Invest in Your Customers More Than Your Brand - Michael Schrage - Harvard Business Review

by Michael Schrage  |  

To appreciate how broken most contemporary models of advertising and promotion have become, listen to Jeff Bezos complain about how Amazon's core values are misunderstood. "One of the early examples...was customer reviews," he recalls. "One [critic] wrote to me and said, 'You don't understand your business. You make money when you sell things. Why do you allow these negative customer reviews?' And when I read that letter, I thought, we don't make money when we sell things. We make money when we help customers make purchase decisions."

Exactly. The overwhelming majority of advertising / promotion / marketing / branding investments and expenditures most organizations make today are more about "selling things" than "helping customers." What do you think customers find more appealing? Amazon invests accordingly. Customers aren't idiots; they know when they're being sold.They're both smart and wired enough to seek out — and appreciate — quality assistance.

Consider Amazon's recommendation engines . They're "membrains" interfacing advice and influence: advisory in recommending reasonable and relevant options, influential by basing those options on the choices of people with comparable interests. Bezos' recommenders are predicated — and dedicated — to the proposition that providing meaningful contexts for customers makes purchasing decisions easier, safer and better. Shoppers are but a click away from learning more about their potential buy. That's compelling. Recommendation engines and reviews have both proven remarkably (cost)effective sales, marketing and promotional media for Amazon.

The secret of their success, of course, is that they don't sell. That insight's neither counter-intuitive nor paradoxical; it reflects the marketplace reality that customers can easily discover everything about your products and services that you don't want them to — whether it's true or not. Consequently, the Bezos bet is that relevant recommendations and reviews — good advice — are better brand investments than digital sales pitches. Close the deal by being openly helpful and helpfully open, not by "selling better." Amazon transformed customer behaviors and expectations by consistently favoring innovative "advice" over sales-oriented "advertising" and promotion. Credibility comes from commitment to facilitate decision, not calculate persuasion.

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