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Because technology progresses rapidly, the systems and processes that brands use to reach their customers, to analyze their customers’ behaviors, and to predict what their customers want evolve as well. This evolution creates an environment of increasing competition, as brands at the top of their industry attempt to adapt to technological changes and challenger brands try to disrupt or displace them with new, more innovative processes. An environment of disruption emerges from the back and forth of leading and challenger brands.
To learn more about this environment, Loyalty360 asked senior level marketers what it means to be a challenger brand seeking to disrupt a bigger player and what the opportunities and challenges of being in that position are. Among the many answers we received, one from Erin Raese, senior vice president of global marketing and growth at Aimia, seemed striking because of her cautious attitude. “I fear that brand marketers,” she says, “by taking on the challenge of being a disruptor, are doing so at the cost of what’s best for their customers. Just because it disrupts doesn’t make it right.”
This attitude tells us that, while disruptive technology may be very exciting, navigating its challenges can be difficult. Furthermore, from the other responses that marketers gave to our questions, we found that brands that successfully handle disruption do three things. First, they evolve their identities to meet the disruptive environment. Second, they seek to differentiate themselves from other brands, and third, they do their best to understand their competitors.
On the subject of brand evolution, Christina Tramontozzi, head of marketing at ZyloTech, says, “Using data to better engage customers and create opportunities that have only existed by channeling this resource is paramount to our customers’ journeys with us. We leverage the data-driven insights about our customers into stories that create connections and trust about our brand. When incorporating both the art and science of marketing, we unleash the authenticity, personalization, and real-time interactions that customers today expect.”
In other words, brands that use up-to-date strategies to create narratives and trust surrounding their brand identities have a better chance of surviving than brands that don’t. Once, all a brand needed to do to be successful was establish a strong identity and pull in revenue from name recognition. However, in an environment of disruption, a brand needs to align its identity not only with its services but with its customer expectations as well. This may require some brands to completely change their positioning. Others have doubled-down on their identities to achieve greater recognition. In either case, brand evolution requires that brands align their identities with their goals.
Bernard Chung, senior director of solution marketing at SAP, puts it this way. “In the beginning, organizations focused on the brand and the brand strength to engage with their audiences. But today brands must be a lot more pervasive and immersed in our day-to-day lives. Brands have become more than a thing off in the distance. [They are] much closer objects [with which] many of us can develop a relationship.”
Brands also need to differentiate if they are to survive in a disrupted environment. That is, brands need to set themselves apart from their competitors. This could be something simple, like offering a similar product at a lower price. Creating a unique customer experience, while more complex, might produce greater benefits, however. The challenge of disruption is effectively listening to the market, to what the customer wants, and differentiation may require a brand to anticipate these wants. Still, even if a brand anticipates, it must also be able to capitalize on that knowledge by being the first organization to market or by creating an incremental fix. This is the core of differentiation: being noticeable to the customer.
Kate Hogenson, senior loyalty consultant at Kobie Marketing, says, “What we are seeing in the marketplace is that companies are commodifying their brands by looking too closely to match their competition. They should be focusing on differentiating instead. In a shifting market, brands should work on developing programs that engage customers across all touchpoints and devices to deliver a continuous and more personal brand experience.”
Erin Raese, however, prefers a different term, distinction. “It is not differentiation but rather distinction that brands need to strive toward,” she says. “You can differentiate a price but as soon as you do, someone will beat you. True distinction is where you’re creating a unique value for your customer. In today’s world, brands need to become a part of their customer’s lifestyle.” Regardless of term, Hogenson and Raese seem to be advising the same thing: improve the customer’s experience through personalization, through a unique, brand-to-person relationship.
Lastly, brands that successfully navigate the disrupted environment understand their competitors. This means that they are able to predict where the market will go and which organizations will come out ahead as the market changes. It also might mean predicting what products and services competitor brands will release. However, a brand really can’t begin to evaluate its competitors until it has solidified it own identify and established a niche in the market.
“I caution against focusing too much on competition,” says Raese. “Often, brands become followers and can chase each other right down the rabbit hole. My advice is definitely to watch your competition, but make sure you know who you are first. Make sure you know your customer. Then watch your competition with a discerning eye for the unique and creative aspects you can leverage to make your brand better.”
All of this suggests that successful brands have an excellent understanding of their own identities, the market, and their competitors. Without this knowledge, they can neither evolve, differentiate or compete. However, brands require another element if they are to be truly successful. “Affinity, fondness, and love are all core aspects of being human,” says Ken Greer, CMO of Augeo Marketing. “Most potential disruptive ideas fail not on the merits of the idea itself but because it never achieves user love. When we introduce a disruptive innovation, we disconnect users from their comfort zone. We need to make sure to reconnect those users back to something even more comfy.”
The full executive report on disruption can be downloaded here: https://loyalty360.org/content-gallery/research-and-reports/executive-perspectives-disruption-(1).
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