Harvard professor Thales Teixeira explains why customer behavior, not technology, ultimately drives disruption. The emergence of a new technology is often cited as what drives the disruption of an industry or business. But that’s not true in most cases, according to Harvard Business School professor Thales Teixeira. Instead, startups disrupt established companies by decoupling the customer value chain — picking one aspect of the business and doing it better than the incumbent. His findings, based on eight years of researching startups, tech companies and incumbents, are explained in his new book, Unlocking the Customer Value Chain: How Decoupling Drives Consumer Disruption. Teixeira joined the Knowledge@Wharton show on SiriusXM to talk about his book. An edited transcript of the conversation is available at: https://knowledge.wharton.upenn.edu/article/what-drives-disruption/
We’re in a world where the pressure to justify marketing spend seems to grow all the time. A hundred years ago, it was okay for John Wanamaker to say: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
But that era is well and truly over. In the new world of digital, anything that shows demonstrable ROI has a tendency to win people over.
This in part explains why print has suffered as a marketing medium. Marketers look at digital with its real-time statistics and their heads are turned. They are able to see likes, clicks, shares, visits, comments, download — the list goes on. While some of these may be viewed as vanity metrics, they do show a level of impact that can be discussed by CMOs and directors.
Most marketers do seem to believe in print, at least anecdotally, but a lack of evidence of its success has somewhat hampered its usage.
The print sector has started its fight back and is confronting this challenge. Last year, the direct mail industry pulled together to form the joint industry committee for mail (JICmail). Working with research company Kantar TNS, it aimed to create the first-ever industrywide audience standard that would allow marketers to compare print and digital marketing channels.
The initiative’s initial findings have already produced some strong insights. For example, it found that, on average, 51% of all mail is read immediately — whether addressed or a door drop — and a further 19% of recipients follow up on this later. In addition, each piece that enters the home is revisited 3.8 times on average. Furthermore, 21% go on to create commercial actions — for example, prompting a purchase, or a visit to a website or physical store.
All this offers food for thought that should certainly make marketers think twice before writing off print. And here are three more reasons to consider print:
1. Print has become an antidote to digital overload. Consumers are constantly being bombarded by digital messages. We may spend a huge amount of time on smartphones engaging with social media, but how much are we actually absorbing while we’re scrolling through the endless content on these feeds? With print, however, it’s not so easy to click away. As the evidence above suggests, you might put it down, but the chances are you’ll return to it later. It has the ability to leave a lasting impression in a way that digital doesn’t.
2. Print can drive online performance. As KFC found out when it was in the midst of its 2018 chicken shortage crisis in the U.K., a quick-thinking print campaign can pay dividends online. Most people will have seen the ‘FCK’ campaign online, but it first grabbed people’s attention after it was printed in newspapers, magazines and on billboards. It only appeared online after people shared the print advert far and wide.
3. Trust in digital has waned. Fake news and data privacy concerns are some of the reasons why consumers have grown to distrust digital platforms. But for marketers, a series of revelations has led to a loss of faith in digital metrics over recent years. This includes measurement company Comscore finding that 54% of online display ads were were not being seen by anyone, and Facebook overestimating the average time people spend watching video by 60%-80%. Or as Thomas Barta, the influential co-author of “The 12 Powers of a Marketing Leader,” puts it: “Marketers were promised better targeting with digital. In reality, some digital metrics are still pretty dodgy.”