In this opinion piece, Michael Buckley (pictured below), managing director of Accenture Interactive for Australia and New Zealand, argues that in order for brands to beat their competitors, they must recognise a new, wider playing field.
Identifying competitors has become increasingly difficult for brands. Traditionally, a business may have compared itself to direct competitors, however the lines have become blurred due to rapid innovations in technology and digitisation. As a result, customer expectations have become fluid across industries, and we now expect to see the impact of design and technology in all areas of our lives.
To beat both traditional and newly emerging competitors, brands need to identify what drives loyalty and changes in purchasing behaviour. Our work with clients has pointed not to pricing or advertising, but to customer experience – companies with a strong experiential element are outshining traditional players.
Exceptional customer experiences offered by brands such as Amazon and Spotify have raised the bar for businesses in all sectors. For example, Amazon’s short delivery windows have set our expectations for immediacy, not only for delivery but also through omnichannels’ enabled communication. Meanwhile, curated features like ‘Follow Friends’ and ‘Discover Weekly’ from Spotify have granted users a personalised offering.
In short, experience has become the new benchmark for valuing brands. In the age of the customer, how brands respond to and make customers feel is becoming the crux to remaining competitive.
Brands are recognising they need to catch up, with a recent Accenture survey revealing 76 per cent of CEOs agreed they need to be more proactive in disrupting their own industry. Brands must ensure they are providing experiences for consumers that can contend with the new generations of competitors. It’s no longer enough to create something that people like; brands must also build experiences that people love. According to Accenture research, 40 per cent of brands agree that their customer experience is inconsistent across channels, and only one third believe their data and analytics are differentiating. By merely focusing on direct competitors, and even experiential competitors, companies still risk falling prey to the crisis of customer experience currently felt by struggling CMOs.
Accenture Interactive and Fjord have created a way to measure ‘brand love’, accounting for business disruption and rapidly changing consumer expectations through the development of its Love Index. The report has determined love and brand experience affinity can be categorised into five dimensions to help determine where brands are succeeding and where they’re falling behind.
Netflix scored as the most loved brand in the world – a digital company that is setting the pace for all others, regardless of vertical. Netflix has bridged devices, locations and connectivity to make its services accessible at all times. In so doing, Netflix has made itself dependable and its customers loyal. The streaming service has reshaped the way people consume content. It disrupted TV viewing, cinema-going, storytelling, and pop culture.
Brands need to abandon traditional tools for measuring competitors as digital technologies take hold of nearly every aspect of our daily lives. In order to define new competitors, it is necessary to define the types of competition:
- Direct competition – has been the traditional focus for marketers, which targets brands whose traditional and emerging providers who sell similar products and services. For instance, Tesla is a relatively new direct competitor in the automobile industry.
- Experiential competition – refers to organisations that offer an experience that effectively makes another organisation’s product or service redundant. For example, self-driving cars might make it unnecessary to have private auto insurance. While non-direct competitors, they could significantly impact a tangentially related industry.
- Perceptual competitors – these brands are those competing to shape experiences that have set new expectations across sectors. Previous Accenture research has identified companies like Apple, Uber and Sonos as the top perceptual competitors, but the increasing hyper-personalised services offered by Netflix, Spotify and Amazon have usurped the original tech giants. Customers love these brands, and Accenture Interactive believes they pose a more acute competitive threat than many marketers have yet realised.
For brands wanting to catch up with the experience leaders, it is essential to look at perceptual competition not simply as a threat but as market insight for new opportunity. The best opportunities of innovation often result from a deep understanding of the expectation chasm between consumers’ collective expectations and what the best individual industries have to provide.
For example, while Netflix is not a direct competitor for many organisations, its success serves as an illustration of the role that technology plays in our lives and proves that to remain relevant, brands must develop and drive a digital strategy, even if they aren’t traditionally digital brands.
As the digitalisation of everything will continue to disrupt today’s business climate, catching up with experience leaders won’t be easy, but it can be done. All brands are in pursuit of beating competitors and creating lasting differentiation, however in order to do so brands must recognise a new, wider playing field.
The winning formula is to look outside the industry, bring in key learnings from a variety of industries and let it inform a brand’s next move. Ultimately, brand competitiveness can be achieved through commitment to continuously developing experiences at a rate that is consistent with that of evolving customer expectations.