Week 1 Transcripts

Video 1: Transformation in Marketing: Overview

Marketing today is inundated with data. With all the emphasis on technology and data, it is
easy to get caught up with this, but as marketers we must remember that the customer remains
at the centre of everything.
As the vice chairman of Ogilvy UK, Rory Sutherland puts it the next big thing in marketing is
not technology. It is psychology. Indeed. Marketers need to understand customers to be able to
know what they expect, and how to deliver the products and experiences they want. In this first
module, we will begin by understanding what digital marketing strategy should truly
encompass. Then we will explore the world of customer behaviour together by looking at the
six key changes that resulted because of the impact of digitisation.
In particular, we will discuss how customers now have easy access to information, have shorter
attention spans, are able to remain anonymous online, use more attribute-based decision
making, are subject to more peer influence, and are more empowered.

Video 2: The Impact of Digitisation on Businesses

Let's take a look at a few key changes brought about by digitisation.
First digitisation gave rise to the proliferation of big data which allows for decision making
based on advanced analytics. Businesses can narrow cast instead of broad cast, improving
targeting with customer insights that are now possible. In addition, digital technologies enable
automation that will fundamentally change how businesses work. These technologies are also
changing the very nature of innovation and how it happens. Companies can make use of their
customer data to design products around what their customers actually want and are willing to
pay for. New product ideas need not even come from in house as customers take part in co-
creation activities. New ways of offering value propositions could also disrupt existing business
models. Likewise operating models may be shaken up. There are new channels for distribution
and marketing that require businesses to augment their traditional practices. Finally
connectivity. This is arguably the biggest game changer in the history of marketing. It reduces
the cost of interactions, lowers the entry barriers to enter new markets, shortens the time for
brand building. Connectivity also changes how customers behave. Customers research on their
mobile devices while shopping or even watching TV, for instance. Ease of connectivity has
opened a whole new world to humankind. Based on the global study, 60% of the world's
population is online, and half the world's total population use social media. Not only are people
online, but the amount of time they spend online is also noteworthy. The average internet user
looks at his mobile phone 150 times a day and spends 6 hours and 43 minutes online each day.
Assuming we sleep 8 hours a day, that means more than 40% of our waking lives are spent
using the internet.
It is undeniable from this statistic that digital, mobile, and social media have become an
indispensable part of everyday life for people all over the world. In the COVID 19 consumer
sentiment survey, Boston Consulting Group and Facebook found that this existing trend of

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embracing digital experiences will be further accelerated as a new norm with people being
more concerned with social distancing. Social media is seen to be growing in importance for
staying connected, entertained, and well informed. With the online world becoming more and
more dominant in our customers' lives, businesses increasingly need to sharpen their digital
marketing strategy.

Video 3: Digital Marketing Strategy Defined

So, what is a digital marketing strategy about? HubSpot defines digital marketing strategy to
be a plan that helps your business achieve specific digital goals through carefully selected
online marketing channels, such as paid, earned, and owned media.
Now this may sound pretty much like a set of marketing tactics conducted in the online
environment to connect a company to its customers. And perhaps, at this stage, you may not
make much sense of this definition. What are digital goals? What are paid, earned, and owned
media? Fret not. We will certainly make these concepts crystal clear as we proceed with our
programme. But technical terms aside, digital is not just a new medium. It is a new way of life
that has made fundamental changes to the way we behave and how we expect things to be done.
Let's take a step back and examine what marketing is all about first. At the heart of marketing
is understanding your customers' needs and satisfying them better than your competitors can.
In addition, a large part of the marketing strategy is also forming a brand image in your
customers' minds. Accordingly, a digital marketing strategy is not a set of marketing tactics to
just spread the word online to our audience. In other words, digital marketing is not only a
MarCom function. It is marketing done in the digital era. Digital marketing is using technology
to do what traditional marketing has always aimed to do while taking on board the
idiosyncrasies that the online environment brings. A strong brand or brand equity is still the
ultimate goal of digital marketers. We want our stakeholders to know what our brand stands
for, how we are different from competitors, and how we can bring value to their lives.
To be successful, we need to have a good understanding of customers so that we can
successfully create a favourable place for our brand in their hearts and minds.

Video 4: Today's Customer and Marketplace

So, Google shows that 90% of our interactions with media are now facilitated by screens,
laptops, tablets, phones, and televisions. But the prolific news of the internet does not mean
that customers have moved completely to the online environment.
Instead, today's customer is a multi-channel, multi-device, highly connected customer who
bounces back and forth at his own speed between different devices and channels of his choice.
Surely in our personal lives, we experience that while additional channel is important, it is not
the only channel we use. We may find that a lot of the media information online, but that doesn't
mean we have given up shopping in malls or watching TV and movies for good. In fact,
research shows that the lines between offline and online shopping experiences are blurring.
Marketers must look at taking the offline behaviour online, and vice-versa. Encounters with a
brand in all these possible channels combine to form touch points in our heads, which in turn
give us a perception of that brand. In the digital era, digital interactions alone are insufficient.

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So, digital marketing is not meant to replace traditional marketing. Instead, the fundamental
concepts of marketing still hold true. The implementation of the concepts across traditional and
visual channels should co-exist with interchanging roles across the customer buying journey.
Online and offline need to coexist and be integrated well to deliver the best customer
experience, and this will be a key challenge, as well as an opportunity for marketers in order to
differentiate from the competition. The digital channel brings about many opportunities for us
to market and brand better. With the data and instantaneous connections that the digital
economy brings, we have the power to understand our customers better. We can narrow cast
instead of broadcast. We can micro-target in personal lives. Look at Kleenex. They could
identify who was unwell simply by looking at people's Facebook statuses, and they send these
individuals ‘Get Well Soon’ Kleenex packs. No surprise how this feel-good factor from the
surprise recipients resulted in numerous brand mentions and more interactions with the brand.
We also can use analytics to test, track performance, and tweak our campaigns for optimised
impact. Finally, we can use technology to enhance the customer experience, like how Netflix
socks can be used to pause Netflix programmes, once those socks detect that the viewer has
dozed off. The world of marketing has turned magical in this digital era. What was impossible,
or perhaps what seemed more like a sci-fi movie is increasingly possible with the new and
constantly changing toolbox made available to marketers, to make their brands resonate with
customers. So, what can we hope to achieve with additional marketing strategy? First of all,
we want access to and connect with our customers so that they can know about us and find us.
We also want to be able to have access to them, so that we can identify our prospects and
communicate with them.
We also certainly want to use the analytics and channels available online to better target and
acquire new customers. Thereafter, a good marketer will engage with customers in two-way
conversations, as well as listen in to their conversations with other customers. We can also look
to invite customers to collaborate with us. Ultimately the pinnacle we are trying to arrive at is
customer loyalty and advocacy.

Video 5: Impact of Digitisation on Customers: Changes in Customer Behaviour

Digitisation has a wide-reaching and significant impact on customer behaviour, not only in
online activities, but in offline decision making and behaviour too. Some notable changes in
customer behaviour are customers now have easy access to information, they demonstrate short
attention spans, they are able to remain anonymous in their interactions with brands, they make
the decisions differently using an attribute-based approach. Peer influence is more important
to them, and they are certainly more empowered. All these changes affect how we make
decisions and behave towards friends. Let's discuss each of these changes and see how
marketers can manage them to effectively connect with customers.

Video 6: Change 1: Easy Access to Information

The online environment provides us with easy access to information, very often at our
fingertips, which is why our mobile devices are so indispensable to us. We are so used to
googling it whenever we need to know anything new. In the past, big brands had an advantage
because they had deeper pockets to allow them to reach customers.

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Today, it has become more of a level playing field. The easy access to knowledge about new
features and options available enable customers to be able to learn about the product category.
Greater choice possibilities allow customers the power to satisfy their variety-seeking needs
and exercise greater freedom of choice. Theoretically, the customer has to choose an
opportunity in such almost perfect information situations to optimise their decisions. But do
they? On the contrary, researchers found that customers experience difficulty in making
decisions when they are given more information and freedom of choice. Humans are boundedly
rational beings with limited resources to process information. We are also cognitive mises since
we use our mental capacity only when it is important enough. Having more information and
choices could lead to information overload. Research has demonstrated strongly that when
people are subjected to too much information and their processing resources are limited, people
chose a sinful chocolate cake instead of wisely choosing a healthy fruit salad. This decision
was reversed if they were not subjected to an overload of information. This shows that when
we encounter too much information, spontaneously evoked reactions rather than thoroughly
thought-out reasoning tend to have a greater impact on choice. As a result, we may end up with
lower satisfaction, or we may end up making poorer choices in the long run. Information
overload is especially plausible in the online environment when the information we get online
may come from reviews or user-generated content with contradicting opinions. This could
result in a greater uncertainty over customers' choices. They would then have to face the trade-
off of making a choice and accepting the emotional conflict that comes with it. In response to
this decision difficulty, research has shown that customers may defer making a choice by not
buying at all or choose to ignore new information by sticking with the status quo. After all,
why rock the boat when it is good enough. Or, customers may use mental shortcuts or what
behavioural economists refer to as heuristics. These are rules of thumb that customers learn
over time to simplify decision making.
All in all, customers may end up with suboptimal choices, which are a big no no to marketers.
The principle of marketing is based on profits through loyalty, not through transactional
exchanges, and loyalty is achieved through customer satisfaction. With that in mind, marketers
seek to rethink the information they load onto customers. Is there a way to help them make
better decisions? How do we minimise the chances of customers deferring to buy, ignoring
information, or using mental shortcuts which eventually lead them to suboptimal choices and
possibly regret? Let's look at each of these possible negative outcomes of information overload.

Video 7: Change 1a: Avoiding Choice or Choosing Not to Act

Let's look at the first negative outcome of information overload, avoiding choice or choosing
not to act. Why fix what is not broken? I am sure we have heard of that.
Status quo bias happens when people prefer things to stay the same by doing nothing or stick
with age-old habits. It is the path of least resistance because it is tried and tested and also
because it simplifies decisions for us. And we are quite content if not checking if there is a
better way of doing things. This may happen even for important decisions or when only simple
transition costs are involved. We also have a tendency to procrastinate. We all know that we
are guilty of saying I'll do it soon but soon never comes. This is especially true for decisions
involving consequences that are further away in the future such as eating healthy or going to
bed earlier. This is known as hyperbolic discounting where we undervalue the future and

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overvalue the present. How can marketers overcome customers' inertia then? One way is to
provide them with motivation. This requires you to know your target customers. What makes
them tick? Knowing why people are buying your product category is an important question to
answer this. We can also look at the goals and aspirations. People want brands to help them be
better versions of themselves: healthier, smarter, more fashionable, the list goes on. Ask what
your brand can do to help them towards their goals. Salesforce understands that the higher the
number of people who know the solutions, the easier it is for them to sell. They create an
academy to provide online training courses for individuals to learn stuff related to customer
relationship management. To further motivate them to do so, they created certifications which
are virtual badges that participants can post onto their LinkedIn profiles. They know that in this
era, people are keen on getting industry recognition of their expertise. Gamification is another
way to motivate by providing rewards. Rewards can be financial, as in the Prudential Squat
Challenge, which aimed to have Singapore commuters start the conversation about keeping fit.
Machines built with sensors were located at a few key MRT stations in Singapore to
communicate this campaign. Commuters could get a free train ride if they performed 20 full
squats in front of the machine within 40 seconds. Prudential also tapped on social and digital
media to bring this message to a larger audience to encourage participation in the challenge.
The campaign aimed to record 100,000 squats, which is equivalent to 5,000 people doing 20
squats each by the end of the one-month campaign. Rewards can also be non-financial. When
Pokémon GO was launched, it showed us that people can be motivated by the sheer joy and
accomplishment of virtually catching those little creatures with our smartphones. In fact, a
Taiwanese grandfather is so caught up by the Pokémon GO fever that he has mounted 64
smartphones on his bicycle to ensure that he does not miss any Pokémon as he cycles around.
Rewards can also be built into the product itself if it fits with the brand.
Doritos did exactly that with their Roulette product, which is like the Russian Roulette game
where a few chips in the regularly nacho cheese-flavoured bag are ridiculously spicy. This fun
element becomes a great motivation for customers to buy the product as eating it with the
suspense of who gets the spicy chip becomes part of the game itself. Doritos also encouraged
customers to pose selfies of their own reactions as they eat the spicy chip on social media
tagged with the #burnselfie. This campaign certainly got customers out of their seats as Doritos
earned over 22,000 likes, 8,000 shares, and 1,500 comments on just the announcement of the
campaign. Customers also uploaded videos of themselves playing Doritos Roulette. Another
hurdle for customers to snap out of inertia is because they place more value on the present than
on the future. This is often the cause of lack of support for sustainability issues or financial
planning. To overcome this hyperbolic discounting tendency, we can use reminders. Just like
how NTUC Income, an insurance company, does in their "How will the future you thank you’
campaign."

Video 8: Change 1b: Ignoring Information

Now, let's look at the second negative outcome of information overload: ignoring information.
Yes, the internet has exponentially increased the amount of information available. But one-way
people deal with this overwhelming amount of information is by ignoring it.
We may not even be aware that we are ignoring useful information. In fact, researchers found
that customers believe they base their decisions on more information than they actually use.

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We do that when we lazily choose the default options. Of course, businesses have learned this,
and often make the choice that they want customers to take the default option. The laziness to
make choices for ourselves, preferring mindless shopping, is one of the reasons why live
streaming e-commerce has become so popular. iMedia estimates that this industry will grow to
US$129 billion dollars in 2020. Here, sellers are seen as both experts and peers, helping people
to cut through the overwhelming number of choices with their personal picks. Live streaming
online shopping has become a craze in China, especially after the COVID-19 pandemic. Even
Singapore had its own version during the lockdown where hawkers also became online stars
for the day when the old-school wet market experience was live streamed. The implication of
this is that marketers must use decision aids such as comparison charts, tailoring information
to audience's expertise, involvement, and cognition to help customers make a choice. We also
ignore information when we exhibit confirmation bias. This is a natural psychological bias
where we seek evidence to support pre-existing beliefs and ignore contradictory information.
The internet has been accused of perpetuating confirmation bias. We set our filters on Flipboard
to read only what interests us. We choose who we want to follow on LinkedIn. The online
material we receive is also filtered implicitly, based on what our friends, contacts, or inner
circles discuss. A team at the University of Michigan School of Information noted that
"Collectively, these filters will isolate people in information bubbles only partly of their own
choosing, and the inaccurate beliefs they form as a result may be difficult to correct". Ironically,
the way such engines, news aggregators and feed-ranking algorithms work, present us with a
biased selection of information tailored to our preferences. And this is more likely to perpetuate
our existing behaviours. But why is this a concern for marketers? When customers ignore
information, it makes it hard for us to teach them new information about our products or brand.
Branding is essentially a teaching exercise. We need to get customers to learn, and we need to
give some thought on how to teach them. There are three conditions that facilitate learning.
People learn when they are motivated to, when they have the ability to, and when they are given
the opportunity to. Motivation kicks in when people see that what you have to say solves their
problem or offers them something better. Next, ability. Ability refers to the right cognitive load
match for the learner. Also, a combination of both visual and verbal cues aid learning more
than when there is just one. Or if you have to choose one, evidence suggests that more people
are visual learners. Lastly, we should be mindful that there is enough repetition of the material
to be learned, and there should not be distractions.
Let's have a look at some examples of brands' attempts to teach their customers. When P&G
launched Febreze, they found that it is extremely hard to teach customers to use it in their daily
lives as a new habit. The formula could neutralise bad smells, and P&G thought it would be a
godsend for people with smelly homes. But when they positioned it as an odour neutraliser and
launched it with this ad message and target customers in mind, the product almost failed. The
bad smells that were supposed to trigger the daily use of Febreze were not considered offensive
to these homeowners at all. If you live with a house full of dogs and cats, you become
desensitised to their scents. If you smoke cigarettes, eventually you don't smell the smoke
anymore. Even the strongest odours fade with constant exposure. The exact problem the
product was made for solving was not deemed as a problem for its target customers. It is
impossible to teach people when they have no motivation to do anything differently. What
P&G realised was that it was the people with clean, immaculate homes instead who loved
Febreze. Instead of trying to create a whole new cleaning routine for the segment of customers
with smelly homes, what they really needed to do was to target those customers who were

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already motivated to have clean homes. And adding a nice scent was the finishing touch that
marked the end of their cleaning rituals. The product just needed a simple tweak by adding
some perfume to the formula. These customers already had their cleaning routines, and Febreze
just needed to piggyback on the habit loop. The cue is a freshly clean room, add the Febreze
spray as an additional last step to the routine, and be rewarded with a smell that says you've
done a good job. Through P&G's experience, we can see that we have to identify customers'
motivations in order to encourage them to learn what we want to teach them. Years after, P&G
attempted to extend the market by revisiting their initial target market. They used various ads
to try to teach the concept of noseblind, a silent condition that occurs when you get used to the
odours around you and no longer smell them, while your guests still can. And P&G continues
to find reasons to motivate customers to adopt Febreze by informing them of the dire
consequences of bad smell.
Another tip to remember is that there may be different segments in your customer base. The
same message could be told in a different way, to target different segments that have different
goals. For instance, parents may be more conscious of the nutritional benefits of food. So, an
infographic-style message detailing how your brand's ingredients are different from the
competitors could get their attention. But talking about such nutritional benefits to a teenager
is likely to have your message fall on deaf ears. So, we must put ourselves in a teenager's shoes.
What is important at that age? Social life and friends? Crushes? Parties? Games? These are
possibly good guesses. Perhaps our food benefit message needs to be crafted as solutions to
missing out on such fun at parties with friends. This could get their attention and encourage
them to hear you out. Have a look at how a2 milk uses two completely different ad versions
for different segments.

Video 9: Change 1c. Using Mental Shortcuts

Let's now look at the third negative outcome of information overload. We are also known to
use mental shortcuts or heuristics to make judgments to simplify our decision making.
Marketers need to be aware of the common heuristics used and perceptual biases at play.
Let's have a look at a few of these heuristics. Read this description shown. Linda is 31, single,
outspoken, and very bright. She studied philosophy. As a student, she was concerned with
issues of discrimination and social justice. Which of the two is more likely to be Linda? Most
people would think Linda is a feminist bank clerk, but the reason we tend to jump to this
conclusion is because we were influenced by representative heuristic where we felt Linda is
more similar to a feminist prototype. However, this is a more unlikely choice since, statistically,
there is a higher probability that she is a bank clerk than the subset of a feminist bank clerk.
Also, we ignored the information that she was concerned with issues of discrimination when
she was a student, but she is 31 years old now. The idea of representativeness fools us into
thinking that objects, people, or actions fit assumed stereotypes and will likely behave similarly
or have similar traits to those stereotypes. These expectations can bias our judgments.
Nevertheless, this is how the choice of spokespersons influences celebrity endorsers or even
brand images have an impact on customer perceptions and choices. Let's take another poll.
Imagine you are at the mall and see a T-shirt you want to buy. It costs $20. But before buying
your friend calls and informs you that the same tee is now available on sale at 50% off at
another mall two kilometres away. This second mall is accessible by train just two stops down.

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Would you take the train to buy the discounted tee at the other mall? Now imagine again that
you are at a mall and see a laptop you want to buy. It costs $2,699. But again, your friend calls
and informs you that the mall two kilometres away or two train stops away has a promotion
where they are giving away $10 vouchers that could be used on any item. Would you take the
train to buy the discounted laptop at the other mall? Most of us will not think of the savings as
an absolute amount of $10 but consider it as a percentage of the price. We think it is worth it
to make the two KM journey, since it is 50% savings for the t-shirt, as opposed to the small
savings for the laptop. But we forget that the same amount of $10 is saved in both scenarios.
This is because we are prone to make context-dependent choices, which, again, is not the most
rational decision. This example demonstrates the importance of understanding that price
framing or how price information is presented has an impact on customers' judgment of value.
Another commonly used mental shortcut is availability heuristic. This is when we rely on the
information based on what quickly comes to mind when making decisions. So, the more readily
information comes to us, the more they influence our judgments. This is a natural tendency to
help us make quick decisions. A very powerful experiment was conducted in the US that
demonstrates how impactful availability heuristic can be. Three groups of participants in this
experiment watched six films of eight minutes each for six consecutive sessions. One group
watched six films that were sexual in nature. This group was known as the massive exposure
group. The second group, known as the moderate exposure group, watched three sexual films
and three non-sexual films. The last group had no exposure, so all films were non-sexual in
nature. Three weeks later, these participants were asked to estimate the percentage of US adults
performing various sexual acts. The estimates for the massive exposure were the highest. They
were then asked to read a newspaper article about a rape case that did not have a sentence yet
and the recommend the prison term. In this scenario, the massive exposure group recommended
the shortest term. These results show that, by mere exposure to sexual content, the participants
were influenced in the judgment of the frequency of occurrence and even demonstrated greater
tolerance towards sexual misconduct.
Next, consider this scenario A. If there were an outbreak of an unusual disease expected to kill
600 people, which programme would you choose? If programme A is adopted, 200 people will
be saved. If programme B is adopted, there is a 1/3 probability that 600 will be saved and a 2/3
probability that no one will be saved. What about scenario B with these two options? If
programme A is adopted, 400 people will die. If programme B is adopted, there is a 1/3
probability that no one will die and a 2/3 probability that 600 people will die. In scenario A,
most people will choose programme A. The certainty that 200 people will be saved is attractive.
However, in scenario B, most will choose programme B. This is because a certainty that 400
people will die is negative and is therefore aversive. In such an instance, people will choose to
take the risk in programme B. In both scenarios, the options provided are actually the same,
but they evoke different associations and evaluations. The certainty of saving people is
disproportionately attractive while the certainty of death is disproportionately aversive. This
shows the influence of framing effects. By representations highlighting some features and
masking others, different ways of representing information have an impact on our choices.
Humans are known to have a natural tendency to value losses more than gains. This bias is
known as loss aversion. In fact, it was said that the pain of losing is psychologically about twice
as powerful as the pleasure of gaining. As a result, people are likely to choose actions to avoid
losses more than to get equivalent gains to the extent of being more willing to take risks or

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behave dishonestly to avoid a loss. Such risk aversion also could explain why we stick with the
status quo.
I hope you had fun learning about these commonly used heuristics. Other examples include
price quality relationship, letting moods influence choices, or letting well-known positive
attributes halo over and causing us to disregard the negative ones. What are some takeaways?
First, we recognise that humans rely on heuristics to simplify judgmental operations. Next, we
acknowledge that heuristics can lead to systematic errors in judgments. Furthermore, we
recognise that humans are not accustomed to thinking too hard and are contented to trust a
plausible judgment that quickly comes to mind. So, marketers must arm themselves with
knowledge about behavioural heuristics because customers are irrational beings, but the good
news is, as author Dan Ariely so aptly said, we are all predictably irrational.

Video 10: Change 2: Short Attention Span

The second major change in customers is shorter attention spans. There is a statistic floating
out there on the internet that due to the speed of how things happen in the digital world, the
average human attention span has dropped to 8 seconds. But is our attention span really getting
shorter? If it was, how is it that we can binge watch on Netflix for hours or spend more than 8
seconds watching even an advertisement as long as it interests us? Fortunately, the BBC has
debunked this controversial study. Our attention spans, fortunately, are not shorter than that of
a goldfish. Rather, it is simply because it's hard to focus on any one thing for any length of time
with so much content coming at us constantly across multiple channels and devices. So, we
become more selective about what we devote our attention to. In short, our attention spans are
task dependent.
Prezi's State of Attention Report found that more than half of the respondents attributed their
disengagement to instances where a story either lacked substance or did not challenge them
mentally. But more than half, 55%, of all business professionals surveyed for the study said a
great story captures their focus and keeps them engaged. Aside from content quality, there are
also statistics that show website visits have shortened. Data suggests that the average amount
of time spent on websites before navigating away has gone down by 49 seconds in the span of
2 years. But on a closer look at the data, it shows that these durations are more or less stable
on web-based browsing. Instead, it is when people browse using mobile devices that the
average time spent on the website before navigating away has decreased by 11 seconds. When
you take into account the fact that mobile browsing has become a lot more popular, the change
is a lot more drastic. Shorter web browsing on mobile devices should not be surprising since
people are usually on the go and information search is highly task focused. But the fact that
customers are selective about giving their attention means that brands need to ensure their
messages must be relevant to their target customers. Push advertising is not going to be as
effective since leads are being initiated by customers. Brands must be prepared to meet
customers the way they like at their preferred time, in their preferred format. Another
implication for more selective attention is that personalisation is key. Eighty percent of
marketers saw a measurable lift in business from personalised campaigns in Evergage's Trends
in Personalisation Survey. In addition, Hubspot's analysis of 330,000 call-to-actions showed
that personalised ones converted 202% better.

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A word of caution to marketers wanting to embark on a personalisation strategy because it
requires the collection of customer data. Technology allows us to collect data about customers
surreptitiously, such as geographic data by IP address or user behaviour data by cookies. But
customers may have concerns about what data is being collected about them and used by
businesses. There is a thin line between the desire for personalisation and the need for privacy.
Instead, data can be obtained when customers opt to share them with you, such as when
customers share personal information with the business by offering particulars in exchange for
information through gated content. We are not likely to tell a stranger our email address, much
less where we live, are we? Don't spook customers away by being overly intrusive with
personalisation efforts. When prospects know very little about your brand and have yet to trust
you, provide free access to content. Removing the gate from content in this stage can improve
your brand's visibility and enhance your credibility with prospects. As prospects move down
the marketing funnel and are more interested in your business, they will be more likely to be
willing to fill out a form. When customers see that the data is used in a way that provides value
for them, they are likely to welcome such a personalisation.
Spotify did this very well when they used customer data and curated for each user a personal
top songs playlist for the year. As you can see, personalisation is about earning your customers'
trust and building a relationship with them. What do you think of the Kleenex "Feel Good"
campaign?

Video 11: Change 3: Anonymity

The third change observed in customer behaviour is anonymity. The online environment allows
us some form of anonymity and psychological distancing that alters our behaviour from face-
to-face interactions. Without face-to-face interactions, people feel less need to comply with
social norms, resulting in more direct feedback, more demanding requests, or even more
impulsive and indulgent behaviours.
A decrease in social regulation when we hide behind an anonymous or virtual identity may
explain the rise in bullying seen on cyberspace. Three in four youngsters say they have been
bullied online. Netizens are also found to be more honest when admitting to sensitive
information to a screen than to a human being. The dual processing model sheds some light on
why we make impulsive decision that are focused on short-term benefits. Each individual
consist of two entities: the planner and the doer. The planner is foresighted, realizes the
consequences of current decisions, and charts out the optimal path. He controls the doer's
desires through willpower. When asked about preferences, the planner responds with a should
option. On the other hand, the doer lives in the moment and chooses the option that gives the
greatest value in the present. The doer will pick the alternative that is a want option. So what
can we do in our daily lives as customers to curb impulsive behaviours? Consumer researchers
suggest that, by introducing more decision points, we get to halt the autopilot mode and give a
chance for the planner to kick in. This theory works on the premise that, when we are in the
process of consumption, we start off in a deliberative mode in which we actually think
explicitly about the pros and cons. This is when the planner takes charge. Thereafter, we
quickly shift into automatic mode as we consume, such that consumption is mindless and
habitual, and that's where the doer takes over. To curb to doer from making mindless decisions,
the theory states we can introduce more decision points along the way. For example, the rate

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of consumption was found to be lower by physically partitioning resources into smaller units.
Cookies wrapped individually or many divided into several envelopes. When the source is
divided into smaller units, customers encounter additional decision points, a psychological
hurdle encouraging them to stop and think. Opening an additional partition packet incurs a
psychological transgression cost, such as feelings of guilt. Related research has found that
separate mental payment accounts, envelopes with money, can disrupt a shopping momentum
effect.
Another strategy offered was to introduce transaction costs. For example, when queue ropes
were put up to prevent direct access to a buffet line, diners eat less just because they had to
walk more to zip around those lines. Likewise, putting disposable cups further away also
decreased its usage. Similarly, the researchers found that providing information or reminders
may also be sufficient to halt the mindless behaviour and to allow for more deliberate thinking.
For instance, McDonald's uses a sign on the straw dispensers to ask customers if they really
need a straw. On the business side, this theory may offer ideas on how to reduce customers'
bad behaviours. A decision point can snap the person back into a deliberative mode to allow
the planner to take control. Another way to help customers improve decision making is to use
a third-person perspective, such as using avatars. Avatars are representations of the human
decision maker. They could also be considered role models. An example of an avatar decision
making could take the form of asking the customer to choose a similar avatar or role model.
This avatar's choices would then be shown to the customer so that she could adjust her own
choices from there. Researchers found that, by using avatar-based communication, the frame
of reference moves from a first-person to a third-person perspective. This third-person
perspective activates the part of the brain associated with making rational, value-based
decisions. On the other hand, when we are in the first-person perspective, the brain activates
emotions, which could lead us to make suboptimal decisions. So by using avatar-based decision
making, people were found to choose the option with higher utility and hence make more
optimal decisions.
Latest research from the Rotman School of Management affirmed these findings and confirmed
that consumers indeed make decisions differently when they are presented with online avatars.
For example, a bank could present customers with hypothetical customer profiles. Customers
could answer some questions about their lifestyles, goals, family, et cetera, and the business
could use an algorithm to generate avatars that closely match their responses. Respondents of
this study were found to identify their own avatars, use his or her choice, and adjust from there
for personal circumstances that deviates it from the avatar's profile. The research found that
these customers were more willing to engage in robust conversations with financial advisors
and were less influenced by standard risk-related disclosures for banking products.
Most of all, this research found that the respondents prefer avatar-based decision making. I
hope you found these studies interesting and gained some ideas of how to rein our online selves
in, knowing we may not behave in our best interest sometimes.

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Video 12: Change 4: Attribute-based Decision Making
Let's look at the fourth change in customer behaviour, attribute-based decision-making.
Another difference between traditional and digital marketing is how information's presented
differently online versus offline.
In the online world, information about different options tend to be presented simultaneously,
and side-by-side comparisons are facilitated by comparison tools commonly offered to aid
decision-making. This way of encountering product information is different from being in a
retail store. Offline, we see products one at a time. This sequential availability of information
in turn causes us to evaluate products one at a time, sometimes making impulsive purchases
once we see something that catches our fancy before we go on to evaluate others. Take a look
at this picture. What do you see? What do you now see in the second picture? Let's have a look
at these two pictures together. This is the first picture you saw. Most of you would have seen
it as ABC. In the second picture, you probably saw 12 13 14. Now that you see both pictures
together, can you see that the symbol you saw as B in the first instance is interpreted differently
as 13 in the second? This is because the somewhat ambiguous stimulus B is seen as a letter in
the context of letters but seen as a number in the context of numbers. This is how we perceive
stimuli. We do not see stimuli individually but as part of a coherent whole. The context in
which the stimulus appears plays a part in the meaning we assign to it. It is further tinted by
our own existing beliefs, knowledge, motivations, or even moods. Hence when online, we are
often presented with information that we may not think to look for in an offline retail setting,
yet it plays a part in our online decision-making, even when it otherwise would not in an offline
setting. In general, the way information is presented on the website, the order in which options
are presented, and the default options can affect how customer preferences and choices are
made. One instance when our decisions are influenced in such a way is when we are presented
with a few price plans.
Some choices may be decoys whose purpose is to increase the relative perceived value of other
options. For instance, if a $30 product were compared only with a $10 product, we may think
it is expensive, but if there were an additional option priced at $50, the $30 product appears to
be much more reasonable. In this case, the $50 product was the decoy that led you to perceive
that the $30 product was good value for money.

Video 13: Change 5: More Peer Influence

The fifth change that the internet has on us is we are more prone to peer influence. Social
conformity has become more important.
Customers care more about others' opinions. They put less weight on what brands say but rely
more on the F factor- friends, families, fans, and followers. Customers show and share more of
their experiences, too. Such sharing in turn may inspire other customers to emulate and pursue
a similar experience. One obvious reason is that in the cyber world, it is easier to observe what
others do and say. Gaining social approval is more important now than ever before and
contributes to why we are more influenced by others. Besides gaining social approval, we are
also influenced by social proof. This means we think that as many others performing a certain
behaviour, it must be the correct behaviour. In other words, we demonstrate a herd mentality.
This concept known as social proof isn't new.

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A psychologist known as Solomon Asch demonstrated that people are likely to conform to the
choice of the majority even if the decision is clearly wrong. He found that people follow social
proof for one of two reasons: They want to fit in with the group. They believe the group is
better informed than they are. Social proof is especially prevalent online. Online shoppers are
not able to touch and feel a product before buying. Most of us rely on reviews instead. Other
people who had bought and used that product appear to be more knowledgeable, and that
experience can sway our opinions. As you can imagine, social proof can be a very powerful
tool for marketers when used correctly. This can be done by showcasing the popularity of your
brand through positive reviews, customer testimonials, awards, and recognitions. Market
leaders have this advantage since they can boast of being the top-selling brand. Brands can also
call attention to their follower count on social media or show how large their customer base is
to make people more confident that you're the right choice for them.
To sum up, by showing target customers that others similar to themselves like what the brand
has to offer, businesses can use social proof to help their marketing efforts.

Video 14: Change 6: More Empowered

Lastly, in the digital economy customers have found their voices. Social media gives them an
easy platform to air their grievances and call a brand out when they catch it behaving badly.
Customers are now empowered to evaluate and scrutinise any brand's promise and actions. Just
as success stories will be spread, businesses will be exposed for their unethical behaviours and
punished for their mistakes. Whatever happens in Vegas no longer stays in Vegas. These days,
whatever happens in Vegas goes on YouTube. The new digital world demands brutal honesty,
full accountability, and complete transparency. For example, L’Oréal blew the whistle on Dior
by complaining to the advertising standards authority in the US that Portman's lashes in this ad
were airbrushed. This ad was banned as a result. There is no room for secrets anymore, hence,
transparency and authenticity are crucial. Accenture found that 53% of consumers who are
disappointed by a brand's words or actions on a social issue complain about it. And 47% walk
away from the brand in frustration with 17% never coming back. With a newfound access,
others' opinions, and power to air their own views, customers are no longer happy to sit back
and be fed a brand and its values. They have more say in what they want from companies and
contribute or participate in shaping the brand.
This concept of involving customers first started as open-source branding with software
companies but it is now being practiced by other industries, too, under different nomenclatures
such as co-creation or crowd sourcing.

Video 15: Transformation in Marketing: Summary

In a nutshell, today's customers are rather different because of how digitisation has changed
them. They are not just passive buyers anymore.
With the power that technology has bestowed upon them, they are less deferential and more
influential. They choose which brands to invest in, and even serve as sales agents if they love
the brand enough. They readily influence others to buy or warn others not to buy based on their

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own experiences. They demand experiences on their terms. Businesses need to learn how to
deal with this new breed of customers and come around to learning how to manage a brand that
is now really community property. Technology is a common denominator available to all.
Barring different size budgets, counting on technology as a differentiator will be futile, as it
would be more a game of playing catch up. Understanding customers is an important piece of
this distal marketing strategy puzzle that will separate the winners from the losers.
Congratulations on completing the first module in this programme. I hope you have learned
some knowledge of the impact of the Internet on customer behaviour.
To recap, we discussed six key changes. Customers have easy access to information. They are
more selective and, hence, have shorter attention spans. They behave different because of the
ability to remain anonymous online. The online environment causes us to use more attribute-
based decision-making than in off-line buying situations. Customers are more subject to peer
influence and they are more empowered. In the next modules, we will look at how to reach and
then subsequently engage these digital customers.

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