Nick Johnson

Brand Director interested in the future of marketing

Power has changed hands

Nick JohnsonComment
Ahimelech giving the sword of Goliath to David, by Aert de Gelder.

Ahimelech giving the sword of Goliath to David, by Aert de Gelder.

The past ten years have seen a change in relationship between corporations and their customers. Essentially, the power has shifted away from the company and toward the consumer.

Customers can kill brand redesigns. Just ask Gap, who was forced to roll back a logo redesign in the face of social media uproar. Customers can kill entire brand strategies. Look at the Netflix decision to abort the Quikster brand when separating out that company’s DVD and streaming business components. Customers also can demote experience. Look at the fortunes of taxi firms since Uber and Lyft came on the scene.

Previously successful marketing campaigns no longer pass muster, either. Look at the famous Modoc Oil Test, highlighted by the team at Marketing Experiments in the white paper Transparent Marketing. In 1885, an advertisement appeared in the Altoona Tribune in Blair County, Pennsylvania, promoting a new miracle cure, Modoc Oil. It certainly wasn’t shy about highlighting the benefits of this new wonderstuff:

Modoc Oil—the greatest medicine on earth. It has no equal. It relieves all pain instantly: Toothache in one minute—Headache in one minute—Earache in ten minutes—Sore throat in one night—Neuralgia in from three to five minutes...Modoc Oil is a sure and speedy cure. Every family should have a bottle within reach. It’s a doctor in the house.

The response was so explosive, and the demand so high, that the company producing this frankly incredible substance had to build an enormous new factory in Corry, Pennsylvania. It was still firing on all cylinders in 1912.

Nowadays, that approach simply doesn’t work. The Marketing Experiments team put that exact same advertisement in a similar paper with a circulation of 35,000. They got no sales.

Of course, this is a rather simplistic example, but it speaks to a broader truth. What customers expect has changed. They’re wary of “marketing.” They’re skeptical. And gaining their trust requires a lot more than overblown claims of instantaneous pain relief. This shift is forcing global companies to reevaluate the fundamentals of how they do business, from product development right through to marketing campaigns. They must reflect this new reality in which the customer is in control, as the vast majority of marketing executives realize:

73% of marketers now realize that competitive advantage will come from a singular focus on the customer.

In-house, companies are beginning to transition their business models and their organizational structures to reflect the primacy of the customer. This often is known as a “customer-centric” strategy. Yet although many will tell you that being customer-centric is an old precept masquerading as a new buzzword (after all, haven’t companies always focused on the customer?), that thinking is somewhat disingenuous.

For many years now, companies have organized themselves around geographies and product lines. Only since customer power increased have forward-looking companies begun to focus on organizing around customer groups and understanding those groups—and even individual customers—in as much detail as possible.

On the external side, marketing is beginning to create more value for the customer, and striving to be more relevant to their target audiences. The increasing primacy of content as part of a marketing strategy is related to this recognition: Ninety-three percent of brand marketers are planning to create more content in 2015 and beyond(see Future of Marketing survey for more) and that’s because content marketing can deliver relevance and value, both critical in this new world.

The rules of the game have changed. The rulebook is now written by the customer, not the corporation. Fundamentally, four tectonic shifts have contributed to the transfer of power between brand and customer:

  1. The move online: Communication, content consumption, and customer touchpoints have all increasingly begun to move online.

  2. An explosion in transparency: Customers can now see and understand their options far more clearly. Likewise, they are increasingly able to ascertain when someone is trying to make a silk purse out of a sow’s ear, regardless of the marketing budget.

  3. A media landscape that is fragmenting quickly: It’s far more difficult for marketers to find their customers and talk to them where they are—and it’s also difficult to follow the inherent rules and expectations of new channels and platforms.

  4. Customer data that is more readily available than ever: Although this means companies have an opportunity to deliver more targeted, relevant campaigns, it also means that competitors are already doing so. Customers increasingly expect an equivalent—relevant and valuable—experience from companies in the same market.

This is the first extract from my new book "The Future of Marketing: Strategies from 15 Leading Brands on How Authenticity, Relevance and Transparency Will Help You Survive the Age of the Customer".

The book is published by Pearson, and available to purchase here. New extracts will be published here in the coming days and weeks.