Marketing 2.0

By Rebecca Harris
Marketing Magazine
April 30, 2007

You've heard the 30-second spot is dead (and that reports of its death are greatly exaggerated). You witnessed the Mentos/Diet Coke video phenomenon and wished some pseudo scientist with too much time on his hands could find a way to make your brand of cola spray like a sprinkler. You upload your TV ads to YouTube, then ask consumers to create TV spots for you. You have a company blog, where the opinions expressed are not necessarily those of your company. You have a Second Life (or at least you would if you could figure out how to dress your fat-headed naked avatar). You're on Twitter, Linked In, Facebook. You know what del.icio.us is. You're adding daily buzzwords to your marketing dictionary-customer engagement, the conversation, digital divide. Welcome to life in Marketing 2.0.

"Consumers have gone from being dogs, who are responsive, eager, needy and when you whistle they come running, to being cats who have a life of their own, are not nearly as needy and come to you when they feel like it," says Alan Hallberg, Cisco's senior director of worldwide advertising and demand generation. It's a brave new marketing world, all right. So how can marketers, as Hallberg puts it, "rejig themselves when the audience is on stage and you're in the audience?" Obviously "Here, kitty kitty" is out. So enter stage right: the voice of the consumer.
VOC means using consumer insight and intelligence to influence and drive business decisions. Or as one marketing professor put it: "Listen to your customers first before you start going off and inventing stuff." (And don't forget to touch base along the way.) While it sounds simple enough, this little acronym is changing the way some companies market, design products and connect with consumers.

VOC is not a new phenomenon, but technology is changing the way marketers utilize it. Tools such as online social networks and forums can be used to "build relationships with customers but also tap into fantastic insights," says Jennifer Evans, partner at Toronto agency Swing, which specializes in women's marketing. "It's a bit of a mystery why more organizations aren't using these tools to really reach out to people."

One company that gets it is Dell. In February, the computer giant launched ideastorm.com, an online forum that allows people to submit ideas for improving Dell's products and services. The community votes on the best ideas and if it makes sense for Dell, the company will act. For example, ideastorm.com contributors wanted Linux pre-installed on their PCs and notebooks. After surveying 100,000 customers to get even more insights, Dell implemented the idea. "We currently offer it to some of our business customers, but we hadn't seen a strong demand from the consumer market," says Caroline Dietz, a spokesperson at Dell's headquarters in Austin, Tex.

As of early April, more than 3,500 ideas were posted on ideastorm.com, ranging from adding built-in webcams to a "total refresh" of Dell's computer design. "Customers are looking to the companies they do business with to come up with new and creative ways to engage them in the product development process," says Dietz. "We're really just tapping into the value of the Internet and Web 2.0 applications to make it easier for customers [to do so]."

For consumers, the shift to the Internet means fewer intrusive telemarketing calls at home. "Online technology has allowed marketers to reach their customers quicker and more cost-effectively," says Selma Filali, director of market and brand intelligence at Aeroplan in Montreal. "When we launch surveys, we reach our samples in less than 48 hours. That would have been impossible on the phone." In addition to online surveys, the company conducts in-person "kitchen table" meetings with selected members.

"Everything that we do today involves our members and their opinions," says Filali. The company asks members everything from what their redemption experience is like, to what new products and improvements they'd like to see. For example, a lack of seats has always been a big issue for members, "and it had an impact on the way they perceived our brand." Previously, Aeroplan members only had a small percentage of seats available to them on each flight. In October, Aeroplan launched a program called Classic Plus, which means as long as there's a seat on the plane, members have access to it.

Marketing 101, 2.0-style
Talking to consumers isn't exactly a novel concept and in its most basic form is "Marketing 101," says Alan Middleton, a professor of marketing at York University's Schulich School of Business. "This is what marketers believed in all along, [but] "not all of them were doing it very well. And other than the packaged goods industry, it wasn't being done well at all."

But even in packaged goods companies, voice of the consumer is getting a renewed focus. Last year, Wrigley Canada launched what it calls a "consumer immersion program," which involves observing people in their homes and seeing what their interests are and what type of media they use. This is in addition to a full gamut of research, including online surveys and focus groups.

"More companies have come to realize [the consumer] is where it starts and ends," says Len Willschick, manager, consumer and market intelligence, Wrigley Canada. The more insights you have "the better you are able to customize your marketing and sales programs to reach that person. It's beyond what products and brands they use, it extends right into their complete lifestyle."

Even in a Web 2.0 world, face-to-face conversations are important, and the best VOC programs utilize "a combination of on- and offline tactics," says Evans. Swing now has "salons," where the agency brings in a group of women to talk about things like beauty and self-image. "It's not a focus group. We're not showing pictures of things and asking their opinion. We're getting candid feedback about their experiences and attitudes toward a certain topic."

Evans acknowledges it will be challenging for a lot of marketers to adopt this kind of thinking. "You've got to be prepared to deal with ongoing communications and be invested in a long-term conversation. [That's] very different from putting up a television ad and checking your website to see what kind of responses you've gotten... it's something that you have to be committed to over time."

FedEx is also taking a real-world approach to voice of the consumer. Three years ago, the company started a VOC program, which involves in-person meetings with business customers to discuss new products and marketing messages. FedEx has since made the program a mandatory requirement for its marketing team. Most recently, customer feedback from these meetings was used to develop FedEx's intra-Canada deferred (two-day) service.

"We'll often rely on tools like customer research and segmentation analysis without directly hearing what the customers want, specifically right from them," says Brenda McWilliams, managing director of marketing at FedEx in Mississauga, Ont. "So this is a way to reconnect our marketing organization back into direct contact with the customer."

Calling it a VOC "program" though, doesn't sit well with one VOC expert. Successful companies "make VOC part of their culture," says Chris Denove, vice-president and executive director of the voice of the customer practice at J.D. Power and Associates. "The companies that say 'we have a VOC initiative' suggests that there's a start and a stop date. Those initiatives fail, because employees just go about business as usual." Denove, co-author of the book Satisfaction: How Every Great Company Listens to the Voice of the Customer, stresses that VOC has to be "higher than the marketing department. If it comes from the marketing department only, it's destined for failure."

Now, here's a test: "Go to your lowest-level frontline employees and ask them to write down what their job description is. If they write it in technical terms without saying their job is to deliver a great customer experience, then the company has not done a good job establishing a VOC culture."

The challenge for marketers is getting buy-in from the C-suite. "It has to have executive sponsorship because when it's happening in marketing, they don't control all the touchpoints with the customer," says David Ambler, vice-president of client services at The Phelon Group, a marketing consultancy in San Jose, Calif.

Ambler uses the phrase "tin cupping" to describe how if there's no formal program behind voice of the consumer, marketers "have to go out with their tin cup asking for money to be able to do some sort of dialogue with their customers, which is completely the wrong approach. The barrier is looking at this as a strategic initiative versus one that is piecemeal."

But where to start? First, companies should consider the in-bound channels, says Cisco's Hallberg. Cisco has switched to an in-bound marketing approach for lead generation in its B2B work. That means instead of trying to generate leads, the team is serving customers who are truly interested in Cisco products and services.

To start, the company is making sure that its call centres are staffed with people who are "well trained, sophisticated and can handle a lot of questions," as well as optimizing its website for those looking for product information. The in-bound marketing approach is not about "what are we sending out, but which ways will the consumers on their own come to see us."

That doesn't mean Cisco is doing less traditional advertising. "You can't search for something you don't know exists. So there is still a huge role for old-style broadcast communication in introducing new products and creating a brand image."

Cisco's latest marketing initiative centres on the "human network," where people are connecting and collaborating through technology. On Cisco's website, people are invited to share stories of how the human network helped them achieve great things. The campaign also includes TV spots and digital signs at Toronto's Pearson International Airport that transmit messages to cellphones. Hallberg suggests reducing investment in traditional direct marketing because when someone finds out about a new product, "they're not going to sit there and wait for a direct mail piece to show up."

After all, this is life for Consumers, 2.0: They believe the 30-second spot isn't dead, it's just a blur they fast-forward through on their PVRs. They have an instant worldwide audience on YouTube, where they post fake ads and rants or raves of your brands. They read online reviews before they buy new products, and do price comparisons before hitting the mall. They have blogs, Facebook accounts and a Second Life, where some avatars are leading boycotts against your virtual stores.

"We're just at the beginning of this thing," says Hallberg. "The cacophony of voices is going to increase and customers are going to be more empowered. So the companies that are capable of forging a direct link with their customers and are seen as helpers rather than marketers are the ones that are going to survive this. It's going to be a much more difficult world for marketers."

Just what is VOC?
"Voice of the Consumer" is the collective body of consumer insights and intelligence that informs and drives business decisions. But it's more than a market research technique. At its best, VOC is part of an organization's culture and requires proactivity in capturing, understanding and delivering on consumer needs.

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