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The New Marketing 101: Forget Industry Boundaries, Develop Customer Context

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“Today, for only a few hundred dollars, we can hold in the palm of our hands smart devices with computing power that 10 years ago would have cost more than $1 million.  With gigabytes of storage capacity, anyone with a smart phone, a laptop, or a tablet computer can generate and analyze huge streams of data for just a few hundred dollars – data that would have cost billions of dlars in the 1970s.  Smart devices today are a million times cheaper and a thousand times faster than anything available 30 years ago.”

Ray Kurzweil, famed technologist and author of The Singularity Is Near – a controversial book predicting that machines will best human ntelligence by 2025 – spoke these words in a recent speech at the World Technology Network conference in New York City.

Crystallizing the mind-numbing advances in digital technology driven by Moore’s Law over the past three decades, Kurzweil puts into perspective a new form of complexity impacting all marketers today:  the immediacy and scope of data capture.  Data is everywhere.  We generate mountains of it every day, through daily Tweets, Facebook posts, photo sharing, and music downloads.  Streaming movies. Joining LinkedIn groups.  Purchases on Amazon. On and on it goes.

As Guy Blissett of IBM’s Wholesale Distribution group noted to me in a March 2012 interview, “Data is increasingly at the heart of just about anything we do.  Now, almost every interaction is quantified.  Need something from a store? You can check online to see it it’s in stock then purchase it virtually.  Want to rate the store’s website?  Complete their survey then tell your friends about it on Facebook.  Want to evaluate car insurance?  Go to YouTube and see if there’s a video for the brand you have in mind.  We have to become comfortable with more data and more technology.  But for a lot of people, that isn’t their normal state of being.”

Indeed, it may never be a “normal” state of being for everyone.  But it is rapidly becoming the “new normal” state of being for marketers.

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Per Steve Teig, CEO of award-winning software company Tabula, the quantity of data generated in a single day globally exceeds several zetabytes with one zetabyte roughly equivalent to “every movie ever made, every five minutes.”  Big data and what is now being called data science are changing how marketers think about numbers, how we look at patterns, and how we look at industry boundaries.  As data rises to become king of the marketing hill, we need to step away from old notions of industries as static forces, and recognize a new framework which I call “customer context.”

To glean insights about the power of customer context, we can look to many of the successes of Thomas Edison, Steve Jobs, and Intel for examples of how we can begin tapping customer context now.

Billions of Data Generators Walk the Planet

 

The world’s growing collection of smart devices – now numbering in the billions – constitutes a walking army of data generation nodes.  Besides keeping server farms busy across the globe, the data pools yielded by this mobile army are contributing to the disappearance of familiar industry boundaries.

For example, the banking customer who used to visit the local bank branch for multiple transactions can now use their smart phone to scan checks for deposit into their account in seconds.  They can pay bills from any smart device, transfer funds between accounts, even authorize “buy” or “sell” instructions to their broker.The New Marketing 101:  Forget Industry Boundaries, Develop Customer Context image Money and cell phone visual for SMC

In a speech at Research Triangle Park given in April 2012 by Bill Rogers, CEO of SunTrust, he commented on the vaporizing of boundaries in many longstanding industries, including banking, powered by this data feast.  Per Rogers, “The traditional boundaries of banking have been muddied.  Customers no longer have to come into a physical banking location to deposit funds or get cash.  Roughly two thirds of all bank transactions today are electronic. SunTrust now competes not just with the bank down the street, but with Facebook and PayPal.  We find ourselves requiring new tools just to analyze where we are, and where we want to go.”

For marketers, the rise of data and the evaporation of industry boundaries mean we must embrace new methods for understanding customers as well as finding new approaches for developing leading edge products and services in an accelerated way.  The use of customer context aids us here.

What Is Customer Context?

Rather than a linear process which involves protracted stage gates and specific milestones in time, think of customer context as a playing field, a roughly bounded space in which many different kinds of activities or customer interactions can operate simultaneously. Rather than conceiving of what a target audience or user community does as discrete and bucketed, customer context encourages us to begin looking at streams of activity within an expansive nonlinear framework, connecting clusters of needs with new patterns emerging through captured data as well as real-time data.

The New Marketing 101:  Forget Industry Boundaries, Develop Customer Context image icon visual for SMC

Customer context is framed by a core question or set of core questions that ultimately drive breakthrough insights into what products or services can be developed for a targeted group or user process.  The nature of customer context is intentionally dynamic – it becomes a playing field that you and your target prospects iteratively define together over time.  The tricky part is that sometimes this iterative process is consciously directed while other times it involves what can feel like uncomfortably wide-ranging experimentation.

Unlike “traditional” research formats, customer context embraces the importance of data patterns, linkages between human behaviors and technology (new or existing), as well as a desire to shift how a given target audience or collection of users views the relevance of what they are doing.  Thinking about context engages us in a different starting point than “knowing” what the industry boundaries are, what the benefits are, or even what the value proposition may be as this iterative process begins.  An understanding of customer context uniquely offers a rapid iteration and collaborative learning framework in which product development can be accelerated.

Here are two examples which illustrate ways to begin engaging customer context.  Think of the development of customer context as an activation mechanism which allows marketers to examine user patterns and behaviors with a new lens.

  1. Ask a new question:  When Thomas Edison began experimenting with incandescence in 1878, more than 40 years of data already existed about what scientists had discovered did not work in creating incandescence itself.  Rather than treading the same path as his predecessors, Edison began his explorations by asking “How do substances burn?” rather than rehashing what others had asked, namely “What substances will burn the longest?”  Asking a new question led Edison to develop a dynamic new context around lighting that involved concepts 180 degrees opposite from the prevailing thinking about electricity.  He devised a context which embraced oxygen free environments and natural compounds rather than metals while borrowing patterns from the world of telegraphy. He then conducted ethnographic research to determine how the technologies he had in mind would impact daily life.  At the start, Edison had no idea that the light bulb would represent the end point of his search.  But by asking a question which redefined the context of lighting itself, he generated breakthroughs that drove new technology and new customer behaviors.
  2. Imagine a new behaviorSteve Jobs, in conceiving the iPod, saw from customer data that “music” was a huge market. Yet, he was less concerned about leveraging the iPod to compete within the boundaries of the existing music industry, and more focused on generating a new context for behaviors that would entirely redefine music consumption itself. In order to generate this new context, he needed to create linkages between both new and existing technologies (massive data storage, long battery life, plus others).  He also had to imagine new customer behaviors which required connection to virtual libraries of music – birthing iTunes, a revolutionary means for digitally accessing music. Jobs focused on customer context and new behaviors in masterminding breakthroughs for both the iPod and iTunes, shunning industry boundaries.

We can see Intel applying both these customer context approaches today — asking new questions and imagining new behaviors.  Recognizing the speed of market change in smart devices, and mapping this against the company’s slow pace of new chip development, Intel marketers began asking “What kinds of digital interactions appeal to young adults?”  To address this, working under the direction of CMO Deborah Conrad, Intel brought together  software engineers, R&D specialists, and data scientists to develop online as well as streaming content for prescreened Gen Y audiences delivered during live performances by popular rock artists hired by the company.  The Intel team analyzed real-time interactions of audience members with online content during these live performances as part of their customer context exercise. Rather than focusing on industry boundaries, Intel found insights for new offerings via analyzing new patterns of connections between users in this live concert community.  They embraced the “data mountains” that were generated by this process and intentionally sought to create customer context that created a new ecosystem for chip applications.

Where can you begin employing customer context rather than the tired, linear constructs of stage gate mechanisms or other traditional research?  Consider how asking a new question or imagining a new ecosystem of customer behaviors could revolutionize your offerings and break old definitions for industry boundaries you may still be clinging to.

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