Agora Media Group Innovation Blog

Recently, I was fortunate to have the opportunity to do a lecture / presentation at the Annual MARUG (Marketing Associatie Rijksuniversiteit Groningen) Conference,  the largest Dutch marketing event organised by students  here in Groningen. There were over 400 students and business participants this year and the marketing theme for 2010 was Experience Marketing (I actually prefer the term Experiential Marketing). Some of my more recent writings and research have been around emerging television platforms and convergent media so I thought it might be interesting to blend it into the presentation and make it relevant for future marketeers. Because this space could very much play a part in their futures.

A couple of days ago I was watching a show of a Dutch stand-up comedian, who at one point began talking about the excessive choice consumers are given nowadays. He gave the example of having many kinds of toothpaste, which burdens him, because a person becomes indecisive, whilst the only thing he wants is to have clean teeth and a toothpaste which takes care of that.
When he talked about this topic, sociologist Barry Schwartz came to my mind which wrote the book “The Paradox of Choice: Why More is Less” on customer behavior. In the book he explains that choice overload can lead to decision-making paralysis. Choice is the hallmark of individual freedom and does fit the New Consumer which I referred to in The Axiom of Self-Segmentation , a type of person that seeks authenticity, is individualistic, independent and well-informed.

To give you a short insight in the overwhelming offer, here a part from chapter one “Let’s go shopping” of Schwartz’s book:

A Day at the Supermarket

Scanning the shelves of my local supermarket, recently, I found 85 different varieties andbrands of crackers. As I read the packages, I discovered that some brands had sodium, othersdidn’t. Some were fat-free, others weren’t. They came in big boxes and small ones. They camein normal size and bite size. There were mundane saltines and exotic and expensive imports.

My neighborhood supermarket is not a particularly large store, and yet next to the crackerswere 285 varieties of cookies. Among chocolate chip cookies, there were 21 options. Among“goldfish” (I don’t know whether to count them as cookies or crackers), there were 20 different varieties to choose from. Across the aisle were juices—13 “sports drinks,” 65 “box drinks” for kids, 85 other flavors andbrands of juices, and 75 iced teas and adult drinks. I could get these tea drinks sweetened(sugar or artificial sweetener), lemoned, and flavored. My neighborhood supermarket is not a particularly large store, and yet next to the crackers, were 285 varieties of cookies.
Next, in the snack aisle, there were 95 options in all—chips (taco and potato, ridged and flat, flavored and unflavored, salted and unsalted, high fat, low fat, no fat), pretzels, and the like, including a dozen varieties of “Pringles.” Nearby was seltzer, no doubt to wash down thesnacks. Bubbled water was displayed in at least 15 flavors.

In the pharmaceutical aisles, I found 61 varieties of sun tan oil and sunblock, and 80 differentpain relievers—aspirin, acetaminophen, ibuprofin, 350 milligrams or 500 milligrams, caplets, capsules, and tablets, coated or uncoated. There were 40 options for toothpaste, 150 lipsticks, 75 eyeliners and 90 colors of nail polish from one brand alone. There were 116 kindsof skin cream, and 360 types of shampoo, conditioner, gel, and mousse. Next to them were90 different cold remedies and decongestants. Finally, there was dental floss. Waxed andunwaxed, flavored and unflavored, offered in a variety of thicknesses.
[...]
A typical supermarket carries more than 30,000 items. That’s a lot to choose from. And morethan 20,000 new products hit the shelves every year, almost all of them doomed to failure.

These figures to refer to American supermarkets, but I do think these scenarios count for many other countries as well.

The ambiguous title of this article is The Paradox of Choice 2.0 , the aforementioned supermarket example is analog, if we move such a scenario to the digital world, we get a squared choice overload.
First because online stores like Amazon.com have many titles along the Long Tail terms. Secondly, global is the new local, besides the increased choice related to the books themselves, the amount of e-stores from where a customer can order, has increased drastically as well.
The second explenation of the title is the fact that the Social Web adds a new layer to shopping -opinions- which only will add more to the decision-making paralysis next to the online characteristic.
Due to collaborative filtering, recommendations, opinions, ratings and implicit and explicit personalization tools, customers are getting quality assistance in their decision-making which paradoxically is relevant to their search, but at the same time could be paralyzing in achieving their goal.
Think of Amazon.com which recommends other books in the same category, recommends books which are bought together with a certain book, shows the actual % of people which in the end bought that particular book and the % of people who did buy another one. Next to the recommendations, the large amount of reviews and rating does add value to being well-informed, but does make it harder to decide.

There is a fine balance that C-level and seniors need to find in terms of portfolio, product lines, offer and effects on customer behavior like this, responsibility needs to be taken towards customers in regulating the choice overload.
This is referred to as strategic clarity ,this goes hand in hand with More is Less, where these kind of decisions are not made by businesses and therefore will be emotionally and psychologically detrimental.
Too much is not and won’t be a success factor business-wise and customers will ignore all that is too much, from either perspective too much doesn’t get each of the two further.

How will the two entities -advancing technologies/business and online customer behavior- behave and react to each other now and in the future when the freedom of choice is most probably squared once again?
Will the effect of too much choice reach the top which will negatively impact business or shall strategic clarity diffuse more amongst businesses and prove its importancy?

That is what Adam Hartung proclaims in an article on Forbes.

Customers are often locked in your solution and proposition and customers often don’t advice beyond short term business tactics and enhancements which are advantageous for their needs.
The two examples given in the article are clear that customers have other objectives than the suppliers, and this difference can be fatal when it comes to adapting and thriving in fast-changing environments.

Mr. Hartung concludes the focus on competitors instead of customers, nicely in two paragraphs:

To succeed you have to obsess about competitors. And not just about traditional ones, but about fringe ones as well. What customers won’t tell you, the market will, through competitive activity.[...]

[...]Leaders can move beyond surviving and enter the world of thriving only if they obsess about their competition. Watch the competitors that grow, and watch the competitors that don’t grow, and understand why. Look at how customers behave, not at what they say, and see what tests they are undertaking with competitors–especially with fringe competitors with alternative solutions. See what revenues are shifting to other, often emerging, competitors, even if they’re very small. If you want to remain viable, your competition will give you more insight than all the strategic customer councils in the world.

Both groups represent different goals, competitive intelligence is much more suitable for moulding and planning long term strategies than customers can provide you.
Closely watching the competitors is an objective way of analysis, where self-preservation -by customers- is not the first key-objective and peril.
Acquired customers are a great source when it comes to retention, product enhancement, customer satisfaction and so on.
It’s a refinement that concerns internal versus external, short-term versus long-term.
In the end it all revolves around customers, be it yours or someone else’s that will give you -by action- the intelligence to thrive.

What’s your opinion, is it all wrong or subject to refinement?

A strategic principle, as defined by Harvard’s article Transforming Corner-Office Strategy into Frontline Action, is:
“A memorable and actionable phrase that distills a company’s corporate strategy into its unique essence and communicates it throughout the organization” and has as goal to achieve a sustainable competitive advantage. read more