Typical arguments against the idea have been: “Our products are more expensive than our competitors.” “Our prices are higher than our retail because we are afraid to undersell them.” Or my all-time favourite: “It’s our company’s policy not to promote our competitors on our sites.”

Yep. All seemingly sound arguments…. that is if you live in a traditional marketing world. But we don’t. We live in a friction-free economy dominated by empowered consumers. So the rules have all changed.

From my view, having a price comparison service just makes perfect sense. Think about it. Your customers are on your site anyway. They are checking out your products and in the “consideration” zone. Everything we know about consumers is that they will look at the price and go, “hmmm… I wonder if I could get that cheaper somewhere else.” And as sure as the rising sun, they click away from your site, and onto Kelkoo, PriceRunner and wherever, to see if they can get the same product for less somewhere else. Chances are, they can and often do. Which makes me wonder why.

After all, shouldn’t the manufacturer be able to offer the cheapest price, always? Offer it marginally above wholesale price and you have the cheapest price online, and slightly better margins as well. The hotel industry has figured this out, and now many hotel chains, from the Marriott to the Hilton, guarantee the lowest prices direct from their website. Ask yourself, when was the last time you booked via an agent rather than direct? Once you know they have the best price, that’s where you go.

Research has now finally come to light to back up the argument for price comparisons on brand sites.  The new survey by e-tailing group, “Comparison Shopping is a Way of Life”, shows that putting shopping comparisons on brand sites has a significant impact on visitor loyalty and trust.

The survey revealed that consumers are 78% more likely to return to a retailer who displays competitor prices and are 36% more likely to feel an increased sense of loyalty. More importantly, 53% feel that they no longer need to comparison shop for the given product. So essentially, that means you effectively keep every other visitor from leaving your site during those critical last stages if the consideration phase. Although consumer trust in competitor prices displayed over retail or brand sites is quite high, at 52% believing it, you can easily raise this by relying on trusted third parties.

PriceRunner now offer both white-labelled or co-branded comparison engines, for your own site. So customers will know that the pricing you give is exactly what they will find on the comparison sites.

The e-tailing group survey also indicates that consumers often spend up to half an hour using a variety of tools to research products before they make the purchase, so everything you can do to keep them engaged for that time, from providing consumer reviews, good and bad, to transparent pricing, all makes the difference in closing the sale online.

Original article here: http://www.marketingforecast.com/archives/2672

[Source: Hauss, Debbie. Research Shows Providing Price Comparisons Wins Shopper Loyalty, Retail Touchpoints. September 2009]

A famous example of this community policing was seen back in 2005 in what is now known as “the Dog Poop Girl case.” In South Korea, where everybody and their toddler have a mobile phone, a girl and her dog boarded a local subway train.

Naturally, the dog must have mistook the bland floor for dirt – or then he was just making a statement against bad design – and decided to defecate on the floor of the train car, apparently by accident. Nearby passengers were naturally appalled and asked her to clean it up. Surprisingly, she replied something akin to “mind your own business.” 

As all phones today are also spy cameras, a fellow passenger fotographed the girl and posted it on a Korean Website. The  photograph was picked up by the hyper-active asian social networks, retouched, mashed up, commented upon and generally spread around like the pandemic flu. It was in effect, a national user generated “name and shaming” policing exercise.

Naturally, the girl in question became famous for all of the wrong reasons, and probably a social pariah among her friends as well, causing her to drop out of university. Most likely today she is dog-less (and forever so), living in a new city with a new haircut and maybe even a new name. 

Now let’s apply this social policing strategy to our local British burglar. Let’s say a burglar (who we all call Yobs over here) breaks into a property. The house however, is wired to the local community owned and monitored CCTV network (no government or police oversight here) so our Yob is caught in the act by a nearby neighbour, an old lady living on her own and battling an ongoing insomnia problem. Either that or she’s catching up on back episodes of “Eastenders” on the Beeb’s iPlayer. She hurriedly sends text alerts to all the residents in the area. They rush around to the house just as the robber/yob exits. He turns (it is always a he isn’t it) only to face a horde of angry residents, all armed with mobile phone cameras and busily filming the unfolding drama.

Now, assuming our angry horde doesn’t turn into a vigilante mob, they instead run a mobile Internet search on Google’s new Face recognition service, which matches images to those on the social networks to quickly get the yob’s personal details and those of all of his friends and family. His surprised and angry mother is contacted, as is his grandmother, his father, brothers, sisters, cousins, uncles, etc, who all are suddenly calling the Yob’s mobile phone to berate him in what J. K. Rowling would describe as a “Howler Mail”.

To make matters worse, the entire drama, complete with the yob’s very public shame, is posted on the Internet site, www.Gotcha.com, a newfound wikipedia-style public database of social shame and now his very public police record. If he was a repeat offender, then he might even be placed in a prison. But not the usual countryside retreat with drugs, Sky Movies and a free gym membership, but rather a very public room in the town square with glass walls so that everybody can watch him. No curtains. No privacy.

Naturally, the gaping whole in this approach is that we currently live in a fame-obsessed society where criminal activity is glorified as being a “cool profession” with few real downsides, well, except for that potential death thing of course. But as fame has become more important than achievement, we are seeing gangs of youth challenging each other to commit crimes. So when our group of concerned and involved residents show up with their mobile phone cameras buzzing away, a burglar is now more likely to mistake them for paparazzi, break out into a big smile, and perform a little jig for the cameras.

Once on Internet, he would become famous on both sides of the Atlantic. Hollywood or Fox TV would then offer him a lucrative Film/TV deal, only to find themselves outbid by the BBC, using millions from the public purse of course. Books titled, “Why I Burgle” would become runaway best-sellers, making it to the top of the RIchard and Judy list, who would praise it “for its moving hardcore realism” and “as a telling indictment of modern society”.  Even our PM, fading in popularity as he ever is, would invite the famous crook over to No. 10, whereupon our now famous Yob would nick the silverware, which everybody would find hilarious.

Sources: 
On Internet Vigilantism

http://en.wikipedia.org/wiki/Internet_vigilantism

On the Dog Poop Girl case

http://www.washingtonpost.com/wpdyn/content/article/2005/07/06/AR2005070601953.html

http://blog.japundit.com/archives/2005/06/30/808/

On Google and Facial Recognition

http://news.cnet.com/8301-13580_3-10026577-39.html

Whenever I read an article on privacy, I realise that the vast majority of writers are always in the first two camps, with even the modern pragmatist leaning further and further into the fundamentalist camp. So I wonder. Are the conspiracy theorist correct and we are living in Arthur C. Clarke and Stephen Baxter’s future where privacy will cease to exist all together? Or perhaps there is a more obvious explanation. Perhaps the pace of change is so fast that even hardcore pragmatist have difficulty keeping up with them. 

The data collecting capability of business is expanding at a phenomenal rate. In a year, business’s will have collected 40 exobytes (4.0 x 10 to the 19th power) of data on us. How much of that data people have agreed to give up is completely unknown. 

And that number will only go up as Google, the mobile operators O2 and 3 Mobile, and handset manufacturers all continue to leverage people’s willingness to surrender data in exchange for better personal service. Google for instance, has now made its social network, Orkut accessible from mobile phones, but added a location service that allows friends to know where each other are, as long as all of one’s friends are on Google and signed up to the service. Likewise, Nokia has countered with a similar service called Friends that links its Maps 3 software with Ovi accounts and your phone book. Then there is Google’s controversial introduction of its Street View service in Google Maps, which caused so many complaints from even the normally “unconcerned” that Google had eliminate the service in some regions.  

The telecoms industry have even more aggressive plans. We have all seen the movies where national security agencies use  wireless triangulation to pinpoint the location of runaway agents. And yes, that’s based on fact as all mobile phones ping the closest wireless access node or receiving station. So by triangulating between three nodes, they can pinpoint you to an area of roughly 10 meters of so (though don’t quote me on that number as it’s probably a lot less). 
 
Now, according to The Guardian, two telecom leaders have increased their data ambitions. Both O2 Media and 3 Mobile want to match location data with customer’s age, gender, web browsing habits, home addresses and buying habits to order to predict your future behaviour, essentially the holy grail of mobile data.  With operators forecasting greater declines in revenue from voice (in part due to the growing use of Skype on mobiles) they are urgently looking for ways to monetize data and to promote different location and time related services. An example of this is a service I mapped out  good decade before all of this existed called location-aware entertainment (or LAES for short). Basically, LAES is a kind of concierge service that literally personalises the entertainment selection you receive depending on where you are, and what you are likely doing at a given time of day. So in your morning commute, the service would send your favourite newspaper. During lunch, maybe the next chapter of a book you are reading. On the commute home, the next episode of a TV program you’ve been following. All without you ever having to enter your preferences, as the service simply learns them as you go along. 

Cloud Computing raises data privacy concerns to a whole new level. The idea behind Cloud Computing is that instead of having applications stored on your own computer, they would reside on the Internet, in much the same was that many blog word processors do today. The goal being that every file you create, you also store on the Internet, just as people currently store huge personal libraries of photos on Flickr. Privacy activist fear that companies will start tracking every keystroke as we work and write; a notion that will convert many of the pragmatist to the fundamentalist camp. In truth, Cloud Computing could be the end of privacy as we know it, as well as a major security risk for users. Imagine what information a hacker could steal by gaining access to every keystroke not only you make, but everybody who uses a popular service such as a Cloud version of Microsoft Office. And let’s face it, they’re server software is known to sometimes look a bit like Swiss Cheese.  

So is this really the end of privacy then? Or will corporations get better at managing and securing data? The answer is, business’ won’t have a choice. Companies are increasingly facing a growing guadmire of legislative, security and reporting requirements that will inflate their cost almost as quickly as they inflate their ability to leverage all that data. Which makes senses given that politicians have the most to lose if corporations leak or misuse data. Because ultimately, politicians are the ones people blame when corporations behave badly. 

Still there are grey areas. Although current EU legislation on data privacy dictate that customer’s have to opt-in for specific uses of data, companies can simply package this opt-in requirement around a “cool new service” that is so generic that it allows them to do whatever they want with the data and even in some cases, share that data with “selected partners” that are made available over the service for your benefit. So customer’s still need to choose carefully before signing up to new services until these loopholes are closed.  

Already now, marketers are constantly debating what can and cannot be done with customer data. And yet, never have I met a marketing manager willing to live in the dodgy grey areas of the law to marginally increase sales. They all fear their legal departments far too much for that. Besides, why bother? Is it really worth the potential political and PR fall-out?  So can company’s be trusted with your personal data? In most cases, yes. But proceed with caution and read the fine print, carefully.

Now if we only had a regulation that controls what the government collects on us.

Imagine if you will, having the power to see what is happening anywhere in the world, and at any past or present time. And that power was shared eventually, to everyone in the world. This was the premise of the book, “The Light of Other Days” by Arthur C. Clarke and Stephen Baxter, which discusses the problems which arise when a wormhole is used for faster-than-light communication. In the novel the authors suggest that wormholes can join points distant either in time or in space and postulate a world completely devoid of privacy as wormholes are increasingly used to spy on anyone at any time in the world’s history.

What’s interesting about the story is it’s parallel to what is happening today in the world around us. Before we get to that however, here’s a short summary of the story.

Hiram Patterson is the founder and CEO of the fictional company OurWorld, who the author styled after a cross between Richard Branson and the controversial media tycoon Rupert Murdoch. His company happens upon the most revolutionary technological breakthrough of the century; the creation of a stable wormhole. Not the promethean-sized wormhole that you could fly spaceships through to get to the other side of the universe. Nor the kind that transports you naked back in time. Or even the kind that opens doors into parallel universes. No, Hiram’s scientists created a minute wormhole, so small it could only be detected through specialized equipment.

At first, they didn’t know what to do with this breakthrough, as it didn’t seem to have any discernable usage other than expanding the niche knowledge of a handful of relativistic physicists. More frustratingly, they discovered that without access to near limitless energy sources, they would never be able to expand the size of the wormhole beyond its minute proportions.

However, OurWorld is a business, hence it’s out to make a buck. So driven by the forceful personality of Hiram Patterson, the scientists eventually found out that although microscopic wormholes were too small to transport anything useful, like a person, they could however transmit data. So they set out to create the WormCam, the world’s ultimate fly-on-the-wall camera. One that sees not only what is happening at the present, but also at anytime in the past.

At this point, Hiram completes his transformation from Richard Branson to Rupert Murdoch and applies the new technology to his own higher purpose: to get exclusives for his media empire. He quickly dial’s back the WormCam’s time viewer to expose the truth of political conspiracies and scandals dating back to the assassination of Abraham Lincoln to present. Naturally, the guy makes a mint on his exposés. All the while, politicians struggle to figure out he’s doing it. Although he also reveals fantastic historical nature documentaries, he can’t resist the ultimate reality porn of exposing celebrities and famous personalities sunbathing naked.

The resulting societal changes are dramatic. Politics undergo what can only be described as a complete top to bottom cleansing, with anybody having committed even the smallest indiscretion quitting public office before they become public fodder.

Over time, the scientists miniaturise the technology to produce a portable, mass-marker version of the WormCam. With everybody having access to these devices, even the smallest notion of privacy evaporates for all. Spouses use it to expose affairs. Teachers to expose students cheating. Men to view naked women, women to view naked men. Imagine, what happens with everybody can know everything that another person does, now and throughout their entire past lives. Entire generations of youth even have wormholes embedded into their brains to enable collective minds; the ultimate form of social networking where one is never alone.

By now, you can see where I am headed with this. The story of this all-transforming technology is a mirror of what we see happening with the Internet.

Consumer movements endless exposing every corporate misdeed and government lie.

Every minute of a person’s life and death – Jade Goody style – recorded and exposed in gory, pornographic detail for people to dive into, comment on, praise, rip apart, criticise and fantasize over in orgiastic delight.

The complete exposure of private and public lives, thoughts, friendships and personal and professional networks exposed on an up-to-the minute basis on Facebook, Twitter and LinkedIn.

The ordinary, the extraordinary, the unbelievable, the absurd, the bizarre, the inspiring and the provocative behaviour of millions of people, fictional and real, captured and viewed by millions every second over YouTube, Google Video, Tudou and other social video sites. We even see the collective mind in action thanks to Wikipedia.

The Internet is our very own personal wormhole to every aspect of the world. Thanks to Google Earth, we use it to see remote far-away places, or even far away stars. Thanks to Google Maps and Street View, we use to find out where we are, and view everything from our own neighbourhood, to those of neighbours we will never know nor see. We use it to discover truth and fiction in equal measure. Employers use it to check up on their competition and their own employees, while employees use it to check up on their colleagues and employers alike, both as individuals and as corporations. And naturally, marketers use it to continuously try to understand what it is that we all want, and how to exploit that knowledge to either the consumer’s and the corporation’s mutual gain, though more typically to the corporation’s gain at the expense of the consumer, the environment and the rest of the world.

The now continuous debate over privacy already seems somehow pointless. Because thanks to the Internet, we have willingly surrendered privacy in favour of collective knowledge and truth in the hope and desire that by participating in the bold experiment called the Internet, we will carve a brave new world out of the carcass of the dinosaur we have to grown up with. One which is somehow kinder, more honest, less greedy, and more equitable than the world it replaces.

For the past three years, I have become a huge advocate of using the Internet as a way to create dynamic, lasting business change. There is a phenomenal amount of corruption, incompetence and greed in the corporate world, with AIG being just the latest example. If one were to compile a comprehensive global list using a 12pt font, it probably would be a mile and a half long. And toping the first tenth of the list would be much of the global banking, hedgefund trading and other financial industries that have so screwed up the current global economy. So while government’s tinker with throwing good money after bad into a system that is either corrupt, incompetent, broken model or all of these, here are my own strategies for how business could be using the Internet as a way to rebuild what they have lost and are in danger of never getting back, consumer trust.  

Strategy 1: Implement a policy of total transparency

We are currently at the cusp of a fundamental change in business, and even political thinking. Customer activism and watchdog groups are growing apace. Each day, they get better at revealing corporate and government dirty laundry. Each day they seem to gain greater access to information that was once considered confidential and proprietary, either through various freedom of information government movements, or a near endless resource of existing and former company employees whose own loyalty and trust have been wiped out by a decade of loyalty-busting labour practices. Each day, they are grow in influence among an ever-growing cynical consumer base whose most powerful weapon is the easiest to utilize, to stop giving money to people obsessed with other people’s money. Their message: “if profit is your sole reason to exist, your days are numbered.” 

The time has therefore come to fundamentally rethink the notion that secrecy is vital to the successful functioning of business and government. The Internet should be used to publish information proactively. Useful information to publish will depend on the nature of the business and product. For some, detailed ingredients lists, along with explanations as to what each ingredient is, its health risks and why it’s used, are important. For others, cradle-to-grave environmental statistics and policies will be key. How much energy did it take to make the product? How much to ship and recycle it? What materials are used in packaging, construction, so on, and how are they collected and recycled and by whom?

When mistakes happen, CEO’s and business leaders need to get tougher skin, fess up and talk about immediately. Errors are forgiven. Customers are actually reassured to know that companies are human after all. Lies and obvious omissions won’t be forgiven. They will make it look like you have something to hide and customer’s won’t trust you, something they are more inclined to do anyway.

US footwear company Timberland provides a useful benchmark on product information transparency. Their product labels, which are designed like nutritional labels, indicate the name and location of the factory where the shoes were made, the amount of energy used in production and the percentage of renewable energy used. It even shows the percentage of factories assessed against code of conduct standards and the number of hours employees have volunteered in the community. When it comes to information transparency, it’s safest to err on the site of too much rather than too little.

Price transparency is also critical, while also being the most difficult part of total transparency to implement. In much the same way as Marks & Spencers exposed what was behind its labels to reveal its ethical supply chain, price transparency shows the real cost of delivering a product to the shelves. What percentage of the product’s total price is made up by sourcing, manufacturing, packaging and marketing cost? What are the margins for the seller and the manufacturer? For many marketers, this is indeed a bitter pill as few customers will support a 400% or more mark-up, especially on household necessities such as chicken and eggs. This is where having ethics at the core of the company’s business will really pay off. Customers are probably more willing to pay higher margins to company that gives 100% of its profits to charity, and less willing to pay the same knowing that profits will go to finance the purchase of a super yacht for top shareholders. If you are not sure you should implement price transparency because you believe that consumers don’t know your real cost, here’s a simple exercise. Go to Google and enter: “the real cost of product x” or “profit margin on product x” where product x is what you sell. I ran this exercise on the cost of a pair of £100 Nike trainers (£2 was the conclusion) and on a $0.99 McDonald’s Cheesburger (89 cents was the conclusion). Whether or not these numbers are accurate is irrelevant. Because they’re the only answers I found, they’re now the only answer I believe. So you can let consumers dictate what people believe is the truth, or you can be transparent and let them know the truth and use good business strategy and product differentiation strategies to justify your profit margin.

Increasing label sizes to communicate all of this information can be daunting for a consumer to read and even counter-productive as it increases the amount of packaging. A more environmentally friendly solution is to use QR codes. Essentially square bar codes, QR codes can be read by mobile phones and link consumers instantly to websites. Larger codes can even convey the needed data in the code itself. With Nokia starting to ship new phones with pre-installed QR code software, the technology is becoming a feasible alternative to labeling.

Strategy 2: Foster dialogue with stakeholders

Business partners are typically considered to be critical stakeholders. However, a growing number of corporations are realising that they can’t monitor their long supply chain alone and are starting to partner with watchdog organisations and NGOs. As independent groups, watchdog organisations are often more effective than the companies themselves at finding out what is really happening in their own supply chain. By using the Internet to provide open communications between the NGO’s, corporate managers and suppliers, companies can stay on top of any violations of its codes of practice and change suppliers who fail to live up to them.

Partnering with employees seems obvious, but 69% of companies surveyed by IBM don’t partner with their employees. These companies view employees at best as resources that can be cut from the bottom line to suit quarterly profit returns. This short-sighted and dangerous thinking has completely eroded employee trust. Through the own behaviour, CEO’s have taught employees to look after their own personal interest above the company’s. 

By creating internal web communities that connect employees and management around the company’s CSR objectives and initiatives, employees can be empowered to drive real corporate change and customer confidence. They can share best practice, discuss problems as they arise and create solutions. They can participate in the charity process or even help shape the way it functions.

Strategy 3: Empower your customers

The final strategy is to view one’s customer base as partners rather than consumers. As partners, the company needs to empower them with the ability to help define and drive the corporate agenda and business practice. This goes far beyond UGC, or participatory marketing. As with the second strategy, customer empowerment requires using web 2.0 tactics to involve customers in every aspect of the business. In practice, this means letting local customers define the community issues that are most relevant to them. It means letting customers voice their concerns about the way the company does business locally and globally. It means giving customers a conduit directly to the CEO or even to Board management rather than filtering their opinions through layers of corporate bureaucracy. Board level decisions are too far removed from the customers that keep their businesses running.

Just as the NGO and watchdog organizations can be partnered with to follow one’s supply chain, customers can be partnered with to follow one’s reseller and sales network. Not all outlets will act in the best interest of the brands it sells. By encouraging customers to report overcharging or questionable service bundling practices, companies can reign in rogue sellers and protect their own customer base.

In short, the more information, control and involvement one gives to customers, the more likely are they to remain so for life. For involved customers are committed customers. And committed customers are far less likely to quite on you when times get rough or migrate to your competitors for a promotional gain. By involving and empowering customers in such a core, critical fashion, you generate a loyalty that far supersedes anything currently experienced by today’s loyalty programs.

Further reading:

http://www.prweekus.com/Profit-transparency-top-consumer-study/article/123629/

http://hbswk.hbs.edu/archive/1801.html

http://www.clickz.com/2221951

http://www.fas.org/sgp/crs/misc/RL34101.pdf

http://www.gaspricewatch.com/new/default_V3.asp

http://www.corpwatch.org