It's about how marketing is built to serve a production economy, even though we're now living with an economy that is overwhelming based around service. Basically, marketing is built on out-dated and increasingly creaky foundations!
Our long overdue upgrade
STANDFIRSTOur whole industry is built on ageing foundations. The upgrade we need will come from digital techniques, embodied by new approaches such as Service Design.
The Internet is one of the most exciting catalysts for change in all our working lives. We work our little digits to the bone trying to keep up. As an endless barrage of digital innovations brighten our laptop screens, it's tempting to focus on what we could do with it all - perhaps missing the point of what we should do to support the changing shape of modern business.
This essay may feel more like playing the tortoise than the hare, but it's worth taking a moment to understand the long game. Sometimes legacies from the past hold us back from making the most of the future. After all, it's not what futuristic technology that you use, it's the way that you use it. That's what gets results.
So let's rewind to the last comparable revolution, long before we got familiar with typing "www" in front of everything.
Marketing shows its age
The first marketing agencies sprang up as the industrial revolution launched into full swing. Production capabilities dramatically increased, and companies found themselves with an exciting emerging need to promote products to a wider audience. Suddenly, they could go national. Suddenly, every household in the land became a potential consumer. Companies happily commissioned external agents to make the best of the job. The job required skills in announcement, broadcast and capturing people's attention and affinity. Our industry founded itself on persuasion, disruption and targeting: a marketing industry built around the needs of a production economy.
That was a long time ago. We are no longer an economy dominated by production. Service industries overtook manufacturing share of GDP around the 1970s, and now make up over 75% of UK & US GDP. The businesses we operate, and our national consumption patterns, have undergone a seismic shift. In tandem with this, we are well set into the digital revolution. Digital has grown out of a service economy, and has also accelerated the growth of that economy. The digital revolution and Europe and North America's developed service economies go hand-in-hand.
The marketing requirements of a service economy are different to those of a production economy. This is no longer about announcing the availability of commodities, and chasing a series of disparate sales. Service-based businesses have a much stronger behavioural component than product-based businesses. Just as with products, any given service can gain competitive advantage through unique and advantageous features. For instance, a banking service can have a better interest rate than its competitors; or a holiday company can offer more cost effective package deals. But a lot of what convinces customers to buy into a service is in the way that service provider behaves. Will this bank pick up the phone when I need them? Will this holiday company treat me like cattle, or like a rock star?
When a brand's behaviour is a critical deciding factor, the agenda for that brand's marketing changes. Where marketing for a production economy was about announcement and persuasion, marketing for a service economy is about interaction, personalisation and integration. That is, customers want to experience your services before they buy - they want to interact with you. They want to know if your service can deliver a good fit for them personally. And they want to be sure that your brand is genuine - that you are who you say you are, wherever you are met.
New generation, new approach
I believe we are only now starting to upgrade our marketing model to suit the conditions of the age. It is not really digital technology that's driving it, but it is native digital techniques.
At the forefront of this change is Service Design - a new discipline to focus on the total user experience of a service. It has an obvious parallel with industrial product design, which emerged as a distinct trade not too long after our first marketing agencies appeared. The agenda for product design was to tailor the functionality and experience of a product to suit its user. Similarly, Service Design aims to appraise and develop the complete experience of a service, and tailor it for its target audiences. What product design is to a production economy, Service Design is to a service economy.
Service Design does not only apply to service provider brands. Almost all production-based businesses benefit from increasing their focus on the service they provide. Service, at its broadest, is the front line of a brand's behaviour towards its audience, and the experience that brand aims to create.
The language of Service Design is noticeably similar to the language of User Experience Design. While digital agency UX professionals are used to talking about digital interfaces, Service Designers talk about the service interface, which is the complete set of touchpoints for that service. Customers, shoppers and consumers are generally referred to simply as users, and service design goes through stages of persona creation, user journey mapping and prototyping. There is an obvious parallel between how digital has been causing marketing to develop, and how Service Design is now emerging out of a mature service economy.
The new .com companies are already fluent in Service Design principles. Companies like Runkeeper and Evernote use all of their media touchpoints to provide increasingly capable and customisable services for users. In fact, they seem far more focused on using touchpoints for service provision than for traditional marketing usage. They rely on social reputation more than on broadcast advertising. They don't try to put users onto regular email programmes in order to squeeze more sales out per customer. They don't use apps or other tech as naive, zeitgeisty novelties. They think about data capture primarily as a benefit to their users rather than themselves. They think of media planning as ways of serving their users more comprehensively, at times and places that suit them best.
The paradigm has shifted. It is almost impossible to tell whether digital is a cause or an effect of the new agenda for modern service economies. But it is certainly at the forefront of the change. As agencies continue to digitise, and as our clients' business models do too, I predict that we will get an increasingly clear view of a new model for marketing.
Although digital technology will always be about innovation and upgrades, I'm not so much interested in upgrading technology as I am interested in how we use digital to upgrade the marketing model.
- It's not what technology you use, it's how you use it.
- How we use digital is too often pinned to an antiquated marketing model.
- The needs of our service economy require different priorities, perfectly suited to digital.
- Service Design characterises the upgrade that we need.
Richard Neville is the Chief Strategy Officer at Elvis