Posted on: Wednesday 10th of August 2011
Two years ago, McKinsey reported on a multi-category, multi country research project which showed that in the face of exploding product choices and digital channels, the increasing need for two way conversations with consumers and “the emergence of an increasingly discerning, well-informed consumer”, marketing strategies that rely on “influencing customers by relying solely on one-way, push advertising” were losing traction.
They’ve just revisited this research and report that “this evolution has only accelerated” as consumers go online to social networks, blogs, review forums etc “to quench their thirst for objective advice about products”.
McKinsey draw one important conclusion: As the avenues (or touch points) customers use to interact with companies continue to multiply, “the problem for many companies is that the very things that make push marketing effective—tight, relatively centralized operational control over a well-defined set of channels and touch points—hold it back in the era of engagement.”
However, there is a much bigger conclusion that McKinsey haven’t cottoned on to yet: it’s about content as well as process. Nowadays consumer-facing brands are competing in two markets, not one. There are traditional markets serving consumption needs via products and services. And there is a rapidly emerging market for decision-support services that the provide the information, tools and services that consumers need to make better decisions about these products and services.
This ‘second market’ for better decisions is, in many ways, more important than the first market for products and services, for two reasons.
First, value. A better decision offers more value than a better product or service – because, by definition, a better decision leads you to the better product or service anyway.
Second, trust. Traditional brand trust revolves around making and keeping product performance promises. That’s great. We can’t do without it. But now a new level of trust is emerging: “can I trust you to help me make a better decision, or will you seize any opportunity to bias and influence the outcome in ways that benefit you more than me?”
Through the blinkered lens of marketing’s traditional persuasion-paradigm, the emergence of this second market looks very threatening. In fact, it’s paving the way for new win-wins, as brands evolve towards a new role as providers of information services. These can help cut go-to-market costs, and build trust and customer engagement at the same time.
Helping individuals make and implement better decisions is the new highground of value. Brands, new and old, now need to find ways to scale this peak.