Will Online Reviews & Testimonials Kill Traditional Branding?

Are-Customer-Reviews-Killing-Brands

Over the last few weeks I’ve noticed a handful of articles discussing the devaluation of brands in a world of near perfect information. It has me thinking about the effect such a change would have on traditional marketing approaches. And, more importantly, the implications on brand loyalty programs, product launches, and small businesses vs big box brands.

The Purchase Decision Mix

In a recent Harvard Business Review article, Messrs Itamar Simonson and Emanuel Rosen provide a model for determining the impact effect of various variables on the final purchase decision. They suggest:

Customers’ purchase decisions are typically affected by a combination of three things: Their prior preferences, beliefs, and experiences (which we refer to as P), information from marketers (M), and input from other people and from information services (O). This is the influence mix. Think of it as a zero-sum game: The greater the reliance on one source, the lower the need for the others. If the impact of O on a purchase decision about a food processor goes up, the influence of M or P, or both, goes down.

This is a very logical approach and in the article they discuss how various categories of goods/services will respond under this approach.

I’d suggest you take a few moments to read their article before continuing so that we’re all working off the same context.

As I noted yesterday to my readers that subscribe to my “Friends of Tom” emails, where I share articles, research and reports I find interesting [CLICK HERE if you’d like to receive the Friends of Tom emails], the rise in the influence of online consumer reviews could have enormous implications for brand loyalty programs, product launches, and small businesses vs big box brands.

Brand Loyalty Programs

If online consumer reviews continue to gain ground as influential inputs, the need for and investment in brand loyalty programs should increase. In a world of perfect information, consumers don’t need brands as short-cuts anymore. They simply need to fire up the closest digital device, point it towards a review site or Internet search, and the brand (as perceived by fellow humans) will be displayed right there in front of their eyes.

For brands that have historically relied on the reputation or desirability of those brands as a new customer capture tool, the need to hold and expand their relationship with existing customers will become more important in relationship to other marketing efforts.

This will insulate the brand against missteps — loyal followers won’t abandon ship at the first sign of trouble. Instead, they’ll give the brand the benefit of the doubt and create a safe environment for the brand to explain itself. These same loyalists will likely need to be organized and directed to counter publish reviews and testimonials to offset any negative “press” a brand may receive. Lastly, if reviews successfully drive down the role of branding, then these reviews in essence become brand advertising. Thus, smart brands will invest in building a loyal army that will gladly sing the brand’s praises online and off.

Product Launches

In the Mad Men days product launches meant expensive TV and print advertising campaigns. One could argue that even today, advertisers still favor the big media splash for most product launches to create awareness and drive early sales.

But in a world where the prospective buyer, upon becoming aware of a new product, immediately begins searching for product information, reviews or opinions online, one could argue the ad campaign shouldn’t lead the charge. Instead, a smart brand might want to seed the product into the marketplace and encourage independent third-party reviews from buyers. Thus, when the ad campaign finally breaks, the interested prospect can find those reviews.

It could even spawn a new type of social media company/service. A service that allows consumers to write reviews but embargoes those reviews from the internet — releasing them in an orchestrated manner in conjunction with a launch campaign.

The whole notion of having reviews of new products available immediately upon product launch (in order to drive sales driven by positive consumer reviews) really turns the traditional product launch model on its head.

Small Business vs Big Box Brands

This is probably the most exciting arena for change. If Simonson and Rosen are correct, online reviews could be the great democratization tool in modern retailing and business. For decades big box stores have leveraged nearly ubiquitous brand awareness and a generally lazy consumer to squeeze small businesses out of the picture.

With deeper pockets, more locations and the ability to simply out-shout smaller, independent businesses, big box brands had a real marketing edge. But in a world where customer reviews carry significantly more weight than any ad, the playing field is leveled.

Consider Yelp in the restaurant world. Yelp actually helps independent restaurants more than big box ones. Not only is it just as easy (if not easier) for a small, independent restaurant to generate a high number of positive customer reviews, the existence of those quality reviews gives the prospective diner permission to step out of their big brand comfort zone and try the place they’ve never heard of before.

No longer does the small restaurant have to invest in ads targeting tourists or locals — they simply need to own the #1 spot for their city or at least their food category on Yelp — which is based on average quality (number of stars) they receive on their reviews.

 ThinkAbout The Possible Scenarios

Need help getting your team’s head around the possible scenarios such a change could cause in your marketplace? Feel an outside voice could bring new insights and opinions into your internal digital marketing discussion? Then email me to talk about our ThinkAbouts. These structured half- and full-day exploration and ideation sessions are designed to help your team connect the marketing dots in new ways and find new solutions to old problems.

photo by: by kevin dooley

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About Tom Martin

Tom is 20+ year veteran of the marketing and advertising industry with a penchant for stiff drinks, good debates and digital gadgets that helps digitally challenged companies create innovative and effective digital marketing strategies. He is the founder of Converse Digital , author of The Invisible Sale and a contributing writer for Advertising Age. Tom guides clients through the digital marketing maze and helps companies teach their sales force how to Painlessly Prospect their way to more sales. Connect with him on Google+ or follow him on Twitter or connect with him on LinkedIn.

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