Absolute Value

Absolute Value:  What Really Influences Customers in the Age of (Nearly) Perfect Information, by Itamar Simonson and Emanuel Rosen, HarperBusiness 2014

This is where "MadMen" meets Big Data, where our quaint and fun ideas about marketing get broken down into bytes of tiny, tiny, extremely small individual totally personalized info data bits.  It’s up to the marketers to sort it all out, move it into meaningful chunks, right?

Well, not exactly say authors Simonson, also a Stanford professor, and Rosen.  Not only has marketing completely changed, but so have we, The Consumers!  Great!  That means we can get exactly what we want when we want it, right?  Automobiles, clothing, healthy snack bars, kitchens, jewelry – I can choose the colors and the feel for all of it!  Hah!  I love this new and very personal marketing world!

But wait just a minute…. It’s not all that irrational, you say?  The authors argue and illustrate how consumers are now empowered to take advantage of three trends:

1.     The rise of reviews from other users

2.    Unprecedented access to expert opinions

3.    Easy access to friends and other user communities on social media.

Can you imagine the classic exploding Ford Pinto gas tank story happening today?  How long do you think before Twitter or even Facebook would have publicized the first Pinto death story?  And so the authors believe that the new reality not only changes Marketing 101 forever, but it also has immediate and far-reaching implications to improve consumers’ lives.  Comparison shopping on-line for cameras and flat screens, for instance, allows consumers to opt out of “safe” middle offerings in order to get exactly the right features and pricing. 

What does the emergence of almost perfect information do to the old safe concepts of branding, positioning and customer loyalty?  And has brand loyalty gone the way of the Studebaker, the Singer Sewing machine or the Hamilton watch?  Yes, and say the authors, if you once relied on brand loyalty to schedule a hotel or airline – Hilton or USAir, for instance- all it takes is one really big snowstorm and a day spent in the waiting area to obliterate whatever happy warm feelings you and USAir once shared.  Next time you’ll book with On-time and Cancelled Flights Percentage Data in mind!

The case examples in this book are colorful and persuasive – ASUS, Yelp, Hermes vs. Mercedes, Apple, Krispy Kreme, and sadly, Samsung.  As Matt Richtel in the Dec. 7 2013 New York Times said, “You are no longer the sucker you used to be.”