‘Beyond advertising’: How companies can build better customer relationships

Presented here for discussion is a summary of a current article published with permission from Knowledge@Wharton, the online research and business analysis journal of the Wharton School of the University of Pennsylvania.

How many times do you block advertising in an app or online? Yet, many companies persist in this marketing technique.

In a new book, Wharton marketing professor Yoram (Jerry) Wind and The Wharton Future of Advertising Program executive director Catharine Findiesen Hays argue that consumers are in control and want to interact with companies in new ways. Their book, “Beyond Advertising: Creating Value Through All Customer Touchpoints,” addresses ways companies can develop a more integrated relationship with those they serve.

In an interview on Wharton Business Radio, Mr. Wind noted that consumers can get information on any brand they want to buy — the features, recommendations, pricing — at any moment on their mobile device. While traditionally at the “mercy” of marketers in knowing all the details, consumers now have more information than the marketer, are skeptical and don’t trust advertising.

“Consumers are sending a very clear message to advertisers: ‘We hate your advertising. We want to block it,’” said Prof. Wind.

At the same time, “Beyond advertising” means that, beyond traditional media, brands have to reach consumers through package, product and store design as well as call center interactions — any point of interaction a consumer has with the brand.

Finally, targeting needs to shift from “How much of my product does somebody consume?” to other parts of consumers’ lives such as “their communities, their aspirations, where they’re going,” according to Ms. Hays. Marketers must align the brand objective with consumers and society.

The authors state that silos between marketing and other departments make an integrated approach to branding and consumer outreach more difficult to acheive.

But Ms. Hays said that some forward-thinking marketers are welcoming the change. She said, “It’s a shift from feeling like they’re totally in control of what the conversation is around their brand to actually being part of a conversation — bringing consumers in, bringing people in — so that they are part of a cultural zeitgeist, in fact, and part of people’s lives.”

BrainTrust

"It’ll never be the same again. Those longing for the good old days will have to binge watch "Mad Men" on Netflix — the irony of it all."

Mohamed Amer, PhD

Independent Board Member, Investor and Startup Advisor


"The changes in advertising will be more subtle as opposed to radical because of these fundamental realities."

Ross Ely

President and CEO, ProLogic Retail Services


"The ultimate consumer touchpoint is their touchscreen. Nothing puts the consumer in control more than their phone."

William Hogben

CEO, FutureProof Retail


Discussion Questions

DISCUSSION QUESTIONS:
Do you see “in control” consumers driving radical or subtle changes in advertising and other communication approaches for brands? How should marketers change their thinking about customer relationships?

Poll

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Cathy Hotka
Cathy Hotka
7 years ago

Ads have become so intrusive — now with video and sound that launch when you open a page — that consumers almost have no choice but to install ad blockers. At the same time, they’ll happily engage on social media platforms. Companies need to learn how to talk WITH consumers, not AT them.

Max Goldberg
Max Goldberg
7 years ago

This topic is not new, nor are the ideas posed by the Wharton paper. The old model of push advertising has been waning for years and has been replaced by an interactive conversation. Marketers should provide consumers with the information they want to make informed decisions. They need to show how their products can make consumers’ lives better. And they need to try to establish an emotional bond with consumers. Anything less is a recipe for failure.

Joan Treistman
Joan Treistman
7 years ago

It could be about controlling turf that keeps marketers from an integrated strategy. Indeed, consumers are in control. But many marketers prefer to believe their ideas, strategies and tactics will move customers. And they’d rather move forward with their beliefs than observe, research and analyze what is really going on.

Professor Wind and Ms. Hays describe the situation perfectly. They mention “points of interaction.” It’s challenging to consider each point of interaction independently and then try to integrate a strategy around them. Whether there is a plan in place to adapt to “in-control” consumers or not, consumers are seeing brands within a continuum of their own pattern of exposure to media and shopping behavior. So it makes sense to capitalize on those points of interaction. But it may take stepping out of your own sphere of influence to work within a larger corporate and marketing framework.

Steve Montgomery
Steve Montgomery
7 years ago

Not sure anything Ms. Hays wrote is actually that new. The power shift from retailers and marketers to consumers began when alternative sources of information first appeared. By far the largest of which was the internet. With its arrival, the consumers found they could locate information online that the clerk in the store was not likely to know. When manufacturers and retailers learned of its potential as an advertising medium many overdid it, and still do. With cookies they can stalk a potential customer and some do. It’s no wonder that consumer block ads.

The other elements of the article’s summary have been noted before. Manufacturers and retailers have long been aware of aspirational shoppers, the impact on packaging, the impact of the shopping environment, etc. Silos in companies have existed since the beginning and unfortunately still do. I agree that it can make cultural changes difficult.

Knowing all of this and doing something about it are two different things. There are companies that are working hard to make the changes and then there is the rest. The question is, which are you?

Mohamed Amer
Mohamed Amer
7 years ago

Shopper reviews, social networks and social listening, one-way to 360-communications, real-time personalized offers, the experiential economy — all these and more are rooted in consumers’ power and are transforming branding and communications radically. It’ll never be the same again.

Those longing for the good old days will have to binge watch “Mad Men” on Netflix — the irony of it all.

Ross Ely
Ross Ely
7 years ago

Fundamentally, brands must reach consumers through advertising to build awareness and generate demand. Even “new generation” brands like Dollar Shave Club and Airbnb are using TV advertising to create awareness and position themselves in consumers’ minds.

The changes in advertising will be more subtle as opposed to radical because of these fundamental realities. Once a brand is established, it can broaden its marketing approach to include community-building and aspirational messages. However, traditional advertising techniques will still play a major role in creating the identity for a brand.

William Hogben
William Hogben
7 years ago

The ultimate consumer touchpoint is their touchscreen. Nothing puts the consumer in control more than their phone. They’re using it interact with the people they care about and they’ll use it to interact with the brands they care about too — but space is limited. Their phone is the new most valuable real estate and competition for that spot on the home screen isn’t just with other retailers, but everything else in their lives. Merchants need to develop strong mobile strategies now before they get shut out of digital and pushed out of business.

Lee Kent
Lee Kent
7 years ago

Of course! The consumer has said they don’t like being sold to and they put their money where their mouths are. This has been going on for a while now and smart retailers get it.

On the other hand, let’s not confuse advertising with marketing. Subtle though it is, there is a difference. Advertising is where you tell folks what you’ve got. Whether it’s a sale coming up or a great new product. They have to find out somewhere.

Today’s consumer likes for these ads to be entertaining. Not a selling piece. Something that shows the product or the deal in a way that draws them in. Look at all the Super Bowl ads. We, here on the ‘Wire, even run a competition on them. Consumers don’t mind sitting back and watching an ad that captures them in some way.

Marketing, on the other hand, needs to back waaaay off. Let’s even find a new name for it. Shall we? Since I am on the local CXPA (Customer Experience Professional Association) board here in Atlanta (shameless plug) I really am coming to see the role of marketing as more like “Experience Designers.”

Let’s put that in our caps and noodle on it!

And that’s my 2 cents.

Roger Saunders
Roger Saunders
7 years ago

Consumers have been significantly “in control” of the Path to Purchase for the past 15+ years. Long gone are the days of a manufacturer designing a product, retailers building a bigger box, and marketing messaging being limited to traditional media forms, focusing simply on product.

I recall a Money Center banker bemoaning some 30+ years ago the difficulty of setting rates when he stated to a Chicago audience, “It’s a challenge to set rates nowadays. The consumer knows rate changes as fast as we do. They’ll kill for one-eighth of a point.”

Perhaps he recognized that the consumer was at the center of the equation even then. Shortly after, Illinois opened up to branch banking and one of America’s largest institutions was sold. Advertisers would do well to understand that they, too, have to put the consumer in the center of the equation, lest they find themselves playing under new ownership.

Harry Truman offer this thought in 1952 before returning to Missouri, “There is nothing new in the world except the history you do not know.” Advertisers need to know their consumer, as the latter is inventing the history of their journey.

Karen S. Herman
Karen S. Herman
7 years ago

Consumer habits are formed by changes in the economy, society, technology and other factors. How consumers adapt to these changes correlates with how they interact with brands.

Forward-thinking brands are already anticipating how to guide the consumer and their brand interactions. Look at Amazon, Tesla, Burberry and Donna Karan and you will see them going direct to the consumer.

Consumers are not trying to control, they are trying to adapt. Brand interactions that make this adaption easy, enjoyable and rewarding are key.

Ralph Jacobson
Ralph Jacobson
7 years ago

Marketers need to capture as many sources of data as they can, both internal and external, to paint a clearer picture of their target audience and build demand and true loyalty. These sources include social (both internal, like call center, customer reviews, etc. and external social channels), local news and local events that affect shopper lifestyle needs and even the local weather. You need to be able to see how all of these forces interact with each other and when that becomes available, you get far deeper insights and are able to improve demand forecasting dramatically. This is the way some innovative retailers are changing their marketing strategies and developing stronger, more personal shopper relationships.

Tom Redd
Tom Redd
7 years ago

Real simple: take control of your promo. No Wharton-level thinking is needed to say, take control. What does this mean? If a shopper opts out of a select retailers’ ads then never drop them an email and never be a pop-up on their browser. Earn the respect of the shopper. They make one purchase, then send a CEO-level note and thank them, then disappear. If they want you they will come back.

Real simple. Run your network and do not let ad services do the promo for you.

Jane Sarasohn-Kahn
Jane Sarasohn-Kahn
7 years ago

This is happening especially in particular segments where crowdsourcing and engaging in dialogue with peer-consumers and with companies can benefit the individual — say, with health and health care, food, clothing, personal care and beauty, and consumer tech.

Ken Morris
Ken Morris
7 years ago

The balance of power has clearly shifted from retailers to consumers. Customers have the ability to search and compare products and prices online, read customer reviews and get instant feedback from their circle of friends via social media.

Consumers don’t like intrusive ads that are blasted to the masses and aren’t relevant to their individual preferences or needs. They don’t buy newspapers, don’t watch traditional TV, they are a new breed. Ads are on a path of slow death and have been on that path for some time. Savvy retailers are replacing their investments in ads with investments in social media and communicating with customers on a more personal and intimate level.

I may sound like a broken record, but “customer context” is the key to effectively communicating with customers and providing relevant and desired information and offers. Real-time retail capabilities are currently available and retailers should understand their customer’s preferences, what’s in their closet, what they have purchased and what they have browsed online. Brands that understand what is happening in this moment, in this location with my personal preference will reinvent marketing. With customer context, retailers can have meaningful communications that will be more welcomed than ads.

Shep Hyken
Shep Hyken
7 years ago

Get used to it! Consumers can, at the touch, tap or swipe on a screen can delete not only your ads, but your relationship. It’s simple. Get permission to engage with the consumer and then provide them value through the engagement.

Kenneth Leung
Kenneth Leung
7 years ago

With modern technology, consumers can block and shape communications from brands. Marketers need to think about compelling content and activities that consumers would want to receive or interact. Force feeding messages through massive media buys is seeing diminishing returns, while small programs with attractive content and interesting interactions offer better results.

Camille P. Schuster, Ph.D.
Camille P. Schuster, Ph.D.
7 years ago

Of course consumers are driving with their control. No longer can companies just put out a message and be the sole owner of brand image. Consumers can block, ignore, respond to, or change any message the company sends. Smart companies will keep tabs on what consumers are saying and doing to create an interactive dialogue.