The market trends that work on increasingly market-savvy customers
In my last three posts, I discussed the rapidly changing, increasingly demanding role of the Chief Marketing Executive. Whether your title is Chief Marketing Officer (CMO), or Chief Customer Officer (CCO)—or even Chief Influence Officer (CIO)—the challenges are the same. The CMO/CCO/CIO is best equipped among C-level executives to lead the technology-driven challenges IF they understand and ‘own’ their expanding role.
In this installment, we’ll look at the new marketing dynamic for 2017. I take a look at broader market trends, including new internet/digital tech and increasingly market-savvy customers whose trust must be earned.
Key requirements for navigating the new environment—
- Moving beyond the declining “Interruption marketing” model of marketing ads and digital pop-ups.
- Recruiting marketing staff with a greater range of technical and cross-silo communication skills.
- Knowing when it is more cost effective to outsource parts of a new marketing initiative to, e.g., digital marketing specialists.
- Collaborating more closely than ever with sales executives to ensure the validity of different price points for widely varied regions, demographics, and brands.
Better tracking of digital marketing effectiveness
It has been challenging to measure newer, more indirect digital marketing efforts, compared, e.g., with traditional venues like TV (still the most widely used venue). This, plus inertia are the main reasons over two-thirds of marketing executives spend less than 10% a year on nontraditional media.
But all that’s about to change: online advertising expenses are projected to rise to 60% in 2018, according to ZenithOptimedia. –The primary digital venue, of course, is mobile– already comprising 75% of internet use. Though time spent on smartphones is reaching a saturation point, chatbots and digital assistants should help better target and customize messages to an increasingly fragmented customer base. This will require greater investment in new AI-based algorithms that drill down from general patterns of customer behavior to small cohorts and individuals.
However, mass personalization is more than just tailoring messages to different psychographic profiles; it’s also about giving the customer unique insights that are of value to them. In a broader sense, building loyalty requires sincere dedication to helping people. An important part of that equation is securing your customers’ data. After the Target data breach of 2013, it took the company almost two years to reestablish customer trust. Wells Fargo and Uber are among corporations now having to do the same.
Predicting consumer behavior is complex
The actors driving consumer behavior in 2017 are very complex in nature. It’s commonly believed that millennials and other age groups are gravitating to ‘post-materialism’ consumer values. This would seem to explain the move towards product-as-services. Consumers are also now more concerned with sustainable green products and emphasis on local community as opposed to globalism.
Surveys confirm this evolution of consumer market values. However, behaviors often don’t reflect values which are, in reality, aspirational. However, branding and marketing need to validate these values to confirm consumer aspirations. Bottom line—people take their values seriously even if they don’t predictably act upon them.
We live in an age of fear and uncertainty. At a deeper level, those forces are driving consumer choices. There is an underlying fear of potential scarcity. This is based on a growing realization that current consumption patterns are unsustainable given environmental degradation, the growing cost of many commodities, and the higher incidence of environmental syndromes like autism.
Other factors driving consumer behavior
- Young consumers are less patient than earlier generations. It’s harder than ever to get their attention, let alone change their consumer behavior. The assumption has been that if you win their attention and provide some useful information about a product that they’ll be persuaded to buy. –Not true! Consider how difficult it is to change your own behavior. It takes a combination of environmental and other behavioral reinforcers to get anyone to adopt new habits.
- Young consumers love giving feedback online about brands, products, and services. In fact, they have come to believe they ‘own’ brands, not marketers. Quickly responding to negative consumer feedback is critical.
- It’s more effective to get consumers to interact with a product than just to think about it (e.g., via Sunday paper samples). Another example—P&G helped increase sales if Febreeze to one that was more rounded and decorative and then more likely o be left out on a counter instead of under the sink.
- Offering consumers discounts and other perks for continuing to use your product or service (e.g., discounted personal training sessions for gym members) also helps build consumer loyalty.
This past year, several agency CEOs lost their jobs because of attitudes and behaviors towards women. This, combined with increased attention about racial and gender gaps in the U.S., ensures that diversity will be a big issue at marketing departments, media companies, and ad agencies. What is especially outrageous are those companies that build products for women but have no women on their product/service development team.
Building diversity within companies builds credibility, provides critical feedback from major demographic segments about products and services–and is simply the right thing to do.
Blockchain could change everything
Just a few years ago, Bitcoin had a checkered reputation because it was used in dark web transactions and its value was less stable. Blockchain tech is now looked upon much more favorably because it integrates increasingly well with automation and artificial intelligence. In the future Blockchain, payments could be used immediately to pay for basic needs—e.g., fuel, repairs and other uses. The critical advantage of Blockchain payments is that they are encrypted and therefore much safer than credit-card information which is cookie-based and is, therefore, hackable.