I have often heard the phrase, “What are the three things that keep the CEO awake at night?”. These days, I believe there are three letters that keep CEOs of most major industries awake: OTT (Over The Top).
OTT players are behind the major force that is redefining the industries which is rapidly shaping customers’ behaviours now. Let’s see how:
The ATM has been the window to bankers’ customers; for the retailers, it has been the POS terminals; whilst the TV has been the window to the broadcasters and Pay TV providers’ customers. Let’s visualise a scenario wherein the CEOs of all these and other industries are staring out their office windows pondering about the future while their customers walk right into the retail store, take their smartphones out of their pocket, scan the bar code of the item that is meticulously stacked up on shelf and compare prices of the item on eBay, watch a YouTube demo of the product, decide to buy the item 5% cheaper at eBay and pay for it through PayPal - all within the comforts of the brick-and-mortar shop – and end up walking out of the store feeling happy about their frictionless Over The Top shopping experience! Not to be left out, the CEO of the telecom gazes at the balance sheet watching the top line and bottom line dwindle while the OTT players are gaining their customers’ mindshare, leaving the telco as a mere “dumb pipe” carrier!
Sounds grim! Yes, much of it is real but a lot can be done by these businesses using analytics to understand consumer behaviour and enhance the customer experience to retain them. You only need to look at eBay’s Red Laser, Amazon’s Price Check, Square’s non-merchant system payment and how Venmo enables splitting a restaurant bill at social dining occasion and peer-to-peer money transfer that leverages the Facebook friends-circle, are all shaping the future and shaking the industry ecosystem. All this happens on a single window to the world of commerce that is in the hand of the consumer – the Smartphone!
It is probably unthinkable for 100+ year-old companies such as Kodak, the Apple and Google of its time, to be at the verge of collapsing under its own weight. In 1975, Kodak invented the digital camera, the same year that Theodore Levitt wrote his famous article Marketing Myopia in the Harvard Business Review, but Kodak executives did not appear to have read it! It’s a pity, Kodak did not see the success of its own innovation, left it for its competitors to claim the glory (possibly because Kodak thought it was still in the chemical business and failed to see the shape of things to come!). Kodak was not alone; Polaroid, Borders, Blockbuster et al. have been recent victims of their own success!
Theodore Levitt talks of the fateful times for several industries leading up to the 1970s (i.e. railroad, electric utility, grocery store chains, the Hollywood et al.). What is interesting is that history seems to repeat itself, but only the players are different now!
Several industries are at cross-roads now, more than ever before. What business is the telco in? Are they in communications or media or retail or banking? For that matter, what business are the brick-and-mortar retailers in? More importantly, what signals are they getting from their consumers about changing behaviours? Are these signals falling on deaf ears or going over the top? There is always someone else who is listening to the signals attentively and taking timely action. This time around it will be the OTT players who are paying attention and taking charge!
Businesses have a choice, if they want to overcome the insomnia. Looking into the crystal ball is an option, but that is sure to miss the fingerprints that your customers leave behind with every interaction with your company. Which way you go depends on your ability to connect the dots! Looking at what happened is useful, but analysing why it happened and more importantly, why it did not happen compared to industry norms will provide greater foresight! Checking the rear-view mirrors often helps notice the blind spots as well as to attain a sense of the frustration your customers may be experiencing during the long bumpy ride with your business and may help to prevent them from jumping off the bus at cross-roads!
Some in the industry deny existence of a problem / trend among their customers. I like Theodore Levitt’s quote, “If thinking is an intellectual response to a problem, the absence of a problem leads to absence of thinking”. Analytics helps to uncover problems before they surface. Analytics is not only intellectually stimulating but also promises to see future obstacles on the road for navigating a safer driving experience – or even for survival!