Surviving Disruption in the Age of the Customer

Time to Cut Traditional Ads and Invest in Customer Relationships

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You're about to be disrupted.

Did you notice when the Kindle ravaged the publishing business? Did you pay attention when Groupon threatened retail, or when Expedia obsoleted travel agents. Did you heave a sigh of relief that it wasn't you?

Well, consumers have more knowledge, more power, and more leverage than ever. Thousands of startups are ready to help them. Change is accelerating. Disruption is coming to your business, it's just a question of when.

Old sources of advantage, like manufacturing power, distribution strength, even mastery of information flow, don't matter anymore. Digital undermines all of them. The only way to survive one of these disruptions is to invest in customer relationships.

Here's the punch line of Forrester's latest report, "Competitive Strategy In The Age Of The Customer:" only the customer obsessed company can survive. This is not just jargon, it has a real meaning. A customer obsessed company focuses its strategy, its energy, and its budget on processes that enhance knowledge of and engagement with customers, and prioritizes these over maintaining traditional competitive barriers.

If you believe this, you change the way you do research. You spend less on surveys whose results come back too late to act on. You invest instead in real-time listening to social media and the search for customers' unarticulated needs. You think the iPad came out of surveys?

If you believe this, you change the way you do service. You invest in a comprehensive cross-channel customer experience program, and stop treating your call center workers as slaves.

If you believe this, you change the way you do sales. You stop incenting your sales force to cram the channel and concentrate on connecting directly with end consumers. (The sorry state of the textbook industry, for example, came from concentrating more on professors than students.)

And you change your advertising. Take 10% of what you spend on advertising blasts – TV, print, outdoor – and spend it on interactive content, online social programs, and mobile apps that create real connections and loyalty among your customers.

It's a radical idea. If you do this, then not only will your company be better positioned to survive disruption, but you, the marketer, will be at the center of your competitive strategy. Of course, you could keep doing what you're doing now, trying to lock-in customers and lock out competitors with big brand pushes, contracts, and scale. That will work fine until some startup figures a way to serve consumers better and disrupt your business. Fair warning.

Josh Bernoff is senior vice president, idea development at Forrester Research and the co-author of "Empowered: Unleash Your Employees, Energize Your Customers, and Transform Your Business," a management book that teaches you how to transform your business by empowering employees to solve customer problems. He blogs at
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