Very rarely do business predictions deliver any kind of real value (or accuracy). And as much as I hate all the predictions posts that are currently doing the rounds, if I don’t add my 2 cents and try to cut through all the BS I wouldn’t be doing my job properly. For about 6 months now I’ve been a big believer that business will probably change more over the next 18 months than it has over the last 10 years, so this post aims to support that claim. I’m not looking at trends around what channel to post your social media on, how video ads are getting better returns or the future of periscope for brands. 

The more important issues centre around the simple facts that data is getting bigger, it’s now harder than ever to manage customer relationships and concerns around privacy and trust are threatening brands on a daily basis. Not to mention the fact that disruptive business models are causing industries to change at a rate faster than anyone expected. 

So, for what it’s worth, having read enough 2016 predictions to give me a headache, but having had the privilege of hanging out with many research analysts way smarter than me recently, I offer what I think will be the five most defining factors to affect businesses in 2016.

1. Traditional Businesses Fight Back

We spent much of 2015 talking about disruptive brands like Uber, Airbnb and Alibaba. It all felt to me a little bit like the early days of social media when everyone was getting hysterical about the death of traditional media such as TV ads, outdoor and print. We’ll talk about social shortly, but I believe 2016 will see many established brands coming out fighting. Uber are currently the fastest growing company in the world and brands are worried about where their next competitive threat will come from. Brands want to fight, but most of the time, they are not even sure who the enemy is.

And by fighting, I'm not talking about the kind of reactionary fighting that Nokia displayed a few years ago when it tried to re-launch its devices from a “burning platform”. Nor am I talking about the kind of B2B v B2C fights that traditional brands like Blackberry tried to start a few years ago when Apple were disrupting them. At the time they proudly held on to a $236 share price, but $BBRY hasn’t traded much above $7 for a few years now.

No, the type of fights we will see in 2016 are when traditional business realise that they are sat on potential gold mines of assets that they haven’t been using properly. Everyone will continue to talk about disruption and being “uberised” out of the market, but the world is now moving so fast that disruption is no longer disruptive. It’s normal. And businesses must react quickly. My big boss Marc Benioff likes to say,

"Companies are no longer competing against each other they are competing against speed.”

For brands to remain agile, they clearly need responsive cloud based solutions to drive their business forward at the speed of their dynamic customers and disruptors, but more importantly, they need to leverage the assets that they already have. According to research firm Forrester these are:

• Market Footprint
• Capital Assets
• Massive Amounts of Customer Data

The business who we will see struggling at the end of 2016 will be the laggards hold on to legacy business practices, respond poorly to market threats, and see a huge gap forming before their eyes between themselves, their customers and their share holders.

2. Re-Think Personalisation

Personalisation has been maturing for a few years now. The most recent Gartner Digital Marketing Hype-Cycle suggests that personaisation technology is now so mature that it may not even feature on their research next year. And if you’ve had the pleasure of going to any conference or marketing expos this year, you will have no doubt been bombarded with messages around customer-centricity, personalisation at scale and automated customer journeys.

The mistake that many brands are still making is thinking that personalisation is the ultimate goal, in that the sooner we can get customers to give us their data, the faster we can serve them the right message, on the right device, on the right platform, at the right time. As a result cross-device identification will become one of the biggest challenges of 2016. And as attention spans are allegedly dropping to around 5 seconds on mobile devices, personalisation has (rightly) been at the top of every savvy marketers agenda. As we enter into 2016 though, things are not that simple anymore. Customers are no longer as eager to give brands their data. The Edelman Trust Barometer Report 2015 confirmed that the lack of trust between consumers, brands and executives has never been wider.

Messaging apps are exploding with reports (like this one from Radium One) suggesting that around 75% of all consumer conversations now take place on apps such as Snapchat, Line, WeChat and WhatsApp. Facebook are taking this so seriously that they have recruited the president of PayPal to launch their messaging platform to brands in 2016. This will be as significant a shift for brands as it was when Facebook opened their platform for brands to build on back in 2010. 

But what this means for business is that they need to start thinking about personification, not just personalisation. In many cases, you don’t need to know 4,000 attributes about your customers purchasing behavior and preferences in order to serve them a relevant message, you just need to know what they care about right now. If you imagine that personalisation being able to communicate with customers when you know their personal data (name, mobile, email, date of birth, gender etc) then personification is when you need to communicate with your customers when you don’t know their data. This relies more on behavioural economics and understanding the emotional intent of a customer online, and still being able to serve them a relevant piece of content, without requiring their details. Brands that start to leverage technologies such as Idio and Predictive Intelligence will be the ones that take the lead in this space. The companies who will get left behind will be the ones who are simply using personalisation software, influencer ratings and customer sentiment as a blunt instrument in order to try and win their audiences' attention.

3. Privacy As A USP

In 2016, privacy well go from being a niche consideration in the domain of HR, legal and IT teams, to be a core value to which customers will respond. In the past, it has been suggested that only 5% of the population really cared about privacy and would likely change their online behaviour based upon privacy risks, but research is starting to show that the vast majority of customers are now concerned about their personal data, how it is being used, and they are nervous that someone other that their communications may be read by someone other than the intended recipient. With data breaches and privacy incidents regularly being reported in the press, leading organisations will shift privacy from being a legal / risk question to one that is addressed as part of the marketing strategy.

Transparency around data security, as well as providing clarity around privacy protection will not just become a legal hygiene issue, but one that impacts customer churn and in turn increases share-of-wallet and customer satisfaction. As tempting as it is to gather valuable data as quickly as possible, in order to serve content, ads or marketing messages that deliver a perceived ROI, the most successful marketers in 2016 will be creating such compelling customer experiences that they create more value than they capture. To take the words of Avinash Kaushik, Google’s chief evangelist,

“ Information is powerful. It is how we use it that will define us.”

4. Traditional Org Charts Will Be Ripped Up

The debate around the most suitable org structure is as old as the marketing industry itself. Are the most successful business centralised and “dandilioned” or are they organic and “honeycombed”? Should everyone adopt Spotify’s model of squads, tribes and chapters? There is of course no right answer but what is clear for 2016 is that org structures need to focus on the customer, not the business. In many cases, this just means more discipline and getting smarter about your customers, but organisations can not discount the possibility that they will need to completely re-evaluate they way that their business hierarchy is organized.

The shift to customer-led strategies will force CEOs to restructure their leadership teams, favouring digitally savvy executives who understand people (psychology) and numbers (data and technology). The need for customer obsessed business models is already causing friction in many organisations, but as they seek to compete with their most agile competitors, they can’t afford to be too eager to preserve the old way of doing business.

Ashley Friedlein (eConsultancy CEO) wrote a brilliant article you should read about what businesses might do if they started with a blank sheet of paper instead of a traditional org chart. If 2015 was the year of the CDO (Chief Data Officer), 2016 will be the year of the CXO (Customer Experience Officer).

What I expect to see is the businesses who are being disrupted focusing on shiny objects, new platforms and apps that will send them further off course in 2016. Something new will be unveiled at SXSW, Le Web or Web Summit which will become the most important part of their new marketing strategy, distracting from the things that will deliver business change and transformation. Brand leaders on the other hand will embed digital into all parts of their business, harmonising visual and human (online and offline) experiences and being able to react quickly to the hyper-adoption / hyper-abandonment of their customers.

5. Operations Becomes the Nucleus of Value

According to researchers at Forrester looking at aver 15,000 enterprises, leading brands are making the shift to gain first-mover advantage and aggressively address the threat from disruptors. They're doing it based upon four core principles:

1. From being aware of customer wants and needs to obsessing about the value and personalisation of customers' experiences.
2. From wrangling big data to using analytics that enables personalised services across human and digital touch points.
3. From seeking perfection to (imperfectly) moving at the speed of dynamic customers and disruptors.
4. From optimising within functions to working cross-functionally to deliver consistent value across customer journeys.

“We don’t have to predict the future... because we have a business model that is adaptive.” Caspar De Bono, Head of B2B, Financial Times. 

Analytics As A Competitive Weapon

As brands seek to get smarter about their customers in 2016, analytics will go from being the responsibility of the business insights team, analysts or agency to being everyone’s responsibility. Live dashboards, with KPI’s delivered in real-time to iphones, ipads and watches will help executives respond faster than ever before to changing customer needs. Delivering insights instantly to the wrists and pockets of key stakeholders, especially the ones who are not in the marketing team (but may have a say in increased budgets or head count), will be a huge competitive advantage.

"If we have data, let’s look at data. If all we have are opinions, let’s go with mine." Jim Barksdale, Ex-CEO, Netscape.

Analytics improves an organisation’s ability to understand, anticipate and act on data to drive customer value, business efficient and growth. But data is diverse and is now spread across many channels and platforms. An analyst at Google told me recently that 90% of consumers now cross 5 channels when making purchasing decisions on items such as financial products, cars, holidays, house purchases and clothes. When you also consider that many customers are talking to each other about brands and the things they want to buy on private messaging apps (which are PRIVATE) it means that unless you are the NSA or GCHQ, relying solely on traditional customer listening or social media monitoring tools won’t work anymore. Analytics dashboards need to be fed with accurate data from social media, apps, connected products, sales data AND customer service insights in order to provide a decent view of exactly what customers [want/need/expect].

“Insights are things we don’t know, should know, but have the ability to change.” Eric Swayne

I spent time with a huge manufacturing company this year who used to wait up to 30 days for their figures, insights and reports. Using a cloud powered service that slices up millions of lines of their data, and allow executives to segment it on a mobile device has meant that they now have access to accurate data within seconds. When I asked how transformative it was to be able to see reports within seconds instead of hours, days or weeks, I was told that the positive business impact on projected revenue was estimated to be in the tens of billions of dollars over the next five years.

• 90% of the world's data was created in the last 12 months
• The 2.5 quintillion bytes of data that we create each day is equivalent to a company the size of Google being created every 4 days
• The digital universe will be 40X bigger by 2020

Having live access to customer data will not only help brands innovate faster, it will make supply chains more efficient, help to predict crisis (VW?), improve the returns from ad budgets and dramatically reduce customer churn and increase satisfaction. Leaders will use the insights that they gain from their customers to deliver highly targeted content that resonates in that moment. And they will understand that their customers want highly personalized messages that don’t feel like they have been created by an algorithm. To learn more, search "customer journey analytics" and learn all you can as quickly as you can...

“In 2016, cutting-edge algorithms will give leaders a leg up over competitors drowning in data and using run-of-the-mill analytical tools.” Forrester (Critical Success Factors 2016)

Tools that help brands access big data like Hadoop have helped to solve the issue around managing the volume of big data but even when they have all the data, brands still make bad decisions. Consulting firm PwC told me recently that up to 75% of executives still make emotional decisions concerning decisions that affect the major strategic direction of their business. One of the reasons for this is that brands haven’t been able to find enough value in the data that they already have. We don't really have a big data problem, we have filter failure. I like the thought that, in the words of Robert Scoble, "There is no such thing as big data, just lots of small spoonfuls of data". I was discussing this with IBM and they told me that,

"Less than 20% of businesses use more than 50% of their data".

What this means, is that despite marketers often trying to make "data driven decisions" and create business models for their next campaign in order to convince the business to give them more money, many executives are still overwhelmed, and feel under-prepared for the challenges that their brand is facing. Giving them the right tools and insights will be a major step towards helping them be better at their jobs.

Improving your analytics capabilities is not a sexy answer (and doesn’t feature on many 2016 predictions lists), but it will be the silver bullet that separates leaders from laggards.

Useful Advice for 2016:

So…

No sexy predictions post full of shiny new technologies that are likely to grace the pages of Wired or Fast Company, but in my opinion ~ trends that will shape the most successful businesses over the next 12 months.

• No matter how big or well known a company may be, without a meaningful business strategy, brand is meaningless.
• No matter how paranoid you think you are, you’re not paranoid enough.
• No matter how deeply entrenched the culture, all companies must be open to revolution.

** Note: Despite my love of social media, I didn’t cover social much here as I believe these seismic business changes are much bigger than social. Social is just one small part of the marketing mix and does not provide an answer to every marketing problems. In many cases it is a good answer. But it is not the answer. social media is a service channel and in most cases, should not be used to sell stuff. Brands did not stop advertising on TV and shift their ad spends to TV like marketers predicted 5 years ago. TV still works. OoH still works. Direct mail still works. It is only when you understand exactly what your customer wants and how they behave, will you know exactly what proportion of your budget should you spend on each to get the highest returns. Just sayin' **

Here’s to 2016! It’s going to be a BIG year…

As you start finalising your own plans, you might be curious about what your peers have been up to, find out in our State of Marketing research report. 

This article first appeared on Jeremy's LinkedIn Pulse page