- Anything indicative of changes in your financial circumstances. These may include phrases or keywords that you use on social media platforms, such as walkaway, laid off, fired, broke, moving to your parents house, etc. Banks will examine the correlation between these tweets and actual financial behaviors.
- What your social media connections are doing financially. The idea here is that your friends have similar habits and characteristics as you. If one of them tweets about financial hardship, to banks that could mean you might also have trouble later on.
- Upcoming life changes. Similar to financial changes, the idea here is that banks want to know when you’re approaching major life events, such as getting married or buying a safe car to transport your new child. This information allows banks to tailor certain products and services toward you
How new technologies are changing marketing
The combination of the Internet, social media, and mobile devices ushers in an era of mass collaboration. These new technologies allow anyone to connect to anyone and everyone, at any time — and there are already signs that the relationships we have with ourselves, with each other, and with our institutions are changing in response.
1. From Audience to Community
The first shift relates to media and the evolution of audience to community. For five hundred years, we have lived in a world of broadcast media. We are accustomed to thinking about media as a channel to distribute a message to an audience. But as “one-to-many” becomes “many-to-many,” our audiences become communities. Audiences once passive, anonymous, and isolated are suddenly active, empowered, and connected. You aren’t giving a lecture anymore; you are hosting a dinner party. Your success is determined by how well you connect people together and keep the conversation going.
2. From Consumer to Co-Creator
The second shift affects our identities as individuals. With the evolution from passive audiences to active communities, we shift from consumers to creators. In commerce, customers participate in the quality of services, the design of products, and even their manufacture. Social technologies are empowering individuals, enabling them to find their voice and take collective action.
3. From Push to Pull
The third shift affects brands and the ways they engage customers, employees, and the public. In a social age, people don’t like to be pushed. They don’t need brands to tell them what to buy, where to buy, or when to buy. Their social networks do this for them.
4. From Products to Platforms
The basis of competitive advantage is shifting from products to platforms. The shift is most notable in the technology arena. Apple’s dominance is due to the success of its platform more than its products. Other companies make an excellent smartphone. But the iPhone is a superior platform for creating a seamless experience through iTunes, the App Store, and now iCloud. Facebook is increasingly a platform for other companies. Competition is becoming how well you create platforms from which you can (a) bring products to market, (b) grow an ecosystem of partners, and (c) pull key constituencies into orbit.
With all the richness of choice alternative is not there
If Customers Ask for More Choice, Don’t Listen
In his provocative book The Paradox of Choice, Barry Schwartz’s warns that giving consumers more product choices actually lowers their purchase satisfaction. Schwartz reasons that having too many options makes us fear missing out, which causes anxiety, analysis paralysis and regret.
But many marketers have dismissed Schwartz’s warning, arguing that today’s consumers expect a wide range of options and have learned to filter greater amounts of information. Marketers’ own research usually backs this up. When asked, consumers in these studies almost always say they want more choice. And, in fact, one of the top reasons shoppers give for not making a purchase is “couldn’t find the right option.” Understandably, therefore, marketers are reluctant to cut back on SKUs for fear of disappointing consumers and losing sales. Instead, companies continue to develop a growing array of niche products to fit every imagined need and aggressively promote them.
This isn’t just a problem for consumers. Cognitive overload is bad for brands too. The harder consumers find it to make purchase decisions, the more likely they are to overthink the decision and repeatedly change their minds or give up on the purchase altogether. Smart brands reduce the effort of making choices without reducing the appearance of choice. Some progressive brands simplify product choice without reducing choice by helping consumers navigate and trust product information and weigh their options.
Customer Loyalty Isn’t Enough. Grow Your Share of Wallet
Companies spend a great deal of time and money trying to improve customer loyalty by measuring and managing metrics like satisfaction and Net Promoter Scores. But traditional gauges of loyalty correlate poorly with what matters most: share of wallet. This is the percentage of a customer’s spending within a category that’s captured by a given brand, or store or firm. Customers may be very satisfied with your brand and happily recommend it to others—but if they like your competitors just as much (or more), you’re losing sales. Making changes to increase satisfaction won’t necessarily help. This doesn’t mean traditional metrics aren’t valuable; it can be very useful to know whether your customers are satisfied and would recommend you to their friends and colleagues. But these measures in themselves can’t tell you how your customers will divide their spending among you and your competitors.
The new rule has important implications for strategy. To understand what drives changes in share of wallet, managers need to shift their focus from drivers of satisfaction to drivers of rank.
First, you can’t assess brand performance as if it existed in a vacuum. That sounds obvious, but in reality it’s exactly what most managers do, measuring customer satisfaction or using other metrics that are based on customers’ perceptions of their brand alone. As a result, the loyalty objectives used to evaluate and compensate managers usually have to do with achieving a certain satisfaction rating (which rarely boosts share of wallet), not with improving a brand’s rank (which actually does).
Second, the rule makes it possible to craft strategies that directly affect brand performance and then measure the impact on share of wallet. Think about how a company typically tries to improve share of wallet. The effort often boils down to launching initiatives intended to make customers happier and then measuring satisfaction. Companies should understand exactly why their customers use each of the brands they do. If you’re not number one, you should ask your customers why they prefer your competitor and use the insights you gain to move up the ranking ladder. The Wallet Allocation Rule is clear on this point: If you can’t improve your rank, you can’t improve your share of wallet.
Many companies could see this kind of revenue jump if they decided not to pursue customer satisfaction for its own sake and focused instead on how satisfaction and other loyalty boosters could help them pull ahead of the competition. If growth is what you’re after, stop watching your scores and start paying attention to your rank. The path to winning has always been the same. It’s not just how many points you score that matters—you need to score more than your competitors do.
Vehicle Ownership Lifecycle
The Things Customers Can Do Better Than You
Many firms assume that customers can do just one thing of real significance: buy their products and services. It’s time to seriously challenge that assumption, as many companies are doing by looking to customers to fuel their growth engines.
Many companies are simply recognizing entirely obvious realities about customers and their desires and competencies, choosing to leverage these rather than fight against them, as so many firms do. Here are five examples:
Customers know more about each other than you know about them. That’s the source of much of the stratospheric value placed on Facebook by investors. Imagine a traditional company that tried to generate the kind of information Facebook generates: real time data on what movies people are watching, where they travel, the books they’re reading, the restaurants they’ve tried. Facebook dispensed with all the research most companies would have tried to dig up, and instead focused on letting customers provide it.
Customers are more credible than you are. That means they make better marketers for a firm than agencies or internal employees.
Customers are more persuasive than you are. That means they make better sales people.
Customers often understand buyer needs better than you do. One of the great misconceptions still floating around is that customers can’t articulate their needs, much less develop ideas for products to satisfy them.
Prospects in your market would rather affiliate with their peers (your customers) than with you. By nature, most all of us are open to creative new ways to affiliate with our friends and peers. Companies are often uncertain about being able to create opportunities to affiliate that customers would embrace— but they can, as long as they avoid making the common mistake that customers want to affiliate with the company. They want to associate with their peers — meaning your customers, not you.
What Consumers Really Want
How Banks can use social media for determining potential credit risk
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