imd biennial 2014 piskorski

Does Your Business Need a New Strategy?

… or what has the Digital World doneto the Customer Decision Journey

@mpiskorski Professor of Strategy and Innovation at IMD

2© 2014 Mikołaj Jan Piskorski

Special shout out to Rafael Cano-Castillo (@rcanocastillo)

3© 2014 Mikołaj Jan Piskorski

2,819,482,983

How many Internet users are there?

4© 2014 Mikołaj Jan Piskorski

EuropeNorth AmericaLatin AmericaMiddle EastAfricaRest of AsiaChina

And they are all over the world…

5© 2014 Mikołaj Jan Piskorski

… and now they spend more time on the Internet than watching TV…

2010 2011 2012 2013 -

1

2

3

4

5

All online TV Radio Print

Hou

rs p

er d

ay

6© 2014 Mikołaj Jan Piskorski

… and they love to interact socially, search, read content, and email…

Social Platforms 22%

Search 21%

Reading content 20%

Email 19%

Multimedia 13%

Online shopping

7© 2014 Mikołaj Jan Piskorski

… those who interact socially online are young and old…

15-24 25-34 35-44 45-54 55+0

50

100

150

200

250

300

350

400

450

Male Female

8© 2014 Mikołaj Jan Piskorski

… social interaction is not necessarily what you think it is…

View profiles and pictures of friends

35%

View profiles and pictures of stangers

35%

View own profile9%

Add con-tent to

pro-files 8%

Add or

delete friend

s8%

E-mail5%

Percentages of all unique action clicksexcluding navigation, platform and IM

9© 2014 Mikołaj Jan Piskorski

Remember when we could control what information customer got?

… this gave rise to the marketing funnel

Awareness

Familiarity

Consideration

Purchase

Loyalty

10© 2014 Mikołaj Jan Piskorski

But now customer can roam freely on the internet...

… driving her own Customer Decision Journey talking to many other people

11© 2014 Mikołaj Jan Piskorski

… or the more complicated version…

12© 2014 Mikołaj Jan Piskorski

… but really the point is that it’s no longer a funnel

13© 2014 Mikołaj Jan Piskorski

Implication for your business:

You have to be…

… here… andhere

…and also here

… and here

… and again

… here too

… andhere

14© 2014 Mikołaj Jan Piskorski

Share of socially generated e-commerce revenue:

Global excluding China

15© 2014 Mikołaj Jan Piskorski

Fortunately, you do not really have to be everywhere:

Consider mobile phone service

16© 2014 Mikołaj Jan Piskorski

You just need to understand what your customers’ journey is:

% of users in market who bought a product after they saw it on Facebook

Automotive

Food

Financial services

Travel

Alcoholic beverages

Personal care

Healthcare

Nonalcoholic beverages

0 5 10 15 20 25

Percentage of social network users

17© 2014 Mikołaj Jan Piskorski

How do we meet the customer along the customer decision journey…

… and have others talk about us?

18© 2014 Mikołaj Jan Piskorski

Consideration stage:

Pinterest!

19© 2014 Mikołaj Jan Piskorski

Consideration stage:

Engagement rates

70% female one in five women in the US is on Pinterest

28% household income over $100,000

40% are 35 years old and over

Spend 16 minutes on Pinterest per day vs. 12 minutes on Facebook

80% of them buy something they pinned

40% of them buy something they saw pinned

5% of referral traffic to apparel sites comes from Pinterest!

Average purchase

– via Facebook $80

– via Twitter $69

– Via Pinterest $175

20© 2014 Mikołaj Jan Piskorski

Consideration stage:

Friends recommend American Express to their friends for free

21© 2014 Mikołaj Jan Piskorski

Evaluation stage:

Blair Fowler aka JuicyStar007

http://www.youtube.com/watch?v=0nGsMWnmbbk

22© 2014 Mikołaj Jan Piskorski

Evaluation stage:

Blair Fowler aka JuicyStar007

23© 2014 Mikołaj Jan Piskorski

Evaluation stage:

She is not the only one

24© 2014 Mikołaj Jan Piskorski

Buying stage:

WeChat in China

25© 2014 Mikołaj Jan Piskorski

Buying stage:

Twitter buy button

26© 2014 Mikołaj Jan Piskorski

Experience stage:

Nike’s ecosystem

Nike’s devices collect data

Phone/Computer

Online social

platform

Twitter/Facebook

27© 2014 Mikołaj Jan Piskorski

Experience stage:

GE Industrial Internet

General Electric invested $250,000,000/year over 4 years into industrial Internet

– Turbines now have 100 physical sensors and 300 virtual sensors to help customers identify problems before they occur and improve fuel efficiency

– A turbine generates over 500GB of data per day which General Electric uses to build its next generation turbines

– 1% efficiency increase = $20,000,000,000 per year in savings for customers…

Even if GE only captures 10% of these savings, ROI is very high!

28© 2014 Mikołaj Jan Piskorski

Loyalty Stage:

Merging CRM data with social data

Facebook has emails andphone numbers

of its users

Your CRMhas emails and phone numbers

of your customers

Custom audiencecan be exposed

to advertisingon Facebook

or Twitter or LinkedIn

Use your own loyalty program to see if those

who were exposed reacted(great for offline purchase)

No wasted advertisingmeans higher ROI

29© 2014 Mikołaj Jan Piskorski

To sum up

Online > TV

– Customer is now free to roam

Online = Social + Search + Content + Email

– Meet the customer where she roams and put sign posts

– Have others meet her there too and have them put sign posts

Many touch points are required to cover the journey

– Not just Facebook page and Google Ads

Change the product to fit this new environment

– Bake the journey directly into the product to generate insight and loyalty

30© 2014 Mikołaj Jan Piskorski

More on this…

… or @mpiskorski or mpiskorski@imd.org