Chances are your company is not a disruptor, but it is facing disruption. This is the situation for almost every CEO. Companies like Uber and Tesla are held up as heroes, but they’re anomalies. The rest of us aren’t disruptors, but we are being disrupted. And this is having a real impact on business performance and brand.
For instance, as we enter 2020, we are seeing a massive shift in digital marketing. Consumers are experiencing digital marketing fatigue, and they’re tuning out!
Too Many Fishermen, Not Enough Fish
At Sticky Branding, we compared similar marketing campaigns over a five year period. In 2019, compared to 2014, it is taking ten times the budget to generate 30% of the result.
If I look back further, the story is even more depressing. I used to be able to track lead attribution to articles. Between 2005 to 2008, I generated at least one new customer for every article I published. That translated into $15,000 in revenue for four hours of work! Plus, the lifetime value of each of those new customers.
Today, you can write a hundred articles and not generate a single lead. According to a research report by Moz, 50% of the articles published have no likes, shares, comments, and probably no views.
Sure, it’s easy to say things like, “Good content rises to the top.” But it doesn’t! You can write brilliant articles that people should actually pay for, but that doesn’t mean anyone will be compelled to buy your services. Why? Because they don’t see them!
With Google’s latest algorithm changes, the search engine is getting pickier. There’s now so much content being produced — combined with the billions of articles, videos, and website pages that have already been indexed — that Google can’t share everything.
For the past ten years, content marketing experts have proclaimed, “content is king.” Not anymore. There’s just too much of it. The reality is for your content to be seen you have to “pay to play.”
But then that triggers the next problem. Most CMOs already know this and are increasing their digital advertising budgets for 2020. This is creating a race to the bottom. Costs are skyrocketing, because there are too many fishermen and not enough fish.
How to Spot a Disruption
The erosion of digital marketing’s effectiveness is an example of a disruption. The strategies and tactics that worked well three years ago, or even eighteen months ago, are running out of steam. Yes, you can keep doing what you’re doing, but watch your performance metrics: expect your cost of customer acquisition to increase, exponentially.
Marketing is just a microcosm of the problem. You can spot the early warning signs of a disruption in two key areas of your business.
The first sign that your business is facing a disruption is in the erosion of profitability. Sometimes this will be at a departmental level, like marketing, and sometimes it will be in your business model. For instance, Uber and ride-sharing services have undercut the profitability of the taxi industry by up to 40%.
Study your balance sheet:
A) Are you noticing plateauing or slowing growth?
B) Do you face rapidly increasing costs?
C) Is it getting harder and harder to achieve your financial objectives?
Shifts in the financials are a good indicator that your organization may be facing a disruption — either at a departmental or industry level.
The second place to spot a disruption is in your corporate culture.
Change and disruption can have a negative impact on your employees and your culture. For instance, you may notice your employees are feeling overwhelmed and unable to keep up with demand. You know your people are working hard, but their efforts don’t seem to be making a difference.
As the pressure increases you may see increased in-fighting, increased sick leave, low morale, and increased employee turnover.
These are all early warning signs that your organization is not coping well with the change ahead.
Focus on Brand
It’s both offense and defense — a strong brand provides your business competitive immunity to the change ahead.
So what comes first: brand strategy or business strategy? It can seem like a chicken or the egg question, but it’s not. In a world of rapid change, brand strategy comes first — especially for small- and mid-sized companies.
Building a strong brand is based on a set of strategic choices:
- Where do we play?
- How do we win?
- How do we want to be known?
By clearly answering each question you are making decisions that will shape your business strategy. You are deciding what your brand will be and what it won’t be. You are determining who it serves, and you are capturing what you want it to become.
The clarity you have on your brand strategy also gives you the agility and strength to deal with disruption. It helps you to overcome bureaucracy and outdated systems get in the way of developing a business strategy:
- “It’s the way we’ve always done things.”
- “We’re an [insert category] business, not a [what you want] business.”
Branding isn’t about the past. It’s about the future. Your brand is a lagging indicator of what your business has done, but branding is about making strategic choices about what you will do.
This subtle difference is a source of strength. As you notice the signs of change — declining performance, working harder for similar results, increasing costs — take the time to revisit your brand strategy.
Your brand strategy is the operating system for everyone in your company — from marketing to operations to management. It sets the standards by how you are growing your business, and how to communicate what makes your business unique. It helps them make choices every day. The aggregate of all those small choices aligned in the right direction will give your business a significant competitive advantage.
If you and your team achieve this level of clarity, you will have the agility and foresight to deal with any disruption. You will be able to win, even if the rules keep changing.
Written by Jeremy Miller.
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