In a previous blog post, I shared thoughts on a book chapter Naras and I are in the process of writing. I thought I’d follow up by focusing on one of the key external drivers forcing CMOs to take a hard look at their ecosystems.
Changes in Consumer Behavior
In the not-too-distant past, if you wanted to “buy” something, you went to a store (or several), evaluated your options and ultimately made a purchase. Now, brick and mortar stores have become little more than distribution centers for people who have done their “shopping” online and want the convenience of picking up in-store. Since 2000, online retail shopping has grown by 210% and accounted for a $130 billion market in 2008, according to comScore (SCOR). And while in-store sales are declining, online sales are, in fact, growing.
The shift in consumer behavior has been driven largely by the rapid adoption of technology, a trend that continues to grow as barriers (cost, ease of use and access) continue to decline. But the shift itself is only remarkable when you consider what has happened as a result: the balance of power has shifted from brands to consumers. Let there be no doubt, consumers are in control. They dictate when, how and through what channel they make purchasing decisions. They have to; after all, they are consuming more media now than ever before and must decide who to trust and where to get their information.
And consumers are often influenced by the points in the customer ecosystem over which CMOs have the least amount of control – peer reviews, bloggers, advocates.
To say that consumers view traditional marketing as irrelevant is an understatement. In a North American Technographic Benchmark Survey by Forrester Research, half of consumers surveyed indicated that the marketing emails they received were irrelevant to their wants and needs. More than half felt there is too much outbound marketing cluttering their inboxes, flooding their mailboxes or tying up their phones. In other words, consumers are overwhelmed by the amount of information thrown at them.
It’s no wonder that they’re wary of brands and trust their peers more than anyone else. But if traditional outbound communications have lost their efficacy, what then is marketing’s job? Harnessing the power of the advocate.
Once again, this is why understanding the customer ecosystem is critical. According to a Nielson Global Online Consumer Survey, recommendations from personal acquaintances or consumer opinions posted online are the most trusted form of brand advertising. 90% of those surveyed indicated they trusted recommendations from people they know while 70% felt that consumer opinions were trustworthy.
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In my next post, I’ll include a visual of the customer ecosystem and discuss why it is so important for marketers.
