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.

Sony Walkman
Old model Walkman serves as an example of Sony’s predicament: Nice sound, beautiful design; but you can’t transfer any music to the device if your computer doesn’t conform to narrow specifications.

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!


Sony earphonesBut 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.

Analytics and the web: trust vs coupons.

Summary: Business Analytics represents a set of tools which has evolved from Data Warehousing  and Business Intelligence to Big Data, with some proposing Analytics 3.0 as the next big thing. Understanding its evolution from the perspective of the customer centric web can help us see its real value and limitations, and where we should be investing.

How can we control our business better? How can we plan for it, particularly when it’s a large enterprise with many products and thousands of customers? This question is behind the evolution not just of Business Analytics but also of many advances in IT; we can summarize its development in the following table.

Analytics 1.0. Analytics 2.0. Analytics 2.1.
NameData Warehousing, Business Intelligence. Big Data Information rich offerings.
What it does.Gather and analyze operations data: point of sale, inventory, customer contact.Vast data sets, much more powerful number crunching.Use Big Data to improve operations and transactions.
Who uses it.Most big companies.A few big companiesVery few companies.
Weak points.Stuck at reporting, seeing past trends, not actual analysis. Expensive and difficult to use for small and medium sized businesses.An end in itself? Correlations, not causality.Follows data, not actual customers.

CogAnalytics 1.0 had to innovate to gather all the information from operations, with the help from mainframes and later PCs; going from paper to computers meant a huge advantage in reducing costs, improving efficiency and controlling companies; as Davenport recalls, the most important task was always asking the right questions, to establish which information we needed to be gathering and analyzing, since these were such arduous, time and resource consuming tasks.

Most large companies use these tools in some way, although Business Intelligence has really mostly meant reporting about past operations, which is very useful but a long way from actual predictions. This sort of data gathering, reporting and analysis is still beyond the means of most small and medium sized businesses.

Analytics 2.0 means Big Data: suddenly we have tons of information available, and not just from inside the company; we could have the information for weather patterns, pay days and shopper visits to our stores; and we have the means to gather and process all that information, going from single local servers to many on the cloud, with innovations like in memory processing. Some companies such as Google, UPS and the port of Hamburg have thrived by using Big Data

Analytics 2.1, which Davenport sees as 3.0, is about the use of Big Data and the change it requires from companies to include useful information into their products. It’s useful as it completes the information loop, but it’s more of a 2.1 change because we are still talking about what companies do with all this information with respect to their internal operations and in some select cases about their products, which can result in a huge competitive advantage like for Google and Amazon, and does require changes in the organization; but there is a bigger and altogether different phenomenon going on, and that is how information access is changing our own customers.

On the web our customers are discovering many more aspects related to our products, and they are finding about them from other consumers. In many instances the purchase decision is taking place without any intervention from brands or retailers: our customers find which products best serve their needs among themselves and only contact us at the moment of purchase. Their experience is taking a whole new life after the sale, as they exchange impressions and experiences, which affect our future sales.


In the “old” 1.0, 2.0, 2.1 mentality we can track customers just like we can track our products and operations, with tons of information and processing power, to then seek to improve the efficiency of our transactions; and this is very useful and profitable, but it doesn’t deal with our customers’ new expectations. And those expectations aren’t only about our products but also about ourselves.

A useful real life example example is the poor girl who found herself looking for certain products which taken together denoted an upcoming baby: the data collected allowed Target to send her pregnancy related coupons, which had an adverse effect on her as (a) it angered her parents, which she hadn’t informed, (b) probably made her feel uneasy about being spied on, and (c) probably put her (and others who read the story) off shopping at Target: great use of statistics, complete marketing fail.

What makes the failure even worse is that our customer is more than willing to tell us what she’s looking for, if we only know how to listen and help her find what’s best for her, which goes way beyond price cuts, coupons and promotions; in fact she’s more than willing to help our other customers find what’s best for them. Making customers feel like they’re spied on and used is exactly the opposite of what’s required, which is to earn their trust, make them feel safe and valued. We need to take into account our customer’s expanded experience and our own place in it.

The wording in the NY Times magazine story is telling: Target was fishing for times when customers were “vulnerable to intervention by marketers”  and wondered “How do you take advantage of someone’s habits without letting them know you’re studying their lives?”. If it isn’t already clear, customers don’t want to feel vulnerable or that they are being taken advantage of.

We don’t need “data scientists”, we need to know who our customers are, what they are looking for, why, how our product responds to their needs, how they find it, what they do with it; in other words we need to go back to the basics of marketing, now on the web. Business analytics and big data can indeed help, but they are only ingredients in the long term relationship we need to build with our customers.

Analytics 1.0. Analytics 2.0. Analytics 3.0.
Name.Data Warehousing, Business Intelligence. Use Big Data Our customer's use of data.
What it does.Gather and analyze operations data.Vast data sets, much more powerful number crunching.Understand how our customer uses data.
What we can use it for.Manage operations better.Incorporate useful info into our products.Respond to our customer's new expectations.

We can take these steps to respond to our customer’s new expectations:

  1. Establish a centralized way of learning about our customers, including all touch points from analytics and Big Data. This is also the first step for other projects such as CRM, customer satisfaction and the web.
  2. Establish how our customer’s expectations are changing, and how we need to respond.
  3. Establish who we want to be for our customers on the web, not just what info we can gain from them.


Customer satisfaction and the web

Summary: Customer satisfaction is a central pursuit for any company, and yet we have few clear tools to manage it. In this article we look at the usual suspects through the perspective of our web empowered customers. While these tools do help we urgently need to expand their scope, cut through the consultant speak and look for specific opportunities.

Customer satisfaction has been rightly established as a necessary competitive advantage to help us retain customers and has been helped by concepts like customer satisfaction surveys, net promoter score and customer effort, which we can summarize in the following table:

General idea.Customer satisfaction.Customer recommendations.Solve specific customer service problems.
Fancy name.Csat.Net Promoter Score.Customer effort.
What it does.Post sales customer survey.Substract customer "promoters" from "detractors"Focus on solving post sales problems efficiently.
Benefit.Gives us a service benchmark against which to improve.Only requires one or two questions.Lets us focus on improving specific problems.
Problem.Questions may not cover what customer really cares about, answers might be biased.Needs to be complemented with more questions, doesn't tell us where to improve.Applies only to customers who have contacted customer service, not the entire universe of clients.

When we talk about customer satisfaction we usually mean surveys we ask customers to fill after a sale, which we can then aggregate and follow through time to see how we’re doing; the problem is the surveys themselves can be a nuisance for customers (for instance if they’re long); they could be giving answers devoid of meaning to get away as quickly as they can; the questions can be interpreted differently from what we meant (the customer might not have the heart to give the overall experience a bad mark for fear of harming sales staff, or on the contrary might give them poor marks for something that is beyond their control); or the questions might not make sense to them:

  • Customer rates his overall satisfaction 8 out of 10.
  • Next question in the survey: Why did you not rate us 10 / excellent?
  • Customer thinks to himself: “Because perfection is only the purview of the gods, so no one ever gets a 10”. We could normalize but then other customers might be willing to give it a 10.

The first lesson is that we need to adapt our customer satisfaction questions, how and when they are asked as they are themselves part of our customer’s experience: do they feel that we really care or that we are going through the motions? Does it capture the aspects they care for? Is it an additional hassle to respond?

CustomerFrom our customers’ perspective their experience has expanded thanks to the web, so it refers to aspects beyond the scope of the traditional satisfaction survey and the control of our sales staff. Our customers now find answers to their questions through other consumers on the web, while ignoring our advertising and marginally remembering periodic sales and promotions. ConsumersWhen asking a question (does the color wear off quickly?) they get answers from their peers, which are not necessarily right but point to a much bigger experience through which our customer is discovering our product’s attributes, quality and value. As I have argued before, it is in our own interest not just to respond to our customer, but to lead them through this wider and deeper experience, so they can achieve an overall better result and a productive and even fun experience at every step of the way.

The second lesson is that we need to respond to these new expectations through the web, become another trusted peer in our customers’ network, and help our sales staff be in sync. With this expanded definition of our customers’ experience we then need to adapt our notion of their satisfaction.

TugThe Net Promoter Score (NPS) introduces the concept of a much shorter survey, usually consisting of one of two questions, such as “would you recommend us?”, which seek to summarize our customer’s overall experience; it has the advantage of addressing some of the concerns with longer surveys. We can then choose to focus on our “promoters” and / or “detractors”, which seems to play well with our customer’s interaction with our product through the web, particularly the idea of our brand’s fans.

The first problem with NPS is that it doesn’t tell us where to improve, which leads us to ask more questions, which in turn takes away its advantage over normal surveys.

The second problem is that while it sounds nice to focus on our “promoters”, “detractors” are a lot more vociferous on the web, so unless we have a plan to deal with them we might find ourselves putting out many, many fires.

The third problem is that satisfied customers are not necessarily promoters, much less fans of our brand. Brands with real fans (as opposed to fake Facebook like “fans”) took years to cultivate them, and that relationship might not be as profitable as we would like it to be: while Apple is a prime example of hard core fans for their Mac PCs, their numbers were so low compared to other brands that the company almost died several times, and resurrection only came thanks to a much wider audience through iPods, iPhones and iPads, people who generally are fans of the brand if not quite as rabid as the Mac crowd.

The third lesson is that while a simple, easy to grasp indicator such as NPS can help us see which way the wind is blowing, it doesn’t tell us where to invest, and may even derail our efforts.

Customer Effort introduces an interesting concept with respect to Customer Service: instead of trying to exceed our customers’ expectations we should deal with the specific issues they struggle with and spend more effort trying to solve, quickly and efficiently. This has the advantage of letting us know where to invest to improve customer satisfaction.

The problem with the Customer Effort approach is that its power as predictor of customer loyalty only applies to post sales Customer Service, not to the customer’s entire experience: as a general rule we do want to exceed our customers’ expectations when they are looking for our product, which is a different mindset from solving post purchase problems efficiently: meeting or exceeding those expectations might indeed preclude problems from occurring in the first place.

The fourth lesson is that if we expand the concept of customer effort to the entire customer experience as seen through the web we might find something even more useful: how much effort does our customer have to spend to find out which options are best for him? What works best for his budget? Which product attributes are more important? It’s not so much a series of problems as a series of opportunities to improve our customer’s overall result, his experience at every step of the way, and his satisfaction; this would have the added advantage of letting us know precisely where to invest.

To improve our customers’ satisfaction and hence attract and retain more of them we need to understand that their expectations are changing as their experience is now wider and deeper thanks to the web; that is to say, thanks to their interaction with other consumers, through which they are discovering our product’s attributes and what is best for them; and it is through the web itself that we need to engage our customers to improve their satisfaction. The web can help us complement our sales staff’s efforts and help them be in sync with our customer’s new expectations.

Customer experience beyond customer service, knowledge management and CRM.

Summary: As we seek a competitive advantage and to better serve our customers  we come across concepts that seem nice, but might be difficult to implement or fit together: Customer Relationship Management (CRM), Knowledge Management, Customer Service. To help us cut through the jargon we can use our customer’s perspective on our product, which has been changing thanks to the web.

The subject of CRM, Knowledge Management, and Customer Service has been knowledge about our customers, we can sum up how they have been generally used:

Tool or function.Knowledge Management.Customer Relationship Management.Customer Service.
Actual use.Gather and distribute staff knowledge about customers.Mine data to learn about customers.Deal with customers after the purchase.
Goal.Efficiency, sales.Improve customer loyalty.Solve post purchase problems, complaints, warranties.

All of these tools and functions are useful, although their actual benefits might not match their grandiose names; CRM for instance has been synonymous with loyalty programs, not actually managing entire relationships; and customer service is a euphemism for solving whatever problem the customer has after the sale.

We should also point out that these projects may imply substantial investments and their return might take some time, depending for instance on our product sales cycle (buying toothpaste is a matter of months while a refrigerator takes decades, so hanging on to that loyal customer might not be easy).

Our own customer’s knowledge about our product helps us see that their experience can be much broader and deeper than what Knowledge Management, CRM and Customer Service cover:

  • With a simple web search our customer can find not only the best, but how other consumers have fared in the long run, and discover the myriad components that make up not just a product but the entire experience surrounding it: What’s the best quality? Which are the essential components? Which are nice to have but we can do without? What should we avoid?
  • Our customer can also contribute to other consumer’s quests: whether staff is rude or courteous, warranty responses quick or not, which products have worked out better in the long run, if a price is fair…

The difference between what we know about our customers and what our customers themselves know about our product is crucial.

We could give the tools that help us deal with our customer’s perspective a new name, such as Customer Knowledge Management, but that would miss the point, which is that we need to think and act according to the much bigger customer experience that encompasses all these tools. Marketing has long identified all the parameters that make up our product’s value, but seeing it from our customer’s perspective lets us answer the hard questions:

  • Is our customer loyal? Can loyalty be bought with bonus points or are we confusing it with something else? Are we selling our customers and ourselves short?
  • Does our customer appreciate our product’s quality and attributes? Or do we need to keep enticing him with lower prices? Is our in store staff prepared for our customer’s wider questions?
  • Does our customer appreciate a better experience, such as faster turnaround, efficient service, and how much is he willing to pay for it?
  • What are the limitations of CRM, Knowledge Management, Customer Service and traditional advertising for the greater customer experience?

We can already draw several lessons:

  1. For the first time we have the means for our customers to tell us directly what they are looking for, what they are and are not finding, as opposed to indirect means like data mining, our staff’s interpretation of what customers want, or biased surveys.
  2. We need to see our customers’ greater experience as an opportunity for growth and innovation, to complement the efficiency and loyalty goals for Knowledge management, CRM and Customer Service. This can help us put these programs in perspective, particularly when we are in need of growth and not just internal process improvement.
  3. We need to use the same medium our customers are employing to expand their experience: the web. This means thinking beyond our own stores or distribution channels, beyond the moment of purchase and more about everything that leads to it and everything that happens after.

To meet our customer’s new expectations in their expanded experience through the web we need to take several actions:

  1. We need to be more proactive to engage more proactive customers. The web is the only mass medium that lets us be a direct counterpart in our customer’s conversation.
  2. We need to give our customers the proper incentives to contribute and make them feel appreciated when they do so. We also need the right tools and incentives for our own staff to use our customer’s contributions.
  3. We need to change our mindset to see our customers as active agents and not just as the recipients of our actions,  as information partners and not merely as information sources. This might be the key to everything else and may require it’s own plan to keep it from becoming an empty slogan.
  4. We need to expand our data mining through the web beyond what happens at the store to feed CRM and Knowledge Management systems, while keeping our customers’ privacy concerns in mind and their information safe; the opportunities of the wider customer experience go beyond merely attempting to track our customers on the web.

We also need to take into account the fact that customers might know more about the experience surrounding our product but they are not product or market experts, following them blindly might lead us to Homermobiles.

CRM, Knowledge Management and Customer Service are all useful and necessary, but their traditional uses respond to a more narrow, inward looking view of our customer’s experience, which has been expanding thanks to the web. We can use our customer’s wider experience as a focal point, to understand what each can contribute, as well as how to use the web itself to engage our customers.

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.
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

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.

How do we rate our current website?

IMG_20140310_114530037The web and our business:

  • Is our web site relevant in our customer’s quest?
  • Does our web site have a positive impact on sales? Do we have business metrics for our web site or are we relying on generic traffic?
  • Does our web site help our customers appreciate our product’s attributes and quality?
  • Can our customers find the info they are looking for quickly?
  • Can our customers act on the info they find on our site? For instance they may follow up by looking for a nearby store, see if it has the product in inventory, look for an important parameter they had not thought about before.
  • Is the web helping specific strategic initiatives?

Our web site as part of our overall web presence:

  • Which media and touch points do our customers use in their quest related to our product?
  • Which media is more useful or would be more useful in their quest, how does our web site rank among the other web options?
  • Are we investing in what offers a better return or in what’s available by default?

The web as a process:

  • Do we have control over digital assets, like the domain, hosting, FTP?
  • Is all our content regularly backed up and available?
  • Is our content easy to update?
  • Is there a specific process to generate, edit and sign off on content?
  • Who’s in charge of our web projects? Who are the stakeholders?
  • How do we measure the web team’s success?
  • What are the web team’s functions?


We’re a small company, what can we do on the web?

Small boat

As a small business you may feel that you should be on the web but that it may be too costly or complex; while there is certainly an investment that needs to be undertaken the good news is that it may be well within your means once you realize the resources required; it is also something you need to be doing for the health of your business.

Investment in what? Ultimately the web can be used as a marketing tool to attract more clients and retain them better, which may be exactly what your company needs to survive and grow in times of a seemingly perpetual recession.

  • If your local or regional customers cannot afford your products, you may be able to attract national or international customers.
  • You may find that your expert knowledge of clients, their needs, and your products is something that cannot be matched by bigger competitors even if they have a cost advantage, as customers fail to find the exact solution they are looking for with them, which you may be able to offer.
  • You could have specific skills which may seem very normal to you but may be uncommon and scarce, and which the customer is looking for.

Marketing? But we barely have money for the usual things available for small businesses, like leaflets and directories, if at all in times of a recession, how can we afford web marketing?

You can probably afford marketing on the web because most of the work hinges on the knowledge of your customers, which only you have; the web is only a set of tools which helps you do more with this knowledge. The need for an investment remains, but most of it will be your own time, which is usually the one resource small business have some flexibility with.

I would suggest that beyond working more hours, which is the usual reaction of a small business manager, you should allocate a specific amount of time, say one or two hours a day, and establish that as part of your marketing budget (so the price of your salary for one hour, times the number of hours per month): don’t let this work go outside your budget or go unappreciated, this isn’t a hobby but part of the business.

The decisions you need to take are:

  • Establish a need for marketing in general, to attract more clients. Most small businesses rely on location, word of mouth, fliers, while traditional advertising is outside of their reach. The good news is that web marketing can be more efficient than any of these.
  • Establish how the web in particular can help you (a web medium strategy): audience, specific opportunities and goals.
  • Establish web solutions for each opportunity, which defines a content strategy. You will be generating this content.
  • Establish the additional resources required: functionality, technology, interface design… This may sound daunting but if you think of the quickest, cheapest, most efficient way to get your content across to your audience, there are many resources available for free or at a price within your budget. The better defined a project, the easiest and cheapest it will be for a developer to help you.

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