Shaping Consumer Buying Habits in a Post-Choice World
Join SAP Hybris at The Gathering, an exclusive union of the world’s bravest brands, in Banff on February 22-24.
Have you noticed how stressed out many marketing professionals seem to have become over the past few years? Or if you are a marketer who’s been in the game for a while, have you reflected on how much more hectic and challenging your job has become since social media forced you to drink through the data firehose?
The explosion of internet media introduced more customer touchpoints than marketers can possibly keep up with. When TV, magazines, billboards and the like were the only ways to be seen by consumers, it was manageable. Today, not a chance. CEOs are pushing CMOs harder and harder to prove the ROI of their marketing investments – something most marketers still struggle with.
At its core, the role of the marketer has always been about choice/rejection. Choose our brand, reject the competitor. Marketers target the ‘moments of truth’ to achieve this. In the digital world, there are many more moments of truth to manage. Think of all the interactions on social media and how brands have to get defensive really quickly in some situations. In the past, marketers had a good idea of when those moments were, and were largely in control during those moments.
While most marketers continue to grapple with these new realities of today, I want to turn some attention to how you’ll need to do marketing to be successful 5 to 10 years from now (and how you can start laying the foundations today so you don’t get caught unprepared again). The next wave of marketing – which has already begun in some areas – will be based on automation. Automation will create a new paradigm for marketers, one where choice/rejection is removed from the equation. The digital age expanded the number of touchpoints for choice/rejection, whereas the automation age has the potential to eliminate them. The question becomes: “what is the role of the marketer if there is no opportunity to influence?”
Think for a second about Amazon Dash, a device that allows you to simply press a button to purchase a product. Think about that smart fridge that might be in your kitchen a few years from now, ordering a new carton of milk for you when it recognizes that you’re running low. Imagine that each virtually mindless, purely habitual purchase you make is no longer even that – the possibility of you breaking the mold and choosing something new has gone from 1% to 0.1%. To marketers, that is a world of difference. Unilever is one company that seems to understand this thread, given its $1B acquisition of Dollar Shave Club.
When you no longer go into the store to select your brand of laundry detergent, how does a competing brand tempt you to choose their product instead? If a brand can no longer tempt you with an attractive promotion, superior product placement, better pricing or product (the traditional 4Ps of marketing), how does a marketer get you to switch to their brand? The answer is the marketer can no longer be about just marketing. The marketer needs to become an expert on the entire customer experience.
The complete customer experience is in part about how the front office and the back office work together. If I press the Dash order button but my order never arrives or arrives late, that’s not a positive experience. If I order but my billing is out of whack, that’s not a positive experience either. The entire shopping experience, from ordering to receiving, must link together perfectly. Automation will provide an opportunity for brands that can offer a better overall experience to win in the market. Brands that get the automation piece right, integrate their front and back office, and offer that amazing customer experience, will see their margins rise and the risk of losing customers fall significantly.
According to Ivey Business School marketing professor Niraj Dawar, “spending billions to remind consumers to buy your brand will seem inordinately wasteful. Instead, advertising dollars will be redeployed to building relationships, challenging incumbents, increasing rates of consumption, and influencing algorithm designers and owners. Brand loyalty will be redefined, forcing marketers to differentiate much more clearly between mere repurchase and actual loyalty. Marketers of incumbent brands will need to ask whether the algorithm is “loyal” or the consumer is. For challengers, the critical question will be what they need to do to compel consumers to change the algorithm’s default settings.”
The companies that succeed in the digital age will not just get the customer experience right, they’ll also understand that it’s about the power of connecting the business and the brand at every node. With this comes an opportunity for emerging players to steal market share, but also an opportunity for incumbents to keep a firm grip on theirs.
The future of marketing is a highly complex and contentious topic but one that I love thinking and talking about, so if you’re interested in hearing more, get in touch.
Register for the online-only SAP Hybris LIVE: Digital Summit happening on March 8 to benefit from some invaluable learning without the usual airport lines.