The future of marketing – You don’t own your brand anymore

In my last blog, I introduced two trends that have fundamentally changed data-driven marketing over the last two decades. In this instalment I want to introduce two more seismic shifts that modern marketing organisations have to deal with.

The third big change to impact marketing has been the dramatic change in consumer expectations.

Alberto Brea recently said, “Amazon did not kill the retail industry. They did it to themselves with bad customer service.”

The impact of Amazon

I think it is possible to over-exaggerate the impact made by e-commerce platforms – and Amazon in particular – on retail in general. For a lot of companies these platforms are part rival, part new-channel-to-market. In fact, NYU Professor of Marketing Scott Galloway recently noted that if you look at the clothing market in the US, the fast-fashion retailers – specifically H&M, Uniqlo and Zara – have all had higher top-line growth than has Amazon. I think that the evidence suggests that it is possible to compete – or at least co-exist – with the e-commerce giants, so long as you have the right offer.

But it is now very difficult to have “the right offer” – in particular for millennials – if that offer doesn’t include insanely great customer service. We have been conditioned to expect more.

We have been conditioned to expect more.

Here’s a simple example. I bought a Network Attached Storage (NAS) device recently from Amazon.co.uk to securely store my digital music, video and photo libraries. When the device arrived during the late afternoon the day after I had purchased it, it wouldn’t boot properly. I went to the forums and established from the error code and the discussions that it was likely a hardware error, so I filled-out an online return form. By now it was early evening (I won’t tell my boss about the two hours I lost trying to troubleshoot a device purchased for my own personal use if you don’t), so I went downstairs from my home office to spend some time with my wife and kids. And I promptly forgot all about the defective NAS.

The following morning, a replacement unit arrived. I hadn’t even gotten around to printing the return label and boxing-up the defective unit before Amazon had sent me a new one. About 15 hours had passed since I completed the online return form.

It takes our bank longer to move some 1s and 0s from one side of a data centre to the other than it takes Amazon to ship a replacement product from one end of the UK to another…

By contrast, it takes 48 hours for a payment that I make from my current account to show-up on my credit card. My current account and credit card are both with the same bank. In fact, pretty much all our financial holdings are with the same provider, because when we got married my wife established pretty quickly that I was a liability with money – and demanded that I put all of mine in the bank that she used where she could see it. But it takes our bank longer to move some 1s and 0s from one side of a data centre to the other than it takes Amazon to ship a replacement product from one end of the UK to another.  Think about that for a minute.

Here’s the thing: I’ve been with the same bank since we got married. That’s about 18 years. It has always been this way, and honestly, I was never that bothered. Until very recently I took an ‘it takes as long as it takes’ view of these things. But not anymore. Now it drives me nuts that it takes 48 hours for a payment to show-up on my credit card. Amazon, eBay, Netflix, UBER, and the rest have completely re-set my expectations. I now expect a completely different level of customer service from the brands that serve me.

The Millennials that we all obsess about reaching? They are the Amazon generation,
and they have never known anything else.

And the Millennials that we all obsess about reaching? They are the Amazon generation, and they have never known anything else. I highly doubt that my 11-year-old son will be prepared to make the same allowances for my bank – borne of genuine loyalty and middle-aged inertia – that I do.

Why you don’t own your brand anymore

And so, to the fourth thing that I think has changed: companies don’t own their brands the way they used to.

The world is increasingly flat and increasingly interconnected. The Internet has made it easier for new companies to launch their products to a global audience – and digital payment platforms and global logistics make it relatively straightforward for consumers to transact with those new brands. The competitive landscape that our brands inhabit has changed – and probably permanently.

The rise of social networking has also led to a phenomenon often referred to as “brand democratisation”. Twenty years ago, if you wanted to persuade customers that yours was a “premium” brand, it was often enough just to hire a slick ad agency. Brands controlled the message, including how and where it was delivered and consumed. If you repeated your message often enough, it became the truth. Today, social media has given three billion consumers a very public forum in which to freely talk about brands, their products and the service they receive. And life is suddenly a lot more complicated for brand managers.

Online sentiment is almost always binary: it’s either very positive, or extremely negative.

Online sentiment is almost always binary: it’s either very positive, or extremely negative. Social media not only hands over a lot of control from brands to customers, it cedes control to those customers who have a strong – even visceral – reaction to the brand. The silent majority are often drowned out by the vocal minority. Reactions – positive and negative – are amplified.

When Liri Andersson and Jonathan Macdonald wrote their Brand Democratisation paper in 2012, the “United Breaks Guitars” video by Canadian musician Dave Carroll had received twice as many views as the video of Barack Obama’s inaugural acceptance speech. For several years, United’s brand was arguably effectively defined by that one video.

Right now, United Executives could be forgiven for feeling nostalgic for those days, thanks to another video that went viral on social media and that exists solely because of the ubiquity of the smartphone. In the same paper, Andersson and Macdonald argue that following the Gulf of Mexico disaster, BP effectively lost control of the narrative to a viral parody Twitter account – @BPGlobalPR – run by people entirely unconnected with BP.

Since customers are going to have these discussions whether brands like it or not, organisations may as well ensure that at the very least they have visibility of them. Text is just data, so organisations have an opportunity to learn from all those social media posts – the good, the bad and the ugly – via sentiment analysis and topic modelling. It is for this reason that we see companies increasingly think of Twitter as a customer service channel, rather than just an outbound marketing channel.

Next time: what a VC investing in the FinTech sector can tell us about what has stayed the same in marketing.