Part I Fundamental Trends Shaping Marketing
- Chapter 1: Power Shifts to the Connected Customers
- Chapter 2: The paradoxes of Marketing to Connected Customer
- Chapter 3: The Influential Digital Subcultures
- Chapter 4: Marketing 4.0 in the Digital Economy
Chapter 1: Power Shifts to the Connected Customers
For Vertical, Exclusive, and Individual to Horizontal, Inclusive, and Social
Horizontal, Inclusive, and Social
Marketers need to embrace the shift to a more horizontal, inclusive, and social business landscape. The market is becoming more inclusive.
Social media eliminate geographic and demographic barriers, enabling people to connect and communicate and companies to innovate through collaboration. Customers are becoming more horizontally oriented. They are becoming increasingly wary of marketing communications from brands and are relying instead on the f-factor (friends, families, fans, and followers). Finally, the customer buying process is becoming more social than it has been previously.
Customers are paying more attention to their social circle in making decisions. They seek advice and reviews, both online and offline.
Chapter 2: The paradoxes of Marketing to Connected Customer
Online vs. Offline Interaction, Informed vs. Distracted Customer, and Negative vs. Positive Advocacy
Marketing amid Paradoxes
The changing landscape creates a set of paradoxes for marketers to deal with, one of which is online versus offline interaction. Both are meant to coexist and be complementary, with a common aim of delivering superior customer experience. Furthermore, there is a paradox of the informed versus the distracted customer. Even as connectivity empowers customers with abundant information, customers have also become overly dependent on others’ opinions, which often outweigh personal preferences. Finally, with connectivity come enormous opportunities for brands to earn positive advocacies. Still, they are also prone to attracting negative advocacies. That may not necessarily be bad because negative advocacies often activate positive advocacies.
Chapter 3: The Influential Digital Subcultures
Youth for Mind Share, Women for Market Share, and Netizens for Heart Share
Youth, Women, and Netizens
Youth, women, and netizens have long been researched thoroughly by businesses but typically as separate customer segments. Their collective strength, especially as the most influential segments in the digital era, has not quite been explored. Youth are early adopters of new products and technologies. They are also trendsetters, yet are fragmented as to the trends they follow. Ultimately they are game-changers.
As information collectors and holistic shoppers, women are de facto household managers, the chief financial officer, purchase manager, and asset manager all rolled into one. Finally, netizens are social connectors, as they overwhelmingly connect, converse, and communicate with their peers. They are expressive evangelists as well as content contributors in the online world. Together, youth, women, and netizens hold the key to marketing in the digital economy.
Chapter 4: Marketing 4.0 in the Digital Economy
When Online Meets Offline, Style Meets Substance, and Machine-to-Machine Meets Human-to-Human
Redefining Marketing in the Digital Economy
Marketing 4.0 is a marketing approach that combines online and offline interaction between companies and customers, blends style with substance in building brands, and ultimately complements machine-to-machine connectivity with human-to-human touch to strengthen customer engagement. It helps marketers to transition into the digital economy, which has redefined the key concepts of marketing. Digital marketing and traditional marketing are meant to coexist in Marketing 4.0 with the ultimate goal of winning customer advocacy.
Part II New Frameworks for Marketing in the Digital Economy
- Chapter 5: The New Customer Path
- Chapter 6: Marketing Productivity Metrics
- Chapter 7: Industry Archetypes and Best Practices
Chapter 5: The New Customer Path
Aware, Appeal, Ask, Act, and Advocate
Aware, Appeal, Ask, Act, and Advocate
In the digital economy, customer path should be redefined as the five A’s—aware, appeal, ask, act, and advocate—which reflect the connectivity among customers. The concept of Marketing 4.0 ultimately aims to drive customers from awareness to advocacy. In doing so, marketers should leverage three main sources of influence—own, others’, and outer influence. This is what we call the O Zone (O3), a useful tool
that can help marketers optimize their marketing efforts.
Chapter 6: Marketing Productivity Metrics
Purchase Action Ratio (PAR) and Brand Advocacy Ratio (BAR)
Driving Up Productivity
- Increase Attraction
- Optimize Curiosity
- Increase Commitment
- Increase Affinity
Purchase Action Ratio and Brand Advocacy Ratio
In line with the five A’s customer path, we have introduced a set of new metrics. These are purchase action ratio (PAR) and brand advocacy ratio (BAR), which can better evaluate how effective marketers are in
driving customers from awareness to action and finally to advocacy. In essence, PAR and BAR allow marketers to measure the productivity of their marketing activities.
Chapter 7: Industry Archetypes and Best Practices
Channel, Brand, Sales, and Service Management
Pattern 1: Door Knob
The first major and most common pattern is the doorknob. The most distinctive feature of the doorknob pattern is the high commitment despite the low curiosity level. A well-known industry with the “door
knob” customer path is consumer packaged goods (CPG).
Pattern 2: Goldfish
The second major pattern is the goldfish. The most distinguishing feature of the goldfish pattern is a high curiosity level (ask > appeal ). The goldfish customer-path pattern is found mostly in business-to-business
Pattern 3: Trumpet
The third major pattern is the trumpet pattern, found mostly in lifestyle categories such as luxury cars, luxury watches, and designer handbags. The uniqueness of this pattern lies in its high-affinity levels. People who follow the trumpet pattern typically trust the quality of the category brands. Hence, they are willing to advocate brands even if they do not buy and use those brands. In other words, the number of advocates is higher than the number of actual buyers (advocate > act).
Pattern 4: Funnel
The fourth major pattern is the traditional funnel. In a funnel category, most purchases are well planned and customers are highly involved in the purchase decisions. In fact, this is the only pattern in which customers go through each stage of the customer path on the road to purchase and advocacy. They ask questions about the brands they like and eventually purchase the brands if they like what they hear from the conversation. They advocate only if they have experienced the product themselves. The funnel pattern is found mostly in consumer durables as well as in service industries.
Learning from Different Industries
In analyzing the generic five A’s framework and evaluating conversion rates across the different stages, we identify four major patterns for various industries: “doorknob,” “goldfish,” “trumpet,” and “funnel.”
Various industry types can be placed under any of these patterns, each with a specific customer-behavior model and a different set of challenges. We also identify four different industry groups based on BAR statistics, each representing a set of marketing best practices: brand management, channel management, service management, and sales management.
Part III Tactical Marketing Applications in the Digital Economy
- Chapter 8: Human-Centric Marketing for Brand Attraction
- Chapter 9: Content Marketing for Brand Curiosity
- Chapter 10: Omnichannel Marketing for Brand Commitment
- Chapter 11: Engagement Marketing for Brand Affinity
Chapter 8: Human-Centric Marketing for Brand Attraction
Building Authentic Brand as Friends
In Marketing 3.0, we introduced this concept of human-centric marketing as the natural outgrowth of customer-centric marketing (Marketing 2.0) and product-centric marketing (Marketing 1.0). In
human-centric marketing, marketers approach customers as whole human beings with minds, hearts, and spirits. Marketers fulfill not only customers’ functional and emotional needs but also address their latent anxieties and desires.
Understanding Humans Using Digital Anthropology
Social listening is the proactive process of monitoring what is being said about a brand on the Internet, particularly on social media and online communities. It often involves social media monitoring software to filter massive amounts of unstructured data from social conversations into usable customer intelligence information. Big-data analytics are often used for the purpose of social listening
Developed by Robert Kozinets, netnography (ethnography focused on the internet) is a method that adapts the practice of ethnography to understand human behaviors in e-tribes or online communities.
Similar to ethnography, netnography aims to study
humans through immersion into their natural communities in an unobtrusive way.
A precursor to human-centered design (HCD), emphatic research is a method—popularized by design companies such as IDEO and frog—that involves the human perspective and empathy in the research process. It typically involves participatory observation and immersion in the context of customer communities with the objective of uncovering latent customer needs. Unlike social listening and netnography, emphatic research requires in-person observation, dialogue, brainstorming, and collaboration among researchers and the community members to synthesize the most relevant insights. Thus, emphatic research is the method closest to traditional ethnography.
Building the Six Attributes of Human-Centric Brands
A person who is seen as physically attractive usually has strong influence over others. Thus, brands that aim to have influence over their customers should have physical attractions that make them unique, albeit not perfect.
Intellectuality is the human ability to have knowledge, to think, and to generate ideas. Intellectuality is closely related to the ability to think beyond the obvious and the ability to innovate. Brands with strong intellectuality are innovative and have the ability to launch products and services not previously conceived by other players and by the customers. The brands thus demonstrate their ability to effectively solve customers’ problems.
A person with strong sociability is confident in engaging with others, showing good verbal and nonverbal communication skills. Similarly, brands with strong sociability are not afraid of having conversations with their customers. They listen to their customers
as well as the conversations among their customers. They answer inquiries and resolve complaints responsively. The brands also engage their customers regularly through multiple communications media. They share interesting content on social media that attracts their customers.
People who can connect emotionally with others to drive their actions are very powerful influencers. Brands that evoke emotions can drive favorable customer actions. They connect with customers on an emotional level with inspirational messages. Sometimes, the brands also connect with customers by showing off their humorous side.
People with strong personability have self-awareness; they are conscious of what they are good at while admitting what they still have yet to learn. They show self-confidence and self-motivation to improve themselves. Similarly, brands with strong personability know exactly what they stand for—their raison d’etre. But these brands are also not afraid to show their flaws and take full responsibility for their actions.
Morality is about being ethical and having strong integrity. A person with positive moral character has the ability to know the difference between right and wrong. Most important, they have the courage to do the right thing. Similarly, brands with strong morality are values-driven. The brands ensure that appropriate ethical considerations become a key part of all business decisions. In fact, some brands put ethical business models as their core differentiation. The brands keep their promises even though customers do not keep track.
When Brands Become Humans
More and more, brands are adopting human qualities to attract customers in the human-centric era. This requires unlocking customers’ latent anxieties and desires through social listening, netnography, and emphatic research. To effectively address these anxieties and desires, marketers should build the human side of their brands. The brands should be physically attractive, intellectually compelling, socially engaging, and emotionally appealing while at the same time demonstrate strong personability and morality.
Chapter 9: Content Marketing for Brand Curiosity
Initiating Conversations with Powerful Storytelling
Creating Conversations with Content
More and more marketers are making the shift from advertising to content marketing. A mindset shift is required. Instead of delivering value-proposition messages, marketers should be distributing content that is useful and valuable for the customers. In developing content marketing, marketers often focus on content production and content distribution. However, good content marketing also requires proper pre-production and post-distribution activities. Therefore, there are eight major steps of content marketing that marketers should follow in order to initiate customer conversations.
Chapter 10: Omnichannel Marketing for Brand Commitment.
Integrating Traditional and Digital Media and Experiences
- Trend 1: Focusing on Mobile Commerce in the “Now” Economy
- Trend 2: Bringing “Webrooming” into Offline Channels
- Trend 3: Bringing “Showrooming” into Online Channels
Step 1: Map All Possible Touchpoints and Channels across the Customer Path
Step 2: Identify the Most Critical Touchpoints and Channels
Step 3: Improve and Integrate the Most Critical Touchpoints and Channels
Integrating the Best of Online and Offline Channels
Customers hop from one channel to another and expect a seamless and consistent experience. To address this new reality, marketers are integrating online and offline channels in an attempt to drive customers all the way on their path to purchase. Marketers should aim to combine the best of both worlds—the immediacy of online channels and the intimacy of offline channels. To effectively do this, marketers should focus on the touchpoints and channels that really matter and engage
employees in the organization to support the omnichannel marketing strategy.
Chapter 11: Engagement Marketing for Brand Affinity
Harnessing the Power of Mobile Apps, Social CRM, and Gamification
Enhancing Digital Experiences with Mobile Apps
- Step 1: Determine the Use Cases
- Step 2: Design the Key Functionalities and User Interface
- Step 3: Develop the Back-End Integration
Providing Solutions with Social CRM
- Step 1: Build Sense-and-Respond Capabilities
- Step 2: Develop and Empower Social CRM Agents
- Step 3: Leverage Community Involvement
Driving Desired Behavior with Gamification
- Step 1: Define Actions to Trigger
- Step 2: Define Customer Enrollment and Tiering
- Step 3: Determine Recognition and Rewards
Mobile Apps, Social CRM, and Gamification
To drive customers from purchase to advocacy, marketers need a series of customer engagement tactics. There are three popular techniques that have been proven to increase engagement in the digital era. First, marketers can use mobile apps to enhance digital customer experience. Second, marketers can use social CRM to engage customers in conversations and provide solutions. Finally, marketers can use gamification to drive the right sets of customer behavior.