by Ray Larson
In a recent podcast, The Marketing Revolution: What entrepreneurs need to know, we discussed three key effects of this disruption to the status quo. The first was the change from traditional marketing to inbound marketing. The second was how the buyer is now more in control than ever. The last point was how all media is now social media. Let’s discuss in more detail the second point, the empowered consumer. How did the consumer gain the upper hand? What does this reversal of power mean to my brand and marketing efforts?
What’s powering this change? Moore’s law, the phenomena of faster and cheaper computing power, has placed much of the world’s information at the fingertips of consumers. This quantum leap in computing power has made information retrieval and sharing geometrically cheaper than ever. One serendipitous consequence: the ability of consumers to read reviews, find expert opinions, and share their experiences about their purchases with other consumers on social media. Consumers now possess the ability to determine the value of products and services in advance: where they can find the lowest price, what’s it’s like to own the product, and its quality, all of which influence their decision to buy. This trend will become even more pervasive in the future as Moore’s law continues to deliver cheaper and faster computing power.
So in a world where consumers can easily determine whether or not a product sucks, regardless of the efforts of marketers, what are the ramifications for business owners?
A new framework for the world of empowered consumers
Two scholars have constructed a new marketing framework that provides insights on how companies can succeed in this new age.
A book authored by Stanford scholar Itamar Simonson and well-known marketer Emanuel Rosen challenge marketers to change or perish in a world where the consumer truly is empowered. Consider their scholarship, Absolute Value :what really influences customers in the age of (nearly) perfect information your wake up call.
- Consider how much influence the role of others (“O”), defined by the authors as other people and information services, plays in the decision to buy your product or service. Imagine your product on a continuum of O- independent to O dependent. Where does it fall? Products that are much more susceptible to the views of others are thus less susceptible to the influence of marketers. Thus traditional persuasion techniques will not resonate.
- Generating interest in the quality of a product, rather than brand awareness, should be the objective of O dependent products. Products less O dependent, typified by little differentiation in their quality in comparison to competitive offerings (toothpaste, for example), are more susceptible to the influence of marketers. These products can be marketed with success with traditional marketing techniques.
- The future trend is for higher O influence as information about products and services, in the form of reviews, expert opinions and the accessibility to the experiences of others becomes even easier to obtain. Technological advances contribute to a further decline in the ability of marketers to influence purchase outcomes using traditional marketing.
- For years brands have stood in as quality “proxies.” A consumer made purchase decisions based upon prior experiences with the quality of a brand. This perceived expectation took much of the risk out of a purchase decision. With the ubiquity of review websites, expert opinions, and social media, consumers can more easily assess the quality of a product. Purchase decisions are longer a crapshoot based largely upon the effect of marketing and prior experiences with a brand. Information from others (again, ask yourself where your product/service falls on the O continuum) overshadow prior beliefs and assumptions. Brand value suffers in an age when the “absolute value” can now be accessed.
So what’s a business owner to do when the value of a brand means less and traditional marketing techniques are less effective? Here’s four takeaways based upon Absolute Value:
- Research precisely what features your clients want in your product/service. In this new era, it’s no longer about the brand: it’s all about your product, its quality and features.
- Re-dedicate your company to providing the absolute best possible product and service. Quality rules when consumers are closer to possessing the ability to determine the absolute value of your product or service.
- Focus marketing efforts on generating interest in your products based upon its quality. With the plethora of review websites, expert opinions, and price websites, the quality of your offering reigns supreme in the minds of consumers.
- Accumulate reviews. Make it easy for your customers to share their incredible experiences with your product and services with others. Trumpet your company’s dedication to quality and value.
In the past a company with a mediocre product but a strong marketing team could excel. Those days are over. The age of the empowered, enriched, educated buyer is here. Adapt or perish.