An unlock is the discovery of an accelerant for the brand, product, or service invisible in plain sight. In May 2020, Pr Scott Galloway wrote that “in the last 20 years, there have been three unlocks in the business world that have created over $500 billion in shareholder value” (Apple Store, Amazon Prime, Walmart ClickCollect) and that the 4th one was revealed in April 2020 at Amazon shareholders’ call: Jeff Bezos told investors that the $4 billion in profits they were expecting would be reinvested in developing the earth’s first “vaccinated” supply chain.
The vision is bold (at-home Covid tests, plasma donors, PPE equipment, distancing, additional compensation, and protocols to adapt to a new world) and examplifies the definition of great strategy: “cuts a swath between market conditions and a firm’s assets. Put more simply, strategy is a firm’s answer to the following question: What can we do that is really hard?“
In July 2020, Think with Google consolidated consumer behaviours stats and the impact on business with McKinsey report & BCG research in COVID-19 has accelerated digital adoption — the time to transform is now.
Businesses must embrace digital transformation to keep up. Nearly all organisations, whether traditional companies or startups, are reorienting their business models to be more digital as a direct result of the impact COVID-19 has had on changing consumer behaviours.
McKinsey Consumer Sentiment Study showed a framework to calculate potential next normal usership (with growth x intent to continue percentages).
BCG outlined that Companies don’t need to reinvent themselves to gain uncertainty advantage. They just need to become better at detecting signals, more decisive in acting on them, and more proactive in building practices that foster resilience. The 3 sources of uncertainty advantage:
- Signal advantage. Out of a desire to avoid undue risk, businesses can get locked into a cycle of analysis paralysis, delaying key decisions until they acquire information that they feel they can trust. Yet a small cadre of organizations with superior sensing capabilities have been able to move forward with greater confidence. Instead of tracking 5 or 6 variables, for example, as many organizations do, they track 70 or 100. Advanced modeling tools allow them to interpolate this data, develop early-warning systems, and draw patterns out across different time horizons to see how impacts grow, weaken, or mutate.
- Decisiveness advantage. Businesses with uncertainty advantage don’t require precision to act. Individuals are encouraged to develop not only out-of-the-box ideas, including new business models, products, and services, but also the conditions for success—for instance, external coalitions, joint ventures, lobbying, and other factors that could help nudge the desired scenarios into reality. Establishing the right practices and rewarding employees for their contributions are also crucial. These steps build organizational learning and inculcate a “what if” mindset that conditions teams to consider innovative alternatives as part of business as usual.
- Resilience advantage. Businesses with resilience advantage cultivate options, agility, and attentiveness, which allow them to devise multiple ways to reach their goals. They also prepare their workforce. The 25 companies in the S&P Global 1200 Index with the strongest TSR over the last decade recovered faster from the 2008 crisis and rebounded higher, ending the decade with EBITDA margins that were more than five times higher than those of their peers. These companies proved that crisis can spark transformation.
Starting suggestions: Empower employees to challenge the status quo. Questioning existing norms and ways of working can feel like a high-risk, low-reward proposition for many employees. To elicit the best inputs, leaders need to model curiosity, create playful workspaces, and forge an active learning organization that celebrates and rewards experimentation.
HBR provided examples of How Businesses Have Successfully Pivoted During the Pandemic eg. Spotify, restaurants, Unilever P&G portfolios.
While BCG reminds us that Only 30% of Digital Transformations Are Successful. In Flipping the Odds of Digital Transformation Success, the extensive research and examples show the need to perform well on all six essential success factors:
- An Integrated Strategy with Clear Transformation Goals
- Leadership Commitment from CEO Through Middle Management
- Deploying High-Caliber Talent
- An Agile Governance Mindset That Drives Broader Adoption
- Effective Monitoring of Progress Toward Defined Outcomes
- Business-Led Modular Technology and Data Platform
Google Digital Marketing Maturity Benchmark developed in partnership with BCG helps organisations analyse where their business sits on the path to full data-driven marketing and attribution.
These eight charts show how COVID-19 has changed B2B. B2B leaders that commit to further digitizing their go-to-market models should derive competitive advantage in the form of more—and more loyal—customers than their slower-moving peers.
This reminded me of a business fundamental: customer LTV. PSFK shared in July 2020 that consumers who are more connected to a brand are 76% more likely to buy from it over competitor, 57% more likely to spend more; And compared to satisfied customers, emotionally connected customers have a 306% higher LifeTime Value and will recommend brands at a much higher rate (71% vs. 45%). More recently, in October 2020, in Creating Customer Relationships That Last, research shows that 88% consumers would shop at retailers with a premium loyalty program vs a competitor offering lower prices. Elevated expectations on post-purchase experience is a huge opportunity to attract new audiences, deepen relationships with existing customers.
It was music to my ears to listen to Horst Schulze, The Ritz Carlton founder, talk about loyalty and acknowledge CLV on HBR IdeaCast Setting a High Bar for Your Customer Service. So obvious that retention costs less than acquisition but so many few leaders / companies talk about it.