Is Product Management the future of Product Marketing ?

Let’s start with a question: In the era of digital and personalized, does talking of Product Marketing as “the process to promote and sell a product to an audience” still make sense? In other words, can we say that the shift from product-centric to customer-centric driven marketing is going to kill the mass marketing as we know to today?

Modern marketing is born with the advent of mass-production. The availability of goods and services at low cost to all population raised the need, for the producer, to differentiate their goods and services and promote them to a much larger audience. Mass-marketing was born.

Mass-marketing is driven by the product. Product is the object to promote and sell. Once the product is defined, marketing teams identify the broad market segments to target, set prices and promotions, and plan mass market campaigns sing several channels. The interaction model is one-way: products are pushed into the selected segment through mass market campaigns (“direct marketing”).

This process has some terrific advantages: from one side, it allows producers to easily reach a huge quantity of customers; from the other, it allows consumers to be informed about different products.

The drawback of the process is that, due to the high number of similar products available and to the widespread use of these strategies, customers are constantly bombarded by an overwhelming amount of promoted goods and services, for the main part, irrelevant to them. Customers are increasingly frustrated by generic offers they are bombarded by marketers. The result is that mass marketing and traditional marketing campaigns are no longer effective.

What the customers want today

We now know that customers don’t want any more generic products, they do want personalized products and offers, at the right price and, more important, at the right moment.

Customers want is to have the old shop owners model back, where shop owners were intimately familiar with them, knew their needs and their tastes. Using this information, shop owners were able to select and propose the right product to any customer, preventing excessive offering or even spamming. Each customer wants someone (or something) helping:

• to identify the right products which fit customer specific needs
• to find this product across a multitude of products and offers that seems all equal.

In other words, Customers are looking for personal shopping assistants able to provide expert advice and give the highest possible level of customized and personal customer service to individual shoppers. By giving personalized attention and providing advanced knowledge of products, services and trends, Personal Shoppers became trusted consultants for shoppers who wanted an enhanced shopping experience.

What companies are doing

Companies are slowly changing their mindset: they are switching from a product-driven perspective to a customer-driven marketing strategy:

1. Digital marketing is moving from traditional mass-market campaigns to personal recommendations activated only when customer is willing to buy (i.e. when he/she is searching for specific goods)
2. Analytic marketing is shifting from traditional segmentation to micro-segmentation driven by customer’s profiling and preference analysis (i.e. customer’s preference are used to create micro-segments)
3. Customer`s Lifecycle Value (CLV) is becoming a key metric for companies (as Loyalty members produce 30-50% of the whole company`s revenues, merchants are focusing on making them happy, rather than on acquiring new random customers.
4. Customer Experience has replaced Service Level as Quality KPI for all companies

But more advanced companies are doing more. They are not pushing single products anymore, they are pushing their customer experience quality:

• Retail company are promoting themselves as the best customer experience company, that means the best place where to shop
• Producers are presenting themselves as the company which understand your needs. You don’t buy anymore a smartphone for its features, you buy it for the “experience” it provides to you.

Technology, again, should be the game-changer: in the last few years we have saw a proliferation of personal assistant devices: Siri, Cortana, Ok Google, Alexa and more. They are a tremendous mechanism to push people to shop at a certain brand. If Alexa is good in answering my questions, then its recommendations will also be worth-following.

As these electronic personal assistants will become smarter at knowing your needs, preferences and behaviors, the better they will be able to deliver great customer experience. And the better the experience they deliver, the more indispensable they will become to consumers’ lives.

The explosion of Bot and Artificial Intelligence demand is not driven by cost reduction but by the engagement opportunity these technologies offer.  

If some companies, such as Amazon and others, are betting on personal assistants as a mechanism to increase customer engagement, what are “pure” product companies doing?

They are also switching to increase the customer engagement too, not only through Brand promotion (i.e. using Social Media). The idea is to create customer loyalty to the company and not to the product of the company.

But Producer companies are also changing the way their products are created. The customer preferences and feedbacks are no longer only used to create targeted customer pools for new products, but to understand customer’s behaviors and preferences and consequentially to create personalized product. For example, Zara (fashion company) uses some of its loyalty customers as reference for future fashion products. New cloth lines are developed on the bases of this reference customers and proposed on small scale in other Zara shops. If sold, Zara starts a mass production, otherwise they move to other cloth lines.

Personalization is the key to customer loyalty.

The future of Product Marketing

All this being said, it is reasonable to assume that Product Marketing as we know it is doomed to disappear. The whole marketing is changing, not only because it will be more and more digitized but also because traditional methods are going to be replaced by new ones. Product marketing activities will be absorbed by Product Management.

• Segmentation will be used together with preference analysis to better understand customer’s needs and to build micro-segments based on customer’s preferences
•  Social engagement will increase its importance as products loyalty will be replaced by brand loyalty.
• Recommendation engines will be more and more important to promote the right product at the right moment. Customers activity will trigger sales interaction, not campaigns
• Through channel optimization, it will be possible to reach out to your customers, and to promote your brand`s positive message, in an incredibly effective way.
• Listening will become more important than talking because the information you gain by asking questions will help companies create extensive insights on their customers. Electronic Personal Shoppers will use these insights to recommend new offerings and store events to their clientele. Because of the appropriateness of your recommendations, customers will greet your communications with positive expectation and enthusiasm.
• Companies will continue to look for new customers, but their efforts to acquire new customers will be balanced by their efforts to keep them. This means the SEO and Search engines will continue to dominate the scene, but customer loyalty will be more important than customer acquisition
• Company KPIs will be revolutionized too: emphasis will more from pure revenue analysis to customer cycle value analysis

Traditional marketing technique will not be abandoned in one day! The coexistence between mass marketing and personalized marketing will continue for a long time but definitively the shift will continue relentlessly. The future will belong to the electronic personal shopping assistant not to the products. Traditional product marketing is going to die. Its activities will be “transfer” to product Management and to Communication marketing.