Recommendation Age Law of Consumer ConfidenceThe year is 1998. You want to grab dinner and a movie with a coworker while on a business trip. You ask your local contact for a restaurant recommendation. He gives you a name and address, and you hope for the best. Next, you pick up a magazine and skim through a few new movie reviews. What’s good? You pick a movie you’ve never heard of and then open up the phone book in your hotel room. “Hmm… that address sounds familiar.” You pull out your city map to see if the theater is near your hotel room and the recommended restaurant. It is! So, you give the theater a call and listen to the recording that lists this evening’s show times.

For 2013, that’d be a lot of work, right? You could probably find both a movie and a restaurant more your style with just a couple minutes spent on your iPhone. You could throw out a quick Facebook status asking your friends for movie recommendations. You could hop on over to Urbanspoon or Yelp to find a restaurant that creates your favorite kind of food. The entire information hunt is about a thousand times easier – not to mention more tailored to your particular tastes.

Welcome to the Recommendation Age

This is what I call “The Recommendation Age.” It’s nothing new. (After all, you still asked that business acquaintance for a dinner recommendation back in 1998.) But what is new is how universally accessible recommendations have become. The backyard fence and water cooler – where we received many of our recommendations twenty years ago – are now available anywhere, anytime, from all of your devices.

There are five laws of The Recommendation Age. Over the next few weeks, I’ll be writing about each of these laws:

  1. The Law of Consumer Confidence
  2. The Law of Authenticity
  3. The Law of Transparency
  4. The Law of Responsiveness
  5. The Law of Ratings and Reviews

The Law of Consumer Confidence

You could sum up the first Law like this…

The Recommendation Age levels the playing field between big and small brands.

  • Consumer confidence is not so readily granted to big companies just because of sheer size and prevalence. These major brands have to work harder than ever to gain consumer confidence by providing an excellent product and excellent customer service.
  • Even the smallest companies can gain high-level consumer confidence when they offer an excellent product and excellent customer service.

In the past, if you wanted a new guitar, you’d have to go to the local music store and pick from their selection, knowing little to nothing about the quality of product or service behind the brand. Today, you can hop on any number of music gear retailer sites, view YouTube product demonstrations, or maybe even catch a Google Helpouts session from a particularly savvy manufacturer.

Perhaps one of the industries that’s been most affected by the Law of Consumer Confidence is healthcare. Molly Gamble of Hospital Review writes:

Between word-of-mouth, the CMS’ Hospital Compare, HealthGrades and various consumer blogs, patients have seemingly infinite amounts of healthcare data available to them. David Woolwine, vice president of Learning and Organizational Development at Sentara Healthcare, an eight-hospital system based in Norfolk, Va., notes that patients have become more informed over the past few years and have taken a new role in care delivery as a result. “They know the ins and outs of healthcare now,” he says. “They’ve looked at particular diagnoses and can participate in the delivery of their care. People look at quality and service ratings, blogs and all kinds of consumer comments. They are also asking more clinical questions,” says Mr. Woolwine.

Healthcare is just one industry that consumers of The Recommendation Age are able to question with increased (consumer) authority. Consumers are doing the research, gathering the information, and challenging industry establishments with intelligent, informed questions.

Meeting the Demanding Standards of Consumer Confidence

So, what can your company do?

  • Put long-term improvement above customer retention. Instead of thinking, “How can I keep my current customers?” ask yourself, “How can I make a better product?” Address the second question and the former will resolve itself.
  • Put your people out there. Train your employees to be brand advocates. Everyone should be a wealth of information, and everyone in your company should be available to hear and respond to consumers through social media.

Check back next week for a discussion on The Law of Authenticity. Or, read ahead when you download the eBook from Amazon.