Magazine article Ivey Business Journal Online

Thriving with the Crowd: Marketing with (and against) the New Influence Peddlers

Magazine article Ivey Business Journal Online

Thriving with the Crowd: Marketing with (and against) the New Influence Peddlers

Article excerpt

Moving at the speed of the crowd has become mandatory for any company that is on the web (which is just about every company). These companies must understand how influence gets peddled in the marketplace today (and constantly refresh their understanding) - and they must constantly reevaluate how customers are influenced and what the appropriate response should be. Readers will learn what the responses should be in this article.

It's not easy being a marketer in an age of crowdsourced opinions. A hotel chain, for example, might spend millions of dollars promoting a set of strong and consistent marketing messages-only to find them contradicted on a travel site like TripAdvisor. Or a high-end restaurant accustomed to touting its stellar Zagat ratings could be undermined by lukewarm reviews on crowd-sourced opinion site Yelp.

People have always sought information and advice from those they feel they can trust-friends and family, journalists or film critics, and publications like travel guides or consumer reports. Today, they have many more available sources. These new kinds of digital advisers and opinion aggregators, which compile independent and unfiltered reviews from users and consumers, operate beyond marketers' control and have significant power to shape consumer opinion, behavior and spending.

This article will describe four approaches marketers can take to trump this new breed of advisers by turning the crowd into their friend.

THE NEW LANDSCAPE OF INFLUENCE

We have identified ten distinct sources of influence that can sway consumers. (See Figure 1.) Though some have been used for ages, four of the ten have only materialized as potent forces since the advent of Web 2.0. The new sources are enabled by social networks such as Facebook and Pinterest, opinion aggregators like Yelp and Rotten Tomatoes, automated recommendation engines such as those of Netflix and Pandora, and price-comparison services like Priceline and Google Shopping. Further, the six other sources of influence have been enhanced and democratized in the Internet age.

Together, these technology-enabled sources of influence, both new and old, increasingly intervene between a company and its customers. As a result, customers' opinions about whom to trust for advice have changed. For example, the Edelman Trust Barometer, an annual survey of societal trust, found for the first time in 2006 that customers considered "a person like yourself" to be the most trusted source for advice, as opposed to other sources such as business or government.

Not only are attitudes regarding trust changing, but behaviors are as well. Consumers continue to escape from traditional marketing channels into digital realms, with several important outcomes. First, customers can now comprehensively inform themselves. Today, more than a fifth of consumers have used mobile phones to compare prices while in a store. Second, they can loudly inform others; nearly a third of consumers have penned negative online reviews after disappointing experiences. And, they can move toward purchase decisions at their own pace.

It's hardly surprising that in a 2012 Accenture survey, 80 per cent of consumers reported that they were reevaluating their purchase choices more than they did just two years before. That's bad news for marketing departments that rely on stable customer segments moving predictably along a linear path to purchase. What marketers need now is to regain their footing using new models for influencing customers at the right time, in the right place, with the right message.

An entire cottage industry of evangelists has developed in response to this challenge, with no end of their own opinions on effective Internet and social media marketing techniques. The challenge for companies is to identify and embrace the methods, both old and new, that are the most compelling to their customers, while responding effectively to competitors that are trying to do the same. …

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