DM Magazine April 2021

6 Five Digital Changes That Are Here to Stay ❱

13 37 Customer Experience Statistics You Need to Know ❱

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VOL. 34 • NO. 4 • APRIL 2021

THE AUTHORITY FOR THE DATA-DRIVEN BUSINESS

DIGITAL CHANGES THAT ARE HERE TO STAY ❱ 10 In Conversation: David Kincaid on Brand Stewardship

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Vol. 34 | No. 4 | April 2021 PRESIDENT Publisher & Editor-in-Chief Steve Lloyd - steve@dmn.ca DESIGN / PRODUCTION Jennifer O’Neill - jennifer@dmn.ca

CONTRIBUTING WRITERS Tom Beakbane Conner Galway Sean Claessen Toma Kulbytė Michael Dickenson Stephen Shaw

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ADVERTISING SALES Steve Lloyd - steve@dmn.ca

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A CX Game-Changer Puts Loyalty in the Fast Lane

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FINDING A LIFELINE

How SEO and Analytics Help Build eCommerce

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Digital eCommerce:

Everything Changed, Nothing Was New

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37 Customer Experience Statistics You Need to Know and Consider in 2021

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A Troubling Engagement Capacity Gap Emerges

DIGITAL MARKETING

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Brand Stewardship:

An Interview with David Kincaid, Founder and Managing Partner of Level5 Strategy

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Part 2.

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Five Digital Changes That Are Here to Stay APRIL 2021

Consilience: A New Way to Understand Human Behaviour

COURTESY TOM BEAKBANE

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CUSTOMER EXPERIENCE

A CX GameChanger Puts Loyalty in the Fast Lane

BY SEAN CLAESSEN

W SEAN CLAESSEN is Chief Strategy Officer of Bond Brand Loyalty. He joined Bond in 2008, as Executive Creative Director, and has taken years of millennial marketing, experiential excitement and an appetite for innovation into new realms. He now draws on Loyalty and Customer Experience vocabularies to innovate better in-store, digital, and people-related solutions that create return on investment and return customers.

❱ DMN.CA

ith the online holiday shopping frenzy just around the corner, Bond announced our truly exciting partnership with Uber Direct, Uber’s retail-focused delivery service that just launched in Canada.

For loyalty program members redeeming their points, the collaboration means the days or weeks-long wait for catalogue merchandise is coming to an end.

Our latest purchase and redemption solution delivers rewards in near real time, right to people’s doorsteps.

But what has really arrived is a new, blossoming era of the rethink of the customer journey and experience.

First, let me lay out how we got here. Like a lot of disruption in retail, the road leads back to Amazon.

For better or worse, the online juggernaut has trained people to want their purchases more and more immediately — two days, one day, same day. This has set a new standard in the delivery experience that other retailers have struggled mightily to keep up with.

Now, tech-enabled, last-mile delivery solutions — or what I call “logistech companies” — are empowering retailers of all sizes to get customers their stuff within hours. Whether its tech giants like Uber or regional start-ups such as ShipperBee, these providers give businesses the last-mile capabilities they need to outmanoeuvre and ultimately beat Amazon at their own game. For loyalty program operators, it means they can turbo-charge the purchase and redemption experience, and swiftly meet customers’ rising expectations for speed and convenience.

In the rewards space, physical goods still matter to members (perhaps now more than ever, in the year of home), and redemptions continue to have positive impacts for programs. In Bond’s Loyalty Report, 72 percent of all members have made redemptions, and there is almost a two-fold (1.8 X) lift in satisfaction among redeemers versus non-redeemers.

However, for program operators across the retail, banking, travel and other key sectors, the product catalogue itself isn’t the place to differentiate — they need to differentiate on the experience. Our research from The Loyalty Report found that the top drivers of

loyalty include ease of the redemption process and the time it takes to receive redeemed rewards, which results in a 6.8 x satisfaction lift. That’s giant. In addition, more than two-thirds (68 percent) of loyalty program members find instant retail redemption appealing, and 32 percent are willing to pay a premium to instantly receive rewards. In addition, Uber’s research found that nearly three-quarters (74 percent) of consumers surveyed said same-day delivery increased their brand loyalty. Any way you slice it, some of the most profitable SKUs in retail right now aren’t the actual items — it’s faster delivery.

We’ve said before that a toaster is a toaster is a toaster, and generally speaking, that’s still true.

Getting the experience of getting the toaster right is the way to gain a competitive advantage. And today, that means ensuring it’s easy to use, it’s enjoyable, and it provides immediate gratification.

By connecting the last mile of eCommerce with loyalty, we’re excited about a new era of customer experience. And this is just the beginning. As our partnerships grow and expand, we’ll increasingly blur the lines between traditional eCommerce and rewards, between customer acquisition and retention, and between rewards redemption and impulse purchasing.

Let’s say down the road, a grocery store loyalty program lets members use points to shop at a clothing retailer and get those items delivered immediately — that’s a compelling customer acquisition tool.

Or, if a bank’s credit card program can turn rewards redemption into impulse purchases because of the speed and convenience of delivery — that significantly changes the economics of the underlying loyalty program.

As marketers, we’re all trying to figure out how to meet new expectations and new needs in today’s new ab-normal. One certainty is that the eCommerce landscape has radically changed, and customers’ expectations have changed along with it.

Loyalty mechanics are going to a big part of the new eCommerce and digitally enabled customer journey — and can even help drive it forward.

APRIL 2021

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DIGITAL MARKETING

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Five Digital Changes That Are Here to Stay

BY CONNER GALWAY

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here’s a principle in behavioural sciences that it takes people about six months to adapt to major change. There are various stages, but the general model shows that humans are incredibly resilient and, after a half a year, we will have not only accepted the change, but our minds and bodies will operate as if it were our default state.

That’s about where we are right now with the pandemic. We’re just over six months into it, which means the changes are no longer novel. They’re not temporary inconveniences anymore — we have adapted and we’re acting as though this is business as usual.

At the same time, we’re all starting to build our 2021 plans and, while the idea of a “plan” might seem like a punch line because there is such a mountain of uncertainty between here and pretty much any point in the future, there are some certainties that we can be building on: ❱ DMN.CA

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DIGITAL MARKETING

1

Zoom is never going away

Or, at least, virtual calls aren’t. Zoom has done to meetings what Slack did to inter-office emails.

While a variety of Slack competitors have popped up, the idea that we’d go back to communicating with our co-workers primarily via replies and CCs feels out of the question at this point.

Applications Business travel, as we knew it, will not be making a comeback. It’s time to invest in webcams/microphones as basic business tools.

Meeting attendees are no longer limited by geography.

We should reimagine the meeting structure for a virtual world, ie. better agendas, shorter sessions. There’s an opportunity to get creative: When we can’t impress with catering and fancy stationery, what else can we do to make attendees feel valued?

2

Customers expect high-value digital experiences

Virtual tours, interactive retail, and live support are everywhere, and they’ve become table stakes.

Everyone from retailers to gyms to hotels and realtors have gotten so creative with the way they’re able to deliver a digital experience that draws people in and gives them the interactions that would otherwise be missing.

What holds many people back is the need to be perfect and polished, but value doesn’t come from production. People expect that we’re taking care of them, giving them the information they need, and perhaps even entertaining them. High-quality content is a plus, but it shouldn’t hold us back from creating something that’s going to be valuable.

Applications The website is no longer an informational step in the customer journey — for many businesses, it’s now the destination. Social media is no longer a representation of the brand experience — APRIL 2021

for some, it is the primary brand experience. Customers are looking for more from their digital interactions, which means we have space to deliver them longer videos, more detailed pages, and higher-touch virtual experiences.

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Everyone delivers

Amazon dominated delivery from 2010-2019, and we should thank them for that. They built up people’s habits and their openness to getting just about everything delivered.

Now, there’s space for every small retailer, producer, and even service-based business to be using tools like Shopify to offer directto-consumer retail. ECommerce, in general, has already risen by 30 percent this year, and there is a 0 percent chance that all of those purchases are going to go back offline in the future.

Applications There’s never been a better time to sell online. With Shopify and other eCommerce tools, it has never been easier.

The market is hungry to support small businesses.

People are used to ordering and receiving just about everything.

In many categories, free shipping has become a near-expectation. That doesn’t mean that we all have to eat the costs, but it does mean that we should be aware of the expectation and price or position our products accordingly. Eventually, offline retail will make up the minority share of total transactions.

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Video, video, video

This is certainly not new, but like many trends, the pandemic threw it into hyperdrive. We are so hungry now for richer experiences and more meaningful interactions that images just don’t cut it anymore.

Similarly, in a world where digital is the only touch point that we get to have with many of

our customers, video is the best way we have to forge meaningful relationships with them. Not to mention the fact that TikTok, Reels, Stories, and Snapchat are the fastest growing communication channels, and they all have one thing in common: they’re videofirst. Now, imagine a world that has fully adopted 5G connections and you can see that the trend is only going to accelerate.

Applications Every step in the customer journey can benefit from video, not just the top of the funnel. It’s more important than ever that we understand the various steps in that customer journey. Video can be many things, from shiny brand clips to raw IG stories, educational webinars, and live customer support. Most public-facing video formats are becoming shoppable.

5

Omnichannel, but make it 2021

At this point, the physical experience that we have with brands has been relegated to a small percentage of our total brand experience. Over the past 10 years the idea of an omnichannel strategy has grown in popularity as digital was pulled out of the shadows and we started to appreciate that the Internet wasn’t going anywhere.

Most of the strategy work went into figuring out ways that digital touchpoints like apps, websites, and social media could complement physical retail.

Now that digital is the primary way we interact, our greatest opportunity is to make sure that the physical experience is embedded in the digital one.

Consider how we book a time at an Apple store, receive a live demo, then purchase via the app while we’re on-site. Sure, that’s how a trillion-dollar company can run their customer experience, but consider that hotels and restaurants are no different from those futuristic-seeming stores.

We book online, check-in via an app, pay with a QR code, and receive support with messenger or live chat.

The best omnichannel strategies in 2021 acknowledge that there is a whole ecosystem of customer interactions, and physical may just be one small part.

Applications Does the unboxing experience match our eCommerce store?

When they visit in-person after only interacting online, does it feel familiar? Are we tracking customer purchase behaviour across our various touchpoints? Are we allowing people to choose the method that works best for them?

Business not willing to make the investment Perhaps the most surprising thing to me has been that most businesspeople have accepted that the digital world is now the primary way people interact, but they’re not yet willing to make the same investments in those interactions. That shows up most obviously in the more substantial meetings that businesses host.

Once upon a time, we’d invest hours, or even days of our lives traveling to them — we’d pay for venues, catering, printed materials, and presentation equipment.

Today, those same meetings often consist of a dimly-lit webcam staring up at an executive’s chin while they ask if everyone can see their screen. What if we were to invest half of the planning and resources that went into offline meetings to deliver materials to the attendees, create an elevated video experience, and find other creative ways to engage our audience?

Now, what if we applied that same thinking to every one of our 2021 digital interactions? See my follow up commentary on page 9 of this issue.

CONNER GALWAY is President of Junction Consulting. Conner founded Junction because he saw a need for organizations to expand their thinking about what’s possible for digital value within a business. As Junction’s strategist, he spends his days researching, analyzing, and solving problems with our clients. He shares his latest thinking in our weekly email called The Brief that’s read by executives at many of North America’s most revered brands.

DMN.CA ❰

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ECOMMERCE

FINDING A LIFELINE

How SEO and Analytics Help Build eCommerce

BY MICHAEL DICKENSON

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year into the pandemic, it’s clear that consumers have adopted a “new normal” for shopping — and it’s digital. According to new research

by PSFK, shopper loyalty has changed. Nearly 40 percent of consumers purchased from new brands and retailers online in 2020 and two-thirds intend to remain loyal. Just 23 percent of consumers intend to shift spending back to in-store from retail after the pandemic.

In this disrupted environment where consumer loyalty is up for grabs, business intelligence and data-driven decision-making are key to success. These are musts to capitalize on opportunities in eCommerce, which is projected to grow by nearly 20 percent in 2021, according to eMarketer.

Amid this growth, new performance analytics platforms are needed to drive more profitable eCommerce with better insight into e-analytics and product attributes. Business intelligence solutions for consumer packaged goods (CPG) and retail companies should be zeroing in on, and drilling down into, more detail from the way that consumers interact with your websites and online marketing programs.

Maximize the following: ❯❯ Share of Page – Is your ❱ DMN.CA

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eCommerce SEO working across all search terms, on all sites?

Pricing – Price analysis including item-by-item comparisons, alerts when action needed Trends – detect new trending items Competitors – Capture all product attributes including brand, manufacturer, form, packaging, flavours, scents, nutrition facts, drug facts, etc. We use these attributes to identify competitor items and so should you.

Availability – delivery times, charges and item availability both 1P and 3P fulfilment.

With so many businesses looking to build eCommerce analytics expertise as shopping trends shift, Ironbridge has been working to rollout new systems which address these key factors.

In our ‘new normal’, the most successful online brands and retailers will be those that gain greater visibility into how product attributes, pricing and promotions perform — or don’t. Find what gives you the insights necessary to execute informed shifts in strategy.

Built especially for CPG and eCommerce, our new system, called Line Item, enables a deep dive into e-analytics to help eCommerce

marketing professionals, data scientists and brand managers understand more about share of sales, pricing strategy, product trends, competition, and supply chain attributes.

The idea is to help marketers optimize their eCommerce SEO strategy across all keywords on retailer websites and online marketplaces. They can find out how their brands or items are ranking, if their promotion strategy is working, and if long-tail keywords are worth promoting.

The analytics platform analyzes page share, rank by item, brand, form, in fact by any attribute.

Marketers also want to accomplish a deep dive into each product to capture all attributes to reveal what drives value. These include brand, manufacturer, form, packaging, flavours, scents, nutrition facts, and drug facts.

Product attribute insights can help eCommerce marketing professionals detect competitor activity, including the launch of new items.

Because we track hundreds of items in each product category, the performance analytics platform can help keep tabs on new products, brands and competitors.

The goal is to reveal items that are newly trending, enabling a robust view of the competitive landscape.

Another vital process is for eCommerce marketers need to more fully understand and optimize their pricing. Marketers should compare unit pricing item-by-item across competitors and web sites daily as well as over a specified period for analysis. We can send pricing alerts, including MAP violations that enable adjustments or other actions.

Ironbridge Software has deep roots in the CPG industry. I founded the company to provide a complete service for the CPG industry through database expertise, analytical expertise, and software capabilities. Over the last 30 years, Ironbridge has built its business on the needs of CPG and eCommerce clients, including some of the biggest Fortune 500 CPG brands in the industry.

Today we’re seeing an unprecedented period in which an accelerated shift has forever altered digital buying trends.

Our clients are leaning into eCommerce, and they need the key data that I have described above. We hope that our approach to providing solutions will lead the industry to more accurate and responsive demands upon their providers.

MICHAEL DICKENS0N is CEO and Founder of Ironbridge Software Inc. APRIL 2021

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ECOMMERCE

Digital eCommerce:

Everything Changed, Nothing Was New The pandemic forced a lot of the trends and disruptions that we had all been seeing on the horizon for years to become a reality faster than any of us could have imagined.

We had nearly 20 years to embrace the Internet as an important business tool — it became something that the public was using back in 1991, and by 2011 if you didn’t have a website, you had been left behind. Social media gave us less time, but we still had at least 5 years — Facebook business pages launched in 2007, and most businesses were still making the move to social around 2012.

Both of those shifts were tactical, meaning that they were one arm or one function of our businesses moving into a new realm.

The shift that we’re in the midst of, however, is structural. It’s the fundamental move to digital as the core way that our businesses operate. We now communicate, build communities, create brand experiences, and sell online. Even if the eventual transaction happens in-store, most of the shopping happens digitally, and the customer follow-up, online reviews, and re-purchasing will inevitably happen online.

There are many major trends that we can all see as evidence of this digital transition — here are three particularly interesting ones: 1. The office is a resource, not an obligation The idea of a permanent work from home economy is misguided.

We crave physical interactions — especially the more creative of us — and the most ambitious ladder-climbers will always seek out in-office visibility. The difference will be that because we’ve learned that productivity is not dependant on proximity, we’ll do away with mandatory work hours and the office will, instead, be seen as a resource where staff can use equipment, meeting rooms, and as a space to get away from home. Every business will be connected primarily through digital tools, and all of their vendors, service providers, and even customer relationships will be managed online.

The impact will be that we can work from anywhere because work happens online, but we will be reminded of the creative and productive benefits that shared spaces can bring.

2. Brands will invest in storytelling and community over advertising The basic buy attention & sell stuff model worked great when products and retail space were scarce. When your mattress purchase was limited to one of the fifteen options that your local retailer had in store, the TV commercial for Serta or Sealy was the only way that they could make sure you made the right choice.

Now that we all have unlimited purchase, travel, and subscription possibilities, the brands we choose are more often going to be the ones that have been referred, reviewed, and embedded into our communities. Not to mention the fact that we’re learning of more ad-fraud (see this thread about the $100 million that Uber was wasting), ad blocking, and faulty attribution every day. 2021 is going to be the year where we see APRIL 2021

an escalating investment into content and community, and away from “Buy Now” advertising.

3. Everything will be sold, or booked, online (even when customers are in the store) There is absolutely no need for 1,000,000 square foot shopping malls where you’re forced to wade through crowds in order to get to the commodity product that probably would have arrived already had you just ordered it on Amazon.

The only things that had been holding us back from every business transacting online were: ❯❯ Many customers hadn’t yet got used to online shopping; and ❯❯ It was too technically challenging or too expensive for many small businesses to sell online.

The pandemic took care of hurdle number one for us, and Shopify (and others) have taken care of number two.

That’s not to say that there’s no place for great retail experiences — in fact, experiential retail is about to have its best year yet. Many of the most valuable brands have been built off of the interactions that customers have when walking into their stores. Think of some of 2020’s hottest companies: Apple, Tesla, Peloton, and lululemon — even Amazon is getting into the physical retail game.

The important difference is that when you buy a product or service in any of those stores, it’s seamlessly integrated into every other touch point you have with the brand, and nearly all of those other touch points are digital. This year, every organization, no matter the size, will be transacting digitally or they’re going to lose a significant percentage of their audience.

So what?

This transformation can’t be outsourced. We can’t assign a line item on the budget where we hire a junior employee or add “digital” onto a manager’s job description. In order to take advantage of the opportunities we’re about to see in 2021, every organization is going to need to become a digital-first organization. That’s a way of thinking, planning, and building that we call Digital from the Inside Out. That idea, Digital from the Inside Out, applies to every industry, from retail to real estate, and the way that organizations can embrace it is going to be unique to each of them.

We’ve been fortunate to work with thousands of tourism brands across North America over the past decade, and throughout 2020 we’ve been focused on helping them navigate through perhaps the most challenging economy they’ve ever faced.

Now, it’s time to plan for a new economy, one that’s going to look different from what we were used to in many ways, but will also bring with it a ton of opportunities for creative, ambitious organizations.

CONNER GALWAY, Junction Consulting

DMN.CA ❰

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IN CONVERSATION

Brand Stewardship: An Interview with David Kincaid, Founder and Managing Partner of Level5 Strategy

BY STEPHEN SHAW

A

STEPHEN SHAW is the Chief Strategy Officer of Kenna, a marketing solutions provider specializing in delivering a more unified customer experience. Stephen can be reached via e-mail at sshaw@kenna.ca ❱ DMN.CA

s the world slowly awakens from this pandemicinduced slumber, brands will be facing a very different looking marketplace. They will need to work hard to revive the loyalties of consumers whose attitudes and shopping habits have changed.

The brands that succeed will be those that remain relevant to the lives of the people they serve. Those are the brands powered by an inspiring vision that unites everyone in the company. Responsibility for shepherding the brand is shared enthusiastically across every business unit, not just the marketing department.

Yet most companies today are not governed by any kind of unifying brand vision and purpose. Brand building is seen as a marketing expense. Senior leadership confuses it with advertising. Terms like

unique value proposition, mindshare and brand equity are alien to them. The CFO scoffs at attempts to treat the brand as worth something. Unable to put a dollar sign on brand name recognition, the value of the brand gets lumped together with other intangible assets under the heading of “goodwill” on the balance sheet.

Brand management, as a discipline, grew out of the business practices of the major consumer packaged goods companies in the mid-20th century. Companies like Proctor & Gamble, Unilever, Colgate-Palmolive, General Foods, and Kraft developed systematic product lifecycle methodologies to develop, launch, nurture and retire brands. As the discipline matured, it became tightly integrated with financial and operational planning. Brand managers were schooled in all aspects of business, not just the marketing side of it.

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IN CONVERSATION By the start of this century, however, the strategic focus of most publicly traded companies had swung from brand building to maximizing shareholder value.

Marketers were now being asked to prove the link between brand building, shareholder value and the bottom line. Marketing budgets were deemed to be a discretionary expense, subject to cutbacks. And that has largely been the story of the past two decades, as most major enterprises got hijacked by number crunchers.

Today the attention of financially minded CEOs is riveted on driving up stock value (in large part because their generous pay packages are wrapped up in stock options).

If companies are to survive the disruption that lies ahead, the brand must be the face of business strategy, argues David Kincaid in his new book “The Brand-Driven CEO”. A renowned branding expert, whose early career was spent learning his trade at General Foods, American Express and Labatt during the glory years of brand management, David has witnessed with growing alarm the declining influence of brands.

He urges CEOs to transform their businesses into brand-driven organizations and cultures. In his book he lays out a roadmap for CEOs to operationalize brand strategy and protect their companies from the postpandemic fallout.

Stephen Shaw: Is the message of your book aimed at the CEO who doesn’t take brandbuilding seriously, or the CMO who isn’t taken seriously by the CEO? David Kincaid: Well, it’s a bit of both. As I say to most CEOs, your brand is probably the most underleveraged asset on your balance sheet. In the ’70s and ’80s, the old stalwarts, like Procter and Gamble and Colgate-Palmolive, managed their brands as assets.

I was fortunate enough to be hired by General Foods [today Kraft Heinz] as a brand manager in 1980. When I started there, I was told, “You’re going to work on Maxwell House coffee.” And I thought, okay, well, I’m not a big coffee drinker, but I’ve been seeing a lot of ads for Maxwell House APRIL 2021

coffee with Ricardo Montalbán as their spokesperson. He was very popular then on a show called “Fantasy Island.” And so, I thought, wow, this is going to be great. I might get to meet Ricardo Montalbán at an ad shoot. I was shown to my office — a little hole with a single light bulb. My boss told me, “Here’s your AC Nielsen reports. Here’s your volume shipment reports. Here’s your warehouse withdrawals. Here’s your manufacturing and inventory control report. The coffee and the kitchen are down the hall. I’d love to get any ideas you might have on how we can add half a point to the merchandising margin on roasting ground Maxwell House.”

Shaw: And you asked, “When do I get to meet Ricardo Montalbán?”

Kincaid: No, no. I said, “Well, of course. I’ll get right on that.” I didn’t even know what the hell he was talking about. Well, I learned very quickly what they were, because that information was used to run the business — not the ads with Ricardo Montalbán. Our job, as brand managers, was to sustain growth in a very competitive marketplace. So, you were trained on how to run a business. It was the breeding ground for the next generation of CEOs. But in the 40 years since, with all of the mergers and acquisitions, the costcutting, those training grounds no longer exist. Brand management has devolved into marketing management.

Shaw: And CEOs are now technocrats who came out of the finance or operational ranks.

Kincaid: They’re hands-off, exactly. You know, a brand is a very precious asset. The accountability for managing the value of that asset has to be held at the highest levels of the organization, starting with the CEO. During those consolidation years, unfortunately, the job of brand-building was given to marketing. The CMO’s role was to do the new website. Not market trending; not opportunity analysis; not understanding where the market is headed; not developing new value propositions; not mobilizing resources to deliver on unmet needs. That was not the role of the CMO. That’s why

marketing went from being an important value driver to a cost center — a variable cost that can be cut in a bad year. Brand building is not just about putting out some ads to make people aware of the brand. It’s about creating a leadership position in the market.

When Apple comes out with a new phone, what makes people stand in the pouring rain outside one of their stores so they can be one of the very first to buy it? Apple has created an emotional dependency.

That’s the real power of brand building.

Shaw: Going back to that earlier era at General Foods, what was the demarcation line between brand management and marketing at the time? The chain of command?

Kincaid: I reported up to a category manager, responsible for an entire product portfolio, whether it was coffee or cereals.

And that manager reported up to the senior vice president of marketing and sales, who reported to the CEO. And our CEO would spend time walking the floors talking to brand managers, asking, “What’s the health of our business? Where’s the consumer going? How is the market shaping up? Who do we need to defend against?” So, brand management was a very strategic role.

Shaw: When did that start to change?

Kincaid: I’d say late ’90s, early 2000s, driven by the tech bubble. You may remember all of those tech companies trading at absolutely unreal multiples because of market speculation.

That had a huge ripple effect. It raised growth expectations for everyone, not just the tech sector.

Suddenly, the quarterly analyst calls became hugely important to a CEO and a CFO because they had to explain or defend their growth rates. And that external pressure led to a strategy of growth through acquisition. CEOs could say, “Look, I’m keeping pace with the market.” And in much less time than launching a new brand would take. That led to a different type of CEO whose focus became brand acquisition and consolidation, not brand building.

Shaw: Your book presents a new strategic model for CEOs to adopt. Can you provide a brief overview of that new model?

Kincaid: Yeah. And let me be clear: I’m not suggesting we go back to the good old days. It’s OK to have a financially oriented CEO. All I’m trying to do is get those individuals to acknowledge this asset called a brand and put as much focus on that as they do on cost containment. We did a lot of research globally, not just in Canada, with a whole range of CEOs, many of whom had developed strong global brands.

All of them had at least five years of continued growth. And we talked to them about their role, their contribution in making that happen. What really drove their success, we discovered, was the ability to articulate a purpose, vision, and a direction for the brand. The ability to ask fundamental questions like, “What business are we really in?”.

So, it’s this ability to articulate a long-range strategic direction, and then be able to align their teams around it — get them excited and inspired by that direction. But the other fascinating thing that we discovered is they all operated with what we call in the book the new “four Ps”. So, there’s the original four Ps of marketing, which have been around since the ’50s …

Shaw: Product, price, place, promotion.

Kincaid: Right. That’s what the CMO is paid to focus on. But the “four Ps” of brand management are People, Process, Intellectual Property (IP), and Partnerships, all linked to the brand vision and purpose. These are the things that the CEOs we spoke to took personal accountability for. You know, last year 72 percent of the value of the S&P 500 was driven by intangible assets. These included patents, trademarks, copyrights, and brand value. If you don’t view these soft assets as critical, you’re missing the core driver of value in today’s marketplace.

Shaw: Brand purpose is certainly the focus of a lot of companies these days. Do you make a distinction between purpose as the main reason a company exists, and purpose as DMN.CA ❰

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IN CONVERSATION an aspirational desire to change the world?

Kincaid: What we discovered is that those leading CEOs are very good at articulating purpose. In some cases, that purpose might be focused only on delivering value to stakeholders within a particular sector. Or it might be broader and more world-changing. But the fact is, they all have one. They’re not just there to produce widgets at a higher price. They’re doing it for a higher order reason. Now, in today’s world with everything that's going on, I do believe a higher-order purpose is going to become even more important.

Shaw: Aren’t today’s frugal consumers just scanning the shelves for cheaper options and not paying much attention to what brands stand for?

Kincaid: Yes. When you’re stuck at home having to order everything online, convenience and price tend to be the chief concerns. But coming out of this pandemic I think brands have an opportunity to create value in new ways. They should be asking: What business are we in? Why are we in that business?

How do we do business? Now is the fundamental time to be asking those core strategic questions.

And again, no disrespect to my marketing compatriots, that’s not the job of the CMO. That’s the job of the CEO to ask those questions.

Shaw: So as long as the CEO recognizes the value of the brand.

Kincaid: Bingo.

Shaw: So, who in the organization helps set the strategic direction based on an understanding of market trends and needs?

Kincaid: Well, the point I make in the book is that it’s the responsibility of the C-suite, so, senior leadership. And again, I don’t care whether that’s the head of manufacturing or the head of marketing or the head of sales.

But it should be led by a Chief Commercial Officer — call that executive a “strategic growth guardian”. That executive should know where the market is headed, where the consumer is headed, where competitors are headed.

Shaw: The irony is we have more data than ever before, yet seemingly less insight because no one in the organization is in charge of surfacing those “Ahas”.

Kincaid: Exactly. We even use that expression at Level5: “Aha.” As a result of those two or three big insights, what’s the “aha”? What do we know now that we didn’t know?

An “aha” isn’t just about having that knowledge. It’s the implication — the strategic application of that knowledge. That is a wonderful role for a Chief Commercial Officer to own.

Shaw: Professor Scott Galloway — I’m sure you’re familiar with him, bit of a gadfly, a contrarian, loves to poke the hornet’s nest — recently commented that “We're in a post-brand era.” He said that consumers are going to use “mass due diligence” to

Advertise in

simply bypass brand messaging.

What does that mean for the future of branding?

Kincaid: I agree with him. It’s the world that we’re in. But I look at disrupter brands like Casper who we had a chance to interview. They saw that people don’t like going mattress shopping and having a pushy salesman talk to them into buying an expensive mattress. The mattress shopper often knows what they’re looking for already. So now they can just order it directly from Casper, skipping that awful store experience. Casper simply said, “We just want to serve the customer as best we can.”

Shaw: That’s the reason behind the explosive growth of DTC brands, isn’t it? They disrupt categories. They identify a segment of the market that’s not being well-served and steal share away from the complacent legacy brands.

Kincaid: I don’t consider that disruptive. I consider that good brand management.

Shaw: For Casper, it seems, it’s all about offering a unique brand experience.

Kincaid: There’s this story about Nordstrom, which as you know is legendary for customer service.

In walks Mrs. Smith with her chauffeur lugging a set of winter tires. She walks up to the nearest sales associate and says, “These winter tires don’t work. I just want to return them.” The sales associate immediately checks the customer database and says, “By all means, we’ll take those, and we’ll credit

your account and look after this for you. Is there anything else I can help you with?” Mrs. Smith says no and walks out with her chauffeur. Standing next to this sales associate is a store trainee who’s just overheard the exchange and is puzzled. “But we don’t sell snow tires”, he points out. And the sales associate answers, “Mrs. Smith thinks we do.” The point is that you can keep a brand strong and healthy by giving customers a great experience.

Shaw: Over your long successful career arc, what’s the one irrefutable and consistent truth about branding that you’ve learned?

Kincaid: I put myself through school playing in a band. I was the business manager, but I was also the drummer. So, my job was to watch the audience. And if we needed to change the song list during the set, that was my call.

I learned a very valuable lesson early on when this crusty old bar manager came to me and said, “All right. Let’s get this straight. So, if you don’t play the right songs, they don’t get up and dance. If they don’t get up and dance, they don’t get hot and sweaty. If they don’t get hot and sweaty, they don’t buy my beer. If they don’t buy my beer, this is the last time you’re playing in this bar.” And I’ve never forgotten that. My job was to watch the audience. And if they didn’t like the song, change the goddamn song, or else we ain’t getting paid. So, the customer calls the shots and always has. That’s the lesson.

Targeted. Timely. Responsive.

Find out more, get details now.

Contact Steve Lloyd for more information steve@dmn.ca ❱ DMN.CA

APRIL 2021

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CUSTOMER EXPERIENCE

37 Customer Experience Statistics You Need to Know and Consider in 2021

BY TOMA KULBYTĖ

C

ustomer experience has fast become a top priority for businesses and 2021 has been no different so far.

But, why are so many companies focusing on the customer experience and what happens to companies that choose to ignore it?

Customers no longer base their loyalty on price or product.

Instead, they stay loyal with companies due to the experience they receive. If you cannot keep up with their increasing demands, your customers will leave you.

Cross-device shopping via a wide range of channels has made it difficult for companies to maintain consistency. Processes and technologies need to change in order to provide a consistent experience across all platforms.

It wasn’t too long ago when every business claimed that the key to winning customers was in the quality of the product or service they deliver.

But, things have changed. Now, an even more important success factor has appeared.

Providing the best customer experience We recently asked 1,920 business professionals to share their number one priority for the next 5 years. The result: Customer experience (or CX) came in first APRIL 2021

(beating product and pricing).

It’s no surprise that customer experience is the number one priority. The Temkin Group found that companies that earn $1 billion annually can expect to earn, on average, an additional $700 million within three years of investing in customer experience.

For SaaS companies in particular, they can expect to increase revenue by $1 billion.

That’s right. Investing in CX initiatives has the potential to double your revenue within 36 months. So, where is this revenue growth coming from?

The customer’s wallet. A good customer experience means your customers will spend more. In fact, 86 percent of buyers are willing to pay more for a great customer experience. The more expensive the item, the more they are willing to pay, according to a research from PWC. For example, customers are willing to pay a price premium of up to 13 percent (and as high as 18 percent) for luxury and indulgence services, simply by receiving a great customer experience.

CX also influences on-the-spot purchasing, too, since 49 percent of buyers have made impulse purchases after receiving a more personalized experience. But the most convincing reason why CX has become so important is this: A Walker study found that at the

end of 2020, customer experience will overtake price and product as the key brand differentiator.

If CX is to play an important part in your 2021 plans (and it should), use this article to stay ahead of the top customer experience statistics in the upcoming year.

At SuperOffice, we’ve helped thousands of companies use sales, marketing and customer service to improve the customer experience.

This gives us access to data and insight into how consumers feel about the experience they receive — which we’ll be sharing in this report (And unlike other lists, these CX stats are completely up to date).

What is customer experience?

Customer experience is your customers’ perception of how your company treats them.

These perceptions affect their behaviours, and build memories and feelings to drive their loyalty.

In other words — if they like you and continue to like you, they are going to do business with you for a long time and recommend you to others. So, it’s easy to see why it’s important for so many companies to focus on CX. But, in order for your customers to like you, you need to get to know them. You need to invest in the long-term relationship (also known as relationship marketing), because when you understand who

they are, you are able to deliver a personalized experience across the entire customer journey. But gaining this in-depth knowledge about customers isn’t something that just happens. You need to collect customer data (i.e. Voice of Customer data) and bring out valuable insights from that data with speed and precision.

The good news is that it doesn’t matter what kind of business you’re in — improving the experience for your customers has been proven (time and time again) to increase retention, satisfaction and revenue.

So, what can you do to create a positive customer experience?

Let’s take a look at the five most important trends.

1. Customer experience is the new battlefield No one wants to do business with a company that treats you poorly. And how you feel after an interaction with a customer service center has a huge impact on your future purchase decisions. A good interaction keeps you happy and satisfied, while a poor interaction could lead to you stop doing business with that company again.

It’s because of these extremes why 88 percent of companies now prioritize customer experience in their contact centers. Yes, it’s that important. And it’s easy to see why.

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CUSTOMER EXPERIENCE If a customer is choosing to do business based on CX, then that’s where you have to stand out.

In fact, more than two-thirds of companies now compete primarily on the basis of customer experience — up from only 36 percent in 2010! Therefore, if you want your customers to have a positive experience, you have to invest in it. It makes sense, right?

The sad news is that less than half of all organizations will be investing in the customer experience next year. In fact, our own research found that only 44 percent will increase the investment in their CX initiatives.

But if you are investing in CX, where do you begin? According to Gartner’s research, companies that successfully implement customer experience projects begin by focusing on how they collect and analyze customer feedback.

Whether you use surveys, web forms, or Net Promoter Score (NPS) programs, read through their comments, suggestions and opinions to see what they expect from you. Then, invest in those projects to meet their expectations.

2. The importance of multichannel servicing will increase Companies interact with their customers across multiple channels, which can be through forms on their website, live chat, social media and more. However, while customers may be positive and accept different service levels from different channels, they also expect that the communication remains consistent. Are you providing a consistent experience across all channels, both online and offline?

It can be challenging, but the gold standard here is IKEA. If you visit any IKEA store around the world, you will get the same experience. IKEA invests heavily into customer experience. This year alone, they’ve opened more stores, invested in its home delivery network and launched a brand new app — all to the benefit of their customer.

And the pay off has been huge.

Not only is IKEA one of the most beloved companies in the world, but their annual revenue has now reached more than $40 billion worldwide. And it’s this level of ❱ DMN.CA

execution and result that is driving more companies to invest in the omnichannel experience. In fact, in their 2020 report, PWC found that the number of companies investing in the omnichannel experience has jumped from 20 percent to more than 80 percent.

Adding to this, Adobe recently found that companies with the strongest omnichannel customer engagement strategies enjoy a 10 percent Y-O-Y growth, a 10 percent increase in average order value and a 25 percent increase in close rates.

It sounds like a no brainer to invest in CX, right?

3. Mobile customer experience is priority When it comes to providing a positive experience across different channels, mobile customer service is expected to soar. The reason is simple — a bad mobile experience can do serious damage to your brand. For example, 57 percent of customers won’t recommend a business with a poorly designed website on mobile. And if a website isn’t mobile-friendly, 50 percent of customers will stop visiting it, even if they like the business.

By not providing a positive mobile experience, you’re putting business growth in jeopardy, as the graphic below shows. It’s no longer the question whether the mobile experience is important or not.

We know it is. According to Stat Counter, 52 percent of all internet traffic now comes from mobile, with desktop usage on a trending decline.

So it comes as no surprise why 84 percent of companies who claim to be customer-centric are now focusing on the mobile customer experience. However, for companies that aren’t, they’ve been slow to adapt to this trend — especially when it comes to customer support — as an overwhelming 90 percent of customers report having a poor experience when seeking customer support on mobile devices. The most common complaints being navigation, site search and load times.

There is a huge gap that needs to be taken seriously. If your customers cannot navigate your website with ease and find what they are looking for, then you frustrate them. And you lose them.

4. Customer frustration will lead to churn According to Esteban Kolsky, 72 percent of customers will share a positive experience with 6 or more people. On the other hand, if a customer is not happy, 13 percent of them will share their experience with 15 or even more. The challenge here lies in the fact that, in most cases, customers don’t tell you they’re unhappy. In fact, only one in 26 unhappy customers actually complain. The rest, they just leave, Kolsky claims.

For many companies, the absence of negative feedback is a sign of satisfaction. But, as the research shows, this might not be the case. Your customers may not be happy, or worse, they’re sharing their bad experiences with others.

Customer expectations are at an all-time high and it’s a tough time for companies to meet and exceed them. Even if you provide a positive customer experience nine out of 10 times, that one time you do not could be fatal.

In their future of CX report, PwC surveyed 15,000 consumers and found that one in three customers will leave a brand they love after just one bad experience, while 92 percent would completely abandon a company after two or three negative interactions.

What constitutes as a bad experience? Sometimes, it’s as simple as poor follow-up. Our own research found that very few companies follow up with their customers. Put simply, you can avoid many of these poor experiences by sending a follow-up email.

5. Self-service help will be the first choice In 2021, companies should ensure that customers are able to find answers to their questions using a wide-range of self-service options.

Today, 67 percent of customers prefer self-service over speaking to a company representative.

Furthermore, 91 percent of customers would use an online knowledge base, if it were available and tailored to their needs.

Customers are willing to find the answers themselves. So much so, that by 2030, Gartner estimates that a billion service tickets will be raised automatically by customerowned bots.

To handle this demand, companies are turning to Artificial Intelligence (AI). In 2019, 25 percent of all customer interactions were automated through AI and machine learning.

With 90 percent of companies now planning to deploy AI within three years, this number is expected to grow to 40 percent by 2023.

In the short-term, you need to make sure that when a customer has a problem, the right tools are available to them, so they can solve it, themselves. In the long-term, you need to think about how AI and technology can help you improve customer experience.

Conclusion With nine out of 10 businesses competing mainly on customer experience, it’s the organizations that take customer experience seriously that will stand out from the noise and win loyal customers over. One thing is for sure, in order to deliver a positive experience you have to know your customers better than ever before. This means creating complete customer profiles that help you understand and measure your customers’ behaviour at every touch point, and across multiple channels. (One way to handle this is by using a CRM.) Once you know your customers well enough, you can use that knowledge to personalize every interaction. Customers these days have more power and choices than ever before. Thus, you are responsible for understanding and acknowledging their needs.

If you make sure their interaction with your company is smooth, pleasant and continuously improving, you will drive brand loyalty. If not, you’ll give your competitors the best gift you can — your customers.

What is your favourite customer experience trend? Are there any important customer experience statistics we missed?

If you got something valuable from these customer experience statistics, thank the companies that did the research and feel free to look me up to chat at length.

TOMA KULBYTĖ is a content specialist at SuperOffice. Previously a Communications Manager and graduate from the University of Oslo, Toma likes to write about all things CRM.

APRIL 2021

CUSTOMER EXPERIENCE

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A Troubling Engagement Capacity Gap Emerges

O

n the heels of massive digital disruption and now, a year into the global pandemic, only 50 percent of business leaders say they are well prepared to support customer engagement priorities moving forward, and 82 percent say the challenges of managing customer engagement will only increase in 2021. What’s more, only 54 percent of leaders consider their organizations well prepared to enable a remote workforce to effectively serve customers.

These are just a few of the key findings of new global research conducted by Verint. The conclusions are based on a survey of more than 2,000 global business leaders across 12 countries on key priorities, trends and challenges associated with customer engagement, COVID-19 pandemic impacts, perceived organizational preparedness, and future plans.

The research quantifies and illuminates a widening Engagement Capacity Gap brought about by new workforce dynamics, ever-expanding customer engagement channels, and exponentially more consumer interactions — all which must be managed with limited budget and resources.

“Our new research reveals that organizations have experienced the perfect storm of digital disruption converging with pandemic-related impacts,” says Verint CMO, Celia Fleischaker. “At the start of 2020, companies were already struggling to handle the increasing complexity of customer engagement. COVID served to further impact companies’ preparedness levels and derail planned investments, putting them in a more vulnerable state or leaving them even further behind. It’s urgent for organizations to close this Engagement Capacity Gap as it threatens top business initiatives such as acquiring new customers and evolving customer engagement strategies to drive revenue growth, which survey respondents named their number one business priority.”

Nearly three-quarters (74 percent) of respondents were forced to put off hiring in 2020 due to COVID-19 and related economic considerations, and only 51 percent say they intend to increase staffing in 2021. Thirty percent reduced or eliminated planned investments in 2020 designated for new systems/technologies associated with workforce management, customer communities and speech/text analytics.

Respondents expressed a wide range of key concerns; 94 percent cited “understanding and acting on rapidly changing customer behaviours,” while 88 percent said “managing the growth in volume of customer interactions” were the two most pressing issues.

Other top concerns voiced by respondents were having a unified view of customer engagement and overcoming data silos (79 percent); using customer feedback to improve experiences (78 percent); and building enduring customer relationships (77 percent).

When it comes to the customer engagement technologies organizations considered most critical in 2020, 85 percent agreed that cloud-based solutions helped in managing shifts in channel usage and interaction volumes to a moderate or high degree. Moving forward, 88 percent of respondents say they expect to invest to a high or moderate degree in cloud-based customer engagement and experience solutions to close the Engagement Capacity Gap. Leaders expect to invest most in customer engagement solutions, such as workforce management, and chat bots or intelligent virtual assistants, as well as those to support compliance.

Eighty-six percent of respondents had a moderate to high investment in analytics prior to the COVID outbreak, but only 38 percent found those analytics useful to help manage shifts in channel usage and interaction volume. An overwhelming 90 percent cited difficulty in unifying data across silos as a deterrent to driving analytical insights.

Verint is responding to help customers address these urgent challenges with a new website including dedicated information regarding vital technologies to support the future of work, experience management and engagement data management.

The survey was conducted Nov. 26 - Dec. 11, 2020 through independent research firm REVELOCITY Group via a customized web-based survey. The survey group consisted of 2,281 individuals who are decision-makers/recommenders/influencers for customer engagement and experience solutions for their companies operating across 12 different countries and regions worldwide.

Verint builds customer relationships by connecting work, data and experiences across the enterprise. Their customer engagement portfolio draws on the latest advancements in AI and analytics, an open cloud architecture, and The Science of Customer Engagement™ to help customers close the engagement capacity gap.

APRIL 2021

DMN.CA ❰

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MY VIEW CONTINUED FROM page 18

Consilience: A New Way to Understand Human Behaviour

It is becoming evident that consciousness is a core functionality of animals that began evolving about 540 million years ago for the practical purpose of sensing the whereabouts of food and predators and acting accordingly, and quickly. Other academic perspectives found in many textbooks are also demonstrably incorrect. For instance, emotions cannot be separated from perception and rational thought. At the level of biological processes, attention, emotion, and rationality are indistinguishable.

Consilience upends academic paradigms In 1998 Harvard University professor Edward O. Wilson published, Consilience: The Unity of Knowledge. The book explains the history behind the fusing together of academic disciplines. A hundred years ago physics, chemistry, and biology were separate and distinct domains of human knowledge. Now they overlap, and biologists employ the discoveries of physicists and chemists to make sense of natural systems.

Geneticists, using the tools of chemistry, routinely provide insights into human history and culture. This cross-fertilization between different disciplines enhances our ability to understand everything.

Wilson envisaged that the process of unifying knowledge would continue on the same trajectory through the application of science-like principles. In particular, evolutionary theory would enable scientists to unravel the complexities of human behaviour. But, surprisingly, scientific and academic ways of thinking are turning out to be far from all-encompassing.

Now armed with an understanding of how our sense organs work, how neurons handle complexity, and how we attach words to concepts, we can see that human knowledge is a domain that plays a relatively small part of what occupies our neuronal systems.

Neuronal systems are primarily occupied with making sense of our surroundings, maintaining our bodies in a state of health and ❱ DMN.CA

responding, through muscular action, accordingly. The domain of knowledge, supported by words, plays a relatively trivial role.

Contrary to Wilson’s expectations, consilience reveals that knowledge is just one piece of a larger, more complex puzzle.

Knowledge is not all-encompassing and able to explain everything.

Academic and scientific knowledge is built socially; it is dependent on the use of words and cannot be disentangled from the quirks of human interactions.

Behaviour is quicker and deeper than thinking When frontline scientists use slow-motion video to observe the unfolding of interpersonal encounters it becomes apparent that seemingly discrete events, when carefully analyzed, are made up of smaller micro-behaviours emergent within a particular situation. For instance, when mom hands her baby a block, we conceptualize it as the baby wanting the block and reaching out to grasp it. In fact, the baby’s arm moves in concert with mom’s arm. In other words, their behaviour is emergent from that particular context.

Researchers now realize that the actual movements of human beings, as opposed to the acts we are aware of and recount, were as difficult to observe before the invention of video as were the planets before the invention of the telescope.

Conscious introspection and our verbal accounting of our behaviour is not a robust starting point for understanding human motivations and purchase behaviour. Early in my career, while refining pack designs for various brands of beer, I observed how research analysts, when conducting individual interviews, were attuned to the respondents’ body language, noting how long their eyes rested on each design. The analysts did not attach much importance to the respondents' verbal accounts of their motivations for evaluating the effectiveness of a design.

That is not to say that respondents' verbal accounts lack significance. We are a profoundly social species, and we are constantly, at least subliminally, aware of the consequences of our

behaviour. When beer drinkers purchase and consume a certain brand, they do so within a landscape of social meaning. Everyone, when pressed, can provide an explanation of their behaviour, often along the stereotypical lines of “I prefer the taste” or “it’s good quality.”

Brand-builders need to understand how respondents express themselves in order to develop the insights from which effective messaging can be created.

What’s the point?

One of the core tenets in consumer goods marketing is that the first few seconds of a brand encounter are critical. Brands are noticed or overlooked in an eye blink. This wellestablished truth accords with the reality that our brains are emergent systems that work in-the-moment.

From the dawn of the evolution of nervous systems, their function has been to react instantly to immediate threats and opportunities. This core functionality remains and is the reason we are constantly searching for the point of people and things.

The necessity of knowing the point is one aspect of the deeply tribal nature that we observe in human society. We handle complexity — such as this subject of consilience — and need to know its point. How is it useful? We do the same with brands, immediately needing to know their purpose, which in the jargon of marketing, is termed positioning. We also do it with words that have become the banners of tribal loyalties, such as vaccines, Trump, freedom, and God. A new way to see the world There is a mounting trend to make sense of human society through the lens of science and academia. I argue this view is constricted and willfully blind to the realities of interpersonal dynamics and the lessons of history.

Consilience demands that we take a higher, all-encompassing perspective. On an individual level this is challenging because each of us has to walk back from established patterns of thinking.

When we hear words like science, thinking, consciousness, and religion we need to recognize that, similar to all words, their meaning is

cultural and constantly changing.

My contention is that the human brain is no more a deep mystery than other organs. I argue that thought leaders in all disciplines need to understand the implications of what scientists have been discovering about our neuronal systems, the emergence of communications, and human nature.

Traditional ways of conceptualizing human behaviour are similar to undertaking planetary travel while believing the earth is flat or trying to program a computer without knowing how semiconductors work.

Consilience requires flexibility of mind I believe marketing practitioners have the flexibility of mind to understand consilience and put it to use. At the least it provides a solid foundation for: ❯❯ Accounting for and bridging the rifts in viewpoints between the managerial and artistic mindsets. ❯❯ Acknowledging the limits of verbal accounts of motivations. ❯❯ Explaining the realities of human behaviour rather than ascribing to academic accounts with their inbuilt mythologies.

More broadly, a realistic understanding of human nature can benefit society in many ways.

Consilience can be employed by educators to better equip future generations with the skills they need to handle the challenges of modern life. And I dream that consilience will transform the political landscape and help us collectively reconcile the widening rifts in society.

TOM BEAKBANE is president of Beakbane: Brand Strategies and Communications, a company that has delivered over 20,000 projects to Fortune 500 clients since 1986. He resurrected the concept of consilience after attempting to account for the gap between textbook theories of human behaviour and his experiences creating marketing communications. He closed the gap by tapping into his passion for understanding developments at the frontiers of science. Beakbane earned an honours degree in biochemistry and neurophysiology from Durham University in England. He lives near Toronto, Canada with his wife. They have two daughters.

APRIL 2021

// 17

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MY VIEW

Consilience: A New Way to Understand Human Behaviour How I started on a journey to close the gap between textbook theories and my experience in business. The process of changing my way of thinking took time and was unsettling. (Part 2)

C

onsilience is the fusing together of different domains of human knowledge revealing that how the brain works is different from popular conceptions. It provides a new and powerful approach to understanding human behaviour that illuminates how communications work in changing the way people behave.

Marketers operate at the intersection of three sometimes incompatible ways of thinking: business managers who have a mindset grounded in economic and academic theories related to markets; agencies that employ the skills of the creative arts, including design and writing; and the realities of individuals whose behaviour rarely conforms to tidy categorizations and theories.

Consilience reconciles these contrasting domains, enabling practitioners to navigate between them with more confidence.

Consilience is rooted in recent breakthroughs in biology, genetics, computing and other disciplines that allow us to come to terms with the realities of how our brains work. Armed with this knowledge we can make sense of the disconnect between market metrics such as purchase frequency and self-reported attitudes that have been profoundly perplexing.

Marketers not knowing the earth is round For example, consider the findings of the market statistician Andrew Ehrenberg. During a 50-year career Ehrenberg analyzed purchasing patterns in more than 300 markets across 5 continents and modelled them using a single mathematical equation known as the Dirichlet formula. ❱ DMN.CA

The late Ehrenberg was twice awarded the Gold Medal of the British Market Research Society twice, first in 1969 and again in 1996, and the (American) Advertising Research Foundation honored him with a Lifetime Achievement Award in 2010, but the marketing community largely ignored his findings. He reported that “repeat-buying of any item from any frequently bought branded product-field tends, within certain broad limits, to follow a common pattern and can be dealt with by one single theory, irrespective of what the brand or product is and irrespective of what other brands its buyers may or may not have bought as well.” He found these patterns not only in packaged-goods markets but also in business-to-business markets, including aviation fuel contracts, ready-mix cement, cars, computers, and medical prescription.

“Marketing people not knowing about [the Dirichlet formula] is like rocket scientists not knowing that the earth is round,” Ehrenberg wrote. His findings show that advertising does not work by increasing a person’s level of conscious awareness or by changing their attitude. Instead, awareness and changes in attitude follow changes in purchase behaviour.

We can start to make sense of these puzzling facts by re-conceptualizing how human behaviour arises. Contrary to ageold presumptions, our behaviour is not the result of conscious thought processes. And verbal explanations for our actions are poorly correlated with actual behaviour patterns.

Behaviour is not the result of thinking Western academic culture is

Tom Beakbane

PHOTOS COURTESY TOM BEAKBANE

BY TOM BEAKBANE

A Three-Part Series based on Tom Beakbane’s new book.

underpinned with various presumptions about the connection between knowledge, reason and behaviour. It is usual to believe that knowledge leads to conscious deliberation — that is, thinking — that then results in behaviour. This picture is akin to visualizing the human brain working in a way similar to how a computer handles and processes information. This portrayal is being overturned by a largely unreported scientific revolution that has been underway for the last two decades. New technologies have made it possible for researchers to observe the brain in action and see what is happening genetically and chemically in each cell of the human body.

It has become clear that actions that we think of as dissimilar, like manipulating an object with our hands, writing and speaking are, at a neurological level, almost identical. Each requires fine muscular coordination. However, activities that we consider simple, such as walking and looking, are in fact extraordinarily complex, requiring extremely fast and fluid muscular action.

Brain-scanning technologies have established that conscious

thought processes are slow — taking upwards of half a second, and are too slow to be responsible for the moment-to-moment movements that constitute how we navigate through the world, react to what is going on around us, and handle social interactions.

The human brain is a different kind of challenge I contend that the brain’s basic biological processes and how they have evolved are relatively straightforward to understand, especially for those interested in the scientific details. The whole matter of understanding how human behaviour comes about, however, is unusually challenging to comprehend because the findings of frontline researchers conflict with traditional academic perspectives.

One such perspective is that the human brain is considerably more sophisticated than the brains of other animals and that consciousness was a relatively recent evolutionary development.

This perspective is being upset through discoveries in genetics that provide unambiguous evidence that humans and seemingly simple animals, like tiny roundworms, have genes that are remarkably similar.

CONTINUED ON page 16 APRIL 2021