In his 1980 seminal work “The Third Wave,” futurist Alvin Toffler described how society evolves in waves and how each new wave builds on and puts aside the previous societal wave.
Per Toffler, the First Wave was that of an agrarian society. That was succeeded by the Second Wave of the industrial society, which, in turn, was succeeded by the Third Wave of the information society. In essence, each wave formed from the one before it, over many centuries, moved human civilization forward while transforming it at the same time.
The world of digital engagement is experiencing a similar transformation, though it is not taking centuries to change how consumers act and what marketers do. This is the human-civilization transformation equivalent of marketing (and the entire enterprise), only at a very rapid pace:
• The First Wave: This wave of digital engagement was characterized by Web site-based interaction between consumers and brands. It led many enterprises and entrepreneurs to believe that if they built a killer Web site, revenue would follow; massive investment in Internet technologies was the result. Then came the dot-com bust, after which real winners started to emerge. These companies had not only invested in building a business model around their Web presence, but also had invested in providing a differentiated online customer experience.
This wave also brought to fore the measurable effect of online advertising on online sales and, thereby, initiated the critical transformation in which marketers became accountable for actual, not influenced, sales.
• The Second Wave: This wave of digital engagement was characterized by channel-based digital interaction between customers and brands. As digital TV, email, social, mobile, location-based services, online video, and digitization of outlets/kiosks started to take hold, marketers became faced with an ever-growing number of digital touch points to manage. In addition, marketers were faced with two very interesting trends:
- Customer engagement in most of these digital touch points was a two-way communication between the brand and its target, either explicitly (such as social media) or implicitly (through back-end analytics and measurement).
- Customers moved from one touch point to another as they engaged with a brand. Given the two-way communication happening at most at these touch points, this customer journey rendered the strategies implemented for the traditional purchasing funnel--one of the most beloved concepts of sales and marketing professionals--ineffective.
Most marketers struggled with this multichannel, two-way engagement. Investments were prioritized to build engagement capability in each individual channel, mostly separately rather than as a part of a holistic customer experience strategy. It became increasingly more important for organizations to build attribution capability to ensure that the impact of each touch point was measured, agreed on, and understood as customers moved from one to the next during their decision-making process. Marketers started to realize that they were operating in an entirely digital world where every analog touch point had a digital footprint.
During this Second Wave, which crested with alarming speed, digital marketing came to the fore. Along with that came a plethora of point solutions that could address channel- and touch point-specific marketing problems. Marketers wound up with a spaghetti bowl of point solutions to make sense of their customers’ digital footprint.
• The Third Wave: This is the latest and still-emerging wave, characterized by customer journey-centric digital engagement. As marketers started to make sense of their customers’ cross-channel journeys, they soon realized that their own channel-focused silos were getting in their way. In addition, marketers realized that to truly provide world-class digital engagement across key customer journeys in an efficient and effective way, they would have to integrate and interact with other parts of their organizations, such as sales, finance, supply chain, production, HR, engineering, product design, etc.
All of this interaction and integration has to happen in a way that has never been done before. Hence, this Third Wave of digital engagement is not only transforming the operating model of marketing, but it is also transforming the operating model of the entire enterprise to ensure the enterprise remains relevant in a digital world. This enterprise transformation is further necessitated by the impending emergence of the “Internet of things,” which has the potential to turn every product into a touch point for digital engagement.
To prepare themselves for riding this wave successfully, enterprises have started to look at the key building blocks required; one of the first is the creation of a unified platform for digital engagement across existing and emerging channels. This unified platform will fuel the implementation of the customer journey-centric strategy required in this digital world. Indeed, channel-specific point solutions are no longer sufficient for riding the fast approaching crest of the Third Wave of digital engagement.
In the case of human civilization, countries and societies that adapted to each wave described by Toffler survived as well as thrived economically. Similarly, for enterprises to thrive during the latest wave of digital engagement, they will need to adapt fast by realizing that this is not just a marketing or a technology transformation exercise, but an enterprise transformation initiative.