He makes some very interesting points about building connections between people within the product itself. As a conversational marketing strategist, I naturally find this very relevant because, the majority of time, both products and retail experiences constantly fail to create opportunities to connect customers to customers; almost as if their marketing directors are afraid of having customers talk to each other.

But this thinking is akin to sticking one’s head in the sand, because customers ARE having these conversations everyday in forums, blogs and twitter streams, mostly without the brand’s participation. So here’s the rub, marketing directors either need to accept this fact and adjust their product, approach and ideally their entire business structure, or continue to struggle in a world that will become increasingly hostile.

Doesn’t seem much like a choice to me, but it still amazes me how many consultants and marketers alike think that old ways of doing business – make a website, buy a print, radio or TV ad – will draw people in to buy and do business. What they don’t see is that the main reason people are probably still doing business with their brands is because of:

a) previously good personal experiences,

b) lack of choice

c) Word of Mouth from other customers

and NOT from overpriced ads.

There are far more cost-efficient ways of doing business today. But it does mean accepting that change has happened and that it’s time to embrace new options. And Seth gives plenty of cases in point.

The new consumer journey

A while back, I attempted to create a model the way companies need to leverage new marketing to engage today’s consumers. I looked at a number of interesting approaches, but in the end opted to build around the idea of a marketing spiral.  I’m sure there are a number of other ways to illustrate the consumer journey other than using a spiral, but this is what I came up with. If anybody wants to take another stab at this, please do and let me know where you post it. Read on to discover how you can use this model to define your new marketing program.

Today’s consumers start with an Initial Considersation Set. Martin Lindstrom’s brain scan research in his groundbreaking book, “Buyology,” clearly shows that we all have an initial consideration set for every product category, many of which are completely unconscious. We choose a brand of shampoo simply because we are used to choosing it, or because on some unconscious level, our gut tells us that it’s better than the others for any number of reasons which we spend less than a few seconds consciously thinking about.

“It’s natural.” “It has a secret formula.” “It’s scientifically proven.” “I like the way it smells.” “It makes my hair feel nice.” “It’s cheap.” All these statements and a near infinite variety of others, which are completely personal to each individual, contribute to our initial consideration set.

Martin Lindstrom’s research also reveals that changing these ‘consideration sets’ is harder than it looks. In some cases, it even requires truly radical events. It took a global recession to turn affluent middle class shoppers into price savvy buyers. It took an end-of-the-world scenario involving climate change to get people to start considering carbon footprints when looking to buy a new car.

Advertisers historically have used creative disruption as a way to “open our minds” to another possible consideration set. For decades toothpaste that cleaned the teeth and kept them healthy was enough for us. Suddenly however, advertisers have effectively convinced us that we actually want toothpaste that doesn’t just clean, but makes them white, because we all know, white teeth are healthy teeth. The same consideration set has now been given a qualifier, healthy teeth = white teeth, so I need whitening toothpaste.

On the Internet, transparency means that marketers have to think and behave differently, because people can quite simply use Google to research a product to find out if it actually makes our teeth white, or even if white teeth are healthy teeth. Which is why where Affinity comes to play. Affinity is about building emotional connections between brand and consumer. To build affinity in today’s online world, marketers leverage social media strategies targeted around Influence and Advocacy.

Although common social media lore is that some people are better influencers than other, BzzAgents in the US has found that anybody can be an influencer. An influencer happens to be somebody you know or meet who says the right thing at the right time. You might happen across somebody on a train who is reading a book that looks interesting because a) they are laughing their head off and b) you are bored stiff reading the same old celebrity trash in the Metro. So you might think, “if I had that book, I wouldn’t have to read this lousy newspaper.” This is precisely the experience BzzAgent discovered when it sent out its agents to promote some of the latest reads. At the end of the day, building an emotional bond with consumers is all about trust. And that trust starts more often than not, through somebody else.

As we continue down the crazy funnel of consumerist choice, we move towards having Conversations. Back on our train, you’re likely start up a conversation with the book reader. “So is that a good book?” You might ask, though the roaring laughter would probably be a dead giveaway. In more structured mechanisms, brands can create opportunities for conversation using Presence & Participation, by participating in or even hosting conversations on their own blogs and in existing blogs, review sites and forums. These conversations can have a massive benefit. Your consumers get to talk to real people who speak like real people, not like an aggressive PR agent on a mission or a call centre in Bombay.

The next step in journey is to facilitate their Participation with your brand by creating Visibility & Distribution. This is achieved with seeding content and leveraging advertorial placements, content partnerships, relevant sponsorships and other forms of content generation around the brand. The key is to think like Coca-Cola. “Be everywhere the customer is thirsty.”

Use social listening to map out all of the places people are looking for content about your brand, and ensure your content is there. Going back to our toothpaste example, our toothplace marketer should find everyplace online where people might be looking for information on ‘clean and white teeth,’ then make sure they have positioned the right content to help consumers in their research.

The Engagement step is crucial. Even if the consumer walks away believing everything they heard about your brand and product, they will do more research and participate in further conversations or interactions with the brand. In fact, the higher the cost or level of complexity the product or service is, the more research consumers do.

So once you have seeded loads of content across the Internet, you need to make it easy for people to search and find it. Discovery & Search of content is so important that brands who get it spend disproportionate amounts of their budgets on search engine performance and optimization. Keyword optimization, social topic and taxonomy analysis, content submission to multiple social sharing sites, the use of rich metadata on content and content linking are all techniques that can be employed to make it easy for people to find and engage with your content.

To ensure that the content does what it needs to, i.e. convince the consumer that you have the best toothpaste for instance, it’s best to leverage the consumer’s voice as much as possible and target against consumer passions (fashion, music, film, whatever). The more relevant you can be, the more focused your message is to your audience, the more likely you will be included in their final consideration set.

In other words, if you can get a hundred ordinary people to test, record and talk about your toothpaste versus other brands, the more likely people will add it to their brand list. To ensure credibility, it’s best to foster conversations not just on your site, but on trusted forums and communities that editorially make sense for your brand.

After all of this interaction with you, your content, other customers, our buzz agents and the average guy or girl on the street, the consumer finally buys your product. Great! Job well done! On to the next one. Right? Wrong!

Winning a consumer is only the first round. Imagine what will happen if the consumer’s experience with your brand is completely not what he/she expected, or worse, is just plain awful. That disappointed consumer will write about those awful brand experiences. Other customers will jump on the brand-bashing bandwagon and the individual and collective experiences will get shared to every living person they can reach ensuring your brand is not on anybody else’s initial consideration set.

Sadly, bad reviews outnumber good reviews in just about every category. This is basic psychology really. People who feel cheated want justice. Because they are unlikely to get their money back, they will enact justice by trying to prevent others from making the same mistake. So they become detractors. Detractors can destroy a brand’s reputation online, which is why it’s important to make sure the product experience lives up to the hype. The good news however, is that detractors can be won over surprisingly easily. It often just takes a brand that is willing to listen honestly and is sincerely willing to try to do better.

Most agencies recommend social listening however as a way to find out want people are really saying about your brand, and observing as away to learn how they use your products; all with the goal of tackling negative word of mouth and to improve their marketing to consumers. The general problem with this advice is that the real reason to listen to word of mouth is not to rush into a PR campaign whenever you hear harsh criticisms, but to collect ongoing feedback and communicate these as insights to the product teams with the mandate of making better products and services. That’s the message you want to communicate. “Sorry, we listened. We are making it better.”

Naturally, if you have a great product, your toothpaste makes teeth brilliantly white, your book is a brilliant piece of literature, then social listening will give you the genuine testimonials of real consumers. Best of all, they’ll be testimonials delivered not necessarily by you, because let’s face it, how many people trust testimonials by marketers, but rather by consumers directly to consumers. All you had to do was make sure that a) you have a good product and service and b) you are in the right places having the right conversations and supplying the kind of content people need to understand and believe in your product.

Like the latest fad in fashion, Conversational and Community Marketing is all the rage in marketing today. So what’s so special about it? Do you really need to be bothered, or can you happily go about your business and ignore it?

None of us can escape the fact that the Internet has changed many things for businesses. In my earlier post, I talked about the growing importance for total transparency in everything from a company’s behavior to their pricing and profit margins. Guiding this need is the every growing Internet population of ‘Prosumers’, or rather ‘empowered shoppers.’ Although the size of the prosumer population has never been officially measured, we can figure it out by looking at people’s online behaviors.

For instance, if you look at the last years results from Forrester’s Technographics surveys, you see that:
•    10% of the UK online population read blogs
•    17% watch user generated videos
•    12% participate in discussion forums
•    and 20% read online reviews.
These are all behaviors of empowered shoppers. Let’s focus on the last point, the 20% who read reviews, which is the most common indicator of an empowered consumer.

Related US study by Forrester shows a similar breakdown of behaviors.

Nielson Netview estimates that there are 34,151,628 online Brits. So 20% of that figure is roughly 6.83 million Brits who we can classify as acting like prosumers. Granted, that still means there are still a good 27.3 million other online shoppers you could target. But consider this. If every one of the 6.83 million empowered shoppers talks to just 3 other people, your ‘informed shopper-base’ suddenly grows to 20.49 million shoppers! Suddenly, that 27.3 million has shrunk significantly. So it’s probably safest to treat everybody like a prosumer and get on with business.

Let’s look at it from another angle. What if 80% of your prosumer base doesn’t like your brand and trashes your products online? You have a serious problem on your hands, even if that 80% represents just 1% of your customer base. Because that 80% will promote their negative opinions to the rest of your customer base, encouraging them to flee in droves. On top of that, the percentage of the prosumer population is actually growing. So by next year, that 1% will increase to 2% and so on.

So what can you do about it? Well, first you can start by listening to your customers and take their pulse of how they feel about your brand. There are a number of buzz trackers and listening platforms out there, but the one I prefer, both for cost efficiency and for their ability to scan in multiple languages is that offered by Attentio. To get a quick idea of what the Attentio Brand Dashboard can do, check out their website at Attentio.com or give it a go at their public buzz monitoring site, Trendpedia.com. For some sample results, check out this review I made for Lexus a few years back while I was working at Lateral.

Excerpt from the Lexus Hybrid Debate

The Brand Dashboard continuously trawls a wide range of online sources, from blogs to forums, newsgroups and social networks, looking for certain keywords that you define, which act as flags of potentially relevant conversations. As there are literally millions of sources to scan, most listening tools work as a “present to forward” looking information source. In other words, to get the most accurate results, you need to set it up in advance and let it run for several months. Backward looking scans with Attentio are possible but are typically limited by the length of time articles and comments remain online, currently between 3-6 months on average. With Lexus, I scanned a number of keywords related to the brand, but also the names of competitor’s brands and common words used around hybrid technology. This allowed us to get a good feel for what people really thought of Lexus’ Hybrid cars.

Some companies I know, now utilize this type of data to complement their ongoing qualitative and quantitative research as it provides a higher level of reliability than what they get through focus groups and panels. After all, people are far more likely to tell what they really think in sites like TripAdvisor than in any focus group you run.

Listening however, is only the first step. You also need to be able to respond to opinions online. The most effective way of doing this is to empower and encourage every employee in your company to participate in social networks, forums and blogs where the conversations are happening (which you can also identify using your Brand Dashboard). The advantage here is that your employees are typically your best advocates. So let them talk and share their opinions and knowledge. There are examples of companies who have done this to remarkable advantage.

The first is Microsoft, where practically every employee blogs about something, most related to their specific profession. There are currently 262 officially tracked blogs in their directory across a mind-boggling array of subjects. These blogs are effectively are helping Microsoft to redefine their approach to be more “customer focus” through one on one interaction with customers. In many cases, this ability to have real conversations with customers is helping Microsoft to fix errors and improve products at a faster pace than ever before.

Another great example is Redfin, a US based estate agency. Redfin’s CEO, Glenn Kelman took the US real-estate market by storm last November when he decided to be completely transparent about the US real-estate industry. As such, he publicly exposed every dirty trick estate agencies use to sell you a property. His blog was almost a “how-to” in avoiding the cons that most British still face when trying to purchase property. With 300+% year-over-year growth in unique visitors, Redfin has been the fastest-growing major real estate website in the U.S Redfin has also increased its market-share significantly as a result of its game-changing approach.

Redfin and Microsoft are both examples of companies who have mastered Conversational Marketing.

Another surprising example was McDonald’s in New Zealand. Selling burgers is easy. Selling McDonald’s to a group of cynics and non-believers is a different proposition altogether. In 2006 this was the situation McDonald’s found itself in. No matter what it had been doing and saying over the previous years around its health, quality and nutrition initiatives, people were still viewing McDonald’s food with wariness and mistrust. Nothing seemed to stick, sink in or sway public opinion in favor of a company that was trying to break free of its past. This was hurting the organization, not only from an image standpoint, but also with regards to the bottom line. McDonald’s decided it was time to get on the front foot and set the record straight about its food and they way it behaves once and for all.

Peter Bush, the CEO of McDonald’s Australasia had the right idea. ‘If we could sit down for just five minutes and tell our story one to one with the consumer, McDonald’s wouldn’t have the brand issues we have today.’ His conversational approach become the seed to their Take a Closer Look campaign, in which people’s conversations and concerns were displayed in the ads against McDonald’s irrefutable facts. Essentially, McDonald’s leveraged conversations around its own myths as the basis to start conversations with its customers.  The result was that 70% of people who had seen the campaign believed what McDonald’s was saying. Ultimately, people reported that the ads made them feel better about eating at McDonald’s.

The New Zealand campaign was eventually followed by a larger, online initiative called Make Up Your Own Mind, in which consumers could literally ask any question to McDonald’s and they would answer it with facts. Unfortunately, when I challenged them on their continued decline of their food quality in many restaurants I visited, their answers were cut and pasted from other questions people asked, word for word, making it sound like the work of PR people. When further questioned about their support of aspartame in their Cola’s, their answer was literally right from the official apartame website: hardly a non-biased, credible source of information. The lesson here, always assume that your consumers already have done their online research. Brand sites like these are typically the last resort, not the first port of call.

Community and Conversation are often mixed in today’s marketing lingo, however they shouldn’t be. Although they are linked, they aren’t exactly the same. The McDonald’s campaign used Conversational Marketing, but it didn’t create a community. In contrast, Bugaboo strollers clearly has created a community of involved like-minded parents on its site, effectively leveraging people’s real conversations and stories within its communications to foster a sense of participation and brand ownership. When you link Conversation and Community to brand strategy, you get a robust brand platform from which you can engage today’s growing base of consumers who want to be involved in the shaping of the brand.

The resulting benefits of participation and ownership can add significant value to the brand, seeding it with real human experiences and emotion that reaches the long tail of your consumer base. Considering that 49 % of people made a purchase based on friends recommendations on social media property (Razorfish, 2008), social media can be viewed as an important channel and tool to interact, manage and enable these brand communities.

If this strategy appeals, does this mean you should run out and create a community? Not at all. What most digital agencies won’t tell you is that you actually don’t need to build your own community. In fact, unless there is a clearly unmet nascent consumer need for your community, you are much better off partnering with an existing community than building your own. Start by looking to see which fan created communities already exists around your brand. You may be surprised to find a few. Brands such as Apple, Nokia, Saab, Ford, Harley Davidson, Suzuki, Asus and many more all have dozens of fan created brand communities that you can interact and partner with. On top of this, there are thousands of niche, vertical communities around every passion you can imagine. Many of which could very well serve your existing customer’s interest and needs. And most of these verticals are heavily under-funded and some corporate partners could be very welcomed.

There are a number of different ways brands can establish leadership online, from providing a groundbreaking service like Amazon.com, to creating a strong brand position that completely resonates with a core customer base, which is what RedBull has done. To identify potential leadership strategies that a brand can adopt in any given category, I have created a 7 stage positioning chart.

Brand strategies for traditional and empowered consumers

Now the first 4 stages are the brand positions that have defined traditional marketing since the 1980’s. These are Stage 1: Generic or unbranded, Stage 2: Brand as reference, Stage 3: Brand as personality and Stage 4: Brand as icon.

Stage 1, or Generic Brands are often commodity products, such as oil or aspirin – products which, for the most part, are all pretty much the same. In generic brands, volume, price and accessibility determine sales. As you see in the chart, it occupies the bottom corner of our “differentiation versus consumer” matrix. Which basically mean’s that it’s a brand positioning that appeals mainly to value-oriented consumers. As such, loyalty is practically non-existent. The cheapest item typically rules. Marks & Spencer has used this positioning recently when it created its new low priced, value line of “Basics” as a way to keep their recession concerned shoppers from defecting to Tesco.

In Stage 2 we move to the Brand as Reference stage. This is when a brand becomes the category. Think Xerox or Gatorade, where your product name becomes synonymous with it’s benefit. Gatorade = sports drinks and Xerox = photocopying. Interestingly, Google has been trying hard to ensure that “googling” something, to mean they are searching the web, doesn’t appear in any dictionaries as a way to keep their brand out of this troublesome space – a strategy that has so far proven effective.

Stage 2 brands often live in areas of intense competition. Take Colgate for instance. It’s a toothpaste competing with Aquafresh and a number of other brands, which all, to varying degrees of success, do exactly the same thing – clean your teeth. So marketers of reference brands tend to focus on traditional value-based segmentation models to understand needs, “I need/want to look good,” so “white teeth is important”. Advertising then looks for hooks to find good ways of matching rational product benefits with these needs.

Because Stage 2 brands are often low involvement brands, loyalty is often based on “points and rewards” schemes, essentially turning loyalty into a commodity business that you can buy and sell. Naturally this is problematic because a challenger brand can always offer to “buy” up loyalty by purchasing points from customers who defect. Frequent flyer miles are a good example, where airlines have been known to purchase each other’s customer’s frequent flyer miles.

Stage 3 brands work hard to differentiate themselves by using personality as a point of difference. The UK softdrink Tango used this to brilliant effect in its advertising in the early 1990’s. Historically, the strategy was effective because it made brands more humanistic and appealing. It also created emotional reasons to purchase rather than rational ones. In markets where TV still dominates, personality can still work as a brand strategy. However, in the online world, its impact tends to be more limited. Once you start, you have to constantly reinvent the creative to keep it fresh, alive and interesting. And even then, consumers eventually grow bored or tired with the effects. Just track the rise and fall of Diesel Jeans. What was the last ad from them that you can remember? When was the last time you visited their website? And why would you anyway?

Much of the value-based segmentation that exist today came from the drive to give brands a personality that resonates with consumers. Loyalty for Personality Brands tends to be driven around brand experiences. This is why you have a lot of product trialling in supermarkets for instance. Or why brands like Kraft spend millions on creating recipes around its products to get you to try them in new dishes.

Most of today’s top global brands, from Nike to Nokia, are at Stage 4, the Brand as Icon stage. In this stage, the brand is part of the psychological make-up of the consumer. It becomes a way for people to identify themselves. So the 18 year-old football fanatic wears Nike and Quicksilver and drinks Red Bull because those brands help him define who he is. Loyalty among icon brands tends to be fairly strong, as it’s built on an emotional basis that is linked to the way the customer wants to be perceived.

As much of this brand ID creation is influenced by the brand behaviours of peers and tribes, the community, both online and off, plays a growing part in our brand preference list. If we extend this thinking further, we see an evolution where the brand itself becomes a type of community, one defined by common interest and preferences. This is why owners of Harley Davidson motorcycles often feel a bond or affinity with other owners. Or why drinking a can of RedBull is like being part of a club of hi-energy fanatics.

There is an interesting variant on this brand space which is quite strong among today’s prosumers, and that’s called the Brand as Activist/Philanthropist. Currently this is a highly attractive and powerful niche positioning that appeals heavily to prosumers. The more empowered a consumer is, the more cynical they become about corporate behaviour and blatant profiteering. By linking the brand to its social/CSR behaviour, the brand gains real meaning and impact online. The opportunity for customer involvement is also very high as you can make the customer part of your “giving back to society” activity.

With the exception of a few key brands such as Newman’s Own in the US, which is founded as a social enterprise, most brands utilise this not as a brand positioning, but rather as a tactical strategy. Which is a shame really, because as global problems increase, the opportunity for brands to stand out with this strategy are significant.

One could argue that the Brand as Activist/Philanthropist is not really an evolutionary step up from Brand as Icon stage, but rather a comparable strategy in itself. However, I have put it here simply because I believe that Iconic brands will have to align their brand values with their behaviours to survive. Prosumers are looking for brands with real meaning. Not just marketing fiction. And how the corporations and the people behind the brands behave determine that meaning. We have seen enough evidence of this in the last decade, between Shell, Nike and now Texaco, to know that a business and brand has to be more than its products and marketing. It has to be also its mission, beliefs, values and most importantly, its behaviours against the first three.

An equally powerful brand position to adopt online is Brand/Customer Partnership, our Stage 6. I see a lot of Iconic brands trying to move into this coveted online brand space with mixed results. The idea is that the brand becomes defined with the participation of it customers interacting within a community or conversational framework.

The power of this position is that it leverage’s the needs of prosumers to create deeper reasons to engage with brands beyond marketing fluff. Remember, most of society lives in a world beyond their control. Corporations and government seem to have all the power and generally are seen to exploit people. The Brand/Customer partnership strategy recognises this and helps empower customers more directly by allowing then a greater degree of control over key aspects of the business, from product creation using Customer Made strategies, to distribution and sales using social affiliate marketing. The customer becomes a virtual member of your business and hence is rewarded for contributing to the business. In a sense, the customer becomes a “brand owner” via their active involvement and participation. This sense of ownership offers them the psychological rewards of being more in “control over their lives” while also being able to contribute to something larger than themselves that they can believe it.

The last point it critical and is why many iconic brands continue to fail in this strategy. Most iconic brands were built up off the back of stellar marketing budgets over decades. If you have spent a billion dollars or more on building your brand, it can be very hard to suddenly start surrendering its development over the masses. The other problem is that Iconic brands typically see their CSR initiatives and marketing as completely separate entities. In fact, some see Brand and Corporation as separate entities as well. And this is where the positioning becomes hard to implement.

To work in true partnership with consumers, you not only have to be willing to surrender a degree of control over your brand development, you also have to give them a reason, that is larger than themselves, to want to become involved. So just letting customers create commercials for you or asking them to give ideas for new products simply isn’t enough. You have to have a goal, a mission that they can believe in and want to be part of. Think of Dove’s Campaign for Real Beauty. The effectiveness of the campaign was that it not only gave people a reason to believe, but it also empowered them to contribute to the debate and be part of a mass movement.

Which is why the Brand as Activist/Philanthropist sits before Brand/Customer Partnership. If you adopt the first strategy, you will have powerful motivators for customers to work in partnership with you to make it happen.

In this space, the community of like-minded buyers are key to thriving in this space. Suddenly the brand is no longer a brand of me, but a brand of we. As marketers, we need to look beyond the individual to also look at their networks.

The final positioning is Stage 7, Brand as Democracy, in which you literally use your brand as a platform for tackling global problems working in tandem with your customers. Brand as democracy enables the community to turn the power of the brand into direct social action in an effort to affect global change. Whether it is to use the brand as a media or to use the brand as a platform for doing good.

In essence, you allow them to decide what problems you should be addressing to solve. For instance, if you are Coca-Cola, your customers may dictate that you should be addressing the problems of global obesity and water shortage. Using democratic principles and digital platforms, you can empower your customers to vote, debate, propose and participate in finding solutions to these problems together with you. To make this work, you would need to align your agenda with that of the community and create a triple win alliance between you, the customer and NGOs. Here, the customer and society win through the community action; the NGO wins through greater reach, participation and finance; and you win through a level of loyalty that cannot be beat by any other brand or strategy.

The key to making this positioning model work is to know how to apply positioning strategies of this nature is to have a detailed understanding of your market, competitors, business trends and consumer behaviours. This is why I typically recommend starting with a quick internal and external audit that involves your marketing and sales staff, as well as anybody else with who may have a unique insight. I then work with you to define a number of likely brand positioning scenerios to find the one or ones that best fits the business needs and objectives. As it’s possible to be at different stages at the same time in different markets or for different consumer groups, it helps to look at your business holistically and understand which positions are the best for which markets.

Many of the more competitive brand strategies rely on new forms of online marketing, or even require the creation of new online services and products. In the later articles, I will explore some of the more popular methods being used today.