The sustainability of today’s business in a world increasingly controlled by the customer seems daunting for many businesses, who are used to and, in many cases, hell bent on maintaining status quo with respect to how they market their products and communicate with their customers.
The pundits are saying this:
In order to adapt to the market of tomorrow you, as a business, have to listen to what your customers are saying. You have to make it a priority to build your business around the customer NOT the other way around.
So one would assume that the more you know about your customer, the better you can target messaging to them in ways that will optimize receptivity to the communication.
This is the reason why many marketers, including we at ArCompany, are encouraging brands to develop relationships with their customers.
Here’s the glitch, though…
…Consumers don’t want to have Relationships with Brands.
In last year’s Corporate Executive Board (CEB) study of the 7,000 consumers, 23% have said they have a relationship with a brand. However it was also discovered,
…for most consumers, increased interactions don’t drive relationships and often work against purchases.
What the researchers discovered was,
Without realizing it, many marketers are only adding to the information bombardment consumers feel as they shop a category, reducing stickiness rather than enhancing it.
I had an interesting discussion the other day with Doug Stephens, aka @RetailProphet and Kerry Morrison, @kmore and CEO of Normapp.
We all agreed that the value of Big Data is slowly becoming the holy grail to business, hoping to find the sweet spot that can determine what drives a consumer to buy. However, consumers are ever wary of the amount of information that is available to business especially in the face of the NSA scandal.
Whether this will compel government to make business more transparent about the information they collect OR allow the consumer to have more control over what personal information is shared remains to be seen.
The truth of the matter is it’s difficult to break people’s habits. Whether this and the next generation will be more closed off from social networks is not a realistic expectation. Payment systems and mobile will increasingly compound this wealth of data.
No one is really immune to the inevitability of the data solutions for business as this sort of intelligence becomes increasingly prevalent.
On the other side of the fence…
Brands Don’t Have the Processes that Allow for a Return on Relationship
Doug Stephens said it best,
The CEO, who has 5 years to retirement, is not going to be the maverick and attempt to develop new ways of doing things, especially where he’s in unfamiliar territory.
Companies typically operate within a defined period. Employees are compensated based on performance. Objectives are defined and results are collected within those timeframes.
- Customer Satisfaction;
- Churn Rates.
These are the standard measures to benchmark company and individual performance. However, relationship building takes time as anyone knows.
The value of content, interactions, and other relationship drivers will take time to impact the larger organizational goals. In these cases, results begin to develop beyond the set timeframe a company is willing to allow.
I’ve often been frustrated with clients, who expect immediate impact for engagements they’ve initiated in short-order.
The company of today is unwilling to modify existing systems and process to accommodate the new mediums and their promise of nirvana.
We’ve come to a crossroads.
So, if brands don’t have the wherewithal to make the appropriate changes with the times AND if customers don’t really want to build the relationships with brands, at what point does each succeed?
True Acceptance and Perhaps, an Agreement
If we can’t stop the collection of our data, as consumers, can we perhaps have some control about its usage?
If you, as a customer, understand that we are collecting information about you, will you give us, the business, the information that we need to make your experience better?
We touched on this notion during our discussion. Kerry Morrison noted, in the beginning when they were devising the premise of NormApp.
We have these amazing social platforms where users are telling us precisely what they want, what they need, problems they’re having and no one was listening…Why can’t businesses connect with us on a personal level, not as demographic data, but as unique individuals?
If you stop to consider this, everything is morphing to an environment geared to the individual. The notion of hyper local, “small town”, “villages” where everybody knows your name (hence where Norm conceived), what you like, and where you go – it’s more attainable now than ever before with the help of social intelligence.
Can Social Intelligence Accurately and Consistently Infer a Customer’s Propensity to Purchase?
Doug and I tended to disagree. I would assume what a customer says he’ll do may be the case probably 80% of the time. Doug noted,
If you look at my tweets, you’ll probably assume I hate Air Canada because of how much I complain about them. In reality…. I always fly Air Canada because of the points.
So, is behaviour is largely the dictator of brand affiliation and purchase propensity? I would argue that the data can tell a different story.
Language (mentions), in combination, with behaviour (transaction, check-ins, pic uploads) can determine the extent of a person’s affiliation with a brand, and predict their purchase propensity.
Natural Language has come a long way to detect aspiration vs. intent to purchase within sentences. Technology has gotten so sophisticated that the ability to use past behaviour/mentions as a predictor of consumer outcomes exists today.
The Quid Pro Quo: Nirvana
The business will use intelligence to know more about the customer, and may inadvertently bombard customers with offers, content etc they don’t want to see. However, if there is no relationship and the customer largely ignores the communications, then neither party is better off.
The balance here lies in ensuring the consumer doesn’t have the business by the noose. On the flip side, business must understand, in aggregate as well as the consumer level, the information that impacts parts of the purchase cycle. If there is no relationship, then both have to come to an agreement of give-and-take.
- What do I, as a business have to do to retain you, as a customer?
- What am I, as a customer, willing to give you, the business to keep me satisfied and coming back?
I sit on both sides of the fence on this one.
As a customer, I want the best product, the best service. I want it at my convenience and at the price I’m willing to pay. No, I don’t want to be solicited but sometimes I’m willing to look at offers that are relevant to me at that time.
In many ways, I want the brand to know ME.
The solution comes down to communications.
Whether it’s called a “relationship” or not there has to be some sort of communication that allows each party to get what they want.
If Big Data is to provide insight, it will allow brands to understand these things: how their external factors influence their purchase behaviour; who they turn to for advice for the type of product sold by the brand; the reason they want or don’t want that product.
Doug Stephens spoke about a time when, if the brands don’t make drastic moves to “understand” their customers, channel preferences, and how they want to be communicated, then the onus will be on the customer to be the control channel that dictates information they want to disclose, and how they want to be communicated to, etc.
For that CEO, who has only 5 years to his retirement, perhaps it is too late in the game for him. He can’t see the forest for the trees.
I still believe, however, that companies out there want to do the right thing to create a sustainable business. CRM is a tried, but true model that is reinventing itself in the social channels. This is what the new vanguard is all about. It doesn’t have to stifle a business but allows it to evolve in other ways imaginable.
As for relationship, it’s just a word.
At the end of the day, it’s an understanding that aligns both the business and customer on the same plane. It’s this understanding that sustains the business and keeps the customer coming back.
Photo source: Hang in there
Founder at ArCompany, and Director, International Council on Global Privacy and Security by Design Hessie is a seasoned digital strategist, and intelligence analyst having held senior positions for top ad agencies including Ogilvy, Rapp Collins, ONE and Isobar Digital. She also has extensive start-up experience in AI technologies, social tech, online publishing and artificial intelligence like Yahoo! Answers, Overlay.TV, Jugnoo and Cerebri AI. Hessie is the co-author of EVOLVE: Marketing (as we know it) is Doomed! She is also an active writer for Forbes, Cognitive World, Towards Data Science and Marketing Insider Group.
Hey there boss, I absolutely LOVE this, from two angles.
One is a little bit of a validation viewpoint, as this is EXACTLY what samfiorella and I talk about in our . Instead of using big data and NLP to push more crap down the throats of consumers, really identify where the customer is at a given stage in the purchase life cycle, and use the data we have to meet their needs at that given time. It’s true personal marketing, but at scale.
Secondly, from a technology point of view, it’s amazing to see how far we’ve come. As you know, we have some great things in the pipeline that marries technology to business and consumer needs, and knowing what we have as well as what it can do – when used properly – bodes well for the future of business.
Danny Brown samfiorella Frankly, Danny, the future is frightening for any pure youngster without any online footprint; speaking of our kidlets. They will reveal without a care and perhaps that’s the ticket.
This generation of engagers is still stuck in the pre-social media world; we remember how it used to be.
Brands will need that pure generation of pre-millennial age to really dive into “relationships.” Case in point for what that era is already doing…my post today.
Soulati | Hybrid PR I think that comes down to both education by savvy parents, and better ethics by brands. It’s not the tech that disappoints, but the use of it, from both sides of the equation. samfiorella
Danny Brown Soulati | Hybrid PR samfiorella We can say that now, but parents are losing the battle, Danny. The kids after our kids will know nothing different and the parents could be also brainwashed not to mind. I dunno; I don’t have faith in our ability to monitor all platforms and engagement.
Soulati | Hybrid PR Parents are losing the battle because they’re ignoring it. We sign up for networks and ignore ToS, and we do little to change platforms’ approaches, apart from the little bit of moaning on Facebook that lasts a day, and then we’re back to sharing all and sundry. Today’s consumers (including parents) are hugely savvy – Twitter and Facebook’s biggest demographic lies in the 44-55 age group).
We can blame technology to a degree, but if we don’t take responsibility for actions where we can, then we have little to blame but ourselves. samfiorella
Danny Brown Soulati | Hybrid PR samfiorella I want to hear from you in 10 years when your littles are preteen. Mine is 11.5 and while I’m savvy to monitoring and we’re speaking on it, I can’t be present hovering 24/7 esp. when she goes to parties and they’re all online. That’s what I’m talking about.
Soulati | Hybrid PR But that’s kids and teens for you, Jayme, online and offline. We can only guide – they still make the choices. To think we can know everything they do is naive (and that’s not at you, but in general). samfiorella
Danny Brown Soulati | Hybrid PR samfiorella Yep.
Soulati | Hybrid PR Danny Brown samfiorella Perhaps the change will only come when the MILLENIALS are the parents – the kids raised on the social media world doing the parenting.
That’ll be the same millennial creating Trayvon memos for Buzzed…? But yeah, that aside, it might take a generation raised on digital to better use it. We’ll see.
AmyMccTobin Soulati | Hybrid PR Danny Brown samfiorella Agree; alluded to that above in my comment aka blog post.
Soulati | Hybrid PR AmyMccTobin Danny Brown samfiorella My kids are slowly seeing the good and bad side of this sharing experience. And they’re learning really early to use discretion in what they share. It means that I don’t necessarily have to hover but ensure they understand the dangers. I give latitude because they need to learn. My daughter asked me today what I do and I told her honestly, “I give companies information about people like you so they can figure out how receptive you’ll be to buying their stuff”. She was horrified for a moment and then said, “I guess I should just tell them”. Pretty smart huh?
What a fascinating piece, Hessie. A veritable Yin and Yang.
Here’s the dilemma…I shop for books on Amazon and it sends me suggestions about what to buy next. My purchases there are business books, my peer’s novels and the occasional thriller and kids book. Sometimes a few gifts. Now, because we’re smart consumers, we’re NOT going to buy books on having better sex or solving depression because those titles are shared everywhere and opinions form. If I want a XXX book, I’m going to half-price books.
If there’s a brand with products that are socially acceptably neutral, I’d bet consumers would be willing to reveal all — yes, I exercise and love your paleo diet and your FitBit is working wonders for me on the tennis court and oh, Babolat, I love my new raquet.
When a brand sells products that are invasive to privacy — health devices for personal medical conditions, gels and creams that solve itches, rashes and other dilemmas or even sex toys…do you think we’re going online to purchase those at the risk of getting embarrassing direct mail anyone can see?
For brands to get consumers to want to play ball with personal information, they have to look harder at the brand and product portfolio.
What brands get is only half the person; the other half is still protecting privacy.
Soulati | Hybrid PR I’m not clear on this Jaymie, are you saying that Amazon makes inappropriate suggestions to you… they are my Favorite online retailer because they make suggestions that match my interests.
I think I’m a cynic about privacy – I gave up on the concept so long ago that I don’t get flustered when a company appears to know a lot about my online habits.
AmyMccTobin Soulati | Hybrid PR Hi, Amy. What I said is that brands that are not neutral like Amazon need to understand they will not develop relationships with consumers.
Amazon does great suggesting titles for me to buy; what if I only bought XXX and eroticism books? Then they would suggest more of these and everyone would know that’s my flavor of the day.
Amazon and other online brands only get HALF THE PERSON. The other inside/secret/private self is not for public display. Consumers who are smarter are not sharing and liking the sites that show political persuasion or thoughts on the Zimmerman trial. We who are smart will not share that side of self for marketers to jump on and social networks, too.
Soulati | Hybrid PR AmyMccTobin Well, I see lots of smart marketers sharing their thoughts on social, and certainly if you buy political books of a certain persuasion I guess you’re outing yourself.
As far as exotica, I’ve always marveled at the Vermont Country Store catalog – they sell all sorts of linens, and pillows, and sex toys. I know! Who’d a thunk it, but then again, when a box shows up from them in your mail box no one is the wiser. And NO, before one of these snarks ask, I did not purchase from them – but I saw their catalog at my neighbor’s house.
AmyMccTobin Soulati | Hybrid PR I saw that catalog, too! In fact, I used to look at every page and then one day it came and I saw those toys, and went, really? Is that what Gramma wants to buy with her flannel nightie and foot warmer? HEH…hilarious.
Oh, Danny? Snark Opp. (She said it, not moi.)
Soulati | Hybrid PR AmyMccTobin Hi Jayme I agree that as an individual you should WANT brands to only see part of you. There is a degree of privacy that allows humans to have control of the things they WANT to reveal about themselves. My “closet” side says “I secretly devour books like “Hunger Games” typically read by teens. But I don’t want to disclose that because I don’t want to be judged. BTW this is an EXAMPLE. Your example about Amazon is right on the money. Brands ONLY really want to know the things about you that they can leverage to bring you closer to purchase.
hessiej Soulati | Hybrid PR AmyMccTobin So a smart brand like Amazon will allow the buyer to make certain private purchases… and only show the ones they want collected.
PS Hessie – we all see what you watch on Netflix because it shows up in your FB feed, and YES, we are judging you.:)
AmyMccTobin hessiej Soulati | Hybrid PR AHA, see, that’s where Netflix needs to be smarter. My kids watch Netflix ALL the time. I wish Netflix could distinguish users NOT by account but by members who make up that account. So, Sponge Bob, Different Strokes, Fantasy Island are NOT me:)
Really enjoyed reading this and it made me again consider the power that small business owners have where they can establish personal brands that mirror an aspect of their business and thus keep all relationships between people!
CogentCoach The great thing is that small businesses, in comparison, have more “real” relationships with their customers. That “village” or “mom and pop store” mentality is what we have to get to with larger brands but they fail because operations and process hinder this. The one-to-one relationship is what we had a long time ago, and it’s what we have to bring back.
hessiej CogentCoach I agree. Nordstoms is a large store where you get the personal feeling when you visit, but small businesses have this by their very nature. I wonder where the breaking point is for useful relationships – what size does a company have to grow to in order to see the personal touch disappear? I wonder if any research has been done on that transition.
CogentCoach hessiej I don’t know if they do though… I deal with a lot of small businesses that do NOT have a personal touch; when you interact with them it is obvious that selling the job is far more important than customer service – think Restaurant Impossible and how often it’s the case on there.
Zappos and Amazon make me feel a lot more warm and fuzzy than a lot of small businesses I work with.
AmyMccTobin CogentCoach hessiej Good point to clarify I guess 🙂
My thought is that small business have an easier time building relationships, if they choose to take advantage of doing so.
Big businesses find it harder, although as you point out Amazon and Zappos do a good job with personalized technology and as I mentioned, I think Nordstroms does a good job person to person.
It makes me wonder if a small business can also do more damage by having bad customer relationships than a big business. If a small business is bad, I tend not to go back and share that opinion with others. If a big business is bad, my first thought is that the employee or that store is bad – takes me longer to discount an entire big business.
Blessing or a curse I suppose.
CogentCoach AmyMccTobin hessiej Personal touches are a must these days. Small business is ripe to make this happen because they have a more direct relationship with each and every one of their customers. Big business absolutely have the ability to scale the personal or individualized need and that’s why leveraging this data is important to understand the user profile and preferences.
I’m not sure whose loss is bigger when it comes to having a bad customer relationship. Big business, like Goliath, can easily topple under the weight of some bad customer relationships, but they also have the resources to turn it around. Bad PR is also much more visible than that of the small business.
For the smaller guy, it’s the reason why they SHOULD treat every single one of their customers as gold. They may not necessarily have the resources to bounce back as easily.
I do think a lot of consumers are inviting brands into the conversation when they mention them on social channels. Yes, some consumers are holding the brand’s reputation hostage…because of a legit gripe, or because they just want concessions/free stuff.
But others just want to improve their customer experience while providing feedback outside of a survey. Heck, they might even be advocating for the brand.
Brands should monitor for those conversations, and then use human judgment on how they should communicate with that consumer. If the consumer pushes back after the initial engagement, then back off. Otherwise, continue to deepen the relationship by soliciting feedback w/a “how can I help you” mentality.
That will then give the brand implied permission for a soft sell.
Meanwhile, monitoring those brand mentions and analyzing them “in aggregate” can help the brand improve the customer experience and product development w/o ever imposing on the customer w/further engagement. Again, use the feedback loop available through social channels.
dbvickery Thanks Brian! Sometimes I do think that brands are put so much more on the defensive these days. They’re continuously under a microscope and like you said, waiting for the moment to strike at a vulnerable moment. I agree that the insight to a brand is more important than how to strengthen a relationship. Invariably if these insights make the customer happier and stickier, and ultimately increase their share of wallet with that brand, then the right balance has been achieved.
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