According to a recent study by Chief Outsiders, a national marketing strategy consulting firm, 88% of Chief Marketing Officers (CMOs) see the difficulty in staying ahead of Marketing Technology.
Why?
According to Forrester, technology has not just impacted business, it has disrupted it. So much so that CNBC reported that the average life span of an S&P 500 company is about 20 years. It was 60 years in the 1950s according to Credit Suisse. 1
The way technology is evolving, imagine what that figure might be in 20 years.
All you have to do is look at Moore’s law to understand why technology is moving so fast.
What is Moore’s Law & How Does It Impact Marketing Technology?
In 1965, Gordon E. Moore, the co-founder of Intel, made this observation that became Moore’s Law.
Moore’s Law refers to Moore’s perception that the number of transistors on a microchip doubles every two years, though the cost of computers is halved. In addition, Moore’s Law states that we can expect the speed and capability of our computers to increase every couple of years. Plus, we will pay less for them too. Another tenet of Moore’s Law asserts that this growth is exponential.2
Source: Moore’s Law graph3
It is hard for a human to keep up with exponential growth. And marketers are human. This is why marketers are having trouble keeping up with marketing technology.
Why specifically do CMOs think it will be hard to stay ahead of technology?
Because many CMOs haven’t kept up with marketing technology to-date. And the exponential growth that is expected to continue will be mind-boggling.
The Marketing Menu Changed!
For example, as recently as the 1990s, marketers had a finite list of advertising and promotional tactics at their disposal. The tactics to increase sales, improve brand awareness, and grow market share were low tech too.
- Television (local, spot and cable)
- Radio (Local & national)
- Print (Direct mail, FSI’s, newspaper -remember those?)
- Out of Home (Billboards, transit benches, and shelters, taxi’s, etc.)
- Promotion (sports teams, schools, etc.)
- Yellow pages if a local or multi-location business
Today, with the addition of OTT (Over the Top) TV, banner ads, advertising on social media, and other digital options, the choices on where to place advertising dollars are staggering.
MARTech = Marketing Technology
The modern CMO is faced with options in Martech and Adtech. Yes, those are real terms used within the marketing world. In 2011, we had about 150 MarTech choices. By 2019, there were over 7,000 choices.
To put in perspective, RedHat published the following tech stack that is aligned with the customer journey. One brand using this technique would interact with over 30 Martech vendors.
Who can keep up with that, let alone stay ahead of it?
Source: 4
Technology has disrupted business in many ways. According to Forrester, the primary reason technology has disrupted business is based on three issues:
- Empowered consumers
- Blurred lines between digital and physical
- Disruptive business models powered by data and tech
In their reports titled “Winning In The Age Of The Customer,” and “The Customer-Obsessed Enterprise” Forrester suggests that companies that are not just customer-focused, but customer-obsessed, achieve higher revenue growth, customer satisfaction, and employee satisfaction.
Enter the COVID-19 pandemic
To put into perspective how important technology to business is, consider how different brands in food service were impacted by the pandemic.
- Wing Stop reported sales +8.9% for the last two weeks of March when most restaurants were down 60-80% source: https://www.restaurantbusinessonline.com/financing/despite-pandemic-wingstop-reports-same-store-sales-jump-nearly-10
- Domino’s reported sales +7.1% for April (March 23 to April 19) Source: https://www.qsrmagazine.com/fast-food/dominos-already-building-new-normal
- Chipotle sales decreased 16% in the last two weeks of March compared to -25% at McDonald’s & Pizza Hut, -30% at Taco Bell and -35% at KFC
- According to Black Box Intelligence, sales reported by all restaurants in their database for the week ending April 19 were -47.6%
As reported in QSR magazine for Domino’s “What’s happened in the first four weeks of Q2 (March 23 to April 19) has been more enlightening. Domino’s witnessed U.S. company comps jump 10.6 percent. Franchises are up 6.9 percent. Blended, it’s a 7.1 percent year-over-year same-store number.”
Chipotle’s digital sales grew 80.8% and accounted for 26.3% of sales for the quarter leading into the pandemic. Source: https://ir.chipotle.com/2020-04-21-Chipotle-Announces-First-Quarter-2020-Results
The first 3 examples are from brands that were already focusing on their digital capabilities. Wing Stop was one of the first restaurant brands to offer chatbot ordering on social media platforms. And Domino’s has become the de facto leader in the pizza segment when it comes to technology.
The key takeaway for restaurants is that the pandemic created a new set of consumer desires and demands and the brands (often chain with marketing teams) already knowledgeable and leading in technology won. This plays out in retail too. If you’re a retailer and you didn’t have an eCommerce platform prior to March 13, you’re probably hurting bad, or closed.
The pandemic forced many brands to accelerate their use and adoption of technology to meet the new consumer needs.
Conclusion
The bottom line when it comes to brick & mortar businesses is that marketing technology is part of the customer experience and great technology can create a great frictionless user experience. Bad technology can do the opposite. The pandemic forced business owners to embrace eCommerce, digital ordering, and contactless payments and transactions faster than ever before. Consequently, brick & mortar brands must:
- Own all the consumer touchpoints
- Own customer data
- Connect offline to online for a true omnidirectional view of your customers
It’s not easy to keep up with technology. The effects of social distancing and working from home simply made every business pivot or adapt to less touch and more connection via technology.
If Forrester is right, the technology we marketers use to reach intended customers needs to pivot and more companies need to become customer-obsessed to succeed.
Staying ahead of that trend will be very difficult, very difficult indeed.
Doug Reifschneider is a 30+ year marketing veteran in the foodservice industry. He currently works with Chief Outsiders as a fractional CMO.
https://www.itbpartners.com/doug-reifschneider/
Sources:
- https://www.cnbc.com/2017/08/24/technology-killing-off-corporations-average-lifespan-of-company-under-20-years.html
- https://www.investopedia.com/terms/m/mooreslaw.asp#nearly-60-years-old-still-strong
- https://hackernoon.com/moores-law-is-alive-and-well-adc010ea7a63?source=rss——-1
- https://cdn.chiefmartec.com/wp-content/uploads/2020/02/red-hat-martech-stackie.jpg
- Source: Winning In The Age Of The Customer Forrester report
- Source: The Customer-Obsessed Enterprise Forrester report
