16 Jan 2017
Todays’ customers are rapidly changing their buying behavior, and, as a consequence brand loyalty is diminishing quickly. Today’s customers place less trust in brands and tend to switch brands more often than they did in the past. For a long time, a company’s brand was seen as its most important asset—sometimes even considered as more valuable than products, patents, and process perfection put together. However, as customers are increasingly becoming empowered buyers, they tend to investigate the real value of products and rely on facts and peer reviews more than on logos and old habits.
When customers relied on printed brochures and catalogs that they could pick up at a retail store or from a sales representative, combined with their previous experience with a company, brands served as proxies for quality. If a TV was made by Sony, or a mobile phone by Nokia, customers typically assumed that it was a good product. Back then, if the first experience was a good one, customers often bought products from the same brand over and over and stuck to that single brand for extended periods of time. In the transparent marketplace that is driven by universal Internet access and constant mobile connectivity, customers now shop around, looking for the best product for the best possible price—regardless of brand.
In the book “Absolute Value,” Itamar Simonson & Emanuel Rosen illustrate that brand used to be an effective tool when information was scarce and hard to come by. In the book, they write: “The new information environment around us allows consumers to predict much more accurately the experienced quality (or absolute value) of products and services they consider getting. The implications for consumers and businesses are enormous. First, reliance on absolute values means that, on average, consumers tend to make better decisions and become less susceptible to context or framing manipulations. For businesses, it means that marketing is changing forever.”
This shift from brand value to absolute value is very positive for the customer as it helps them make better and more educated purchasing decisions. At the same time, it increases competition that raises product quality, while keeping prices down. Upstarts can benefit immensely from this behavioral and technological change as it is now cheaper, faster, and easier to compete with established brands. Social media and data-driven marketing make it quick and cost effective to get the product story out there, if they have a good one. The product is front and center in the new world of commerce.
Without the brand, the product is on its own
When empowered buyers quickly research their way to a buying decision, each product now has to prove itself on its own. It can no longer be marketed and sold based on brand value alone. This means that companies need to focus more on the product and especially on its accompanying product information. This is equally true for B2B as it is for B2C as the modern B2B buyer is inclined to use the same buying behavior at work as they do as consumers. The consumerization of B2B has already happened, and it is continually growing in strength.
Reviews and other types of user-generated content are of course very valuable as customers tend to trust their peers more than the retailer or the manufacturer. Besides building trust for the product, it also is great for SEO (Search Engine Optimization). It also puts pressure on the product itself, as it needs to be satisfactory for the customer and live up to the promise that is being made in the product story. With customers that focus on products rather than brands, it is the product’s promise, not the brand’s. In many cases, the product is completely on its own and needs to be able to tell its story by itself.
Customers + products = business
Customer-centricity is now more important than ever and knowing your customer becomes critical if you want to provide them with the best possible customer experience. If you combine customer intelligence with product intelligence and use that to serve up the right product with the right information to your customers, you are in a good position to win new customers and keep them loyal, regardless of brand.
As a consequence, high quality information about your customers and products is essential to be the winner in the battle of the customer. You have to be great at managing both types of information to succeed. To do that you need the appropriate organization, processes, and systems support to get there and stay there.
Johan Boström, Co-founder and Evangelist, inRiver