Part 9 in a series introducing my new book, The End of Business as Usual…this series serves as the book’s prequel.

Digital Darwinism is the evolution of consumer behavior when society and technology evolve faster than the ability to adapt. At the intersection of relevance and obsolescence is the ability to recognize opportunities for change based on shifting consumer behavior and the subtle coalescence between emerging and disruptive technology. Businesses must realize that change is taking place today with or without them. And, to what extent varies from company to company. But without an understanding of how technology and society are evolving and how decisions are influenced and made, businesses are either left to make decisions in the dark or change simply for the sake of change. We all know how difficult, if not nearly impossible, it is to change. We also realize that once we do begin the inevitable process of transformation, the distance between where we are and where we need to be is not expeditious in any sense. In the era of digital Darwinism, the journey toward evolution and revolution is in fact, the destination. It is perpetual.

Many of you know me as someone who has championed social media over the years, going back well before the days of the original Social Media Manifesto. This is a time I must implore you to think different. See, social media is not the catalyst for change, but merely one of its agents. While Facebook and Twitter are often the recipients of accolades for their roles in fueling revolutions, we must remember that they are the networks that facilitate an uprising. However, it is repression, angst, injustice, vision, aspiration and hope that serve as the true stimulus for insurrection and progress. Technology plays a part in transformation and it is up to you to learn how social, mobile, real-time, and all other emerging trends are affecting your industries and markets.

In the world of business, customers are using new technology to share experiences. And, those experiences are either to your benefit or detriment. As Mark Cuban, owner of the Dallas Mavericks and Chairman of HDNet, shared, “To be successful in business, you need to see what others don’t.” To that I would also add, “and do what others will not or can’t.”

Through a Telescope, We Bring the World Closer – Through a Microscope, We See What Was Previously Invisible

I used to say, “in brevity, there’s clarity.” While I still believe this to be true, I also see that there’s a delicate balance necessary in understanding what is hype or trending and what is truly disruptive. Therefore we must look forward and at the same time, look closer at what’s taking place right now to analyze true impact. Separating fact from fiction or hype from disruption is now part of our job as our consumers are driving these results based on what they adopt, how they communicate, and how they influence and are influenced in decision making cycles.

To help, IBM reached out to over 1,700 Chief Marketing Officers, spanning 19 industries and 64 countries as part of its annual CMO study. The goal was to learn how consumer behavior and technology are changing business focus, forecasts and decisions. The results are both illuminating and helpful.

So, what’s keeping everyone up at night?

As you can see, big data, social media, the myriad of available consumer channels and devices make up the top three trends leading to corporate insomnia. But beyond those trends, the entire list is fascinating and worthy of study…

1. Data explosion – 71%
2. Social media – 68%
3. Growth of channel and device choices – 65%
4. Shifting consumer demographics – 63%
5. Financial constraints – 59%
6. Decreasing brand loyalty – 57%
7. Growth market opportunities – 56%
8. ROI accountability – 56%
9. Customer collaboration and influence – 56%
10. Privacy considerations – 55%
11. Global outsourcing – 54%
12. Regulatory considerations – 50%
13. Corporate transparency – 47%

If we break out the expected level of complexity and preparedness to handle what lies ahead in terms of emerging vs. disruptive technology, we surface what IBM refers to as the complexity gap…

The new IBM CMO study also reinforces my research and experiences with leading enterprises. Businesses do indeed seek to get closer to customers. To that end, CMO’s believe that there are three key areas for improvement:

1. Deliver value to empowered customers

2. Foster lasting connections

3. Capture value and measure results.

Addressing each of these items unlocks the true essence of the trends that are disrupting businesses today…customers are becoming increasing connected and as a result, they are empowered, influential, and increasingly elusive.

“Customers today have more control and influence with the brand than ever. We need to make sure it’s give and take—a two-sided conversation, with both parties having responsibilities in the interaction.”
- Ann Glover, Chief Marketing Officer, ING Insurance U.S.

Market research has over the years, helped to guide executive decisions. Nowadays however, market research is simply studying the equivalent of a mass audience without surfacing the nuances that define the audience with an audience of audiences. The study found that 75% of CMOs use customer analytics to mine data, but only 42% study customer reviews and only 26% track blogs. What CMO’s are largely missing of course is context and the ability to foster empathetic strategies and supporting protocol.

As we can clearly see, CMO’s are missing the ability to extract and introduce a truly human touch, focusing on markets rather than individuals.

If you take a look at the graph above, it these traditional metrics that drive increasingly ineffective decisions at a time when those very decisions are starting to also work against the company. Customer analytics is at least in the fourth spot, but as you can see, it isn’t until we get down to the 50% mark that personal data factors into strategic decisions. As you’ll notice, the either disregard or underestimation of blogs, even today, edges supply-chain performance data by a mere 1%.

Customer Engagement is not the Same as Conversations

Remember, at the top of the list of priorities of CEOs is getting closer to customers. Yet, looking at this information, it’s clear that the customer and the idea of the true picture of customers are contrasting.  To truly engage, businesses must not only understand customers, but also act. It really is a play on the old saying, actions speak louder than words. But here, actions speak as loud as words and therefore, anything social, requires social action.

When I was writing the new book, I sought out a working definition of the work engagement. It was both unbelievable and also understandable that the results were varied and confusing. I proposed a working definition in the manuscript that explained engagement as the act of a consumer and an organization or brand interacting within the consumer’s network of relevance. Engagement, and here’s the important part, is then measured by the takeaway value, sentiment, and resulting actions following the interaction.

With this definition is mind, we zero in on the discrepancy between how businesses view the customer and how they measure “engagement.”

According to the IBM CMO study, CMOs reveal that data is focused on managing the customer transaction and not the relationship. This is not engagement. And, this is why I believe that any discussion about sCRM is premature at best. As the following data demonstrates, companies are still placing greater emphasis on the “M” and not the “R” or relationship.

“We have to get scientific about the customer experience.”
- Nick Barton, Vice President Sales & Marketing, Greater China, InterContinental Hotel Group

This is the end of business as usual and rather than merely focus on the transaction, businesses must focus on creating a meaningful and shareable customer experience first.  In the above chart, we can see that awareness/education, interest/desire, use/enjoy, and bond/advocate make the list. And, the direct beneficiary of those initiatives is the customer.

Engagement is not just about communication. It’s about creating experiences that mean something, something that’s positive and worth sharing. And, that’s what’s possible today. In fact, if we look beyond transactions and measure results as they define and drive experiences, we can expand our toolbox to include what I refer to as the A.R.T. of disruptive media. How can we best use our customers networks or services of relevance to inspire or spark actions, reactions and transactions. How can we shape experiences and outcomes?

IBM found that at the top of the list of course, is the now infamous quest for what seems like seeking the holy grail without a map, ROI. But there’s hope as customer experience is second on the list. Truly, with the customer experience defined from beginning to end, the other metrics fall into place.

As we said early, actions speak as loudly as words and as CMOs focus their priorities for shifts toward disruptive technology, the customer is at the front and center of corporate transformation.

CMOs have their work cut out for them of course, but at least their hearts and minds seem to be in the right place as we look at 2012 and 2013. Everything comes down to customer relationships and experiences and that’s what will separate today’s CMO strategies from tomorrow’s success stories. To that end, at the top of the list is enhancing customer loyalty and advocacy. Following is designing experiences for tablets and mobile devices. Third, CMOs will use social media as a key engagement (hopefully as defined earlier) channel. Now we’re talking!

“In a corporate setting, instilling an entrepreneurial attitude in our own people is the most important challenge. After all, our people are our best marketing tool.”Vivienne Tan, Executive Vice President, Philippine Airlines

#Winning

While this post serves as part of a prequel to The End of Business as Usual, I’m starting to see that this series could really serve as its own book. Perhaps it’s a bridge with Engage representing the side of strategy and execution. Either way, I could keep writing and we must draw this chapter to an end. But, before I do, I’d like to take a moment to share a key finding deep within the IBM report.

IBM found that CMOs that use customer data to improve customer experiences are actually outperforming those businesses that do not invest additional effort in fostering customer relationships.  This is the chart that should bring it home for you. This IS what you’re fighting for. This is data to savor as it demonstrates the end of business as usual and the beginning of a new era of relevance. You are the change agent and your organization, your team, your peers, need you now more than ever.

Lead the way!

Order The End of Business as Usual today…

Part 1 – Digital Darwinism, Who’s Next
Part 2 – Social Media’s Impending Flood of Customer Unlikes and Unfollows
Part 3 – Social Media Customer Service is a Failure!
Part 4 – I think we need some time apart, it’s not me, it’s you
Part 5 – We are the 5th P: People
Part 6 – The State of Social Media 2011: Social is the new normal
Part 7 – I like you, but not in that way
Part 8 – Are You Building a Social Brand or a Social Business?

The spirit of social media is enlivening industries, refreshing marketing, and humanizing businesses. While the steps to the social revolution are gradual, so are the budgets that fund innovation. Progress is underway however, and with every experiment and pilot program, we learn the answers to the questions that serve as the gateways to change.

Early experiments are sparked within various forward-looking divisions and funded by other resident or surrounding programs or departments. As social media permeates and socializes the frameworks of the modern businesses, finances and supporting resources will shift to advance expansion.

A recent study conducted by Duke University and the American Marketing Association documented the rise of hiring, budgets, and social media spend over next year.

According to the 2010 CMO Survey, on average, CMOs expect to increase marketing budgets by 5.9% citing social media as a crucial slice of the Internet marketing mix.

Business Growth Strategies

CMOs are optimistic about the future of the U.S. economy and many are focusing efforts on proactively increasing customers, purchases and improving their abilities to retain current customers.

Over the next year, growth strategies reflect a focus on market expansion and depth.

Market penetration (introducing current products and services to current markets): 44%

Product and service development (creating and introducing new products and services to current markets): 26%

Market development (adapting current products and services to new markets): 18%

Diversification (new products/services to new markets): 13%

Digital Marketing Leads the Way

With a 5.9% average increase in marketing budgets, Internet marketing is the beneficiary of overall budget with 12.2%; social and traditional CRM accounts for 9.9%; the introduction of new products checks in at 6.9%. Traditional advertising on the other hand is estimated to fall 2.5%.

B2B

In reviewing the results from the study, it appears that B2B products and services companies are mapping out among the largest expansions in marketing spend over the next year at 8 and 7.7% respectively. When comparing B2B to B2C products and services companies however, B2C trails 2.1% and 1.6% respectively.

Branding plays a pivotal role in B2B marketing over the next 12 months, increasing spending by 11.8% compared to only 4.3 across other sectors. The socialization and modernization of CRM is also pivotal to B2B growth, representing a 16.6% rise compared to 7.5% across all other sectors.

Social Media

Social Media offers tremendous growth potential and as such, budgets are multiplying. As reported in the research, social media budgets will spring from 5.6% to 9.9% this year. However, over the next five years, social media budgets will swell to 17.7% of the total marketing spend.

Comparing and Contrasting Social Media Spend: B2B an B2C

Continuing the trend in aggressive expansion, B2B companies plan the greatest increase in social media spending this year, jumping to 11% from 6.5% last year. B2C services trails, however social media spending continues to bloom from 2.9% to 6.9%. When we look at B2C product company forecasts for social media, we’re presented with a much different picture. Social media spending is expected to jump from 7.5% to 11.6% within the next year and upwards of 19% over the next five years. In comparison, B2B product and B2B services will scale to 15.3% and 18.9% respectively.

Visualizing Hybrid Theory

Recently, I discussed how social media was influencing not only the evolution of business, but also how the roles and skill sets of individuals within each socialized department would also develop in order to pave the roads to the future. I call this idea Hybrid Theory and it represents the fusion of best of breed expertise into varying social roles.

The study highlights how nearly one-half of companies expect to hire new media marketers over the six months and 61.4% and 77.5% will fill new marketing roles over the next year and two years respectively. Most notably, only 27% are expected to look at university graduates.

Experience counts for everything…

The most sought-after skill sets now and in the immediate future, include Internet marketing, innovation and growth, social CRM, and brand management. If we look at Hybrid Theory, those individuals who possess an understanding and a sliding scale of experience of all of the above can create their own destiny.

Executive-level marketers were asked to share their opinions on which brands currently set the standard for excellence. The results include Apple, Procter & Gamble, and The Coca-Cola Co. Honorable mentions were given to Google, General Electric, Nike, and McDonald’s. In social media, I would also add Starbucks, JetBlue, Dell, Virgin America, ebay, Cisco, among many others.

Connect with Brian Solis on Twitter, LinkedIn, Tumblr, Google Buzz, Facebook
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Please consider reading, Engage!: It will answer your questions…

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Get Putting the Public Back in Public Relations and The Conversation Prism:

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Image Credit: ShutterStock

In early December, we released a public alpha of PeopleBrowsr, an attention-centered dashboard for managing your online relationships, brand management, and communication in Twitter and across multiple social networks – all from one place.

The public alpha is running incredibly well and thanks to everyone who contributed feedback, ideas, and recommendations, the public beta will be even more incredible.

If you’re a brand manager, communications or customer service professional, community manager, or on the product support or development team, PeopleBrowsr may very well be the most comprehensive, real time monitoring and engagement solution available today. My good friend Sukhjit, created a phenomenal video demonstrating how she tracked conversations, images, and videos related to the inauguration of President Obama on Twitter and across the Social Web – as it happened.

Hopefully this helps you…