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The Death of Advertising: is Customer Experience King?

As traditional advertising becomes less effective, online reviews which reflect quality customer service are imperative in reaching potential customers.

The old model of advertising is simply not working – click-through rates on digital ads average as low as 0.15%, while major advertising agency M&C Saatchi revealed that its revenue growth in 2012 had come from CRM and digital, rather than traditional advertising.

What’s Killing the Humble Ad?

The customer journey has now grown more complex. Back in the day of a dial-up tone, consumers made purchase decisions by getting personal recommendations from friends, via publications or from adverts.

Nowadays, a consumer will engage with many different marketing channels over several days. Advertising, even though it still has some value, is just one of many touch points on a consumer’s buying journey.

Power to the Customer

The recession has created a shift in power between businesses and consumers. For starters, consumers more than ever demand value for money – 84% of people say they would now happily purchase a store brand or value option.

The way people shop is also changing. Consumers no longer follow a straight path to purchase and will interact with brands across:

  • Different devices – 80% of tablet owners in the US have used their tablet to research and buy products.
  • A variety of mediums such as social media, apps, blogs and video. In fact, 68% of 18-to-34-year-olds were at least somewhat likely to make a purchase after seeing a friend’s post about a product.

Retailers who haven’t adapted to this new way of shopping have failed. The demise of big high street stores such as Comet and HMV show what happens when brands fail to give consumers what they want, when they want it.

Communicating With New Consumers

So how do you ensure you attract the attention of this new consumer? Well there’s never been a better time to invest in customer service.

Start listening to your customers and encouraging them to review your business if they’ve had a good experience.

Online review community, Trustpilot, recently commissioned some research which shows a positive review from a real person has a much bigger impact on purchasing decisions than traditional advertising. They discovered that:

  •  77% of UK consumers using the Internet check online reviews before making their purchasing decision.
  • 94% of Brits won’t buy from you if you’ve had negative reviews.

Negative reviews can be good for companies though – as long as you don’t ignore the criticism. The same research discovered that responding to negative comments helps improve sales –15% of consumers are more likely to do business with a company after reading a response to a negative review that resolves the problem.

Things to think about:

  • While the old advertising model isn’t totally dead – in 2013 brands upped their video ad budgets by 65% from the previous year – the days of telling people what to think is over and a new era of transparent communication has begun.
  •  Allowing users to review your product – and responding to any negative experiences – alongside more traditional marketing channels such as online ads and email marketing will potentially increase your revenue.
  • It’s not as hard as you think – it only takes three to four positive reviews of a company for a consumer to be influenced to buy from them.

If you want to understand more about the power of online reviews, download the full Trust Economy Report by Trustpilot now.