Marketing in the age of the super consumer

The discipline of marketing is currently undergoing the most radical changes it has ever faced: changes that are rapidly rendering conventional strategies and techniques ineffective. Yuchun Lee assesses these changes and their implications, presenting a coherent new framework for reinventing marketing.

By Yuchun Lee, Unica

Three interrelated trends are transforming marketing: the increasing power of the customer; the growth of interactive and internet-based media; and the relentless increase in marketing complexity.

Let us briefly consider each of these.

• The rise of customer power
  Marketers are losing power and control to their customers, who now have unprecedented access to third-party information and opinions about companies, offerings, marketing claims, services and even pricing. They can identify competitive alternatives that were once inaccessible due to distance or inconvenience. Customers are even gaining more control over how companies contact them – and they are demanding even greater power to avoid unwanted messages. These changes span industries, cultures, and all types of businesses.

"Marketers are losing power and control to their customers, who now have unprecedented access to third-party information and opinions about companies, offerings, marketing claims, services and even pricing."


Yuchun Lee, chairman, Unica

• The budget shift to interactive, and internet marketing
  As customers gain power, marketers are increasingly moving their investments away from traditional mass media. These budgetary changes began as small shifts in focus, and in some organisations, they still are. But they are rapidly gaining momentum. In the UK, online ad spending leapt by an impressive 39.5% during 2007, according to the Advertising Association (AA) and the World Advertising Research Centre (WARC). Furthermore, Jupiter Reasearch has predicted that it expects the previously niche area of mobile ad spending to be worth 1.3bn euros in Europe by 2012.

• The upsurge in marketing complexity
  Both the rise of the empowered customer and the shift to interactive and internet marketing are contributing to unprecedented marketing complexity. For example, marketers know that customers are increasingly comfortable crossing channels during the process of making a purchase. Shoppers may research online and buy offline, or vice versa. In response, marketing organisations are struggling to construct, execute, analyse and optimise integrated multi-channel campaigns.

  
  It's no longer enough to simply pour prospects into a 'sales funnel': marketers must coordinate all customer touchpoints in a buying process that is more individualised than ever. These programmes must fully reflect customers' individual contact preferences. Issues such as these are adding complexity to all facets of marketing, and forcing through changes in areas ranging from organisational structure to campaign planning.

'More and louder' doesn't work

Faced with deteriorating performance, it is human nature to work harder at familiar tasks, attempting to regain yesterday's success by simply doing more. Some marketing organisations have responded in exactly this way: they are delivering more one-way messages and sending email with ever-greater frequency.

Customers, of course, experience this as noise. They don't like being shouted at, and respond just as one would expect: they tune these messages out. Where technology or law permits, they may simply prohibit companies from contacting them. That's why digital video recorders, pop-up blockers and the Telephone Preference Service, which allows consumers to opt-out of receiving marketing calls, have become so popular – and it's why direct mail response rates have dropped by 80% in the last eight years.

Every year, marketing strategies based on 'more' and 'louder' become less effective. What will work? Is there another, better model?

The new four Ps of marketing

The classic marketing textbook began with the traditional four Ps: product, price, place and promotion. All four have in common a company-centric view of the world. The company defines its mass-produced product, attempts to set its most profitable price, establishes distribution channels and crafts one-way promotions targeted at the customers it has selected. Customers are largely passive or, at best, reactive. Marketers can implement these four Ps with little customer dialogue, interactivity or feedback. The result is marketing that is unresponsive, doesn't meet customers' new expectations and doesn't work.

To be successful today, businesses need something different: a customer-centric approach. Truly customer-centric marketing isn't annoying to the customer, nor does it feel like noise; it feels like a service. It is relevant and responsive. It recognises that the customer really is at the centre of the new universe. It begins with listening, not shouting. Customer-centric marketing can't and won't be achieved overnight. But, using it as a goal, marketers can identify virtually unlimited opportunities for performance improvement.

The real value can be found in a new set of four Ps: personalisation, presence, persuasion, and permission. These new four Ps are all about the buying process, not the selling process. They view the world as customers do, not as marketers want to.

Respect customer power

These new customer-centric four Ps of marketing demand an ongoing two-way dialogue, in which marketers listen more closely to their customers, understand what they're saying, and respond rapidly and appropriately. This requires segmenting customers at a more granular level than ever before.

It requires a deeper understanding of the individual customer lifecycle, and of the customer's cross-channel behaviour. When marketers gain this understanding, they can uncover crucial hidden patterns and opportunities, discover when to act and react, and even reinvigorate fading or threatened relationships.

Yuchun Lee, Unica's Chairman, CEO and Co-founder.