Fulfilling the web’s promise

The web is all around us, we use it daily as consumers and yet its use by our companies and organizations still leaves much to be desired. To fulfill the web’s promise we need to step back and look at its use by our customers, as opposed to the technology and design behind it, to see how we can improve our participation in it.

Our customer is looking for a set of earphones or headphones; where does this quest take him, what products does he end up with? Could he have done better? Is his path filled with uncertainty and hassle? How much does he enjoy the final product? In the old mindset, all of this is “his problem”; in the new mindset, it is a series of opportunities to compete on a better outcome and improve the experience for our customer at every step; and the web lets us meet our customer at each of these steps.

Our customer ends up with a set of earphones which don’t quite fit his ears, listening to poorly sounding music from his phone; he isn’t sure of having made the best purchase and pretty soon stops listening and leaves the earphones on a shelf, to be forgotten. In the meantime there are earphone tips which would have made them more comfortable, digital players which would have made the most of the music files, music which would have knocked his socks off; and all their vendors are missing a sale. In the old world this would be the end of the story; in the new world he will leave comments at the store’s and the brand’s websites: “Don’t bother, it’s not worth it”; and at a stroke the brand will have lost thousands of potential customers, not just this individual’s future purchases.

The lesson is that the very first step for any web project is to ask ourselves: Where do we want to take our customer? For companies with established brands, the question becomes: just how much are we really fulfilling our brand’s promise? We are talking about the breadth and depth of our customer’s experience with our product.

Following Theodore Levitt’s classic 1960 HBR article “Marketing Myopia”, the earphone brand isn’t in the earphone business, but in the “sheer pleasure from music” business, or in the “make workouts less boring with music” business; the digital camera manufacturers are in the “get that perfect shot while on holidays with the family” business or in the “help me see if this photo hobby is for me” business: the idea is old, but the web makes it all the more possible, and all the more pressing because our customer is closer to that expanded definition of our product.

The second step is to establish a way to generate insights into our customers to answer that basic question. Who has that knowledge? How can we collect it, understand it, use it? This implies a cultural shift because we can only answer these questions from our customer’s perspective instead of seeing him as the source of all our problems.

This cultural shift might be a deeper problem than you think, as we might have lavished on our product’s design, spent years perfecting the engineering behind it, countless resources on our supply chain… Only to have the wretched customer “holding it wrong“.

This second step involves another cultural shift because we cannot ask specific results from whoever is in charge of generating insights: it’s a learning process and we’ll know what to do with the insights only once we have them. Some people don’t have the temperament to work outside of an established framework, some companies aren’t structured to invest in results that aren’t applicable in the shortest of terms, some executives don’t have the time to stop and think, office politics might get in the way… But the insights are still necessary to proceed, and whoever is able to produce them will have a competitive advantage, so we need to find a way; those insights might also be a required ingredient for other projects such as CRM. The solution I suggest is to establish a “Web Lab” which builds a map of our customer’s experience and produces specific web solutions, some of which might be very simple and easy to implement.

The third step once we have those insights and establish a few web solutions, is to understand the resources required to implement them. The good news is we will have already made the biggest and most difficult investment, namely those customer insights. We will also be in a position to establish which resources are the most important, what we can do with what we have, which resources need to be cultivated internally and which need to be outsourced, and specific requirements for external suppliers.

It would help if we followed a web methodology which establishes a specific flow for our projects, from our goals and solutions as defined in a content strategy, to the information architecture, usability and programming requirements; while these may sound daunting to the uninitiated, it is much easier and quicker to implement for the respective specialists with good requirements, and a lot can be done with available and even free or very cheap technology.

As consumers the web is expanding our horizon and our expectations; if we invest in understanding our own customers’ path we can use the web to improve their experience around our product, expand our sales as well as our profit margins, and have a competitive advantage.

CRM and the web

TheGreatVine CRM 02Customer Relationship Management is technology with a great promise that remains largely unfulfilled; understanding why and drawing parallels with our use of the web can help us use both better.

My initial feeling about CRM was that its results remained limited because of the difference between its business applications and its implementation by IT departments; this is part of the problem but the biggest one can be seen as yet another case of putting the cart before the horse: we need to first define what we mean by CRM and how we can use it, and only then look for CRM technology.

In the words of Maklan, Knox and Peppard in “Why CRM fails – and how to fix it“, we need to think of the marketing capabilities we need first, and only then look at the investment in CRM technology that can support them; it has usually been the reverse, installing the technology and then somehow hoping that our customers will appreciate the effort and reward us with more loyalty. We have been guilty of thinking of CRM as an end in itself, instead of as a tool that supports our actual relationship with customers.

The same idea applies to the web: if we don’t establish first how it affects us and how we want to use it we will fall on its defaults, be it popularity for its own sake, the latest fashion (Twitter, Instagram, Chatroulette, etc), pretty websites no one uses, or annoying our customers with ads.

To generate the marketing capabilities we need the authors in “Why CRM fails” suggest a framework based on four capabilities and three forms of marketing relationships, as illustrated in the following table (this is my interpretation):

Capabilities:Marketing relationship: Transactional.Marketing relationship: "One on One", long term relationship.Marketing relationship: Networks.
"Demand Management":
Generating revenue for products and services.
Dot.001Dot.001Dot.001
Creating marketing knowledge: generate and disseminate insights about customers.Dot.001Dot.001Dot.001
Building brands.Dot.001Dot.001Dot.001
Relationship to customers: CRMDot.001Dot.001Dot.001

Maklan, Knox and Peppard exemplify marketing capabilities with a company that discovered a few of its customers had an effect on many others (their “followers”), so taking them from “transactional marketing” to “one on one marketing” would have a positive effect on sales, and this is a specific goal for CRM which requires a specific investment.

The approach I suggest for the web complements this framework by looking for specific customer insights according to the biggest opportunities to improve our customer’s experience with our product, as part of their “quest”, first in general according to our brand’s promise, and then at each step, from when they look for our product, to when they purchase it, to when they use it.

As with the marketing capabilities framework there is no magic bullet, we need to generate these customer insights ourselves, they can help us establish specific opportunities and solutions on the web, as well as specific CRM opportunities and the tools we need to support them; we cannot ask our web vendors or our CRM vendors to generate them for us, even when they follow “best practices”.

The ability to learn and experiment to generate these insights will surely be a clear competitive advantage. The good news is this investment in customer insights now has at least two forms of payoff, on the web and with CRM.

How the web affects our marketing: Effect on our customers.

Questions and limitationsTo give us a better idea of how we can use the web more effectively we can look at its impact on our business through the classic Marketing scheme, as illustrated in the table below; in this first part we’ll be looking at the effect of the web on our customers (for consumer goods).

Analysis: 5 CsValue creationCapturing value (delivery and communication): 4 PsMaintaining value
CustomersMarket segmentationProducts and servicesClient acquisition
CompanySelect target marketPromotionClient retention
CompetitorsProduct and service positioningPrice
Collaborators
Context

Why does our customer buy our product? How does he choose among products? Where does he buy it? These are age old questions which the web is changing as consumers are finding more answers about our products, mostly from other consumers, and because of their exposure to products and prices from around the world.

Cultural, social, personal, psychological impact.

As a mass medium the web is a source of general news, entertainment, a work tool, and is used for personal communication. As such the web is changing our customers’ knowledge of what can better satisfy their needs, as well as their aspirations. They are exposed to other products, other cultural perceptions of our product, can find the latest fashion before it is retransmitted by their local media. They can now belong to online communities for their hobbies or life styles which may go beyond what is available locally; and their own experience is useful to other consumers.

During their search they are also exposed to worldwide prices, which has an impact on their views about ours: Are they perceived as fair? Too high? Are they comparing the same products or services? They also develop views on the difference between what’s available locally and elsewhere: are the same products available? Are they available at the same time? If not do they feel treated as second class customers?

The moment of consumption also has an influence; I define this as the relationship between disposable income and consumers’ aspirations. For instance in a society which has little experience with general consumption aspirations will gravitate towards personal rewards and marking social status by showing one’s wealth; on the web this is confronted with other consumption moments, for instance one in which health and respect for the environment are appreciated, while social status is shown through craftsmanship, as opposed to mass produced products.

Language plays a role in keeping consumers in their silos, with english as a lingua franca that carries the cultural message mostly from the US and Western Europe, but now anyone from the cultural periphery can have a big impact if they choose their language and audience well.

To make sense of the influences of the web on our customers we need to establish the impact on their expectations, on our brand promise and on our delivery of that promise at each stage of their consumption experience, for the different segments we serve. We can already derive a few general lessons for our marketing:

  • Our brand promise needs to adapt to our customer’s evolving expectations, and we then need to fulfill this new promise.
  • We need to participate in our customer’s quest by responding, being relevant and useful, showing the way, earning their trust.
  • Our customers’ experience when they search online can be richer, which can work to our advantage if we want to compete beyond prices, as they are able to better understand the different product attributes, everything that is required to satisfy their needs, and even its social symbolism. We need to compare this possible richer experience with the one customers are currently having (do they only buy mainly on price?).
  • Our customer’s path generates information which is itself useful to other customers and may thus be highly valuable to us.
  • Traditional media which push messages at our consumers and are not part of their search have a limited impact on their purchase decisions, particularly when consumers have learned to tune them out; and this applies to old school ads on the web itself, which can also be easily blocked on their browsers and apps.
  • Digital, Internet connected, viral, social media which isn’t relevant to our customers quest is of little use to us; it may be preventing us from seeing the bigger picture and diverting precious resources.

The danger is that we find ourselves out of loop with respect to our customer’s expectations; the opportunity is first to be part of this conversation and align all our contact points, from the web to our brick and mortar stores, and second, to help our customer have a more productive, interesting, even fun experience with our product.

In conclusion: As marketers we have the opportunity to make a better contribution to our company’s results by using the web more effectively. The web allows us to have a direct, personalized communication with our customers, and in many ways takes us closer to the primary mission for marketing; the other side of the coin is that our customers increasingly expect more relevant, quicker answers, which other media cannot help us provide.

To do this we can take three steps:

  1. Set our own expectations by taking a step back to understand how the web is changing our customer’s experience and expectations and how we can use the web itself to improve them. This will also help us decide on a budget and or marketing mix with other media.
  2. Set our company’s internal expectations by uncovering specific opportunities and their web solutions, and establishing how stakeholders are affected by them.
  3. Understand the resources required for web solutions, including a web project methodology which takes into account the functional differences between the web and other media.

 

Non premium and the web

We previously saw how the web is changing the notion of a premium product, but what if our strategy implies not being a premium provider? For instance premium might have negative connotations for our customers if we serve a segment within a specific income bracket, being synonymous with “expensive”, “a luxury we can’t afford”, and might make our customers avoid our stores or our products.

In the same vein Apple might have found that growth prospects in the smartphone market are better for sub $300 USD products or phones with bigger screens, none of which it was offering at the time.

The change in expectations still applies and we still need to use the web to respond to our customers, as their experience with our products begins online before they visit our physical store. Our customers may not be thinking “premium” but will appreciate answers to their queries, help in finding the right product, finding it more quickly, understanding the product attributes more important to their needs, the options required to achieve their objective – all of which works to our advantage to stop competing mainly on price. As a mass medium the web may provide us with the opportunity to compete on the experience surrounding our product at an affordable cost for a low or medium market segment.

The other side of the coin is that what might have seemed like premium before may not be premium in our customer’s mind anymore, and the difference between what they expect and what they are (or aren’t offered) will be perceived as a hassle, as inefficient.

The change in expectations might even have implications in the way our customers use our physical stores, for instance if during their online experience they grows accustomed to finding products quickly and following a certain logic (sports apparel>men’s>training>shorts) without having to ask for assistance, and our store’s organization doesn’t make sense to them (new>diving equipment>last season’s>women’s.

The perception of being a premium provider may work against us and it’s a great sign if we can adapt to our customer’s expectations by changing our positioning; but we need to go further and not fall for the trap that would take us from a particular disposable income to generic lower priced products, particularly when our customer’s expectations are changing through their use of the web, and when we have the opportunity to differentiate ourselves in a cost effective way by making our customer’s experience more productive, fun and less risky.

Going premium on the web

IMG_9036AAs competition in cheaper and more generic products gets more intense we might feel the need to make our offer more premium. How can the web help?

We can define a premium product as one clients appreciate for its performance, quality, design, a particular style that appeals to them, reliability, durability, the expertise required to produce it, as a social symbol. The emphasis is on the customer’s appreciation and expectations of the product, more than the product itself, even if it does have to conform to certain standards.

In the old days understanding, appreciating and finding such items was a luxury available to few, not just because of the price, but because of the knowledge of where to find them, the trust earned by such brands and shops and the expertise and time required to help us find the best.

Today consumers have new avenues of discovery by contacting other consumers on the web. While not all consumers are necessarily product experts, and some may be biased (they might for instance recommend a brand simply because it’s the one they bought), they do offer valuable information previously difficult to come by, such as real usage experience of the product: it is all very well if a brand or shop tells us that it’s the very best, but will it survive our particularly damp environment? Is it prone to breaking? Will it look different under different lighting? There are a myriad aspects surrounding a product which consumers look for and are now able to get answers for.

Customers’ needs may not have changed, products might be the same, but the ability to uncover all these relevant parameters is changing our customer’s experience with and expectations about our product; it follows that the very definition of what is premium is changing.

To use the web as an advantage it is precisely in these conversations that we need to be participating. Seen from this perspective what’s so startling is the almost complete absence of brands from the online conversation. Consumers are finding answers on forums, fan pages, even blogs, simply because that’s where they can find some answers, because with millions of consumers connected someone will know the arcane details of how to clean a fountain pen, why the last button on a jacket is not used, who makes the best coffee in town; we do need to be careful not to confuse the current use of these media as the only way to deliver answers.

How can we participate? We may think of our web vehicles, such as our brand website, as a “super marketer” that interacts with customers on a one to one basis; this requires specific objectives, specific policies (for instance how to deal with trolls), even a specific tone; we could also break down the complete experience into smaller pieces and think of each as a “game” in which we seek to help our customer achieve a better result, such as appreciating the engineering behind a product, feeling good about his choice, even establishing the value of his online experience as a point of reference for other customers.