…they prefer technology companies to traditional media.
I’m old enough to remember when there were only four “real” TV channels. Even ten years ago, Netflix wasn’t streaming, and we still looked to “cable” for media entertainment. Traditional television broadcasting companies had control over their markets; similar to those companies today that have established infrastructures in place, thwarting would-be competitors.
But recent technological innovation has changed all that, of course. With the widespread availability of the Internet and broadband service, consumers readily adopt new options for accessing, viewing, and experiencing media in all its various forms. In fact, this year’s study showed technology companies topping the charts in the media category. Google, Netflix, and Amazon were the three highest rated media companies in 2016 (with CQ scores of 4.58, 4.10, and 3.98 respectively).
In contrast, traditional media companies were largely rated in the negative, with their average CQ dropping a dramatic 9.11 year-over-year. And the major broadcasting companies do appear to be struggling to find growth (the industry saw an $18 billion shortfall in revenue in 2015, and the value of the Dow Jones Media Index fell from $811 billion to $640 billion between August 2015 and February 2016).
The technology sector, however, shows the opposite trend. The soaring popularity of technology companies rated within and as part of the media category represents a larger shift that is as dramatic as it is telling. And we have every reason to expect that this rate of change and extra-category disruption within all industries will increase. On average, companies’ lifespan on the S&P 500 is now only 15 years (a 50-year reduction over the last century); and experts predict that, within five years, the majority of companies in that index will be ones we have never even heard of yet.
It’s not so far fetched to imagine that, in another five years, every industry will see technology companies – ones with the creativity and operational agility to meet new consumer demands – outperforming their traditional counterparts. And I’m not talking about inventing new functionality for the sake of having something different to offer; more bells and whistles. To be relevant, companies must use technology to stay in step with what matters most to consumers; delivering new functionality and creating new options that show consumers they are understood, respected, and valued.
Getting customers, keeping them, growing them – keeps us all in business. But today’s customers have more means, power, and control to circumvent traditional business offerings to get what they want, when, and how they want it.
As industries become commoditized and as companies within those industries struggle to differentiate their offering from competitors’, the subtle, emotional, and intangible brand behaviors CQ defines become ever more important. Ultimately, whether or not a company intuitively “gets” its customers may be the most important differentiator in a fractured, crowded marketplace. Developing this kind of intuition is the ultimate path to winning customers’ share of heart.
The above is an excerpt from our Customer Quotient™ (CQ) research.