In recent times, the Harvard Business Review has reported on a so-called “new era” that is emerging in marketing. In an HBR article co-authored by Joshua Bellin, Robert Wollan and John Zealley, three marketing science specialists at Accenture, the notion of marketing as a set of sequential trends that overtake and supersede one another is covered.
What are those sequential trends? The HBR article outlines five of them and dubs them “eras,” each of them evolving with increasing rapidity:
- Mass marketing (up through the 1970s) – The era of mass production, scale and distribution.
- Marketing segmentation (1980s) – More sophisticated research enabling marketers to target customers in niche segments.
- Customer-level marketing (1990s and 2000s) – Advances in enterprise IT make it possible to target individuals and aim to maximize customer lifetime value.
- Loyalty marketing (2010s) – The era of CRM, tailored incentives and advanced customer retention.
- Relevance marketing (emerging) – Mass communication to the previously unattainable “Segment of One.”
Clearly, it’s technology that has been the catalyst for change as we migrate from one era to the next. Mass marketing was a staple for the better part of 40 years, what with radio/TV and newspaper advertising being paramount. But subsequent eras have come along much more quickly as we’ve moved from market segmentation to customer-level marketing and loyalty marketing.
As for the emerging era of “relevance marketing,” new techniques are enabling marketers to exploit explicit data by name (such as previous purchase history and other known information) along with implicit data (additional information that can be inferred by behavior).
The question is whether this kind of “relevance” will engender long-term wins with today’s customers. The same technology that enables advertisers to target “Segments of One” is what enables those very targets to weigh the worth of those messages, discounts and offers so that they can find the best “deal” for themselves in their exact moment of need.
As far as the customer is concerned, wholesale digitization means that last week’s “preferred vendor” could be next week’s “reject” — with “loyalty” standing at the wayside holding the bag.
The danger is that for the seller, it can rapidly become a “race to the bottom” as buyers’ spontaneity erodes profit margins while the brand goodwill dissipates as quickly as it was created.
Marketing thought leaders Jim Lecinski, Gord Hotchkiss and several others have referred to this as the “zero moment of truth” – and in this case the “zero” may also be referring to the seller’s profit margin after we’ve progressed through the five eras of marketing that bring us to the “Segment of One.”
What are your thoughts about where marketing is ending up now that technology has given companies the power to micro-target — particularly if it means profit margins declining to their own “micro” levels? Please share your thoughts with other readers.