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Walk The Talk

What marketers are learning from word of mouth and group dynamics

Feb 18, 2008

-Noreen O'Leary




Jarvis asked to visit the company, and did. "My conclusion, coming back from Dell," he says, "is your customers, posting their own experiences and advice, are your best advocates. Here was a company collaborating to create content, media and marketing without content, media and marketing partners. Agencies have been criminally lazy about recognizing the potential of this new world. The fact that they are paying more for TV, even as audience levels decline, is proof of their insanity. Every aspect of media is going through massive upheaval. Are agencies going to be like music companies and ignore this? The Internet kills the middleman and agencies are the ultimate middlemen."

Still, Knox, a P&G veteran of 31 years, says consumer buzz needs the kind of traditional media support agencies produce. "Word of mouth in the absence of all other marketing doesn't work as fast," he says. "A base level of awareness is necessary. It should be an integral part of the overall marketing mix."

As some companies have learned from consumer communications -- Wal-Mart, for instance, which has endured controversies over labor practices -- a good public relations strategy may also need to be part of that mix before a marketer attempts to be more transparent via consumer outreach initiatives.

"For certain brands, before reaching out to consumers, it is key to first come face-to-face with corporate responsibility and social issues," says Peter Kim, a senior analyst at Forrester Research.

Public relations firms may in fact succeed in the future where traditional agencies fail. In an increasingly transparent world, consumers not only look for information about brand experiences, they also want to know about corporate ethics and practices. In light of the China product recalls of last year, Deloitte's Conroy says marketers should expect another new area of inquiry from consumers: sourcing. As an example, he cites a popular nutrition bar -- he declines to name it -- that he says contains not a single ingredient produced in the U.S.

That demand for more complete and objective product information is growing along with technological advancements. The result? Conroy believes the consumer-products industry may find itself at an inflection point this year unlike anything it has seen for the last two decades.

Consumers have never had so much access to online information, and it's not just about posting their own product reviews anymore: New retail tools are popping up on the Web all the time. Information aggregators offer comparative information about local pricing and availability for everything from consumer products and autos to gasoline. Amazon customers use its affiliated search engine, Pricenoia, to find the lowest price at Amazon sites around the world. In China, consumers indulge in "mobshopping," signing up at sites like teambuy.com.cn -- a consumer phenomenon Conroy believes will come to the U.S. (An example: Up to 500 shoppers agree to converge on a retailer at a given day and time, demanding volume discounts of up to 30 percent on items like TVs.) New comparative Web sites like NearbyNow, Slifter and Frucall allow consumers to check for availability and compare prices of products.

Conroy envisions this scenario: A consumer is shopping at a big-box retailer, looking at big-screen TVs. He or she can use a mobile phone to visit a comparative-shopping site, type in a UPC for a particular model and find places online to buy the same unit for cheaper than what the store is offering. The customer, using the physical retailer, not the Web, as the research tool, can even then buy it from one of those online competitors.

"If you're a retailer, it used to be you had a captive audience," says Conroy. "Sure, consumers may have done their research before they got there, but then you had them. Now you don't, because that whole world of commerce is available in the palm of their hand."

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