In his latest tome â€œTiltâ€, well known marketing strategist Niraj Dawar has proposed the idea of organizations shifting away from a product-centric approach to a customer-centric approach. Niraj speaks to Ankur Gaurav of Pitch about what goes into the making of a successful business, Facebook Marketing and how business costs have shifted downstream among other related issues. Some excerpts:
Products which have nothing different to offer sometimes become successful because of the heightened promotion and activation around them. Does this mean Product innovation is losing importance for marketers and consumers?
Marketing has gained enough power to create a need for products; product innovation is a means of staying in the competitive game. Companies whose innovations reduce customers’ costs and risks are able to build value that matters to customers, for which customers are willing to pay, and for which they may become loyal.
Big Data or more specifically, conversational data on facebook, twitter and other social media channels has the potential to help the brands improvise accordingly before they launch a new campaign / product. What is the best way to use conversational data?
Social media data is becoming increasingly important in building an understanding of each customer. It offers great potential for creating what I call customer portraits. However, there is another use of this type of data, and that is to build an understanding of aggregate patterns. This is akin to aerial photography of your customers. There is much unexplored value in the big picture view of aerial photos.
Can you help us with a few examples of brands which have visibly utilized this chunk of data in any way?
Many brands are trying to sketch consumer portraits from social media posts. What is of interest is not a specific company but what is possible once these portraits have been assembled. Most companies attempt to predict and pre-empt the next transaction. But as I explain in TILT, this is very often a mug’s game. In many industries, most competitors have equalized predictive power, so they’ll spend the expected marginal return trying to buy the next transaction. Instead, they should examine what is unique about their understanding of customers based on their unique perspective on these customers. The question that marketers should strive to answer is -given our big data, what is it that only we know?
Facebook has become marketersâ€™ favorite. At the same time, consumers are sick of their personal pages bombarded with promotional messages of brands. The fact is that facebook has transformed from a social networking website to an economical platform for advertising. Will this transformation help Facebook in retaining and increasing its members?
According to what I have observed, one of the more promising uses of Facebook is as an influence marketing medium. Marketing directly to a consumer may not be as effective as marketing to their friends who then mention or recommend the product to the target.
What is the future of Facebook marketing?
Facebook recognizes that its competitive advantage resides entirely in the willingness of its users to continue to share information over its platform. So it must continually innovate to encourage users to continue posting and sharing. Otherwise the spectre of becoming a MySpace always haunts Facebook.
In your new book â€˜Tiltâ€™, you tried to lay emphasis on the â€˜tiltingâ€™ or moving away from â€˜product-centricâ€™ functioning to â€˜customer-centricâ€™ functioning for better results. How does it reflect the brand sentiments and strategy adopted in the present age?
While the companies do acknowledge that only customers drive their brands â€“ and why theyâ€™d rather buy from them as opposed to their competitors â€“ they still focus only on the product at hand and not what or how the customers buy.
What are the trends which have redefined the businesses today?
I would give it to three things which have completely redefined the businesses. The primary focus of costs has shifted out of the factory to downstream activities such as customer acquisition, customer satisfaction, and customer retention. For example, how a customer is ready to pay a 700 per cent price premium for a can of Coke delivered to him from a tailor-made machine in whatever the circumstances he wants it. It is chilled, it is single serve and it is at the point of thirst, thus moving the concentration away from upstream activities and making one realise that the downstream activities are driving the organisation value, and yet, the organisation continues to focus only on upstream activities.