Company Loyalty Vs. Customer Loyalty

‘Company loyalty’ is a new term I heard recently from Sriram, co-founder of Crossword book stores and now an independent marketing and retail consultant. Should consumers be loyal to their brand OR companies be loyal to their consumers?

The tables are perhaps turning. With innumerable choices, commoditization of many services and products, consumers have no reason to be loyal to any brand. Or if there is a reason, what could they be?

Brands are often described as a symbol of promise. As what people think, feel and experience about a product or service. And in turn it is an expectation. If the experiences are richer and expectations are consistently met, then there is loyalty.

Yet it is complex. To understand what goes in the minds of people and what the motivations are.
I have been a great fan of Onida brand, ever since I came across the brand in the late 80s. The reason was the perception it built that it is great in sound quality and overall product quality. That perception continued to remain with me. Ten years back, when I bought a television, I waited for over a week to get a specific model of the brand. The dealer tried convincing me to go for other brands when the consignment from the company started getting delayed. Every evening I would go religiously to check whether it has come. Four years back, when I bought a DVD player, it was Onida. Today, with many technological advances and commoditization of technology, I don’t’ know whether Onida is the best. Yet, when I change my TV, most likely it is going to be Onida. Somewhere and somehow it has become an emotional connect.

"Every brand is a discovery of a consumer need"

Attending a recent session on Market research methodologies was a revelation of sorts, given that my understanding of market and consumer research is anything worth mentioning. The hightlight of the session was listening to the case studies of Paras Pharma, and some of the stories directly from Darshan Patel (Darshan bhai as he is known) himself.

Starting in 1988, Paras had hardly any growth till 1993. What followed then was a fairy tale story. Story of churning out brands – all of them is either number 1, or number 2 or in very rare cases number 3 in their categories. Behind every rupee spent on building these brands is meticulous research and insights. Consumer research continues to be an integral part and an ongoing process for Paras. Paras today has about 20 brands, the leading one being Moov.
Paras is also perhaps a rare case of manufacturer turning into a consumer and brand building business. Reportedly, over 32% is annual sales turnover goes into marketing and advertising. Something that is never heard of. ‘Advertising is my raw material’ is what Darshan bhai had to say.

A relentless focus on consumer research to understand consumer needs & motivations and developing products and positioning them accordingly is at the centre of this brand building saga. True its philosophty that 'Every brand from Paras is a discovery of a consumer need'.

Coming full circle: The thin line between creative and media

Google recently said that it is investing on creative side of the business and will also work closely with the creative advertising agencies. It is merely validating the belief that in digital it is a thin line between creative and media.

Modern gadgets are now bringing together communication, entertainment consumption and utility applications together making consumer behaviour unpredictable. As sharing, tagging and the likes in 'social' takes centre stage, people decide what will get consumed and pushed.

It is not surprising that conventional media metrics find itself lacking. 'Opportunity to see' is now a billion times more than what it was earlier. Therefore, merely planning to create opportunities to see with or without scientific means or tools is surely not enough. What and how is it delivered and the experience that can be provided will be the key. "Transmedia Story telling" is a term coined by Henri Jenkins, citing the need to tell stories (effectively communicate) in a highly fragmented media space where content is now delivered through multiple platforms.

Media agencies are now acquiring creative skills while creative agencies are equipping themselves with media capabilities. It is coming a full circle again.

Hypocrisy & marketing communications

Shahrukh Khan says 'Wish Karo. Dish Karo' in Dish TV commercial.
Dish TV really wishes.

I recently heard that Sharukh Khan uses Tata Sky DTH at his home. So much for the credibility and impact of celebrity endorsements.

A leading snacks brand recently seems to have decided that their employees should stay healthy. So in addition to providing them with gym, fitness lessons and other facilities, it ensured restricted access to junk food for their employees. Result? It is difficult to get a packet of their own brand of snacks in their premises (report in Mint newspaper). Hopefully, a precursor to the company's decision to rig the portfolio to healthier snacks and beverages.

Online Social Lending comes to India

Much has been written about how internet has changed our lives and how it is leading us to Life 2.0.

What is often spoken and written about is how the Social Media is changing marketing and advertising as we know it and there is enough of hype around it. And that is missing the wood for the trees. The reality is that Web 2.0 is fundamentally changing and creating new business models. And that some of them are making a difference.

Nothing can be more interesting than those changes in the financial sector. More precisely in the micro-finance/social lending. At a time when every possible scam is rocking the industry. Social lending as a concept is nothing new and has been around for generations. Borrowing from your friends, family and community certainly is not new. The internet has only made it universal, scalable. Just like it did in many other business.

Zopa is first online market place that connects lenders and borrowers. Lenders and borrowers register on the site, get the best deals. No middle men. No extra overheads. Zopa started in UK and is now in four of five countries. Prosper is another player which started in US. Kiva is world’s first international person-to-person micro-lending website where individuals can lend to entrepreneurs across the borders.

DhanaX is India’s first such site. Connecting needy to the lenders. Dhanax works with NGOs in identifying the borrowers. Dhanax works on a ‘for-profit’ model, where DhanaX gets a share of the interest collected. The effective interest to the borrower is about 20-22%. RangDe is non-profit initiatives based out of Chennai, but seem to have consciously stayed out of an online payment gateway (I did not understand why). RangDe aims to get micro loans at a very low interest rate, where the social lender gets 3.5% returns on investment.

Online p2p micro lending is opening a whole lot of opportunities for many of us to be actively taking part in building the economy. And also an interesting example of how digital connectivity changes lives.

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What do you do when you don't know what to blog about here?

Then change the templates, change the layout, colours, widgets and whatever...

This is what happened here exactly. I changed the 'look and feel'. The house is now repainted on the occasion of new year.

Hopefully, this year I will be able to write something as I have been doing reasonably successfully in my travel blog.

"Markets are Conversations"

(This is a piece which i wrote recently for Alootechie, the only Indian website on Online marketing / advertising industry)

Have you heard of Social Technographics? Social what? Or have you read the research paper ‘Sources and Consequences of Embeddedness of the Economic Performance of the Organizations: The Social Network effect’. Huh! I still haven’t understood the title itself. But then if you are in the online marketing profession, all these will catch up with you soon.

It was in 1999 or 2000 that the Cluetrain Manifesto was published. Initially, it was cluetrain.com, a collection of ideas put together on a website about the way internet is changing the markets. The book, ‘The Cluetrain Manifesto’ was later published as a sequel to the website and turned out to be an instant hit, topping the charts for a long time.

I came across the manifesto in 2003. Just before taking up my new job with an online media/marketing agency, I asked my then would-be boss on whether I should do some reading up, since I was getting into a new role. He gave me a copy of this book and said that would suffice. (I am itching to say ‘the rest is history’).

Written in a tongue-in-cheek, humorous and delightful style, it is hugely entertaining (the preface asks ‘when was the last time you laughed aloud reading a business book’), but at the same time make many marketing professionals squirm in their chairs.

Sample some here:

If language is a living organism, TechnoLatin words are like those pod people in the movie Invasion of the Body Snatchers. They look real, but they are not. And like the pod people, TechnoLatin has become the norm. Clarity is the exception when it should be the rule. Today we no longer make chips, circuit boards, computers, monitors, or printers. We don’t even make products. Instead we make solutions, a fatuous noun further bloated by empty modifiers such as total, full, seamless, industry standard, and state-of-the-art.

Equally vague and common are platform, open, environment, and support when used as a verb. A veterinarian using TechnoLatin might say that a dog serves as a platform for sniffing, is an open environment for fleas, and that it supports barking.

In short, this brilliant book tells the story of how markets changed from real human conversations to the ‘business-as-usual’ where everyone is demographics, eyeballs, abstractions or statistical aggregates. And now finally, with internet and new technologies, how everything is changing once again, and how the customer is having the last laugh. An eye opener for me was the phrase ‘Markets are conversations’.

Much bits and bytes have flown through the wires since then. (In the industrial era, this phrase read as “much water has flown under the bridge”). New fads and jargons came. Some remained, while some died.

The conversations have now been baptized and given a new name: Social Media. And the new battle is Social Media marketing. Predictably we have a new series of jargons, definitions, terms, and then of course, the consultants.

Just as we thought that we have learned something – that markets are not about xxxgraphics (demo-,psycho- etc.), here are some things you need to brace up with. ‘Social Technographics’ from Forrester research will tell you what kind of social animal are you (or your customer) online. In this new social ladder, one can be slotted anywhere between a ‘creator’ at the top (wow!) and an ‘inactive listener’ at the bottom, which your father certainly will not be very proud of. (especially in this ‘Chak De Bacche’ season). What will you do with this data? One more slide in our PPTs. Someone commented on a popular blog about this research report – “Gosh! You'd almost think they were selling dot-com-2.0 snake oil in an opaque bottle”

Then there is something called ‘Community Analytics*’. Earlier we have heard of Marketing Analytics, which typically tells a bank that there is 58.23% chance of a customer applying for a personal loan before his second wedding anniversary and that an offer like a free vacation to the moon has the highest propensity of generating response.

And yes, there is Web Analytics, “which gives a wealth of information like comprehensive cross channel view of your customers’ behaviour, preferences and motivation and evaluate your ability to build and maintain sustainable relationships while keeping an eye of powerful attributes like customer life-time value, channel loyalty and ROI”. Life was certainly a lot easier earlier.

And now Community Analytics will help you identify communities, influencers, laggards with the help of complex mathematical models. No sarcasm intended. All these are powered and driven by well-meant intellectuals. Wonder what is next!

Meanwhile, some of us are trying to ‘engineer’ some conversations. We air drop some characters or sometimes ourselves into these conversations and talk how great that product or this service. Maybe it is working now. Isn’t it only a matter of time before genuine people start recognizing these engineered conversations? Perhaps yes.

Getting into the honest conversations in the market and ‘marketing’ is a genuine challenge. The ‘why and how’ of social media marketing is still debatable. Till then we continue to believe that we are ‘innovating’, ‘disrupting’ and in the bargain, hopefully a little bit of learning as well.

If you have not read the book ‘The Cluetrain Manifesto’ the complete version is available at http://www.cluetrain.com. After a hard day at work, it is worth it.

*Community Analytics is a name of an organization.