Monday, May 20, 2013

Disruption and Anticipating the Zero Moment of Truth

Five years in advance of the effective date, I announced my retirement after more than twenty years as head of Durham, North Carolina’s first community-destination marketing organization (DMO.)

In large part, I hoped the long lead time would deflect the tendency for eulogies to get over the top when it comes time for an event like that.  My ego has always had plenty of nurturing so my concern instead was to place as much focus as possible on the organization’s continued sustainability.

To me, if anyone deserved to be carved into a monument or have a street name, it would have been those who made the DMO possible including those with the temerity to hire and stick by me all those years.

Accolades would have also been deserved for the late Senator Robert S. Swain of Buncombe County and Representative George W. Miller of Durham County.

In the early 1980s, Senator Swain pioneered DMOs in the North Carolina General Assembly as local tourism development authorities to be self-funded by a local-option assessment added to the bills of overnight visitors.  In turn, this was designated to fund marketing to leverage attraction of all types of visitors and ultimately to expand local tax bases.

A decade later Representative Miller embedded guidelines for use of the tax into legislative resolutions when attempts were made by many communities to subvert this formula and divert the special levy off into general funds instead.

Unfortunately, this happened throughout the state, including here in Durham as I found on arrival in 1989 when only 10% remained for the purpose intended.

Together, these two individuals are largely responsible for 80% of North Carolina’s remarkable growth in visitor-centric economic and cultural development.

In the early 1980s I was one of the first DMO execs in the nation to use a CADO minicomputer for accounting at a prior DMO start-up in Anchorage, Alaska.  That was followed by deployment office-wide of a multitasking IBM System 36 including the ability to store and access documents from throughout the office and a rudimentary form of what would become called interoffice email.

The return-on-investment in productivity had struck me as obvious but even more so the comprehensive adoption to a DMO provided a strategic advantage over competitors, advantages still not grasped in many communities today.

So in mid-1989,  when we began to set up shop in Durham, it wasn’t a leap to go with a fully-networked system.  Of course, I took some heat in the community for having terminals on each desk and the comprehensive use of intra-office email which made us one of the first to go interoffice when the web made that possible.

Even in the home of Research Triangle Park and Duke University, many took decades to grasp the advantages that could be leveraged with technology.

In Anchorage, we had also been an early-adopter of the Exxon Quip fax machine after I saw it advertised during a business trip in 1978 just before leaving the DMO in Spokane, Washington.

So naturally, when I got to Durham many years later I sounded this out with someone to whom I was referred by a board member and was told fax machines weren’t used in Durham, especially in small offices, especially in start-ups.

I quickly made assurances that we would use it with prospects across the nation and was able to secure one anyway.  Fax technology dates to the 19th century and was wireless here in the US by the 1920s.  By the 1980s it was one of a wave of disruptive technologies.

In the summer of 1989, I hadn’t yet heard of the Internet or that the first IPS had just been established to make it accessible commercially for the first time but I had hoped to fully and seamlessly integrate office technology into marketing.

With that I was a little ahead of the times but I read now that this integration is foreseen as part of what Brian Solis forecasts in his excellent new book [What’s The Future] of Business?

Within 48 months of it becoming commercially available, the Durham DMO was among the first to not only integrate the Internet into community marketing but then to rapidly make it a strategic core of our marketing.  Yes, we took some heat for that too.

I guess I was always more comfortable with the “disruptive technologies” that Dr. Clayton M. Christensen, a BYU alum who graduated from BYU three years after I did, described in his breakthrough 1997 book entitled The Innovator’s Dilemma.

Christensen’s research found that highly innovative companies fail, not for lack of great management, listening to customers, investing in R & D or improving products and service but because of what Solis calls “doing the right things over and over.”

They missed seeing the significance of or reacting to other disruptive technologies as they came along.  Oh they were aware of them and even predicted their influence but as the Heath brothers write in their new book entitled Decisive about the fall of Kodak, these companies failed to establish a “trip-wire” that would trigger a reaction when digital adoption reached a tipping point.

The role of DMOs where I spent my 40-year career in community marketing is an area where continuing and never-ending innovation is a must.  One of the very unique things about Solis’ book is that he includes links to his sources and individually to his excellent blog posts for more background.

He pointed me and other readers to an excellent white paper by Crowdtap, that can be downloaded at this link entitled The Power of Peer Influence.  The advertising element of marketing, the overall effectiveness of which is now in negative territory first began to appear in the US more than 300 years ago.

The paper’s authors glibly note that “the future of marketing will more closely resemble the last five years than the previous 300.”  Disruptive technologies are impacting marketing as much or more than any other area of business or social enterprise.

It isn’t just about technology.  I don’t know if it is on track, but Forbes noted in 2011 that between 2003 and 2013, over 70% of the Fortune 1000 companies would turnover, compared to 35% during a similar span in the 1970s and 45% in the 1990s when Christensen published his research on disruptive technologies.

Solis writes about “Digital Darwinism, when society and technology evolve faster than our ability to adapt.”  Remember, Charles Darwin found that it wasn’t the strongest who survive but those who evolve.

Solis describes “Generation C (connected)” which cuts through all age groups including mine and now represents more consumers than several cohorts combined.  Only one in five consumers is unconnected to the Internet now.

Strategically, the answer isn’t just keeping up with technology although that is “part of the answer.”  Solis lays out why marketing and other business activities must begin with more research into the customer experience.

By that he doesn’t just mean the idea of integrating experiences into products and services. The experience begins at the very beginning of the marketing experience, even before what Google calls the Zero Moment of Truth (ZMOT.)

Different than the many businesses, organizations and facilities that eventually benefit, a DMOs primary role is to stimulate interest, to get a community on the list for consideration long before visitor-related businesses, organizations or facilities are in a position to harvest that visitor interest.

This seminal stimulation of interest comes even before the ZMOT.  The resources in this blog are a must read for for today and tomorrow’s DMOs.

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