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ConsumerLoop #11, December 2001

Complete control

For many years marketers were in control and advertised their products and services in order to sell as much as possible of what they produced. However, there has been a seismic shift in recent years and it is now the consumer that calls the shots. This change in the centre of control has substantial implications for marketing as traditional marketing practices have been established around the marketer in the controlling role.

At the same time we have been witnessing an increase in the disenfranchised consumer in developed markets. This shows that marketers now have to take into account a consumer who is knowledgeable about marketing and, in many cases, cynical. They may deconstruct marketing messages or, in more extreme cases, set up pressure groups to air their views on specific marketers or marketing practices.

The move away from mass marketing towards one-to-one and niche marketing also plays a key role. Consumers will increasingly expect marketers to deliver what they are looking for, not a product or service that is simply designed to appeal to as many potential buyers as possible. They are looking to direct a dialogue with a marketer not receive a monologue.

The consumer in control is one of the most important Forces of Change impacting on marketing today as it is changing so many of the practices and processes that are established. Through the Loop has been analysing some of the implications of this as part of its Knowledge Development Programme.

Why is there a need for more control?

This need for having greater control results from a number of factors. The overriding factor is the rise in uncertainly in life. This has occurred for a number of reasons, some of which are closer to individual consumers and some of which are more macro but make a clear impression.

Major world events can impact on consumer uncertainty and lead to buying decisions being postponed or cancelled. It is too early to be sure of the long-term impact of 11 September or the foot & mouth outbreak in the UK. However, research has shown that short-term uncertainty may not necessarily dampen longer-term underlying optimism.

Closer to home there is frequently less stability in consumers’ lives. Changing working practices have meant that there is a job is no longer guaranteed for life. Work may not provide the security required for consumers and their families. Furthermore, they may find that their journeys to and from the workplace are taking longer due to traffic congestion. Some have been looking to downshift, opting out of the normal working environment for a different type of life. Others will look to change how they work within “traditional” employment. Employers and employees have to work together to find ways to bring a level of personal control back into the workplace.

Time pressure is increasing. A reduction in working hours was supposed to lead to greater leisure time. Have working hours actually been reduced? In addition, there is an increasing number of activities that make demands on precious leisure time. Consequently, there appears to be less time to relax and take things easy. This adds to the level of stress experienced and a perceived loss of control.

Changing social patterns includes the fact that more women are working and in increasingly senior roles. This leads to a shift in how household roles and childcare are allocated between parents. This means that there is an opportunity to help consumers maintain control over their home lives.

On a more micro level, the personal information that is being collected from consumers whenever they use a credit card, visit a Web site or telephone a call centre leads to a degree of uncertainty about how that information will be used by the company. Consumers will look for confirmation about what is collected, how it is stored and how it is likely to be used. They want to retain control of their own personal data.

The role of consumer information

Previous Loop newsletters have referred to the issue of “perfect information.” This alters the role of marketing communications and has a major impact in the area of pricing. It is increasingly difficult to maintain differential pricing, not just across different retail outlets but also across countries. Consumers are more aware of what is charged in different channels and are more easily able to buy across borders if they can obtain something cheaper. This is probably the major driver bringing down prices in some countries such as the UK and means that, ultimately, there will be no price wars. Marketers will not be able to use confusion pricing policies to ensure that their prices cannot be compared with competitors.

Consumers are increasingly aware of the company behind the brand and will evaluate a brand in terms of the wider picture. Companies are providing more information to consumers, often through Web sites or sponsorship initiatives, while other intermediaries are being established to help consumers learn more about companies and brands.

These new intermediaries provide a simple means of comparison for consumers. These new intermediaries will be able to act as “reverse advertising agencies.” The consumer will be advertising his or her interest in purchasing a product to the marketer rather than a marketer trying to sell a product or service to as many consumers as possible. Web sites are already operating that enable consumers to group together to obtain price discounts from suppliers. Other services will compare companies and brands in terms of ethical audits or levels of consumer satisfaction or complaints.

Even more likely, buyers will opt for products and services that are quick and easy to understand. There will be an opportunity for marketers who talk the consumer’s language or for intermediaries who “translate” and compare supplier offers. 

Customer loyalty is the most important factor determining the success or otherwise of a company. This cannot be guaranteed. Furthermore, customers talk about their experiences with companies. If they are dissatisfied they are likely to talk to more people. This does not mean demonstrating in the streets. It could be wider, however, than talking to friends. Consumers are more willing to complain about a bad experience and this could include talking to the media or even creating a Web site! Ultimately consumers vote with their wallets.

Implications

The consumer in control opens up tremendous new opportunities for marketers. However, in order to take advantage of this, many marketers will have to undergo a major rethink in how they communicate with consumers and even how they manufacture products or run service offers.

The shift from broadcast towards narrowcast communications will become more pronounced. Marketers will have to learn how to enable and respond to dialogues with consumers. Intrusive marketing communications will be shunned, as they will be viewed as trying to wrest control away from consumers. However, communications that are requested will be welcomed.

Products start to take on a greater element of service. Marketers will be expected to provide solutions that makes consumers’ lives easier that can involve product or service elements. This will often involve the new intermediaries that will be founded to help consumers, often by acting as a link with suppliers or aggregating products from several suppliers, simply doing the shopping. Solutions providers will move from the business-to-business to the consumer sector. Consumers will look for help in different areas of their lives from running the home to looking after children and understanding finances.

Time slippers will look to obtain the maximum possible advantage from all occasions. The long journey to work will represent an opportunity to gain time as the car is transformed from a mere means of transport into a mobile office or entertainment centre. One result will be more time listening to the radio and less time watching television. It is changes like this that will have a resulting effect on how marketing communications are developed as consumers’ media habits are changing significantly.

Customer focus will be the key to success. Marketers will have to shift their focus from internal processes (products) or channels (media or distribution) to the customer or consumer. This could include restructuring the company around wants and desires of the market-place so that the appropriate products and services are developed for the different customer groups. This also avoids the situation where different divisions of the same company are selling different products to the same consumer with little or no knowledge of that the other is doing. 

We have entered an age where the consumer not the marketer will dictate choice. At the same time, the market-place has become increasingly competitive and so the winners will be those companies that listen to the consumer not try to sell to them. The marketing flow has been reversed.

Action points

  • How does the new type of relationship affect how you listen to your consumers?
  • What mechanisms do you have for listening to consumers?
  • How is consumers’ personal data handled?
  • Can you develop products and services that help consumers take control of their lives?
  • Are you working with consumer agencies?
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