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Are You Using Digital to Create Customers or Create Fans? (Thinks Out Loud Episode 326)

Does digital create fans or only customers: Fans using mobile phones to light up stadium

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A protestor outraged by the introduction of the European Super League held a sign that said, "Fans, Not Customers." The nascent soccer competition felt its customers’ — excuse me, fans’ — wrath and shut down, all within four days of announcing its existence. Four. Days.

That’s extraordinary. And it’s a testament to how fans feel about the brands, the organizations, the experiences they identify with. And given that few brands would ever feel the same outpouring of emotion from their customers — and they are customers in these cases — it’s a sign of how far most brands have to go. Worse, digital often plays a small role in driving those passionate responses… or only encourages negative passions.

Airbnb and others are trying to change that. In fact, Airbnb has pivoted away from performance marketing — the go-to method for most digital marketers — in favor of brand marketing. They’re trying to cultivate a passionate fan base, one that will choose them first. And, consequently, lower their customer acquisition costs and reduce their dependency on Google and other gatekeepers.

In this episode of Thinks Out Loud, we’ll look at Airbnb’s plans. We’ll discuss how digital can contribute to your customers’ brand experience. And we’ll review whether digital can help you create not just customers, but fans for your brand too.

Want to learn more? Here are the show notes for you.

Thinks Out Loud Episode 326: Are You Using Digital to Create Customers or Create Fans? Headlines and Show Notes

Show Notes and Links

As always, here are the "regular" show notes, detailing links and news related to this week’s episode. Take note, there are a lot of links this week based on the wide-ranging discussion. Be sure to check out all those that matter for your business once you’ve given the episode a listen.

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Past Insights from Tim Peter Thinks

You might also want to check out these slides I had the pleasure of presenting recently about the key trends shaping marketing in the next year. Here are the slides for your reference:

Technical Details for Thinks Out Loud

Recorded using a Heil PR-40 Dynamic Studio Recording Mic and a Focusrite Scarlett 4i4 (3rd Gen) USB Audio Interface into Logic Pro X for the Mac.

Running time: 25m 30s

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Transcript: Are You Using Digital to Create Customers or Create Fans?

Well, hello again, everyone. And welcome back to Thinks Out Loud, your source for all the digital marketing expertise your business needs. My name is Tim Peter. This is episode 326 of the big show. And to thank you so much for tuning in, I very much appreciate it. So there were two news stories in the last week that speak to a challenge and an opportunity that exists within digital.

The Marketing Side of Digital Transformation

And that’s where I want to spend some time today. And they sort of build on what we talked about last week in terms of what’s happening with digital transformation. And they talk about really a lot of trends we’ve covered for years, but this is very much a marketing story. This is very much a branding story. And I want to start briefly by telling you about the two stories.

Two Big Branding Stories

The first is the fact that you’ve probably seen this. I’m not going to do a whole big thing about this. There’s so much to talk about this that is outside my area of expertise, but the story about the European soccer Super League or football, if you prefer to soccer. But the Super League, that a group of teams about 15 teams had agreed to create, and then it was announced and it fell apart all within the span of about 4 days. And I’m going to come back to that in just a moment.

And the other story is a great article on phocuswire.com — that is, about the travel industry — and it’s a comparison of what Airbnb has been doing during the pandemic from a marketing perspective and what Booking.com has been doing from a marketing perspective. It’s an outstanding article; well worth your time. And that’s where I’m going to start. I’m going to start with the PhocusWire article about Airbnb and Booking.com.

Airbnb’s Brand Marketing vs. Booking.com’s Performance Marketing

Now, if you’re not aware of what’s been going on, the article talks about how Airbnb has essentially ended its reliance on performance marketing during the downturn, it has focused almost exclusively on brand. Now, when I’m talking about performance marketing, I am mostly talking about search. Obviously display media plays a role. Obviously YouTube videos play a role or video advertising plays a role. But it’s all very focused on direct response, on we’re going to put an ad in front of a customer at a specific moment that leads them to click and leads them to buy. And that is a very, very common way to market a brand, not just in travel, but with digital generally. And it’s something I’ve built a lot of my career on. So I’m fairly pro performance marketing generally speaking.

At the same time, what Airbnb is doing here is really fascinating and really worth thinking about, and for a very particular reason that relates in fact to performance marketing, as well as brand. Now, search marketing, search of all kinds, whether we’re talking paid search or organic search is a core element of digital.

Why Search — And Gatekeepers — Must Exist on Digital

We’ve talked about this so many times on the show. I’m not going to beat this to death, but customers use search to find what they need. More importantly, they need search to help them make sense of all of the data that exists out there. We live in a world where content is limitless and search help customers find what they need. In fact, this is a known principle of digital we’ve talked about many times.

Because digital offers unlimited choice, somebody has to become the gatekeeper. Somebody has to provide some form of filtering, some form of curation, some form of selection to customers so they’re not overwhelmed by all the choices that they have available to them.

The Two Types of Digital Winners

And those gatekeeper roles really fall into one of two categories:

  1. They can either be the source for everything; they can be the place where you go that has all the answers.
  2. Or they can be a niche.

And yes, niches can be big, but think about the examples we know all the time:

  • Google is the gatekeeper of text on the web. They’re the large offering. They’re the dominant player. But somebody like DuckDuckGo takes the niche focused on privacy.
  • If you think about YouTube for video, they’ve got the broad set, they are the dominant player. But you also have Vimeo for business. You have Netflix for narratives. So it’s just different ways of going about it.
  • Facebook and Instagram are the social gatekeepers. Or if you think about something like TikTok, or Snapchat, or LinkedIn for business, again, they’re focusing on very specific niches.
  • Amazon for e-commerce. I mean, they even call themselves “the everything store;” it’s right there in the name. Versus Etsy, who’s focusing on a handcrafted niche, or Reverb, which focuses on musical instruments and especially used musical instruments.

So that’s a normal thing you’re going to have happen.

Why Airbnb’s Approach is Fascinating

And this is the reason why what I think Airbnb is doing is so interesting. Because the problem with these gatekeepers is that it becomes easy for you to depend solely on those channels for people to find you. That’s a huge risk. It can be incredibly dangerous for your business. Now I’m not here to bash Google or any other gatekeeper, they often bring enormous benefits to you.

Benefits of Intermediaries and Gatekeepers

The biggest benefit by far is that customers, people can find you, even if they didn’t know they needed you. They just know they have a problem and these tools point customers to the solution. It’s the classic example of the old marketing quote that no one needs a drill. They need a hole. And if you’re in the business of making holes, regardless of how you do it, that’s hugely beneficial to you.

Customers are simply asking a question. They’re saying, “I have a problem. I need somebody to help me solve this problem.” And you, who they may never have heard of before, can be what they find. That’s great. It’s the whole principle behind unbranded search on Google. People look for a category or they look to solve a problem. It’s where recommendations on social come in, people are like, “hey, I need to find a way to make a hole in this wall over here.” And other people come back and say, “have you considered, I don’t know, drills,” or maybe your new fangled hole making device, The Hole Maker 3000? I mean, that’s all great. And it’s something they would never have known to ask for. So huge upsides.

Downsides of Intermediaries and Gatekeepers

The downsides of course are several.

  1. Let’s be really clear about this, they can find your competitors just as easily as they can find you. If those competitors are bigger, they might find them more easily. So that’s a problem.
  2. Sort of the 1A of this because it’s so closely related, the gatekeepers get to decide whether you’re the right solution or not. There’s another old marketing quote that says “don’t build your brand on rented land.” Yet that’s exactly what you’re doing when we talk about unbranded search. That’s often what’s happening when we talk about social. And if the gatekeepers decide tomorrow that something else is a better answer, you’re in trouble. That’s a huge problem. They can change the rules on you at any time. And suddenly all your traffic can go away. All the interest from consumers can go away.
  3. And then the other problem, and I don’t know if this is two or three. If we have 1 and 1A, this is item 2. If it’s 1 and 2, this is 3. You get the idea. You can get addicted to the dopamine hit of spend a dollar, get a couple of dollars back, which by the way, huge advantage if we know we’re spending a dollar on performance media, and we know we’re getting two bucks back or three bucks back or five bucks back or ten bucks back, we’d be silly not to keep spending that dollar. I tell people this all the time, I teach classes at Rutgers where I teach people to do that. If you’re getting 10 bucks back, every time you spend a buck, why would you ever stop spending that dollar unless you can find a place where you can get an $11 back for that dollar you spent? But at the same time, you have to remember that no one is looking for you. They’re looking for solution to a problem that they have.

Are You Creating Customers? Or Are You Creating Fans?

So those come with benefits and they come with challenges. And you need to start thinking about the bigger picture here, which brings me back to the European Super League, this soccer story. And for those of you who don’t know the story, a group of the most famous soccer teams in Europe decided to break away from the Champions League, which is soccer’s big tournament among the best teams each year to start their own league… and obviously, keep all the money. This was a financial play. There’s a ton of great coverage. I’m going to link to the New York Times article in the show notes, but there’s been great coverage about it all over the place from a number of perspectives. So I’m really only going to talk about this in so far as it illustrates the specific point I want to make.

What really is most interesting about this to me was that the whole thing started and ended in just a few days when they announced this plan and then soccer fans all around the world lost their minds. By the way, for all my listeners who are in Europe or Asia or the like, I do apologize that I’m not calling it football. Obviously I do recognize it is called football everywhere in the world, except the United States. So I don’t want to discourage you listening to this or thinking I’m trying to disrespect anybody. I’m just trying to keep it clear for listeners here in America as well that we’re talking about what is often called soccer here. So the idea is fans just went nuts. Fans felt it was going to ruin soccer or football as they knew it. And that’s where I want to pick up the story.

The fans were so upset, protestors even blocked one team that planned to join the soccer league from getting to one of its regularly scheduled batches. I mean, people were upset. They saw it as the ruination of their favorite sport. There were protests in the street, Prince William, second in line to the throne in the United Kingdom issued a statement saying that the Super League was a bad idea. I mean, that’s pretty big. And one of the protestors shown in the New York Times photograph was holding a sign and this sign, as the saying goes, hit me right in the feels. The sign said, "Fans, not customers." I’m going to say that again because it’s really important and it’s core to what I’m trying to get to today: "Fans not customers."

Are Your Customers Fans of Your Brand?

So here’s the question. Can you imagine anyone doing that for your brand? When soccer fans search, when football fans search, what do you think they search for? Soccer? Football? No. They search for teams. They searched for Manchester City or Manchester United, or FC Barcelona, Real Madrid or arsenal or Paris Saint-Germain, or Juventus or whomever the big teams are that they prefer. Not even the big teams, the teams they prefer. Liverpool, Everton, they search for English Premier League. They search for Bundesliga. They search for La Liga. They search for players.

The point is they’re interested in the brand, not the category. In this case, they really do want a drill. That’s what they care about. They are fans, not customers.

Can You Encourage Customers to Search… For You?

And I think that’s an extraordinary lesson for us, because if you think about what Airbnb is doing in the story I started with, that’s what they’re trying to do. They’re working to be the place people go. They’re working to be the place customers go. They’re working to create fans of the distinct experience that they attempt to offer, not customers, which is brilliant. It is fascinating. It may not work. They may fall down. But the fact that that’s what they’re attempting to do is, from my perspective, genius and digital plays a key role in this.

Brand is the Sum of Customers’ Experiences with Your Business

Now I want to be fair. Digital is only going to be one component of this, but I’m going to focus there because let’s face it. That’s what I do. There are many components here. No one ever got a Man City tattoo because of a single interaction with the team. This love is passed down from parent to child, generation to generation. I’m a big baseball fan. It’s my favorite sport.

And I remember falling in love the first time I walked out of a dark tunnel when I went to a park for the first time, and I walked out of the dark tunnel and I saw this glorious field in front of me with the sun streaming down on the players, running around on it. I mean, it was just amazing. Or your experience where you catch your first ball. Digital’s got a lot of work to do before we get there, but the best brands are thinking about how they can use digital to extend that experience when the customer isn’t, metaphorically at the field. Obviously in your world, at the field could be in a bunch of different things. But they’re really thinking in terms of how do we create that experience consistently? What are we doing?

How Digital Can Help Build Those Experiences

So Airbnb is thinking heavily about the experience at every stage in the customer’s journey. Their site and their app are fast. They’re easy to use. They’re easy to navigate. The search on the site works really well. They create content that underscores everything they’re trying to accomplish. And I mean that in terms of text and videos, but also curated experience with hosts who know the area. They’re connecting customers and hopefully fans to what matters most to them. And they’re doing it no matter where the customer is. They’re incredibly mobile enabled at every touch point in that journey. The experience works great on desktop or mobile, messaging is built into the platform so guests can connect with the host or Airbnb wherever they happen to be in their journey. Images are well scaled to the various screen sizes. They also make sure the app supports hosts and makes it easy for the host to create and curate content and the experience throughout the process. It’s brilliant.

What Natively Digital Companies Do

That’s what natively digital companies do. And it results at least in part in fans. Have they reached a level yet where fans will protest in the street? No, obviously not. Just as I said, this isn’t something that happens from one interaction. This happens over time. It’s also clear that they’re thinking in these terms. They don’t want people to Google their offerings. They want people to Airbnb. They want to be the destination from the outset. And they’re putting in the effort, they’re doing the work to make that happen. Will they succeed? I don’t know. I don’t think there are any guarantees here, but I don’t think it’s because they have the wrong strategy. If it fails, it’s because they failed to execute or they failed to deliver on that experience consistently. But I think their intent is correct.

How do You Respond?

And the question comes up of what do you do if you want to be these guys?

It’s Not Either/Or

Well, first, I don’t think it’s an either/or situation. As I’ve said many times, there is power in the word “and.” I don’t think it’s brand or performance marketing. I think it is brand and performance marketing.

You need to think about both as part of how you get customers to find you, especially if you’re a smaller brand or a newer brand or a younger brand or a less well-known brand, customers can’t become fans until they know who you are in the first place. So you have to work to win that unbranded search. You have to appear when people search for a specific category or specifics solution.

Best Way to Win on Google: Have Customers Search You By Name

At the same time, the best way to win on Google or social or whatever comes next is to get customers asking for you by name. Because as I’ve already said, Google or Facebook or whomever could decide that some other product is a better answer when a customer is searching for that category.

But they’re almost never going to decide that when the customer searches for you by name. And yes, I’m aware that Google offers alternatives in the search results. But if you’re what people are looking for, Google’s still going to give you top billing almost all the time. In fact, you’re going to get a fair bit of direct traffic and referrals and recommendations without anyone going to Google at all.

How You Know If Your Marketing Works

My friend, Mike Moran, and I were having a conversation the other day, where we talked about the fact that you really know your marketing is working when you can’t track it. And don’t get me wrong. Obviously you want to use analytics. You want to use data. There’s all kinds of things you can track beyond the things you think.

At the same time, sometimes you’re just going to have traffic show up as direct traffic and people are going to buy, and you’re going to go, where did that come from? And it’s going to be tough to tell. But it’s an indication that they’d heard of you, they knew something about you and they trusted you enough to buy, or fill out a lead form, or get in touch with a sales person or whatever the correct conversion action is on your site. But that doesn’t happen if your marketing isn’t doing its job.

What is the Benefit Your Customers Receive?

And this all comes back to doing, thinking about who you are and the value you provide to customers. I know I’m not the first person to say this, but why do you do what you do? What is the benefit? What is the reason people would want to be fans of what you offer? And then how do you use digital as well as real life interactions to deliver on that value? What is the customer experience? What do you want your customers to do when they think of you?

How does your content help reinforce that experience? How does your site search and navigation let customers get to what matters to them quickly and easily? Think about how you’re reinforcing your brand promise in each indirection, whether that interaction happens on desktop, whether that interaction happens on mobile, whether that interaction happens in real life, that’s what brand marketing becomes. It’s the sum of all of the interactions your customers have with you. And it’s how you get to say, we don’t have to put so much emphasis on performance marketing because people know to seek us out in the first place. And most importantly, it’s how you start to build not customers, but fans.

Show Closing and Credits

Now looking at the clock on the wall, we are out of time for this week. I want to remind you that you can find the show notes for today’s episode, as well as an archive of all our past episodes by going to timpeter.com/podcast. Again, that’s timpeter.com/podcast. Just look for episode 326.

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While you’re there, please don’t forget that you can click on the subscribe link in any of the episodes you see on the site to get Thinks Out Loud delivered to your favorite podcatcher every single week. You can also find us on Apple Podcasts, Google Podcasts, Stitcher Radio, Spotify, Overcast, wherever fine podcasts are found. Just do a search for Tim Peter Thinks, Tim Peter Thinks Out Loud, or Thinks Out Loud. We should show up for any of those.

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Sponsor Message: SoloSegment

As I do each week, I’d like to thank our sponsor and encourage you to check them out. Thinks Out Loud is brought to you by SoloSegment. SoloSegment uses machine learning, natural language processing, and some really cool AI technology to understand customer behavior and personalize the experience customers have on large enterprise B2B websites. SoloSegment does this using anonymous behavioral data that connects website visitors with the content that matters to them to help them accomplish their goals and to drive conversions for your business. They do all of this while protecting customer privacy. You can learn more about SoloSegment and all of the wonderful work that they do by going to solosegment.com. Again, that’s solosegment.com.

Show Outro

With that said, I want to say once again, how much I appreciate you tuning in every single week. It means so much to me more than you could possibly know. With the year that we’ve had with all the craziness that’s been going on, I recognize people are making choices that work for them, and the fact that you choose me and this show just means more than I can possibly say. So with that said, I hope you have a great rest of the week. I hope you have a wonderful weekend coming up and I will look forward to catching up with you here on Thinks Out Loud next time. Until then, please be well, be safe and as ever, take care everybody.

Tim Peter is the founder and president of Tim Peter & Associates. You can learn more about our company's strategy and digital marketing consulting services here or about Tim here.

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