Success boils down to the little matter of trust

By SIMON HENDERY

Alan Mitchell has a solution to advertising overload - but he admits it is one the industry may not want to hear.

While corporates put huge efforts into researching the effectiveness of their marketing campaigns, few bother to gauge effectiveness from the consumer's perspective, he told New Zealand audiences this week.

The UK-based marketing writer and author, who is a regular contributor to specialist publications including Marketing Week, New Media Age, and Brand Strategy, was brought to New Zealand by the Association of Market Research Organisations and spoke to about 400 marketing professionals at functions in Auckland and Wellington.

His message: the traditional model of marketing which has served both buyers and sellers well for the past century, has had its day.

"In the whole area of identifying and meeting people's needs, perhaps we need to rethink the processes even more fundamentally than we have done," he told the Business Herald.

"Now, when you have [production] over-capacity and you've got advertising overload, the win-wins that were there are becoming win-losses and that's a problem."

He cites two of the world's great retailers, Tesco and Wal-Mart, as examples of companies making the transition to looking at marketing from their customers' perspective.

Wal-Mart, which he described as the world's largest marketing company, was "an information processing business - that's how it makes its money". The US retailer's success lay in its ability to push product ranges customers wanted. "It is still operating on anonymous mass data - it knows exactly what is being sold [through its stores] but doesn't have a clue who is buying it."

Tesco, on the other hand, used data collected about individual shoppers using its Club card "to identify the needs of the individuals it is connecting with and using that data to drive its operations".

Historically companies have seen their core assets as their plant, products and infrastructure, but smart operators now realised that their real core asset was the relationship they had with their clients.

"The customer trusts these guys and says: 'Can you do something else for us because I trust you'.

"The really powerful businesses of tomorrow will be relationship businesses where there is this trust."

Mitchell pointed to German supermarket group Aldi, which sells mainly non-branded goods, as another company turning the traditional marketing model on its head. Marketers had developed the "greedy" mentality that they could charge a premium for a brand."[Aldi] have come in and said it's not clever to buy a brand, it's smart to buy on value - they're changing the emotions."