The Survival of the Fittest?
by Jimmy Muldoon, Red Badger
On March 16th, the UK went into national lockdown. Non-essential shops closed and online delivery slots for supermarkets were being snapped up in seconds. Just a week later, a national lockdown came into force in the U.S., and two weeks after that, Amazon’s share price had increased by 28%.
Conversely, by the time the lockdown was announced in the UK, International Consolidated Airlines Group’s (the parent group of British Airways) share price had crashed by 64%.
The coronavirus pandemic has impacted the majority of companies across the globe in every sector.
We didn’t see this coming
The two examples above demonstrate the immediate impact of the pandemic. Companies had little time to react and some were simply better set up to deal with what was coming, others saw entire industries crippled pretty much overnight. Seven months later and the planet is still coming to terms with how to operate in this hiatus-state before we find the ‘next-normal’.
We should have seen this coming
We’ve seen organizations quickly pivot and take advantage of changes in behavior. In April, Zoom was able to capitalise on the increased need for video conferencing capabilities. Loyal Google Hangout users were migrating to Zoom because of the gallery view. Zoom later removed the call length cap on the free version to increase usage. During the summer, other platforms caught up but this hasn’t stopped Zoom’s share price from increasing by more than 400% and is now valued at more than ExxonMobil.
Customer behavior has shifted to more digital products largely because of changes in everyone’s immediate circumstances, but these are also rewiring expectations for the future. The longer that users are forced to adopt new practices due to lockdown, the more likely these new behaviors are to persist. Some of these trends (e.g. Zoom happy hours) will reverse after the pandemic but others (e.g. widespread remote working) are undoubtedly here to stay. Organizations need to be able to understand customer behavior and exceed a new and evolving set of expectations when it comes to digital experiences.
The prize is only getting bigger. In 2019, two days of online sales hit over $2b, in 2020 - over 130 days have so far.
Before the pandemic, Gartner reported that 73% of buyers claimed the experience was the number one factor to loyalty, not price or brand. With loyal customers five times more likely to purchase again, product experience is something that has to be right. This is even more important as people now rely even more on digital services.
Now we know, what’s coming next?
So what’s next? It’s one thing to know that changes need to be made, but knowing what to do and how to do it is another challenge entirely – customer problems don’t exist in isolation, they are part of a context and ecosystem (which itself is a moving target)...
Organizations are complex. Start-ups can grow and pivot at pace as they don’t have legacy systems or a complicated integration to consider. How do large organizations cut through the complex to deliver change? Then there’s the issue of data. To understand what customers want and expect requires a lot of data and skillful people to correctly interpret it in order to produce actionable insights.
My advice? Start. That’s the key. Just start. Too much time is wasted building and looking at business cases that are built on untested hypotheses and introspective thinking. Start with your customers. Speak to them. If you have research from 2019, bin it. It is irrelevant in the world we live in today. Understand what excites them and where they are currently getting frustrated with your products, services and experiences. Adopt a framework that allows your teams to focus on customer value (we use North Star). By being customer-obsessed, you’ll ensure that whatever you build will be used by customers.
This requires clients to commit to new ways of getting things done: to fund a Product mindset and delivery team, rather than a Project one; to work across functions, with insight and research embedded in teams, and with product and design thinking closely coupled to engineering and technology processes that get new experiences into the hands of customers immediately. A few sacred cows might need to be challenged (automated governance anyone?) and collaborations across silos must be mandated.
At Red Badger, we help clients focus on a single customer segment and deliver value for that segment. The reason we do this is to prove the case for change. If we can demonstrate value in a single segment it’s easier to get the organization on board for a greater velocity of change. Plus, building a solution for a single customer segment means we build out processes and systems that make it easier to tackle additional customer segments or learn and iterate on the original solution and add value.
Considering these times of COVID it seems fitting to lean on a biological example. The theory of evolution is often misquoted to ‘the survival of the fittest’. This would lead us to think that it’s the biggest and most powerful that survive. Darwin’s actual statement on the theory of evolution is “It is not the strongest of the species that survives, not the most intelligent that survives. It is the one that is the most adaptable to change.”
A fully integrated Product-led approach, obsessed with customer value, is the route to adaptability. Those organizations that recognize this and make the change will be those that thrive in our new, less predictable world.
Jimmy Muldoon, Red Badger