Social media researcher Jess Owens (@hautepop) on consumer decision-making and why brands need to listen to social media forums:
There’s a new book out about how social media’s changed how people buy things.
In Absolute Value: What Really Influences Customers in the Age of (Nearly) Perfect Information, Itamar Simonson and Emanuel Rosen argue that amid more reliable sources of information, branding is losing its value:
“How people buy things has changed profoundly—yet the fundamental thinking about consumer decision making and marketing has not. Most marketers still believe that they can shape consumers’ perception and drive their behavior. [… But] when consumers base their decisions on reviews from other users, easily accessed expert opinions, price comparison apps, and other emerging technologies, everything changes. Counter to what we frequently hear, consumers will (on average) make better choices and act more rationally.”
So it sounds like a book we at FACE ought to buy, right?
But we wouldn’t want to be under-informed consumers! If social media is so good for helping people reach informed decisions, we thought we’d first turn to social to see what people were saying…
Turns out it’s pretty contentious.
What’s driving discussion is the “bad news” Simonson & Rosen have for brands: “…brands are less needed when consumers can assess product quality using better sources of information such as reviews from other users [or] expert opinion,” they said in HBR last month. This was picked up by James Surowieki in the New Yorker with a long piece on The Twilight of the Brands
This is a big claim, and it’s driving reaction from the plannersphere.
Twilight of the brand? Don’t bet on it – says Edward Boche. He argues in defence of branding: it’s not just a label and an advert, it’s the shaping of the whole product experience.
Patricia McDonald, Chief Strategy Officer at Isobar UK, was more practical. She tweeted:
“I think the idea of “perfect competition” implies a lot higher interest in many categories than consumers have and ignores the fact that many purchases are impulsive/emotional.” [1, 2]
This is a great point. Sometimes we can overcomplicate things in the marketing world – but really, who researches the chocolate bar they buy at the station, or the toothpaste they pick up at lunchtime? What does drive those purchases? Habit, price – and brand recognition at the shelf.
Simonson & Rosen’s claim that there’s no such thing as “information overload” (and so everything can be researched) just doesn’t stack up against the common sense of what we know of our own shopping behaviour. Much of the time it’s not rational to spend time researching and making a rational decision, right? The automatic, stereotype driven instinct of Daniel Kahneman’s “System 1” thinking is usually good enough.
So brand functions as a decision-making short-cut, making sure consumers have the stereotypes and emotional associations to mind when it comes to making a decision at the shelf.
No new ideas
‘Absolute Value’ ultimately reminds us of the Cluetrain Manifesto. Arguably Simonson & Rosen’s book is just fleshing out Cluetrain points 6-12, written fully 15 years ago:
6. The Internet is enabling conversations among human beings that were simply not possible in the era of mass media.
7. Hyperlinks subvert hierarchy.
8. In both internetworked markets and among intranetworked employees, people are speaking to each other in a powerful new way.
9. These networked conversations are enabling powerful new forms of social organization and knowledge exchange to emerge.
10. As a result, markets are getting smarter, more informed, more organized. Participation in a networked market changes people fundamentally.
11. People in networked markets have figured out that they get far better information and support from one another than from vendors. So much for corporate rhetoric about adding value to commoditized products.
12. There are no secrets. The networked market knows more than companies do about their own products. And whether the news is good or bad, they tell everyone.
It’s funny how little changes, right?
The answer Cluetrain give is a lot more listening.
34. To speak with a human voice, companies must share the concerns of their communities.
35. But first, they must belong to a community.
And companies have to listen to what this community is saying, and what it’s concerned about. Market research isn’t just about product testing: “Here’s what we’re doing. What do you think about it?” It’s got to be built on a solid foundation of listening. “What are you thinking about?” So the brand can go away and think about “How might we fit into that?”
This is arguably one of the strengths of social media forums and reviews: brands can’t talk back! The channel can’t be repurposed as a matter of comms and CSR. It’s just there for listening. So what can you get if you do that?
There’s value in social media reviews yet
Looking back to the book “Absolute Value’, it ultimately reaches a conclusion that’s still good news for market research.
“Today, products are being evaluated more on their “absolute value, their quality,” Dr. Simonson said. Brand names mean less. The results suggest that companies should spend less money trying to shape consumer opinions in traditional ads, he said, and more on understanding what and who are shaping those opinions.”
Now, we disagree with Simonson & Rosen on advertising’s supposed death – how do people start talking about a new product on a forum if they’ve not been exposed to it through broadcast media to spark an interest?
But it’s a useful set of pointers for what might be worth researching.
And as Simonson & Rosen indicate, social forums and reviews are a huge information resource for this kind of study. Sometimes they’re the most valuable sources for our research projects. Despite the rise in social media and social networks (Twitter, Tumblr, Instagram and so on), forums, reviews and blogs continue to be active sites of discussion – “Web 2.0” isn’t dead! Forums can be particularly valuable for research because they’re more in depth – people talk about details that couldn’t fit into Twitter’s 140 characters or that might bore their Facebook friends.
What can you get out of it as a researcher?
Firstly forum discussions give great insight into “System 2” decision-making: the rational thought-out stuff. This is most relevant for higher-ticket purchases such as mobile phones or personal electronics such as high-end audiophile headphones, or hair styling tools.
What kinds of things can you learn?
- What factors do people mention most often in their comparison and decision making process? E.g. price, design, particular functionalities,
- Which brands do people mention as the competitive set?
- What strengths and weaknesses are associated with each brand?
- What are the tensions and trade-offs they articulate? E.g. in headphones, it might be a fundamental tension between “warmth” and “clarity” of the sound. These “insights with tension” can be great creative inspiration for later product and comms platform development.
- Who are they citing as people they’ve listened to? E.g. “My brother said that __”
- What are the expert sources they’re citing, e.g. websites, reviews, or other forum members
But even for FMCG products, there’s sometimes a treasure trove of information. Take a look at this Mumsnet thread on shrinking chocolate bars with the above questions in mind.
But there’s another side as well – the bigger picture. Are you really listening if you just use forums to answer a fixed set of questions? They contain a wealth of wider information about the context of people’s lives and the topics they’re passionate about. If you’re making baby buggies, read up on what mums say about the pleasures and difficulties getting out-and-about – and the wider question of how people negotiate the role of “staying at home” or “going out to work”.
Or sites such as Money Saving Expert‘s forums contain lengthy personal financial narratives, telling the story of how people ended up deep in debt – or the dreams of financial security they aspire to. It’s not exactly the quick, instinctive decision-making of the “System 1″ brain – but it is highly emotive.
From the “mortgage-free wannabees” trying to make my dream a reality!! to threads talking about Why do you spend?, the wealth of insight is astounding. Often people talk about the families they grew up in and how this shaped their attitudes to money, spending and status – and they talk about how they’re trying to do better for their kids. Sometimes it’s pretty heartbreaking stuff to read.
Simonson & Rosen’s book, Absolute Value, is a useful reminder that consumer decision-making involves information gathering from many sources, many or most of which brands can’t control. It pushes the emphasis onto improving customer service and after-sales care over comms and marketing. Ultimately it’s a case for improving the product and product experience – make the object talk-worthy enough that it spawns all the positive word-of-mouth needed.
That said, all these things remain part of “brand”, the nexus of perceptions and associations people hold about a product. The claim that “brand is dead” is, shall we say, premature.
Where do we disagree with Simonson & Rosen? It’s not a brand new idea (Cluetrain got their first), and it holds more true for higher-spend, features-led techie product categories than others.
But mostly we disagree with the emphasis on rationality. Really studying social media forums shows that, yes, a certain amount of rational comparison and assessment is going on, to be sure. But forums and reviews say just as much about the emotive sides of purchase too – needs, hopes, fears. We wouldn’t call this irrational behaviour: what a purchase delivers socially and symbolically is just as much a source of value – and a valid reason to buy it - as its objective functionality. That’s brand again.
And that’s why brands need to listen to people on forums.
Stay in touch with Jess on LinkedIn or Twitter.
Or, if you think forums could hold the key to your brand’s business challenges, speak to our Client Director James Hirst, on 07961 527 366 or email firstname.lastname@example.org.