question via email from one of Forrester’s clients, who asked:

“How do you explain the success of companies that consistently provide a poor experience but perform well financially?”

I wish more people asked this question because it shows that they’re thinking about customer experience in the right context: as a path to profits. Here’s my answer: Creating a superior customer experience is the most important thing that companies need to do. But it will never be the only important thing they need to do.

My co-author and I describe the relationship between customer experience and other factors that lead to business success in Chapter 13 of our new book, Outside In:

“Is customer experience a silver bullet that will kill off all your company's problems and make your stock price soar? No. If there is such a bullet, we haven't seen it. The fact is, regardless of your customer experience, you can still get clobbered by a big, strategic threat like a new market entrant (Netflix if you're Blockbuster) or a substitute product (digital photography if you're Polaroid). That's especially true if the new market entrant or the provider of the substitute product offers an amazing customer experience (Amazon.com if you're Borders or Barnes & Noble).”

When you have a virtual monopoly, you can get away with providing a poor customer experience right up until you can’t.

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