What can the creator of the first department store, an epic fantasy television series and a former hedge fund manager teach us about modern marketing?
Read on to find out.
John Wanamaker, the father of modern advertising and the creator of the first department store in Philadelphia back in 1910, is famous for his well-known quote:
“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
With the mainstream adoption of trackable display and performance advertising, this quote is increasingly untrue for digital marketers. But Wanamaker was also the source for another less well-known quote which is more appropriate to our times:
“When a customer enters my store, forget me. He is king”
A king is in command. A king can do what he wants. A king acts and everyone else reacts. And if you watch HBO’s epic television series, “Game of Thrones”, you know exactly what I mean.
So why is this more true today than ever before? It’s because we are in the middle of experiencing 3 of the biggest “FROM – TO” changes the world of business has ever seen.
FROM Information Drought TO Information Deluge
It used to be that if you were a consumer and you wanted to learn about a product or service you had to rely either on TV, a few close friends, or a sales rep. If you were a business buyer you had to rely on the once a year trade shows or dust off an outdated analyst report. But now everyone one can instantly tap into opinions and reviews from the hundreds of millions of users on Facebook, Twitter, and Yelp. You can see product demos and how-to tutorials on Youtube. You can find in depth answers on Quora. Discover dedicated interest groups on LinkedIn. See detailed product breakdowns on Pinterest. Now everyone can, with a little time investment, become more knowledgeable about a product than even maybe the people who work at the company that produces it.
FROM Buy then Try TO Try then Buy
It used to be the norm for a buyer to part with their hard earned money before using a product. Often the product would not live up to its promises but the buyer was locked into a contract or had spent their budget and couldn’t afford to buy something else. With the rise of freemium buyers can try before buying. With the subscription model you can pay month to month and leave if the product doesn’t continue to live up to expectations. Knowing the buyer can make a decision at any point in a time, and not a single point in time, shifts the power to the buyer. It’s no longer caveat emptor.
FROM Limited Choices TO Limitless Choices
Let’s consider for a moment how buying a car has changed. In the past you had one or two dealers in a town and those dealers had a limited number of models. So at most you might consider two or three cars before entering into a slightly bizarre negotiation ritual between the car salesmen and some manager in a back office. You eventually drove off the lot unsure whether you had a deal. Today when you buy you have vastly more information and can negotiate precisely and with confidence. Taking it a step further, you may never even purchase a car and just use services like Zipcar or Lyft. Choice has exploded.
So given this new uncharted territory where customers are kings, how do you as a marketer and a leader within your organization survive and even prosper?
Here are 3 changes you need to help your organization make:
FROM Buyer Transaction TO Customer Relationship
The role of marketing does not end after a customer has bought something. In fact a recent study by Totango showed that on average, companies spent only 21% of their marketing budget on existing customers, whereas these customers represent 61% of their revenues. So the new role of marketing is to shift your mindset away from acquisition and towards relationship marketing. What does a customer need now? What will they need next year, and the year after that? And customers don’t just want to buy stuff. They want to learn through content marketing, they want to get better at doing their jobs. Marketing is about getting customers to open their minds not just their wallets.
FROM Functional Silos TO Customer Journeys
The freemium model has blurred the lines between Product and Marketing. The explosion of social sharing and the ways to express opinions in public at scale has blurred the lines between Marketing and Support as Mimecast and Get Satisfaction eloquently articulated in last month’s LaunchPoint webinar. Customers have problems or questions and they just want them solved or answered. A customer doesn’t care about your functional silos. So, forward-thinking marketing organizations think in terms of customer journeys. There is no destination. Just stops along a continuing journey.
FROM Reactive Renewals TO Proactive Engagement
How many companies have you worked in where the customer only hears from the company just before contract renewal? Contrast that to companies such as Amazon. In his letter to Amazon shareholders this year, Jeff Bezos (remember that former hedge fund manager we talked about earlier?) recalled a story about an Amazon customer who received an email (and refund) from Amazon on his rental because they “noticed that (he) experienced poor video playback while watching Casablanca on Amazon Video On Demand.” Two things are noteworthy about this story. First, that it’s now possible to measure and monitor the customer experience in real-time. Second, that being proactive gets a different qualitative response from customers. It builds customer trust and loyalty. Bezos has built a $60B business in less than two decades on this core premise of being customer rather than product driven. He started with books, and then expanded to music, movies, clothes, toys, and electronics.
This change is hard – no doubt about it. But like any epic journey, it’s worth it. If you want to embark on this journey then it’s advisable to learn from someone who has already started ahead of you. Andre Pino, VP Marketing at CloudBees is one such pioneer. Register for tomorrow’s LaunchPoint webinar at 10am PT to hear Andre talk about how they are orienting around customer engagement to adapt in the new kingdom of the customer.