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A Buyer's World
It was about 15 years ago that marketing analysts started writing about marketplace power shifting from the seller to the buyer. There were a lot of reasons for the shift, but the most significant cause was attributed to the proliferation of products in most categories. With significantly more choice, consumers could simply abandon one seller for another or one product for another. Consumer loyalty started its long, slow march toward extinction.
This dynamic created an understandable response among sellers. As they confronted more heated competition, they turned their attention to selling better.
Selling better, for many businesses, was all about beating the quality drum. Why wouldn't consumers purchase a product that was superior in quality? Quality was perceived as the silver bullet - the unrefutable argument, the key to redemption in position and profit. We know now that most quality claims failed to deliver on their promise. The question lingers, "Why?"
My grandfather, Roy Archer, was a paragon of brand loyalty. Grandpa was a Studebaker man, through and through. Growing up, I rode in his Commanders, his President, and his Avanti.
It broke my Grandfather's heart when Studebaker failed, because - as "a mechanical man" - Mr. Archer's convictions about Studebaker's superior design and engineering were unshakeable. A lot of people, many engineers and mechanics among them, shared Grandpa's opinions about Studebaker's superior quality. They were probably all correct. There is still a firm belief among those that know, that Studebaker was ahead of its time. It was a superior quality automobile. But here's what matters:
Quality didn't save Studebaker. Quality might not save you either. Claims about quality abound. You won't ever read, "Buy this widget. It's so, so."
As I observe marketing dynamics today, I see another profound shift: what I would describe as the death of selling as we know it. Consumers still enjoy superior power in most purchasing systems. Sellers prosper or perish at their mercy.
With the Internet, and the extraordinary amount of information that is accessible through search engines, on-line forums, and direct consumer feedback, almost everyone can substantially improve their "expert-buyer" status. It is so easy to compare products and services today that businesses are terrified of the implications.
It used to be that marketers defined dimensions of quality and created the strategies by which they positioned their product against competitive offerings.
Today, consumers define what quality means and how various products stack up against those benchmarks. There's a serious lesson to be taken here by marketers: pay attention to how consumers evaluate your products. Their evaluative dimensions are much more strategically relevant than yours are. You don't control positioning like you used to. Get used to it.
Market anthropologists have revealed another strategically startling truth. Consumers use products in unintended ways. In addition to using the product as the producer intended, they adapt them to their own purposes. As a result, they evaluate products in ways we don't anticipate and might never have imagined.
When I think about what's happening in the marketplace today, I wonder whether Studebaker might survive and prosper were it around today? Would champions like Roy Archer use the power of the buyer and the forum of the internet to give this company traction?
It's ironic, today Studebaker's quality might save it. Quality - as consumers define it - has never been more relevant. Quality - as sellers define it - has never been more irrelevant.
The lesson: It's a buyer's world. Those of us in marketing who don't adapt won't survive.
As I think about these issues, I've come to an important conclusion - at least in my own mind.
I advise my clients to start thinking very differently about where they focus their energies and their budgets. Most businesses today concern themselves too much with making a better message. There is a belief out there that a better message will create better business performance. This assumption comes from living too long in a seller's paradigm.
I believe that business must shift their focus to creating a better channel strategy through which they deliver their messaging. Truth be told, a lot of "great messages" never make it through the pipeline to the buyer. They might as well not exist.
Don't misunderstand me. I'm not suggesting that messaging brilliantly is not important. I am suggesting, however, that channel strategy has overwhelmed messaging strategy in strategic importance.
Today, most products aren't sold. They're bought. These products are bought because consumers have come to a conclusion - through a variety of means, needs, and desires - that the product will better their lives. That conclusion is reached because the consumer accredits the information they use to decide through their personal process of uncovering it. There are a variety of ways they find information; these are the channels marketers must pay attention to.
Bottom line, consumers are more likely to believe information they uncover themselves than information you direct at them in an amplified fashion.
Information is just like a product; it's bought, not sold. When the consumer buys the information, they are more likely to act on it.
Posted on August 26, 2006 11:20 AM | Permalink
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Comments
This is an insightful post, as usual.
I have often watched many of my clients succeed quite well employing very little traditional marketing and advertising. In fact, even my own small brand design firm -- what many people would define as a boutique firm -- has survived and thrived for nearly 15 years doing what others have told me is shockingly little self promotion.
It occurrs to me that your insight about consumers 'discovering ' something through their own process rings very true. Discovering something yourself rather than having it forced upon you is a key part of self-actualization through consumption. There's a cool factor to it... a feeling of accomplishment. An accomplishment you want to make others aware of.
While it might not apply as broadly to mass market products, to niche service firms like mine and many others out there, this truth leads one to believe that the emphasis should be on retention... on building loyalty... by continually managing the evidence of your excellence through brand. This in turn fuels the sort of 'viral', earned marketing that your clients deploy on your behalf. If you're providing them with an excellent and meaningful product, service, or experience, they take pleasure in 'tipping off' the key people in their circles of influence. The client gets to play the role of someone in the know, you get the promotional equity -- not in a traditional way but in a very meaningful way -- and the new client hopefully gets critical help where needed. Everyone wins, in theory.
Understanding this dynamic really does bring one back to channel strategy as you've pointed out, and in this dynamic the channel strategies are different, perhaps many of them yet to be discovered. This is where there is new and exciting ground to be gained, particularly for the small to medium size enterprise, in my opinion.
Brilliant, Neill. I think this is why David Aaker was so careful as to say ‘perceived quality’ when talking about brand equity—the consumer perception is king. Thus, with Studebaker, it had innovated, and its low volumes meant that the cars were of better quality than what came out of Nash, Rambler, Chrysler, Ford and GM at the time, but the quality was in areas that everyday consumers—those less knowledgeable than your grandfather and who could be more easily swayed by the marketing muscle of the Big Four—could not see.
At B-school, we were told a story by our Marketing 201 lecturer (Peter November) about a guy who had invented a better-quality hole-punch. The problem was, no one cared, and no one would pay the premium on it. Most folks just wanted two holes, roughly so many inches apart, and that was that—the quality of the chad matters less, except for those involved in a certain election outcome.
An insightful post, to be sure. And personally painful, for it reminded me of my most abject financial failure as an arts presenter.
I presented a 16-performance run of John Gray's musical, "Rock and Roll". I had, by all accounts, the best pre-show publicity on the show's entire tour. We opened New Year's Eve, with champagne and pizza in the lobby. The weather was cooperative (In Alberta, this is a major consideration.); the reviews couldn't have been better.
We could not GIVE tickets away. The audience, apparently, did NOT discover something about what we were selling (so energetically) to convey to other potential customers that would encourage them to attend. Or, as Sol Hurok so famously expounded, "If they're not coming, there's no stopping them!"
We lost a pile of money, and I lost a lot of confidence in my abilities as a marketer. Even now, more than 20 years later, I'll ask myself now and again what happened. I think what happened was what your post was about!
wonderful post - one I will be printing out and giving to people. The realization that times are different, and some posters and postcards ain't gonna cut it anymore - it's a shift that is taking a while to come through. Last week's Time Magazine had a great article on just this - I find it amusing that the first to dismiss alternative marketing are those most threatened by it - namely the traditionalists. Isn't it always the way...