11 - Marketing Implications for the Near Term
The author discusses some of the marketing implications of the shopper economy. (EN: This smells a lot like a summary chapter for the book, likely quick bites of what has been served up before.)
Shopper Behaviors Are Becoming a Form of Currency
- Marketing efforts are changing from an indirect method of reaching customers (through media channels) to a more direct relationship between brand and shopper.
- Shoppers are being remunerated, and are becoming accustomed to remuneration, for behaviors that add to the brand's value chain with immediate and individual rewards
- Given that rewards can be banked and redeemed at will, and their monetary value can be calculated, it can be considered as a form of currency, and the wages for their efforts
- The behaviors of attention, participation, advocacy, and loyalty are regarded s "denominations" of currency that have increasing value.
Shoppers Are the Medium
- A given shopper is a medium through which hundreds or thousands of others may be reached through his social networks
- A shopper can passively share a brand (by merely being seen to participate in a program) or actively promote it (by taking some action to suggest it to others)
- Shoppers are aware of and concerned with their own image and personal brand, and consider opportunities accordingly
- The more cultivated their public persona, or the more people they reach, the more stringent shoppers are in associating to brands
The Age of the Personal Endorsement Deal
- Shoppers are aware their word is valuable, and keep track of the number of connections they have and their influence in channels - noting their "friends" count of Facebook and checking their influence score on Klout.
- Shoppers are already talking about products - encouraging or discouraging others from buying - and are aware companies want to encourage them to provide positive remarks and stifle their negative ones
- People recognize that celebrity endorsers are paid, and therefore less trustworthy than the "everyman" endorser
Advocates Are Not Necessarily Heavy Buyers
- Contrary to assumption, your most loyal customers are not your most outspoken advocates or vice-versa. The two are very different groups, with very different motives.
- This means brands must actually put effort into discovering the identities and motivations of these two separate groups
- Buying advocacy is taboo, but giving people encouragement and tools to spread the word is not.
- Loyalists should not be prodded to advocate, but should be up- and cross-sold as consumers.
Virtual Currency Will Be Increasingly Frictionless and Fungible with Fiat Currencies
- Successful programs provide customers with immediate rewards, not one they must earn over a longer period of time; they also want rewards that they can redeem for what they want, meaning they must work like "real" currency
- In rewards programs that offer merchandise or cash, people choose cash.
- During the recession, more people sought out rewards. If it worsens, there will be even more interest. If it improves, people will likely cling to the habit.
Leveraging Used Goods for Growth and Loyalty
- When a customer sells a used item, it is an endorsement of the brand to the buyer, and an affirmation that the product's value has longevity, which makes the buyer likely to buy directly in future (growth)
- The resale value received for selling the item is likewise an additional benefit to the seller, and also confirms the longevity of the value, which increases the likelihood of remaining loyal to the brand
- This is also true when retail stores buy back used products they have sold - consider the Best Buy buyback program or the game exchange program for GameStop. Premium brand automobile dealers have long supported this through trade-ins and "certified pre-owned vehicle" sales.
- A buy-back program also drives quality through the organization: in order for it to have salvage or resale value, the product must be high quality in the first place, designed with durability in mind. However, his can be signaled to customers, even if it is not true, by the mere existence of such a program.
Experience Design Will Become Very Important
- Experience design considers the long-term relationship between customer and firm throughout the lifecycle. It does not stop at the sale.
- To be engaging, a brand experience must be pleasant, or at the very least not unpleasant, which is where the principles of XD must be applied
- Gamification is the extreme success of XD. If all tasks, including shipping and learning about products, become as fun as a playing a game, the customers will be more engaged.
- An alternate view is "pointification," in which the customer does not find the experience fun, but recognizes they are being compensated in some way for the inconvenience and awkwardness
Context Creates Relevancy
- Most activity in digital channels is not leisurely, but focused on a task. Content that enhances the experience is relevant, whereas content that distracts is unwanted.
- The value of branded "virtual goods" is highly elastic, depending on the object's emotional value to the user.
- Novelty is a driver of value for virtual goods: while a virtual good can be replicated infinitely, doing so decreases its value to the user
- There are some instances in which people will pay (real money) for a virtual good, but the real opportunity is in giving away the virtual good to drive product sales
The Potential Value of Tracking
- Tracking the behavior of shoppers, buyers, and even prospects will become the goal of many marketers in the next few years. It is a daunting task that requires a lot of attention, but has rich potential for business intelligence
- There is already a significant amount of information in data warehouses that is not being leveraged, for lack of a way to correlate data pertaining to an individual in various channels and modes of interaction.
- Any information that is not tracked represents a blind spot in marketing intelligence - but at the same time there will always be a "good percentage" of shadow shoppers who evade identification.
Optimizing Investment in a Shopper Behaviors
- Marketing focus overmuch on creating prospects and converting them to buyers. Participation, loyalty, and advocacy are very much ignored, and their value is unexploited.
- Advocacy is of significant importance because customers have a credible voice and can identify others who are most likely to need and buy. You can support and encourage advocacy, but only to a degree.
- Participation builds awareness and associates experiences to the brand that will ultimately make the participant more likely to buy. Participation can be measured by the number of participants, the attendance at an event, or the resulting buzz - but always tempered by the knowledge that people will participate for an incentive who will not buy or generate sales.
- Attention is fundamentally the same as advertising in which the brand makes a direct payment or provides a benefit to the audience for their time.
- Loyalty is targeted to encourage future behavior, not necessarily to reward past behavior. The assumption that people who bought in the past will automatically buy again, with no other incentive, is dangerously wrong.
- Not all shopper behavior falls neatly into one of the categories, and some does not fall into any of them.