The seven myths of online loyalty – part five

In this seven-part series, Michael Shostak explores some common myths and misconceptions about building customer loyalty online and, more specifically, explains why many of the loyalty tactics employed on the Internet simply don't work. Previous instalments can be found online at...

In this seven-part series, Michael Shostak explores some common myths and misconceptions about building customer loyalty online and, more specifically, explains why many of the loyalty tactics employed on the Internet simply don’t work. Previous instalments can be found online at www.strategymag.com by searching for ‘Seven Myths.’

In this month’s column, I explore online customer loyalty myth number five: Do consumers really want a relationship with your brand online?

The exponential growth of the Internet has brought with it many promises, the most over-hyped of which has been the promise of a utopian relationship-marketing channel – a channel where marketers can reach consumers on a one-to-one basis and establish deep and lasting relationships.

With all the promise came many fads. E-marketing. Permission-based marketing. Relationship selling. Personalization. Mass customization. One-to-one marketing. All-to-one marketing. Friendship marketing. Reverse marketing. Customer relationship management (CRM). eCRM. CMR (Customer-managed relationships). Real-time marketing. And so on.

So much attention has been given to this topic that there are scores of books and consultants specializing in the area. Even more alarming are the countless number of technology companies that have jumped on the relationship-marketing bandwagon. In fact, one of the hottest software markets today is the CRM market. (It seems that in 2000, every technology company on the planet was an e-business enabler. Now, they’re all into CRM technologies, regardless of whether they’re databases, contact management software or e-mail management software).

Unfortunately, amidst all the hype, we marketing folk – silly creatures that we can be – forgot to ask our customers if they really want a ‘relationship’ with our brands? Certainly, given the attention and investment in technology, you’d think the answer is a categorical ‘yes.’

But in reality, the Internet has yet to live up to its promise of being the perfect relationship-marketing channel and many of the marketing techniques designed to create deep and lasting relationships online have yet to yield results.

To understand why, we first need to examine the role of a brand online. (In fact, you can scratch out the word ‘online’ in that sentence.)

A brand, in the simplest of forms, is nothing more than a promise and a guarantee. It is a promise because it encapsulates a value proposition to a consumer that communicates the benefits – emotional or rational – of the product or service that the brand represents. It is a guarantee because it implies consistency of experience – I’ve had experience with this brand before so I know what to expect if I experience it again.

For online brands, this is a critical concept because, quite often, there is no tangible product to speak of. Yahoo! has a strong brand because it consistently lives up to its promise of being a central communication hub for people on the Internet (their words, not mine). Their value proposition to consumers is that they connect people to information, products, services and other people on the Internet. Simple and succinct. And they have also been exceptional at guaranteeing consistent quality of experience – their site is fast, reliable and uses a simple interface that has not changed much over the years (even as they’ve added many new services).

Conversely, Amazon has struggled with its brand ever since it shifted its promise from being earth’s biggest book store to being earth’s biggest store, period. To their credit, they have stayed true to their guarantee of being best in class when it comes to customer service online and, to this day, they continue to set the standard. And from a consumer’s perspective, that means there are no surprises when dealing with them as a vendor.

So, given that the role of a brand online is about a promise and a guarantee, where does the ‘relationship’ part fit it?

Well – it doesn’t, for two very good reasons.

First, to quote my good colleague Paul Reilly, ‘relationships are formed between people.’ Paul is a wise man. As marketers, we often forget that relationships are indeed between people, not between people and inanimate objects. That’s why Wal-Mart has greeters at the door and employs ‘associates’ rather than ‘sales clerks.’ Online we have tried to mimic this notion, as in Amazon prominently greeting me ‘Hello Michael Shostak’ when I go to their site. But I’m not sure it has quite the same effect as a smiling face.

Second, most Internet ‘relationships’ are unilateral – marketer to consumer or in some cases, consumer to marketer – but rarely both ways. And a good relationship implies there is a two-way exchange. More importantly, the control of the relationship typically rests with the marketer and not the consumer, which does not make a great foundation for deep and lasting relations (unless you consider ticking a check box on a Web page as control).

But what about permission-based marketing? Isn’t that one of the great relationship marketing tools that the Internet has brought us? Well – while it sounds good, it doesn’t really deliver on the promise either.

According to one-to-one marketing gurus Don Peppers and Martha Rogers (see www. 1to1.com), the definition of permission marketing is: ‘A marketing method whereby companies get their customers’ permission to market products or services to them. By talking only to volunteers, permission marketing guarantees that consumers pay more attention to the marketing message.’

Really?

The promise of permission-based marketing is that it establishes a trusted bond with a consumer who has given you, the marketer, permission to supply that consumer with marketing information. But how does this lead to a ‘relationship’? The concept is flawed because it assumes that (a) the communication is two-way, which it’s not, and (b) that the communication will be more targeted, relevant, personalized, customized and therefore, more valued. But rarely is this ever the case, simply because the economics of the model don’t allow it to be so. (It’s typically too costly to customize automated information to the level where it actually becomes highly meaningful to the receiver).

In most examples I’ve seen, permission marketing is nothing more than a fancy name for a mailing list – the same mailing list that I get added to when I check out at the sporting goods store down the street. So the ‘relationship’ is nothing more than ‘We have a newsletter – you have an e-mail address.’ And I, as a consumer, receive the same newsletter as Bob next door and Jane in New Zealand. Hardly the ingredients for a meaningful relationship.

At the end of the day, we marketers need to stop looking at the world through a brand-centric lens and put on a pair of consumer-centric goggles to really explore the role that ‘relationships’ play in the success of our brands online. Only then will we be able to answer the question: Do consumers really want a relationship with our brands?

Next month, myth number six: You can create a ‘community’ around your brand.

Michael Shostak is president of Vickers & Benson Interactive and has spent the past 10 years of his life demystifying technology and marketing. For rebuttals, platitudes or other comments, Michael can be reached at mshostak@vbdi.com or at (416) 480-7978.