In the spring of 2020, as we all grappled with the changes around the globe, several digital leaders from Ogilvy spent time with Ted Schadler, a Forrester analyst who has been covering technology, disruption, and transformation inside enterprises for nearly three decades. We discussed experience-led transformation, the dire need for differentiation in digital experiences, and the agency landscape. It was clear that we were at an inflection point: Enterprise transformation was transforming right before our eyes.
Depending on your circle of advisers and influencers, customer obsession has been around for a while. You can go back to P&G and the creation of brand management or look at more recent examples from the early days of Amazon. It was Jeff Bezos who created Amazon’s 14 Leadership Principles with customer obsession being number one. I can still remember reading the Fred Factor in 2004, when Mark Sanborn scratched the surface on what passion and obsession can do for an individual and an organization. Six years later, Delivering Happiness was released, and this Zappos-inspired book brought ideologies to corporations and consultancies around the globe.
Putting the customer first is not a new concept.
However, as more and more companies began to interact with customers digitally, new methodologies were born. I can still recall meetings with the CEO and founders of EffectiveUI, what Forrester would now refer to as a “digital experience agency,” and how they talked about “users.” This high-growth agency was creating experiences that were useful, usable, and delightful. This was revolutionary for IT departments that were accustomed to taking requirements and building interfaces. The methodology for creating useful, usable, and delightful experiences differed and caused organizations to shift the ways in which they designed and built software.
As enterprises moved from creating one-off applications to ecosystems of digital experiences, we saw the term digital transformation turn up. Digital transformation means a lot of things to different organizations, but it typically pertains to some mix of the following: replatforming the technology stack, organizing applications around the customer or user, leveraging data, creating new business models, and creating operational efficiencies. Somewhere in the mix, many companies forgot about the customer — or at least forgot to continually talk to customers so that after embarking on a three- to five-year digital transformation journey, the organization ended up at the destination only to find that its customers had gone elsewhere.
Which brings me back to our conversation with Ted. Like the paradigm-shifting change P&G embarked on by creating brand management, today’s leading companies are aligning around experience-led transformation. Brand is still important, but what makes a brand matter is more than just advertising. Brands are made up of thousands upon thousands of touch points. Thus, companies are shifting to customer-centric operating models, focusing their strategy, operations, and budgets on the customer. Brands are looking for ways to differentiate across all touch points, many of which are not owned solely by the product. As companies have focused on proper UX methodologies, they have unintentionally ended up with homogeneous applications. Often, great applications, but just not differentiated. Ted pointed out that nearly every airline app was the same, nearly every restaurant app was the same, and every retailer looked the same. Sure, imagery might change, but functionality and even look and feel were interchangeable. In some regards this isn’t a shock, since most competitors are trying to attract the same “users.” However, his point is that brands need to differentiate, and it won’t be on functionality.
Creativity has never been more important.
Which led to a conversation around which agencies and consultancies are doing great work in this space. It is obvious that no specific service provider or sector is dominating the market. Two key trends are apparent in this current state. First, budgets for experience still come from different parts of the organization. This often leads to different service providers being hired to execute against different business objectives. Second, the service provider space has been evolving rapidly as providers chase the money. Large consultancies are buying up creative shops, systems integrators have gone upstream into design and strategy, and traditional advertisers have stretched into digital experiences and development. Buying a service firm and bolting onto an existing enterprise takes time, and not all end up in a great place.
In any case, all three service provider sectors are going after marketing, IT, commerce, experience, and replatforming work, and from what I’ve researched, these service providers think they can do it all. Yet I see no clear winners, even as service providers add more self-proclaimed capabilities every year. Ironically, service providers are facing the same problem their clients’ digital experiences are facing: the need for differentiation.
But when all is said and done, the customer is the key. Acquiring customers, retaining customers, and up-selling customers are critical across all businesses. The service providers that continue to invest in understanding their clients’ customers will win in the marketplace. Much easier said than done.
Author: Mike McFadden, EVP Digital Transformation and Partnerships
As the Executive VP of Digital Transformation and Partnerships, Mike focuses on growth and driving the client experience. He believes in the power of collaboration and is inspired by watching global teams come together to solve complex problems. He is passionate about the human-centered approach that Ogilvy uses with its clients and energized by seeing this philosophy weaved throughout our organization and culture.
