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HYPER-
RELEVANCE
ERA
A HYPER-RELEVANT FUTURE 16
3
SOUTH
AFRICA’S
RELEVANCE
CHALLENGE
Established South African companies that are not
meeting their customers’ needs in the moment are
risking their bottom line. Nearly three quarters of
consumer switching is driven by a lack of relevance,
putting R438 billion of potential annual revenue in
jeopardy. In the era of relevance, brands can regain the
high ground by expanding their marketing frameworks
and re-aligning their activities to a new set of
principles— beyond their comfort zones.
How do you retain customers? If it’s by prices of products in real time on a
buying their loyalty with rewards, rebates mobile device, or the ability to access live
or discounts, you may be giving up customer service support from wherever
something priceless: your relevance. they might be. For another customer
segment, that might mean having a
That’s because in South Africa—and
credit card that stays uniquely attuned
throughout much of the world—the era of
to their lifestyle, offering them features
loyalty marketing is waning. Businesses
and benefits that explicitly help them to
can no longer expect their customers to
pursue their favourite mix of activities.
be motivated by incentives such as points
or miles to purchase goods and services. Business clients want the same thing.
The era of relevance is dawning and it In business to business engagements,
requires a major mindshift. companies can no longer simply negotiate
large contracts with the procurement
Today, customers demand personalisation
function or senior leadership of the client
in everything: products, services and
organisation; they now need to consider
experiences. They want to feel safe, and
the end-to-end digital experience for all
even pride, in their choices. They want
buyers. What buyers experience in their
companies to evolve with their needs,
daily lives as consumers has reset the
moving beyond traditional offerings to
bar for business interactions. Businesses
make it easier for them to do the things
selling to other businesses must now
that their activities connect to. For one
deliver consumer-like content, features
set of customers, that might mean an
and experiences.
uncomplicated way to compare the
4
Simply put, in this new era, companies • In the loyalty era, customers were
need to offer customers more than just dissuaded from re-evaluating
convenience and affordability. They their options. In the relevance
need to evolve with their customers’ era, mobile-enabled and digitally
wants and needs, becoming not just savvy customers are constantly re-
relevant to them, but hyper-relevant. evaluating their options
(see Figure 1).
To do that, executives must develop
a deeper understanding of what • The loyalty era was backward-
differentiates each era. looking and time-lagged; the
relevance era is forward-looking
• The objective of the loyalty era was and real-time.
to create incentives for customers
to become loyal members and • The loyalty era focused on the
keep making purchases. The “what” economy, which is linked
objective of the relevance era to a purchase, while the relevance
is to create a gravitational field era focuses on the “why” economy,
that attracts customers into orbit which is linked to evaluation.
around the brand by serving
their every relevant need in every • Even the technology enablers
possible moment across every are different: in the loyalty era
possible channel. it was Customer Relationship
Management (CRM) software; in
the relevance era its digitisation of
everything (see Figure 2).
OLD NEW
FROM THE LOYALTY LOOP... ... TO NON-STOP EVALUATION
Evaluate Expectation
Evaluate Reality
$ Promise Delivery
Figure 1
5
A new growth era:
from loyalty to relevance
TECHNOLOGY
ENABLER Mass Production Market research Enterprise IT Advanced CRM Digitalisation of
everything
PERFORMANCE
INDICATOR Customer Customer Customer
Volume Purchase funnel
lifetime value retention attraction/gravity
Figure 2
This shift is already impacting the bottom But now is the time for leaders to make
lines of companies across South Africa. the shift to the Relevance Era—to lay the
According to Accenture’s 2017 Global groundwork for major changes to their
Consumer Pulse research, in the South processes, organisations, and mindsets.
African market alone, companies lost
Accenture's research has identified a
R 663 billion last year in potential revenue
framework and set of principles to guide
due to customer switching. Lack of
executives on this journey.
relevance drove 66 percent of switching.
Overall, this dynamic has put R438 billion Let's first discuss digital and marketing
in potential annual revenue at risk (see trends—and the challenges and
Figure 3 and About the Research). opportunities they present.
So, what does it mean to be hyper-
relevant? Although the definition of hyper-
relevance will evolve along with customer
needs and habits, companies must strive In 2017, South African companies lost
to be, among other things, meaningful, R663 billion in potential revenue due to
CUSTOMER SWITCHING.....
dynamic, dedicated, transparent,
inspirational, standard-setting,
omnipresent and accountable (see About
the Research). Of course, these are just Attributed
some of the attributes that customers by consumers
to relevance
66%
have come to expect from their provider
factors
of choice in the relevance era. Relevance
is and will always be a moving target.
6
HYPER-
RELEVANCE
IN A DIGITAL
WORLD
The increasing pervasiveness of digital technology
and rise of mobile adoption in South Africa —with a
penetration rate of over 70% in 2017 according to a
study by GSMA —are shifting customer journeys and
expectations. Yet while companies in South Africa have
made progress in expanding their digital capabilities,
customers still aren’t happy, leaving much work to do.
7
70%
OF SOUTH AFRICANS
NOW USE DIGITAL
CHANNELS
DURING SHOPPING
“MOMENTS”.
10% 15%
37%
SLOW SWITCH FAST NO SPEED 50%
TRAFFIC LANE NOW! LANE LIMIT
They rely mostly on They selectively They strive to They make digital 25%
traditional channels engage in digital for leverage digital technology part of
and interactions. utility value, more broadly, all dimensions in 27%
Even then, they discovering how the experiencing new their life. Mobile 10%
leave digital traces experience digital / physical access is key.
improves. combinations. 2014 2017
Figure 4
8
80%
OF SHOPPERS DO
NOT FEEL THAT THEIR
SERVICE PROVIDER
OFFERS A FULL OMNI-
CHANNEL EXPERIENCE
85 87
82
80
66 65 66
63
60
Customer
Expectations score
Digital Customer
36 Relevance index score
Figure 5
Our data shows that digital technology gives customers control. It also defines how
relevant the brand is to them. But to maximise digital investments, companies must
change their marketing organisation.
9
THE
CMO
IMPERATIVE
To be hyper-relevant to customers, the marketing
organisation must become more data-driven. To
retain their place at the table, Chief Marketing
Officers (CMOs) must drive strategic value.
10
A NEW
DEFINITION
OF RELEVANCE
Changes in customer journeys indicate new ways to
serve their needs
Accenture’s experience, case-study 5. Personalisation: The need to feel that
research, and analysis of high-performing their experiences with the company
companies supports the creation of a are continuously tailored to their
new framework for engagement in the needs and priorities.
Era of Relevance. We call it the 5 P’s (see Our Consumer Pulse Research bears out
Figure 6) – and it serves as a guideline this new framework. Consider: Nearly
for the kinds of needs that customers three quarters of consumers say that a
increasingly expect all brands to fulfil: company with a strong purpose aligned
1. Purpose: The need to feel that the to their values would have kept them from
company shares and advances their switching to another provider. And more
values. than half (60 percent) deem purpose to
2. Pride: The need to feel proud and be an important factor for companies
inspired to use the company’s to have in order to be relevant to them.
products and services. Likewise, across the rest of the 5 Ps, most
of the consumers who responded to our
3. Partnership: The need to feel the
survey indicated the importance of these
company relates to and works well
with them. factors for a company to be relevant to
their needs and would be key to retain
4. Protection: The need to feel secure them as customers.
when doing business with the
company.
PURPOSE PRIDE
Customers feel Customers feel
the company proud to use the
shares and company’s
advances their products and
values services
PERSONALISATION
Customers feel their HYPER-RELEVANCE
experiences with the
company are tailored to
their needs and priorities
PARTNERSHIP PROTECTION
Customers feel Customers feel
the company secure when
relates to and doing business
works well with the
with them company
Figure 6
11
In South Africa, insurer Discovery Health This inspires a sense of pride. In so doing,
provides an example of what the 5 Ps of Discovery Vitality forges a partnership:
Hyper-Relevance look like in practice. the harder the customer works to stay
Consider its programme, Vitality. While healthy, the more points he earns—points
the programme’s goal is healthier people, that are redeemable for discounts on
and healthier people mean less long-term things like gym memberships, Apple
risk for the company, the customer also Watches, wholesome food, and more.
enjoys a highly relevant experience. This all gives the customer a sense of
security (protection) because he knows
First, personalisation: A customer is
someone is helping him monitor his
assessed for health risks, and receives
health, and that he will be rewarded for
diet and activity recommendations to
taking care of himself.
help him to meet his lifestyle goals.i Add
healthy cooking lessons and access to Vitality has reduced the Discovery Health
discounted healthcare and fitness clubs, Medical Scheme’s claims costs by about
and it becomes clear to the customer that three percent annually, (approximately R11
Discovery Vitality’s purpose aligns with billion) between 2008 and 2017.iii By the
his own—to lead a healthy and positive company’s estimates, Vitality members
lifestyle. As the customer becomes incur 30 percent lower hospital costs and
healthier and more active, he can chart live up to 21 years longer than the rest of
his progress in real time and earn points.ii the insured population.iv
12
Many companies will be challenged to help themselves. The goal of the
to satisfy all 5 Ps at once. Three key campaign, says the bank, is to help
principles can help guide efforts to customers feel Uniquely empowered
better connect with customers.
to help themselves in all areas of their
lives—not just banking.
1. Extend yourself
2. Get personal
In this era of hyper-relevance, companies
must extend themselves beyond their
A key component of becoming a hyper-
comfort zones to position their brands in
relevant business is conveying exactly
new, expanded ways based on the 5 Ps.
the right message, experience or offer to
One of South Africa’s “big four” banks customers, in exactly the right context.
provides a noteworthy example of how a It’s a level of personalisation that few
company can reach beyond its traditional companies ever attain. A large South
boundaries to be more relevant to African retailer with operations in a
customers. Some years ago, it found number of countries, has worked to
itself contending with a rapidly changing deliver highly personalised offers to
customer base—young, digitally savvy customers across the channels they
people that were somewhat sceptical of prefer in the moment—whether that’s in-
traditional ways of banking. store, via mobile phone or the company’s
website.
In response, it blazed a trail in support
of customer relevance, launching an The retailer understood that a
online banking platform, a cellphone promotion could only be as profitable
banking service and a mobile app. More as a customer’s willingness to take it
recently, the bank has developed digital up—and an unwilling customer is a lost
tools. These include secure interactive opportunity. To improve engagement, the
messaging, one-touch fraud reporting retailer makes use of the analytics and
and fingerprint ID. These pioneering marketing tools of a software provider to
efforts have given customers protection, access realtime data, analyse that data
partnership, personalisation and even and engage directly with customers via
pride. And the bank has the results to omni-channel marketing campaigns.
prove it: its customer base grew more
The retailer uses predictive data analytics
than 5 percent between 2015 and 2016,
to suggest deals based on a customer’s
while transaction volumes increased by
propensity to accept certain offers,
almost 13 percent in a tough economy.
and calibrates its offers to a customer’s
Some 80 percent of the bank’s customers
behaviour in a way that all marketing
now use the banking app. The bank is
channels can simultaneously use. The
also focussed on giving customers a
retailer can also offer shoppers free Wi-Fi
sense of purpose. A recent ad campaign
and loyalty benefits.
promotes the idea of helping people
13
This allows the company to better These actions underscore the
understand customer preferences, importance of digital to the retailer’s
track traffic throughout its stores, and customer-relevance strategies. Although
improve customer service. To make the online sales in South Africa contribute
engagement even more personal, the only about 1 percent to total retail
software provider can consolidate store sales (compared with 8.2 percent
visitor data from multiple other sources, and 16 percent in the US and Europe,
including CCTV cameras, security doors, respectively), that’s changing rapidly.
point-of-sale and social media. Among
This retailer’s online clothing sales
others, this allows the retailer to better
increased more than 100 percent
understand customer preferences, track
between July 2016 and June 2017, a
traffic throughout its stores, and improve
growth surge meaningful enough for it
customer service.
to dedicate a warehouse just to fulfilling
online orders.
14
3. Reject the status quo
To succeed in this era of relevance, companies
must be willing to continuously abandon the old.
As new technologies shift customer journeys
and expectations, they can (and should) also
enhance the ability of companies to engage
with customers in the most relevant way.
Often, the greatest roadblock is a company’s
lack of willingness to transform its processes,
organisation and mindset to adapt to changes
in its environment or market. Shifting from a
product- and service-focused mindset to a
platform approach has helped some companies
overcome this barrier. One large South African
telecoms provider did just that.
15
A HYPER-
RELEVANT
FUTURE
As many executives in South Africa are
now finding, competing in this new era
of relevance is a significant and growing
challenge. Today’s mobile-enabled
consumers are constantly re-evaluating
their purchasing decisions. They are
choosing the brands most relevant
To succeed in this era of relevance,
to them in the moment. And they will
marketers and companies in South Africa
pay a premium for them. Businesses in
must face facts. They are dealing with:
the country that achieve this profound
degree of relevance will have pricing
• A consumer base that is increasingly
power and will drive repeat purchases.
embracing digital technologies
But success is far from assured. Large, and growing disenchanted with
established organisations in particular are companies’ lack of digital savviness.
often held back from meeting consumers’
changing needs and wants by the very • Marketing organisations that have
investments in assets and ingrained an antiquated understanding of
processes that gave them the economies customer needs and are too focused
of scale to succeed in the first place. As on communications, advertising and
our research shows, these companies can promotional events and not enough
no longer count on loyalty to help them on data.
hold their ground. In sharp contrast, There is a stark contrast between new
digital disruptors are hardwired to excel highly relevant offerings and the offerings
at being hyper-relevant. They can easily of companies that hang onto outdated
market to niche groups of consumers, best practices. “Relevance” is the new
they make buying easier and more omni- benchmark for success. To close this
channel, and they constantly improve growing gap, South African business
the overall shopping and purchasing leaders must create new advantages
experience. They can also pivot swiftly before their current strengths fade.
from one growth opportunity to the next.
16
BECOMING A HYPER-RELEVANT BUSINESS
To identify a clear path forward for today’s Target: This path involves targeting new
large organisations, Accenture undertook a value and business models by rethinking
major research initiative in 2018 to determine investments based on a better understanding
how leaders in sustainable growth are of customers’ digital needs. This will help
different from their peers. We found that the organisation decide whether to pursue
these companies: or invest in a new idea or opportunity.
Questions to ask include: Does this idea solve
• Understand the changing digital needs existing customer problems? Could it open
of customers. up new sources of value or is it a “flavour-
of-the-month” distraction? New plays are
• Pivot growth strategies to profitable funded by optimising costs elsewhere.
areas beyond the core.
Design: Innovating compelling new
• Fund new growth by optimising costs experiences and maximising the relevance
elsewhere. of a product, service or experience is core
to this set of capabilities. Questions to
Additionally, our findings indicate that
ask include: Should products be flashy
the path to continuous growth depends
and bleeding edge, or staid but practical?
on developing five interdependent sets
Answers are driven through customer
of capabilities. Supported by advanced
analytics that steer design decisions.
technologies, these capabilities sharpen the
organisation’s ability to conceive, design Build engagement channels: This third
and exploit distinctive offerings that meet capability set is all about developing the
customers’ demands at the exact moment kinds of engagement channels that allow
they most need them. Together, these continuous evolution—and creating an
capabilities characterise organisations that organisation that can prototype, deliver, and
can consistently deliver hyper-relevant scale the most innovative experiences at
services—they transform static companies breakneck speed.
into what Accenture calls “living” businesses.
Scale: This set is about plugging into
The “living” business journey encompasses a broader set of ecosystem partners.
five capabilities. Embracing this approach means formalising
new or established collaborative relationships
Target core and disruptive growth initiatives.
with alliance partners. It requires employing
Design products and services as hyper- technologies like cloud and blockchain to
relevant platforms. connect employees and partners with the
customer data that matters—seamlessly and
Build prototypes and scale new and securely.
innovative experiences.
Rewire: Relevance demands a workforce
Scale by cultivating a broad and essential set that can stay ahead. It means cultivating
of ecosystem partners. a mindset that puts customers front and
Rewire the organisation’s culture and centre. It means drawing on the latest
workforce by embedding and powering a technologies to mobilise the right people at
mindset that keeps customers at the core. the right time. It means using AI wisely, with
direction. It means breaking down siloes so
the right information gets to where it needs
to be when it needs to be there.
17
ABOUT
THE
RESEARCH
This report combines multiples streams • Evolving customer dynamics and
of proprietary research. Between June attitudes related to digital trust,
1 and July 30, 2017, we surveyed 24,877 pricing and changing business
end-user consumers in 33 different models.
countries via the Internet. We asked
For our 5 Ps framework, we called on
respondents to evaluate 11 industry
our experience working with clients,
sectors (up to four industries per
case-study research, survey data and
respondent). What resulted was our
analysis of high-performing companies to
thirteenth edition of the Global Consumer
expand on Abraham Maslow’s oft-quoted
Pulse Research. It provides insights into
“hierarchy of needs”, first published in
changing consumer behaviour, attitudes,
1943. As a point of reference, Maslow
and expectations impacting companies’
sought to map the psychological needs
customer strategies across digital and
of humans and their motivations,
analogue channels. Fifty-five percent of
providing a model for the traditional four
South African respondents that took part
P’s of marketing: product, price, place,
in the survey indicated they earn above
and promotion. Our 5 Ps framework
R100 000 per annum.
reinterprets Maslow’s hierarchy for the
The research focused on country-specific digital age.
perceptions with respect to:
As part of our Global Consumer Pulse
Research, we specifically tested how
• Marketing and Sales practices in
the 5 Ps related to consumer switching
terms of channel preference, usage,
behaviours. We broke out the first four
and experience. Customer Service
of the 5 Ps (purpose, pride, partnership
in terms of changing expectations,
and protection) into two factors each, to
customer experience, channel
determine the extent to which these eight
preferences and other behaviours
relevance factors, if not personalised for
consumers exhibit relative to digital,
consumers’ needs, are driving them away
social media and mobility adoption.
from a brand. The eight are: meaningful,
dynamic, dedicated, transparent,
• Sentiment toward artificial
inspirational, standard-setting,
intelligence, robotics and intelligent
omnipresent and accountable.
technologies.
18
TO FULFIL THEIR COMPANIES MUST BE:
CUSTOMER S’ NEED FOR...
Figure 7
19
ABOUT ACCENTURE CONTACT THE AUTHORS:
Accenture is a leading global professional services WAYNE HULL
company, providing a broad range of services and
solutions in strategy, consulting, digital, technology
Managing Director of
and operations. Combining unmatched experience and Accenture Digital in Africa
specialised skills across more than 40 industries and all wayne.l.hull@accenture.com
business functions—underpinned by the world’s largest Linkedin: Wayne Hull
delivery network—Accenture works at the intersection
of business and technology to help clients improve
Twitter: @wayne_hull
their performance and create sustainable value for their
stakeholders. With more than 435,000 people serving YUSOF SEEDAT
clients in more than 120 countries, Accenture drives Thought Leadership Director
innovation to improve the way the world works and lives.
Visit us at www.accenture.com.
Accenture Research
yusof.seedat@accenture.com
Linkedin: Yusof Seedat
ABOUT ACCENTURE RESEARCH Twitter: @YusofSeedat
Accenture Research shapes trends and creates data-
driven insights about the most pressing issues global JOSHUA BELLIN
organisations face. Combining the power of innovative Thought Leadership Senior Principal
research techniques with a deep understanding of our
clients’ industries, our team of 250 researchers and Accenture Research
analysts spans 23 countries and publishes hundreds joshua.b.bellin@accenture.com
of reports, articles and points of view every year. Our Linkedin: Joshua Bellin
thought-provoking research—supported by proprietary Twitter: @JoshBellin
data and partnerships with leading organisations such as
MIT and Singularity—guides our innovations and allows
us to transform theories and fresh ideas into real-world
solutions for our clients. SPECIAL ACKNOWLEDGEMENT TO:
Visit us at www.accenture.com/research PAUL BARBAGALLO
Senior Development Editor, Accenture Research
ARLENE LEHMAN
REFERENCES Research Analyst, Accenture Research