5.3 Discussion

The marketing panel began with each panelist sharing his or her view of consumer power and how their company is responding to this power.

For example, GM is embarking on trust-based marketing with its new Auto Choice Advisor. Mr. Vince Barabba, General Manager, Corporate Strategy and Knowledge Development at General Motors, explained how the Auto Choice Advisor (ACA) works. The ACA is an online trust-based advisor. It is designed for people who are shopping for a new car but who are not sure which makes and models might suit their needs. At the ACA website, potential car buyers answer a few questions, such as how they plan to use the car, what features they want, and how much they are willing to spend. Based on their answers, GM shows them which five car models match their needs best (out of 150 makes and models available from all manufacturers). What is unusual is that GM cars do not show up on the recommended list unless they meet the consumer's criteria.

For GM to offer such an unbiased recommendation service (using impartial data from JD Powers) is surprising to many companies.

Isn't GM possibly sending potential customers to the competition? But offering unbiased information is the heart of trust-based marketing. In addition, by providing trustworthy information, GM hopes to establish a dialogue with customers. Personal communication with customers is an important part of trust, Mr. Barabba said. The ACA establishes a dialogue with customers, a dialogue that complements the market research data which GM gathers.

For example, in the dialogue with consumers, GM learns consumers' true preferences. If GM does not already have cars that meet those preferences, then GM learns about that gap immediately with ACA. Finding out early gives GM the ability to respond to that need. It also gives GM the opportunity to modify an existing vehicle in a way that meets those emerging requirements. As soon as the car is available, GM can make its presence known on the ACA. Thus, consumers find out about the new product very quickly.

For Mr. Jeff Katz, CEO of Orbitz, providing unbiased, trustworthy information is imperative. Orbitz is a completely Web-based business and was formed by five competing airline companies (United Airlines, American Airlines, Delta, Continental, and Northwest). Katz shared evidence of the growing power of consumers. He explained that the average travel shopper visits 3–4 websites before making a travel purchase. The amount of travel purchased on the Web in 2005 is projected to be $50 billion, with the industry reaching $25 billion in 2002.

Orbitz, in business since 2000, sold $3 billion in travel and has 1 million customers each month. "If you can offer unbiased information in the delivery of the product, and offer customer care while the consumer consumes the product, you will have a trusting relationship," Katz said. Orbitz offers a customer care program that includes highway information and air systems alerts to customers, warning them of any potential delays or developments that will affect their travel (such as air traffic controller strikes in other countries.) The importance of the customer care dimension is increasing. Orbitz offers not only low fares, but adds a dimension of service that eases some of the hassles of travel. That service differentiates Orbitz from the competition.

Dr. Melanie Kittrell, executive director of eBusiness Strategies and Solutions at Merck & Company, Inc., provided further evidence that demonstrated the growing power of consumers. Some 70–100 million people in America are going online to find health information, she said. "People search for information about treatment options, and that information impacts their decision-making. The appetite for healthcare information is compelling pharmaceutical companies to move online and provide a rich source of information about their products. Many pharmaceutical company sites started as brochureware, but now they are much more interactive. Consumers now get a more personalized experience and receive information that they can use with their doctors."

Merck has created websites targeted to consumers, and it has also created websites for physicians, such as Merck Medicus. The goal is to provide evidence-based information in an advertising-free environment, which builds trust and credibility. As Merck provides this information, it must also be vigilant because pharmaceutical companies operate in a very regulated environment. Providing robust information but respecting the regulations is especially important.

Finally, Merck is moving away from a product-centric approach toward a more customer-centric approach. That is, instead of using the web to inform customers about each of Merck's products, Merck is creating sites that support interaction and dialogue. In this customercentric view, the goal is to match customers with products, moving away from brochureware toward enriched medical information sites that help people make decisions. Kittrell showed a slide illustrating the move from brochureware to customization to personalization and finally toward the highest level, which is characterized by high trust and high value.

Questions posed by the audience provided a lively discussion among the panelists:

Is trust-based marketing a paradigm shift or an aberration?

Mr. Barabba saw trust as always having been important. Mass advertising created the separation between producer and consumer, but technology is restoring that connection and bringing producers and consumers closer together again. Dr. Kittrell agreed that trust was a paradigm shift that was here to stay, because of the volume of information that is available to consumers now. "The Web makes the information available, and it brings a transparency about the various treatment options that individuals have. Companies can't create mistrust and survive long. The Web is providing a new opportunity to develop more trust in doctors. We went through a period of mistrust of doctors. Now patients look up information on the Web and discover that the information is exactly what the doctor told them. So they feel confident that they have explored all the treatment options."

How can firms that have a reputation for being push-marketers move to trustbased marketing?

Mr. Barabba shared that his company made the move to trust-based marketing because the old way of working wasn't working. "It took soul-searching on the part of management to make sure we had the right products, and then how to let consumers know we had the products that they wanted. Mass communication is not effective because all the car makers are saying the same thing. So you need to find new ways to communicate with customers. We looked at the new trust-based advisor technology and took advantage of it. With the ACA, we act as an intermediary. As an intermediary, you don't promote one car over another—intermediaries have to be unbiased in order to be trustworthy," Mr. Barabba said.

Orbitz also takes a no-bias approach, and that nonbias is written into the bylaws of the organization. "Any change from push marketing (or ‘torment marketing’) to trust marketing has to start on the inside," Mr. Katz said. "You can't be a schmuck and be trustworthy. Trust has to start on the inside, and the organization has to believe in it."

Dr. Kittrell agreed, "Trust has to flow through the whole chain. In the pharmaceutical industry, customers can't order medicine themselves. They have to talk with their doctors, take their doctor's advice, and feel confident in that, as well as the opinions of the pharmacist, payors, and providers. The way to move from ‘push’ to ‘trust’ is to look less at individual products and services. Instead, companies need to take a more customer-centric approach. The goal is to get information tools to the consumer so that the consumer can make a good healthcare decision—not just about the features of a single product, but about their whole needs and how various products fit those needs."

Does using a trust-based strategy mean that your company will have lower margins?

Mr. Barabba said, "No. If you really believe that you will make the right product for the customer and put resources into it, then a trust-based strategy will actually improve your chances of getting higher margins. At GM, we have the phrase, ‘a gotta-have product.’ That means knowing that the cars meet customer needs. ACA is a tool that can do a better job of matching customer needs to products and identifying those requirements. Perhaps you thought you had what the customer wanted, and then find out that you did not. The ACA technology is a tool that tells you they want something else, and you can respond quickly to that, having a competitive advantage in that faster response."

Dr. Kittrell agreed. "Customer decision-making won't impact margins as much as help match the right products to the right customers. It will identify when products are right for customers. Customers may in fact choose a company's products more often if they have the tools available to help them decide when they need those products."