Buying in an information rich world
Thinking about the landscape for brand building today is a bit like looking at an upside down map of the world. There are lots of things you already know about it. Countries, continents, oceans and seas, but at the same time everything looks quite unfamiliar.
Navigating this new and inverted world means you have to look at things very differently and try to understand the forces that are driving the change.
Possibly the biggest is that while we as individuals used to have less information than brand owners, today we often have more.
Intuitively we see it happening every day. For an easy example, think about buying a car. Most car buyers today walk into the car dealership with more knowledge of the car they're considering than the dealer does – from how powerful the engine is, to how reliable it should be, to the best pricing deals within a 20 mile radius, to how much margin the dealer should get, to many of their friends think it’s a great car.
What is less understood is that controlling information has in fact the foundation of the past 60 or so years of marketing activity and brand thinking.
In the past the cost of information was high in terms of both time and money. Today it is free. When the cost of information is high, you’re not likely to search it out very often. This reality created the concept of the sales funnel. It's based on a foundational assumption that a consumer has only a limited number of brands they are likely to consider for any purchase, and that purchasing decisions are made in a rationally reductive fashion. Depending on the value and emotional significance of a purchase they will only conduct deeper information searches within this pre-existing consideration set. If we use our car example, the assumption has been that a consumer will only consider a subset of the total choices on offer at their price-point and desired car type. For example choosing from Chevy, Dodge, Ford, Chrysler and Toyota would mean excluding such brands as Honda, Hyundai, Volkswagon or BMW.
This was a world where advertising spend created a barrier to entry, acting as an exclusionary force and preventing new brands from entering the consideration set. Historically, this power has at times allowed inferior products from better known (and hence considered) brands to triumph over superior products from lesser known (and hence not considered) brands.
However, when information is free, immediate and readily available, the assumed funnel no longer exists. Instead the customer is constantly flexing their consideration choices throughout the purchase process, sometimes increasing the number of considered brands, sometimes decreasing them, and sometimes changing their minds at the very last minute.
Living in an inverted world where information search is free and the traditional sales funnel no longer exists means brands now need to consider some very different things:
1. That loyalty is something to be earned daily.
It isn’t that consumers have intrinsically become less loyal. Instead, the elimination of cost (in money and time) in searching for information has increased their consideration of other brands with potentially superior products. Which means a brand owner needs to consider what they can do for that customer to earn their loyalty on a daily basis, and not simply assume that past purchase behavior will translate into the future.
It’s no surprise that Apple, Amazon and Zappo’s (that Amazon purchased) have created rabidly loyal customers at exactly the same time as other have bemoaned the decline in loyalty. In each case, their strategies for earning loyalty have focused on consistently delighting their customer. For Apple, this is through building innovative and desirable new products supported by a strong services layer. For Amazon this has been through a relentless focus on innovation on behalf of the customer. And for and Zappo’s this has been through superior customer service and customer relationship management.
2. That inferior products, no matter how strong the brand, won’t succeed.
Just ask GM and Chrysler. The days when an inferior product from a better known brand could win over a potentially superior product from a lesser known brand are over forever. Without the Internet, it’s unlikely that brands such as Vizio or Hyundai could have so rapidly gained traction within embedded markets and consumer considerations sets. But they did, and it will happen again to anyone who isn’t focused intently on continuous product and service innovation.
3. That you need to consider the entirety of an increasingly non-linear sales path.
The days of a straightforward and easy to map sales funnel are over. Instead, we’ve swapped the linear funnel for an often highly non-linear (and sometimes a seemingly completely irrational) decision making journey. In this world, all the channels of communication that can be reached via search and social have become incredibly important.
This means that today, for example, having someone providing customer service on a major 3rd party product-category forum might be a more important driver of final sale than any of your traditional marketing communications.
All of these changes in combination are huge, and necessitate changes in the way we consider the journey our customers take. If their path is non-linear, we can’t always assume they’ve followed the path we’ve laid out for them. If search and social are the drivers of information, then third party viewpoints will almost certainly be more important than our own. And if decisions can change at the last minute, then providing more opportunities at the end of the traditional funnel probably makes more sense than you realize.