afaqs!

Guest Article: Venkat Mallik: There is more to it than digital alone

By Venkat Mallik , Rapp India, Mumbai | In Digital | January 28, 2011
Everything that we have known about marketing is incorrect because of the excessive dependence on opinion research in the past.

There is this story about a casino which learnt that spraying a particular kind of perfume made its patrons spend more money because the smell just made them feel better, richer, more reckless, whatever. A great consumer insight, and certainly, a profitable marketing strategy.

But, I have one question..

What's the medium, dude? Thin air?

Scent marketing and sensory branding has been around for a bit, and I guess all of us know about the smell of food making us hungrier and having the Pied Piper effect on us. The point is not of scent marketing. It's about the fact that as we get more and more insights into customer preferences, and why they buy or behave in a particular way, the number of new avenues for us to get them to buy (or buy more) begins to explode. Those avenues are not just about media thinking, whether traditional or new age.

In the same vein is the example in Martin Lindstrom's book 'Buyology', about the bank that painted itself pink. The colour pink triggered childhood associations with the pink piggy bank, a somatic marker that created a feeling of comfort and security. The bank went against the banking convention of 'suit' colours, and needless to say, succeeded against the run of play.

Clearly, opinion research couldn't have given us either of the above insights.

Radical expert opinion suggests that everything that we have known about marketing is incorrect because of the excessive dependence on opinion research in the past. The 4 per cent 'human' in us has historically covered up the 96 per cent 'animal' in us, in ways, which have completely vitiated marketing learning.

So, while there are a lot of new changes in the new world of marketing, many of them around how digital will change life for all of us, the first, and probably the most fundamental change driver, will be new forms of research which give us insights that opinion research just hasn't delivered.

There are huge gaps between what consumers say and what they do.

So, what car are you going to buy, Sir?

I am certainly going to buy the ..... 7-series, or the next-in-line sports convertible.

What car do you own, Sir?

I currently use the metro because I think it's important for the future of the human race to reduce the number of cars on the road.

Consumers do tell you what will make them look good, rather than what they really intend to do. And, sometimes, even they themselves don't know what they might do.

We have carried out observation studies for a global confectionery major and have learnt that 70 per cent of the decisions get made at the point of sale. Positive attitude be damned! Repertoire buying categories dominated by FMCG have seen that the consumer has three or more preferred brands, and that she happily chooses between them, or sometimes, outside them. Consumers probably don't even think enough about it and prefer taking it as it comes within broad mental boundaries. Imagine drawing up a mental excel sheet to buy your next pack of soap!

New insights into how and why people buy are getting us to think differently about marketing for sure. And, there is much more to come.

This brings us to the next story indicating the second trend discussed here. A few years ago, a rather well-known retail chain sold a leather bag to a customer. The bag turned out to be defective. So, the customer called the outlet and went through the usual struggle of not reaching the right person and not getting a solution beyond the typical 'laissez faire' treatment. Until, she went digital! And then, the PR team, the digital agency and everyone around them were looking for her so that the bag could be replaced! Manufacturer power, to channel power, and finally, to consumer power.

Customers have had complaints against brands and companies for times immemorial. But, to wash your linen publicly wasn't easy. The internet, with its one degree of separation, has helped change the balance of power. Now, when someone says brand owners are no longer in control of their brands, you know what it means. Finally, consumers can give brand owners the knuckle treatment.

This presents great opportunities, though, as in, positive word-of-mouth helps create more sales. The bigger story, which all of us kind of sense, is that people (customers) are now able to get opinions from close friends and not-so-close friends who might know a bit more about the new phone or television they intend to buy. This makes the impact of what customers or people think, feel or believe about our brand of much greater significance because they can tell so many more people. And, they probably do!

This logically leads to the next big shift. Customer service departments now often have 'marketing budgets'! Brands need to keep their customers happy so that they do not raise their voices negatively, and hopefully, share a good word. Coupled with that is the increasing difficulty in getting new customers and the scarcity of profitable new customers.

The concept of Customer Lifetime Value is clarifying to businesses around the world that the customers they acquire often cost more to acquire than their lifetime payback. And, once acquired, keeping them happy and making them spend more is integral to creating and running a profitable business. So, businesses around the world are beginning to balance the marketing spends between acquisition and retention / cross sells. Customer service has become integral to marketing. There are concepts such as one customer view, branded customer service, living the brand and many more to please customers, because happier customers give better value.

Suddenly, the individual customer has become important (and, no longer relates to the homonym). The need to stay in touch with the customer and know his or her views at an individual level requires a different kind of marketing mindset and skill-set. One-to-one management of customers calls for tracking customers at the individual level. This involves, for instance, keeping a tab on their service experience, transaction history, their demographics and life stage, and if allowed access, on information such as their attitude towards life and our brand or service. This, in turn, calls for the need to have the right kind of technology and processes to gather such information, analyse and make use of it. This is where marketing technologists and specialists in analytics come in -- a slightly scarce and new-found expertise area critical to creating smarter ROI driven marketing programmes.

Talking about ROI, 'Dhandhha do warna danda lo' seems to be the post recession attitude among clients who say that they will pay for delivered behavioral results rather than attitude change. If you want my money make the horse drink the water.

The cascading effect is that agencies are back to talking behavioral shift after a holiday of a few years, and their structures are getting even more complex. It's become more than a full-time job, and a bit too complicated for clients to deal with multiple parties with new age specialisations and then integrate the plan at their end.

Clients probably want marketing communication partners to give them a solution, which is packaged from beginning to end with the added proviso of responsibility for end results, rather than a 'relay race' model! So, the era when agencies could just say "we deliver positive brand attitude with the rest being handled at the client end" is kind of fading away.

All these changes call for a new form of marketing and communication leadership. A thinking leadership that helps us unravel the real truth, rather than use strategies and methods from the past that have a success rate of one in 10 or more attempts. And, we need new structures and capabilities to help deliver keeping in line with the new thought process. Agencies like ours and others of our ilk now promise to study consumer attitudes and behavioural patterns, including transaction data amongst others to get a real insight before suggesting an end to end Marcomm solution which helps deliver behavioral change. And then again, if you agree with our suggestion, we make it happen for you irrespective of what it takes, and still bow to say two bags full, Sir!

Let's rap to this new world of marketing...

(Venkat Mallik is president, Rapp India, a part of DDB Mudra)

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