Marketers must face up to the buyer’s side of the coin

The rise of internet search and product review sites is empowering buyers, rendering marketers’ ‘sell’-obsessed communications obsolete.

Back in the 18th century, when ordinary citizens wanted to acquire and use something, their likelihood of going to a shop was very low indeed. Depending on what it was they wanted to buy, individuals either made it themselves, bought directly from a local craftsman or producer, went to a local weekly market, or bought from a travelling salesman or peddler.

Outside central London, the permanent, fixed location “high street shop” only became viable in the wake of a whole train of developments. Increased population densities were needed to provide enough customers. Lower cost, more secure transport was needed before shops could confidently source items from further distances (pot-holed tracks plus highwaymen don’t encourage risk-taking). More people had to earn cash wages (before then, most exchanges were made on credit and credit depended on the shopkeeper knowing the individual in question). Also, the experience of shopping itself had to improve. One crucial innovation was the marking of each item with a standard price rather than the shopkeeper deciding on the spur of the moment how much he was going to charge you. Finally, consumers’ go-to-market habits had to change, and that took a long time.

Today, a new set of developments are changing consumers’ go-to-market habits. The modern shop combines three crucial ingredients of commerce: a logistical staging post for goods; a source of information to support buying decisions; and a mechanism for payment. But now e-commerce can provide an alternative to all three: home delivery (thanks to the rise of logistics powerhouses such as DHL, FedEx and Tesco); the internet as a source of information; and digital payment. But that’s just a scene-setter for the decisive shift – in the role of commercial information.

For the past 100 years, consumers have acquired most of the information they need for purchases from two sources: advertising and shops. Slowly but surely, the internet is changing that. As The Economist put it last week, consumers’ growing ability to get information about whatever they want whenever they want means that “the consumer is finally seizing power”.

The Economist is right, but like many who make such observations, its report on the subject instantly returned to business-as-usual assumptions, with a bit of digital stuff added on. Big mistake. Like the rise of the shop, many different ingredients are coming together to transform the content, context and processes of marketing.

Take information content. In today’s world, most of the market information provided to consumers is seller-centric. Mountains of information are produced by legions of different sellers each with the intention of persuading the consumer to choose its particular offering. Content follows purpose: which is to help sellers sell. It’s then up to consumers to sift through this avalanche and make their choices in what is essentially a DIY process.

But now the pendulum is beginning to swing. New services are emerging to provide buyer-centric information designed to help buyers in their search for value: product and price comparisons, peer reviews, and so on. This is effectively a new market catering for a previously unmet consumer need, not for products per se, but for professionally organised help in going to market: to get exactly what I’m looking for, at the best possible price, in the most convenient way. Edmunds.com, Skyscanner.net and wotif.com are good examples.

Such services pre-empt traditional marketing communications and channels in two ways. First, they change your starting point. Shops used to be a main source of product information. Increasingly, the internet is supplanting that function. Ford reports that 80 per cent of US car buyers have now researched their purchase before going anywhere near a dealer.

Second, given a choice between seller-centric and buyer-centric information, buyers naturally opt for the latter that addresses their “search-for-best-value” needs. That’s why the majority of US internet users start with search, comparison shopping or auction sites, rather than going direct to a retailer or brand site. Edmunds’ slogan sums it up: “Where smart buyers start”.

This points to a change in marketing communications. If advertisers need to move to where consumers’ eyeballs are, then increasingly they need a presence in search environments where consumers’ search for value is top of the agenda.

Finally, go-to-market processes are evolving. Traditional marketing communications is a top-down, seller-controlled stimulus-response process, where sellers seek to stimulate a response from buyers. But alongside this, new bottom-up, buyer-controlled processes are emerging, search being the classic example. This creates the need for “search-response” processes, where buyers’ requests for information stimulate seller responses.

What does all this mean for advertisers and their agencies? Like the rise of the shop, the extent and pace of these developments will vary greatly by category and consumer segment. As with shopping, habits take time to change. The devil is in the detail.

But broadly speaking, a “third moment of truth” is emerging. The first moment, as enunciated by classic marketers such as Procter & Gamble, is product use: is the consumer satisfied enough to want to buy again? The second, “shopper”, moment of truth is in store when choosing between alternative product options. The third “buyer” moment pre-empts the first two: when the buyer chooses between go-to-market options. This third moment of truth revolves around channel choice: which channel most helps in a buyer’s search for value.

That leads to point number three. The go-to-market coin has two sides: sellers in search of customers and buyers in search of value. In the past, go-to-market processes have been defined by sellers’ search for customers. But now the buyer’s search for value is moving centre stage, and sellers will increasingly have to adjust to the requirements of buyer-centricity.

That may sound terrifying, but handled properly it has major benefits. When buyers initiate go-to-market processes and define communication content they effectively provide sellers with the Holy Grail of marketing information: who is interested in buying what, when. Confetti.co.uk knows who is planning to get married before anyone walks into a wedding shop. Edmunds knows what cars consumers are going to buy before they go anywhere near a dealer. Helping consumers in their quest for value is actually the best way for advertisers to address those thorny issues of waste, lack of effectiveness and poor accountability.

This all points to a new role for marketing. Historically, we’ve treated the product as the source of consumer value and the communication as a means to realise this value (by closing a sale). The communication reflects the go-to-market needs of the seller, not the buyer. Now that division of labour is becoming untenable. While the product meets the customer’s consumption need, communication must increasingly meet customers’ go-to-market needs. The consumer pays for your marketing budget already. Why not use it to add value?

Alan Mitchell, asmitchell@aol.com

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