A better place – The Great Vine

July 23, 2015January 24, 2017

The web and consumption in emerging markets

With the ongoing worldwide recession many companies have put their hopes in emerging markets but for some the results have not lived up to their expectations, are taking much longer than thought or seem imperilled. The view from the web can help us put things in perspective and find specific opportunities for the right product mix and distribution channels.

Will China’s consumption take off? Will Brazil shrug off its recession? How can we grow more in Mexico? These are pressing matters for companies that have invested in emerging countries and now depend on them for their results. Seen from the perspective of the connected consumer we can see several opportunities:

What’s our customer’s experience as a consumer?

Closed, State led, corporatist economies left behind consumers, who made do with what was available locally, whether it was good or bad. The moment the economy opens and / or consumers are exposed to other possibilities thanks to the web, they leave old, stale brands behind to embrace what’s better or simply different.

The opportunity for multinational brands is to earn customers’ trust by offering choices which are clearly better than what they are used to, which represent the state of the art they can aspire to, or the best at their budget. This is a serious advantage when the competition is used to being a monopoly that treats its customers as barely tolerated pests.

[boxright]In some cases consumers would prefer national brands for patriotic reasons, in others anything foreign is automatically considered better, and brands will need to navigate these cultural peculiarities with care. For instance while many Mexicans would prefer to buy a national product they also traditionally thought of “made in the US” as synonymous with “better”, not because US products were the very best but because national products were so very bad; with the opening of the economy in the 1990s Mexican consumers have learned that the very best might come from other countries and that there are also bad US products, while many national brands were bought or disappeared altogether. The opportunity lies in earning our customer’s trust, and while some segments will buy national or foreign products regardless of their actual quality, the vast majority appreciates what’s done well.[/boxright]

The risk for multinationals is to repeat the same patterns as the local competition and become part of the oligopoly. We might be the biggest ice cream producer or the biggest eyeglasses manufacturer in the country, with healthy economies of scale and stupendous control of our supply chain, but it doesn’t mean our consumer appreciates o even understands our product – which means an opening for other brands.

How can the web help?

We can draw up a comparison with our competitors along our customer’s journey in terms of satisfying her needs, beginning with the basics of safety, hygiene, identity, and establish which specific value drivers our brand can own.
We need to take stock of our customer’s online journey, how it is exposing her to new products, prices and other consumers’ experience, as her purchase decision is increasingly being taken before she even steps into our traditional channels. We need to establish how much traditional marketing and distribution channels contribute to the sales funnel and trim them accordingly.
We need to use the web to be part of our customer’s conversation.

What’s our customer’s probable evolution as a consumer?

All economies have undergone an evolution in terms of consumption, and we can apply this experience to new markets. Customers have gone from conspicuous consumption (Bling! Cheap clothes!) to utilitarianism (Why do I have so many pants?), from conformity with what’s available locally to higher expectations (Customized fit, lower prices, durability, worker’s conditions), from mere transactions to participation (I would buy these pants again if they were available in grey).

The opportunity is to segment our customers according to their expectations, depending on this experience with consumption, their disposable income and aspirations, and adapt our value for each of these segments. A good example is how Audi and other car manufacturers have adapted their models to have more rear seat space in China, but there are many more opportunities beyond luxury.

We can then anticipate our customer’s probable evolution to adapt when some segments outgrow their original expectations, others are saturated or suffer external shocks (such as China’s fight on corruption and its effects on luxury goods used as gifts).

How can the web help?

We now have a medium through which our customers can tell us directly what they are looking for, what they are and are not finding, how much they are prepared to pay for it. This is an invaluable tool for our segmentation and product mix as we can take the guessing out of the equation.
The web can also help us deliver much of this value, from recommendations based on up to date profiles, previous purchases and what others are buying, to group purchases, to the pre purchase of special runs.

September 15, 2014January 24, 2017

Sony’s flawed beauty

Analyzing a a polished brand like Sony from the perspective of the connected consumer can help us understand its predicament and any possible solutions, as well as our own.

What makes a beautiful sound? An experienced player who can go beyond mere technique, with a good instrument, in an acoustically ideal place… Heard by someone utterly bored by the score?

The question is rather: what makes a beautiful sound, to whom? In the old, monolithic world the virtuoso should be appreciated by the cognoscenti. Anyone not able to appreciate not just the music but the hard work behind it was simply an ignoramus. And while ignorance is still not a virtue, and should not be fawned over like most mass media do, we all have the right to appreciate quality differently. Someone who doesn’t try to appreciate something is a fool; someone who tries but doesn’t find it to his liking is within his rights.

If you think everyone tries to appreciate quality here are some counterexamples: is wine foreign, “frenchie”, not something real men drink, even if it happens to taste good? Is it something that implies sophistication, which you should pour with care and ponder, even if it tastes dreadful? Or is it something you can discover to make up your own mind?

What makes a good TV? A good stereo? In the old world engineering prowess and the opinion of experts counted, never that of the consumer. And this was all the more important in a world filled with substandard products, with shysters ready to gouge innocent consumers with over priced, unreliable, toxic junk.

But then the world changed. Consumers didn’t only have the opinion of sales reps and specialized magazines, they had each other. And lo and behold, soon they could know more about the product than either the hapless store clerk or the so called expert. The topics went far beyond what even the most seasoned technician could know, for they were about what mattered to consumers, like the colour of the device under different lighting: the experts didn’t know or simply didn’t care, for an expert has a social standing among his fellow experts and cares about gigahertz, surely not about how it looks in grandma’s living room.

Our consumer might still not be a technical expert, in fact he might not know exactly what’s best for him, but he has discovered many more aspects that do matter to him, and he’s hearing about them from the horse’s mouth: other consumers just like him; and it is in this world of new expectations that companies need to compete today.

As you can expect, it’s not a pretty picture, with the vast majority of companies stuck with the tired marketing methods of the old monolithic world: Customers are asking for reliability, durability, whether a product’s colour is more yellow grey than blue grey, all companies can offer is “New!”, “Sale!” and technical details such as megapixels and gigahertz which the customer doesn’t fully understand.

The other side of the coin is that this represents a unique opportunity for companies to escape competition on price alone, particularly when facing lower cost competitors.

We can try to understand the predicament for Sony and everyone else from this perspective. What made a Sony Walkman an icon but a Sony MP3 player a sales fail? What makes a Sony mobile phone an also ran?

There are other aspects such as more fierce competition, but part of the problem is that Sony has had to compete in broader experiences, and not just in products; it’s not as if the company was blind to this, and in fact took steps to incorporate content and its distribution through its purchase of movie and record companies… Only to find that the competition offered consumers the chance to download music “for free”: No piracy, no iPod boom, but by itself that doesn’t explain all of Sony’s MP3 player problems: customers who actually bought music had a terrible experience transferring it to the players because of the clunky interface, clearly the company couldn’t extend its amazing industrial design to its equivalent in software; and at the time Sony needed to go beyond this, to encourage and facilitate music discovery and purchases, which Apple eventually managed to do with iTunes.

The connected consumer has made the experiences Sony competes in even broader and deeper; it is notorious that customer’s expectations have diverged wildly from the brand’s response. What makes Sony a particularly interesting case is that the company keeps producing great products, which its customers aren’t able to discover or use fully.

The case of the accidental Sony earphones.

Take the case of a consumer who grew up with audio CDs and is suddenly faced with the dreadful prospect of worse sounding music through iPods and their included earphones: he starts looking for alternatives, and in the myriad brands stumbles upon a Sony product, which with the included earphones sounds much better. Later our consumer wants even nicer sound, and starts looking to upgrade his earphones, or even to get into headphones. He has specific questions such as “what would be a definite improvement?”, “what’s a reasonable price?”, and not being an expert is missing important variables such as “not all MP3 players can drive all headphones”. Sony’s response? New! Big bass!

But our consumer is stubborn and carries on with his investigation, during which he stumbles (seeing a pattern?) upon Sony earphones (say the XBA-4), and crucially upon other people’s experience with them. They seem interesting, but are much more expensive than what he is willing to pay, and has the nagging impression that Sony charges more just because of its brand caché. He archives this model in his head and starts to decide between a Yamaha and an Audio-Technica in his price range.

As he prepares to purchase one of these, he decides to do some last minute, quick side research: those XBA-4 wouldn’t be available locally, would they? Surprise surprise (for his local retailers usually have old and overpriced models), they are… At half price… At a stodgy department store whose web site barely works. What to do? Go with the safe models, buy from reputable online sellers, or take the risk that he’s actually buying a blender through the clunky seller, or even that his credit card details are stolen?

Our consumer takes the plunge. The earphones arrive and they sound amazing, so much so that music becomes once again a pleasure to listen to, he starts buying more music and eventually buys another MP3 player from Sony. Much to his horror he also discovers that these same earphones sound merely “ok” or dreadful when connected to his phone or his stereo, in other words even if the earphones are good the overall experience might still have been bad.

Here are some conclusions we can draw from this example, which apply to everyone:

Our product might have cutting edge industrial design and technology, but our customer’s experience around it, from when he looks for it, to when he buys it and uses it might be horrible, fraught with doubt and dangers.
Our customer has many questions which traditional marketing and our in store staff cannot answer; we could step up our staff training programs to improve technical proficiency but they would remain out of sync with our customer, and in any case his experience begins before he even sets foot in a store: by the time he gets there his mind will already be made up. Answering through the medium our customer is using, the web, would mean sales and a competitive advantage.
Our customer’s access to other consumers’ experience is opening their eyes; these are not “pundits” but regular consumers whose shared experience points the way to the important stuff as well as the myriad minutiae which make up an experience, and may not be important to everyone but are bound to be important to someone – perhaps to our customer. You can now see why those poor companies that put a blogger or Facebook jockey in charge of their social media projects have fared so disastrously.
The one size fits all approach from old marketing isn’t going to cut it when we need to respond to our thousands of customers individually. This doesn’t mean that we need to be everything to everyone, we need to establish an online brand persona through our customer’s self service experience.

Sony still needs to master research and development, industrial design, manufacturing and distribution: these are necessary but no longer sufficient. Their customer’s experience is now much wider and growing and they cannot expect technical excellence by itself to win customers over. While this may sound like a daunting task, the flip side is that it represents an opportunity for Sony to attract customers on the merits not just of its products but of the overall experience around them, something lower cost competitors will be unable to do.

The first step for Sony and the rest of us is a change in mentality: our customer is out there, already looking for our product; is he discovering the best according to his budget? Does he know where to begin? How to grow? How can we help?

The second step is to establish how we can cultivate this knowledge, at all touch points and then among our different internal departments, to then be part of our customer’s conversation on the web.

July 2, 2014January 24, 2017

Anatomy of a web solution: the case of the golden converter.

In our search for a better use of the web we can fall for the usual obstacles of fancy technology, nice design or popularity; but real solutions with an impact on our bottom line need a business anchor like the one illustrated by the case of the golden converter.

Platinum "cool" fountain pen — Platinum “cool” fountain pen

While looking for his next fountain pen, our consumer stumbles upon the Platinum Cool, a clear or “demonstrator” fountain pen made by Platinum of Japan. While researching other consumers’ experience with this pen he forms an opinion on its performance (nib, flow, ergonomics), design, desirability and accessibility (price).

He uses his pens with converters, as opposed to cartridges, but then finds a problem: the only converter Platinum apparently sells has a golden part which he intensely dislikes, and would show through the transparent pen. In the old economy, this would be the end of the story, our consumer loses interest and Platinum loses a sale.

Platinum Cool with Goulet Pens sanded converter

In the new economy our customer searches for “platinum converter silver” and lo and behold, finds an answer from a Platinum distributor (with whom TheGreatVine has no relation), in the form of a web page with a video and text which explains how the converter can be disassembled and the annoying golden bit sanded; he even mentions the material that can be used.

The result is that the brand recovers potential sales, the distributor earns the gratitude of potential customers and thus potential sales, even if the price elsewhere is lower.

The lessons from this case are:

Breadth of the experience: Our consumer’s experience begins way before he sets foot in a physical pen shop (if he ever does), and ends much later (all those who have the pen but were unhappy about the golden converter and ask related questions, all those who try the solution and say whether it works or not).
Depth of the experience: our consumer now knows that the product can be customized to his needs.
Someone from the brand or distribution channels must know enough about consumers and their tribulations, about the product, and have the right incentives to be able to offer a solution.
The web solution itself has two parts: (a) it needs to be found, in this case through the keywords consumers are using (platinum converter silver), and (b) it needs to be easy to understand (both in text and during the video), in other words we value ease of use much higher than fancy technology. The solution proposed (website and video) must also be easy and cheap to produce.
In this case the brand is out of the loop, while it should be giving its distributors the incentives to generate this type of solution.

July 2, 2014January 24, 2017

Anatomy of a Web solution: car pooling in Europe

Are web solutions about technology, about people or about money? The answer depends on who you ask but the case of Blablacar (formerly covoiturage.fr) can help us understand them better.

Carpooling sign in France (entrevoisins.org)

Carpooling allows people to share car rides and split the costs. The car owner pays less for fuel and tolls, the rider avoids other more expensive and cumbersome transportation like buses and trains. The recent SNCF (train) strike in France provided an additional incentive to use this alternative.

Carpooling has a straightforward financial element: save money; it also has social components:

Meet other people, perhaps even engage in interesting conversations, see a bit of the countryside; or endure painful silences and unsavoury characters (or worse): it is the modern, more efficient equivalent of auto stop.
Individuals organize themselves by the thousands, so that drivers can establish routes, times, number of passengers, ride price or costs, passengers can ask about luggage size, smoking and even music preferences, and they can make specific enquiries about each other and accept or refuse rides.
Less pollution is generated (for instance with less cars on the roads, each with more occupants), and some governments have attempted to reward car pooling (for instance with carpooling only lanes) for this reason and to improve traffic.

Car pooling web solutions have two possible origins:

A community of individuals which organizes itself, usually with the help of a benevolent tech savvy user; this is a service for users by users, which usually runs into specific limitations: not easy to use, doesn’t cover as many routes, doesn’t have all the options (is it easy to know if I can take my cat? Is it easy to specify that I’m allergic to cats?), there’s no easy and safe way to check the reputation of the driver (is he a maniac?) or the rider (is she a psychopath?). A core of users will think it’s perfect, but the overall numbers remain limited and there are specific costs: for instance if a rider doesn’t show up and the driver still has to make the trip, it will cost him more than he had planned for.

A company trying to offer a specific service, usually following the logic of “capture the market, charge later”; this type of company requires a financial backer that demands growth in users and can wait for a return; it has the incentive to provide a polished service that covers most of what users want, particularly if it has competition on its heels: if done right the number of users and routes will be greater, the service more efficient and potentially the costs lower, for instance if the driver is paid even if the rider doesn’t show up (with a prepaid service) – which gives the riders the incentive to keep their word. It’s important to realize that while the solution may be more refined, the main input remains the community of drivers and riders.

One fine day, a company decides that to keep offering a useful and reliable service, and / or to repay the investment, it needs to start charging its users. The reaction to blablacar when it did just this is telling:

Many users felt betrayed, for it is their community.
Others cannot understand why they have to pay for a service which they see as occurring among themselves.
Others are opposed in principle to any form of payment, which would introduce the awful stench of capitalism.
Some drivers confessed that having an assurance of being paid was better.
Many drivers and riders find that the service is useful and offers convenient routes.
There are other carpooling options, some of which will remain staunchly free.

Apart from a few cultural idiosyncrasies (commerce and marketing being the work of the devil) the case helps us see a few lessons:

There is a lot of value unlocked when individual consumers organize themselves massively: this is consumer side innovation, as opposed to production side innovation, and can be very interesting for companies looking for a competitive advantage and differentiation.
The web makes this massive organization potentially much easier and faster.
Normal consumers depend on more tech savvy individuals, but this limits the benefits and reach of the solution as techies think about technology, not about consumers.
Companies that grow from a community need to cultivate it, so that everyone understands the individual and communitarian benefits of a better service, even if some will be opposed in principle. This is not just a communication effort but also a genuine operational issue, as the company benefits from the input of each individual.
Offering a better service can be a noble goal in itself and an option to less involved, nine to five jobs.
All companies can gain from thinking of their customers as a community, in which they need to be better integrated. For instance that community can help a company see which products are in demand, which problems they face, which changes would be desirable, before the competition can.

April 23, 2014January 24, 2017

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.

April 3, 2014

Going premium on the web

IMG_9036A As 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.

March 10, 2014

New vs old

At the heart of what the web can do for us is the idea that our customers can do better, we can help them get there and use this as a competitive advantage. The biggest change isn’t technological but a mindset which we can illustrate by comparing where we want to be (“New”), vs where we are today (“Old”).

New	Old
Discover the best worldwide.	Stuck with whatever's available locally, whether it's good or not.
Discover all that is required to fulfill our need.	Incomplete picture.
See how all that is required is connected.	Stuck with unconnected bits.
Several options.	Few options.
Productive search.	Frustrating search.
Fun search.	Hassle.
Transparent, open.	Opaque, closed.
Available whenever we need it.	Available at specific hours.
Sales staff on our side.	Sales staff indifferent, trying to sell what's more expensive.
Knowledgeable sales staff.	Sales staff doesn't know the product, can't understand what we are trying to achieve.
Customer feels welcome.	Customer is seen as a pest.
Relevant to our quest.	Interrupts our search.
Find the best at our budget.	Unsure about the best options for our specific circumstances.
Sure about making the best purchase.	Unsure, risky purchase.
Trusted.	Weary.
Goodwill.	Mistrust, hostility.
Long term relationship.	Customer ceases to exist after the sale.
Can achieve results with the product.	Don't achieve results.
Easy to use.	Frustrating.
Can grow with product.	End of the line with product.
Want to give good feedback.	Want to complain.
Recommend.	Criticize.

February 27, 2014

Where we can be, where we want to be

Our customers’ expectations are changing as they are able to connect among themselves and get better answers to their questions. The web has enabled this change and can also help us meet the challenge; at the core of our response is our relationship with each and every customer as well as our online corporate personality.

Let’s follow our customer’s quest, comparing her expectations with the response she is getting from brands. At the very beginning, our customer has a set of needs which she expresses in her own way; she is not a product expert so she doesn’t know exactly what is best for her, what she should be looking for, what’s a reasonable price, in fact she may not even be certain of making the right questions.

With her new web powers she is able to fire off a few search queries which may result in some answers, depending on her language, the topic at hand, and how many other consumers have made the same questions before. The responses she gets from companies are ads and “marketing speak” which she has been conditioned to ignore from years of watching TV or reading magazines, and she gets more useful responses from other consumers, even if they don’t directly address her questions.

If she is brave enough she might even sign up on a forum, ask a question directly, and get different types of responses: some will chide her for even asking, others will offer what they see as the obvious choice (what they themselves have bought), and a few will try to be useful. In so doing she refines her quest.

She then decides she’s done enough research and goes to shops which sell the product she is looking for. Talking to the sales staff she quickly realizes she knows more about the product than they do, and that beyond price promotions and the latest models they are unable to help her further refine her own quest and decide what is best for her. Sales staff may have the very best training, the best motivation, the best of intentions; they are simply out of sync with the customer, who will only go to their shop once (a) she’s tired of searching, (b) needs to solve her need even if she’s unsure of what’s best for her or (c) finds going to more shops a hassle.

The important bit is the difference between our customer’s new expectations and the response – or lack thereof – that she is receiving. Our customer now knows more about the products that may satisfy her needs, but she is also more frustrated, has the feeling that she is missing out on better options, and isn’t finding answers from us; this is what we urgently need to address.

Beyond reacting to our customers we also need to engage them, to propose solutions, to be a player on equal footing, otherwise we run the risk of always playing catch up. The prizes are well known to progressive CEOs around the world, we want the long term relationship, the loyalty, the good referrals, but these need to be earned on the web by being relevant, useful, by investing in goodwill and trust. This is hard work and there is no magic formula, but it also takes us back to a more primordial meaning of marketing, in which we know our customer, we understand what she’s looking for, we are on her side, we know what’s best for her at this precise moment, at her budget, we can show her the end result of her quest and how to get there, and we can even get out of the way if needed. The future is here.

February 11, 2014January 24, 2017

How can we move beyond competing on prices and promotions?

With increased global competition it can seem that options for businesses are limited, beyond stepping up R&D with the implicit risk and limited ROI, integrating price discounts into the overall strategy, packing up and moving to lower cost countries… Or buying up the competition. And yet seen from another perspective there remain many opportunities available.

Think of the typical small business purchase of computer equipment: the consumer has a specific need (a new employee needs a PC), goes to a few retailers… And is faced with a wall of unintelligible technological terms which only confuse him (Four cores! 3.2 Ghz!), and price promotions (20% off!). In the end the customer is none the wiser as to which one is best for his business: it might be cheap, the technology might be super, but is it worth it?

The typical reaction by the consumer is to ask a technology savvy friend (a.k.a “the geek”) who will ponder the different processors, hard drive space, memory and half heartedly make a recommendation. But here’s the catch: the consumer’s needs are not about technology, but about the use of technology: Will it be easy to use? Will it have everything that is needed, from programs to energy protection? Will it help us work better? Will it be reliable? WIll it be durable? The customer doesn’t express these needs, his geek friend cannot help with them even if he did, and brands are left competing on price, newness and razor thin profit margins. Everyone loses compared to a situation in which brands responded to the customer’s actual needs.

Other markets may not be as dramatic but if we follow our customers’ quests and establish the end result they achieve we can realize there is usually a better possible outcome and a better experience along the way, which our customer can appreciate and be willing to pay for. In fact that better outcome might be exactly what our brand promises, but then we need to ask ourselves to which extent it is fulfilling that promise and how much room there is for improvement. This isn’t a critique of manufacturers and retailers, it may simply reflect the limitations of traditional advertising based marketing, but is intended to show the opportunities to compete on improving the actual value for our customers, which would let us move beyond competing on prices.

Este artículo también está disponible en castellano.