This Week's Herman Trend Alert

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  The Herman Trend Alert

July 31, 2013

Marketing's Dirty Big Secret

Recently Joyce attended the Annual Conference of The National Speaker's Association. There, one of the most effective general session speakers was an 18-year-old German business entrepreneur and professional speaker Philip Riederle, wise way beyond his years. His mission was to talk about communicating with Generation Y.

Riederle had been engaged by a German telecommunications company to help them communicate with their young customers using social media. While working with the organization, he discovered a statistic that we consider startling. Something called "Prevention of Optimization" accounted for $5 Billion USD of profit. "Prevention of Optimization" means that people are not offered the cell phone plans that would be most beneficial to them. When young people discovered this fact, there was a storm of negative response on Twitter.

We are also seeing this kind of taking advantage in the hotel industry as well. Hilton has gutted its Hilton Honors program. While they claim that there are some award rooms that are available for as few as 5,000 Hilton points, most of the lower-priced rooms are 40,000 and more. Some rooms that last year were 15,000 to 20,000, this year are 40,000. Increases for more expensive hotel rooms have increased even more. Already many frequent travelers have left Hilton, taking their loyalties elsewhere. Our forecast is that more and more will do so.

As futurists, we believe that some enlightened manufacturers and service providers have already begun to change this attitude. They understand that with social media, marketers can no longer afford to take advantage of their customers and clients. Once the word is out, networked consumers simply will not continue to do business with organizations that they do not trust. They will vote with their feet and their pocketbooks and abandon marketers whom they feel are taking advantage of them.

Particularly, The Millennials will not allow marketers to get away with these pretenses. Rather than being able to hide these activities, consumers will demand transparency in all dealings. Companies that do not conform will lose their young customers, then increasingly older customers, as the news goes viral. With social media the playing field is definitely different and will continue to evolve.

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