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June 19, 2013

Accepting the New Digital Consumer

Posted by Puneet Gupta (View Profile | View All Posts) at 8:03 AM

Nutella Commercial [Source : TOKENFATK1D http://www.youtube.com/watch?v=ThIrw_LpuRA]

A significant part of the information revolution that's unfolded rapidly over the past several years is around metadata that can be sliced, diced and interpreted in such ways that organizations gain insights about their customers. We learn about behaviors as a group of course, but companies are going deeper to get a glimpse of an individual's tastes and preferences. This development gives enormous influence to consumers. So much so that companies need to accept the fact that consumers now have most of the power in a digital marketplace.

Not convinced? Well, individuals can disrupt or even shut down a business ultimately if they leverage their brand communities and social media outlets in certain ways. That's the stark change that's come about in the digital world. Imagine for a moment if the owner of a company said today that you could buy the product his company made in whatever color you wanted so long as it's black. I reckon that he would go out of business very quickly. Yet it's hard for some companies to grasp this fact. Yesterday's all-powerful organizations can no longer dictate to consumers what they want or need. A corporation has two choices: It can draw a line in the sand and challenge this convention. Or it can accept the new reality of the digital age and engage with its consumers to influence the conversation.

One of my favorite treats is a wonderful chocolate-hazelnut spread called Nutella. I read with interest recently that one of its loyal customers organized a 'World Nutella Day'. Initially the company that owns the brand, Ferrero, was taken by surprise by the fact that the customer rally originated not in its corporate suites but rather out there among its fans. My first reaction, of course, is that every company should have this kind of problem on its hands! Wouldn't we all like to be faced with the prospect of having to deal with loyal fans who create a global day devoted to our products? Still, I understand the company's point of view. Brand management is an important, long-term effort. Left unchecked, a product's name and reputation can veer of course quite quickly. The Nutella episode, however, supports my premise that companies have two options in how they can deal with the new reality of consumer power and influence. At first, the corporation sent a cease-and-desist order to the fan who organized the online World Nutella Day. According to reports, doing so angered some fans and risked an online revolt. So the company chose the second option: It withdrew its letter to the fan, accepted the reality of its customers' collective influence, and worked with them. I'm getting hungry just thinking about that online festival.

The story about the hazelnut spread also supports my belief that companies need to be prepared for a new and potent version of a consumer perception that's as old as the hills: buyer's remorse. The minute someone has purchased something, it's human nature to feel as though he didn't get the best option or the best price because there is something better out there that he just didn't know about. Today's digital consumers are more conscious of missing out on something because of their access to data. Companies need to better understand their customers as individuals and doing away with the dangerous perception of after-purchase remorse.

One of the most important aspects of a company embracing the digital influence of consumers is how it operates its social media channels. Don't be fooled by big numbers. A million social media followers are just that - a big number. The real test is how you're segmenting that big number and building relationships with a small, valuable, core group.


The businesses still hold the edge when it comes to digital marketing/Social media. The difference is rules have changed.

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