|
Challenge Your Company's Current Vacation Ownership Marketing Approach--
Almost Everything You Thought You Knew About Marketing Is Wrong
by Jim Gilmartin
Marketing is in Crisis
That's not news. The news is what is causing that crisis. Most know that these are harsh
and unforgiving times in marketing. The ad business side of marketing had its worse year in history in 2001, and
according to projections being made further business decline in 2002 will give advertising its first back-to-back
negative growth years since the Great Depression. Everyone seems down on marketing. People are tuning out marketers'
messages as never before. Consider some other random symptoms of marketing's problems:
- The rate of new product failures has risen to 80 percent or more, according to Bill Gorman's New Product
News.
- Customer loyalty is withering by many accounts, making one company's customers easy pickings for another
company.
- Consumer trust has gone south, according to Roper Starch.
- Customer satisfaction has never been lower, according to the University of Michigan's American Consumer
Satisfaction Index.
What is the source of the grim picture in marketing? Why does the rash of symptoms plaguing their art baffle
so many people whose livelihoods depend on marketing? Why can't vacation ownership companies with mega budgets
and talent solve their marketing problems? Why is it that with more information on customers than ever before in
marketing history, vacation ownership companies are finding them tougher challenges to sell to?
A recent Saturn commercial illustrates some of what is wrong in marketing. It showed a Saturn weaving uphill and
down in a desert-like landscape filled with German Shepard sized-ants fanning out across the barren stretch. Technically
brilliant, the commercial was substantively empty. Silly. Asinine. The embarrassingly juvenile commercial reflected
a total disconnect with Saturn's brand image. It may have tested well in focus groups, but focus groups can be
as far removed from reality as computer-drawn ants.
There is a cornucopia of reasons given for marketing's problems, and certainly no shortage of ideas offered for
their cure. Interestingly, explanations offered for marketing's travails generally exculpate vacation ownership
marketers from any responsibility. Instead, marketing's problems are said to be the result of external conditions,
like a well informed, more educated consumer population (presumably marketers are among the better educated, so
why should there be a gap?). Other popular whipping boys include the astonishing range of choices that consumers
have, ad clutter which disorients the mind, and of course the Internet.
However, one condition that arguably is playing the greatest role in marketing's horrendous derailment is
rarely mentioned: the aging of society that is driving historic changes in the leading views, values and behaviors
in the marketplace. In the process, this is radically changing the rules of marketplace engagement.
Until vacation ownership marketers come to grips with this historic event, customers will continue tuning out their
messages on a massive scale and client companies will continue being skeptical of their marketing agencies. Madison
Avenue is suffering from a generation gap between itself and the older, more seasoned and autonomous consumer universe
that has emerged. Perhaps nothing else has done as much to throw marketing off course.
The Internet Changed the Rules Of Engagement between Company and Customer
The most revolutionary change the Internet brought to marketing is giving shoppers the means to learn from each
other about a product or company. Customer reviews of books, CDs, cameras, computers and other products pose serious
challenges to advertising because customer-to-customer testimonies ultimately have greater power to influence shoppers
and buyers than traditional advertising.
Some people simplistically preach that the most basic rule of all in marketing is "Know your customer."
However, how do you get to know your customer? Customers often are not the best experts about themselves. Ford
fell into such a trap by following the guidance of customers who thought the minivan idea not a good idea.
Almost Everything You Thought You Knew about Vacation Ownership Marketing Is Wrong
Almost everything you thought you knew about vacation ownership marketing is wrong! Customers
now control most markets. Companies held more sway over markets and customers when they controlled information
about themselves and their products. Boastful advertising cannot compete with tales of real life experiences told
online by customers. Customers once had limited recourse when a company displeased them. Knowledge is power.
Regrettably, markets past don't offer much help for succeeding in today's markets. Lessons on marketing meted out
in business schools and learned on the job in the marketplace reflect decades of experience in markets dominated
by the views, values and behavior of people under the age of 40. That makes almost everything you thought you knew
about vacation ownership marketing wrong. In 1989, the year that adults 40 and older became the New Customer Majority,
the validity of many ideas about marketing, that were shaped by experiences in youth dominated markets, began to
fade. But not necessarily their influence on marketing.
Ultimately, the biggest challenge in vacation ownership marketing today is overcoming the momentum of old ideas
made obsolete by the Internet and the New Customer Majority. Consider the old idea that youth is the ideal human
state. In service of this bad penny, marketing experts repeatedly remind us that aging boomers hate the idea of
aging, so base your marketing to them on the values of youth. Many studies indicate that people generally adjust
well to aging.
Marketing suffers from a pandemic of chronic youth syndrome (CYS). The truth is, many people in marketing seem
more afraid of aging than most aging boomers are - or at least older boomers who have had enough time to work through
their earlier midlife qualms about it.
In yesteryear's markets, vacation ownership marketers learned through trial and error that selling the rational
marketing triad of product features, functional benefits and monetary value worked. In yesteryear's markets, vacation
ownership marketers learned through trial and error that marketing was also a game of persuasion. However, product-centered
marketing is dead, say Joe Pine and Jim Gilmore in The Experience Economy. Like many others, Pine and Gilmore
say marketing is now more about the customer experience than the product.
Youth Dominated Markets of the Past Have Passed Into History
Marketing's crisis owes much to the fact that too few people in marketing realize that New
Customer Majority minds don't work the same as minds in the Old Youth Majority. Often marketing communications
are tuned into the younger mind.
"Know your customer" is the first commandment of customer relationship management. CRM depends on databases
and data mining to help companies "know their customers." To "know your customer" includes
understanding her in terms of her season of life. A 45-year-old is not just a 20-year older version of her 25-year-old
self. The 45-year-old is typically less concerned about playing to the external world in her buying behavior.
Midlife developmental changes in behavior that members of the Customer Majority are experiencing challenges the
view of marketing as a game of persuasion. The object of vacation ownership marketing has been to "capture"
customers and overwhelm their wills. Power marketing is OUT. That's why so much vacation ownership marketing is
not working. Adaptive marketing is IN. This oneness turns customers into co-creators of marketing success.
A New Marketing Challenge: Meeting Customers' Self-Actualization Needs
More than thirty years ago Maslow said in Toward a Psychology of Being that highly
matured people reflect "polarities and oppositions" in their behavior; strive to simplify their lives;
experience changes in values; become more autonomous, and avoid extremes. Identity is the biggest single factor
in customer behavior. These observations are customer centric taglines. Nothing has had more influence on how marketing
is done than those values. Because these values play well in the New Customer Majority, there is a growing generation
gap between vacation ownership marketers and the marketplace majority.
Perhaps no company has reflected better understanding of the midlife soul in its marketing than the New Balance.
It became the fastest growing shoe company in America by connecting with the more temperate behavior of the New
Customer Majority with its tagline, "Achieve new balance." It is ironic then, that New Balance's popularity
in the New Customer Majority has spread into younger age groups, according to Maria Stefan, Vice President of the
Sporting Goods Manufacturers Association.
An Aging Society Laid the Foundation for Personalized Marketing
The rational marketing triad works better among the young because the young want proof. Ambiguity
unsettles the young mind. The older mind often reflects aversion to the kind of unbridled explicitness that turns
young minds on. "Shades of gray" perceptions of reality dispose the older mind to tune out bold, absolutist
claims about products and companies. Members of the New Customer Majority are more relationship minded than the
Old Customer Majority that was more categorical minded. This predisposes members of the New Customer Majority to
respond quite favorably to companies that see them as whole people, not merely as prospects for a product or service.
Personalizing the customer experience is something that top people in sales have always done. It was only recently
that marketers began thinking of personalization as a marketing strategy. But despite all the experts on personalizing
the customer experience that have cropped up, the real impetus behind the various "sects" of relationship
marketing is an aging population. The quality of the buyer-seller relationship is more decisive among members of
the New Customer Majority than it was under the Old Youth Majority. New Customer Majority buyers want companies
they place their loyalties with to feel what they feel.
Lexus turned enough members of the New Customer Majority into loyal customers by establishing empathetic connections
with them to earn it the highest repurchase rates in the auto industry - higher than Infinity. Many former loyal
Mercedes and Cadillac owners will now be Lexus owners for the rest of their lives - provided Lexus continues empathetically
delivering on the customer experience. Moreover, certainly don't tell Lexus that older people won't switch brands.
Lexus demonstrated two opposing truths about older customers - truths reflected in the Yankelovich Monitor's pronouncement
that today's consumers are "more paradoxical." Giving customers experiences that make them loyal is an
affordable value added perquisite.
As the median age has risen, relevance of marketing messages to customers has decreased. Often, ad creatives will
be much younger than the customers they are addressing are. Richard Lee, head of High-Yield Marketing in Minneapolis,
researched this problem. He conducted a survey of ad agencies to assess attitudes towards older customers. Unsurprisingly,
Lee found that young creatives felt most comfortable creating product messages for people around their own age
or younger. If the target audience happens to be younger consumers, that works.
Until recently, the long-standing bias against marketing to older people was reflected by media trackers like Arbitron
and Nielson. They reported only the media habits of people 49 and younger. When people turned 50, they no longer
existed on Madison Avenue. It is actually easier to turn people in the New Customer Majority into loyal customers
than it is young people. Training ad agency creatives in how New Customer Majority minds work will not only pay
off in more effective marketing in 40-plus markets, but in younger markets as well.
Changes in What Customers Buy
Reaching midlife changes not only what people buy it also changes their purchase frequency
patterns. The automotive and housing industries will also experience falling demand due to population contraction
in key age groups. We can expect some growth from households headed by people aged 45 and older, but even total
spending growth there reflects slower economic expansion than seen in the past. Still, as the New Balance story,
demonstrates, the New Customer Majority could be the salvation for many companies. It offers persuasive anecdotal
evidence that the market reach of a product that is usually marketed primarily to youth and young adults can be
dramatically expanded through segment busting strategies that give it an appeal to virtually all age groups. The
customer experience is key to success in securing a competitive advantage in today's buyers' markets. Young
people buy products. Middle age and older people buy experiences. New Balance identifies with the values
of midlife in ways that give aging boomers the pleasurable experience of dealing with a company that understands
them.
Changing Your Approach is Not Difficult
Creating customer experiences that give a company a strong competitive edge isn't necessarily
expensive, nor complicated. Meeting the expectations of New Customer Majority shoppers is not very difficult. The
New Customer Majority loathes artifice. Ad agencies are killing the ad business by continuing to ignore the New
Customer Majority by pumping out advertising that was more suitable in the pre-1990s marketplace. One of the most
persuasive pieces of evidence that companies do not have a good understanding of their customers is falling customer
satisfaction levels. We shouldn't define customer satisfaction in the era of the New Customer Majority simply by
gracious smiles on a retailer's sales floor, nor the acceptable performance of a product bought by a customer.
That helps to explain why customer loyalty is fraying so widely. No industry experienced a rise in customer satisfaction
from 1995 through the end of 2001. Some 90 percent of the companies in the index experienced a drop in customer
satisfaction.
"My way or the highway" describes how the New Customer Majority feels about companies and brands. Success
in today's buyers' markets demands enterprise-wide changes in mindset, from the executive suite to the mailroom.
The shift from a product centric mindset to a customer centric mindset dramatically changes how both marketing
and customers are viewed:
- Customers are no longer targets; they are humans to be served.
- Vacation ownership marketing is no longer a game of persuasion; it is a service.
- Customers are no longer data sets; they are human beings.
- The focus is no longer on products; it is on the customer experience.
Making such changes in company think requires the power of executive leadership. A CEO must also be the CTO
- Chief Transformation Officer, for no change can take place in company mindset to support a customer centric business
model without the unequivocal commitment of executive leadership. Putting it as Bill Clinton's campaign manager
James Carville would put it, "It's the Customer, stupid!"
- Note: This article is adapted and summarized from the unpublished writings of David Wolfe, Wolfe Resource
Group, Reston VA.
|
