How Did We Get to the Age of the Customer?
May 14, 2014
Author: Aldo Cundari
Publication: Strategy Online
Ever year, as part of staying in touch with our clients’ customers and their behaviours, I visit our automotive client’s dealerships and observe how customers behave in store and how well sales associates are interacting with customers. A couple of years ago, the dealership was filled with customers shopping for new vehicles, always a welcome sight, but it was really how they were shopping that caught my attention.
Customers were not there for product information or presentations from sales. They were there for a test drive, after which the majority decided on the spot to negotiate an offer. This differs from just a few years earlier, when the average customer would visit a dealership at least three times before starting to negotiate a price. It was through these multiple visits that they built up their product knowledge prior to their final decision.
Today the opposite holds true – before visiting a dealership customers spend countless hours online researching brands, built a virtual car with the features they want and reviewed multiple financing options. They gather information, read consumer reviews and influencer opinions, and use their social networks to get first-hand experiences from known third parties. Once they’ve done their research and made an informed decision, only then do they visit the dealership (whose customer reviews they’ve checked) and arrange a test drive with the intent to purchase.
This is the new customer and our new customer challenge. How do we influence this new customer, give them the information they need to make decisions and anticipate their questions before they arrive at retail?
The dealership story is a micro example of today’s environment. The last decade has witnessed a massive shift in how we market products and services, driven by digital technologies, social media, hyper competition, product proliferation, globalization and changing customer behaviours. The most dramatic element of this new era is an empowered customer who is leveraging information through all things digital at a frenzied pace, making the world of marketing a much more challenging place. Just keeping up requires a huge commitment.
As we look back, it’s interesting to plot economic change against the evolution of marketing and how these combined changes contribute to today’s environment. The way marketing change has played off of economic change and vice versa demonstrates how innovations in both fields have moved us through a variety of marketing eras to our current situation.
The Industrial Age spread innovative solutions and new manufacturing processes, and created a wide variety of goods in all sectors of the economy. Initially, because of low volumes, all goods were purchased. As manufacturing efficiencies and outputs improved, there emerged a middle class wanting to buy these goods, which gave rise to mass marketing and the Marketing Era,which introduced early advertising and other marketing disciplines into the selling process.
The Information Age followed and is still a vital part of today’s economic and marketing environment. As the power of digital technologies enabled the customer to take the upper hand, the relationship started to flip – in essence, creating an empowered customer. About 10 years ago, the adoption of social media moved us from the Information Age into the Age of the Customer, which is much more disruptive and has dramatically changed how consumers behave, purchase and engage brands. Beware of not meeting customer needs, because if you don’t meet their expectations, they’ll just move on.
Since the Industrial Age, the pattern of innovation has been fairly consistent. Manufacturing and business innovations would stimulate new marketing practices, which would then be used to persuade customers to open their wallets. In the last decade the sequence has reversed, and the customer is now dictating the terms of engagement.
With this new leadership role, the customer has shaken up marketing, while in previous eras, innovations in manufacturing, information and communications sparked new practices in the industry. This new customer/brand dialogue signals that a new pecking order is now in play between customers and organizations, and if you are ignoring the shift, you do so at your own peril.
As the digital revolution fragments media options and puts customers in the driver’s seat, marketers have to re-evaluate their approach and look deeper to understand, empathize and help customers meet their needs through their new purchasing and decision-making behaviours.
For marketers, realizing the game has fundamentally changed is the first step. The second step is to do something about it. The starting point is to embrace change, and set in place the organizational commitment and capabilities to build and sustain a critical mass of customer intelligence to guide you and your organization. As history has shown us, progress is relentless, and in today’s marketplace, you have to use every asset at your disposal to thrive in an environment where progress is moving at hyper speed.