Marketing 4.0

1. The Digital Economy Demands a New Marketing Approach: Marketing 4.0

Marketing 4.0 is a marketing approach that combines online and offline interaction between companies and customers.

Paradigm shift. The digital economy has fundamentally altered the marketing landscape, necessitating a new approach that blends traditional and digital strategies. Marketing 4.0 recognizes that while digital interaction is crucial, offline touch remains a strong differentiator in an increasingly online world.

Key elements:

• Integration of online and offline customer experiences
• Emphasis on authenticity and transparency
• Leveraging machine-to-machine connectivity and artificial intelligence
• Focusing on human-to-human connections to strengthen engagement

Marketing 4.0 adapts to the changing nature of customer paths in the digital economy, guiding customers from awareness to advocacy. It acknowledges that in a high-tech world, customers long for high-touch experiences, and products become more personalized as services become more personal.

2. Power Shifts to Connected Customers in a Horizontal, Inclusive, and Social Landscape

The transparency brought by the internet also enables entrepreneurs from emerging countries to draw inspiration from their counterparts in developed countries.

Democratization of influence. The digital economy has shifted power from vertical, exclusive, and individual forces to horizontal, inclusive, and social ones. This transformation has empowered customer communities, making them more vocal and less afraid of big companies and brands.

Key shifts:

• From exclusive to inclusive: Economic powers are more evenly distributed
• From vertical to horizontal: Smaller, younger companies can compete with larger, established ones
• From individual to social: Social groups wield more power than individuals

These shifts have radically changed the business landscape. Customer communities have become more powerful, freely sharing stories about brands. Conversations about brands are now more credible than targeted advertising campaigns, and social circles have become the main source of influence.

3. Paradoxes of Marketing to Connected Customers Require Balanced Strategies

Connectivity significantly reduces the costs of interaction among companies, employees, channel partners, customers, and other relevant parties.

Navigating contradictions. The connected world creates several paradoxes that marketers must address:

1. Online vs. Offline Interaction:

   • Online and offline experiences must coexist and complement each other
   • High-tech world increases demand for high-touch interactions

2. Informed vs. Distracted Customer:

   • Customers have more access to information but shorter attention spans
   • Challenge: Winning customer attention and creating meaningful brand conversations

3. Negative vs. Positive Advocacy:

   • Negative advocacy can trigger positive advocacy from loyal customers
   • Brands need an army of lovers willing to defend them in the digital world

Marketers must embrace these paradoxes, developing strategies that balance online and offline experiences, capture attention in a distracted world, and cultivate brand advocates who can counter negative sentiment.

4. Youth, Women, and Netizens are the Most Influential Digital Subcultures

Youth, women, and netizens have long been researched thoroughly by businesses but typically as separate customer segments. Their collective strength, especially as the most influential segments in the digital era, has not quite been explored.

Leveraging key influencers. Youth, women, and netizens (YWN) represent the most influential segments in the digital era, each playing a unique role in shaping market trends and brand perceptions.

Characteristics and influence:

• Youth: Early adopters, trendsetters, and game changers
• Women: Information collectors, holistic shoppers, and de facto household managers
• Netizens: Social connectors, expressive evangelists, and content contributors

To effectively engage these segments, marketers should:

• Target youth to gain mind share and set trends
• Leverage women's influence on household decisions to grow market share
• Utilize netizens' social connections to expand heart share and amplify brand messages

Understanding and engaging these influential subcultures is crucial for success in the digital economy.

5. The New Customer Path: From Awareness to Advocacy (The Five A's)

The ultimate goal of Marketing 4.0 is to drive customers from awareness to advocacy.

Reimagining customer journey. The traditional AIDA (Attention, Interest, Desire, Action) model has evolved into the Five A's: Aware, Appeal, Ask, Act, and Advocate. This new framework reflects the connectivity among customers and the non-linear nature of the modern customer journey.

The Five A's:

1. Aware: Passive exposure to brands
2. Appeal: Short-term memory or brand attractiveness
3. Ask: Active information seeking
4. Act: Decision to purchase
5. Advocate: Loyalty and recommendation

Key considerations:

• The path is not always linear; customers may skip stages or move back and forth
• Social influence plays a significant role, especially in the Ask stage
• The ultimate goal is to convert customers into loyal advocates

Marketers must understand and optimize each stage of this new customer path to effectively guide customers from awareness to advocacy.

6. New Productivity Metrics: Purchase Action Ratio (PAR) and Brand Advocacy Ratio (BAR)

PAR measures how well companies "convert" brand awareness into brand purchase. BAR measures how good companies "convert" brand awareness into brand advocacy.

Measuring marketing effectiveness. Traditional metrics like brand awareness and customer satisfaction are insufficient in the digital economy. PAR and BAR provide more comprehensive insights into marketing productivity.

Calculation and significance:

• PAR = Number of customers who purchase / Number of customers aware of the brand
• BAR = Number of customers who advocate / Number of customers aware of the brand

Benefits:

• Evaluate effectiveness in driving customers from awareness to action and advocacy
• Identify bottlenecks in the customer journey
• Guide resource allocation for marketing activities

By focusing on these metrics, marketers can better understand their conversion rates at each stage of the customer journey and make data-driven decisions to improve overall marketing productivity.

7. Human-Centric Marketing Builds Authentic Brands as Friends

Brands need to become authentic and honest, admit their flaws, and stop trying to seem perfect.

Humanizing brands. In the digital era, customers seek brands that behave like humans—approachable, likeable, and even vulnerable. Human-centric marketing addresses not only customers' functional and emotional needs but also their latent anxieties and desires.

Six attributes of human-centric brands:

1. Physicality: Unique and attractive brand identity
2. Intellectuality: Innovative problem-solving abilities
3. Sociability: Engaging in meaningful conversations
4. Emotionality: Evoking emotions and inspiring action
5. Personability: Self-awareness and authenticity
6. Morality: Strong ethical principles and integrity

To build authentic, human-centric brands, marketers must:

• Understand customers through digital anthropology (social listening, netnography, empathic research)
• Develop brand attributes that reflect human qualities
• Create meaningful connections that address customers' deeper needs and desires

8. Content Marketing Drives Brand Curiosity Through Storytelling

Content marketing shifts the role of marketers from brand promoters to storytellers.

Engaging through value. Content marketing involves creating, curating, distributing, and amplifying content that is interesting, relevant, and useful to a clearly defined audience. It aims to create deeper connections between brands and customers through storytelling.

Key steps in content marketing:

1. Goal setting: Define clear objectives aligned with business goals
2. Audience mapping: Identify and understand target segments
3. Content ideation and planning: Develop themes, formats, and narratives
4. Content creation: Produce high-quality, original content
5. Content distribution: Utilize owned, paid, and earned media channels
6. Content amplification: Leverage influencers and engage in conversations
7. Evaluation: Measure performance against set goals
8. Improvement: Continuously refine strategy based on insights

Effective content marketing provides value to customers while subtly promoting the brand, fostering curiosity and engagement throughout the customer journey.

9. Omnichannel Marketing Integrates Online and Offline Experiences

Omnichannel marketing—the practice of integrating multiple channels to create a seamless and consistent customer experience.

Seamless integration. As customers become increasingly mobile and channel-agnostic, marketers must provide a consistent experience across all touchpoints. Omnichannel marketing breaks down channel silos to create a unified customer experience.

Key trends driving omnichannel marketing:

1. Mobile commerce in the "now" economy
2. Bringing "webrooming" into offline channels
3. Bringing "showrooming" into online channels

Steps to implement omnichannel marketing:

1. Map all possible touchpoints and channels across the customer path
2. Identify the most critical touchpoints and channels
3. Improve and integrate the most critical touchpoints and channels

Successful omnichannel marketing requires organizational alignment, breaking down silos, and leveraging big-data analytics to optimize the customer experience across all channels.

10. Mobile Apps, Social CRM, and Gamification Enhance Customer Engagement

The success of content marketing over traditional marketing is that it is highly accountable; we can track performance by content theme, content format, and distribution channel.

Driving loyalty. Engaging customers after the initial purchase is crucial for building brand affinity and advocacy. Three key techniques have proven effective in the digital era:

1. Mobile Apps:

   • Enhance digital customer experience
   • Use cases: content delivery, self-service, product integration
   • Design considerations: use cases, functionalities, user interface, back-end integration

2. Social CRM:

   • Manage brand interactions and build relationships through social media
   • Key differences from traditional CRM: customer-driven, conversational, always-on
   • Implementation steps: build sense-and-respond capabilities, develop empowered agents, leverage community involvement

3. Gamification:

   • Apply game principles to non-game contexts
   • Common applications: loyalty programs, customer communities
   • Benefits: increased engagement, motivation for desired behaviors

By effectively implementing these engagement techniques, marketers can create more meaningful connections with customers, driving long-term loyalty and advocacy.

Last updated: August 8, 2024