Will Near Perfect information Change Your Marketing Strategy Thinking?
The entrepreneur always searches for change, responds to it, and exploits it as an opportunity. Peter Drucker knew about opportunities, didn’t he? We are certainly well into the age of change created by the internet and digital technology applications. We are now seeing the changes in shopping created by customers taking advantage of the near-perfect information. So we don’t have to search very hard for change, do we? But exploiting it is a bit more difficult. In this article, we’ll explore how to change your marketing strategy thinking to give some ways so these changes create better business opportunities.
We recently came across a book that got us more interested in this topic. The book is Absolute Value: What Really Influences Customers in the Age of (Nearly) Perfect Information. This book is about how marketers should respond to more savvy shoppers making smarter decisions because they have access to more information and more options than ever before. It helps us consider the question of whether to change your marketing strategy plan.
Written by marketing experts, Emanuel Rosen and Itamar Simonson, Absolute Value is essentially a manifesto for marketing to the new smart consumer empowered by technology and near real-time information.
The underlying argument of Absolute Value is that technology has changed how shoppers go about value-maximization – the fundamental objective of shopping behavior. (i.e. trying to get the best bang for their buck). Here is some of the evidence offered by the authors:
Research done for Google in 2011 found that the average shopper now consults 10.4 sources of information prior to purchase— almost twice as many as in the previous year
Consumer confidence in reviews around the world is increasing. In 2012, 70 percent of consumers surveyed online by Nielsen indicated that they trust online reviews—an increase of 15 percent in four years.
Thirty percent of U.S. consumers start their online purchase research with Amazon.com, which, with its wealth of reviews, has become a clearinghouse for product information.
Note that value-maximization is all about choosing the option that provides the best subjective perceived value (influenced by cultural, social, personal and psychological factors) for the money paid.
It certainly does not imply always going for the lowest price. This is because customers are often willing to pay a premium for service, experience and image part of the value proposition.
Related post: Case Studies to Evaluate New World Marketing Concepts
Until recently, consumers have been hampered by two barriers to value-maximization; imperfect and partial product information. With only partial information to inform a purchase, our selection process for the best value is sub-optimal.
However, technology is changing all this – making value-maximization a whole lot easier through potentially perfect and unlimited information available on-demand and on-the-go. And ideally, it is combined with a buy button that lies in the palm of every hand. As Absolute Value authors point out:
Marketing Strategy Thinking
The practical upshot is that technology is making consumer markets increasingly rational – people are value-maximizing better. To back up their point, the authors point to a number of studies showing that ‘irrational’ consumer behavior (not value-maximizing) often disappears in the real world, information-rich situations.
Armed with technology and information consumers behave increasingly rational.
Absolute Value suggests instead that marketers should focus on communicating the “absolute value” of what we are promoting – the experienced value of the product itself, rather than building the brand image or brand loyalty.
Marketing Strategy Thinking
The practical upshot of this is that in a world where consumers choose based on absolute value rather than brand spin, the central role of marketing changes from brand marketing to product marketing.
The authors sum up their view with a nifty quote by innovator James Dyson:
There’s only one word that’s banned in our company: brand. We’re only as good as our latest product. I don’t believe in brand at all.
Rosen and Simonson suggest the implication is clear for marketers – they need to focus on delivering the best value proposition – clear, distinctive and desirable – for target markets. In essence, what is needed is a good dose of rational marketing.
See our article on how to create the best Unique Selling Propositions.
Keep observing: Case Studies to Evaluate New World Marketing Concepts
Specifically, five implications for marketers emerge from Absolute Value:
Less focus on branding, more focus on product
Less focus on nurturing loyalty, more focus on innovation
Less focus on the “irrational consumer”, more focus on the rational consumer
Less focus on “choice overload”, more focus on empowering choices
Less focus on brand positioning, more focus on product value
Marketing strategy thinking … our takeaways
Absolute Value is a compelling read for marketing people who want to understand how technology is changing how shoppers decide. It is loaded with examples and provides a useful new framework for marketing to the smart consumer.
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But in our opinion, Absolute Value is really not absolute. We are certainly heading in the direction the books says. However, there are many ‘soft’ factors in product and service selection.
As long as these factors are influential factors in the value equation, the absolute value will not be so absolute. Where customers are most heavily influenced by price as their value measure, the changes suggested by the authors are more pronounced.
One thing we need to point out in either case: businesses certainly need to get their absolute value proposition right.
So what’s the conclusion? The conclusion is there is no conclusion. There is only the next step. And that next step is completely up to you. But believe in the effectiveness of great value propositions and word of mouth marketing. And put them to good use.
It’s up to you to keep improving your creative marketing efforts. Lessons are all around you. In this case, your competitor may be providing the ideas and or inspiration. But the key is in knowing that it is within you already.
All you get is what you bring to the fight. And that fight gets better every day you learn and apply new lessons.
When things go wrong, what’s most important is your next step.
Try. Learn. Improve. Repeat.
Are you devoting enough energy to improving your marketing, branding, and advertising?
Do you have a lesson about making your marketing strategy better you can share with this community? Have any questions or comments to add in the section below?
Mike Schoultz is the founder of Digital Spark Marketing, a digital marketing and customer service agency. With 40 years of business experience, he blogs on topics that relate to improving the performance of your business. Find them on G+, Twitter, and LinkedIn.
Digital Spark Marketing will stretch your thinking and your ability to adapt to change. We also provide some fun and inspiration along the way. Call us for a free quote today. You will be amazed at how reasonable we will be.
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