room44 innovates

Our passive drift towards a world where sensors, monitors and machine learning pose a real challenge to innovating companies.

Trust is a testimonial

The signals from our research on future trends tell us that commerce for new brands is going to get tougher. While shopping for consumer products is easier in many ways than it was a few years ago, it’s still a complex operation. We can all research online, visit stores and compare prices across media to get the best deal. You may resist a visit to the shops if you’re buying clothes, but Apple says that 80% of people who buy online have been into store first.

We read seller recommendations and take notice of peer testimonials. This might be the single thing that influences our final buying decision. Without buyer endorsements, we have learnt not to trust brand promises and to be wary of positioning statements that promise too much.

Trust is what everyone else does

So, we don’t trust things until someone else validates our decision. As James Clear says in his book, Atomic Habits, “we’d rather be wrong with others than right by ourselves” and this describes the problem facing innovators today.

Unless shoppers make independent judgements, we will all end up making the same decision and the biggest promoter will win out.

The industry that has evolved around these issues makes our lives harder still. We’ve all received advertising from brands who don’t mind where their address list came from. Scraped data is big business. Similarly, our passive drift towards a world where sensors, monitors, facial recognition, sat nav and machine learning push us into actions, is a real issue for innovating companies.

Trust in technology

Wearable technology is a relatively easy thing to spot. Phones, watches and tablets are part of the fabric of everyday life. As we use them, our behaviours are captured by some of the biggest data harvesters the world has ever seen: Facebook, Google, Amazon, Apple to name only the big few. These data-centric platforms have one objective: to advertise to you. Every feed you access is sending you adverts that respond to your search activity. You are being inexorably nudged towards a buying decision. You are sensing little acts of influence every minute of every day that you spend on a device.

Trust is a nudge in the right direction

If you are a brand and aren’t nudging your customer towards you, you are being nudged out of the market. If you’re a new brand, you have choices: stay local and grow organically, trade local and get ‘found’, or secure investment and dilute. It’s a tough one.

But all is not lost. Consumer inbuilt scepticism allows for some push-back. Why is your most frequently seen advert in your feed? Where does that email come from that reminds you it’s your friend’s birthday? Who knows that your car lease is due for renewal?

Our filters for advertising are as highly tuned today as they were when all we had to worry about were leaflets through the door and posters on the bus. But the volume of media we consume (estimated at @300,000 words per day, the same length as an average novel) makes it hard to resist buying something just to satisfy the pressure.

So, how do new brands break into a market?

There are many answers but the truth is, it’s going to take time. Tenacity, energy, creativity and bloody-mindedness will help. There are a lucky few who may gallop through this cycle and X Factor-esque quick wins may happen. Pragmatically, though, the best advice might come from the most unexpected philosopher of our time, Jack Reacher: “Hope for the best, plan for the worst.”

Target trust

Play the long game and build customer trust over awareness. Target trust over availability. In fact, target trust as your marketing collateral. It’s where ‘organic’ growth comes from and it doesn’t rely on digital endorsement, peer approval or huge media spend.

Future thinking. Future-proofing. It’s what we do.

Let’s be honest, innovation doesn’t interest most companies as much as sales.

Companies tend to inspect their future when they’re already seeing a drop in sales because their market moved on without them, or because they are doing really well and need to invest some profit.

It’s more often the former than the latter.

So, the first step to getting more customers through the (metaphorical or actual) door is to try to gain referrals. Even in the digital age, referrals and testimonials are the cheapest sales conversion tool. Cheapest, quickest, simplest.

Customer Experience Management

Customer Experience Management (CEM) became a thing for that very reason: to put some numbers around customer behaviours when referrals tail off.

A common acronym used is NPS – Net Promoter Score: the number given to the consumer’s response when asked if you did something right.

Primary research you can’t buy

I’ve got a friend who, like all of us, sits across many consumer segments and tells it differently to NPS.

He’s domiciled in the UK, spends a few months a year in the US, and travels across Europe for his work in SAP. Not your average consumer, but well placed to see good and bad treatment of customers by brands. Where the average shopper might have favourite stores in different towns, he has favourites in different countries. 

Last week I wrote a blog about the (Emotional Quotient) EQ factor and how it’s an emerging way of understanding and keeping customers loyal so you don’t need to keep looking for new ones. Afterwards, he and I got into an e-mail trail on the subject that I’ve reproduced here with a very few amends.

The message is: brands that are renowned for their good NPS performance need to wake up. Assumed bastions of great customer service aren’t doing so well and they need to work harder to stay in business. 
The chat started with this blog. Enjoy this particular perspective.


Is it great value for money, product quality, service or all three that makes consumers loyal to a brand?

Him. Very few have all three. LL Bean comes [to mind] right away.

Me: I wonder what LL Bean would have to do to lose the loyalty you’ve shown it since we first met [over twenty years ago]?

Him. Yes it’s hard to pick another company in the US. And difficult to pick one in the U.K. besides hotels and B&Bs – which still count as they are businesses. 

To me it’s a combo of value for price. And either never fucking up or, if they do, they fix it promptly and kiss your ass for next time. 

I find the kissing ass for the next time doesn’t happen much anymore. 

Still cheaper to kiss my ass and keep me as a customer than getting a new customer. Because I’ll refer the company if I like them. And the referral will be even better if they fucked up, fixed it and did something to keep my business 

There are hotels in Yorkshire and Scotland that get our repeat business.

Dead models

Volvo [cars] are great but not a UK business. And the [Volvo] dealership experience blows but that’s all over. Such an antiquated business model. Like real estate agents. 

The Paul chain in London is great. Does stuff to keep our business. But they are not UK either. 

Maybe John Lewis. But my negative experience with them when I first moved to the U.K. tarnishes their standing. Maybe I’m too tough therefore can never be satisfied. 

I’ll tell you my favorite section of the Saturday Times and I flip to it first: Customer service horror stories. And of course the [brands] always change their tune when the Times contacts them. I’ll never do business with Vodafone just from reading that over the years. 

Businesses always seem to be interested in new customers rather than retaining old. And now they are hot on data mining BLAH BLAH but core values that keep me as, not just as a customer but, a loyal customer meaning I recommend them to friends seem to have been lost. 

Take Amazon. I really don’t like them. 

I think they are having an overall negative impact. But most times I go to the store or online direct I get more expensive or out of stock product cheaper on Amazon. Free shipping (I’m in prime so my Dad can watch their stuff) and it’s usually in stock. 

Aviva insurance seems good but I’ve never claimed. I get loyalty discount.

CapitalOne credit card (US) is great. Cash back and the best exchange rate around. 3 decimal place from interbank and no fees. 

BA used to be awesome. They were the best at fixing problems and keeping your business That stopped mid 2000s.

Now they are just like everyone else but more costly. Steve (our local car service garage of choice) the mechanic has been good. He fixes bulbs on the car all the time at no charge other than the bulb. That (Volvo) car blows 5 to 7 bulbs a year. 

I’m still thinking about any company in the world I like as much as LL Bean. You can use a product for a year or more and can return it for a refund if you are not satisfied. I’ve never done that but they have replaced zippers on backpacks I’ve used for years. 

Zipper quality seems to have declined in recent years. 

The brands here are listed and tagged because this is useful, and primary, market research that they’d never receive by sending out a NPS questionnaire.

They’re very welcome to discuss this insight and how room44 can help them work our a consumer-centric plan. All they, and you, have to do is click here.

Future thinking. Future-proofing. It’s what we do.

What’s the difference between a headline and a trend? We all get a bit dazzled by hype. We tend to believe the headlines when the reality of a situation can be very different.

Trends are important when planning product and service development. Trends tell us what we may face as competition, as well as what the solutions our customers will be seeking might be.

Trends tell us how to anticipate how markets could evolve, be exploited and how we can influence them by delivering value.

Trends aren’t always easy to unpick, though. Here’s a current example: Amazon is the big news today. We see Amazon in every headline and we are told that the company will continue to be part of our lives, even if we can’t imagine how drones and no high street stores will change our world.

Anyone that follows Amazon knows that ‘fun’ is a big part of the corporate ethos and is probably a factor in its success. Who has begun to think that Jeff Bezos and fun go hand in hand? When Jeff goes, will the fun go too?

What we aren’t told is that Amazon is still, roughly, a fifth the size of Walmart. Amazon is growing at @50% year on year. Walmart is growing more slowly: about 2% year on year but from a much larger base. If the current rates of growth persist, Amazon won’t catch Walmart in size for almost half a decade.

Do we think Walmart isn’t already reacting to Amazon? That the largest grocery retailer in the world isn’t working on a strategy to ring-fence its business?

Another trend we read about is the experience economy: consumers spending money in places that offer a real and immersive brand experience (a bit like Walmart delivers). Amazon is a supplier of stuff we want, efficiently and without any real experience attached. In fact, almost none at all. Click and forget.

Once we get over the thrill of drones dropping off pizza and beer, we may want to go and see what’s new on the shelf. Maybe Walmart will develop a new reason for us to visit stores while delivering our groceries via their own drones. Maybe retail isn’t dead after all.

The future of the high street could actually be looking more interesting. Perhaps, when all the commodity chains have stripped their cost base so far that drone delivery and a website is all they have left, we’ll see an uprising of local, artisan, craft and quality makers. Maybe the rise of electric vehicles and taxation on mineral based fuels won’t be matched by the predicted range of batteries we’re told we should believe… or maybe batteries just won’t charge as quickly as we’re told they will so short shopping trips become attratctive again.

Perhaps quality producers of food, clothes, furniture, bespoke services… all the things we love to buy, but struggle to find among the coffee chains and estate agents, will start to look good to more people.

We could see a return to local specialisms based on produce available in an area. Maybe all those community experiments that have been tried over the years (see Transition Towns) will have their day. Maybe it’ll become easier for small producers to reach a shopping audience without the absolute need for e-commerce. Perhaps the trend towards taxing sugar in soft drinks will extend into processed foods and will persuade more people to eat better and shop more locally; shopping local begins to look good for another reason. Maybe shopping more critically will mean we need less plastic packaging.

Maybe we’ll all benefit from a hybrid of efficient delivery of staple items, and the experience of shopping and meeting people too.

I could go on. Trends are important, and it takes an enquiring mind to see past the headline and to where the unmet need is. Maybe we could have a chat about that.

Future thinking. Future proofing. It’s what we do.

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