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.
One of these forces is so fundamental that it actually enables many others. I describe it as being where the traditional information asymmetries have been inverted.
Put more simply, while we as individuals used to have less information than brand owners, today we often have more.
Intuitively we all know the truth in this. For an easy example, just think about how buying a car has been transformed in recent years. Most car buyers today walk into the car dealership with more knowledge of the car they are 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 many of their friends think it’s a great car.
What is less understood is that this traditional information asymmetry has in fact been the foundation of the past 50 years or so 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. This foundational assumption holds that a consumer has only a limited number of brands they are likely to consider for any purchase. Depending on the value and emotional significance of said purchase, they will only conduct deeper information searches within this pre-existing consideration set. If we use our car example, the assumption would be that a consumer might only consider from within a subset of the total choices on offer at their price-point and car type, for example Chevy, Dodge, Ford, Chrysler and Toyota and as a result, exclude such brands as Honda, Hyundai, Volkswagon or BMW.
In this world the use of advertising spend and promotion creates a barrier to entry and an exclusionary force preventing new brands from entering the consideration set. Historically, having 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, as David Edelman noted in the Harvard Business Review the assumed funnel no longer exists. Instead the consumer today 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. He calls this new mode of purchase the Consumer Decision Journey, and the article is well worth a read.
When Fred Wilson of Union Square Ventures stated that “I believe that marketing is what you do when your product or service sucks” I’d say it was this old world that is currently breaking down that he was describing.
Living in an inverted world where the 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) from the information search has increased their consideration of other brands with potentially superior products. In this world 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 (who 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 Applecare, iTunes and the App Store. For Amazon 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 radically and quickly disrupted existing 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 entirity of an increasingly non-linear sales path
The days of the sales funnel were relatively straightforward, and easy to map, particularly in terms of when and where people fell out of the funnel and what you needed to do to become more relavent relative to your competition. In fact sales funnel analysis was (and still is) a staple offer from many marketing consultancies.
Today, we’ve swapped a linear funnel for an often highly non-linear ( and sometimes seemingly completely irrational) decision making journey.
In this world, all channels of communication and of information search, particularly the explosion of digital one’s that exist around the brand become incredibly important.
Today, for example, it may be that having someone providing customer service on a major 3rd party product-category forum be a more important driver of final sale than any of your traditional marketing communications.
Image borrowed from: http://www.geeksix.com/wp-content/uploads/2010/03/upside-down-world-map2.gif