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As a strategy & innovation consultant I came to meet & work with many large & mid-size organizations in various industries. Far from generalizing or being judgemental, I often notice that in most cases Inertia and lack of strategic thinking have done more damage than a slow economical cycle which is outside their control.
Let me explain, if we take Lebanon as a marketplace, we quickly observe that the big chunk of companies are operating either in mature or in declining categories. Moreover, their business practices did not evolve much since at least 20+ years.

Wether in retail, automotive, F&B, etc.. all these segments will not witness major growth due to: demographic stagnation, competitive intensity and bargaining power of consumers to name a few. Most of these industries with their current structure have reached their peak and will at best grow in line with the national GDP rate (1-2.5%). if applied on a company that sells for $M5 worth of goods, the incremental revenues will at best represent $K100-$K150/year, barely enough to cover the increase in cost of living or cost of doing business due to inflation (approx. 4%). people will not start eating 5 meals a day, will not drive more than 2 different cars at best, will not buy more clothes than what their closet can fit, etc..

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That shows why most companies have seen their sales & profits stagnating over the past few years. And for those who will manage to beat the market and increase sales by more than 10%, it is most likely that this result will be achieved at the cost of very low profitability as they will need to invest in aggressive marketing and promotion in various forms & offers to steal market share.

So if the market is not growing enough & you can't profitably gain market shares from rivals due to customers inertia driven by your offering's lack of differentiation, the question becomes 'Where would growth come from?'

I am sure you agree that this is not a good story for any businessman who would like to see his turnover doubling every 5-6 years and his return on Capital following suit so he can invest in salaries increase, recruitment, bigger stores and up-to-date technology. so how can we break this vicious cycle and ignite sustainable growth that create value?

The answer is not seeking to gain incremental growth in mature sectors but rather to invest in Innovation strategies to create new market spaces and new consumers. How? let us look at examples that have disrupted existing businesses and created new markets & new customers​

Airbnb: This company has adopted what we call a 'Disruptive innovation' strategy by smartly targeting 'non-consumers' of hotels and travel services &/or 'over-served customers' who don't really need or value a lot of the hotels numerous facilities with their expensive price tags and limited immersion in city life experiences (living like true Parisian or Lebanese). Their innovation was to have an in-depth understand of these users problems & aspirations then leveraged technology to put them in contact with a segment of people who are looking to make some extra money by renting their real estate/assets when not in use. By doing so Airbnb created a whole new market and opportunities for those 'always wanted to travel or live like the natives' and for a lot of entrepreneurs to open shops to serve these Hosts who are not able to manage their properties on regular basis (due to work schedules or other constraints).

In Lebanon, occupancy rate for apartments on Airbnb is increasing, averaging around 55 percent in Beirut, according to AirDNA, a website offering statistical data on Airbnbs around the world. The number of Beirut properties listed on Airbnb has grown fourfold in the last three years, with listings jumping from 300 to nearly 1,200 offerings this year, according to the November issue of Lebanon Opportunities. Renting apartments and rooms through the online platform has become an attractive business for investors. “Airbnb started with individuals listing their apartments, but it is becoming a business model, where professional management companies are leading the market,” said Elie Karaa, managing Partner at Local Host, which manages 50 apartments through Airbnb.

One can confidently say that a substantial chunk of the growth in the hospitality sector has been scooped not by traditional players (hotels) but by a company that don't have an operation in Lebanon nor a single employee or ever invested in any asset!..Yet managed to create & grab a whole new market & customer base.

Same applies to Uber ( new mobility model), Netflix (who disrupted the low-quality video rentals shops). These examples show that the new competition has no boundaries and it will not play in existing markets but will innovate to Create new ones and render the legacy ones at best very weak & at worse totally obsolete.

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What can local companies do about it? Innovate to create new businesses that will re-ignite double-digits growth.

Innovation carries a lot of misconceptions ranging from: technology only, not critical at this stage, 'not for us', etc..

Innovation is not 'invention'. It is simply a way to design better or cheaper new offerings that will make your company strategy tangible to accelerate growth that is economically profitable and appreciated by existing & new customers.

There are numerous ways a company can innovate. to do so it has to start by:

a. Conduct a PEST analysis to contextualize your business now & in the near future.

b. Defining what business are you in? (equally which ones you are not)

c. Understanding your customers 'job-to-be-done', their frustrations & aspirations

d. Identifying your current competitive advantages and core capabilities

e. Synthesize the above data then Ideate new 'Business models' with ten-types scenarios.

f. Design prototypes to test the solution in-situ to measure its appeal & mitigate risks.

Let us give a tangible example; auto-dealers are all suffering from a decline in sales which are highly dependents on the mother company's ability to design & manufacture new models that will hopefully appeal to local buyers taste but also to consumers spending appetite. This makes their business outlook fully reliant on external factors that can be highly cyclical.

The solution: 'what if' a car dealer decides to innovate in order to lower his dependency on suppliers and stabilize his revenues by offering a car sharing platform service? Leveraging those who have a car that they don't always use (only drive to work & back for ex.) and targeting those who either use cabs & poor public transport or those who can not afford to buy a car for each family member or those who moved down-town and now need a car only 'occasionally'?

The legacy thinking would say that this initiative would affect new car sales. Well, not quiet true since he would be targeting non-users or over-served but also dealer can supply potential entrepreneurs with his range of pre-owned cars to be put for sharing after being recouped from new sales..


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This is just to illustrate what should every company be thinking about to move from 'Playing to play' onto 'Playing to win'. i.e beating market levels and winning with customers in a unique way (profitability, experience, market share,...). To do that it must seek to strategically answer the critical questions: Can I redefine the business am in? Where would growth come from? how can I reduce dependencies? Are there opportunities to differentiate that am overlooking by being in my comfort zone? Then use innovation to develop adjacencies and new categories that will energize the growth curve, create new jobs, new entrepreneurs, profitable growth and transform our aging 19th century domestic economical model into a brighter 21st century knowledge & innovation based model.


Joe Ayoub is the founder of brandcell. A Strategy + Innovation consulting firm
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There’s a change in business leadership that’s transforming the way we solve problems...and that shift revolves around design thinking. Design affects much more than appearances and can help develop innovative solutions for just about any problem.

Paola Antonelli, said it best: “Design is not style. It’s not about giving shape to the shell and not giving a damn about the guts. Good design is a renaissance attitude that combines technology, cognitive science, human need, and beauty to produce something that the world didn’t know it was missing.”

If that sounds a like a bit of a stretch, bear with me for a moment…

According to Tim Brown, design thinking is “a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” Businesses deal with diverse and complex issues on a daily basis, but all of these issues all have two things in common: we need to understand them, and we should address them. Design thinking helps with both.


Take IBM As An Example:

In a recent project, an airline approached IBM to improve its kiosks to speed up passenger gate check-ins. While the engineers started by improving the kiosk’s software, designers went straight to gate agents to ask why the check-in kiosks weren’t used more effectively. Designers found out that female gate agents struggled to keep kiosks charged because their constricting uniforms prevented them from reaching electrical plugs behind the machines. By finding the root of the problem, IBM delivered a mobile app that significantly eased the boarding process and reduced airline costs. -Anne Quito of Quartz.

Thinking like a designer helps you become aware of issues in a way that isn’t very natural to other disciplines, and this can be especially helpful when users are involved. Design both helps you understand issues in a new context, and figure out how solutions will work in real-time.

And now that I have your attention...

Here’s Exactly Why Industry Leaders Are Betting Big On Leading With Design:

1. It Redefines The Problem

IBM was able to come up with an innovative solution because the designers involved questioned what the real problem was. Sometimes the real issue at hand isn’t immediately obvious...or worse, the problem we try to address is really the symptom of a larger problem. Design thinkers always question the brief, because sometimes the real issue isn’t seen at face value.


2. It’s Collaborative

Design thinking calls for collaboration, creating a positive environment that’s great for growth and experimenting. Herbert Simon, Professor of Psychology at Carnegie-Mellon University even said “There are no judgments in design thinking. This eliminates the fear of failure and encourages maximum input and participation. Wild ideas are welcome since these often lead to the most creative solutions.”


3. It Solves The Same Old Problem In A Different Way

It’s important to create and consider many options for similar problems, even when the solution seems obvious. Having multiple perspectives can lead to innovative approaches. After all, would the same old problem keep happening if solutions were effective enough?


4. It Puts The User First

Design thinking helps shift focus away from a ‘features-first’ approach to a ‘user-first’ mentality. By observing and speaking directly to users, you can solve the problems that real people face. That’s the difference between adding value versus blindly adding features based upon assumptions. Great problem-solving taps into a customer’s feelings and experiences to provide purposeful and informed changes.


5. It Leads To Simpler Solutions

Design perspectives don’t just address challenges, they rethink them entirely. This tendency to reshape problems leads to innovations that seem deceptively simple. With the user constantly in mind, design thinking ensures that solutions are intuitive, and even humanizing.


Better Business By Design

Design is a process; and when you think of it that way, it becomes less about appearances and more about discovering new opportunities to meet and exceed a user’s expectations. It’s both a mindset focused on solutions and managing philosophy of great businesses.

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Some of the world’s leading brands have rapidly adopted the Design Thinking approach:
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The McKensie report regarding the Lebanese economy development has been finally out earlier this year. One of its main recommendation for regaining stability and growth  is to focus on the key sectors that would drive the economy potential.
It is not surprising that knowldege and innovation are at the core of these recommendations. They should be a key focus for the Lebanese government economical plan: relying on thechnology to develop the productivity in key sectors but also helping companies across sectors to  innovate in order to survive and drive growth.

To do so, Lebanese Companies need to focus on critical, differentiating capabilities in order to align innovation with their overall business strategy. Referring To Booz & Co article on the subject, “the best performing companies develop additional capabilities that are very specific to their chosen innovation strategies. Some companies are technology drivers: Their strategy is to develop leading-edge products. These capabilities, however, are less crucial for need seekers, whose strategy is to identify unmet customer needs and innovate to fill them. The most successful companies, we found, are those that focus on a particular, specifically aligned set of common and distinct capabilities that enable them to better execute their chosen strategies.”

Successful innovators globally focus on what matters most rather than spreading their effort and resources on capabilities that are less critical. Identifying the core value proposition of Local Brands and Businesses will lead to better focus and alignment, and will uncover innovation opportunities, boost top-line growth and reduce relative costs--all at the same time.

Today, through the toughest economic crisis of the country, it is the right time to react and take action. Innovation should not be considered as a luxury anymore, Innovation is a must to survive, to avoid cannibalization, to disrupt the market before being disrupted.

It is time for local businesses to re-invent themselves like global ones are doing constantly to keep up with market changes. Lebanon has always been the country of services and creativity, in a time where services are gaining grounds VS products facilitating the life of busy consumers, Local firms in the sector business for instance should jump on the opportunity to take their offering to a different level using the latest human centric approach to be in line with their customer’s changing expectations.

Brandcell Innovation and strategy consultancy have been applying the design thinking approach for few years now, helping Brands and Companies in Lebanon and the region in various sectors (banking, HORECA, Healthcare, Retail...) define their value proposition, innovate and re-design their service strategy and experience. 

Because we believe that here in this small country more than anywhere in the world innovation is the precious fuel of our future.
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With pressure at an all-time high and investors losing patience, it’s time for brands to take control of their destinies. Although there’s no single way forward, the mission remains clear: Disrupt your business before someone else does.

On the whole, the fast-moving consumer goods (FMCG) sector continues to face headwinds to growth. Many longstanding brands within the sector, while once prosperous, have found it challenging to repeat yesterday’s success. At the root of these challenges is the rapid pace of change in the world, which has forever altered the way consumers engage with brands. While this dynamic has certainly challenged traditional conventions, it has also presented many new opportunities. The brave brands that have capitalized on these opportunities are finding success and are seeing a clear path back to growth. Those who haven’t proactively embraced today’s pace are finding themselves vulnerable to a new generation of fearless entrants intent on bringing disruption.

It’s time to bring the fast back into fast-moving consumer goods. We offer four ways that brands can bravely seek to disrupt their businesses, as well as examples of brands that have taken the leap, in an effort to jumpstart their business, and returned the fast to FMCG.

1. Disrupt by Thinking Like a Startup

Innovation is the lifeblood of any brand. It always has been, and always will be. But innovating at scale has posed a challenge for large brands within large corporations. Applying established growth methods to established brands is, by definition, counter to the innovation they seek. To achieve mass disruption, brands need to think like a startup.

This is a strategy into which many FMCG companies—including Nestlé, Procter & Gamble, Coca-Cola, General Mills, and Mondelēz—have leaned, forming startup/venture funds or incubators to find their next innovation. These organizations are finding success by isolating themselves from the typical constraints and KPIs of their larger businesses and acting like entrepreneurs, working with lean innovation philosophies built to nurture a startup mentality and disruption.

Within this year’s Best Global Brands ranking, there are several standout examples of brands fostering mass disruption by thinking like a startup. All of these companies have demonstrated strong commitment and responsiveness:

  • Nestlé started an internal innovation project consisting of a digital acceleration for the company. Called DAT and inspired by Facebook and Google, the project is an entrepreneurial space, located in Nestlé’s global headquarters, where employees work for periods of eight to 12 months at a time. DAT members undertake immersive training and work on strategic business ideas, often participating in hackathons and intensive problem-solving activities. For Nestlé, the overarching goal is to “loosen the screws” of a large and hierarchical corporate company in order to permit flexibility and experimentation, e.g., the values of a successful startup.
  • Pampers found success in its Pure Protection line, which is an example of its lean innovation process, developed by a 10-person team over approximately 18 months—roughly half the amount of time and staffing resources of a typical rollout.
  • Lancôme launched Le Teint Particulier, a cosmetic foundation that was created by L’Oréal’s technology incubator. The foundation is customizable to specific skin tones: the Lancôme staff take a full scan of a customer’s skin and then use a diagnostic tool to calculate the precise formula that matches that skin. The foundation is then mixed in-store, before being placed in an identifiable bottle, with all the skin-type and color-preference information kept on file for the consumer’s next visit.

Want more inspiration on thinking like a startup? Explore the Breakthrough Brands that are driving disruption across sectors.

2. Disrupt through new business models

The rise of e-commerce has certainly transformed the landscape for FMCG brands forever. Brands that have relied on traditional business models, built on the shoulders of brick-and-mortar distribution, must continue to look for new ways to develop consumer-centric propositions—from product development to branding to distribution. Brands that haven’t sought new business models have found themselves being disrupted.

For instance, we’ve seen how FMCGs have been disrupted by the direct-to-consumer (DTC) challengers that are taking control of their value chain, capitalizing on shifting consumer purchasing behaviors. It wasn’t long ago that propositions like Dollar Shave Club, Warby Parker, and Allbirds were not considered serious competitors by the category’s elite. However, these brands recognized that the DTC business model has many benefits: the ability to be nimble, leveraging the opportunity to get much closer to consumers, innovating in real time in the marketplace, controlling the entire value chain, and pivoting with agility.

In response, some large FMCG brands are taking a page out of the disruptors’ playbooks and exploring alternative channels and business models as a means of innovating at mass scale. From this year’s Best Global Brands list, we highlight the following examples:

  • PepsiCo launched DTC product Drinkfinity, as the company responds to consumer preferences that are shifting from fizzy beverages to alternative territories. This innovation features a reusable water bottle with disposable flavor pods.
  • Kellogg’s launched a key innovation initiative, Joyböl, a “ready-in-seconds smoothie bowl,” targeting the hyper-convenience trend. In doing so, they also launched DTC, forgoing traditional distribution.
  • Gillette, fighting back against category disruptors, began receiving orders through the company’s new online DTC service, Gillette On Demand. This new service offers the traditional subscription-only option and an additional flexible on-demand purchase option, with an industry-first reorder process that is as simple as sending a one-word text message.

3. Disrupt through acquisition

With organic growth continuing to be a challenge, FMCGs should look to grow through acquisition, either to boldly enter new categories (to capitalize on shifts in consumer desires) or to bravely double down on categories where they already play.

Interbrand’s Brand Strength methodology comes into play when considering an M&A strategy, as data shows that this is a viable approach to jumpstart a stagnant category. M&A activity among the top FMCG companies, including P&G, L’Oréal, Nestlé, and Unilever, has seen an increase for 15 years running, driving the highest revenue jump for this group since 2011.

Examples from this year’s Best Global Brands:

  • Kellogg’s acquisition of RXBAR for USD $600 million was a bold move to capitalize on shifts by consumers to more health-conscious offerings with simpler ingredients.
  • L’Oréal acquired Modiface, a leading-edge VR technology player, signaling its commitment to evolving consumer experiences with cosmetic brands.
  • Colgate purchased two of the fastest-growing professional skincare brands, PCA SKIN and EltaMD, in an attempt to elevate the brand into the global skin-care category.
  • Danone completed its USD $10 billion acquisition of WhiteWave, bringing together businesses and brands to better meet consumers’ diverse preferences in high-growth categories.

4. Disrupt by bravely taking a stand

Disruption can take many forms, including casting your brand in a new light and creating new relevance and engagement opportunities with your audience. More and more, people are not merely buying your brand but rather buying into your brand, as they seek those that align with their values.

This is playing out as brands go beyond the traditional approach of simply pushing their product’s benefit messaging. Instead, brands that stand out engage in true brand activism, driving home a stance that bravely tackles topics that matter to consumers. Some examples of brand activism from this year’s Best Global Brands:

  • P&G announced a partnership with advocates, including journalist Katie Couric, aimed at driving gender equality. P&G announced the partnership during its #WeSeeEqual Forum and noted that some of P&G’s best-performing brands have the most gender-equal campaigns: Always’ #LikeAGirl, SK-II’s “Change Destiny,” and Olay’s “Live Fearlessly,” along with Tide, Ariel, Dawn, and Swiffer ads that show men sharing the load in household chores. Chief Brand Officer, Marc Pritchard, noted, “It’s clear that promoting gender equality is not only a force for good, it’s a force for growth.”

 

  • Danone is another brand firmly taking a stand when it comes to “One Planet. One Health.”—a campaign that reflects its vision that the health of people and the health of the planet are interconnected. What makes this successful is the internal commitment and external authenticity with which Danone leverages this brave brand stance.

The future belongs to the brave

Brands need to take bold action to achieve growth. The path forward can take many shapes. Opportunities are out there, but to find them, brands need to have the bravery to disrupt themselves before someone else does. This isn’t a sector for the timid. The future belongs to the brave.

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A successful company understands the need to reinvent itself every now and then to keep up with competition, market changes, technology and customer interest. Not doing so can mean a drop in stock price, a decrease in revenue, bankruptcy and even death. Does the name “Blockbuster” sound familiar?

Netflix Before

Today’s generation probably doesn’t remember that in the late 1990s and early 2000s, “Netflix and chill” wasn’t as easy as firing up the laptop and picking out a movie or TV show to binge-watch with no commercial interruptions. Instead, Netflix was kind of like an online Blockbuster.

In 1998, Netflix launched the first DVD rental and sales site with Netflix.com. One year later, the company debuted its subscription service, which allowed movie buffs to rent unlimited DVDs for a low monthly cost and receive them by mail.
 

Netflix After

It wasn’t until 2007 that Netflix transitioned to online streaming. Finally, viewers of all ages would have access to some of their favorite shows and movies, as well as original Netflix content.

Although the company has received some negative feedback from customers due to pricing changes, it’s experienced financial success over the long term. For example, Netflix stock was trading at $3.55 at the beginning of 2008. On Sept. 5, 2018, the stock closed at $341.18.

These days, it’s safe to say that Netflix is one of the best stocks to invest in. In July 2018, Netflix announced 5.15 million new subscribers during the previous quarter, bringing its total base to 130 million.

 

IBM Before

IBM knows a thing or two about reinventing itself and keeping pace with ever-evolving technology.

Since debuting as the Computing-Tabulating-Recording Company more than 100 years ago, IBM has undergone major transformations. Back then, CTR manufactured and sold various types of machinery, such as commercial scales, industrial time recorders, meat and cheese slicers and more. It wasn’t until 1924 that CTR became International Business Machines Corporation, although it had operated under the name since 1917 in Canada.

Fast-forward a few decades to the 1960s, after Thomas J. Watson Jr. became CEO and “led IBM’s transformation from a medium-sized maker of tabulating equipment and typewriters into a computer industry leader,” according to IBM’s website. In 1964, the company created System/360, which made it possible for machines in a product line to work with one another, creating a huge impact in the corporate world.

Less than 20 years later, in 1981, the IBM Personal Computer arrived. Although it wasn’t the first-ever PC, people began buying these computers to use in their daily lives.

However, the 1980s and 1990s were rough for the company. According to its website, “IBM was thrown into turmoil by back-to-back revolutions.” The PC revolution also brought competition from Microsoft and Apple, reported NPR in 2011. Further, IBM suffered annual net losses that reached the billions — a record of $8 billion in 1993, to be exact.
 

IBM After

The company had two options: reinvent or die. So, IBM shifted its focus to IT and consulting, according to NPR.

Still, the company has plans to further reinvent itself. In her most recent chairman’s letter, CEO Ginni Rometty wrote, “We have reinvented IBM for this moment — to fuel your dreams with Watson, with IBM Cloud, with deep expertise, with trust.”

According to the company, cloud and security revenue was up 20 percent in 2018. The increased trust in their cloud and security services led to a 4 percent total revenue increase from 2017, or $20 billion.


 

Amazon Before

More than 20 years ago, Amazon was a very different company. It’s hard to believe this go-to online retailer that sells everything you could possibly think of — from TVs and computers to groceries and household items — started off as an online book retailer.

In July 1995, CEO Jeff Bezos launched Amazon.com, which has changed drastically since the mid-90s. Back then, the website contained a lot of blue, hyperlinked text — quite different from the colorful photos and well-organized categories you’ll see on the site today.

Author Brad Stone — who wrote the book, “The Everything Store” about Amazon and Bezos — told NPR in 2013 that he thinks Bezos started off selling books because it was “a good place to start: [Books are] small, they ship easily in the mail, the selection that the internet enables was a great strategic advantage over the traditional chain booksellers of the time like Barnes & Noble and Borders.”

Indeed, buying books on Amazon was — and still is — easy and preferable to going to a physical bookstore for many people. Although Amazon experienced success with its book-selling strategy, in time Bezos reinvented Amazon to sell more than just books.


 

Amazon After

In 1996, the retailer introduced an affiliate program — known as the Amazon Associates Program — which helped the company expand its reach, according to CBS News. And after announcing its IPO in 1997, Amazon introduced “1-Click shopping” and began offering different products and services in various categories: music, DVD/video, home improvement, software, video games, gift ideas, kitchen and more.

These days, the company is making big money. For the second quarter of 2018, Amazon earnings reached $52.9 billion. In early September 2018, Amazon also became the second U.S. company after Apple to hit the $1 trillion mark in market value.


 

Old Spice Before

Old Spice is no longer associated with “old” men, thanks to successful rebranding attempts. The antiperspirant — which debuted in 1937 as Early American Old Spice for women and then in 1938 as Old Spice for men — is now a popular brand for all ages, but it wasn’t always that way.

After experiencing decades of success, Old Spice began to lose sales as competition increased. A 2014 case study by the University of Southern California found that by the early 2000s, the company suffered from “an outdated brand image.”

In 1990, Procter & Gamble — which owns brands from Pampers to Gillette — bought Old Spice from the Shulton Company. P&G attempted to rebrand the product, but it wasn’t until Old Spice launched its “Swagger” Campaign in 2008 that it started attracting the younger demographic it needed to compete with brands such as Axe, according to the study. Old Spice’s real moment of reinvention, however, came two years later.

 

Old Spice After

In 2010, NFL player Isaiah Mustafa starred in Old Spice’s “The Man Your Man Could Smell Like” campaign. You might remember it: Standing in front of a running shower with nothing but a towel on, Mustafa tells female viewers, “Hello, ladies. Look at your man, now back to me. Now back at your man, now back to me. Sadly, he isn’t me.” He goes on to suggest that if men switch to Old Spice, they can smell like him.

When the ad debuted on YouTube during Super Bowl weekend, it became a viral hit. And the campaign made an impact on sales, as well. AdWeek reported in July 2010 that overall sales for Old Spice body wash products jumped 107 percent after two new TV spots and online response videos debuted.

 

McDonald’s Before

In 2001, the book “Fast Food Nation: The Dark Side of the All-American Meal” came out — and it didn’t have that many nice things to say about fast food giant McDonald’s. Rob Walker wrote in a New York Times book review, “The aim of [author Eric Schlosser’s] book … is to force his readers to stop and consider the consequences of McDonald’s and its likes having become inescapable features of the American (and, increasingly, global) landscape — to contemplate ‘the dark side of the all-American meal.'”

Although it’s hard to tell if the book’s release directly — or indirectly — hurt McDonald’s reputation and brand in a monetary sense, the Wall Street Journal did report in 2003 that the restaurant posted its first quarterly loss in 38 years as a publicly traded company.
 

McDonald’s After

In the years since “Fast Food Nation,” McDonald’s has tweaked its menu offerings. McDonald’s currently offers healthy options including salads, milk, fruit and more, and makes its nutritional information available to consumers. In addition, McDonald’s has reinvented the fast food world by offering “All Day Breakfast.” No longer is McDonald’s only seen as the place to grab a Big Mac loaded with 500-plus calories.

In the second quarter of 2018, McDonald’s earned $5.4 billion in revenue. It was trading at $161.72 per share on Sept. 4, 2018. McDonald’s plans to spend more than it’s second-quarter earnings by shelling out $6 billion to make cosmetic upgrades for its restaurants. By 2020 McDonald’s will have new counters to enable table service, expanded McCafe counters and self-order kiosks.
 

Lego Before

Lego has been around since 1932 and for years has been a hallmark toy in many children’s lives. At one point in 2014, Lego was even the top toy company in the world, surpassing Mattel’s Barbie doll, reported the Wall Street Journal. But the Danish toy company wasn’t always a star performer.

According to a 2015 Fast Company article titled “How Lego Became the Apple of Toys,” the company was reportedly on the brink of bankruptcy about 10 years ago. The growth of video games and the internet threatened the toy company. In reaction, Lego reportedly made a few mistakes. Eventually, by cutting costs, improving processes and managing cash flow, the company started to bounce back.
 

Lego After

Next came a Lego line called Lego Friends, which appealed to young girls and fought the perception that only boys could play with the building blocks. But in 2014, when “The Lego Movie” hit theaters, things really started to change. The movie and its products helped Lego get the revenue boost it needed to overshadow Mattel in 2014, according to the Journal. Thanks to innovative products and a successful string of movies, Lego is more than just a toy now — it’s also a cool franchise.

According to Box Office Mojo, “The Lego Movie” grossed more than $469 million worldwide. Its sequel, “The Lego Batman Movie,” grossed $311 million worldwide. And according to the company’s 2017 annual report, net company profit was $7.8 billion.

 

Apple Before

It’s hard to imagine, but in the late 1990s, Apple was on the verge of bankruptcy. Fortunately for the company, one of Apple’s biggest competitors — Microsoft — rescued Apple from collapse by forking over millions.

According to Bloomberg, Microsoft’s $150 million investment helped Apple get the money it needed to change the technology space. In fact, it might be fair to say that, thanks to Microsoft, Apple is one of the world’s most valuable and innovative brands. With a brand value of $182.8 billion, Apple is currently the No. 1 company on Forbes’ most valuable list for the eighth year in a row.
 

Apple After

But give Apple some credit for its success; the company reinvented itself as more than just a Mac maker. Its handheld devices — from the Apple Watch to iPhones to iPads — have brought the company to an entirely new level.

Apple’s ability to reinvent itself helps explain why it’s consistently considered one of today’s best brands, and why Apple loyalists are always wondering, “What’s next?”

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For consumers the future of customer service cannot come soon enough. The customer experience landscape is ripe for disruption. Companies are slowly making progress toward more seamless and simpler customer experiences.
Today only a select few companies leverage all the technology at their fingertips to enable customers to use the technology they use daily in their personal lives when dealing with the brand. A company on the forefront includes Amazon. Amazon has made progress building a compelling customer journey. It's not just the vast and efficient marketplace they've built--Amazon is innovating on all sides of the consumer equation. They have connected their Amazon virtual assistant the Echo (affectionately called Alexa) with purchases customers make. A customer can order more of a product by just verbally asking the Amazon Echo for it. Want to know how many grams in a kilo? Ask Alexa. Want to play your Spotify list in your kitchen? Alexa will gladly do that for you. Outside of technology innovation, Amazon has the most hassle-free customer service and return process I have seen. Another great company is Sephora. Sephora is using messenger apps like Kik to provide personalized content and buyer experiences to customers. They seek to create interactions that feel tailored to the customer, and one on one. Most companies still haven’t mastered social media, yet alone mobile messaging.

Today the technology for most customer service operations is still not savvy enough for customers to avoid the burden of the old phone call. Customers prefer self-service, but will call when it’s a more complicated matter says Kate Leggett, Analyst at Forrester. That includes account closure or booking a complex airline ticket with multi-city travel. It’s only a matter of time until the game changes entirely because of improved technology. Let's face it, the younger generations do not want to call brands--and those younger generations will soon be the bulk of your customers (not to be morbid or anything, but it's the truth). We’re at an awkward inflection point where some companies are doing an amazing job of being on the forefront of customer experience technology, and others are still struggling with the basics. In the future customer experiences will be much more simple. I have created an infographic with nine predictions for you on the future of technology versus the past (and where most of our brands are still today). Please see the infographic below and feel free to share the image.


Prediction #1: Technology Makes Experience Better

For the consumer it can feel like the brand is hiding behind bad customer service technology. Examples? On the phone tree pressing zero does nothing—there is no human to save you from the bad interactive voice response system. Even though it’s 2016 sometimes customer service technology makes things worse.
In a recent article in CIO Magazine an Accenture study was highlighted. Conducted with over 25,000 consumers, it became clear that "Companies have lost sight of the importance of human interaction and often make it too difficult for consumers to get the right level of help and service that they need," says Robert Wollan, a senior managing director at Accenture Strategy.


Prediction #2: Customer Service Is Open 24/7

Customer problems do not only happen five days a week eight hours a day. We live in the global economy where companies must serve customers during many time zones. At the same time customers expect fast responses at night and on weekends. According to influencer and author Jay Baer, 32% of consumers expect a response within 30 minutes through social media channels.

The same report found 57% of consumers expect the same response time at night and on weekends as during normal business hours. Companies tomorrow must operate in a 24/7 world. Otherwise they risk losing business.


Prediction #3: Customer Is In Control Of Where Interaction Happens

Remember when everyone was talking about how brands have lost control? It was kind of a big deal. Brands felt nervous about how customers now controlled the conversation. Social media turned everything on its head. Customer service became part of many very public conversations. This was great for the contact center, it catapulted this department into the limelight, giving more responsibility to knowledgeable employees—improving customer service’s relationship with marketing. However, brands took their strategies and attitudes about customer service and continued to try to control the conversation on social media. We set up customer service outposts on social media. For example on Twitter, along with the main brand’s Twitter account, we set up customer service  Twitter accounts. If the brand is @XYZ on Twitter the help account would be @XYZ_help. Many Facebook accounts were set up the same way, with even a separate Facebook page to help customers.

The problem with this approach is the proliferation of service channels. Where as today often customers have to tag customer service accounts or write on a brand's Facebook wall for the brand to find them, in the future you will see less and less of the tagging of service accounts. With the proliferation of channels there is no way for brands to operate with the same approach they have in the last few years. Every week there is a new latest channel customers talk to each other on. They are sending Snaps to friends, Kik, WhatsApp messages, Weibo, WeChat, texts, tweets and Facebook messages. The proliferation of channels is upon us.

The challenge for big companies is speed and scale. Brands need to explore technologies that will allow agents a unified workflow solution that moves seamlessly from channel to channel. The technology should allow the brand to focus more on finding the customer, regardless of channel—and allowing the agent to easily pop in and offer service.


Prediction #4: Company Knows Information From Every Channel

The No. 1 customer frustration according to Harvard Business Review is the customer having to repeat themselves. Internal dysfunction, old CRM technologies and lack of a customer oriented culture all contribute to poor customer experiences like this one. In the old days you could differentiate your product by delivering it cheaper, or maybe faster, but now it’s a different game. It’s not just about solving the customer problem quickly and effectively. Brands need to ensure they are doing all the work, so customers don't need to remember every single piece of information to provide to the company. What happens when a customer contacts the company from a rural highway in the middle of nowhere? That customer might not have their account information or verbal password. The company will need to make it easier for the customer.


Prediction #5: Mobile Messaging Volume Is High

As mentioned earlier, phone use for customer service has steadily decreased over the past six years. Analyst Kate Leggett said, “we predict it will dip even further as customers increasingly adopt digital channels.” People spend an average of three hours and eight minutes on their smartphone every day doing non-voice activities (Source: Yahoo! David Iudica). The bigger the phone, the more usage. That said, customers are enjoying the ease of communication via messaging in their personal lives—whether it’s through text or even Snapchat, Kik, WhatsApp, WeChat or Facebook Messenger. A few brands (Sephora mentioned earlier) are doing great work on messaging apps—but most companies are slow to take advantage of mobile messaging. In fact it seems that the sharing economy is one of the biggest superuser industries of mobile messaging. Examples include Uber, Airbnb, Etsy and TaskRabbit to name a few. Customers enjoy the ease of use and not having to call the call center. It feels as easy and seamless as an interaction with a friend or family member. This is the future of customer service.


Prediction #6: The Content Finds The Customer

Today a customer’s first attempt to fix a broken product (on their own) is through Google. Google will lead the customer to the most closely related community thread or article. But this isn't ideal, sifting through customer service content can be messy and time consuming. In the future companies will take advantage of data through the internet of things, where content is sent to the customer as soon as the product realizes something is wrong for the customer. Another scenario includes sending helpful just-in time content such as recipes. For example, Absolut is working on making its vodka bottle smart—meaning the bottle will talk to the consumer offering useful content in real-time. Mattel’s “Hello Barbie” listens to consumers and engages back to that consumer based on what she heard. Eventually customers will not have to search through tons of community threads and articles, but the company will ensure content is automatically sent to the customer at the right time.


Prediction #7: The Product Fixes The Product

Today when something breaks customers must take the proper steps to fix it. That includes contacting the company that sold them the product. However in the future as our products get “smarter” the products will be able to fix themselves. An example of this comes from Tesla. Tesla is the only car that’s completely run on software. You can update and service your car while you’re taking the dog for a walk. In the future more of our intelligent products will be able to fix themselves. This is the beauty of the internet of things.


Prediction #8: The Agent Works Through One System

Today agents are plagued with system overload. They’re working in ten different systems that include CRM systems from 30 and even 40 years ago. Not only is this terrible for the employee experience but it’s terrible for the customer experience. Having to wade through 10 systems makes the employee want to pull their hair out—additionally it adds a ton of time to the customer experience. In the future our CRM technology will allow agents to seamlessly move in and out of different customer service channels while staying in one customer service tool. While it will look very different for the customer, it won’t look different for the agent—it will be one easy, seamless experience.


Prediction #9: Customer Service Gets Marketing’s Budget

You rarely hear about the Chief Service Officer. Sometimes you might find a Chief Customer Officer or Chief Experience Officer but rarely is there a c-level officer devoted to service specifically. However you would never see a company without a senior marketing leader such as a Chief Marketing Officer or EVP. But now we know that being helpful can be the best form of marketing. In fact most of the messaging that happens from the customer toward company has to do with customer service—consumers that need help. Customers are not on your website looking for the latest marketing asset. Let's talk about social media for a second. Social media programs are launched by marketing or PR and handed over to customer service after it becomes apparent that service is the only group qualified to answer these questions. But budgets are still not granted to customer service like they are to marketing (or even sales). There’s a reason today you can’t get through to a human on the phone. There is also a reason things are often broken when it comes to customer service programs. Customer service often does not have any money. The budgets go to marketing and sales—but in the future customer service will be the darling of the organization with the money it needs to do right by the customer.

What would you add to this list?
customer experiencecustomer serviceconsumer trendsservice designbusinessstrategy

If the issues of the sharing economy can be overcome, it could transform the business models on which the economy has relied for years

The emergence of peer-to-peer sites such as Airbnb, Lyft and EatWith has been one of the more intriguing web developments of the last few years. These companies are overhauling the traditional concept of business versus consumer by enabling anyone to offer up their apartments, cars or culinary skills in return for cash.

What began as a niche sector, brushed aside by sceptics, has blossomed into a whole industry. There are over 9,000 companies in on the game, according to Mesh, a directory for the sharing economy. With everything from peer-to-peer money lending to lift sharing now available, consumers have a whole new world at their fingertips and it’s sending shock waves across the globe.

PwC estimates five sharing economy sectors alone could generate a whopping $335bn in revenues between them by 2025. And, according to Nielsen, there’s high demand for the collaborative economy – especially in emerging markets, where it’s tipped to accelerate growth by giving consumers access to services they couldn’t traditionally afford.

The sharing economy has created markets out of things that wouldn’t have been considered monetisable assets before

Advocates claim the sharing economy is creating a stronger sense of community while cutting back on waste. Among the supporters is Shervin Pishevar, venture capitalist and peer-to-peer investor: “This is a movement as important as when the web browser came out”, he told Forbes. Timemeanwhile ranked the sharing economy among its “10 Ideas that Will Change the World”. The benefits are several, and could spell trouble for traditional businesses and economic models.


Rupturing tradition

The biggest change from traditional structures is the breakdown in the distinction between companies and customers, with peer-to-peer models giving consumers the opportunity to become businesspeople on a part-time, temporary and flexible level; whether by renting a pet-friendly room to a pooch-lover via DogVacay or offering up a neglected driveway via Parking Panda. Knocking down that consumer-producer wall is something social media has already, in part, achieved (with customers playing a more important role in marketing than ever before, for example) and the sharing economy seems a logical culmination of that gradual shift.

But it could mean bad news for traditional businesses that fail to adapt, according to Josh Goldman, Global Leader for Shopping Measurement at Nielsen. “These companies are creating new economic value and disrupting current established industry players”, he says. Lisa Gansky, author of The Mesh: Why the Future of Business is Sharing, agrees: “There is a massive shift occurring and I believe all industries will be or are already being affected.”

The impact of Uber on the traditional taxi industry is already evident: in San Francisco, for example, taxi usage has plummeted by around 65 percent, according to Kate Toran of the city’s Municipal Transportation Agency (Engadget reported), while, in New York, shares in Medallion Financial Corp – which lends money to the famous yellow New York taxi operators – have tumbled almost 30 percent in a year as demand for the traditional taxis has plunged, according to Andrew Murstein.


Cheaper, more efficient markets

The potential impact of peer-to-peer accommodation sites such as Airbnb on the hospitality sector has meanwhile sparked further attention. In a report, researchers at Boston University estimated that every 10 percent rise in Airbnb supply in Texas caused a 0.35 percent drop in monthly hotel revenue – equivalent to a fall in revenue of over 13 percent in Austin. They also found hotels had cut their room rates as a result of pressure from the lower peer-to-peer prices appealing to cash-conscious consumers.

As well as offering more affordable services to consumers, collaborative models are also arguably more resilient. While hotel supply is limited and any increase involves large-scale work, peer-to-peer accommodation is agile, its space limited only by the willingness of people to offer up their empty rooms. As Gansky points out, the world’s largest hotel chain, Intercontinental, offers only 65 percent of Airbnb’s current capacity. It’s clearly working: according to the UK Economic Impact Study, Airbnb generated £502m in economic activity in the space of a year in the UK, and over 30 million people across the world have rented a room through the site.

“People are attracted to this peer-to-peer model for economic, environmental, lifestyle and personal reasons”, says James McClure, General Manager UK & Ireland at Airbnb. “More broadly speaking, the sharing economy has created markets out of things that wouldn’t have been considered monetisable assets before.” That means making efficient use of excess resources and minimising waste, especially relevant as consumers become evermore conscious of its damaging consequences. Goldman certainly agrees: “This model is creating more efficient markets, period”, he says, adding it could help establish a better supply-demand equilibrium.


Hostile opposition

But there are several issues associated with this new model, and they’re sparking widespread controversy. While Uber has provoked protests and bans across the world, peer-to-peer accommodation has kicked off a debate in New York, with public advocate Letitia James arguing: “Airbnb and the illegal hotel operators it enables are contributing to the affordable housing crisis.”



Others have concluded the lax regulation of the sharing model could do more damage than good to economies. Dean Baker, Co-Director of the Centre for Economic and Policy Research, believes peer-to-peer businesses are providing a loophole for “a small number of people… to cheat the system”. He wrote in The Guardian: “Insofar as Airbnb is allowing people to evade taxes and regulations, the company is not a net plus to the economy and society – it is simply facilitating a bunch of rip-offs.” He argued Airbnb apartments should be taxed in the same way as hotels and that they, like Uber, should be made subject to the same safety standards as regular players.

But increased regulation and taxes are likely to mean higher prices for consumers, in part defeating the object of peer-to-peer companies designed to cut costs and move business away from the hands of overbearing authority. It’s perhaps for that reason that a number of sharing economy advocates argue against regulating this new model; among them are senior research fellow Adam Thierer and his colleagues. “The key contribution of the sharing economy is that it has overcome market imperfections without recourse to traditional forms of regulation”, they wrote in a paper. “Continued application of these outmoded regulatory regimes is likely to harm consumers.”

Whether regulating peer-to-peer services is a good idea or not, these disputes need to be overcome if the sharing economy is to grow to the extent to which some have predicted it is capable. If it does – and it would seem a logical progression in a society characterized by constant connectivity – this model could eventually replace the traditional consumer-versus-provider structure. Key players must find a way to adapt effectively if they are to capitalize on its potential benefits.
customer experienceexperience designdigital strategycustomer serviceconsumer trendsglobal trendsservice designbusinessconsumer behaviour
There are companies that are known for good customer service, and then there are companies that are obsessed with their customers. These brands take it to the next level by offering personalized experiences, amazing perks, and quality products. They also listen to their customers, take advantage of data and technology, and create a seamless experience that provides great service and support no matter how customers interact with the brand.
Here are the 10 most customer-obsessed companies of 2018 that are setting the gold standard for what it means to put customers first. These companies were the most cited in reviews and the business press and were included because of their industry-leading focus on customer experience 


Ritz-Carlton 

The name Ritz-Carlton oozes sophistication, and the staff makes sure the service matches the brand’s reputation. Ritz-Carlton is known for putting guests first and for creating incredibly personalized experiences. The company’s main focus is to build an emotional connection between guests and employees for the best hotel stay possible. 


BufferApp

Customers are such a focus at social media management app Buffer that the support team is known as the Happiness Team. By constantly staying in contact with its customers, Buffer can answer questions and address problems as quickly as possible. Customers come first in everything the company does, and every employee is always on the lookout for ways to “wow” customers. 


Trader Joe’s

Customers at Trader Joe’s are fiercely loyal to the brand, but it has to do with more than just those delicious Joe Joe’s cookies. The store ranks top in customer satisfaction for grocery stores because employees are hyper-focused on customers. From fast checkout to friendly service and product recommendations, Trader Joe’s puts customers first to create a personalized experience at each store and with each shopper. 


Harley Davidson 

Once a customer purchases a Harley Davidson motorcycle, they become part of the Harley family for life. Customers are encouraged to join the 325,000-plus member of Harley Owners Group, or HOG. The group connects riders with each other and with the brand and helps with maintenance and other bike issues. Harley Davidson knows that buying a bike is a big purchase, and it puts it customers first to create a brand they can stand behind forever. 


Amazon 

From free two-day shipping to streaming movies and grocery delivery, Amazon Prime aims to make customers’ lives easier in just about every area. The company is always innovating and finding new ways to solve customer problems. It also has a responsive service team that is empowered to provide gift vouchers and free months of Prime service if anything goes wrong. 


Costco 

By treating its employees well, Costco can create a customer-focused experience for everyone who enters the door. The store famously will take back nearly any return without a limit to when it was purchased or the state it is in. Costco also listens to customer feedback about items people would like in the store, makes it easy to save with automatically loaded coupons, and has been known to reach out to customers who purchased items that may have been recalled. The store offers bulk discounts, but it doesn’t come at the cost of customer experience. 


Zappos 

Zappos is consistently on the top of customer experience brands, and 2018 is no different. The company goes above and beyond to show its appreciation for its customers. It follows the model of surprising and delighting customers by always looking for ways to build a connection. Employees are known to do things like send baby blankets to customers when they hear a crying baby in the background of a service call. It also hosts a series of events across the country with live music and a happy hour to build relationships and reach out to customers.


Dollar Shave Club 

There is a lot of competition in the subscription beauty industry, but Dollar Shave Club stands out because of its focus on customers. The company uses a number of technology tools to understand its customers and what drives them to make purchases. All employees are focused on engaging with customers in any way possible and follow the company’s motto of “We don’t respond to situations; we respond to people”. 


Disney 

Disney isn’t necessarily an inexpensive brand, but customers are willing to pay higher prices for its merchandise, shows, and vacations because of the experience the brand provides. Disney employees are trained to refer to guests by name, especially with children. They go above and beyond to share the magic of Disney with customers of all ages and create unique experiences. 


Netflix 

The streaming giant’s obsession with customers is based on knowing them very well. Netflix collects a huge amount of data on customers to create hyper-personalized recommendations. It uses that data to help customers find their new favorite shows and to create award-winning original content that is exactly what customers want to see. By understanding customers and putting them first, Netflix can build on its knowledge and provide them entertainment they love.

 

 

 

 

customer experienceexperience designcustomer serviceconsumer brandscompany culturebusinessconsumer behaviour
According to a Global Deloitte survey, over 80% of Deloitte Knowledge users indicate that sharing knowledge leads to competitive advantage and adds a real client value.
What are the advantages of adopting a knowledge management strategy?

Knowledge management prevents staff from constantly reinventing the wheel, provides a baseline for progress measurement, reduces the burden on expert attrition, makes visual thinking tangible, and manages effectively large volumes of information to help employees serve their clients better and faster.

 

Being a fundamental business enabler, knowledge management will help organisations:

  • Protect their intellectual capital
  • Focus on their most important assets: their human capital
  • Re-orient their culture by opting for an optimal knowledge sharing strategy
  • Link people to people by setting up collaborative methods
 

Knowledge management opens the doors to a new era of collaboration and sharing
Nowadays, with corporate mergers, employee turnover and global expansion, people must work differently: they need to collaborate with peers that are overseas, exchange ideas, keep current on global matters and have quick answers to their questions.

The power of Social Media plays an important role in knowledge management as it enables employees to collaborate, connect and rapidly access to experts and information.

Social networks also allow people to collaborate, to be human and to express themselves in the electronic environment. They have a solid foundation of trust and popularity among employees and they are part of the knowledge sharing culture.

Increasing company benefits with an effective knowledge management strategy

Knowledge management helps solve most of the common business problems and helps companies increase their benefits by:

  • Improving business decisions thanks to facilitated access to expertise and to leading practices

  • Increasing efficiency, productivity and work smarter by reducing cases of “reinventing the wheel”

  • Improving innovation through wider and borderless collaboration

  • Reducing loss of know-how by capturing explicit and tacit knowledge

  • Speeding productivity with on-board trainings and timely access to knowledge

  • Increasing client satisfaction by delivering value insights

  • Enhancing quality and ability to collaborate by standardising ways of working and enabling discussions with leading experts

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