customer experience; ecommerce, Digital marketing, ecommerce, real-time marketing

Open Kitchen E-commerce – part 2

By  Ger van den Buijs – FiveDolphins.com

no Guts no Glory 2

This article is an extention to an earlier article I wrote on Open-kitchen e-commerce. I got fascinated by this concept, because I realized that it is quite a thing for a restaurant to have an open kitchen. It is like showing ones guts. There is no place to hide, no way to fake, no way to cheat, no way to pretend. You are 100% You and that is exactly why it is so powerful. That made me wonder:

How could openness contribute to E-Commerce?

Rational behind Openness

As a start I will recapture the two articles I refered to in the first article. They shed a light on the rational behind open kitchen restaurants. One is a study from Harvard University. The other one an article in TIME BUSINESS. I will summarize the arguments they bring forward for you in one list. I think these arguments not only apply to restaurants. You can easily apply them to other branches.

If you have read the previous version, you might want to page to the second part which is completely new. In that part I will explain how our first implementation is going to upgrade the user experience of an, yet not to name, e-commerce website.

Research data

Transparency about Safety / Hygiene An important reason for diners to prefer an open kitchen is the transparency about how the food is being prepared. The open kitchen is a guarantee to safe food.

Appetite The smell of food, the activity of the cooks, the sound of pots and pans raises the appetite. You are tempted to pick a little piece from the countertop. And a customer with a raised appetite will order less economical.

Entertainment Going out for dinner is not only about food. It’s an evening out, an event. The open kitchen is a form of entertainment. The cooks become artists. Their movements become a dance. Domino’s “Pizza Theater,”  is a nice example how this can be implemented even in the lower levels of the market.

Professionality / Craftmanship Tossing the pizza dough is more than a performance. It’s professional production. No, it’s even more. It’s a demonstration of craftsmanship, displaying love for the action, the product and it’s value. We’ll go into the role of craftsmanship in more detail in the next chapter.

Interior design and Reduced energy cost These arguments might be very specific to restaurants, but they might trigger you to reconsider some of your interior design decisions. Production no longer needs to be hidden. People go on tours to visit factories, harbors, etc, because they are interested in how things are produced. Instruments and machines have an element of beauty. Why not show that?

Interaction proofs to be more than sociable. It has an effect on consumers and producers. Consumers value the food more when they see it being cooked. More surprisingly, interaction makes the chefs perform better. The sight of enjoying diners raises their performance.

The Harvard study compared three situation. In the situation of mutual visibility consumers attributed a +17.3% higher preference to the food. The effect of one-sided vision was tested in both directions. In situations in which the chefs could see the public, but not vice versa, the public’s appreciation of the food was also raised, with no less than 10%. In situations where the public could see the cooks, but not visa versa, the appreciation of the food was no different than in a closed kitchen.

What could these values mean to E=Commerce? Before we draw the parallel to E-Commerce, I first want to explore the element of craftsmanship to a deeper level.

Economics of Craftsmanship

What defines craftsmanship? To me, the differentiation is not in the ability to create a product in great detail. Also the professional is very capable of doing that. The craftsman, however, delivers more. He is devoted to the value of his product. This is based on a strong outside-in perspective, working from the quality the customer wants. The professional works from inside-out perspective, focused to deliver with high efficiency.

The impact of craftsmanship goes beyond the production itself. When consumers look for quality they consider three elements: Appearance, Functionality and Trust. This model is however incomplete. The model is insufficient to explain for example the global market leadership of some brands.

Next to the visible rational, we need to consider the non-visible rational, the experience. In his book Strategic Pokes: The Business Jalabi, a book you should certainly read, Shombit Sengupta calls this non-visible rational the “sparkling qualities”. Non-visual quality is the assurance of the product’s functionality during its life cycle.

This intangible value is created by the craftsman who adds passion and a multi-angle approach that exceeds the obvious. To customers, these intangibles have an unlimited value. It’s non-intellectual and the value is different from person to person. When customers appreciate the intangible first, they are willing to pay a premium price and return for a repeat purchase.

Open Kitchen E-Commerce

We started off with the question whether there is something like Open Kitchen E-Commerce. Some will answer this question with Yes. They will argue that Social Media have created openness. Twitter and Facebook are podia where companies can be blamed and shamed. Some of these messages go viral, causing great negative impact on company value.

This type of openness, however, only triggers a very limited part of the values that were attributed to openness in restaurants. You could maybe argue that this is equivalent to the hygiene transparency. Question is: “do you know of a E-Commerce company  that really demonstrates the joy of serving customers “? Do you know about an E-Commerce site that delivers the entertainment and craftsmanship of creation?

Another question is: “are our service teams stimulated enough to give their best, like the cooks that can see the diners”? I think the current social media bring that at best partially. This reminds me of the presentation Mark Schaefer did for E-Consultancy about the expectations of the Social Era Customer (SEC). He draws the parallel with the medieval markets. Social Era Customers want :

Social Era Customer Analogy Open Kitchen Restaurant
To know the person behind the company Seeing who serves you, see his style Entertainment
Transparency Openness about the process of service Transparency about Safety / Hygiene
Immediate impact of communication Good service raises appetite,  bad service is devastating Appetite
Openly shared Word of Mouth

The love for the product and value will make people talk about the product and service

Craftsmanship
To feel connected.

The interaction between cook and customer creates the connection people appreciate.

Interaction

These expectations of Social Media Customers match closely with the values of the open kitchen restaurants. My view is that there is still a lot to gain in E-Commerce. Conversion ratios are dramatically low compared to retail. An open kitchen policy in E-Commerce could boost the customer experience to really make the next step. One should realize that within a webshop, a customer is always on his own. There is no atmosphere. Imagine to enter an empty restaurant. My ambition is to develop a new type of webshop that steps up from an isolated experience to a engaging connected experience. That will improve your results drastically.

Economics of open-kitchen e-commerce

Economics of open-kitchen e-commerce

Implementation

You might wonder how to achieve such an open kitchen policy. I distinguish 4 strategies to work with customers:

context marketingContext marketing: adapting the site based on what a customer is doing.

BoFu marketingBottom of Funnel marketing: building an experience based on a customer request

engagement marketingEngagement marketing: building an experience based on a shared passion

Personlization marketing Personlization marketing: allow customers to personalize your product or service.

Together with our partner we are working on the first implementation. We are going to implement the first three strategies. Our objective is to create an engaging community. In an open-kitchen experience, such a community has to be real time and open. Customers need to be able to interact with each other. We position the team as hosts, because they express and strengthen the engagement the community is sharing.

In order for a customer to be willing to participate in the community, he’ll have to had a flow experience. I’ve written an article about flow and it’s meaning in the customer journey earlier. We are going to implement a shopping experience that responds to customer activity and to the interaction a customer has with other customers. The engine will produce additional content that is context specific.

Primary to all this, we’ll need to make sure our customers feels activated. We are convinced questions can play a vital role. Our brain can easily ignore information, but it can’t stop itself from answering questions. One need to realize that questions only activate a person when they require latently known information. Retoric question or questions one does not know the answer to will not activate a person.

We intent to allow customers to participate anonimously. Research shows that customers will only give you their email address when they are 60% through their shopping process. Our intention is to capture our customers early in their orientation phase, because good retailers have proven that when a customer experiences the sparkle of craftsmanship before he dives into the product specifications, he’ll be eager to come back and willing to allow for more margin.

Elements of Open-kitchen e-commerce

Curious how our implementation will work out? Don’t miss the updates. When you send me a brief message, I’ll keep you posted.

P1070701-1 40-60--20Regards,

Ger van den Buijs

Ger is cofounder of FiveDolphins.com, the platform to facilitate customer flow within your site. You can follow me on gervandenbuijs.com, LinkedIn and Twitter (@BuijsGer)

With courtesy to Pixabay for the images.

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customer experience; ecommerce, Digital marketing, ecommerce, real-time marketing

Open Kitchen E-commerce – part 2

By  Ger van den Buijs – FiveDolphins.com

no Guts no Glory 2

This article is an extention to an earlier article I wrote on Open-kitchen e-commerce. I got fascinated by this concept, because I realized that it is quite a thing for a restaurant to have an open kitchen. It is like showing ones guts. There is no place to hide, no way to fake, no way to cheat, no way to pretend. You are 100% You and that is exactly why it is so powerful. That made me wonder:

How could openness contribute to E-Commerce?

Rational behind Openness

As a start I will recapture the two articles I refered to in the first article. They shed a light on the rational behind open kitchen restaurants. One is a study from Harvard University. The other one an article in TIME BUSINESS. I will summarize the arguments they bring forward for you in one list. I think these arguments not only apply to restaurants. You can easily apply them to other branches.

If you have read the previous version, you might want to page to the second part which is completely new. There I will explain how our first implementation is going to upgrade the user experience of an, yet not to name, e-commerce website.

Transparency about Safety / Hygiene An important reason for diners to prefer an open kitchen is the transparency about how the food is being prepared. The open kitchen is a guarantee to safe food.

Appetite The smell of food, the activity of the cooks, the sound of pots and pans raises the appetite. You are tempted to pick a little piece from the countertop. And a customer with a raised appetite will order less economical.

Entertainment Going out for dinner is not only about food. It’s an evening out, an event. The open kitchen is a form of entertainment. The cooks become artists. Their movements become a dance. Domino’s “Pizza Theater,”  is a nice example how this can be implemented even in the lower levels of the market.

Professionality / Craftmanship Tossing the pizza dough is more than a performance. It’s professional production. No, it’s even more. It’s a demonstration of craftsmanship, displaying love for the action, the product and it’s value. We’ll go into the role of craftsmanship in more detail in the next chapter.

Interior design and Reduced energy cost These arguments might be very specific to restaurants, but they might trigger you to reconsider some of your interior design decisions. Production no longer needs to be hidden. People go on tours to visit factories, harbors, etc, because they are interested in how things are produced. Instruments and machines have an element of beauty. Why not show that?

Interaction proofs to be more than sociable. It has an effect on consumers and producers. Consumers value the food more when they see it being cooked. More surprisingly, interaction makes the chefs perform better. The sight of enjoying diners raises their performance.

The Harvard study compared three situation. In the situation of mutual visibility consumers attributed a +17.3% higher preference to the food. The effect of one-sided vision was tested in both directions. In situations in which the chefs could see the public, but not vice versa, the public’s appreciation of the food was also raised, with no less than 10%. In situations where the public could see the cooks, but not visa versa, the appreciation of the food was no different than in a closed kitchen.

What could these values mean to E=Commerce? Before we draw the parallel to E-Commerce, I first want to explore the element of craftsmanship to a deeper level.

Economics of Craftsmanship

What defines craftsmanship? To me, the differentiation is not in the ability to create a product in great detail. Also the professional is very capable of doing that. The craftsman, however, delivers more. He is devoted to the value of his product. This is based on a strong outside-in perspective, working from the quality the customer wants. The professional works from inside-out perspective, focused to deliver with high efficiency.

The impact of craftsmanship goes beyond the production itself. When consumers look for quality they consider three elements: Appearance, Functionality and Trust. This model is however incomplete. The model is insufficient to explain for example the global market leadership of some brands.

Next to the visible rational, we need to consider the non-visible rational, the experience. In his book Strategic Pokes: The Business Jalabi, a book you should certainly read, Shombit Sengupta calls this non-visible rational the “sparkling qualities”. Non-visual quality is the assurance of the product’s functionality during its life cycle.

This intangible value is created by the craftsman who adds passion and a multi-angle approach that exceeds the obvious. To customers, these intangibles have an unlimited value. It’s non-intellectual and the value is different from person to person. When customers appreciate the intangible first, they are willing to pay a premium price and return for a repeat purchase.

Open Kitchen E-Commerce

We started off with the question whether there is something like Open Kitchen E-Commerce. Some will answer this question with Yes. They will argue that Social Media have created openness. Twitter and Facebook are podia where companies can be blamed and shamed. Some of these messages go viral, causing great negative impact on company value.

This type of openness, however, only triggers a very limited part of the values that were attributed to openness in restaurants. You could maybe argue that this is equivalent to the hygiene transparency. Question is: “do you know of a E-Commerce company  that really demonstrates the joy of serving customers “? Do you know about an E-Commerce site that delivers the entertainment and craftsmanship of creation?

Another question is: “are our service teams stimulated enough to give their best, like the cooks that can see the diners”? I think the current social media bring that at best partially. This reminds me of the presentation Mark Schaefer did for E-Consultancy about the expectations of the Social Era Customer (SEC). He draws the parallel with the medieval markets. Social Era Customers want :

Social Era Customer Analogy Open Kitchen Restaurant
To know the person behind the company Seeing who serves you, see his style Entertainment
Transparency Openness about the process of service Transparency about Safety / Hygiene
Immediate impact of communication Good service raises appetite,  bad service is devastating Appetite
Openly shared Word of Mouth

The love for the product and value will make people talk about the product and service

Craftsmanship
To feel connected.

The interaction between cook and customer creates the connection people appreciate.

Interaction

These expectations of Social Media Customers match closely with the values of the open kitchen restaurants. My view is that there is still a lot to gain in E-Commerce. Conversion ratios are dramatically low compared to retail. An open kitchen policy in E-Commerce could boost the customer experience to really make the next step. One should realize that within a webshop, a customer is always on his own. There is no atmosphere alone. Imagine to enter an empty restaurant. My ambition is to develop a new type of webshop that steps up from an isolated experience to a engaging connected experience. That will improve your results drastically.

Economics of open-kitchen e-commerce

Economics of open-kitchen e-commerce

Implementation

You might wonder how to achieve such an open kitchen policy. I distinguish 4 strategies to work with customers:

context marketingContext marketing: adapting the site based on what a customer is doing.

BoFu marketingBottom of Funnel marketing: building an experience based on a customer request

engagement marketingEngagement marketing: building an experience based on a shared passion

Personlization marketing Personlization marketing: allow customers to personalize your product or service.

Together with a partner we are working on the first implementation. We are going to implement the first three strategies. Our objective is to create an engaging community. In an open-kitchen experience, such a community has to be real time and open. Customers need to be able to interact with each other. We position the team as hosts, because they express and strengthen the engagement the community is sharing.

In order for a customer to be willing to participate in the community, he’ll have to had a flow experience. I’ve written an article about flow and it’s meaning in the customer journey earlier. We are going to implement a shopping experience that responds to customer activity and to the interaction a customer has with other customers. The engine will produce additional content that is context specific.

Primary to all this, we’ll need to make sure our customers feels activated. We are convinced questions can play a vital role. Our brain can easily ignore information, but it can’t stop itself from answering questions. One need to realize that questions only activate a person when they require latently known information. Retoric question or questions one does not know the answer to will not activate a person.

We intent to allow customers to participate anonimously. Research shows that customers will only give you their email address when they are 60% through their shopping process. Our intention is to capture our customers early in their orientation phase, because good retailers have proven that when a customer experiences the sparkle of craftsmanship before he dives into the product specifications, he’ll be eager to come back and willing to allow for more margin.

Elements of Open-kitchen e-commerce

 

 

Curious how our implementation will work out? Don’t miss the updates. When you send me a brief message, I’ll keep you posted.

P1070701-1 40-60--20Regards,

Ger van den Buijs

Ger is cofounder of FiveDolphins.com, the platform to facilitate customer flow within your site. You can follow me on gervandenbuijs.com, LinkedIn and Twitter (@BuijsGer)

With courtesy to Pixabay for the images.

customer experience; ecommerce, real-time marketing, social media marketing

5 Things E-commerce can learn from Retail: part 5

Activity

This is part 5 of my series on “things Ecommerce can learn from Retail”. The first one was on educating your customer. The second one was on building customer value. The third blog was on removing obstacles. The fourth blog was on persuasion.

The Library of Virginia 2899347424_7f9416a299_mIn this blog I want to talk about the importance of visible activity. What we mean with visible activity is the behavior your customers show to other customers.

Look at the photo of the restaurant at the top. What does it tell you about the restaurant? What emotion does it create for you as a potential customer?
Andrea Corò 14509525083_a021561731_m

Now ask yourself the same questions about the second photo. Let’s analyze the significance of the difference.

1. Easy & smart decision making

I went out for dinner lately in a town we didn’t know very well. Selecting a restaurant can be quite a challenge in such cases. What I always look for, like most people, is a busy restaurant. Why? To me, the number of customers in a restaurant is social proof that the service and food that that restaurant delivers are good. I know that a busy restaurant will most likely mean I’ll have to wait longer. But, unless I am really in a hurry and just need to grab some quick food, I will follow the advice of the crowd.

When I visit a website, I never get any impression of other customers. Some tell me how many orders they have handled or how many happy customers they have served. But that has a different impact. I just see a number, not the activity itself. It is abstract. Actually seeing customer activity happening ticks the social proof much harder.

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2. Belonging

The number of customers is just one dimension. It makes a lot of difference when I notice that other customers are frequent visitors. Frequent visitors will have more personal interactions with the personnel. They will express their preferences and the personnel will know these. This ticks the emotion of belonging. You clearly see a group and you can belong to that group as well.

Within Ecommerce you hardly get anything comparable. In Social Media some customers might give these types of feedback. Data shows however that customer interaction on Social Media is very rare. The main function of those platforms seems to be to push information from companies to customers. Because of the massive information overflow in Social Media, the customer messages will go unnoticed, unless they are extremely funny.

A second reason why Social Media and Ecommerce are not showing this type of “belonging triggers” is that most companies are afraid of personal communication. They prefer the safe professional approach. Customers however do not get attached to companies. They get attached to people. That’s why you need to empower your social media personnel to express their personal brand and the company brand in their own way. Ted Rubin is one of the people who has laid the foundation for this approach.

3. Trust

The third reason why I want to see other customers is to check the atmosphere. Does this restaurant or shop fit me? Seeing the personnel and customers tells me a lot more then the color of the site or the wall. I don’t say that design is not important and not able to communicate atmosphere. I just think that people communicate atmosphere stronger. Having a match with the atmosphere will help me to determine whether I trust this company.

4. Quality service

There is however one thing that is communicating atmosphere and trust even stronger. That is interaction. Seeing people interact gives an immediate and very strong emotion. In job interviews the first moment of interaction is crucial. The same holds for commerce. The way interaction is done, means a lot to people. In communication only 7% of the information communicated is verbal. The other 93% is non-verbal communication. For written communication that will be different, but still people will look for the non-verbal communication “between the lines”.

Within Ecommerce we have no platform to really interact publicly. Ecommerce has plug-ins to interact with customer service, which is a good facility. Unfortunately that communication is not visible to others, it is not open. Fact is that today’s customers have low trust in organizations and they are allergic to selling communication. Customers put much more trust in feedback from other customers, so you will need to work with customers on an open podium.

Social media does allow people for open communication. In practice that communication is hardly interactive. Much of the “between the lines” information is lost or misinterpreted. That might be the reason why asynchronous communication oftentimes leads to more problems instead of solving them.

This hits the second aspect of interaction. I lately read a research paper that showed that most customers using social media expect a response within an
hour, and a growing group expects a response within 10 minutes. The latter was seen as exceptional demanding.

The next story will shed a different light on that. Recently I was in our local supermarket, which facilitates self scanning of the products. I decided to buy a very expensive type of Italian pasta for a special dinner. When I tried to scan the pasta, it didn’t work. It always works, so this was exceptional. I went to the girl filling the rack to ask what to do now. She didn’t know and went to her floor manager. Without saying a word he walks off with my pack of pasta. Get the picture? How do you think I felt? And how do you think I felt after standing there for one minute?

I am certain that he didn’t stay away for more than 3 minutes, but by then I was feeling really lousy. The floor manager already anticipated that and gave me the pack for free. He knew that the waiting had pissed me off.

So let’s not fool ourselves in Ecommerce. The requirement customers have is real-time interaction. That doesn’t mean you can solve everything instantly. But they expect you to respond instantly and to get clear communication about the way forward.

A helping interaction with the customer, will grant you lifetime engagement. But when doing this publicly, this will have a huge impact on other customers as well. Seeing how your company interacts with other customers will create a lot of trust with all customers.

What do you think?

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With courtesy to Andrea Corò, The library of Virginia and Flickre.com for the photos

customer experience; ecommerce, social media marketing

5 Things Ecommerce can learn from Retail – part 1

 Educate your customer

4612732045_e1e6061b69_zCustomer education plays a central role in the ultimate sales strategy. With educating your customer you offer them help. You also express you care about them making a wise decision for their particular situation. That makes education a powerful instrument for getting customers to connect to you before their transaction.

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What’s more, it is also an essential strategy to maintain the relation with your customer after the purchase. This can greatly influence your success in turning a one-off-sale into a returning customer. Check out The Ultimate Sales Machine by Chet Holmes. Chet Holmes gives many creative examples how education of customers caused sales to boom.

E-commerce can learn from retail in this field. E-commerce is generally very good at providing specifications. Automated interfaces of product specifications provided by wholesale or manufacturer make this very easy. The challenge for E-commerce is to shift its focus to the meaning and impact of specification in order to fulfil the need of each individual customer. Is e-commerce capable to provide more then just the product? If not, harsh price competition will be the result.P1070688-3

What do you think?

Thanks to Ralph Daily and Flickre.com for the photo.

customer experience; ecommerce, real-time marketing, responsive marketing, social media marketing

The Marketing Vulcano erupts. Move, move move !

Vulcano

A marketing vulcano? You probably ask yourself: “what on earth would that be”? Sounds threatening. On the otherhand, we also know that vulcano’s leave fertile lava soil behind. The eruption thus creates a new future.

The growth of vulcano’s is something that facinates me. I can’t get my head around the earth being filled with magma and big tectonic plates shifting slowly, a couple of centimetres per year. When they move from each other, they leave a hole where the magma slowly erupts. When they move towards each other pressure builds up, leading to an explosion of magma. These are the vulcano’s we know and fear.

Let me tell you why I called this blog post the Marketing Vulcano. I use the parallel of a vulcano to express my vision that there are three trends in marketing that are colliding.  Everyone is doing the same thing. It’s probably also what occupies you daily:how can I approach the mass of consumers to gain a little bit more awareness“. When everyone is doing the same thing, it becomes harder and harder to win.

This one directional pressure will cause an explosive move into a new dimension. The winners will be the companies that move towards the new dimension, being “how can I turn my customers into ambassadors“.

We will first discuss the three trends with you. You will have to take a step back. Stop worrying about the operational details. Focus on why you are doing what you do.

We then highlight some elements of the new trend. We conclude with a vision of how ecommerce could look in the near future.

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Trend 1: Mixing models

While ecommerce started out with simple products, consumers have started using ecommerce for more and more complex products.

  • Technical complex products like computers.
  • Complex services like subscriptions, insurance and mortgage.
  • Even personal complex products and services, like healthcare.

Retail has lost much territory, but this trend will slow down. There is a reverse trend going on. We see companies that started as 100% ecommerce now open retail stores. There are brand stores like Philips in Amsterdam, focused on getting interactive customer feedback. We see consumers orient on internet and then buy in a retail shop and visa versa. We see stores that are truly multi channel, with a consistent presence in retail and ecommerce. Retail has some characteristics that are favored by customers. Being able to touch the product is very important in this. Personal interaction is a second mayor differentiator. In retail the shop assistant can work from the customer’s needs and build up value. That is key, because customers need a product, but they pay for the value they perceive. Reversely, when you fail to build value for your customer, you can only compete on price.

In short, we are moving to a more mixed model of the purchasing process.

Trend 2: Standardization

In the early days of ecommerce you had good and bad websites. You could stand out by having a site that worked well and was intuitive. Nowadays the CMS standard systems are so good, even a small shop can be at high standards. Plus you can choose from hundreds of website builders. There certainly still are quality differences, but almost all of these website builders will build a decent website for you.

Also in the area of Marketing much knowledge is standardized in plug-ins and services. Tracing customers, building up CMS databases, email marketing, customer service, and feedback. Customer reviews are also automated and available as service from content companies. All is available and it’s hard to find an ecommerce site that doesn’t have this organized.

When there is little difference between different suppliers, economic law tells us you will end up in fierce price competition, and that is exactly what has happened. The rise of price comparison sites only aggravated this trend. Investments in ecommerce are still big, but the pig trade cycle predicts that at a certain moment in time there will just be too much capacity built up and the shake out will start.

On the cost side, Ecommerce is spending huge amounts of money on Search Engine Marketing, Social Media Marketing and other forms of internet marketing. The lack of differentiation leads to hugh marketing budgets to win the customer. Google, Facebook and other media are exploiting their unique position in digital advertising. Based on the pressumption they can’t be omitted, the prices for their services are rising continuously.

Conclusion: strategies based on technique only are bound to loose importance. As technical innovations are slowing down, it is the effective usage that will create a winning strategy. The rising cost of the digital advertisement platforms will cause companies to look for a different approach.

Trend 3:  Social Media

Consumers adopted social media much earlier than companies. Due to the fact that consumers were on social media, companies had to be present as well. First mainly to prevent damage, as customer service. Nowadays most also publish campaign material, more or less like they would do on television. The best companies also ask for feedback.

Social Media has fundamentally changed the relation between customers and companies. In the mass media era, companies were in control of the public opinion. With the rise of social media every customer is a reporter too. The consequences are various:

  • One customer can break the reputation of a company.
  • Customers are used to being in contact with large groups of digital relations. The concept of “near relationship” has completely changed. The world has become a village.
  • People get an overload of information. All sources compete on an equal level for attention. It has become very hard to make a message stand out.
  • As a reaction to the power of the big companies in the mass media era, the current generation puts more trust in messages by peers on internet. Research shows that word of mouth is currently a hundred times more influential than an expensive marketing campaign. This creates a challenge for marketing.

Conclusion: companies will have to find a way to fulfil the expectations of customers in this social media era.

Focus on the mass

The three trends have build up pressure in one particular direction: making the large mass of people aware of your company in order to sell to a small percentage of them.

This concept originated in the mass media era. Mass media made it possible for companies to reach large groups of people with their advertisement. Ecommerce increased the focus on the mass of consumers. Websites are cheap to operate compared to retail and allow for presentation to groups much larger than any shop can fit. The commercial strategy of Ecommerce focusses on SEO optimization and Google adwords to maximize page views..

The rise of social media as commercial platform in the last couple of years has aggrevated this concept to hugh dimensions. An advertisement that goes viral can reach millions of potential customers in a day. Much more than search optimization can ever deliver.

It has been proven that in any large group of people 3 percent of the people are ready to buy, regardless the product under investigation. Based on this knowledge, the strategy to be visible to a large community makes sense. But the strategy is too simple, is becoming less effective and more expensive.

customer ambassadors

Research (see for instance SeeWhy) shows that Social Media Marketing has only limited impact on conversion. In their research social media accounted for 30% of the visitors. Unfortunately this resulted in only 2% of the sales.

What sells is relation, trust and service. The lava of marketing vulcano is focus on the individual customer. We see several movements towards this customer focus.

  • Email marketingto build a relation with current customers.
  • Personalization of site contentbased on behavior inside or outside the webshop.
  • The rise of trusted brandsin Ecommerce, like Amazon. Trusted brands can ask higher prices, regardless their bad listing on comparison sites.
  • Brand web storesare often times preferred above webshops that sell the same product at a lower price.
  • The popularity of consultants, like Mark Schaefer, Jay Baer, Nisandeh Neta, who teach companies to build marketing upon a trusted relationship with satisfied existing customers.

Email marketing and personalization sound like a personal approach, but these concepts make only a first step. They give a twist to the “reaching the mass” concept in the right direction. The mailing list is intended to be as big as possible. Customers are classified in a number of groups. Each group gets a specific message. The great thing about them is that they base an offer on previous purchases of this customer. Personalization basically does the same thing, but it does it real-time while the customer is browsing the site.

Why is this just the first step? What’s lacking is that the customer does not perceive this as a personal approach. It is a smart automated approach. Today’s customer however expects a personal connection with the vendor and transparent direct communication. Please check my blog about this: 5 elements of Customer Expectation . Email marketing and personalization of websites don’t fulfill these elements. For the customer to feel connected to your shop or brand, you will need to do more.

REDEFINING MULTI-CHANNEL

Our vision is that the Multi-channel concept will start to mean more than just selling and advertising via multiple channels. The methods of retail and ecommerce will mix into one new approach, picking the best of both worlds. The individual customer approach of retail and the digital information of ecommerce will be blended into a new type of interactive ecommerce. Ecommerce will become as entertaining and personal as retail.

Social media is now used to reach millions of people at an inconvenient moment. The future of social media is to interact digitally with a limited number of people at the moment you are relevant to your customer. We will start interacting with customers as a community in the web shop. Consumers are tired of being overloaded with irrelevant information. Being relevant becomes the most important differentiator. We will move from high reach with low impact to low reach with high impact.

We will have to learn to use social media that way. Topics that companies will have to handle are delegation of control and interactive public feedback. These skills are common in retail, so companies with a strong background in retail will have an advantage.

Additionally social media platforms will develop functionality to improve this interactive shopping. Facebook and Twitter are not fit for interactive shopping. Their strength is reaching the mass public. The new social media will need to be part of the customer’s action. That requires that it is really interactive and that relevance to the consumer’s current action is guaranteed.

In our previous post we already concluded that the winning companies will be the ones that manage to scale up personal interaction with their customers. Success will be built upon relationship and trust. Technology will only temporarily be a differentiator. Advertisement will not disappear, but it will no longer be sufficient.

What will make the difference is the people behind the brand, their strategy and their capability to listen to customers and turn customer feedback into a relevant offering.P1070688-3

What do you think?

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PS: This song Dancing on the Vulcano  used to one of my favorite songs.