Marketing is getting confusing.
In the past three weeks I’ve listened—with a slack jaw and wide eyes—as CMOs and their marketing consultants casually upended so many traditional concepts, tenets, and principles. A veteran tech-industry CMO promoted the value of “anti-marketing marketing” at a time when, he says, seemingly every marketing message in his realm has become “cloud-washed.” Several other eye-opening insights, ideas, and opinions cropped up in recent discussions about the profession’s next 12 months:
- The 80/20 rule ought to be rebranded as the 50/20 rule.
- Harley-Davidson and Apple customers aren’t as loyal as we thought.
- Marketers can override autopilot purchasing.
- Some of the most valuable customers spend very little on products and/or services.
- Solution-selling is over.
- B2B marketing that focuses on business growth and bottom-line impact is overblown and off-target.
It’s a topsy-turvy time when longstanding marketing tenets are being tossed out the window. Even the research by Frederick Reichheld, the godfather of customer loyalty research, is being freshly scrutinized to see if it holds up.
I’m not alone in my quest for marketing clarity amidst this confusion. “We believe that many companies need to dramatically shift their marketing strategies to account for the rising power exerted on future customers by the opinions of existing customers,” write Stanford University Professor Itamar Simonson and his collaborator Emanuel Rosen, coauthors of the upcoming book Absolute Value: What Really Influences Customers in the Age of (Nearly) Perfect Information.
However, the rising power of peer opinions doesn’t influence all products, services, or purchasing decisions. Social media and the ubiquity of peer-to-peer information are shifting power away from marketers and to customers, but only with certain offerings. For example, you don’t grab your phone and click its Yelp app to choose a brand of juice. Instead, you probably buy Tang because you’ve enjoyed Tang since your mom served it to you as a kid. Fair enough, you say, but what about higher-priced consumer items? It turns out that many luxury–item purchases are based more on individual emotions rather than on customer reviews: So, springing for a $2,500 Tissot timepiece isn’t all that different from dropping $2.50 on a 20-ounce container of Tang mix.
It’s important for marketers to understand and distinguish among different sources of sway– what Simonson and Rosen describe as the “influence mix” in the January-February issue of Harvard Business Review. The pair writes that purchase decisions are usually influenced by three sources:
“P”: Prior preferences, beliefs, and experiences (including habits and auto-pilot decisions)
“M”: Information from marketers
“O”: Input from other people, including peers, experts, and related information sources.
Certainly, the sway of “O” has ascended in recent years, but it hasn’t achieved omnipotent or universal power over all purchasing decisions. And it probably never will. This is important to keep in mind at a time when “O” hype is extraordinarily high.
By understanding the degree to which “O” influences customers and targets, marketers can make better decisions regarding competition positioning, market research, segmentation, and more, note Simonson and Rosen, who provide a welcome dose of clarity at a confusing juncture.