Marketing in the Age of VRM and Customer Engagement
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The next generation of consumers is looking for meaningful engagement, and they are willing to provide the necessary information to achieve that. So what will marketing automation look like when Millennials freely disclose information about their tastes and preferences to marketers?
Despite all the rhetoric of putting the consumer in control, marketing automation is still pretty much business as usual. Many consumers are looking forward to a time when vendor relationship management (VRM) governs our world.
What is VRM? According to Harvard University, it's a grass roots initiative that "immodestly intends to improve markets and their mechanisms by equipping customers to be independent leaders - not just captive followers in their relationships with vendors and other parties on the supply side of the marketplace."
In other words, VRM seeks to empower the consumer to engage with the supply side, not just pretend to. The concept is gaining a lot of ground in many corners; according to the Perceptions Group, 76 percent of marketers say that by 2017, VRM will be very important to their companies.
Of course, this begs a few pertinent questions: If we, as an industry, build the technologies that power VRM, will the consumer come? And if yes, what will marketing look like?
The first question is answered in part in a recent Mintel Research study, which found that 60 percent of Millennials are willing to share information with brands. And of those who said they wouldn't disclose their information, 30 percent said they'd do so if offered an incentive. Clearly, Millennials see themselves as partners to brands. And not for nothing - there are 80 million of them, and they'll have a combined spending power of $170 billion in a few years' time.
Now for the more interesting part: What will marketing automation look like when massive numbers of Millennials freely disclose information about their tastes and preferences to marketers?
The truth is, we're already seeing some groundbreaking stuff happen with mobile devices. In a recent conversation with Anindya Ghose, an NYU marketing professor, I learned that many brands are already using mobile technology to determine a consumer's exact location in a store so they can offer timely and relevant incentives. If we apply the VRM lens to this scenario, perhaps we'll see situations where consumers are empowered to initiate interactions with the brand while in-aisle - requesting a discount on a product (downloaded to their mobile devices and redeemed at the register) in exchange for something the brand values, such as signing up for a loyalty program. Obviously, such a request would involve identifying oneself to the brand, and providing a mobile phone number - activities that the ascendant generation of consumers is willing to do.
Going one step further, perhaps we'll see a world where consumers, while in-store, provide brands with direct input on product development. Wished your favorite shampoo came in a strawberry scent? Tell it to the brand. If the brand were smart, it would provide a brief survey asking for details, such as whether you'd pay more for a wish-list product, and if you'd switch to another brand in order to get the feature you want. It'd ask how long you'd be willing to wait for a desired product, and whether you'd like to pre-order it. Of course, if the product were already in development, it could inform you right then and there, giving you something to look forward to, and cementing your loyalty.
And of course, the brand could collect and process all of this input in real time in order to create a product roadmap that is truly customer-driven.
Massive consumer disclosure - combined with VRM-powered engagement tools - will lead to a level of cooperation we never dreamed possible for the marketing business. Consumers will tell brands the products they're interested in, and brands will respond with highly relevant offers, prices, and experiences - all customized to the individual.
But more than that, free disclosure and true consumer engagement will go a long way toward restoring trust. Creating an environment where we control the ads we see and the brands we interact with will make the consumer more open to marketing. It's fair to say that while our industry talks a lot about making advertising highly relevant and engaging to the consumer, we're not quite there yet. The good news is that next generation of consumers is game for meaningful engagement - let us hope that the supply side responds in kind.