Getting In Sync - 10 Trends In The Consumer Marketing Landscape

GETTINGINSYNC. TRENDS IN THE CONSUMER MARKETING LANDSCAPE

@ www.33interactions.com.au

THE ‘NEW CONSUMER’ BRAND ARCHITECTS. WE SYNCHRONISE BRANDS WITH EMPOWERED CONSUMERS. 2

We achieve this by designing “just for me” brand propositions and weave those propositions into the lives of consumers in fresh and creative ways, to develop lasting customer relationships and advocacy.

Jeeva Sathurayar | Joel Maloney 612 9993 0450 | [email protected]

@ www.33interactions.com.au

AGENDA. » Introduction » About this Briefing » Getting in Sync » The Fine Print

± Trends 1.

Desire for greater control in our lives and over our interactions.

2.

Search for meaning and authenticity.

3.

Trust in a person like yourself.

4.

Experience matters.

5.

Participation as consumption.

6.

Web 2.0 is mainstream

7.

Social patterns enforced through digital tools.

8.

Immersion of technology into our daily lives.

9.

The Connected Customer.

10. Non-linear purchase funnel.

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IF MARKETING METHODS HAVE NOT EVOLVED IN CONCERT WITH TECHNOLOGICAL AND SOCIAL EVOLUTION, ARE WE OUT OF SYNC WITH CUSTOMERS? The short answer — YES! Consumers are adopting new technologies such as social networking, podcasts, blogs, RSS, commenting, rating, widgets, mobile, and apps faster than we can keep up. Breakfast TV covers Twitter before most marketers have figured out how or if they should use it. II

Search engines have taken centre stage in purchase decision making and online social usage has altered the consumer marketing landscape. Brands offering people something, compete with everything a few clicks away. The “Internet is a nearly perfect market because information is instantaneous and buyers can compare the offerings of sellers worldwide. The result is fierce price competition, dwindling product differentiation, and vanishing brand loyalty.” Robert Kuttner, BusinessWeek, 11 May 1998 Customers can find what they want, critique brands that don’t deliver, and connect with peers to spread criticism across the globe instantly.

Traditional marketing is not working: 95% of consumer product introductions fail to reach ROI targets; 84% of B2B marketing campaigns result in falling sales; 85% of sales promotions are unprofitable; and 72% of TV advertising campaigns fail to achieve positive ROI. Today’s consumer is technically adept, open for experimentation and — most importantly — more active than ever before. Traditional communications, based on classical conditioning and clever ways to dispose of products, does not address connected, savvy, and empowered consumers. For brands to remain relevant, they must adapt to both emerging technologies and shifting consumer behaviour, and create genuine customer value — brands need to get in sync with new consumers.

ABOUT THIS BRIEFING. This briefing is a ‘synopsis’ of a body of work undertaken by over 30 individuals from 12 countries, spanning five conti‑ nents — taking over four years to complete since late 2004 – and not to mention the numerous sources we researched. Brands were finding it harder to connect with consumers; conventional wisdom seemed irrelevant; and CRM systems and 1‑2‑1 promised much but delivered little. The Internet, globalisation, and hyper-competition propelled us away from a production‑led economy to an economy driven by consumption. Our task was to identify this distinctly different creature known as the new consumer, and to develop frameworks to help brands and agencies develop real responsiveness to this new consumer. We found that: a) brands were out of sync with new consumers; b) in a consumption-driven economy, successful marketing must be underpinned by customer value; and c) successful marketing forms a dyanamic system that offers real respon‑ siveness to the new consumer. In other words, brands need to get in sync with new consumers by bringing together new marketing ideas to change the way they connect with their consumers. Brands need to rethink the way they create conversations and relationships with consumers and the way they engage consumers across channels. They need to provide valuable services over one-way messaging, deal with an increasingly complicated and expansive content distribution model, and address the empowerment of connected customers. This briefing outlines trends in the consumer marketing landscape and core ideas that brands can address to remain relevant today. For information on workshops and strategic planning, please get in touch with Jeeva or Joel on 02 9993 0450. This briefing document is provided in good faith to parties receiving the “Getting in Sync with New Consumers” briefing and may not be distributed in any form, sold for profit, or incorporated in any documents without written permission from 33 Interactions Pty Ltd. Third party material referenced in this document is the domain of respective parties.

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GETTING IN SYNC. Organisations need to adapt to shifting consumer behaviour and emerging technologies and address the empowerment of connected customers immediately. We have developed a comprehensive programme to help organisations and their suppliers “get in sync” with new consumers and create lasting transactive relationships that result in consumer advocacy (recommendation and referral). Briefing sessions on “trends in the consumer marketing landscape” and “ideas in 21st century marketing” are provided at no cost to organisations and marketing agencies. Marketers can develop specific actions plans in full day workshops to address an increasingly volatile marketing landscape. Tailored workshops help participants deal with specific consumer marketing problems and address emerging trends and technologies. Our workshops take a step-by-step approach to plan and implement marketing programmes including the use of specific marketing tools, best practice examples, and related theory. Workshops cover: *1-2-1 communications; *interaction design; *social marketing; *marketing integration; *the new brand positioning; *micro‑interactions; *crowd sourcing; *brand experience; and *technology-based marketing systems. Our strategic planning helps clients and their agencies align marketing strategy with contemporary consumer behaviour and emerging technologies, and covers: *alignment of marketing with the CEO’s agenda; *alignment of marketing strategy with the new consumer; *integration across the marketing communications mix for response; *ROI and ongoing customer dialogue; and *brand positioning in the 21st century. We use a zone based approach to focus participant effort on specific outcomes. The Five Zones© (Insight, Breakthrough, Transformational, Impact, and Results) enable participants to develop breakthrough strategies that achieve business objectives. To arrange a briefing session, please contact: [email protected], [email protected] or [email protected].

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TRENDS IN THE CONSUMER MARKETING LANDSCAPE. 1. Desire for greater control in our lives and over our interactions. 2. Search for meaning and authenticity. 3. Trust in a person like yourself. 1

4. Experience matters. 5. Participation as consumption. 6. Web 2.0 is mainstream 7. Social patterns enforced through digital tools. 8. Immersion of technology into our daily lives. 9. The Connected Customer. 10. Non-linear purchase funnel.   COPYRIGHT © 2007–2009 BY 33 INTERACTIONS  |  WWW.33INTERACTIONS.COM.AU  |  [email protected]

MORE CONTROL.

1.

As we move faster and more furiously throughout our ‘always‑on, always‑connected’ lives, we become sharply aware of the demands on our time and the lack of control we have. The end result is increased tension and a desire for greater control.

The more you see the less you know The less you find out as you grow I knew much more then than I do now U2

And not having that control, especially in interactions with products and services, motivates people to become more vocal and audible about how they deal with companies and brands.

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GUARDING 1.1 AGAINST INTRUSION.

Customers face intense levels of message saturation and intrusion from marketing today. 3

Customers have subsequently cultivated much higher levels of resistance to marketing practises and messages. Consumers have no desire to stop shopping altogether but they want to be engaged by marketers in a more satisfying and less intrusive manner — they just want a better way to interact with marketers.

“...people are realising that web 2.0 is actually a huge time sink. Facebook, Twitter, Flickr and Plaxo may have helped foster community and communication, but they’ve also added immensely to the flow of often-interruptive messages that their users receive, leading to information overload and possibly a nasty internet addiction.” Betsy Schiffman, Wired Magazine, April 2008

  COPYRIGHT © 2007–2009 BY 33 INTERACTIONS  |  WWW.33INTERACTIONS.COM.AU  |  [email protected]

SEARCH FOR MEANING AND AUTHENTICITY.

2.

Authentic relationships are integral to our happiness and success. However, the quick-fire connections we seek on a day‑to‑day basis — to help deal with the stress, urgency and information overindulgence in our lives — lack authenticity. LACKING THAT EMOTIONAL SUSTENANCE, CONSUMERS ARE CONTINUALLY SEARCHING FOR THE MEANING AND AUTHENTICITY THAT SUPPORTS THEM.

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3.

TRUST IN A PERSON LIKE YOURSELF.

The lack of trust in companies and institutions has motivated people to trust their peers or people similar to them as the best sources of information.

According to the Edelman Trust Barometer, in most markets:

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1. 80% would refuse to buy goods or services from a company they do not trust; 2. More than 70% will critique companies to the people they know; and 3. One-third share their opinions and experiences of a distrusted company on the Web.

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Clearly, a deep void of trust exists between consumers, businesses, and institutions.

SIDEBAR

PERCEPTION | 80% OF CEO’S BELIEVE THEIR BRAND PROVIDES A SUPERIOR CUSTOMER EXPERIENCE Bain & Company Research

REALITY |

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8% OF THEIR CUSTOMERS AGREE

4.

EXPERIENCE MATTERS.

Savvy customers value novelty and new experiences. Overseas travel, along with vicarious experiences facilitated by the Internet, has raised the bar. These days, the expectations of value are much higher for all brands.

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Customers with infinite choice are not looking for more products — they are looking for experiences that cater to their deep-seated needs at every point of contact. WE MUST REMEMBER THAT ALL EXPERIENCES COMPETE AGAINST EACH OTHER FOR THE ATTENTION OF THE CONSUMER.

Companies intending to be relevant today must learn the art of creating experiences that genuinely engage their customers. Choice fatigued consumers are not looking for another product that hasn’t taken their true needs and desires into consideration. Sohrab Vossoughi, It’s All About Experience, BusinessWeek, April 11, 2008

PARTICIPATION AS CONSUMPTION.

5.

Consumers driven by experiences are increasingly obsessed with the here and now, and have a strong desire to collect as many experiences and stories as possible. Rather than being passive viewers they spend time searching, reading, scrutinising, authenticating, collaborating, and organising. Participation is the new consumption. Status comes from finding an appreciative audience — effectively pitting creative consumers against brands for audiences. Everyone is a creative. Anyone can make a YouTube video or design a MySpace page that sits on an equal media playing field with anything anyone else produces. Importantly, participation alleviates the tension that comes from a lack of authentic connections and relationships.

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6.

WEB2.0 IS MAINSTREAM.

Web 2.0 is effectively the democratisation of the Internet. The paradigm shift towards an Internet that facilitates creativity, information sharing, and collaboration among users has become mainstream. Web 2.0 based communities and hosted services from social-networking, wikis, blogs, and folksonomies (categorising content through tags) have reached the critical point where consumer adoption is far more significant than anyone ever anticipated.

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Homepage customisation, RSS feeds, shared bookmarks, content sharing, commenting, rating, desktop widgets, and Facebook are now commonplace across customer digital experiences.

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Widespread acceptance and frequent consumer usage of Web 2.0 technologies indicates that distribution of content and services is challenging Internet destinations for consumer attention.

SOCIAL PATTERNS ENFORCED VIA DIGITAL TOOLS.

7.

Human beings are social animals and we have a basic need to interact with one another to fulfil our emotional and material goals. For consumers, social is not a technology fad or a destination for marketing messages, it is a dimension of our humanity. The difference today is that technology is helping replicate social structures both online and off. Consider the customer that consumes the best, the coolest, or the most expensive — they will gain the most status.

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Ratings, bookmarks, connected friends, and other tools help replicate and enforce that status in a digital economy.

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7.1 THE WEB AS A SOCIAL MEDIUM. The most significant change in Internet behaviour is the mass acceptance of the Web as a social medium. From tools that help people communicate directly (such as instant messaging, e-mail, and twitter) to those that allow people to connect via non-traditional means (such as photo and video sharing, blogging, commenting, reviewing, and rating), the entire web is becoming social.

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Instead of simply creating social networking sites, the concept of social computing is evolving towards making the entire Internet social. While most consumers use social networking to connect with others, this does not suggest that that there is no role for advertisers; it just has to be accomplished on the user’s terms. With the socialisation of the Internet, consumers are increasingly relying on peers for recommendations and on search to locate products. THE REAL VALUE FOR ADVERTISERS IS THE ROLE OF SOCIAL INFLUENCE IN PERSUADING CONSUMERS TO PURCHASE.

IMMERSION OF TECHNOLOGY IN OUR EVERYDAYLIVES.

8.

Shifts in technology are not what concern people. They are more concerned with how technology can support them in their daily lives and with the things they value. The technology of today is finding its role in the lives of consumers. If it is good, it gets used; if it’s great, it changes our lives... and it has changed our lives. We are squarely in the age of the digital lifestyle and the Web has become so ubiquitous that it’s nearly invisible. All of the learning we’ve done with regards to marketing via the Web is suddenly bigger than the Internet. And, just as importantly, the challenges we are yet to solve on the Web are now challenges that exist beyond the PC. This is all relevant anywhere that digital technologies and experiences exist and, these days, that’s just about everywhere.

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8.1 THE WEB IS EVERYWHERE.

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Smartphones in general, specifically the iPhone, have radically accelerated Web usage on mobile devices. Growth is accelerating as carriers push flat data rate plans and this move is already leading content producers to accelerate investments in building robust mobile offerings. This means that the information and transparency the Web brings to the buying process, like price and quality, is free from the desktop. Continued advancements in device capabilities are making consumers more informed and better connected as they shop. The phone is just the beginning, too. Everything is getting connected: from in-store kiosks, storefront windows and shopping carts, to refrigerators, cars and so on. The march toward ubiquitous computing is on and we are just beginning to see the implications of how we interact with digital technologies and vice versa.

THE GAMING FAMILY.

SIDEBAR

36% of American parents say they play computer and video games. 14

80% of gamer parents say they play video games with their kids. 66% feel that playing games has brought their families closer together.

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9.

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THE CONNECTED CONSUMER.

“The rapid adoption of broadband and technology has fostered the rise of the connected customer. These customers “continue to be exposed to traditional mass media but simultaneously access information directly (anywhere, anytime) to make informed choices when engaging brands, marketers and special-interest groups on a one-to-one basis.” Source: Marketing Science Institute

“Connected customers” don’t just surf the digital world, they shape it! They are more intense about their digital communications and media use. Moreover, these “connected consumers” are actively shaping their engagement with brands and retailers, and influencing each others’ perceptions and buying behaviour. Connected customers are no longer confined to certain segments - they roughly mirror the entire Australian population. For these customers, the new experience might be a conversation or it might be an interactive storytelling session.

ONE THING IS FOR SURE - IT IS DEFINITELY NOT ABOUT THE STATUS QUO!

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CONNECTED WORLDS ARE TRANSPARENT.

SIDEBAR

“... both tempests began with candidates making a critical mistake in the internet age: lowering their guard at private events, under the false belief that there are still private events. The incidents demonstrate how the net has flattened the landscape for political candidates, who can no longer pander to a compartmentalized audience without fear of it leaking out to less‑receptive voters.” Wired (April 2008) - Clinton and Obama were caught making “critical” comments by bloggers at private events.

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9.1 MY MEDIA. In the sixties, a generation fixated on creating new forms of community and expression forced media and advertisers to adapt. Today, a new generation is following suit and dragging the rest of us along for the ride.

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This generation expects that they can customise and personalise everything in their world and daily experiences. Everything must become ‘their media’ — and their media holds more weight in their community. This generation demands products and services that cater to their moods and desires and will actively search, modify, or create their own products and services to meet this demand.

“CONSUMERS ARE THE NEW MEDIA AND THEY KNOW IT.” Elizabeth Ross, Tribal DDB, AdAge, 8 April, 2008

MEDIA MESHING.

Media meshing is a behavioural phenomenon that occurs when people begin an experience in one medium, such as watching television; then shift to another, such as surfing the Internet; and maybe even a third, such as listening to music. The explanation for this behaviour is the constant search for complementary information, different perspectives, and even emotional fulfilment.

9.2

More than a third of all ages say that they have surfed the net while watching television and almost half say they have listened to the radio or watched TV while online. Ofcom | Times Online

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9.3 MICRO INTERACTIONS.

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With information overload, permanent “on” situations, and media proliferation consumers are moving toward shorter micro-interactions like SMS, Twitter, and Facebook. Consumers prefer micro-interactions through which strong, definitive opinions can be articulated. These opinions carry a “larger than life” influence that make it easier, quicker, and more meaningful for consumers to socially influence each other as they make product purchase and brand affinity decisions. TOOLS IN THE MICRO-INTERACTIONS REALM ALLOW FOR SOCIAL INFLUENCE BECAUSE THEY DEMAND SO LITTLE OF THE SENDER AND EVEN LESS OF THE RECIPIENT.

NON LINEAR FUNNEL.

10.

Traditional marketing is built around a linear purchase funnel, starting with awareness and ending with the sale. The proliferation of new digital touch-points has made this concept obsolete as we face a complex digital ecosystem that includes video, widgets, online advertising, podcasting, search, virtual worlds, blogs, mobile, gaming, desktop applications, podcasting… All of this is intensified by the rise of social computing and user participation. Customers snack on digital content and share ideas about products and brands via an array of devices — brand awareness and purchase consideration is formed just as much by consumers as by branding efforts. They research online and buy in stores; they shop in stores and buy online. The Internet has shattered the entire concept of a linear purchase funnel.

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New marketing needs to incorporate new ideas. But The difficulty lies, not in the new ideas, but IN ESCAPING FROM THE OLD ONES. John Maynard Keynes

THE FINE PRINT. This briefing document and “the body of work” referred to as ‘Getting in Sync with New Consumers©’ is an ongoing labour of love for all involved and forms the basis for how 33 Interactions and its partners help businesses get their marketing act together. While we are willing to provide briefing sessions and relevant versions of this document to any that ask, our [pesky and protective, yet sensible] legal people have taken steps to protect our intellectual property. Copyright of this document, variants of this document, and the ‘body of work’ referred to as ‘Getting in Sync with New Consumers©’ is wholly owned by Jeeva Sathurayar, Joel Maloney, and 33 Interactions Pty Ltd. All material contained in this document (including any supplementary data) is the property of Jeeva Sathurayar, Joel Maloney, and 33 Interactions Pty Ltd, and its affiliates, and is protected by copyright; all rights regarding this material are reserved by Jeeva Sathurayar, Joel Maloney, and 33 Interactions Pty Ltd and includes but is not limited to Transdigital Communications Planning®, the 33 Customer Advocacy Ladder©, and The Five Zones Strategic Planning Framework©. This briefing document is provided in good faith to parties receiving the “Getting in Sync with New Consumers” briefing and may not be distributed in any form, sold for profit, reproduced, developed, or incorporated in any documents without written permission from 33 Interactions Pty Ltd. Third party material referenced in this document is the domain of respective parties. © 2009, 33 Interactions Pty Ltd (ABN 87 408 247 635). All rights reserved.

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CLOSING CREDITS. 33 Interactions would like to thank the following Flickr members who have offered their work for use in this presentation under the Creative Commons Attribution Licence. All images in this presentation are copyright to their original authors.

1 / ClickFlashPhotos

9 / Sndrv

16 / Mandolyn

2 / Hamed Masoumi

10 / Emdot

18 / Striatic

3 / Lucas Hoyos

11 / Capitan Giona

19 / Futileboy

5 / Greg Loby

13 / Chegs

20 / Abulic Monkey

7 / InfoMofo

14 / Andreanna

8 / Beija-Flor

15 / Luc Legay

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