Out of Control

Consumers Have Taken Over Your Marketing. How to Deal?

By Published on .

Two years ago Doug Keim, VP-general manager of Georgia-Pacific's Dixie Retail Business, saw the marketing world turn upside down. Traditional advertising methods were receiving body blows as a growing number of people skipped commercials with TiVo; created custom mixes of information using software and Internet services; enjoyed emerging types of media like podcasts; and made their opinions known through blogs, online discussion forums and product rating sites. "We were shocked," he remembers. The nearly century-old Dixie brand risked being left behind.

Mr. Keim marshaled a reinvention of brand and marketing starting with core customers: mothers. His team dove headfirst into field research and experience. Soccer moms were more wired than anyone had realized, both in obtaining information and networking with their peers. Mr. Keim and his team had to find new ways to make decisions and marketing investments. Broadcast and print aren't going away, but as of March, Dixie became the official sponsor of MommyCast, a weekly Internet radio show, to the tune of $100,000 for the first year. Consumer research now includes "unfiltered" feedback through monitoring online venues, which, among other things, sparked some new product names.

"We had two primary profit drivers in our plate franchise-Dixie UltraStrong and Dixie Heavy Duty," Mr. Keim says. There was just one problem: outside of the company, "no one knew the difference." Although UltraStrong was for wet, heavy items, while Heavy Duty was for lighter ones, consumers would confuse the two. So the company has just finished renaming the products Dixie Ultra and Dixie.

The changes have been necessary-and scary. "There's an enormous difference between collecting insights and data and taking aggressive action and placing a bet," Mr. Keim says. "Why aren't we seeing more companies [doing things like this]? Either we're the village idiots or we're on to something."

A growing number of chief marketing officers think it's the latter. According to a 2005 study of Fortune 1000 CMOs by marketing agency Draft Chicago, only 17% of marketers feel their industries are very effective in meeting today's marketing challenges. Experts say the reason is a shift in the consumer-company dynamic. People have unprecedented control over information coming to them and are using the megaphone that is the Internet to amplify their opinions. CMOs need new communication strategies to reach customers.

OLD DAYS ARE GONE

Long ago, there were just newspapers, magazines, radios and three broadcast TV channels. Now TV channels reach the hundreds. Satellite and high-definition radios do the same for audio broadcasts. Then there's information on the Internet: online versions of publications, blogs, discussion boards, downloadable audio and video, games and who can count what else. Marketing has expanded with all the content, and everything competes for a total amount of consumers' time, which is one of the few things that hasn't grown.

Motivated consumers find that new technology lets them control the ruckus. Whether a TiVo attached to a TV, spam filters, or a Web site like My Yahoo that enables users to assemble their own information mixes, people have an increasing ability to set up what Todd Board, senior-VP of marketing-research firm Ipsos Insight, New York, calls a "garden wall," keeping out what they don't want and allowing in only that they do. And consumers are gravitating to the Internet, where their control happens to be greatest.

"[There is] a shift in what I like to call the share of day that different media control," says Chuck Richard, VP-lead analyst for Burlingame, Calif.-based information industry analyst Outsell Inc. "[I]f you had a recorder like a Nielsen [rating meter] ... for everything, you would certainly see big changes in the amount of time people are online." Not only do consumers block much of what marketers want to say, but traditional media increasingly miss people entirely. And even when people might be watching TV or listening to the radio, there is a significant chance that they are multitasking, doing something online at the same time, and so never giving complete attention.

"Lost faith in large institutions" has amplified marketing overload and the ability to control the conversation, says Ed Keller, CEO of the Keller Fay Group and author of "The Influentials: One American in Ten Tells the Other Nine How to Vote, Where to Eat, and What to Buy." In the early 1990s, people stopped believing traditional forms of marketing. Whether the result of greater media sophistication or corporate and government scandal fatigue, consumers were ready to create their own information-gated communities.

Companies can easily misunderstand these forces. Many CMOs, heirs to mass-media orientation, act as though consumers are still waiting to hear what they have to say. This corporate self-centeredness makes perceiving market changes difficult. "Some people are only just beginning to realize how in control consumers really are," says Tony Weisman, CMO of Draft, Chicago.

RESISTING THE GRAVITATIONAL PULL

Even those like Mr. Keim, actively embracing the new, find themselves misinterpreting consumer actions. Changing that mindset takes constant work. "There's always a gravitational pull to fall in love with your own opinion and own experience and own history," he says.

Non-traditional companies can also be surprised by this new dynamic. Bryan Stapp, CMO at online mortgage broker Quicken Loans, points to J.D. Power numbers putting the company's repeat and referral business at 40%, compared to an industry average of 9%. Obviously the company knows its customers and focuses customer service to please. Yet when it started publishing economic quotes and news releases through RSS (really simple syndication), a technology for on-demand information dissemination, he thought that the only upside might be getting some additional syndication in some obscure financial services sites. "These new technologies, you sometimes have to give them room to run, and they can often surprise you," Mr. Stapp says. For example, the company found that consumers, and not just news organizations, were snapping up the RSS-delivered releases and statistics.

But it's not enough to get a consumer to invite you in. "At the end of the day, if you are not a relevant, compelling authority source for the information, it doesn't matter what type of technique you employ," Mr. Stapp adds. "No one will pay attention." Determining relevant content cannot happen in a vacuum-and needn't, particularly when the flip side of consumer control is that they make their voices heard.

Playboy is learning that lesson. "We have a few public groups-the Yahoo Groups kind of thing-and we have a few unsanctioned Playboy groups that like to talk about Playboy," says Michael Sprouse, senior VP-marketing for Playboy Entertainment Group, the company's electronic division. "We have many representatives from our company who go look. We learn what kind of content people like the most. We learn more technical information. [For example,] if somebody says, 'We're having trouble finding XYZ content,' we say, 'Wow, do we have a navigation problem? Is [our site] organized correctly?"'

A company might look for the voice of the customer in several places, including blogs and replies to blog entries, customer review sites where people anonymously hold court on the fate of products and services, special interest newsgroups and message boards, even company hate sites-just doing an Internet search for the phrase "I hate [[insert your company name here]]" can be eye-opening. This is electronic word-of-mouth. "When people start losing faith in the large institutions, what do they do?" Mr. Keller asks. "They go back to their close circle of family, friends and people they know personally."

The result is a world of ad hoc communities-groups of people that come together over particular interests or needs. Because consumers are interacting, not looking just to people they know personally, but also peers, marketers have an unprecedented opportunity to learn. "Look at baby strollers, for example," says Mick Malisic, director of marketing at Frog Design, a San Francisco consulting firm that helps companies develop product designs to better serve customers. "[If you make them], immerse yourself in the community, see what people are saying, what they love about their baby stroller, what they hate about their baby stroller. It's immersing yourself in the consumer culture."

Tapping the Source

It's a ritual marketing bath that a company must engage in again and again, because people are constantly changing their community affiliations, adding some, dropping others. For example, a woman with a baby might start with an interest in baby strollers and offer an online product review, move on over time to the Dixie-sponsored MommyCast, eventually take interest in home-schooling and finally look for an Internet support group for parents with unruly teenagers. And through this time, the same woman might take up yoga, buy two cars and find an interest in modern Latin American literature, and a comment about a company might appear in a community that might seem totally unrelated.

Still, companies have only so many resources, and marketing departments will have to focus them on the areas that offer the greatest chance of finding relevant feedback. There are two major ways of learning from it. One is to look at individual responses for insightful comments. Another approach is to see if a "tangible mass" of people start to say the same thing, as Mr. Sprouse puts it: "If we start seeing an overall trend, we absolutely pay attention to that."

They are all useful additions to more traditional market research, particularly because they are unfiltered by the process of collection that can introduce biases and a sense of expected response, whether a survey, in-depth interview, or focus group. And there are dangers in entering the world of limited feedback. "How many people have made horrific decisions based on the opinions of six people in a focus group?" asks Jon Last, VP-corporate marketing and research at Golf Digest Publications and a member of the Marketing Research Association's board of directors.

He doesn't shy from using online resources; they are a regular part of his research, both for in-house clients and advertisers hiring the group to help provide insight. In fact, whether learning from discussion boards that the company itself hosts or gaining insights from third-party virtual locations, he says that views into the audience have become pervasive in Golf Digest's activities, "whether it's investing more seriously as we have in the development of our Web site, developing a mobile product ... [even] in the framing of the editorial product."

However, the same anonymity that can encourage frank talk can also make it impossible to know who is actually making a comment. A person might be someone with a gripe, a disgruntled ex-employee, or a representative of a competitor. Even for the legitimate consumer, the same caveats for any research apply. "You don't want to make the vocal minority the majority," he says.

Ignore at Your Own Risk

There are less subtle dangers waiting for those who do not treat the phenomenon of consumer control with the respect it demands. A walloping mistake is to embrace the possibilities of interacting with consumers and then not follow through. Anu Shukla, CEO of RubiconSoft, which offers RSS-based consumer services for online retailers, remembers visiting a major manufacturer of cosmetic products sold through chain stores and directly over the Web. "[The Web site] basically said, 'Ask our beauty specialists whatever you want,"' she says. After making up some elementary questions and e-mailing them, she never got a response. "I had an opportunity to meet with their senior executive team at their headquarters," Ms. Shukla says. "They said, 'Here are all of the things we're doing.' I said, 'You're not responding, so why are you offering it in the first place?"' It's what an amateur psychologist might call passive aggressive, offering something and then not delivering as part of a power struggle. But the fight is a losing proposition, as consumers ultimately win, taking their money elsewhere.

Another example of trying to wrest control from the consumer is attempting to prevent criticism or influence the conversation. Get caught-or even associated with efforts to-and your company will receive more bad press than your competitors could collectively fund. Look at Wal-Mart, tarred in a March 7 New York Times story about bloggers using wording from press releases they received from the retailer.

And the subject was bloggers using text without attribution, not Wal-Mart, which apparently was above board about being the source and has even warned bloggers against copying from the e-mails. If that was the result of part of a company's legitimate public relations strategy, how much worse would it be if a corporation hired one of the firms that have as a business model the online equivalent of product placement, charging to anonymously plant positive views in chat rooms and on message boards-and then got caught? Even if there was a good possibility of succeeding, it'd be an enormous chance to take. The public relations nightmare that could follow and the costs incurred would likely far outweigh any potential benefits.

Despite the potential for mistakes, though, engaging customers on their terms is not something that businesses can ignore. Although there may be some hit and miss in trying to find the right mix of ways to speak to and hear customers, avoiding the topic only ensures one thing: failure. Ignore this shift in power, and consumers could leave you in their dust.
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