The Marketing Strategist:

Convergence: What Does It Mean for Marketing?

January 8, 2008

  • News

Since its introduction to the world of ICT in the 1970s, the term “convergence” has come to mean something different to just about everybody you ask: “fixed and mobile,” “voice and data,” “access devices,” “media and entertainment,” “unified communications” . . . the list goes on and on. Too many people, however, consider convergence a technology issue and overlook the wider business implications—including its impact on marketing and, in particular, digital marketing. At a recent Inner Circle Meeting in London, ITSMA examined the commercial and social implications of convergence to better understand how marketers need to adapt in the face of this trend.

Commercial Implications

At the customer level, convergence will force the CIO to reconsider the supply chain and the organisations sourcing strategy. Network- and application-level convergence will also change the needs and behaviours of the end users, driving a change in technology requirements.

Suppliers will have to address these changing customer requirements, but they’ll also want to consider:

  1. How to address the doors that have been opened to new entrants—and new approaches
  2. The increasing need for systems to be interoperable
  3. The CIO’s need to address the strategic drive for improved productivity and cost reduction

Providers will obviously need to be aware of the increasing threat of new entrants as all technology players make a move for the services space. Add to this the fact that the digital revolution is fuelling disintermediation and substitution in all areas, and you’ll need to consider what this means for your portfolio, pricing, and sector strategies. In addition to ensuring that your value proposition addresses the changing role of the CIO, you may also have to work much more closely with organisations that are also or have previously been your competitors.

Some analysts believe that the impact of unified communications will define the next decade of the communications and IT industry and that, through the blurring of boundaries between social and commercial behaviour, we will see the services wrapper adopting a more of a “consumer” approach. A few examples of this include utility pricing (by desk or by user), service-level agreements (SLAs) determined by outputs rather than inputs, and subsidised pricing models (e.g., hardware and devices).

All of these factors will inevitably affect the solutions we develop and the way in which we position them in the market, but by keeping our fingers on the pulse of these changes we’ll be better placed to stay at the top of the tree.

Social Implications

Digitally driven changes are affecting behaviour in every area of our lives, resulting in “cross-pollination” of technology between our home life and our workplace. As home and mobile working becomes more prevalent, people will increasingly use social media for business purposes—something we are already seeing with online B2B communities.

What is clear from these changes is that we must learn to communicate in a different way. For marketers in the IT sector, this change has implications on two levels:

  1. The way in which our customers like to be communicated with will change and therefore we must adapt to meet their needs.
  2. The end users of our technology (our customers’ customers) will be communicating in a different way, and therefore the solutions we offer must reflect those changing requirements.

At our Inner Circle Meeting on this topic, it was quite clear that people do not believe that current communications channels will disappear or that face-to-face communications will be replaced by an entirely online existence, but the mix—and the different methods of communication that make up that mix—is changing, and our communications strategies will need to evolve along with it.

 

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