The story of Digital Transformation is being dominated by management consultancies buying marketing agencies - so where are all the Customer Experience specialists?
I always smile when my clients say it’s hard to stand-out if all their competitors say the same things. Surely that makes it much easier to say something different?
So whenever everyone zigs, it’s worth asking why no-one’s willing to zag. The Digital Transformation space is a case in point.
The Customer Experience gold-rush
In 2014, Gartner famously reported that “89% of companies expect to compete mostly on the basis of Customer Experience" (CX) by 2016, up from 36% in 2012. Since then, it’s fair to say that CX has become the modern battleground / gold-rush / messiah / naughty boy.
Unsurprisingly, the biggest players have dominated the news, with Accenture’s Karmarama deal driving the narrative, scaring Adland’s horses and informing many a ropey post-M&A press release.
But Accenture’s 2013 acquisition of service design consultancy Fjord was the real watershed. This built a bridge between management consultancies and marketing agencies.
What’s odd is the one-way traffic travelling across.
Defining the landscape
Corporate transformation follows a natural chronology. Commercial priorities inform more customer-centric products and services, which then need to be marketed. So, broadly speaking, the runners and riders are:
1) Management consultancies. Top of the value chain, trusted advisors, deciding what’s broken and sending chunky invoices.
2) Innovation / product and service design specialists. The CX experts, from long-standing leaders like IDEO, Made by Many and LSU, to newer businesses like Hive and Work & Co.
3) Marketing agencies. Campaign-led digital / advertising firms. Some also leaning into innovation, like Albion and AnalogFolk, others struggling to adapt to the race for C-suite cash.
So far, so simple. Except obviously these tiers aren’t quite so discrete. For one, not all innovation specialists are created equal.
Building some decent websites or mobile apps doesn’t make a digital agency into a service design expert. Neither can a marketing business wake-up one morning and credibly claim to ‘own’ the customer experience, however seductive the revenue opportunity might be.
They might advocate user research and follow Eric Ries on Twitter but that doesn’t make them practitioners. A brain surgeon might be a whizz with a scalpel, but she ain’t touching my iffy knee.
So for innovation in particular, expertise counts.
The development distraction
Given the vertical integration opportunities and the scarcity of genuine CX specialists, the recent wealth of M&A activity is hardly a shock.
But looking beyond management consultancies, it’s more often companies with technology / development skills who are splashing the cash. In the last year or so, Zenzar bought Foolproof, Globant acquired We Are Experience, Cognizant acquired Zone and Etch shelled-out for Big Radical.
All very sensible - firms that build stuff wanting to shape their brief, rather than just take it.
But, for one, why is the flow of cash predominantly one-way?
And, secondly, because the build job for new digital products is often the most moveable feast in the CX festivities, if we’re looking for the key to innovation, development is a red herring.
In fact, it’s the boardroom where the real action is.
Show me the money
I recently bumped into a mate from Karmarama. Post-acquisition, he can now get a meeting with pretty much any C-suite person on the planet, helping him set the agenda, play with serious budgets and reframe procurement - not to mention dramatically improve his new-business efficiency.
But having worked with various independent digital product and service design agencies, they still find it much harder to get in front of heavyweight decision-makers.
The reality is that innovation is a C-suite issue. It’s a complex sell, takes time to unpack and needs proper attention from the busiest senior people.
And much as I’d like to argue that a pithy, client-centric agency narrative is the whole answer, it isn’t; having a bunch of CEOs on speed-dial doesn’t half make life easier.
Why aren’t the CX specialists - with their zeitgeisty, in-demand talents - searching for their own C-suite fairy godmother?
Cracking the C-suite
For most, the acquisition-by-behemoth ship has sailed. Beyond Accenture and Fjord, EY bought Seren and KPMG have Nunwood, plus there’s IBM iX, Deloitte Digital and PwC Digital Services. Naming choices aside, they’ve got innovation covered.
Instead, I mean product and service design shops showing some vision and proactively shaping their whole category.
Where’s the vision?
If I was running an independent CX agency, I’d think seriously about buying a similarly-sized management consultancy.
When a giant like Accenture jumps the middle tier and buys a far smaller marketing agency, there are real concerns about cultural differences killing the newly acquired golden goose (did Loverboy teach us nothing?).
Contrast that with a meeting of equals, where complementary consultative disciplines dovetail to create obvious mutual value for clients and employees alike.
In fact, why stop there? Fill the third tier and bring in a marketing agency too. Be the CX-led micro-network antidote to the BCGs and McKinseys of the world.
Hell, the press release writes itself, folks.
Create your own future
As well as securing C-suite access and downstream marketing nous, this kind of vision for CX would also address a perennial risk of emerging disciplines - when specialists don’t lead, generalists fill the vacuum.
Most clients aren’t at the bleeding edge. When a new discipline arrives, they’ll adopt the simplest definition from the loudest people they already know (anyone remember the content marketing gold-rush from way back when?).
So innovation specialists can’t sit idly by while global corporations - be that management consultants or, less convincingly, advertising groups - establish the mainstream language of transformation.
As ever, history is written by the victors. If the specialists dither, their vision for a customer-centric promised land will be diluted into something they barely recognise.
The CX gold-rush might not be over, but it will be for them.
Robin Bonn is the founder of Co:definery – a new-business management consultancy. You can reach him on firstname.lastname@example.org
(Image: Waverley Community Association)