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Four marketing lessons established brands should learn from digital native companies.

Dr Thomas Oosthuizen Global Consulting Director

Digital native companies are setting customer expectations high in just about every industry and challenging established brands’ business models – a prospect that keeps many C-suite executives awake at night.

The annual EMEA Crisis Survey from Burson-Marsteller last year found CEOs in EMEA ranked the entrance of a disruptive competitor into their marketplace as the biggest threat to their businesses.

This danger is multiplying as the digital disruptors grow into powerful platforms that use their IT infrastructure, customer data and algorithms to extend into new industries.

This danger is multiplying as the digital disruptors grow into powerful platforms that use their IT infrastructure, customer data and algorithms to extend into new industries. Just consider, for example, how Uber is expanding from personal transport into delivering food and flu jabs.  Or look at how Amazon has grown from an online bookshop into an ecommerce superstore, the world’s largest cloud computing provider, a logistics company, a media giant, and so much more.

Faced with the market power of these digital disruptors, established brands should learn how to compete with them using their own weapons.

Here are four ways in which digital native companies succeed.

What digital native companies all have in common is that they make customers feel like they are the centre of the universe.

1. Put customers at the centre

What digital native companies all have in common is that they make customers feel like they are the centre of the universe. And the reason that customers have that perception is that they are placed at the heart of disruptive companies’ business models.

Rather than focusing on product or departmental siloes, companies like Netflix, Uber and Airbnb focus first on the customer experience. Their goal is to be relevant, personalised, efficient and convenient – the focus is on knowing what customers need and want so that they can deliver on consumers’ expectations.

2. It’s all about data

Following on from the first point, data is the key to unlocking better relationships with consumers and engaging with customers in ways that deliver business value. Most companies have access to a wealth of data from CRM, web analytics, ad tracking, social media, and other sources.

The digital disruptors, however, have mastered using this data to get insight into the needs of their customers and deliver more personalised engagements. Netflix and Amazon, for example, use data to offer personalised recommendations to their customers.

With rich data about customers’ behaviour and spending patterns, brands can deliver more relevant experiences to consumers. They can, for example, craft sophisticated messaging and offers that are highly relevant to granular and profitable market segments. They can also understand what keeps customers coming back for more, and ensure they give customers what they want, when they want it.

3. Commit completely to digital

One of the major lessons to take from companies such as Amazon and Uber is that a half-hearted digital strategy is no longer enough to remain relevant. The customer is digital and the customer wants every experience to be as simple as online banking or hailing an Uber car.

Thus, companies can no longer think of digital as a separate channel, managed by a separate team, nor can they launch ad hoc digital initiatives without thinking about how these integrate with the rest of their channels. They must look at digital as a fundamental building block in their business models for the future.

The implication is that CMOs need to build up their own digital skills and those of their teams. They cannot outsource digital strategy to an agency and they cannot spin out separate digital roles. They need to see digital as part of a unified customer experience spanning multiple touch points.

4. Marketing can’t be a silo in the digital era

Digital technology is not just about marketing – it affects nearly every element of the business, including IT, customer engagement, sales, legal, finance, HR and external partners.

The most successful digital brands have aligned all of these aspects of their business behind the need to give great customer experiences – not just when the customer is shopping but also when he or she needs to return a product, get customer support, or pay a bill.

Getting all of this right is a massive challenge for companies that are not digitally native – it demands massive changes to organisational structures and cultures, as well as significant investments in data and technology infrastructure. But those that get it right can disrupt their own markets and business models before someone else does so first.

About The Author Dr Thomas Oosthuizen - Global Consulting Director

With over 30 years of experience Thomas is a marketing and brand strategy expert working with many global leaders in their field. His core strength is as a business-thought leader translating business strategy into marketing and marketing communications strategies and deliverables.

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