Posts tagged fear saps energy

This one is about those pesky demanding consumers. And their pesky attitudes & expectations.

Oh. Expectations. Expectations are truly tricky things. They elevate quickly (even moreso in the web-based transparency driven world) and they decrease grudgingly. Once a consumer has experienced a truly 100% perfect experience the bar has been set. And in today’s world? You (a consumer) doesn’t even have to personally experience it … you can simply virtually experience it … and your expectations have been reset.

Let’s face it.

In the past a company (or a brand) could get away with not performing at its peak.   Or maybe taking a day off performance wise.  All because consumers didn’t experience full transparency of the best, the cheapest, the first, the most original or the most relevant.

Well.

That’s all over.

And things are bound to get even more radical.

trendwatching calls this phenomena The Expectation Economy. And it is not just a generational thing.  While it is a given for the younger generations who are unburdened by an era of mass production, mass advertising and above all mass ignorance … older generations are quickly stepping into this world wondering what the hell all these youngsters know that they don’t.

Oh.  And every day the older generations are getting more online savvy (even if it is simply to make sure they aren’t getting screwed) and are creating the same expectations as the younger generations.

The Expectation Economy is a consumer trend chock full of experienced well informed consumers from the US to China who has a high list of expectations that they apply to each and every product or service or experience on offer.   Their expectations are based on years of self training in hyperconsumption and the flood of online information readily available.  All of which helps them track down and expect not just basics even for the basics (in other words … there is no such ting as “basic” any more).  Not just the lower level standard of quality but the “best of the best” for what they are willing to pay.

They have redefined quality.

Quality is now based on what they are willing to pay.

“Yes.  I have one dollar.   But now I know what to expect for one dollar.  Oh.  And it ain’t just one dollar worth of value.   Its something more because I know, even though it’s just one dollar, someone out there is willing to give me more than one dollar of value because they want my one dollar.”

So.

What this really means is that in this expectation economy your product or service is no longer just judged against other products and services in your category but by experiences created by other products and services in other categories you cannot even imagine are your competition.  Ok. They aren’t your competition in a true definition of the word (it is not like they are stealing sales) . But.  They are stealing expectations. They are resetting the expectations in your category.

Geez.  How fair is that? You aren’t even competing against them.

Well.  In the new Expectation Economy face it.  You aren’t just competing against those you think you are competing against but also competing against expectations being set by other companies in other categories.

The biggest difference from five to ten years ago? Word of mouth now travels the world in a flash, making product launches instantly global, turning every new brand, big or small, into a potential ‘player’ in the marketplace. Small businesses and brands can become big businesses and big brand overnight.

Basically, this is the Creative Destruction theory (Schumpeter) gone ballistic. Remember. Creative Destruction is all about how the small constantly overwhelm the big to improve the overall marketplace.

And it is happening because never before has intelligence on the best, the cheapest, the first, the most original and the most relevant been so openly available to consumers. And never before have consumers enjoyed doing research and comparisons (lets call it ‘personal competitive analysis’) as much as they do now. In fact consumers are conducting the competitive analysis more diligently than most corporations do (including possibly the most anal comparative corporation of all time P&G).

Blame (or thank) sites, blogs and magazines such as:

• Core77, Inhabitat, Design*Sponge (design, furniture and objects)
• Gizmodo, Engadget, Ubergizmo (cutting-edge gadgets and electronics)
• Treehugger (eco-chic products)
• Curbed (real estate)
• Cool Hunting, The Coolhunter, Josh Spear, NOTCOT (cool, beautiful, have-to-have ‘stuff’)
• Gridskipper, superfuture, Jaunted, Wallpaper, TripAdvisor, Monocle (hotels, restaurants, architecture)
• Flavorpill (coolest city events)
• FlyerTalk, SeatGuru, Skytrax (best airlines and seats)
• Luxist, Born Rich (most desirable luxury goods and services)
• Autoblog, Jalopnik, Hybrid Cars Blog (automotive scoops)
• JC Report, The Sartorialist (fashion and style)
• Kotaku, Joystiq (video games)
• Styledash (beauty)
• Slashfood, Chocolate & Zucchini (food and beverage)
• EUKicks (sneakers)
• Vinography (wine)
• FirstShowing, /Film (movies)
• Digital Photography Review (photography)

This avalanche of consumer competitive intelligence has even spawned consumer information as a job – where consumers inform each other on the best of the best without feeling the need to actually purchase anything or even get paid for what they are doing.

What started with amateur “cottage industry” travel, chef & shopping experts is now applied to virtually every industry or any object that consumers’ desire. In fact consumers can now vicariously consume everything and anything through the eyes of curators/experts and other consumers, and the written/spoken/taped reports they freely share (note again … without getting paid to do any of this).

And all this sharing of knowledge leads to creating expectations.  Expectations with regard to everything. And that leads to …

Irritation and Indifference

Think about the consumer as someone with ongoing annoyance interspersed with occasional boredom and indifference.

Whew. Now that sounds tough for any marketer out there.

Why will consumers’ moods be like this?

Once high(er) expectations have been set, they are bound to go largely unmet, since the majority of brands still choose not to keep up with the best of the best (because that “isn’t our positioning or what we are about” or they simply just cannot match the best of the best).

Well informed consumers will thus find themselves in a perpetual state of indifference and/or irritation.

Indifference will hit those brands that consumers know are underperforming, and that they can avoid due to sufficient availability of the best of the best. If you’re working for one of those underperforming brands, the scary thing is not just selling less (or nothing). It’s that indifferent consumers will stop being forgiving, they will stop being cooperative and giving you feedback on how to be more like other, better performing competitors. They’ll just leave and never return, without telling you why.

Perpetual irritation is just as bad: this will occur when consumers are forced to buy from an underperforming brand, due to limited or no availability of what they already know is the best of the best.
In this light, pay special attention to fake loyalty and postponed purchases:

-          Fake loyalty: consumers will continue to purchase from underperforming brands if the ‘real thing’ isn’t available. To the underperforming brand, all may seem quiet on the western front, until the best of the best suddenly does become available. Good examples of fake loyalty can be found in the airline industry: millions of frequent flyers around the world know that Virgin Atlantic, Singapore Airlines and Emirates offer a superior experience, but since these airlines don’t fly on all routes, consumers have no choice but to fly with subpar airlines now or then, or all of the time. Count on them to vote with their wallets every time new routes are added by these ‘best of the best’ carriers, even if they’ve never flown with them before.

-          Postponing purchases: some ‘best of the best’ brands like Apple actually manage to indirectly convince consumers to postpone certain purchases. Many consumers would rather wait for the iPhone or MacBook Air to become available, than to buy a new phone or laptop. Again, due to the dissemination of information, even local product launches are instantly global. Digital services have already succumbed to phased distribution; the physical world is next.

The Next Generation

Let’s face it: in the past a brand could get away with not performing at its peak, since consumers didn’t enjoy full transparency of the best, the cheapest, the first, the most original, the most relevant. That’s really over. And things are bound to get even more radical: the EXPECTATION ECONOMY is a given for younger generations, who are unburdened by an era of mass production, mass advertising and above all, mass ignorance.

So: not knowing who’s doing exceptional things and setting your customers’ expectations is not an option. Which brings us to the following:

Looking cross-industry is Imperative

Sure, we know that what you really, really want is to look at which trends will dictate your industry. If you’re in automotive, you want to know about the future of transport; if you’re in food and beverage, you’re no doubt interested in everything healthy and green and organic. And of course you have a near-obsession with what your main competitors are up to. But in an EXPECTATION ECONOMY, business professionals should obsessively think and look cross-industry, as opposed to suffering from industry tunnel vision.

Here are three reasons why looking cross-industry isn’t just great for inspiration, but a prerequisite for understanding how to succeed in an EXPECTATION ECONOMY:

1. Your Competition could be Anyone

First of all, focusing solely on your own industry will obscure the fact that in economies of abundance, consumers are increasingly spending their ‘play money’ on goods and services that net them the experience, the indulgence, the excitement, the satisfaction they’re looking for at a specific moment. Which could be new sneakers (even though they already own five pairs), or a new cell phone (even though their current one is perfectly fine) or a long weekend away (even though, if they’re European, it’s probably their fourth getaway this year). So if you’re, let’s say, Nike, you’re definitely competing with Reebok and Adidas and Onitsuka Tiger once a consumer has made up his or her mind that it’s sneakers he or she desperately wants. But before minds are made up, when shopping for a certain kind of excitement, it may as well be Nokia or Starwood Hotels. Or Zara. Increasingly, you’ll be competing with anyone and everyone, which means you need to keep an eye on anyone and everyone.

2. Expectations are Often set Outside your Industry

Secondly, limiting yourself to your own industry will make you miss important changes in consumer expectations, and will thus put you at risk of disappointing or even annoying consumers. Every industry has its own ‘innovation competence’, and the innovations they’re bringing to market not only excite their own customers, they also shape their expectations for other industries. Whether it’s Singapore Airlines’ sense of status, Starbucks’ understanding of indulgence and rituals, H&M’s obsession with making up-to-the-minute fashion affordable, or Apple’s prowess in design and usability. And while flawless execution is never easy, the thinking and attitude behind it isn’t impossible to mirror. Consumers know this, too. Hence their aforementioned indifference and irritation when it comes to the non-H&Ms, the non-Singapore Airlines, the non-Apples.

3. Just copying Competitors is a Race to the Bottom

Last but not least, if you’re obsessed with what your direct competition is doing, you will always end up copying new concepts in your industry. Which means that, unless you’re comfortable with being a ‘smart follower’ and being really really good at it you won’t be successful.

Now, all of this is of course not to say that you shouldn’t actively track what’s happening in your own industry. But also constantly ask yourself: who are our other competitors? What experiences could our product or service be traded in for? And what can we learn from other industries setting consumer expectations across the board?

Oh.

Smart follower.

That’s management speak for waiting to see whether innovative initiatives by more creative and daring competitors are worth copying: if they are, you’re too late, and if they’re not, well, by then they’re probably working on something newer that does work.

Being a smart follower is not a science.  In reality it is all about mixing experience, intuition, and knowing your sources.

In my world i grab a notebook and camera and start taking notes and pictures roaming the streets.  And secondarily scanning the list of best of the best sites/publications. Note that I prioritize “the streets” first.

Always remember. “The streets howl with the truth.”

Find competitors and non-competitors, big and small, who are setting consumer expectations much higher than you’ve ever been able to (because whether you like it or not you are being compared to them).

Maybe they’re more fun.

They have better design. Their stuff tastes, looks, feels better. Their customer service actually responds to emails. They’re cheaper.

Then build what you think are the standards for which you will be measured against. Those are the expectations you need to manage whatever it is you do against. That is where you need to start thinking.  Maybe in developing new products or services or just experiences.

But in this new Expectation Economy you have to at minimum incorporate people’s expectations into what you are doing. And, of course, seek to outdo them somewhere.

Ah.  The Expectation Economy. It certainly isn’t dull.

source: thanks to trendwatching for contributing to this post.