“Are you ready to go to war?”
That’s the question that Fifth Dimension Founder and Director Lyndall Spooner has for CEOs and business leaders.
“This financial year, business leaders have to adopt a wartime mindset, forcing CEOs to be insanely protective and obsessive over their business’s success,” Spooner says.
“Those that don’t, won’t reach desired targets and simply won’t survive.”
According to Spooner – who has more than 25 years of consulting under her belt –Australia’s long-term economic growth has left many businesses unknowingly strategically weak.
“Australia has experienced an incredible run of uninterrupted economic growth for nearly 30 years. As a result, many businesses are unprepared to compete in a declining economy for a more discerning consumer,” she tells The CEO Magazine.
“Since March, consumers have undergone swift and lasting change, and so must businesses in order to remain relevant and competitive. How businesses respond will be highly dependent on the quality of their consumer intelligence. The reality is that many companies are making decisions off poor data.
“Simple consumer metrics that worked up until now, won’t work moving forward.”
“When the economy was growing, intelligence based on a single weak consumer metric did not have a big impact on overall company performance. The benefit of a growth economy is that it can hide and forgive poor management and useless consumer metrics. A recession economy fires a blowtorch on these things.
“In a time of economic war, accessing the strongest consumer intelligence with the right KPIs is fundamental to survival. Right when consumer intelligence will become critical to developing winning compete strategies is when businesses will realise whether they have been working with the right or wrong metrics.”
Many of Spooner’s clients are surprised by the size of the economic potential of the right set of consumer metrics. Fifth Dimension’s founder is of the view that the next 24 months will result in many more predatory takeovers, mergers and acquisitions, disposals and businesses going to the wall. Companies not moving quickly enough to adopt a wartime mentality and recalibrate their customer experience metrics may disappear altogether.
“In the retail environment, our data shows that the return on investment of consumer metrics can vary between 7–150%,” she says. “But few CEOs are willing to change their metrics once they are in place – especially if they installed them in the first place.
“A wartime CEO must be willing to replace existing consumer metrics and KPI structures for the right metrics that will enable the identification of stronger compete strategies, direct investment to the right areas and refocus the business at speed in a rapidly changing consumer landscape.”
Spooner believes the impact of the pandemic lockdown and the recession has accelerated emergent market trends and that now is the right time to assess the strength of consumer intelligence as businesses get ready to meet the new consumer.
“A lot of businesses are going to thrive in this new environment, but even more are going to struggle.” – Lyndall Spooner
“The post-COVID-19 consumers will be like nothing Australian businesses have dealt with before. Consumers will be far more scrupulous in how they spend their money. They will be far more willing to break their existing brand relationships,” she says. “Not only that, the new post-coronavirus consumer will be more aware of their environmental footprint. They will think more about how their spending habits impact society.
“A lot of businesses are going to thrive in this new environment, but even more are going to struggle. The onus of guiding businesses through these new conditions will inevitably fall on leadership.”
The changing consumer landscape will require a wartime CEO that can impose their will to direct change, adaptability and flexibility, Spooner continues.
“Most importantly, a wartime CEO is adaptable to change and is willing to drag their business in the direction they want it to go. If something isn’t working, a wartime CEO will make the bold call to change tack. They may even bypass the standard channels of decision-making for the sake of a swift decision.”
Spooner believes wartime CEOs must understand the new market dynamics and develop a new strategy with a data- and consumer-driven message.
“Every CEO needs to have a good understanding of the ever-changing market dynamics. This may mean rethinking the brand promise and development of new products and services,” she says. “The nature of the lockdown saw certain industries like retail and food and beverage hit the hardest and fastest, and we have already seen how critical it has been for companies to pivot to better meet the needs of consumers to survive.
“Every decision a wartime CEO makes will be rooted in an evidenced-based understanding of customer experience. The key criticality for growth over the next 2–24 months will depend on a leader’s ability to create a meaningful, relevant and comprehensive ecosystem of customer experience metrics that can be constantly updated and analysed.”
Spooner’s five key metrics in a consumer metric ecosystem:
- Presence – many companies still track brand consideration, failing to acknowledge the brand sales funnel designed in 1898 has been disrupted and is irrelevant for how consumers select brands today.
- Brand – you need to know what your core pillars of differentiation are so you can leverage to build commitment and resilience.
- Win rate – your success in winning acquisitions needs to be measured among the active market relative to other providers.
- Pricing – you need a metric that reflects your brand strategy; are you a premium, mid-market or budget brand?
- Loyalty – your customer metric must accurately tag the level of customer commitment to your brand and resilience to competitors.
“Only those CEOs with an innate understanding of their customer base, the conditions necessary to facilitate buying decisions, and the ability to implement and activate whole of business strategies and tactics with razor-thin precision will position themselves for growth,” Spooner asserts.
“This means businesses must have the right information to understand their customer base and the strength of the relationship. In working with industry leaders across a number of sectors, we have seen that moving to the right consumer metrics has increased the accuracy of tagging customer commitment to a brand by over 50% – enabling businesses to effectively drive customer-retention strategies. This is more important than ever.”
Sydney-based consulting company Fifth Dimension has been recognised for its groundbreaking work, receiving a place in the GreenBook Research Industry Trends (GRIT) Top 25 Strategic Consultancies as one of the world’s most innovative companies.