With access to a wealth of online product information and user reviews making consumers smarter about their purchase decisions, traditional marketing approaches and loyalty schemes are increasingly becoming less relevant.
That's the view of Itamar Simonson, a Stanford marketing professor, and Emanuel Rosen, co-authors of Absolute Value: What Really Influences Customers in the Age of (Nearly) Perfect Information.
In the book due out in January, the authors note that consumers used to make decisions based on factors such as brand name reputation; their previous experience with a company; a premium price point; advertising messages versus competing brands; and other products a marketer may display on a catalog page or on the shelf.
But review sites, shopping apps, a wide network of acquaintances available through social media, and wide access to experts is making them less susceptible to context or framing manipulations.
"In a world where consumers enjoy complete access to informed experts and various information services, where they can instantly read the opinions of previous users, it's much easier for consumers to predict their likely experience with a product or a service — it's easier to know the absolute value of things," the authors wrote in the introduction.
"Absolute value" is less about understanding technical specs or reliability and more about "getting closer" to understanding what it is like to own and actually use a product. Emerging technologies such as shopping apps and review sites with better sorting and search tools are also continually enhancing customer's ability to make smart decisions.
The authors eventually introduce a new framework, entitled Influence Mix, for making better marketing decisions based on the mix of influence sources that customers rely on. The authors note that the shift from relative to absolute is taking place in some product categories and, for some consumers, much faster than for others.
The book aims to provoke a debate about the future of marketing and consumer decision, but the authors contend many current marketing approaches are losing their relevancy.
"Marketing is changing forever," wrote the authors. "When consumers can more easily assess absolute values, this means that the influence of 'relative forces' (such as branding, loyalty, and positioning) that used to drive predictions of the experienced quality of things is, for numerous products and services, rapidly declining."
Are proxies for quality such as brand names, loyalty, or positioning becoming less relevant in today's socially intensive information environment?