Trapped in a vicious not virtuous spiral of insight and brand loyalty

I’ve been contributing to Marketing Week for about 15 years now. Since this is my last column I thought I would try to work out what I’ve actually learned over the years.

Horrible sinking feelings aside (“Oh dear! Have I really learned anything at all?”) I can now tell you with complete confidence that …back then I knew what good marketing looked like. Now, I’m not so sure.

In my spring chicken days, it all seemed obvious to me. Good marketing starts out with really good customer insights which inform the development and delivery of superior products and services backed by compelling communications that engage and persuade customers. Do this well and you create a virtuous spiral: secure, superior revenue streams which can then be re-invested in even deeper insights, even better products and services and even more compelling communications, resulting in brand loyalty, which leads to even better returns. And so on.

(Some context: Nobody talked about word of mouth back then, and actually the loyalty bandwagon was only just getting going. Meanwhile, of course, Google, eBay, Facebook and Twitter weren’t even twinkles in anybody’s eyes, though Amazon was, just about. The internet hardly existed beyond a few military and academic geeks and the big debate in marketing was whether the emergence of satellite TV would fragment audiences. How times change.)

So what’s wrong with that vision of good marketing? Well, in itself, not a lot. But now it seems to me that it paints only half the picture, and probably the lesser half at that.

Start with the most basic question of all: what do people want? The answer isn’t necessarily “better/cheaper products and services”. Another, equally plausible answer is “better decisions”. In fact, come to think of it, “better decisions” trumps “better products and services” as a source of value because, if I can make better decisions, those better decisions should lead me to better products and services anyway. So perhaps what people really want is better decisions, and perhaps the ultimate in consumer value is help in making (and implementing) those better decisions.

Now that’s an interesting thought because it raises a lot of questions. Here are three.

First, if the secret of consumer value lies in helping consumers make and implement better decisions, what is the role of “consumer insight”? The unstated assumption of the traditional vision of marketing is that the person getting and using consumer insight is the marketer, not the consumer. But if value lies in better decisions, perhaps marketers should be delivering insights to their customers, rather than gathering it “about” them in a behind-their-backs sort of way.

Start with the most basic question of all: what do people want? The answer isn’t necessarily “better/cheaper products and services”. Another, equally plausible answer is “better decisions”. In fact, come to think of it, “better decisions” trumps “better products and services” as a source of value because, if I can make better decisions, those better decisions should lead me to better products and services anyway.

Second, if the secret of better value lies in better decisions, where does that leave all those marketing activities designed to influence and change consumer decisions and behaviours in favour of a particular brand? Do they help or hinder the consumer in making better decisions? Could it be that we’re spending hundreds of millions of pounds, plus countless hours of time and effort, destroying rather than creating consumer value?

Third, if the secret of better value is making better decisions, where does that leave marketing metrics? One implication is that the most important metric of all is the consumer’s ROI, not the company’s, because ultimately that’s how decisions are measured. If the consumer’s ROI is high, consumers will migrate towards it. If not, they will start disinvesting.

This means we need to understand in detail what “better decisions” look like, what consumers invest in them (e.g. time and emotion as well as money) and exactly what sort of returns they are looking for. Blanket notions such as “satisfaction” don’t really help here. Worse, the fashionable replacement for satisfaction, “willingness to recommend”, takes us away from consumer ROI and towards brand narcissism instead. The real interest with the willingness to recommend score is not what the brand does for the consumer but what the consumer is doing for the brand.

Keeping with metrics, this line of enquiry may also make a nonsense of marketing tools that try to measure pre- and post-campaign “changes” – e.g. the degree to which we have been successful in persuading them to buy our product versus our competitor’s. Of course, brand managers are fascinated by such metrics. But if value lies in helping consumers achieve what they want to achieve, defining success in terms of how well we’ve managed to divert them from their course is questionable.

Which leaves us with one final question. If the virtuous spiral isn’t created by increased “brand loyalty”, where does it come from? Well, a shorthand answer may be that in the course of making and implementing decisions consumers generate huge amounts of new information about demand. This information previously evaporated as soon as it was created, but it can now be used by organisations wanting to align themselves better to what their customers want.

Same basic vision. Just a different way of getting there. Worth a thought?