We followed her door to door across Central America, Asia, the Middle East, Africa and even Ireland. We watched her do laundry, listened to her experience with Tide, checked her pantry, chatted with her about competition, asked about her buying habits, asked for her help with promotions and took to heart her cultural and emotional preferences in advertising. At the time, we did not realize that we were customer-centric and engaged in the 21st century permission marketing. We were just trying hard to please the paymaster.
In the past 30 years, marketers replaced our hero with faceless target customers and assaulted them with mass marketing. But, perhaps, housewife Mrs. Phoenix is rising from the ashes-stronger, richer, better informed and harder to please.
Aiding her resurgence is the increased cost of commercial TV: In the '60s, a brand could reach about 80% of its intended audience by airing an ad simultaneously on three networks. Today, according such a feat would require 100 channels. And despite lower reach, the Television Bureau of Advertising tells us that the cost per thousand for these networks has soared from an average of $1.96 in 1972 to $16.79 in the last few years. In other words, the effectiveness, and cost effectiveness, of mass advertising has nosedived-and, of course, consumer choices have soared with the proliferation of products. In 2003, manufacturers introduced 26,893 new food and household products in the U.S. and TNS Media Intelligence reported the addition of 700 newcomers a day to its database of 2 million brands.
In response, smarter marketers have started shifting from mass to micromarketing. Customer focus, proximity and permission marketing are gaining currency. Marketers are looking for specialized TV channels, experimenting with the Internet, trying episodic marketing, spreading word-of-mouth "buzz" and spending more on specialized magazines, shopping experience, services, targeted radio and better understanding of the paymaster's needs and moods.
Yet in all this one medium seems to be escaping the attention of many marketers: the salesperson at the point of purchase. The possible explanation for this oversight may be the lesser dependence of consumer-package-goods firms-the prime initiators of micromarketing-on sales advice in stores. But companies dealing with products involving interaction between a salesperson and the buyer really have to wake up to the increasing relevance of this powerful marketing tool in the age of the enlightened and Web-empowered consumer.
Why? Well, that's easy: According to a recent Booz Allen Hamilton study, 85% of brand decision making takes place at the point of sale. Similarly, accordingly to Whirlpool, the leading home-appliances manufacturer, which spends close to a billion dollars on advertising, 76% of potential customers go to the store without a clear idea of the brand they want to purchase. Similarly, Cooper Tire & Rubber Co. tells us that salespeople, at the counter, influence 73% of all buying decisions, while a Computer Reseller News study shows that 67% of those coming to PC retail stores seek a salesperson's advice and 94% follow it.
The last is hardly surprising. A salesperson has the unique advantage of interfacing for 10 to 15 minutes with shoppers who actually want to buy and who actively seek a salesperson's advice, whether it is to confirm what they already know or to gain new insight. That is permission marketing at its best and it's nothing new. We knew that back when we were still chasing that housewife around.
What's changed, however, is that it used to be cheaper to use low-cost TV to influence potential customers than to train the sales channel in the art of communicating brand and product benefits to a potential buyers. That's no longer the case: The rising cost of TV and the availability of Internet-based technologies have reversed the equation. The Web makes reaching salespeople in wholesale and retail channels easy, and even allows marketers to track, measure and correlate sales people's knowledge of their brands relative to sales of their products.
A number of companies have started to leverage Internet technologies to increase their reach, frequency and recall of product and brand knowledge in distributor and retail channels. The results are encouraging. Black & Decker has shown significant increases in sales in tandem with increased brand and product knowledge with distributors. Tests at Whirlpool were conclusive enough to form a "brand academy" focused on managing brand and product knowledge with sales associates, retailers and service partners.
Toyota Motor Corp. relies solely on the Internet to enable its dealers to identify specific qualities of the Scion core-customer group, their expectations and purchasing behavior, as well as the details of Scion's "Pure Price" solution for Generation Y customers. The online focus cut Scion's time to market, saved costs and became the integral part of the successful Scion's marketing mix.
We are going back to the future and entering the era of customized marketing. But that should also mean shaking off mass-marketing norms and taking a closer look at the human medium that interacts directly with shoppers and has their undeniable permission to influence purchase decisions. The value of a distributor or retailer who knows a brand's story is not to be underestimated.
Constantin B. Ohanian
Mr. Ohanian is chairman of Vuepoint, a New York company that provides e-learning suites to increase brand knowledge in sales channels. He has pioneered businesses for Procter & Gamble, CBS Records, Clorox, Tambrands and RJR Nabisco.