The book: Absolute Value: What Really Influences Customers in the Age of (Nearly) Perfect Information – a provocative read about the new context of marketing today
The brains: Emanuel Rosen (author of The Anatomy of Buzz) and Itamar Simonson (a marketing professor at Stanford University’s Graduate School of Business) – a strong combination of a marketing practitioner and a academic researcher
The best bits: The primary thesis of Absolute Value is:
“The new information environment around us allows consumers to predict much more accurately the experienced quality (or absolute value) of products and services they consider getting…This means that consumers are likely to make better decisions (on average) and that marketing is changing forever because people will rely less on proxies for quality such as brand names, loyalty, or positioning.”
This perspective provoked two categories of responses in me. The first was strong agreement that consumers and marketing are very different today. There’s no doubt that the ubiquity of “nearly perfect information” means:
- “When quality can be quickly assessed, people are less hesitant to try something new, which means that newcomers like ASUS (makers of the Eee PC) can enjoy lower barriers to entry.” That ASUS was able to come from virtually nowhere and sell almost 5 million computers in less than 2 years is a testament to the power of positive consumer and expert reviews.
- A new framework and approach to marketing is needed. The authors introduce the Influence Mix, which explains that there are three influences on consumer decision-making — the individual’s prior preferences, beliefs and experiences (P), other people and information services in the form of reviews and expert content (O), and marketer-provided information (M) – and that marketers must be much more attuned to how to cultivate and manage O.
- “These days, even your last gig doesn’t matter that much anymore. Fortunately or not, it’s the absolute value of your current product that drives its success.” Companies can no longer afford to rest on their laurels and take customer loyalty for granted.
My second reaction to the book was skepticism at some of the conclusions that Emanuel and Itamar said derived from their thesis.
- They suggest that, because there’s “less sugar in our information diet,” consumers make purchase decisions more rationally now – and emotional appeal is “less effective when it faces meaningful competition from more ‘rational’ sources.” Although people now have much more information to guide their decisions, they remain fundamentally emotional beings and an emotional appeal remains more persuasive than a rational one. No amount of data about superior speeds and feeds will convince someone to buy a computer if they just don’t like it.
- They also believe that marketers should forgo setting target strategies and instead rely on organic segmentation, the natural self-selection that arises in the market. “You can sometimes be all things to all people…,” they write. Not only does this assertion not square with one of the fundamental roles of marketing (helping people find the products that are right for them), but it also neglects the tremendous cost of marketing to multiple consumer groups.
- “The need to target small niches and vertical markets in order to penetrate the early majority (in Geoffrey Moore’s adoption diffusion model) has simply declined” is another conclusion that just doesn’t make sense. The adoption curve has indeed flattened somewhat and the rate of adoption has accelerated in many categories, but that doesn’t mean that engaging certain groups won’t accelerate adoption. For example, targeting women who enjoying sharing healthy lifestyle tips with friends will certainly help boost the popularity of personal tracking devices like the FitBit. No smart marketer should pass up such an opportunity.
- Finally, I had to take issue with the following point because it can be misleading: “…Brand equity is just one element that will have a diminished role in consumer decision making. Related concepts that have been used to analyze brand performance, such as brand identity and brand personality, will correspondingly become less important…once absolute quality can be assessed more directly and accurately…” If brands are developed as simply cues for quality, then, yes, their power is diminishing. But if brands are cultivated as strategic platforms that inform every aspect of a company – its culture, its core operations, and its customer experience – then brand identity and personality remain vital to business success.
I asked Emanuel about this in our interview. Take a listen as he reacts to this broader view of brands, and explains more about his book and the points therein:
- the bottom line: I recommend all marketers read Absolute Value. There is a lot of eye-opening insight and helpful guidance for succeeding in today’s business context. But, do as I did — read it carefully and thoughtfully. Seek to learn, but draw your own conclusions. As the authors say themselves, “We’re sure will get some things wrong, and hopefully some things right. Our objective is not to pinpoint what will happen, but to think – and provoke thinking – about the future of marketing and consumer decision making.”