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Advertising or Advocates? How to invest in the right places.

Posted on November 29, 2010 by Rob Petersen

Where should money be invested these days?  Advertising or Advocates?

The Harvard Business Review, in this December’s issue, says the internet and social media have changed the way consumers interact with brands.  Although we continue to engage BEFORE we buy, we now also actively engage AFTER we purchase a product.  At this stage, we either publicly promote or assail the brand as well as collaborate on its development.

The “old way of doing business is unsustainable,” says HBR and since these are their words, not mine, here’s how they explain it to answer the question.

THE “CONSUMER DECISION JOURNEY”  (IN STAGES)

We all take a “Consumer Decision Journey” everytime we buy a brand.  Before, it had three stages.

  1. CONSIDER
  2. EVALUATE
  3. BUY

A car buyer, for example, would examine a consideration set of comparably priced vehicles and methodically pare down the available choices until he arrived at the one that best met his criteria. A dealer would reel him in and make the sale. The buyer’s relationship with both the dealer and the manufacturer would typically dissipate after the purchase.  But now, there’s an additional stage according to HBR.

  1. CONSIDER
  2. EVALUATE
  3. BUY
  4. ENJOY, ADVOCATE, BOND

Now, consumers are more promiscuous in their brand relationships. We connect with a myriad of brands—through new media channels beyond the manufacturer’s and the retailer’s control.  After we remain aggressively engaged spreading the word (good or bad) to an ever widening social circle offering either praise or criticisms.  If the manufacturer is listening, we offer ideas on how to make the product and customer experience better.  There is sustainable business value to listening.

THE CONSUMER DECISION JOURNEY (IN PICTURES)

Before, the buying cycle was like a funnel.  It started with a large audience and narrowed down to those who made a purchase.  It had a beginning and an end.

Companies typically spend between 70%-90% of their marketing budgets at the top end of the funnel on advertising and retail promotions; yet HBR concludes “in many categories the single most powerful impetus to buy is someone else’s advocacy.”

Now, it’s like a relay race where the baton is handed off to someone who takes it, runs with it and hands it off to the next person.  The process doesn’t just begin and end.  It builds touching more and more people as it goes.

In time, it is predicted the ENJOY, ADVOCATE, BOND loop will be so strong, it will circumvent the the CONSIDER and EVALUATE stages.

This doesn’t mean you shouldn’t spend money on advertising but it does mean if you’re not listening, engaging and helping spread positive word of mouth (when it happens) online and in social media, you’re not spending in the right places and you’re spending a lot more money on advertising than you have to.

But don’t take my word for it.  Starbucks has a brand community to ENJOY, ADVOCATE AND BOND at mystarbucksidea.com where they listen to customers and ask for their ideas about new coffee drinks.

“We used to launch a new product and it cost millions of dollars. Now, when we launch a new product, we already have millions of fans,” say Chris Bruzzo, Vice President Brand, Content and Online at Starbucks.

Are you spending money in the right places?

2 comments
Michele Price
Michele Price

Yes, like business all aspects of it is evolving. Which is why it is funny when folks want to use the old tools or measurements like a funnel. I remember over three years ago when Michael Port suggested everyone in the room replace the funnel with a circle with doors. The challenge comes when you need to communicate with people who are not there yet, if yiou do not use what they are familiar with it is that much harder for them to follow your idea. It is a compromise. When do you use current vs traditional examples in helping to educate change?

Rob Petersen
Rob Petersen

Wow. Michael Port certainly was ahead of his time. But I too experience the same challenges you do with a willingness to change. It seems to me you have to start with the grounding that the model has changed. There is either an acceptance (or not) of that fact that is the pivot point. After that, examples should be geared to those that parallel the client or company you are trying to evolve. Thanks for your input Michele. It's very valuable and hope this reply helps.

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