Wholesome Marketing Ideas, Bite Size

Wholesome marketing ideas, bite size

Sunday, July 31, 2011

Back to the future: a brand new model of trust?

Brands have been around for a very long time. 
A brick from the reign of Augustus

Bricks were branded in Rome. Brick kilns needed to earn the trust of buyers in distant markets to sell their product. The buyer had no way of evaluating the quality of the product until they’d used it, and by then it was too late. So to bridge the trust gap, each kiln stamped its unique logo on its bricks. This gave buyers the assurance they needed, and provided sellers a way to communicate the quality of their wares. Over time, the mark was a way for better kilns to reap the rewards of good quality – previous buyers would repurchase, and new ones would be attracted as the mark gained a reputation. 

But for most of history, brands were a secondary, cold, distant and institutional form of trust. The dominant trust model in commerce was the personal relationship model. When trade was almost entirely conducted at the local level, the purchaser had that ultimate source of trust and recourse: they knew the seller as a neighbor. Buyers would rely on the local blacksmith for advice before deciding on a new set of horseshoes, and return after having purchased them to seek redress if the products were shoddy. They could ask their neighbors of past experiences in having their roofs thatched, and they could squeeze, prod and smell their fruit and vegetables before purchase. The grocer might even anticipate their needs and recommend products, based on their past patterns of purchase. Consumers would have laughed at the notion that they should pay a premium for the dubious privilege of buying goods from a complete stranger who had made the products in a distant land.  Why take the risk?

Well, as we know, consumers eventually took the risk because when trust was locally custom-made for every buyer by every seller, it was expensive. Brand building, particularly brand building fueled by mass media, offered a way to reduce the unit cost of building trust by delivering the same message to large numbers of consumers simultaneously.

The simple model of trust that came to be embodied in brands was this: the seller communicates a promise of quality, lives up to it, and so earns customer trust. With trust come repeat purchases, and perhaps, a willingness to pay a premium price. This model of trust took off as markets expanded, and sellers could shout out their message over print and broadcast media to buyers they had never met. This model is the reason so many product markets exist today.

But is this model now nearing the end of its life-cycle? Is a different model of trust-building now emerging?

Just as the mass media revolution of the twentieth century allowed the mass brand trust model to overshadow the personal relationship trust model, could recent changes in technology and data allow a new model of trust-building?

As a seller, you can now do three things that you could not do when you built brands through mass media:

-          You can listen to each customer;
-          You can remember what they said in the past;
-          You can be responsive and even pro-active to their needs.
General Store, Alabama 1936
But wait. Aren’t those also three things the village grocer could do back when trust was built on local relationships?

And if they are, isn't that the ideal we’re striving for? And if we can build that kind of consumer trust economically, as economically as we build brands, then we’re headed back to a future where trust is custom-built on a mass scale.

But so far, progress is slow. Despite two decades of Customer Relationship Management, despite mountains of data on customer tastes, preferences, and transactions, much of the opportunity to earn customer trust through these three new mechanisms remains unrealized. 

Few companies do this well, in part because they're managing brands rather than customers.
Source page for Roman brick photo: http://viagabina.rice.edu/brickstamp/index.html 
Source page for General Store photo:  http://en.wikipedia.org/wiki/File:General_store_interior_Alabama_USA.jpg

No comments: