Here’s a tip from the halls of business schools across the country, just in case you haven’t spent much time in marketing lectures lately:
Now that customers can research any product as much as they want online, brand names don’t make decisions for people anymore. Customers, reviews, and referrals do.
There are some bizarrely popular trends on Youtube when it comes to consumer products: unboxing, reviews, product comparisons, and more. There are a lot of videos on Youtube, so it’s no surprise that a few hobbyists would take the time to talk about and demonstrate the products they love. What’s bizarre is the variety of products people rate, review, and compare in their videos; even minor purchases seem so complex that you forget most people just buy them on instinct or impulse.
In most cases, customers make their purchase decision with what’s called the PMO balance, which is the combination of
– P: prior opinions and experiences,
– M: marketers, advertisements, and companies,
– O: other sources of information, including opinion leaders, websites, and friends.
The Youtube videos above are all examples of O at work.
In every purchase decision, customers rely on some combination of the three, with other (O) dominating now that so much information is available online. However, many decisions, such as repeat purchases like groceries, tobacco, and gas, are dependent on prior (P) personal preferences, meaning they’re less influenced by O. Some product categories have maintained a strong emphasis on brand and still drive purchases with marketing (M) spend. Cars, alcohol, luxury goods, and household items come to mind.
The takeaway is this: the internet has increased the power of alternate sources of information like reviews, which decreases the power of brands. However, if an industry relies on brands, then brands hold more power and other sources hold less.
At bizmktg.com, we help our clients find the right ways to stay in touch with customers. Call or e-mail the marketing machines today: (800) 808-0249 or info@bizmktg.com.
Read the full Harvard Business Review article here.
