Take Our Digital Disruption Readiness Assessment

James McQuivey

Yesterday I took the main stage at our 2011 Consumer Forum here in Chicago to introduce the 500+ members of the audience to digital disruptors. You can read about the guts of my presentation in my blog post and learn more about the effect of digital disruptors in "Beware the Digital Disruptors," my Mashable piece from earlier this week. 

But what I really want you to do is participate in our Digital Disruption Readiness Assessment. It's found at forr.com/digitalreadiness and takes just five minutes to complete. We launched it yesterday as part of my speech, and many thanks to the hundreds of you who have already hit the survey (even those of you who just checked out the first page and didn't proceed; I want you back). The results are already fascinating and will only get better as we get more of you to participate, so please pass this along to your friends and let's collect enough data that I can share more nuggets as they come through. Here's a teaser:

You're very optimistic: 43% think it's very likely that "My company will be a top provider of its goods and services in five years." Yet only 21% of you think it's very likely that "My company will be more innovative than other firms in our industry or category over the next five years." Red flag: How will your company lead in products if it doesn't lead in innovation? 

In our assessment, we ask you to evaluate your industry, your company, and your individual readiness for (or vulnerability to) digital disruption. And here's the real kicker: When we get to the level of the individual, the answers are sure to trigger empathy.

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Meet The Digital Disruptors

James McQuivey

As I write this blog post, somewhere in the hotel below me our Forum team is busily preparing for the opening day of our 2011 Consumer Forum. There I will take the stage as the opening keynote presenter and, although I'm going to be talking about the future, it makes me think about the past. Because in 1999 I stood on a similar stage and offered my first Forrester keynote address, entitled "Meet the Digital Consumers."

Back on that stage, with the help of Forrester's Consumer Technographics survey data, I explained how consumers -- once digitally enabled -- would forever alter the way companies serve them. It's now 12 years later, and everything I said then came true, plus some. I didn't know then about YouTube, Facebook, or Groupon. But I did know that digital consumers would want more benefits, more easily, than they received in an analog world.

Today I'll stand on the stage and introduce people to a new entity: digital disruptors. Because while disruption is not new (just as consumers have always been with us), digital disruption is more powerful than before. It allows more individuals to bring ideas to market more cheaply than ever before. Below is a sneak peek at a key slide from the presentation I'll deliver in an hour's time.

Digital product disruption is better, stronger, faster than before

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Digital Disruption Is Coming Your Way: A Preview Of My Keynote Address

James McQuivey

Join me in Chicago on October 27-28 as I help you prepare for digital disruption.

Not old-school disruption, the kind you've heard of before, that takes years to develop and decades to have its devastating effect. I'm talking about digital disruption -- a better, stronger, faster version of disruption that is running rampant across industries as divergent as book publishing, cosmetics, and auto insurance. Digital disruptors are people and companies that use digital tools to: 1) remove traditional barriers to entry; 2) produce better products and services; and 3) build digital relationships with your customers that forever relegate you to the margins of your customer's thoughts and plans. And they do all of this faster than you can.

It's what makers of the app Lose It! are doing to the dieting business (and what their competitors at Daily Burn are trying to do to the folks at Lose It!); it's what Garmin is poised to do to personal training; it's what our magic mirror will undoubtedly do to the beauty and wellness business; and it's what every digital disruptor is plotting to do to your business right now.

Beat them by joining them. Become digital disruptors yourselves before it's too late. How? By stealing crucial pages from the digital disruptor's handbook. Check out this video summary to hear more about The Disruptor's Handbook.

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Time For Marketers To Move To Adaptive Planning?

Luca Paderni

Marketing planning has changed little in the past century. It's essentially a linear process built on the development of rigid 12-month plans built around brand and channel metrics. This approach is coming increasingly under strain as the combined effects of the growth of digital marketing platforms and a volatile economy demand marketing plans that deliver clear business outcomes and can adapt and improve to meet evolving market dynamics.

Over the past 12-18 months, we have come across several marketing organizations that have decided to do something about this situation and look for new ways to improve their approach to marketing planning by adopting some principles borrowed from a relatively new methodology originally conceived for software development efforts: agile development.

From the interviews that we did with marketers that are experimenting with this new approach, several of the key principles of "agile" development looked particularly relevant to innovating their approach to marketing planning:

  • A clear definition of business outcomes and associated business metrics
  • A dedicated cross-functional team
  • A deliberate test-and-learn approach
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Netflix Offers Lessons For Digital Disruption In Any Industry

James McQuivey

All through the past decade, observers in industry and on Wall Street have offered reasons to discount Netflix’s efforts. Supposed obstacles ranged from Blockbuster to scant streaming options to recent rate hikes on DVD renters. When will these people ever learn? We understand why people cheer against disruptive players like Netflix — it would be nice if we could pretend all these digital disruptions will go away. But they won’t, and neither will Netflix. We’ve written about this in our latest report that people who keep an eye on content strategy will find valuable (see our newest report on Netflix).

But it’s not really written for them – it’s written for people who take an even bigger view, as do we. These people – today’s product strategists – know that Netflix is a powerful example of disruptive digital product strategy and are eager to learn how to act like Netflix in their own context and industry. In our report, we extract three specific lessons from Netflix:

  • Control the product experience. The company that controls the user’s total product experience will win, whether retailer, producer, distributor, or platform. That company will have ultimate control over what options people have, what prices they pay, and what value they believe they are getting. It’s a big responsibility, but it’s one that people charged with product strategy must be willing to accept. Makers of products as wide-ranging as sleeping pills, running shoes, and auto insurance should all follow Netflix’s lead and control the total product experience they deliver.
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Keep Up With The Pace Of Change By Innovating The Adjacent Possible

James McQuivey

We live in a world punctuated by big innovations. From fire and the wheel down to the light bulb and the iPad, we mark the march of history by the steady beat of transformative innovations. Except that steady beat is no longer so steady. The rate at which these life-altering innovations are coming to market is accelerating so quickly that it's no longer sufficient to invoke even Moore's Law to explain them.

Not only are new things being introduced more swiftly than before but consumers are adopting them more rapidly than before. I make my living studying early adopters, but recently I've had to throw many hard-earned lessons out the window. Because in a world where Microsoft sold 8 million Kinect cameras for the Xbox 360 in just two months, traditional definitions of "early adopter" became irrelevant after about week two. 

This is both exciting and maddening. We've spent that last several years watching the acceleration of innovation to figure out what is making this rate of innovation possible and we've discovered that innovating at this pace is tricky, but doable, with the right approach.

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Are Marketing And IT Finally Having A Go At Working Effectively Together?

Luca Paderni

With the increasing richness and complexity that digital channels and social media bring to the marketing equation, senior marketers increasingly realize that, to be relevant in shaping their brands’ interaction with customers, their teams need to embrace new technologies with the help of the IT group.

In my latest joint research effort with my fellow analyst Nigel Fenwick from Forrester’s CIO role, I explore how marketing and IT can successfully work together in enabling organizations to master the customer data flow.

Our early findings were not very promising . . . What clearly emerged from our interviews with CMOs and CIOs was how deeply ingrained the stereotypes about the two teams are. We heard that:

  • IT is the department of “no” and does not care about customers or what’s happening in the market.
  • Marketing is having all of the fun and spending money without rhyme or reason.
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What Amazon Should Do With Its Kindle iPad App

James McQuivey

 

This week, the iPad app world is frantically sorting through some recent changes in its environment. Last Monday, Apple quietly altered its app approval policies in a way that will make publishers much happier. Specifically, Apple has relaxed control over whether apps can access content paid for outside of the App Store’s purchase APIs. The company has also allowed publishers to price however they want, both outside and inside of the app.

In the same week, FT.com released a subscription-based HTML5 web app intended for iPad users that bypasses Apple entirely, giving the publisher its own path to market that does not depend on or enrich Apple directly. The coincidence of these two events is not lost on most of us industry observers and is the topic of a Forrester report issued by my colleague Nick Thomas last Friday. In it, Nick explains why the FT’s move is probably the first of many such moves by the most recognized publishers, even with Apple’s newly announced policy reversal.

But while publishers figure out their next steps for their content apps, there’s one app that no one is talking about but I believe everyone should have their eye on. It’s the Amazon Kindle app. This app violates even Apple’s revised policies and will soon face a day of reckoning when Apple's June 30th deadline for compliance comes up. 

I don’t claim to know Amazon's plans, but I will claim to tell Amazon what it should do:

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Barnes & Noble Upgrades Nook Color Today, Sets A New Bar For eReaders

James McQuivey

That's right, I said eReaders. True, it looks like a tablet, runs like a tablet, and delivers a lot of the value that tablets deliver, but the Nook Color's 1.2 upgrade (which is actually a step up to Android 2.2; don't let the numbers confuse you too much) is really a foreshadowing of the future of eReaders, not the future of tablets.

First, the facts. With the new upgrade that will be gradually pushed out to all existing Nook Color devices for free over the next few weeks (or you can download now at www.nookcolor.com/update), the folks at B&N have added some very useful features: an integrated email client, Flash 10.1 support, a curated Android app store (see sidebar), and an improved user experience through a myriad of tweaks. These upgrades make the Nook Color look more and more like a tablet, with a very attractive $249 price point to boot.

Must the iPad now cower in fear? No, not really. Because even at this price point, the Nook Color remains a smaller, less powerful tablet than the iPad. And as we've seen, the range of competitors coming in after the iPad's territory are coming in at higher prices with more powerful features (for example, last week I dropped $529 for an LG G-Slate from T-Mobile with 3D video camera and 4G data plan). The tablet market is gradually moving into higher-power features, not lower-power experiences.

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Highlights From My Latest Report On Loyalty Marketing

Luca Paderni

We have just published my new report on loyalty marketing: "A New Approach To Brand Loyalty."

From the interviews with more than 50 marketing leaders, we have learned that more than 40% of chief marketing officers (CMOs) admit that their brand loyalty programs underperform or produce erratic results, or they simply do not know how the programs are performing. The survey also shows that for most CMOs, loyalty marketing is often seen as a means to an end, not a strategy, and that their approach, while necessary, has unclear objectives and focuses too much on short-term financial goals.

Other key findings from the report:

  • Marketers are primarily focused on customer acquisition (65%), increased brand awareness (40%), and marketing return on investment (39%), as opposed to initiatives addressing customer loyalty, such as increasing customer retention (31%) and customer lifetime value.
  • The majority of respondents indicate that customer retention (79%) and revenue growth (53%) are the key metrics used by senior management to evaluate loyalty marketing initiatives, as opposed to Net Promoter Score (24%) and customer satisfaction (24%).  
  • Lack of differentiation (91%) and promotional clutter (73%) are seen as the main reasons why loyalty initiatives are often not delivering the goods. For more than half of the respondents, loyalty marketing initiatives are not aligned with the brand they are promoting.
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