Alan Mitchell: Embrace new consumer ecosystems and evolve

It is axiomatic among marketers that we should look at things from the consumer’s point of view. But it’s amazing how easy it is to slide into the good old-fashioned seller-centric ways of doing things.

In the realms of marketing communications, for example, it goes without saying that each seller wants to draw attention to the particular benefits and qualities of his brand. But, as night follows day, this leads to communications with content and form that are designed to give seller-centric information that’s most effective at persuading consumers to choose a certain product, and not to provide them with the information they need to make the best possible choice.

Add to this the fact that the sum total of many separate, individually rational decisions often adds up to collective insanity – the crushing rush for the door when a fire breaks out, for example – and we have a real problem. The more the consumer is bombarded with “buy me” messages and the louder the cacophony, the harder it is for consumers to access the information they need. And the more difficult and expensive it is for marketers to cut through the clutter.

As Seth Godin, author of Permission Marketing, explains: this is creating a catch-22 situation for marketers. The more they spend on advertising and other forms of brand messaging, the denser the clutter, so the more they have to spend – and so on, ad infinitum.

The prize for breaking this log-jam will be matched only by the difficulty of doing so. But there is another marketing log-jam with even bigger implications than the coming shake up in marketing communications. Its roots go back to marketing’s origins as the process of bringing goods and services to market for sale.

Marketing was invented to help sell products. Because of this fact, marketing has always been driven by the logic of supply chains, not the logic of demand. Soap powder marketers are in the business of selling soap powders. And because of that, they have never addressed the consumer’s desire for fresh clean clothes ironed and ready to wear.

If I want to buy a house, I have to deal with a legion of different suppliers – to find a mortgage, a solicitor, a moving firm, arrange for utilities to be turned on, arrange for insurance, source appliances and fittings and so on. This has nothing to do with looking at the process from the consumer’s point of view. Instead, it has everything to do with the fact that different types of supplier find it convenient to supply.

Likewise, car marketers are in the business of selling cars – not personal mobility solutions. And financial services marketers focus on selling their particular products, when what I might want is a personal financial manager to minimise administrative hassle and maximise the value of my financial assets.

In each case, what is brought to the market hasn’t really got much to do with finding out what consumers want and giving it to them. Instead, it’s got an awful lot to do with being driven by supply infrastructure: what am I best at producing, and how can I sell it?’

But now, like a pot slowly coming to the boil, the pressure for a different, consumer solution-oriented approach to creating value is becoming inexorable. The lid on this pot is beginning to jump and jangle.

Like experience, the word solution is now one of the most over-used and abused words in the marketing lexicon. But that doesn’t alter the underlying reality: the implications of a solution-driven approach to marketing are truly awesome for most consumer marketers. Call it “Martini principle” marketing if you will. It’s where value is created not so much in your assets and infrastructure, but in my life: how, when and where I want it.

The pressure for a broader, deeper consumer-perspective is already transforming the financial services industry. The e-access revolution is remoulding cost structures, distribution channels, brand strategies and forms of value. What’s the real added value nowadays? A better deal on interest rates or convenience, flexibility and the chance to be in control?

Meanwhile, consumer-oriented “systems integration” products such as Woolwich’s Open Plan and Virgin’s One Account are being launched. They deliberately blur old distinctions between current accounts, savings, loans and so forth.

As a recent Internet Marketing Advisory Board report on financial services noted, the days when financial institutions were specialised according to type of institution are over. The consumer (and the Internet) has no respect for tradition, history or a company’s “God-given right to thrive”.

The epicentre of this emerging quest for broader consumer solutions, however, is probably retail. Instead of focusing on discrete products and categories, retailers are increasingly looking towards “consumer ecosystems” or “packages of interrelated products, services and information”, notes McKinsey principal Jevin Eagles in a recent McKinsey Quarterly article.

Unlike previous attempts at brand extension or diversification, these new packages “start with the consumer and work back to the supplier”. Such a package could be a complete home-moving service where the retailer handles the customer interface for all parties, for example.

Anyone who can add value for consumers by minimising the hassle of assembling and co-ordinating the many different ingredients of a task such as moving home, while finding some way of cutting costs too (by using bulk-buying power, for example) has an enormous opportunity to reshape markets and industries, suggests Eagles.

“Consumer ecosystems” could radically change the way consumers shop – indeed the entire retail landscape.

Yet, almost everything about the current system – existing vested interests, the need to “feed” and optimise legacy assets, and long-established marketing channels and practices designed to help traditional sellers sell – work against a would-be builder of a consumer ecosystem . As a result, what suppliers are geared up to supply is increasingly out of tune with what consumers want to buy. That’s the sort of gap that makes radical change not only possible, but desirable.

Alan Mitchell; asmitchell@aolcom