The Boomerang Effect: marketing karma
How do companies adopting CRM realign
their advertising messages to their new marketing platform? A
new theory of advertising is needed. And it needs to be based
on a new concept.
Many processes in life are counter-intuitive.
They run exactly opposite to the common view. Example: people
once believed the Earth was flat and that the Sun, Moon and Planets
revolved around the Earth.
The processes of marketing are also
subject to medieval thinking. For many years it was thought consumers
bought products for their features and manufacturers focussed
their selling on these. Later it was discovered that consumers
are only interested in themselves and what products benefits can
do for them. This was a revelation. Some marketers today still
don't get it.
Another flat earth notion is the conventional
theory of advertising: you make a product, put it on the shelf,
make an ad and run it, your prospect sees the ad and comes in
and buys the product. The more ads you run, the more product you
sell because the more prospects see it and respond.
While this process actually
takes place, it accounts for far fewer sales than the dominant
(but hidden) process of communication we could call the reversal
theory of advertising: it is based on the fact that the person
least likely to notice and consume an advertisement is the person
the ad is aimed at. Sounds ridiculous, but it is true. Consider
this: Ford USA found that the driver most likely to read a Ford
billboard for a particular model was the one who had just bought
the car. Other Ford owners were also likely to notice the billboard.
The one least likely to read it was the driver of a competitive
make (the conquest target car makers lust after). Marketers are
most interested in people who don't already have their product
and least interested in someone who just bought. Among consumers,
the reverse is true.
Why is this so? Simple. Humans are
self centred. Their level of engagement in any activity is dictated
by their level of interest which is driven by how closely it affects
them personally. A person who just signed up to spend a years
salary on a car has more at stake with that model than someone
not even thinking of buying a car and currently driving another
make. In fact, when you apply the Human Engagement Model to the
advertising scenario listing the groups most engaged with the
message to those least engaged the actual target comes well down
the list, a sorry last.
The advertisement appears and the
groups most likely to notice it and absorb it are, in descending
order of personal engagement, the agency creative team that made
it, the creative director, the account director, the account team,
the client contact person, that person's wife or husband, that
person's boss, the boss's wife or husband, the competitor's marketing
manager, the advertising code regulator, the client's staff, the
ad agency staff, the advertising industry journalists, the ad
agency's competitor's new business manager, the retail outlet
management, the customer who recently bought the product, other
existing customers and finally the prospect.
The clue to the round earth theory
of advertising dynamics is in the last three groups. Brand insiders
(customers) are more likely to engage and notice than brand outsiders
(prospects). Countless research reports confirm that brand outsiders
are more likely to notice a brand when it is brought to their
attention by someone else via word of mouth than via advertising.
The most likely culprit for spreading the word? Brand insiders.
This entire process is the Boomerang
Effect. It is like commercial karma: you reap the rewards of your
good deeds rather than your slick words. It works like this: the
customer experience becomes the brand experience via the cumulative
impact of the following: product experience, service experience,
peer experience, social experience, and media experience (including
advertising, press comment, web content, collateral impressions
such as movie placement or comment). The combined impact of these
layers of experience drive word of mouth which in turn generates
interest among prospects. Some of these prospects become customers
and the whole virtuous circle begins again.
Yet companies insist on advertising
past their customers to new, mythical targets defined for them
by the artificial process of market research. Our experience with
American Express taught us that customers hate to be advertised
to. They assume you've got a relationship beyond that of the foot
in the door salesman who continues putting his foot back in the
door every time he visits.
Advertising to prospects can be counter
productive because they don't notice, they don't care, they have
no personal stake in the message, it can alienate new customers,
and it can suppress word of mouth. (This is especially dangerous
for brands whose actual customer profile and whose advertising
target are dramatically different for brand positioning purposes.)
Advertising to customers is, on the
other hand, more productive because they notice, they care, they
have a personal stake, it can magnify their brand experience,
and it can promote word of mouth.
The Boomerang Effect dictates an approach
to advertising that aligns internal and external communications
focussing on your Most Valued Customers, those who underwrite
the future of your organisation. For the first time, it connects
your CRM efforts seamlessly with your advertising activities and
links advertising to measurable ROI. And gives advertising a legitimate
role to play beyond the transfer of surplus corporate wealth to
ad agencies and media owners.