Are You Ready For the Catalytic Consumer?

The old marketing doesn't work any more. The Internet has liberated a new kind of consumer, one who is personally informed, market-savvy and demands two-way permission-based interactions-in other words, the marketer's equal. This new consumer, whom we call the catalytic consumer, is the change agent who is disrupting marketing. Armed with search software, blogs, hundreds of cable channels, TiVo, V-Cast, satellite radio, instant messaging, and mobile phones, catalytic consumers have taken control of the information they want to see- and they ignore the rest. This means that marketers can no longer reach this powerful group with a single message, at any one time or in any one place. To create a dialogue with this influential catalytic consumer, marketers must do their homework and make personal, relevant, anticipated, and attractive offers. This engaging dialogue is called conversant marketing, building a relationship that becomes mutually beneficial to both parties. Why old marketing doesn't work anymore The consumer has reversed the flow of marketing information. Prior to the Internet and accompanying media revolutions, brands pushed their messages through a few big network channels to a mass market of consumers. Marketers first tried to use the old marketing techniques on the Internet, but the catalytic consumers have learned to search for the information they want individually and through their own channels. These are big changes for both consumers and marketers. Market researchers quantify the remarkable magnitudes of these marketing upheavals:

Veronis, Suhler, and Stevenson report that since 1997, network TV watching, newspaper reading, and magazine reading declined 13 percent. Internet hours grew 214 percent over the same interval. In 2003, the money that consumers spent procuring information exceeded the money marketers spent advertising.

An Annenberg study in September 2004 showed that Internet veterans spent 10 more hours online compared to new Internet users, and 84 percent of these extra online hours were spent on professional and personal work.

Today, data show that 20 million wireless consumers evaluate carriers or manage their wireless accounts online; 75 percent of auto buyers research their choices online, and 60 million consumers researched a financial product or managed an account online last year. Meet the catalytic consumer The disruptive new consumer has three distinguishing characteristics. Catalytic consumers use technology to make information an everyday resource. They don't sit on the couch with the family absorbing uniform marketing messages. Rather, they filter the deluge of messages to find just what they need- and then shut out the rest. Catalytic consumers know their value to marketers; it's hard to miss. These market-savvy consumers are looking for their own piece of the action--through rewards programs, downloadable coupons and contests, and online promotions. Most significant, catalytic consumers know that they alone have the ultimate power-the power of their own permission. They control when to grant their personal attention, to which marketers, how often and for what reward. How to reach the elusive new consumer Because each catalytic consumer acts individually, segments are hard to define by traditional age, income, gender, and geography measures. And because their information sources are so diverse, significant quantities of catalytic consumers are hard to find looking at any one Web page of information. Even when searching online for something the marketer wants to sell, each catalytic consumer is quickly off to a new area, no longer reachable by the marketer who bought the search term. In addition to challenges, the Internet liberation also creates opportunities for marketers. One hundred fifty million American consumers are now online. They are increasingly enabled with always-on broadband connections. They are diligent about researching their purchases before they buy and the outcomes of their decisions before they act. As consumers act individually, their online activity identifies segments of peers. Tracking and targeting these segments provides new advantages for marketers. Top brand, pioneering marketers like DaimlerChrysler, E-LOAN*, Hyundai, Sprint, and Upromise are identifying action-ready segments by their behavior. Examples of these behavioral segments are: ad-responders, in-market shoppers, prechurn customers and upsell candidates. With permission, these behavioral segments can be targeted for specific offers, direct messages and more granular segmenting. Because the pioneers have done the work of studying their consumers, they have earned the permission to develop their story with their consumers. Alert catalytic consumers know they are being treated specially and can anticipate relevant and personal marketing communication. Trust builds. Consumers see opportunities to leverage their value. Marketing programs become measurable, precise and real time. Engaging the catalytic consumer as an equal We know that the new catalytic consumer is very different from old mass market consumers and old marketing won't work. However, pioneering brands are finding success in a new kind of relationship. When the catalytic consumer and the marketer engage as equals, conversant marketing becomes possible. Conversant marketing advances both the relationship and the product-and it benefits both the catalytic consumer and the marketer. * Registered trademark About the Author Donald L. McLagan is chairman, president, and CEO of Compete Inc. He can be reached at 617-933-5600, or dmclagan@compete.com. Please visit www.compete.com