John Walsh is Professor of Marketing at IMD. This article is based on a presentation that he gave during the Orchestrating Winning Performance programme, on which he teaches.
Companies have often grappled with the ‘ownership’ of their brands. Ultimately, the brand is simply what it represents in the minds of consumers. Strong brands generate strong emotions and consumers can have a real sense of ownership – and an equal willingness to criticise decisions that affect that brand in ways that they do not like.
It used to be said that consumers having a negative experience with a brand might tell as many as 10 people, whereas those with positive experiences might tell only as few as three. In other words, negative word of mouth spread faster than the positive. The advent of the internet and various social media facilitates opinionated consumers to exchange ideas and influence others. Word of mouth has been turbo charged. Opinions reach billions. Consumers have formed a collective. They have unionised.
The free-flowing exchange of information, the inter-connectedness of consumers, has changed the marketplace. Now, the market bears many of the characteristics of an organisation, albeit a loosely formed one.
Thinking of how we manage employees might help us as we grapple with the new phenomenon of the connected consumer.
Managing customers
1. Communication
The connected consumer places high demands on the brands they buy and are not afraid to ridicule communications that are inconsistent or poorly thought through. A brief scan of YouTube illustrates the point – countless user-generated parodies of advertisements are available, with many viewed much more than the original.
2. Motivation
What motivates consumers to buy or to be loyal to a brand is even more important nowadays. As the number of touch-points between the brand and the consumer proliferate, it is important that the messaging from the brand is consistent with the motivations of the consumer.
3. Delegation
Many companies are already involving the connected consumer in a variety of interesting ways. Companies are now co-creating products and solutions with consumers.
The key issue, as with the case of managing employees, is what to delegate to consumers and what to keep for determination by management. Involving consumers in even the most simple of decisions can have unintended consequences; such as customers selecting a model or direction that doesn’t reflect a company’s ‘image’.
4. Accessibility
Brands should have an open invitation to consumers, whether it is to complain or compliment. Many companies now go beyond passively waiting for consumers to contact them to complain and operate a sort of outreach program, where blogs, chat rooms etc. are scanned to address issues being discussed among consumers and deal with product or service concerns proactively.
5. Learn from mistakes, openly
Good managers learn from their mistakes and the same is true when dealing with connected consumers. Marketing-savvy companies have grappled with the impact of Facebook, Twitter etc., where opinion, whether ill-informed or ill-intentioned, can flow freely.
6. Fairness
Nobody likes to be treated unfairly and the connected consumer can be quite vocal if he perceives an injustice. However, fair need not necessarily mean equal. Consumers can be valuable to companies because they buy large volumes and perhaps those who buy more should receive a lower per unit price. However, even consumers who do not purchase much might be of great value because they can, for example, refer other customers to a brand, give positive reviews, provide suggestions for improvements etc. and this value should be rewarded.
