Over the last 15 years when I have had the chance to work with a range of enterprise clients in India, I believe that the key differentiation between clients who have been able to leverage digital to gain a competitive advantage and the ones that have failed has always boiled down to clients who have had the courage to throw the cannon ball once the re-calibrated bullet hit the target versus the ones that wanted to keep firing bullets.
This analogy has been borrowed from Jim Collins’ Book “Great by Choice” in which he has detailed companies who have performed 10x vis-a-vis their competitors in the same vertical. One of the strategies followed by these 10x companies was to try out new ideas (akin to firing bullets), keep recalibrating the bullets until one hits the mark.
However, once any of the bullets hit the mark they would put the entire might of the organization behind by throwing a cannon ball at that idea. I believe this approach is perfectly suited for the digital strategy of a large enterprise.
Digital is not about getting a perfect blue print before you start the journey, it is more like taking a compass and starting to walk in the right direction. There will be times when you will get visibility of an empty road, you will have the opportunity to accelerate, while sometimes you will also face storms, ascents, and landslides. In those times, you have to face the challenges but ensure that you keep moving in the right direction.
Let me elaborate on the Cannon Ball strategy through some experiences. In no way am I criticizing these clients, as it takes audacity to throw a cannon ball. At my agency, we have failed to throw a cannon ball many-a-time and have lost out on huge opportunities. However, that is where the bullets help in mitigating the risks.
A bullet is a metaphor – for a billion-dollar company a million would be a bullet, while a million would be a cannon ball for many companies. In hindsight, I am glad we did throw adequate Cannon Balls to reach where we are today.
We used to work with a lifestyle brand that does spot sales. Two or three years back they threw a bullet with us. They spent INR 2 lakhs on a spot sale for one city – people had to give their mobile number through a sign-up process and an SMS would be sent to them offering them an additional 5 percent off. The person had to carry the SMS code to claim the discount. This activity created 7,000 SMS with approximately 600 people actually buying products worth INR 5.5 lakhs. We were ecstatic with the results of this pilot, as this was on a minuscule budget and we were confident that they would now route most of their spot sales budget to digital and mobile.
I remember the meeting with the CMO distinctly, where he said that digital has performed “OK” but print still performs much better than digital for them and that they would like to continue with print for their spot sales rather than allocate budgets to digital. His rationale was simple – he spent INR 100 on print – his total sales were INR 400. So, print’s performance was much better than digital. I was aghast as he was attributing every single person walking into the store to print ads without taking into account the millions of products sold over many decades, hundreds of thousands of regular customers who wait for the spot sales, and physical store locations on busy streets.
I suggested that he test his hypothesis by spending the same amount on a coupon-based print ad – whoever carries that print ad gets 5 percent off – if those sales were more than this digital sale then he would know for sure that print works better than digital. Of course, he was not willing to take this up, for obvious reasons. Yeah, we lost additional revenues but imagine what the company lost.
Let’s imagine for a second that this company shifted 50 percent of their spot sales advertising budget to digital three years back. They would have built a database of tens of thousands of spot sales profiles of customers for each city. With this they could have run contests/surveys every few months and continued brand engagements and collected additional data from each mobile number. They could have even built a mobile app for spot sales in each city.
It is also quite possible that in three years they could have reduced paid media spends by relying mainly on their own database for spot sales promotions.
I really wish they had recalibrated and thrown a canon ball – today the same canon ball will cost them 10 times more and will not have the same impact. The other key advantage of digital would be, as one would reach out to niche customers who are interested in spot sales, the discounted messages would not be seen by people who would be willing to buy at full price, thus saving dilution of the brand positioning. Today a lot of non-competitors who have leveraged digital have gained a competitive advantage over them.
We work with ICICI Lombard. This is a company that has been firing bullets with us for more than five years. We have always been given pilot experimentation budgets. Whenever an idea worked, they would give us the additional budgets for those ideas and their digital budgets have grown 10 times over the last few years. There was a time when their ad budgets were not even recovering premium being collected, but they did not discount the effectiveness of all their digital endeavors and simply eliminated the ones that were furthest from the target, as they kept calibrating the ones that were close to the target.
Today, they have become a clear leader in their space in terms of number of brand searches, organic traffic, and effectiveness of paid media in the vertical.
In Part 2 of my column, I’ll share with you six actionable tips on how to succeed in digital.
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