Is sustainable competitive advantage extinct?
Organizations respond in real-time to the explosion of choice ever smarter customers are confronted with. Business models, strategies, communications, etc. are proactively reviewed in increasingly shorter cycles. An explosion of choice? In March 2017, Android users could choose from 2.8 million apps, while the Apple App Store offered 2.2 million apps[i].
Nowadays, according to Credit Suisse, the average lifespan of a S&P 500 company is less than 20 years. In the 1950’s it was 60 years. The disruptive force of technology kills off older companies faster and earlier. Disruption itself is not new, opines the experts at Credit Suisse. What is new is its speed, complexity and global reach. A number of industries currently suffer from disruptive forces that occur simultaneously[ii].
The consequences for organizations and entrepreneurs are severe: whenever one meets a challenge and tries to adapt to it, one risks being left behind by a new technology or trend. A product or a business that took years to develop can become obsolete overnight.
Do you remember who invented the digital camera? Kodak. Unfortunately, Kodak’s management did not see the value of it. They only figured it out when it was too late[iii]. It seems logical that new thinking in management arguments that no competitive advantage is sustainable, and that business models and strategies need to be continually updated. After all, any organization needs to keep its customers and attract new ones. Remaining relevant and excellent is the key.
This is no easy feat, as evidence shows. Customer retention declines globally; from 61% in 2015 to a projected 51% in 2018[iv]. 8 out of 10 start-ups do not survive[v]. 50% to 75% -depending on the source- of all new product launches fail. Regardless of the source, one can agree that the failure rate is too high and too costly. These failures are a result of a lack of insight into current and future customer behavior. New products mainly fail due to institutionalized insufficiencies in the use of the sciences that are best geared to understand and predict customer behavior[vi]. The main reason why start-ups fail is because the market is not ready (yet). Start-ups focus more on solving technological problems than on effectively responding to are creating a market need. In other words, technology for the sake of technology instead of using technology to make the execution of a job-to-be-done so much easier for the customer. Retention, new products or services, start-ups…, the moral of the story is the absence of or a lack of emotional and functional connection with current and future customer behavior.
However, Lafley and Martin (2017) claim there is enough evidence that shows sustainable competitive advantage is not extinct. The authors drew on modern behavioral research to back up their claim. They come up with an interesting conclusion: a competitive advantage is not maintained by offering the customer the perfect choice, but by offering the easiest one.
Customer retention is not achieved by continually adapting to changes in order to remain the best emotional and rational fit for the customer. It is achieved by “helping customers avoid having to make yet another choice”. One succeeds by creating a ‘cumulative advantage’. A cumulative advantage is the layer an organization relentlessly build on top of its initial competitive advantage. It does so by increasingly making its products and services the instinctive, comfortable choice for the customer. The idea that purchase decisions are grounded in conscious choice flies in the face of research in behavioral sciences[vii].
What our brains love most is automaticity. Instead of making a conscious effort, our brains love to do same things over and over again in auto-pilot mode. Although conscious thought and actions is what makes us human and is crucial in our daily lives, only 5% of our cognition occurs consciously. We are not aware of 95% of our cognition[viii]. When we do make the effort of conscious thought, we gladly choose the path of least resistance. This is the reason why, as a consumer, we often choose a leading product in the market; it’s the easy and familiar way.
Every time we choose something, that choice gains an advantage over what we did not choose. Every time we prefer a certain product or service, and as long as it continues to meet our expectations, its advantage over the products or services we didn’t choose accumulates. It becomes increasingly difficult to choose or even consider an alternative. The growth of cumulative advantage relentlessly continues until it is stopped in its tracks by a change that disrupts habit and/or familiarity and forces a conscious re-evaluation.
A value proposition -the articulation of a competitive advantage- can persuade somebody to become a customer. The continual development of cumulative advantage retains the customer. Bottom line: a sustainable competitive advantage is far from extinct. Mastering the customer culture disciplines of customer insight and foresight allows an organization to achieve it.
[i] https://clearbridgemobile.com/youre-doing-it-wrong-the-top-6-reasons-why-apps-fail/. April 21, 2018.
[ii] https://www.cnbc.com/2017/08/24/technology-killing-off-corporations-average-lifespan-of-company-under-20-years.html. April 21, 2018.
[iii] Dr. Linden R. Brown and Chris L. Brown, The Customer Culture Imperative (New York: McGraw-Hill Education, 2014) p. 102.
[iv] Verint, Defining the Human Age: A Reflection on Customer Service in 2030 (Verint, 2018)
[v] https://www.cbinsights.com/research/startup-failure-reasons-top/. April 22, 2018.
[vi] Garmt Dijksterhuis, New product failure: Five potential sources discussed. (Elsevier, 2016)
[vii] A.G. Lafley and Roger L. Martin, Customer Loyalty is Overrated (Harvard Business Review, Jan-Feb 2017)
[viii] Gerald Zaltman, How Customers Think: Essential Insights into the Mind of the Market (Boston: Harvard Business School Press, 2003)
“Grumpy employees work harder” is the headline of an article by Dries De Smet in the Belgian newspaper De Standaard on Nov 19. 2017. Mr. De Smet’s article addresses a recent research paper from Northwestern University in which the authors claim to be the first to provide evidence of a causality between an employee’s mood and her productivity in the workplace. To be clear, we are talking about two groups of contact center employees here: 2,749 customer service representatives and sales representatives in the US. In addition, the researchers have mood data for 24,950 salespersons in 763 retail stores throughout the US (from September 2013 until August 2015).
What really triggered my curiosity was that the newspaper article also claims that happy contact center employees have lower customer satisfaction scores.
First, let’s look at how the researchers defined and measured mood. Mood is measured through an online questionnaire which the respondents were encouraged to fill out daily. Five moods were identified: unstoppable, good, so so, exhausted, and frustrated. Sure enough, statistics reveal that one unit increase in mood score leads to a decrease of 41% in customer satisfaction scores. What happens is that as the mood gets better, the number of calls per productive hour decreases while the number of minutes per call increases by 2 minutes on average, corresponding to a 27% rise relative to the average. The longer call duration is a result of keeping customers on hold. The percentage minutes on hold increases by 8.5 percentage points, which is an increase of 56% relative to the average. Apparently and maybe shockingly, a better mood results in fewer calls, customers being kept on hold longer, possibly reporting lower customer satisfaction.
The researchers thus conclude that an increase in mood causes productivity to decline. And, the data on salespeople in store paint a similar picture. A unit increase in the mood scores reduces average employee sales per hour by 8% and the stores ebitda by 20%. These findings show at least that the negative correlation between mood and productivity among contact center employees, generalizes to a more representative and larger group of workers.
The simple explanation of it all is that, as employees are in a better mood they let their guard down and chat more with colleagues. As we are happier, we are less focused, less conscious of our actions and behavior. And it happens at the expense of productivity.
It’s interesting to see how the research results differ for sales reps and customer services representatives: the effect of mood on productivity are less strong for sales representatives. The reason is that 41% of the sales representatives’ earnings are variable and based on performance, whereas 98% of a customer representative’s earnings are fixed. If getting distracted from work has a high enough monetary cost, one is less likely to get distracted when in a good mood since one can’t afford to let one’s guard down. Bills need to paid.
The researchers do not suggest that employers should try to decrease the mood of employees. The results of their study only deals with short-term and individual mood shifts. They do however provide evidence that mood enhancement in the short-term only does not increase productivity [in contact centers].
The challenge seems clear to me: increase the mood of employees while remaining conscious about the job at hand. There’s nothing wrong with a good mood, the culprit is the distraction that comes with it. Making a large portion of someone’s earning variable and performance based seems to help, but there are others means at our disposal as well. Infusing passion will do nicely. Which begs the question: where are the trainers and coaches in the contact centers that were studied? Maybe in a good mood chatting away.
To delight a customer is to surprise her by exceeding her expectations. This surprise creates a positive emotional reaction leading to word-of-mouth. It’s the unpaid form of promotion in which delighted customers tell other people how much they like a brand or a product. The form of promotion adored by marketers. In a world of informed customers, 92% of customers consider word-of-mouth as the most reliable source of information. Only, from a customer’s perspective, word-of-mouth stands for the voiced opinions of other customers, be they good or bad. Customer Delight has three objectives. The first is to make customers loyal, the second is to have more profitable customers, and the third is to invoke word-of-mouth. Customer Delight can be created by the product itself and by interaction at the frontline. In my opinion, the interaction is a crucial and inseparable part of the product. I consider a product as the result of a making process and therefore do not distinguish between a ‘tangible product’ and an ‘intangible service’. In marketing courses we’re traditionally taught that a product has 3 levels. I’m convinced there are 4 levels, as the graph below illustrates.
Figure 1: The 4 Levels of a Product
The interaction component of the product is the greatest source of opportunities and threats. During contacts with touchpoints in a company, the relationship between the customer and the brand gets partially build and reinforced, or flat-out destroyed. However, a narrow focus on maximizing customer delight at the touchpoints can create a distorted picture, suggesting that customers are happier than they actually are. The entire experience along the customer journey needs to be skillfully managed. Interaction at the frontline is every brand’s Achilles’ heel. Don’t depend on staff to trigger word-of-mouth by delivering exceptional customer experience. Customers know service comes from an individual. There’s no guarantee that the friend you refer to a company will receive the same exceptional service you experienced. Physical, nonverbal statements are the most dependable in triggering word-of-mouth.
The primary goal of delighting customers to make them loyal suggests there’s a difference between a satisfied and a delighted customer, and that the former is not by default loyal. In fact, in a May 2015 article on Cloudcherry’s website, Prem K Viswanath states that “Customer Satisfaction is an idea of the past that finds its place in textbooks as a thing of the past. Customer Delight leads to increased lifetime value, loyalty and customer evangelization.” Many share this belief, but is this really true?
Already in 2010, this belief was challenged in the Harvard Business Review article “Stop Trying to Delight Your Customers.” The article sheds light on a study by the Customer Contact Council, a division of the Corporate Executive Board, of more than 75,000 B2C and B2B customers in various industries worldwide.
In the introduction, the authors ask two simple questions: How often does someone promote a company specifically because of its exceptional service? How often do people abandon companies because of terrible service? The research revealed that people’s readiness to punish bad service outweighs the desire to reward delightful service. In fact, 25% of customers are likely to say something positive about their customer experience whereas 65% are likely to speak negatively. The reality is that for humans, bad is stronger than good. Bad experiences and bad stereotypes form quicker and are more resistant to disconfirmation than good ones. Bad information is processed more thoroughly than good information.
As far as customer loyalty is concerned, the prime goal of Customer Delight, the CEB study shows that loyalty has a lot more to do with how well companies deliver on their basic promises than on how amazing and wonderful the customer experience may be. The CEB research produced two critical findings:
Assuming that the more satisfied customers are, the more loyal they will be, is a false assumption. In the CEB study, 20% of the “satisfied” customers said they intended to leave the company in question and 28% of the “dissatisfied” customers intended to stay. Something other than satisfaction must drive loyalty.
Again, the interaction component is the Achilles’ heel: customers are four times more likely to leave a [service] interaction disloyal than loyal. In my view, every interaction between a customer and a brand represents a service. Service failures not only drive existing customers away; they also repel prospective ones. According to a study commissioned by Zendesk in 2013, a stunning 95% of respondents stated that they share a bad experience with others. 45% shared that bad story with more than 5 others. It’s no secret that customer increasingly share stories about their experiences online. Also according to Zendesk, 87% of respondents share positive experiences with others, and 33% of them share these positive stories with more than 5 others. Still, bad is stronger than good. The White House Office of Consumer Affairs revealed that for every customer who bothers to complain, nearly 26 other remain silent. Silent with the company that is. These silent customers leave the company without warning.
If Customer Delight does not build loyalty, then what does?
It’s hard to put a figure on how much a loyal customer is worth. But, it is generally accepted that it costs 5 to 7 times more to acquire a new customer than to retain one. Loyal customers buy more, pay more, promote more. So building a base of loyal customers makes sense. However, research shows that loyalty is in decline. Connected, informed customers are considering more brands and switch suppliers more frequently than ever before.
More sales, more revenue, more referrals, etc. express a company’s view, not a customer’s. There is a disconnect between customers and marketers. A Kitewheel report revealed that “nearly three-quarters of consumers (73 percent) believe that loyalty programs should be a way for brands to show consumers how loyal they are to them as a customer; but two-thirds (66 percent) of marketers still see it the other way around.”
Today’s customers expect loyalty to go both ways, as it should. Why not, as Mark Bonchek suggests in his HBR article “Why Customer Gratitude Trumps Loyalty”, reward shoppers who don’t spend a lot but are active on social media as brand advocates? Reciprocity is the key ingredient in loyalty, and both reciprocity and loyalty require a relationship.
But do customers want to have a relationship with a brand?As it turns out, the vast majority doesn’t. Typically, relationships are reserved for friends, family and colleagues. In a study involving more than 7,000 consumers in the USA, the UK, and Australia, only 23% of customers said they have a relationship with a brand. 77% don’t.
Yet, of those customers who said they had a strong brand relationship, 64% cited shared values as the main reason. A mere 13% said regular interactions with the brand was a reason for having a relationship. This seems to concur with the fact that exceeding customer expectations during interactions only marginally contributes to more loyalty.
Loyalty is about emotion and repeat business is the resulting behavior. The emotional response that is most likely to drive loyalty is gratitude, as Mark Bonchek writes. The Cambridge Dictionary defines gratitude as: “a strong feeling of appreciation to someone or something for what the person has done to help you.” Gratitude is reciprocal, it involves emotion and behavior.
Delighting customers by exceeding their expectations, or giving gifts and doing nice things for customers work in the short term. Yet, it conditions customers and they can easily be wowed by another brand with nicer gifts. What does lead to sustained gratitude is a shared purpose with your customers, and to help them share that purpose with others. In fact, co-creation with your customers is the strongest loyalty driver. Combine that with frictionless, effort-poor resolution of customer problems and loyalty is reinforced.
 "Global Consumers' Trust in 'Earned' Advertising Grows in Importance". Nielsen. Retrieved 2013-11-01.
 Interaction at the frontline: every interaction with a customer
 “The Truth About Customer Experience”. Alex Rawson, Ewan Duncan, and Conor Jones. HBR Sep, 2013.
 “Stop Trying to Delight Your Customers”. Matthew Dixon, Karen Freeman, and Nicholas Toman. HBR Jul-Aug, 2010.
 CEB is now Gartner.
 “Bad Is Stronger Than Good”. Roy F. Baumeister, Ellen Bratslavsky, Catrin Finkenauer, Kathleen D. Vos. Review of General Psychology 2001. Vol. 5. No. 4. 323-370
 “Why Customer Gratitude Trumps Loyalty”. Mark Bonchek. HBR Oct, 2015.
 “The State of the Customer Journey Report 2014”. Kitewheel. https://kitewheel.com/wp-content/uploads/2014/10/Journey-Final.pdf
Searching for the right customer implies that there is more than one kind of customers. The word ‘customer’ holds a different meaning for different people. I like to define a customer as ‘a person receiving value from another person’. Even if that value is delivered through a fully automated process (somebody designed the process for someone else). Praise when praise is due; I loaned that definition from Adam StJohn Lawrence. Many thanks, Adam.
Adam’s definition doesn’t require that a customer bring in revenue. This may sound crazy. However, in his Harvard Business Review article ‘Choosing the Right Customer’, March 2014 issue, Robert Simon illustrated that a company can indeed focus on customers who do not supply revenue and thrive anyway. It’s not some obscure company he was writing about, it’s the pharma giant Merck. The most important customers for this pharmaceutical giant are not the patients nor the physicians who prescribe drugs to them. It’s the research scientist in universities and labs around the world who are Merck’s ‘primary customer’. They have one goal with this narrowly defined customer: discovering new, spearheading drugs that can then be commercialized by Merck.
The primary customer is not the one who generates most revenue but the one who unlocks the most value in a business. Value is the key word here, just as it is in our definition of a customer. And just as it is in the definition of customer-centricity. In his book ‘Customer-centricity: Focus on the Right Customers for Strategic Advantage’ (Wharton Executive Essentials), the author Peter Faber defines customer-centricity as ‘a strategy that aligns a company’s development and delivery of its products and services with the current and future needs of a select set of customers in order to maximize their long-term financial value to the firm’.
Customer-centricity requires a commitment to identify the customers who matter most and a willingness to allocate a disproportionate amount of resources to understand what the right customers want and to deliver it. Referring back to the case of Merck, that’s exactly what they do: its centralized R&D unit receives the bulk of organizational resources. Just like Amazon dedicates maximum resources to pleasing consumers, their primary customers.
Any organization choosing and searching for the right customer must be willing and able to transform its organizational design and align it with the right customer’s journey. For many, this requires a radical change. Yet the most important question remains: who is your primary customer? The one select set of customers that unlocks the most value in your business.
Balance & Immersion
Earlier we addressed the willingness to allocate a disproportionate amount of resources to understand what the primary customer wants and to deliver it. You have to go all the way, and the extra mile. The identification of the right customer starts with a company’s own perspective.
Your own perspective must be reflected in the choice of the right customer. If not, people will simply be unable to gain momentum and to get inspired and creative in service to the right customer. This perspective is intangible, it refers to the mission, the DNA, the history -if there is one- of a company. It embodies what makes you, you.
When a company sees its own perspective reflected in the choice of the right customer, the first step is taken. Next, a company needs to recognize the value potential of the primary customer. From this point forward you dive into the realm of the primary customer.
The second challenge is to figure out if your company possesses or has secure access to the full set of competencies that the primary customer needs. A CMO looks for a different set than a CRM Manager does. A CIO values another set of competencies than an end-consumer does.
Make the effort to fully understand your right customer’s job. A customer job is anything that somebody is trying to achieve in her or his life and work. Dig in, dive deep, immerse yourself in the ‘other’. Identify the job context, the required and expected gains, and the pains that come along with it. And then, determine if and how you can uniquely contribute to the achievement of your right customer’s goal. This is what will differentiate you.
But let’s not forget the Lifetime Value Potential of your right customer. What is the long-term financial value that your right customer could bring to your organization? If perspective, unique contribution to customer job achievement, and lifetime value potential are in balance, then go! Keep on balancing and immersing into your right customer throughout the entire customer journey. And keep walking the extra mile for your right customer.
The concept of the Customer Job -all credits go to great people at Strategyn, DePaul University, and Innosight- results in nothing less than a paradigm shift. I just love it and use it both in my professional and academic work. I love it, because the concept of the customer job forces you to go straight to the core of human action: the actuator of human behavior. Without a customer job, we’d all be motionless. Without motion, we achieve nothing.
The definition of a customer job is deliciously simple: the description of anything a human being wants to achieve in life and/or work. Mowing your lawn is a customer job, dressing up for a party is a customer job, implementing a state-of-the-art customer engagement platform is a customer job. Customer jobs range from simple to complex and are present in life and work. Forget about needs and wants, they are meaningless until a person has decided to do something.
Forget about B2B and B2C, instead think of work (B2B) and life (B2C) and of everything we try to achieve in both as human beings. The digital revolution rapidly fades the difference between online and life. The Italian philosopher Luciano Floridi and his team conclude in ‘The Onlife Manifesto, Being Human in a Hyperconnected World’ that eventually, the difference will disappear altogether. Analog and offline, and digital and online blend into what they call the ‘onlife experience’.
As offline and online continue to blend, we find it increasingly difficult to separate work from life and we evolve to new ways of working. As a consequence, the achievement of our customer jobs in work and life get entangled as well. One of our clients is an e-commerce fashion retailer with an affluent, predominantly female clientele in the age range 34-45. The vast majority of these customers have full-time jobs. On weekdays, our client’s web shop reaches the highest sales conversion rates every day between 9 AM and 12 AM. A perfect illustration of how work and life blend thanks to living in a connected world.
The fading difference between work and private leads to a change in behavior: it’s harder to separate the ‘private me’ from the ‘professional me’. This allows the ‘authentic me’ to submerge more and I’m all for that. Authentic people live and work in a human-to-human or H2H world. And living and working entails doing things: achieving customer jobs. Without people wanting to or having to achieve something, we’d all be unemployed.
What makes a human being decide to actually do something? Laila Pawlak and Kris Østergaard explain this crystal clear in their white paper ‘The Fundamental 4s: How to Design Extraordinary Customer Experiences in an Exponential World’. As the title hints, there are four fundamental forces that get us going. A human desire to BE better, to DO better, to FEEL better, and/or to LOOK better. Improvement is the key word here, and Mrs. Pawlak argues that the desire to improve is embedded in every human individual. You. Me.
“Becoming better is what drives us as human beings to continuously develop the world we live in” is a quote taken straight from the white paper. Becoming better is what drives the human individual. And once that human individual decides to act upon the desire to becoming better, the customer job is a fact and things are set in motion. Note that becoming better does not automatically signify a ‘safer’, or ‘healthier’ world. In the weapons industry, people are also driven by the desire to becoming better and their developments too impact the world we live in.
As a business or as an organization, we have to fully understand the customer jobs from the customer’s perspective. And then we have to ask ourselves if and how we can contribute to the achievement of the customer job. How can technology enable the achievement? Because that’s what technology really is, an enabler to become better.
Every single customer job is defined by three parameters: (1) the job importance, (2) the pain severity, and (3) the gain relevance. Mowing the lawn may be important to one person, and insignificant to the other. The former may mow the lawn to look better (social status), the latter may not care because a wild garden makes him or her feel better and mowing the lawn is only done when the person can’t find his way back into the house. For some, mowing the lawn is a painful venture, others may just love the exercise. The gains from mowing the lawn will be essential for one person (recognition by the neighbors or avoid a row with the spouse) and just a nice to have for the other (it was getting kind of long). Both people in this example will mow their lawns. One does it every week, the other will only mow when it’s absolutely necessary.
A customer job in work has the same three parameters: implementing that customer engagement platform we talked about is evaluated in exactly the same way. It will help us become better, but how important is it? How difficult is it? What will we gain?
Whatever the business you’re in, make understanding the customer job of your primary customer from his or her perspective a priority. Understand the actuators of human behavior: what sets them in motion? Understand the importance of the customer job, the severity of the pains associated with performing the job, and understand the essential gains. Only then can we determine whether our offer has any relevance or not. Only then can we create real value and innovate. Only then can we truly manage.
“If I had asked people what they wanted, they would have said faster horses.” Whether or not Henry Ford really said this or not, the quote is often used in arguments about how true innovation is created by visionaries who ignore customer input and instead innovate based solely on their vision for a better future. The other side argues the merits of innovating vis-à-vis customer feedback.
The point I’m trying to make is that if you do not ask what people want, but rather what they want to achieve -and thus think in terms of customer jobs- the answer is a lot clearer.
Henry Ford: “What do you want?”
People: “Faster horses!”
Henry Ford: “What are you trying to achieve?”
People: “Get faster from A to B!”
For the record, Henry Ford did not invent the automobile. He adapted the car assembly line in such a way that he was able to manufacture at a much lower cost and thus sell cars at lower prices. What he enabled was the creation of a new and rapidly growing market. Today, Elon Musk is still in the business of getting people from A to B (among others). Only, just getting faster from A to B is not the customer job anymore. It’s getting from one place to the other traffic-jam free, effortless, always connected, clean. Everything aimed at becoming better.
Investing in fully understanding who your primary customer is, and what customer job she’s trying to achieve has significant returns: the ability to create true value and competitive. It can only be done through ongoing immersion in and observation of the customer, yet the rewards are worth it.
At the very core, there’s no difference between a medieval marketplace and Amazon.com. They both serve the same purpose: to be a place for sellers to present stuff to people looking to buy stuff. What differs is size, access, mobility, and payments. Out of these four, only mobility and payments make our lives easier: we don’t have to travel back and forth and we don’t have to carry the stuff we bought. And we don’t need cash at hand. As far as the other two are concerned, they confront us with a complexity we can’t cope with. The incentives and stimuli directing our daily lives become increasingly complicated and varied. As a result, we depend more and more on automated stereotyped behavior: subconsciously registering things in our brains and automatically act accordingly. We’d go pretty nuts otherwise.
So here we are as sellers in this global, online marketplace with access to virtually every human being on planet earth with an Internet connection and money to spend. The entire process, from sales to fulfillment and payment can be handled by the marketplace. In the near future, 3-D printers instantly produce your goods or robots pick your goods in the warehouse where you rent space, and drones deliver it to your customer’s doorstep. Sounds just great.
We can also still load stuff in our truck, drive to a town’s marketplace, pay for our spot and set up our market stall, and start selling. Some market stalls attract few people, others are crowded. Why is that? First and foremost, the seller is able to attract a crowd, usually by yelling and performing in a theatrical way. If what the stalls sells is good, people will return week after week. But the seller never stops his performance to attract people. The market seller knows that his or her stall must be crowded. Why? A crowded stall provides social proof and jump starts our automated stereotyped behavior.
A crowded market stall tells people that it must be a safe place to buy from. It also tells people the deals must be good, since lots of people are buying. We like to use other people’s brains; it saves us the effort. On the other hand, if the crowded market stall sells nothing that we are particularly interested in, we don’t even bother and at best just remember there were lots of people. In the Amazon world, our screens are yelling at us about the trending and the popular stuff. Just like the medieval merchant in the marketplace, our screens scream for our attention. Social proof is provided by peer reviews.
So here we are as buyers in this global, online marketplace with access to every seller on planet earth with a website and an offer on sale. And we are lazy. Amazon wants to be the global one-stop shop. Instead of searching the Internet for whatever product we’re looking for, we can turn to Amazon and find the items we want. One giant marketplace with lots of competing sellers and easy to find the stuff we’re looking for. Today, May 14th, 2017 I visited Amazon’s website, looked at the grocery department, searched for Candy & Chocolate and discovered 59,669 items. I can’t deal with that number.
What the yelling market vendor and Amazon have in common is that both understand human behavior and know how to trigger it. However, at a marketplace with, let’s say, 25 competing market stalls, you have to yell very loud and give an extraordinary performance to attract people. As a buyer, you keep eyes and ears open and follow the crowd to the best tomatoes you’ll ever eat. What’s the chance (y)our voice is heard online? Sure, it’s never been easier to have a voice online. Millions are. Again, what’s the chance our voice is heard?
The bottom line of what I’m conveying is that insight into human behavior is key, regardless of what you’re selling. Deep insight into human behavior allows us to understand customer preferences, and come up with triggers -actuators of behavior, and even with predictors of human behavior. We have the technology readily available. But not often the full, deep insight from immersion into the other.