The concept of 'surrounding the consumer with interesting content' originally grew out of the notion that there are infinite paths to purchase and thus marketers need to be everywhere a consumer could turn. The idea of using Red Laser to check prices, while reading reviews on Yelp! and looking for a coupon in the email is commonplace.
This note takes a look at two different views: The impact of social networks – in the scientific use of the term – on defection and the search patterns of buyers.
There has been a fair amount of discussion (and an equal amount of hope) that word of mouth spreads product adoption. But only recently has the effect of social networks on defection been evaluated. In a Journal of Marketing article this month there is evidence that knowing someone who has stopped using a service increases the odds of you stopping. And this effect might be as strong or possibly stronger than the impact of networks on adoption. The factors driving defection are similarity and the density of the network – if you share common attributes with those in a tight network then the odds of defection increase. Loyalty, as defined by heavy use and/or tenure, mitigates the effect of defecting neighbors on your own decision.
Customer bases with a high degree of inter-connectiivity run a higher risk of defection due to social networks. The question that impacts marketing seems to be: Are your customers connected? (as in they share the same phone service). If they are, then communication when one defects is important; not only to increase the odds of them coming back, but also to decrease the odds of being contagious. This suggests that companies who foster a community of customers should also have direct-to-consumer communications when the migrate away. "Sorry to See You Go" programs should augment "Thank You" and other communications.
From a search perspective a recent research report on retail shopping behavior reveals the ways search is used in the shopping experience. The themes:
- "Generic queries dominate a buyer's search behavior" – buyers are using, and are referred by, non-branded queries. It seems that the idea that the brand cuts thru the clutter, ie it is a surrogate for information (Chris Anderson's view), and gets a product in the consideration set is somewhat a fantasy for most products.
- "Organic listings drive buyer behavior" - Not surprisingly these are organic rather than paid links: 85-15%. This makes for some interesting notions about content and how to leverage it.
Advertising stimuli are often used to seed the search process. But the use of generic terms suggest that consumers go up to the category level rather than a specific brand. For category leaders this is good since they should be in the business of growing the category anyway. For the rest of us this is a big risk - unless we're disruptive and creating a new category. A clever stimulus will put other brands into consideration set, not eliminate them. This suggests that the search strategy should be around owning the broad information that helps a consumer choose – not just the specifics of the brand. So when a product is launched the search aspect should be on how to get it into the natural process of looking at organic, generic terms. Unless someone can figure how to increase the page-rank of a brand new microsite then this path might be less fruitful than one would desire. It does suggest that understanding search behavior and modifying the ad budget should be coordinated. For instance, direct-to-consumer programs should control some ad groups at the time of the in–market date. It also suggests that the role of display ads could change as well – clicking thru to someplace else.
Both of the above examples, while from widely different aspects of marketing, illustrate the continuing need to think differently about how marketing works.