"Reorganization is inevitable".

WorkKarl-Heinz Land is the founder of the consulting firm Neuland Consult  
 
WW: Karl-Heinz Land, the appearance of your book is quite dramatic: "The silent attack on your business model", the meteorite is approaching. Are companies asleep or do they need to be shaken awake?
Karl-Heinz Land: I am indeed shocked at how difficult it is for companies to deal with the digital revolution - not just in Germany and Switzerland, but throughout Central Europe. Many are completely unprepared. In this respect, they definitely need to be kissed awake.
 
What are companies actually doing wrong?
Many have already missed out on the Internet wave, and now they are also missing out on the mobile wave, to name just one example. Many more smartphones are already being sold worldwide than computers. In addition, mobile use is steadily increasing. Mobile devices have become the most important channel, more important than TV and computers. They are the screen with which we do everything today, which we always have with us, which is always in use. Companies must adapt to this usage. Otherwise there is a risk of "digital Darwinism". People's behavior is changing faster than companies are able to adapt.
 
What would be the right approach?
There needs to be a rethink. Companies need a digital vision. Mobile first is the order of the day. Applications must be developed for mobile first and only then for computers. This is the direction we need to go in.
 
Digitalization opens up new opportunities to gain additional information about customers. However, the challenge lies in using this data. 
That's right. Companies need to consider how they can enrich existing CRM (Customer Relationship Management) data with sensitive customer data. We talk about social CRM when social media technologies and services are also used. CRM is enhanced with data from the social web - for example, data from Facebook or Twitter. Facebook is not only a relationship network, but also the largest customer preference database in the world. Every "Like" expresses a preference. This must be used. If companies know their customers' preferences, they can address them in a much more targeted way and make them tailor-made offers.
 
One example please.
Let's take an online bookshop. It sends out a personalized newsletter once a month. You are one of the customers and have subscribed to the newsletter. A few weeks ago, you ordered a book about fishing for your father. We know what will happen: In the next newsletter, you will most likely receive suggestions for books about fishing. But you are not interested in fishing at all. After the third time, you find the newsletter so stupid that you unsubscribe. You think: They don't have what I want anyway. This does not happen if the newsletter is not only created on the basis of purchases already made, but also on the basis of your profile and your preferences from the social CRM. Then the bookshop knows, for example, that you are 28 years old, have just moved to Berlin and like cocktails and sends you the book suggestion "Life in Berlin: The coolest cocktail bars."
 
The offers are more precisely ...
... and not only the customers benefit from this, but also the companies. The conversion rate (when the prospective customer becomes a customer) is increased. In addition, companies save the costs of winning back those customers who previously unsubscribed from the newsletter because the offer did not suit them.
 
This means that customers give the company their data in return for an additional service.
Correct in principle. However, customers do not give away their data, but simply allow the company to use it - as long as they receive a good service in return. As soon as the service is no longer right for them, they cancel the service again. This means that the company can no longer access their data.
 
Data can be misused. How do you respond to data protection concerns?
The data may only be used with the customer's permission. However, customers must be aware of this: Privacy and service are two sides of the same coin. They are in control of the service they are offered. The corner store was only possible because there was no privacy. The stores knew their customers inside out.
 
How are customers served who prefer not to provide their data?
The answer to this is: "No data, no exclusive service. " Either customers allow the companies they trust to access their data. Or they don't - but have to do without the better service. In other words, they have to live with the fact that they continue to receive the outdated 200-page catalog and have to search for the information themselves.
 
How can trust in companies and brands be established?
By guaranteeing the customer that they will only use their data to provide a better service and will not commit fraud. As a guide for the customer, we are currently in the process of obtaining certification from the German Technical Inspection Association (TÜV). A TÜV seal guarantees that data security is guaranteed.
 
Merging and processing the collected data is likely to be cost-intensive for companies.
That is a fallacy. Of course it requires an investment in strategy and technology. However, the bottom line is that social CRM is cheaper and more accurate than many old systems that are based on an annual customer survey, for example. After all, the data from the social web is maintained by the customers themselves - many of them even do it very lovingly! Quite a few update their Facebook profile seven days a week. This gives companies a profile of their customers that they would not otherwise have. The data is always up to date and the preferences of buyers can be analyzed virtually in real time.
 
Let's move on to the reasons why companies are failing to adapt. In the book, you mention corporate culture as a problem: employees with the most digital experience and the greatest affinity for social media often have the least power to promote its use. What do you suggest?
With my company Neuland, I run workshops in which I show managers the "need for urgency". It's an educational measure, if you like. I take the executives with me to the Digital Valley. For a week, they walk around with data glasses from Google (Google Glass). They use them from morning to night and are not allowed to talk to their assistants on the phone during this time. In this way, they learn what is possible with the new technology.
 
Enthusiasm alone might not be enough ...
No. We are also discussing what the organization in companies will have to look like in the future. I am convinced that in three to four years' time, half of all employees in companies will be working with social media. In service, in sales, in marketing, in short, everyone who has anything to do with customers. These people need to be trained.
 
When it comes to social media, it is often said that the proof of the pudding is in the eating. You contradict this statement.
Yes, there are now enough examples of best practice that can be studied to show what has worked and what has not. Of course, not everything can be transferred 1:1, every company and every customer is different and has to make its own experiences, has its own learning curve. Nevertheless, courses can be attended that show what is possible with social media.
 
Another obstacle you complain about is the cognitive firewall between marketing and sales. Instead of pursuing common goals, they encounter each other as "inhabitants of different planets".
It's even worse! Firewalls exist not only between marketing and sales, but even within the individual areas. In many companies, for example, online sales are separated from physical retail. Everyone thinks only for themselves! A reorganization is inevitable in the medium term.
 
What needs to be done?
You have to break down these firewalls and turn the different departments into one team. Today's customers operate in a multi-channel world: smartphone, telephone, call center, Internet, POS ... Companies have to do justice to this.
 
How?
Behind the physical store, the online store, the mobile channel, the sales department, the call center, etc., a digital memory must be established. A central database. The crux of the matter is recognizing the customer and offering them the best possible service, regardless of which channel they use. I don't want to ask them the same question three times: "What was your customer number again?" "What was your request again?" "Oh, you called yesterday, sorry, that was my colleague, I don't know ..." This costs the customer - and the company - time. The marketing of the future is perfect service. And: Satisfied customers pay off. Today, 75 percent of communication about a brand or company no longer comes from the brand itself, but from customers (user-generated content). This is where companies need to start.
 
Would mean: Companies need a concept for referral marketing.
My thesis! I am certain that Google will face hard times. In future, customers will no longer search for the right product themselves, but will want to be found by the right product. For example, via a recommendation in their social network, via recommendation portals on the Internet or via "recommendation engines", i.e. services that automatically provide consumers with the best suggestions for restaurants, car rentals, flights, hotels, etc. based on their profile.
 
Last question: Books on social media are published every week. Why should people read yours?
I don't see the publication as a social media book, but as a book about the future of digital sales and digital marketing - or more generally: as a book about the way companies will have to deal with digital things in the future. Social media is a channel that can be used for this. Web 2.0 has turned the one-way street of the Internet into a dialog. The entire market is a dialog. And this heralds the end of marketing as broadcasting. Companies must adapt to having conversations with their customers. This leads to a subdivision into micro-segments; in case of doubt, one-to-one marketing emerges. With millions of potential customers, companies need to consider how best to communicate with them. It works via social media.
 
Interview: Isabel Imper

The data explosion, social media, the growing number of communication channels and changing consumer behavior are presenting established business models and brands with new challenges. Very few are well prepared. And most don't seem to have a concept either. For example, over 60% of companies have not defined any goals for their social media engagement (Bitkom study 2012).

This lack of planning and vision will not remain without consequences, the authors of the book "Digital Darwinism" are certain. "Social media, big data, increasing digitalization and much more are triggering a veritable tsunami that will destroy large parts of today's economy!" According to the authors, the digital revolution is leading to a permanent transformation of economic and social conditions and a struggle for survival among companies. The importance of empirical knowledge is decreasing at an inflationary rate, while the adaptability of the business model is becoming a strategic competitive advantage. "Survival of the smartest!"

Inaction becomes the worst faux pas, the "late movers" become the "first losers". However, many companies do not yet seem to be aware of this. Strong signals of change are simply ignored. One of the main aims of the book is to make readers think. The book points out dangers and opportunities and shows ways in which companies can adapt to the changing market conditions. What does increasing mobile access to the internet and the emergence of big data in conjunction with cloud technologies mean? It also sheds light on how marketing needs to change. What opportunities does the integration of data from social media services and technologies (social CRM) open up? Why is change management necessary?

The book's concept of encouraging questioning is also reflected in its design and structure. Boxes repeatedly appear in the text, pointing out problems and raising specific questions (do we also have a "top ten excuses" when it comes to social media?) Approaches that managers, marketing and communication managers can check for themselves in their company.

Authors:
 
Ralf T. Kreutzer held management positions at Bertelsmann, Volkswagen and Deutsche Post for over 15 years and is now Professor of Marketing at the Berlin School of Economics and Law. He advises companies as a marketing and management consultant.
 
Karl-Heinz Land is the founder of Neuland Consult and advises companies on digital transformation issues with a focus on social media, mobile, big data and e-commerce. Land has worked in management positions for over 25 years, including at Oracle, Business Objects, Microstrategy, Grand Centrix and Voice Objects. Kreutzer, Ralf T. & Land, Karl-Heinz (2013): Digital Darwinism - The silent attack on your business model and brand. Wiesbaden: Springer Fachmedien.