The 2019 Rugby World Cup in Japan ended triumphantly for the Springboks. But that just reminded me of what happened four years previously.  

It is known as the greatest rugby upset in the history of the sport. And it’s a parable for any company that wants to attract, and keep, customers. 

In Group B, in the 2015 World Cup, the diminutive Japanese side beat the mighty Springboks 34-32. 

How did a minnow rugby-playing nation beat the Springbok powerhouse? Or in business terms, how does a new company successfully compete for customers against businesses that have led their industries for decades? 

The Japanese changed the rules. They knew that trying to beat the Springboks with brawn, using traditional techniques, was never going to work. So they instead used their small size and agility. They took advantage of a rule called the “quick line-out”. By the time the Springboks had lumbered their way to the ball, the Japanese had already controlled the situation, won possession, and were going hell-for-leather towards the goal. 

That’s what is happening to businesses when it comes to customer acquisition and retention. 

The established giants (think Springboks) are operating under the idea that customers will be loyal. They have created an entire industry out of it, with loyalty cards, club points, and parallel currencies such as miles and rewards vouchers. 

These tactics were formalised in the 1990s and perfected by the late 2010s. The problem is, these brawny tactics no longer work as well as they did. 

By the time the company has lumbered up to rewarding the customer at the point of purchase, the customer is long gone, evaluating another offering from another supplier. 

Instead of loyalty, the new watchword is relevance. This means that if you’re a business that needs customers, the game has changed. 

Retailers are in trouble around the world. South Africa is no exception. According to Stats SA, in August 2019 the retail sector grew by only 1,1% year on year, down from 2% the previous month. 

There are lots of local reasons for this  slow economic growth overall and power cuts come to mind  as well as global reasons. The IMF has downgraded its expectation for global growth to its lowest levels since the last financial crisis in 2008. 

One contributing factor is that many retailers are operating under the old rules and are being out-played by competitors using old rules in a new way. 

Our research into relevance in South Africa is instructive. Companies are losing two-thirds of their customers to churn. According to our calculations, that’s R438-billion in potential annual revenue. (I discuss this in a later blog in this series). All because companies, like the Springboks against the Japanese in 2015, are reacting inappropriately and too late. 

This diagram from our research report sketches it very clearly.

With online reviews on dedicated review sites, YouTube, and online forums, it’s never been easier to evaluate new products and offerings. Why stay loyal to one provider or brand, when you can find a better fit for your needs right now?  

The objective of the loyalty era was to create incentives for customers to become loyal members and keep making purchases.  

The objective of the relevance era is to create a gravitational field that attracts customers into orbit around the brand by serving their every relevant need in every possible moment across every possible channel. That’s how to keep that R438-billion’s worth of customers from leaving you forever. 

I will be talking about what it means to be hyper-relevant in other articles in this series. 

For more information, please contact me. Or you can read more about the research in our report,  Welcome to the hyper-relevance era.