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]

Some will remember the past decade as the decade the people started to claw back power from business and government. What with the rapid growth of online consumer activism, whistleblower sites and consumer driven watchdog organisations that has proliferated on the Internet, I have started to wonder if we aren’t nearing a future in which the current shape of government itself is outdated.

This year will undoubtedly be remembered as the year that MPs in Britain were exposed as people who see working in government as the proverbial gravy train. Second homes paid for, when most people in Britain don’t even have a first home. Three months summer holidays, when most people in Britain are lucky to get three weeks. Short working hours, when most people in Britain are working the equivalent of 1.5 full-time jobs. And golden pensions worth millions, when most people retiring in Britain will be retiring in poverty.

Times have changed. We no longer live in the agrarian world that defined the early days of “government by representation”. People no longer have to travel to London from the countryside on horse and buggy in order to have their voice heard in government. We no longer need to rely on “people who know better” about  problems inflicting our society, nor should we. For time has proved over and over again, they simply don’t know any better than we do. We no longer need problems “managed” by people who in truth, only know how to pass laws to “manage” problems under the carpet rather than actually solve them.

This is the 21st century. It is not only the Information Age, but also the Age of Empowerment. It is the time when we the people, should have the direct power to influence change in our world. In which we the people, should be able to find solutions to problems rather than new and clever ways to sweep them under the carpet.

If we are to even think about replacing the current system, we need another model to consider. One model presented itself in Charles Leadbeater’s book, “We-Think.” Now, the last time I talked about “We-Think,” I was kind of doing it a bit of disservice by not talking about the fundamental societal change the author refers to.  The step-change behind the notion of We-Think, is that collective humanity is better placed to actually solve problems than individuals. The core idea works like this.

You take a problem, break it down into its constituent components, and disseminate each part to different groups of people. Each group is composed of a mix of skill and knowledge sets. So you might have one group let’s say, composed of sociologist, scientists, artists, planners, researchers, writers, or even construction workers. According to Charles Leadbeater,  these mixed groups are actually better at solving problems than for instance, a group of specialists who all study in the same or closely related fields. Because we disseminated the problem into smaller chunks to different groups, each problem doesn’t seem all that overwhelming. So when you bring all the different groups together, you can actually solve some very complex problems. This is one reason, for instance, why Nasa has opened up their research problems to the people. And why even die-hard organisations like Proctor and Gamble now allow anybody to invent new products, and earn royalties from their inventions.

We-Think in essence, allows companies to cast a much wider net for its innovations, for far less money than it would cost for them to do it all inhouse using a team of dedicated researchers. Plus you are far more likely to get some truly surprising ideas, which could really never come out of your own organisation. Politicians on the other hand, like to debate problems amongst themselves. Because the majority of them are either lawyers or ex-businessmen, their debates often are very repetitive, typically resulting in a small handful of available solutions: to either pass a new law or privatise, nationalise or re-privatise something.

Nobody stops to think whether these essentially limited basic solution sets are in fact, going to solve the real problem. At best, they are akin to bandaids. They mask the real problems with a skin-colored covering, so you don’t notice the gaping wound that lies underneath, At worst, they make the problem worse, which is what essentially happened with the majority of the PPI (Public Private Initiatives) that the government offered up to outsource the problems to somebody else. The only problem with approach is of course, most of these companies simply Inflated the real problem in order to inflate their profits to solve the artificially inflated problem they were contracted to fix, but which of course, they never did, simply because if they fixed the problem, they wouldn’t be able to milk it for more profit.

At no time, will any of the solutions debated in Parlaiment every involve getting rid of the MPs altogether and letter the people join together online to find the real solution to the problem, We-Think style. More importantly, as citizens would create the laws in this We-Think run society, we would likely have a corporate world that actually works for the people rather than for themselves. After all, when you’re own consumers can pass laws that control how much profit you can make for instance, or even which makes your business illegal altogether, you are likely to make sure they accept what you do and how you go about it. Without the protection of government flunkies, it’s hard to imagine guns and other weapon’s manufacturers existing at all. Likewise, it’s equally hard to imagine any heavy polluting industry lasting long in a We-Think world. It’s easy to corrupt a handful of people to do your bidding or to turn a blind eye, but try corrupting an entire nation of people. May not be impossible, after all, Ceasar was fairly effective at keeping the masses distracted, but in the long run. But in an internet powered We-Think run society where whistleblower sites are common, it’s easy to create a groundswell moment around an eye-opening truth.

Naturally, a We-Think run nation would mean the end of the professional politician. But so what? Reading the headlines nowadays, does anybody really want them? Most consumer research shows that what people really want is to be able to have a say in how things are run, or even to be able to make direct impacts to solve problems. A Vox Pox I did for a Levi’s campaign of young Londoners actually revealed that at the young actually want to solve problems in their local communities, some even in the wider world. But most felt unempowered to do so.

By switching to a model of “direct participatory democracy”, ever citizen could be empowered to make a difference and be part of a collective hunt for solutons to society’s problems. Each problem could be debated online, researched by different groups of mixed specialists and compared and studied with input from other teams. The various solutions could all be analysed by indiviuals actually living those problems and voted on by the public at large. In a true democracy, the people’s vote is supposed to be what decides the direction of government. In  a We-Think government, this literally is what happens, every day. People decide thier own futures, together, collectively. If something doesn’t work out. if a solution is proved to be the wrong one, the people can instantly gather, re-analyse and change it to a new solution, creating what is essence, a truly dynamic, flexible way of government that is fully capable of dealing with our quickly changing world.

% of UK households with Internet Access

All of the underlying technologies now exists for this new, fairer and more open type of democracy exists already today. Broadband penetration in the UK is now at 52%, while basic internet penetration is at 68%, and it’s increasing by about 1 million people a year. Mobile penetration is at 78% of the population.

Population by age, UK

Given that 20% of the UK population is under 16 years, this means that pretty much everybody who could own a mobile phone, does. We all have the tools in our hands and at our fingertips every day to participate in a We-Think government. So the burning question is simply, why don’t we?

Statistics: http://www.statistics.gov.uk

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

There was an important and potentially market changing report released by IBM last year called ”Attaining Sustainable Growth Through Corporate Social Responsibility,” that the sustainability lobby and bloggers picked up, but marketing bloggers seems to have ignored. So here is the video on it for those who missed it.

Now, there is likely to be a belief that because of the recession, we can throw out all of this information. We can unwind our CSR efforts. Finally go back to massive cost cutting and focus on the bottom line by continuing to do business in the way we once used to, without having to worry about ethics. When it comes to the recession, ethics fly out the door. Or does it?

Consider the massive consumer and even governmental back-lash against the massively unethical behavior of the banks that threw the world economy into a tailspin. Governments are calling for more regulation and an end to runaway capitalism. While consumers are calling for a return to the old-days when bankers were trusted members of the community and knew their individual customers. Take a look at the latest Natwest campaigns on YouTube to see where that industry is headed. 

The fact is, we are entering an age where CSR will be what keeps a brand from tanking in the post-recession world. So though marketers and CEO’s might be inclined to shelve their CSR plans (for now), they may want to think twice and start using the recession as the reason to re-engineer their marketing departments and their business.

Here are four ways for companies to rethink the way they approach marketing in order to ensure coming out of the recession ahead of the competition.

Re-thinking corporate marketing

The most worrying statistic in IBM’s report is that 76% of surveyed business leaders don’t know their customer’s CSR expectations. Read another way, one could almost say that these business leaders don’t really understand their customers at all. They may have insights into the consumer’s purchasing patterns, but they don’t really know what makes them choose one product over another, let alone what they really think concerning ethical behaviour. For marketers to really understand today’s consumer market, there are some fundamental marketing behaviours that need to change.

First, marketers should no longer attempt to classify and pigeonhole customers into artificial segmentation models. These are old-fashioned research methods that belong in a previous age and should be left behind. Marketers need to recognise and identify people as individuals, each with their own unique needs and desires. Against popular perception, powerful privacy busting databases are not needed to do this. One simply has to be in a position to ask them to share the information, or better yet, to empower them with better ways to control and share their own data.
 
Second, marketers should stop thinking in terms of persuasion, selling and manipulation. Marketers have been waging psychological warfare against their customers for decades, and many still continue to do so. Armed with the latest psycho-babble from their ad agencies, they rush out to attack the individual’s sense of purpose, family, confidence, self image and integrity and to supplant it with a belief that shopping cures all ills.
 
Not content with brainwashing adults, many marketers are even falling into the legal and ethical landmine that is marketing to children, in the belief that brainwashing a future generation of consumers will ensure long-term growth. In truth, they are merely opening themselves up to an extremely litigious future, when parents of these children start class action suits against these companies for violating parental rights. The law may appear to insulate today, but laws change as quickly as the politicians who push them through. And what is legal today, necessarily won’t be tomorrow.

Third, marketers and CEO’s both need to stop thinking CSR as a public relations department or a new form of marketing opportunity. As Benetton and Marks & Spencer have learned, there is massive business growth for companies who embrace CSR, not as a new product division, or even as a communications platform, but rather as core business practice, one that runs horizontally and vertically through the organisation. One only needs to look at the runaway success of companies such as CaféDirect, Innocent Drinks, Body Shop, FairTrade labelled products and many other new players, to realise where the consumers’ money is going to be spent. These ethically focused companies will dominate the 21st century post-recession landscape.

Even the term marketing itself is out of date. A new term should be coined to more accurately describe what these departments need to do. Perhaps Customer Partnership Manager or Community Engager would be more accurate titles.

Fourth, marketers need to be empowered by CEOs to focus on delivering results annually or even bi-annually rather than quarterly. And their benchmarks shouldn’t solely be focused on sales returns. By changing the measurements for marketers, CEO’s can empower their front-line to think and act strategically over the long-term, rather than tactically over the short term.

Concepts such as, ‘the lifetime environmental and social costs of a product or service’ need to be part of the marketer’s daily vocabulary. They need to be able to think about softer but critical issues such as ‘consumer confidence’ and ‘trust’ over profit margins. The current trend of overcharging for ethical and organic products on the premise that customers will be gladly pay extra for a clean conscience is happening because marketers still prioritise their commercial imperative to endlessly increase profit. The real cost of this bi-polar thinking is a growing damage to brand reputation.

For example, there is growing resentment among consumers who buy high-priced organic products that they are being ripped off in a land grab by opportunistic supermarkets. So as one hand of a supermarket brand is trying to create a sustainable and ethical reputation by committing to FairTrade, organic and local sourcing standards, their other hand is seen as robbing customers blind. 

There is a way forward, but one which will be a bitter medicine to swallow for today’s profit obsessed marketers and CEO’s. That medicine is called total transparency, and it requires a great deal of trust and faith between the corporation and the consumer. That trust and faith can be developed at low cost using the Internet.