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- Europe ensures the success of our brands - 18. March 2016
- Our biggest challenge is the customer - 3. November 2015
Honestly, would you believe any entrepreneur who boasted: “We know our customers better than ever, because of digitization! We have a huge database full of customer data which reveals their wishes. We fulfill these wishes immediately and make our customers happy – and they reward us for it with their purchasing power and strong loyalty”. Sounds good, right? But let’s be honest: Few brands could actually claim that so far. Most are experiencing the opposite: the decreasing loyalty of their customers as they turn away, are suspicious and “ad-phobic”. In Germany, for example, 44 percent of all manufacturers’ brands are losing more than 30 percent of their regular customers per year – and the number is increasing, as we found out in a study with GfK.
What’s going wrong? To get an answer a change of perspective helps. Consider the situation from the viewpoint of consumers. They are, according to global studies, disappointed; in the United States, according to Accenture, more than four out of five consumers (84 percent!) are frustrated, because companies do not deliver what they promise. And we are not doing much better in Germany; where only 30 percent trust brands and their messages. Instead of the hoped for closeness to consumers, the advertising industry is experiencing estrangement. It is as if digitization has not helped them to get to know consumers better, as hoped, but rather to lose sight of them. With regard to entrepreneurial success, this is a catastrophic development. What can be done? One thing is clear; familiar methods will not help here, neither trusty advertising power nor wily technical finesse.
We need a fresh start. The product is no longer the starting point for all marketing activities, but the consumers and their life phases. They are the starting point of all activity; customer orientated production, brand management and marketing.
To inspire consumers, the marketing of the future has to create worlds of experience in which engrossing customer experiences ensure long lasting customer relationships. Airlines then sell travel events, not tickets. And car makers offer mobility experiences, not just cars. The product? It’s only part of a larger picture.
For marketing this change means, among other things:
1. Away from the “14-to-49-years-mentality” – towards micro-segmentation and personalisation
Because consumers move in the new consumer media world individually, media planning with rough-edged categories like “14 to 49” can no longer achieve a lot. In future the focus won’t be on target groups, socio-geographic data and ranges, but the stages of life, needs, experiences of each individual consumer. For the media planning for this personalization, we need more than ever to focus on methods such as micro-segmentation.
2. Away from the channel perspective – towards customer journey accompaniment
Nowadays, consumers use more channels, contact points and marketing resources for their purchases than ever before. The customer journey is now many times more complex than even ten years ago. Online or offline? It doesn’t matter, any mixture is okay. Studies show that few companies have concerned themselves with the customer journeys of their customers.
3. The way from the advertising message to relevant content offers
Exaggerated advertising promises no longer match present purchasing behaviour, because consumers believe nothing without checking. Up to 90 percent of product research is made before visiting a store. Therefore, companies need to develop ideas on how they can support potential customers at an early stage with information and persuasive arguments.
4. Away from self-serving data analysis – towards the use of media for customer satisfaction
In future it won’t be about hoarding data for advertising purposes. Instead, companies should consider how they can use the information to shape their business model, improve their products – and ultimately to make their customers happy. That is the real power of Big Data. Its intelligent use can be absolutely decisive.
Marketing can only achieve this fresh, stronger position if it drops outdated mechanisms and tactics; instead it needs the courage to make a fresh start. The consumers will be grateful. Our task, the task of the agencies, is to accompany this change, sometimes even to carefully push it.
This means we agencies need to reconsider our services and processes, to monitor and constantly optimize them to be perfect consultants for our customers in these difficult, but also exciting times. At Serviceplan, we are working on it; on a daily basis, at more than 30 locations worldwide. And, as of March this year, also in Spain.
First released in World’s Leading Independent Agencies 2016.
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