Which of the following two questions are you or your friends more likely to ask on Facebook or Twitter?
A. What brand of orange juice should I buy this morning?
B. Anyone know a quality laptop I can buy new for under $900?
Of course the answer is B. Two researchers, Itamar Simonson and Emanuel Rosen, explain this with the letter O.
If you're making any kind of purchasing decision, there are three factors that usually influence that decision, write Simonson and Rosen in the Harvard Business Review. The first is your past experience, which they label P. Another is info you get from marketers, which they call M. The third is info you get from other people, which is O. "Consumers are less likely to consult O about purchases that are not very important to them--most people don't go on Facebook or Twitter to ask 'What kind of paper towels should I buy?' or 'What brand of detergent do you like best?'" they note.
All of which leads to the first rule, which is, indeed, brought to you by the letter O:
1. Determine which of your prospective customers are O-dependent.
Commodity goods (milk, OJ) are more P- than O-dependent. In addition, a product's level of O-dependence might differ based on consumer demographics or the distribution channel. For instance, some consumers are more susceptible to impulse buys in brick-and-mortar settings; others, in the exact same stores, might whip out their phones, photograph the product under consideration, and ask Facebook or Twitter if they should buy.
If your product is O-dependent, you face a marketing challenge: in the era of online reviews and social media, you've lost control of the conversation. "Consumers no longer listen only to companies," says Brian Uzzi, professor of management and organizations, and also of sociology, at Northwestern University's Kellogg School of Management.
Part of calibrating your customers' O-dependence is learning which ones are most likely to impulse buy (online or in a store), and which ones, no matter what, will research the heck out of a product by consulting friends and online reviews. The answers are often nuanced. A consumer might behave differently on her birthday, or close to a holiday, or on a sunny day, or on the day after her favorite team wins, than she would at other times of year.
Likewise, the dude who downloads music on impulse might need a thousand recommendations before buying a memoir. Increasingly, says Uzzi, companies will have access to data providing individualized clues to these answers, thanks to the data-gathering capabilities of wearables and mobile devices. Much of his work at Kellogg is devoted to what he calls "the ultimate data set" and what companies, nonprofits, and governments can learn from it.
2. Master the subtle art of influencing influencers.
To demonstrate the newfound power of O-influencers in consumer decision making, Simonson repeated an experiment he first ran in 1992. In the earlier experiment, Simonson and psychologist Amos Tversky asked one group to chose between two cameras priced at $169 and $239. A second group could also choose a third camera priced at $469.
This is a common experiment in "anchoring" a price with three choices. As you probably guessed, the middle-priced $239 camera was far more popular than the $169 camera in the second group. Pricing researchers generally call this the compromise effect or anchoring effect.
In 2012, Simonson and PhD student Taly Reich repeated the experiment. This time, both groups got to browse on Amazon for other cameras and user reviews. The compromise effect vanished. Participants became more O-dependent, basing their decisions not only on price, but also on the camera's features and customer reviews--"factors beyond a marketer's control," write Simonson and Rosen.
Which is why savvy marketers now realize it's their job to influence user reviews. But there's a danger in trying to game the process by paying undue attention to powerful influencers--those consumers and bloggers who post respected reviews in their product categories. Uzzi says he knows of one prominent hotel chain that reaches out to these influencers and compensates them for staying at the hotel--ostensibly in exchange for their feedback. What goes unsaid is that the hotel hopes the influencers will post favorable reviews.
The risks of this strategy are clear. "What if your competitor is inviting the same people to their hotels?" asks Uzzi. Then there's the potential that the not-quite-payola scheme becomes public. Consumers, especially millennials, are already suspicious of online ratings; the last thing any company should do is try to rig them. "What millennials want (authenticity, honesty and credibility) [is] often at odds with the orchestrated outreach of marketing," writes digital marketer Jonathan Lacoste.
What, then, is left for a marketer to do? One approach is to stay active wherever consumers review your product. Tuft and Needle, a Phoenix-based manufacturer and seller of mattresses founded in 2013, responds quickly whenever a customer posts a cranky testimonial. What most often ensues is a public dialogue, in which the company addresses the complaint and pleases the customer, turning the detractors into evangelists. Now, that's marketing.
Another approach is to act like an artist, creating marketing materials with the aim of amusing, enriching and inspiring your customers--all without asking them to buy. Patagonia's documentaries are one example. Make no mistake: The films are clearly labeled as Patagonia products, and their themes--athletic protagonists in breathtaking natural settings--dovetail with Patagonia's brand and mission. But when you watch the movies, you feel as if you're watching a bona fide documentary about a person and a place, not a commercial.
"It's important to have a really powerful spokesperson and story to act as a portal and bring people in," says Hans Cole, Patagonia's environmental advocacy and campaigns manager. "Someone who's devoted their life to the sport or experience and now loves a place so much, they're willing to protect it. We've been seeking out those types of stories."