Sustainable Competitive Advantage in 2015: How customer-first - PowerPoint PPT Presentation

Sustainable Competitive Advantage in 2015: How customer-first science is transforming the way companies achieve a superior position

Audience Question What particular piece of technology produced this duplicate?

Audience Question What particular piece of technology produced this duplicate?

Audience Question Hectograph – A printing process which involves the transfer of an original, prepared with special inks, to a pan of gelatin or a gelatin pad pulled tight on a metal frame. Invented in 1869 by Mikhail Alisov.

Hectograph vs. Copy Machine

I NTRODUCTION : P OINT I: How would you interpret the following We need to understand the unprecedented opportunity to know our customers data set?

1 The Unprecedented Opportunity W E ARE IN THE EARLY STAGES OF ANOTHER REVOLUTION IN THE HISTORY OF EXCHANGE .

1 The Unprecedented Opportunity Key Observations 1. Earlier changes were driven by stored communication ; then by computational power.

1 How would you interpret this dataset?

1 Cuneiform Script Cuneiform script is one of the earliest • known systems of writing, distinguished by its wedge-shaped marks on clay tablets, made by means of a blunt reed for a stylus. This tablet represents what would be • approximately 1,000 bits of data today.

1 Cuneiform Script Vs.

1 Cuneiform Script If you stacked an 8GB thumb drive’s equivalent of cuneiform tablets one on top of another, you could make it to the moon and back.

1 The Unprecedented Opportunity Key Observations 1. Earlier changes were driven by stored communication; then by computational power. 2. The next revolution will be powered by the increase of stored communication, and of computational power, but especially by connectivity . 3. Every thing will have a brain and every brain will talk to everything.

1 The Unprecedented Opportunity The Consumer Every thing will have a brain and every brain will talk to everything.

1 The Unprecedented Opportunity W E ARE IN THE EARLY STAGES OF ANOTHER REVOLUTION IN THE HISTORY OF EXCHANGE . T HE W EB CAN TRANSCEND ITS ROLE AS A CHANNEL AND BECOME THE GREATEST BEHAVIORAL LAB IN THE HISTORY OF MANKIND .

1 The Unprecedented Opportunity Key Observations 1. A myriad of decisions are occurring online and every single decision can be patterned into rich predictive insights.

1 Experiment: Background Customers By evaluating the decisions in the conversion process, Customers we were able to 85% 95% 70% Value Proposition 45% 35% predict that there is 10% 30% 25% Customers 5% 15% 30% something causing 55% 65% 90% the customer 75% 70% Customers concern and/or difficulty at this precise juncture of Customers the process. * Exact Completion and Abandon Numbers have been Anonymized

1 Experiment: Background Experiment ID: TP1568 Record Location: MECLABS Research Library Research Partner: [Protected] Research Notes: Background: An online printing company that specializes in delivering printed marketing materials with minimal turnaround. Goal: To increase the number of purchases online. Research Question: Which product page will result in the largest purchase rate? Test Design: A/B Variable Cluster test.

1 Experiment: Side-by-side Treatment Original C = 4m + 3v + 2(i-f) - 2a

1 Experiment: Results 87.4% Increase in Conversions The treatment page increased the rate of conversion by 87.4% Design Conversion Rate Control 4.03% Treatment 7.55% Relative Difference 87.4%  What you need to understand : By re-sequencing product and process information, the new product page template achieved an 87.4% increase in conversions.

1 Experiment: Results Because the changes did not alter CMS content, they were further tested across additional SKUs 9.4% 5,368% IN CONVERSIONS 87.4% IN CONVERSIONS IN CONVERSIONS 19% 34.6% IN CLICKTHROUGH IN CLICKTHROUGH

1 The Unprecedented Opportunity Key Observations 1. A myriad of decisions are occurring online and every single decision can be patterned into rich predictive insights. 2. The Web should be considered first , not just in campaign planning, but even in product development.

1 The Web as a Laboratory Often, we view our website as simply a channel to be utilized after the development of a product. Behavioral Creative Campaign Media Digital Product Development Brief Planning Placement Promotion Testing Normative Product and Marketing Develop Progression

1 The Web as a Laboratory However, the Web should be utilized as a strategic customer lab to determine the most viable product and marketing strategy. Behavioral Behavioral Product Creative Campaign Media Digital Development Brief Planning Placement Promotion Testing Testing Normative Product and Marketing Develop Progression

1 The Unprecedented Opportunity Key Observations 1. A myriad of decisions are occurring online and every single decision can be patterned into rich predictive insights. 2. The Web should be considered first, not just in campaign planning, but even in product development. 3. The Web is no longer a piece of the marketing mix. It permeates every element of the marketing mix.

1 The Web Permeates Every Element 2013 100% The traditional view of e-commerce Other (3.7%)* Percent Annual Sales E-commerce and m-commerce growth 80% • rates are significantly cannibalizing retail. By 2016, online and mobile sales are 60% • Brick-and-mortar (78.1%)* predicted to grow by as much as 42.3%. 40% Conversely, retail sales are predicted • to shrink by 11.5%. 20% Mobile (5.2%)* Online (13%)* Channels RIS News, 2013 Cross-Channel Tech Trends Study in partnership with Edgell Knowledge Networks, Oct 8, 2013, courtesy www.em\Marketer.com

1 The Web Permeates Every Element 2016 100% The traditional view of e-commerce Other (4.9%)* Percent Annual Sales E-commerce and m-commerce growth 80% • rates are significantly cannibalizing retail. By 2016, online and mobile sales are 60% • Brick-and-mortar (69.1%)* predicted to grow by as much as 42.3%. 40% Conversely, retail sales are predicted • (6.8%)* Mobile to shrink by 11.5%. 20% Online (19.1%)* Channels RIS News, 2013 Cross-Channel Tech Trends Study in partnership with Edgell Knowledge Networks, Oct 8, 2013, courtesy www.em\Marketer.com

1 The Web Permeates Every Element 2017 100% The evolving view of e-commerce By 2017, 56% of all offline sales will be Percent Annual Sales • 80% influenced by the Web. Offline sales Over 90% of customers ages 18-43 use a • 60% smartphone while shopping in store. Web-influenced 78% of respondents reported researching offline sales • online before purchasing in store. 40% 35% of shoppers who research on mobile • purchase in-store. 20% Online sales 93% of people who used mobile to research • go on to make a purchase. Channels 1 Forrester: US Cross-Channel Retail Forecast, 2012-2017, October 29, 2013 1 Turning Showrooming into a Customer Engagement Opportunity, Edgell Knowledge Network, December 2012

1 The Web Permeates Every Element The evolving view of e-commerce “Getting into data, analytics, or mobile isn’t even a decision anymore, so we should stop calling it e-commerce and call it just commerce.” -Chris Fletcher, Research Director, Gartner “Macy’s has stopped breaking out its online sales, taking the position that stores and the web are now so interconnected that it’s not meaningful to separate sales by channel.” -Macy’s 2013 Annual Report 1 Turning Showrooming into a Customer Engagement Opportunity, Edgell Knowledge Network, December 2012

1 The Web Permeates Every Element The evolving view of ecommerce The customer has moved from distinct • worlds of transaction (i.e., e-commerce, Brick-and-Mortar) to a single connected world of commerce (c-commerce).

1 The Web Permeates Every Element The evolving view of e-commerce The customer has moved from distinct • worlds of transaction (i.e. e-commerce, Brick and Mortar) to a single connected world of commerce (c-commerce). In the customer’s connected world of • commerce, a change in experience in Change in experience one channel can affect their behavior in another. Change in experience Channels

I NTRODUCTION : P OINT II: How would you interpret the following We need to understand how to leverage this opportunity to secure sustainable competitive advantage data set?

2 Securing Competitive Advantage W HAT DRIVES SUSTAINABLE COMPETITIVE ADVANTAGE IS NOT A PROCESS , A TECHNOLOGY OR A FINANCIAL POSITION ; IT IS CUSTOMER WISDOM .

2 Securing Competitive Advantage Key Principles 1. Company-centric logic is pleasantly irrational . We use it to lull ourselves into a false sense of security. But the hope of our future rests on customer-centric logic . 2. Customer-centric logic is grounded in customer wisdom . All wisdom is a function of pattern recognition . 3. Pattern recognition enables us to extend past experiences into future experiences .

2 Group Activity: Which Email Won? Email B Email A Subject Line: Get Unlimited Access to [Product] Subject Line: Open this now for Special Savings with Home Delivery