Speculate to accumulate, or so the saying goes. Companies need to make investments, even at risk, in order to grow, says Shaun Bailey.
This mid-twentieth century phrase no doubt rings true today. But what if changing consumer behaviour is causing it to adopt a new meaning?
Thanks to digitisation, convenience and personalisation, businesses in almost every single sector are under unprecedented pressure to evolve in order to keep up with their customers. People want more and they want it now. But even the meaning of “choice” has changed. Where once people were satisfied taking their pick from clothing in an array of sizes and hues, now they want pieces tailored and colour-matched to their specific requirements. Uniqueness is the order of the day.
Brands in many sectors are setting a gold standard here. In beauty, for instance, product sampling service Birchbox delivers personalised kits to its loyal customer base, which has grown from 600 subscribers in 2010 to more than a million worldwide today. In wearable technology, Apple Watch's ongoing collaboration with Nike has resulted in a range of wristwear to match runners’ trainers. adidas is going one step further by announcing it will start mass producing a trainer with a 3D-printed sole to allow footwear to be more precisely shaped to an individual’s weight and gait.
These brands are investing in cutting-edge technology and broadening their offering to more closely meet their customers’ expectations. But are they doing so speculatively? Absolutely not. These market leaders know exactly what people want because they take the time to communicate with them every single day. For instance, Birchbox’s content-rich website provides inspiration, while the brand’s social-first marketing campaigns aim to reach out to and understand the people using its products. Meanwhile, data from wearable technology, alongside a digital-first approach, allows sportswear brands to get to know their customers better than ever.
But for some sectors the pace of evolution is much more difficult to acclimatise to. What’s more, ROI has never been more relied on as an indicator of success. Entirely data dependent, every penny must be accountable. Monolithic businesses that cannot adopt a fail-fast approach when it comes to exploring innovation, seem to barely stand a chance.
One such industry is financial services, where traditional brands are currently under attack from an army of FinTech market entrants that promise a new world order; one that’s revolutionary, intelligent and intuitive.
At Jacob Bailey Group, we work with a number of financial services brands and this year embarked on a research project to try to help them better their chances of keeping up with the competition. We surveyed 1,200 UK consumers to understand the concerns they felt when dealing with financial services providers today. Staggeringly, we found that billions of pounds are at stake if only these businesses sorted out how they communicate. Our survey respondents identified channel, frequency and messaging considerations as all appearing to be overlooked; while lack of personalised and helpful information, and general misunderstanding of individual financial circumstances are common. Financial services simply do not get their customers. The result? People do not feel valued.
But what if they did? Our research found more than 50 per cent of the existing customers of financial services companies would be willing to spend more money on multiple products with the same provider if only they received better communications. And we aren’t talking pennies here or there. We’re talking £2.6 billion on debit cards, £2.3 billion on credit cards, £.2.3 billion on car insurance, £1.9 billion on home insurance. The list goes on.
Technology can seem unnerving to many industries. However, while it has put power in the hands of consumers, it also offers businesses unprecedented opportunities to get to know them. Our research shows that those struggling to keep up with the times could turn their fortunes around simply by paying more attention to their marketing strategies. Speculation in its crudest sense simply isn’t enough for them to thrive today. The greatest investment businesses can – and should – be making is in how they communicate with people. Only then will they know how best to provide for them.
Shaun Bailey is the founder and CEO at Jacob Bailey Group, the Creative Business Services Agency