The Paradigm is Shifting—Pioneers Will Gain Advantages
Evidence is building that the paradigm of marketing is changing from the push strategies suited to the last 50 years of mass media to relationship marketing and now to advocacy-based strategies. The new age of customer power drives this shift. Managers need to decide where their firm should be in the spectrum from push/pull to advocacy. Intermediate points that build trust can be an endpoint in the trust level or can be evolutionary steps on the way to an advocacy strategy. But relationships are not likely to be enough to achieve success in a world of customer power.
There are advantages to being a first mover in this strategy space because when customers develop trust based on advocacy with a particular firm, they are not likely to quickly switch to a competitor. Trust creates a barrier to entry by increasing customer loyalty and by forcing would-be competitors to spend more time and resources to develop a trusted reputation. For second-movers, trust is a chicken-and-egg problem—they cannot create trust without a track record of sales, and they cannot gain sales without trust. Even if later entrants try to compete on the trust dimension, the pioneers will have a superior position if they continue to innovate in the design of advocacy programs. Therefore, not embracing advocacy creates a risk to firms’ growth and profits if competitors gain the trust of customers first. The movement to a trust-based strategy does present short-run challenges, but it also offers major long-run opportunities.
Although trust is not the best response in all situations, innovative firms are moving beyond CRM to implement advocacy-based strategies, and early adopters are formulating action plans to advocate and partner with customers. I predict advocacy will increasingly become the norm of behavior in the next ten years as the new paradigm becomes established and firms meet the threat (and opportunity) of growing customer power. Pioneers will gain advantages, but all firms will have to learn to compete in a world of trust.