Forrester’s Josh Bernoff has recently released a major piece of work looking at Competitive Strategy In The Age Of The Customer:
We took a close look at Michael Porter’s five forces, the definitive framework businesspeople use to analyze competition. There’s no longer any barrier to potential entrants or substitutes – in a digital world, competition can come from anywhere. Customers have real-time information about pricing, product features and competitors; they hold all the advantages. And the key source of supply now is talent – and talent can get up and leave. The competitive barriers that Porter defined matter far less now. The only sustainable source of competitive advantage, the only defensible position, is to concentrate on knowledge of and engagement with customers.
Previous sources of dominance – manufacturing, distribution, even information mastery – are now just table stakes. This is the age of continuous disruption. Your relationship with customers is the only thing that enable you to survive that disruption (think of the movie industry as it continually embraces new formats). That’s why we are christening this “the Age of the Customer.” In our new report “Competitive Strategy In The Age Of The Customer,” we assert that companies must be more than customer focused, they must be customer obsessed.
In terms of what this means for marketers, as Forrester’s Shar VanBoskirk says:
Prioritize word of mouth over mouthing off. Cut your ad budget by at least 10%, and spend the money on connections that have a multiplier effect like social
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