If the last few years were about hooking your business to the Internet, 2003 could be about worrying about the strategic impact of the Net on your business. One rising concern: brand loyalty. Thanks to the Net, consumers now have more choice, more bargaining power and more convenience all of which add up to less stickiness for any one brand. According to a recent survey of American Internet users undertaken by the Dieringer Research Group, online information led to nearly 40 million consumers changing their minds about shopping for a particular brand last year. In other words, its not just enough to set up a website. You now have to worry about a seamless integration of offline and online experiences for your consumers. The takeaway: revisit your Net strategy to ensure that consumer interactions are in line with the brand image you wish to convey.
With wireless Internet technology, Wi-Fi, set to make waves, and airports, shopping malls, and hotels turning into wireless Internet hot spots, this is also a good time to re-evaluate the opportunities and threats to your business from the Net. With the Internet, you got away by integrating it as another sales channel for your company. With Wi-Fi, you need to worry about consumer behaviour and habits that are changing quickly. People will walk into coffee shops to work on homework projects, and shop for groceries while at the airport. So, get ready to overhaul your business as your digital strategy begins to morph into your business strategy.
Also start building a niche mentality by looking for profitable pockets of opportunity in both old and new business areas. That means trawling global trends aging American baby boomers, the growing obesity problem in Canada, enhanced airport security in Europe in quest of new customers. The trick is in finding ways of meeting those new needs profitably. The ability to find a niche and dominate it early will be critical for long-term survival.
Next year will also see the demise of blind faith in the loyal customer. With less and less resources to spend on retaining a large base of customers, 2003 could see a shift in favour of focusing on a smaller segment of profitable customers. More and more companies will serve those customers who are profitable or are potentially profitable. Expect concepts like customer loyalty and satisfaction to drop out of fashion as companies stop chasing volumes, and concentrate on enhancing value from profitable customers, loyal or not.
Of course, values will be a much-bandied word in 2003 but dont be fooled into believing that the return is to anything basic. At B-schools like Harvard and Sloan, the faculty is not introducing any new ethics courses in knee-jerk reaction to the spate of business scandals. Its clear that basic values such as honesty and truth are a precondition for working in the business world and there can be no return to a basic that never went away.
What will change in 2003 is the values system that drives the networks of the business world. More and more companies will try to win shareholder trust by appointing independent directors, splitting the post of chairman and chief executive, hiring CEOs on the basis of spec-sheets instead of status, and breaking the bond between business strategy and Wall Street pressures. Whether its Coca-Colas decision to stop being a hostage to Wall Street by sharing quarterly earnings expectations or General Electric making a clean sweep of its board, expect truth and honesty to be the benchmarks by which all business decisions are taken. At least in 2003.