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23 2009

The Disconnect Factor

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I particpate  in the Social Academy Leadership class which is an incredibly rich course run by Axel Schultze. The other day we discussed a theme which I belive is incredibly important–the idea that there is a huge disconnect between sellers (companies) and buyers (consumers).  If you really believe you can continue business as usual, contemplate the following statistics:
* 76% of customers don’t believe companies tell the truth in advertising. Yet, 78% rate the credibility of word-of-mouth as 7 or higher on a 10 point scale. Keller Fay Group 2008

* One in five retail customers leave the store unserved or under-served.Customer Management 2008

* Consumers put peers near the top of trust scales. They put companies, CEO’s, marketing, employees and products in the bottom third. Edelman Trust Barometer 2006

* 80% of executives believe they are doing a good job in serving customers. Only 8% of their customers agree.Bain & Co. 2006
* 54% of people said they would avoid buying products that overwhelm them with advertising and marketing. 69% said they are interested in products and services that would help them skip or block advertising. Yankelovich Partners 2004
* Consumers are close to a saturation point for things. Yet, most companies take a short-term, price, efficiency approach to marketing. Customers have hunger for more intangible desire for meaningful and valued experiences.
Henley Centre Research 2003
* Only 17% of executives consider customer emotional factors when making decisions. 74% say they focus on efficiency rather than trying to understand what customers’value. IBM Research 2006
* Over 80% of people stop buying products from companies when their trustworthiness comes into question. People spread distrust to friends and associates. Over 33% who lose trust in a company openly campaign against that company on the Internet.Edelman Trust Barometer 2006

* Consumers in the USA and Europe are 86% less trusting of companies than they were five years ago. Bain & Co. 2006

These disconnects underline the fact that business as usual is no longer possible.  Its not a matter of choice.  But of survival.

Very importantly, the buyer/seller disconnect is being led by the consumer , NOT by technological changes.

The way out?  There are many steps of course.  But social media will be very important in the mix.  Social media will allow you to begin talking to your consumer-no matter who you are, no matter what you sell- and begin to fill the gap between where you and your consumer.

Importantly, this disconnect is not found just in business.  Recent events in England underline the same problem in the political sphere ( where politician after politician has caused a furore in ExpenseGate).

The one exception to this political disconnect is a man who was virtually unknown a few years ago.  Barack Obama.  He won a virtually unwinnable election-and remains popular as president because he connected the disconnected. And one of his key tools in doing this was social media.