In this masterpiece, Marketing 4.0: Moving from Traditional to Digital (Amazon link), author Philip Kotler points out that our world has changed and we must change with it to be able to connect, build, and grow organizations and sell products.
Marketing 4.0 takes a deep dive into how the world is changing, how people are interacting, and how messages can be heard and spread.
Over the coming lines, we’ll try to summarize the important aspects of Marketing 4.0.
Chapter 1: Power Shifts To The Connected Customers
In this chapter, Kotler explains how the dynamic will shift from vertical, exclusive, and individual to horizontal, Inclusive, and Social
The new world is bringing about many changes, the old standards of civilization – political, economic, socio-cultural, and religious standards are being replaced by a more horizontal and inclusive set of social standards.
The question is why? What was the catalyst? What happened?
The answer is the Internet.
The Internet has brought connectivity and transparency to our lives and has resulted in great power shifts.
Economic power is not as exclusive as it was before, it is much more inclusive.
This is seen in many aspects of the world today.
In the corporate environment we can see that companies like Amazon, Twitter and Microsoft acquire smaller companies who are moving fast and breaking things t stave off competition and to stay innovative.
Bill Gates, Warren Buffet and others are devoting time and resources to philanthropic activities to enrich more parts of the world.
Instead of seeing the rise of new media dominated by organizations like Fox, CNN or others, we are seeing a shift to a more people based media.
We have the United States of Facebook, the news of Twitter, and the videos provided by the people of YouTube. The dynamic has now turned into being that of people to people.
Traditional stars supported by a central organization like a label or a talent agency is being replaced by the votes of the people.
More people are tuning into Snapchat, YouTube and other platforms to read and watch.
The celebrities are different, the behaviors are a bit different and the expectations are different as well.
The power lies with social circles who have become a powerful social source influence.
A confluence of factors contributed to this new world. A distribution of ideas, and the economic growth of nations across the world coupled with the rise of technology has given way to this new era.
Brands have to optimize for inclusivity and cater to the social crowd, they cannot simply talk at consumers now, they must talk to them and work with them to survive and thrive.
Chapter 2: The Paradoxes of Marketing To Connected Consumers
Marketers in this new day and age have to deal with a new set of paradoxes to stay effective and reach their goals.
The first one is probably one of the most confusing, dealing with online versus offline interaction.
Focusing on just one of these aspects can be short sighted and may not have the impact that is needed for the organization to grow.
See the thing to understand about catering to both aspects of this new world (online and offline) is that they exist not in a vacuum but rather side by side, like neighbors, they are complementary.
Optimizing for the right balance between the two allows a brand to deliver the best customer experience.
The next paradox is that of the distracted and the informed consumer.
It is necessary to be relevant to many people to be able to capitalize on the importance of shared opinion.
Individual customers are not in control of what they buy, their decisions are dictated by the crowd.
The last paradox is that while brands may fear negative advocates, negative advocates are needed to show strength.
Negative advocates can bring positive and loyal brand advocates to the landscape, showing that the brand does matter and plays a vital role in the lives of others.
Chapter 3: The Influential Digital Subculture
There are a few key segments that are typically the most active in the digital world these demographics are the youth, the women, and the netizens.
Many businesses have tapped into the segments in a manner that is fragmented but this dilutes some of the effectiveness.
Producing a strategy that incorporates each segment in a holistic manner can provide the best results.
The youth are important to businesses because they are more open minded and interested in trying new products and technologies.
By their very nature, they are people who define and start trends.
It is important to not group all youth together…
…they have many similarities but they have some subtle differences, understanding the differences lead to more direct communication.
The youth certainly deserve to be heard and catered to because they are shapers and carry significant influence.
The next segment of society to pay attention to is, women.
Women are analytical and are active on many forums, threads and rating sites like Yelp and Trip Advisor.
They make purchasing decisions and are the leaders in their households.
The next section of digital influencers to pay attention to are the netizens.
These individuals are mavens, they are very connected and respected among their peers. Lastly, they are quite communicative, you definitely want them on your side.
Chapter 4: Marketing 4.0 in the Digital Economy
The primary goal in this new marketing 4.0 era is the gain the support and the advocacy of the customer.
This requires utilizing a blend of offline and online interaction, mixing quality substance with style while balancing algorithms and human connection.
Digital marketing is overlaid on top of offline marketing to create a truly modern approach to connecting with your customers.
Chapter 5: The New Customer Path
The truth of the matter is that there is too much going on.
Everyone is trying to reach out to them and sell them something.
Customers are comfortably numb.
Simply increasing your marketing budget and ramping up the speed and frequency of your messages is certainly not going to break the attention barrier.
To break through and reach your customer, you must understand the customer journey.
This customer journey is comprised of five main components (5 A’s), these are:
Awareness, Appeal, Ask, Act, and Advocate.
Brands have to utilize a peer to peer approach from the start and utilize three different channels of influence (own, others, and outer) to establish a presence.
So, what is “Own, Others, and Outer” ? Let’s find out.
Own is when the brand reaches out to the specific desires and tastes of the individual. Others is when a brand is reaching the collective and outer is when a brand is using advertising methods to start a relationship.
Chapter 6: Marketing Productivity Metrics
For a new era we need new metrics, these new metrics gauge results in Marketing 4.0.
What are these new metrics? Purchase Action Ratio (PAR) and the Brand Advocacy Ratio (BAR)
These metrics focus on measuring the progress of the customer from awareness to action and lastly to advocacy.
The metric of BAR focuses on how well companies are able to convert brand awareness into brand advocacy.
While PAR measures how well companies convert brand awareness into brand purchase.
Ultimately, the goal of the marketing team is make sure that there are minimal bottlenecks in the process of the customer journey.
The marketing department has conducted their job effectively if their PAR and their BAR scores are high.
Chapter 7: Industry Archetypes and Best Practices
Different factors dictate customer-path patterns.
Factors such as size of the brand, location of the audience and more have an impact on customer patterns.
Smaller brands usually have deeper relationships with their customers while bigger brands have many different touch points where they are able to interact with their potential clients.
Four major patterns that exist over across industries are : “door knob”, “goldfish”, “trumpet” and “funnel”.
Each of these elements come with different behavioral patterns and challenges.
The Door Knob pattern is the most common, there is a high commitment and a low curiosity level.
Brands who fall into this category must focus on being top of mind and accessible.
Door Knob pattern industries have high competition, thus immediacy is of high importance.
The second pattern is that of the Goldfish, in this compartment, individuals usually have high levels of curiosity.
The key factor in this sort of market is customer intimacy.
An example of this industry is that of the travel segment, higher price levels and very competitive.
The third pattern is the “Trumpet”, this one is prevalent in lifestyle categories.
Think luxury cars, luxury watches and designer handbags.
An intriguing fact in this market is that there are more advocates than actual buyers.
They are more likely to trumpet their praises than act and make a purchase.
The last pattern is the funnel.
In this path customers are involved in each part of the conversation, all the way to their final destination of purchasing and advocating.
This pattern is found in consumer durables and service industries.
Chapter 8: Human- Centric Marketing for Brand Attraction
Social and intuition rules the day.
In the age of connection and personalization, don’t forget personality.
An increasing number of brands are taking on human qualities to be more attractive to humans.
In this era, there is an emphasis on listening to the customers and their conversations, understanding what troubles them and then working with them to solve their problems.
Brands must be intellectual, social, and empathetic to stay relevant.
Chapter 9: Content Marketing for Brand Curiosity
What is content marketing?
Content Marketing is the concept of creating, curating, distributing and amplifying content that is compelling to a specific audience group.
The idea is that brands would be able to connect on a deeper level with their core audience.
This core audience can be new or current individuals who align directly with the brand.
A significant percentage of companies across the spectrum have realized the significance of this form of connecting and have implemented it in their overall strategy.
Companies have found that this is another way of reaching customers in an age where potential buyers are wary of hearing a product value proposition from the company itself.
Connecting with the right people through content can have a domino effect where it reaches others who are interested in engaging and buying from the brand.
Content marketing is made possible because of the need of the potential advocate to connect directly and authentically with their peers and the brands that they love.
Social media can be a blessing and a curse.
It is a curse to those who see it as broadcast media and blessing for those who see it as a way to provide compelling and engaging centric content in a way that matters.
A great content strategy follows a few steps, they are: set goals, map an audience, ideate and plan the content, create content, distribute content, amplify content, evaluate content marketing and then improve content marketing.
Chapter 10: Omni-channel Marketing for Brand Commitment
Customers constantly move from one channel to another – from offline to online and vice versa.
Potential buyers expect to receive a consistent experience all throughout.
The problem for many brands is that they have one way of presenting themselves in traditional marketing channels and another way of presenting themselves in other contexts and settings.
Omnichannel marketing accounts for each potential path that the customer might take.
Omnichannel marketing is the practice of integrating multiple channels to create a seamless and consistent customer experience.
This new approach forces the organization to have a unified strategy that blends together across all channels providing the best experience to each customer, compelling them to make a purchase.
Omnichannel examples can be seen by big box retailers like Macy’s and ecommerce first brands like Amazon who have decided to focus on their weaknesses.
We’ve seen upstarts like eyeglass store Warby Parker and brands like Kanye West have intriguing and unique pop up shops to engage with customers while maintaining a heavy online presence.
This has translated into major results for these brands.
Trends to pay attention to in this regard is mobile first and others data analytics to optimize the customer experience.
Chapter 11: Engagement Marketing for Brand Affinity
Finally, the way for a brand to stand out and be heard by their customer is to grow their Brand Affinity.
Growing brand affinity can be done through multiple ways like harnessing the power of Mobile Apps, Social Customer Relationship Management, and Gamification.
Most marketers may think that their job is complete when they have finally walked with their purchaser from awareness to action, from hearing about the company to buying a product.
This would be far from the truth.
The greatest marketers understand that improving sales is important but getting to that last mile, to advocacy is what can really bring in continuous dividends over the long term.
Advocates can translate into more positive exposure and awareness for the brand as well as repeat purchases from the advocates themselves.
How are brands increasing brand affinity?
Well, one way is through enhancing digital experiences with mobile apps.
These mobile apps can be launched as media for content, self service channels and integrated into the core product or service experience.
The next method is through social customer relationship management.
Social CRM’s defy traditional CRM’s by being customer centric.
A social CRM takes into account the idea of being human centric and having a personality.
Having a conversation with your clients in a way that matters to them.
Instead of treating things as if they are transactional, treat interactions as if it will leave lasting impressions.
In this method, listen to the voice of the customer, involve your brand in general conversations and handle complaints early on.
Another method for building brand affinity is through driving desired behavior with gamification.
We can see these principles exist in companies like Target, CVS, credit card companies and more that reward their users with points and credits when they shop with them.
The Complete Marketing Experience
The idea is that when a brand enters into Marketing 4.0, they are able to get closer to creating a WOW experience.
When the overall marketing machine of the brand is running smoothly, the brand will have more opportunities to create moments that are surprising, personal and contagious.
The Marketing 4.0 book shows us how to slowly improve our customer journey from awareness to advocacy by creating moments of enjoyment, compelling experience, and engagement.
You need to improve everyday and increase your moments of WOW.
This is Marketing 4.0 zen!