The New Science of Buyology
Although Biology is a well-known science, there is a lesser known but of growing importance science that is also, by coincidence, called Buyology.
Buyology has been used in other context (google
the word and you get just over 500 returns, most of which are for a US
store chain), but I've started using it to relate to banking in the new
world of freakonomics, where everyone is struggling to understand the
methods to get customers buying.
My own view is that this term, in its purest form, is defined as: Buyology: the Science of Understanding Business Relationships Buyology
is all about knowing why people buy. How to create business encounters
where purchases are made that can be replicated over and over. It is
the ability to create long-term business relationships, not just a
one-sale stand. Bankers are learning buyological processes
because traditional selling and advertising no longer works. People
don't want to be sold to and they certainly don't believe corporate
speak. What they really want is to deal with businesses that
demonstrate a true understanding of their individualistic wants and
needs. That is buyology. Buyology: targeting customer experiences by their channel(s) of choice Banks'
understanding of buyology is a clear strategic imperative because
business has become so transparent thanks to blogs, Facebook and other
social media. These networks now ensure that any cover-up of any issue
is going to be exposed. That is 21st century internet-enabled consumer
power. Social networks mean that banks must start demonstrating clear
integrity to be trusted or the truth will out. In effect, you
cannot have a relationship without trust, so banks that don't
demonstrate clear integrity will only have the one-sale stand or the
partner abuser. Buyology: the sharing of a meaningful trust. Bank
relationships are based upon trust and trust is easily broken. This is
just as true in the investment markets as retail for, in the investment
markets, buyology has been moved to another extreme. Buyology for
investment banks means creating services the customer needs and wants,
but doesn't understand. The relationship has become one where
the trust is in ignorance. A little like a father-child or
priest-confessor relationship, the institutional buyer has to believe
the broker-dealer is looking after their best interests.
Unfortunately, this is being called into question, thanks to the new
regulations around best execution and transparency, which implies
broker-dealers don't always act in their client's best interests
(really?!). This trust has also been tested by Enron, Worldcom,
Parmalat and such like, and is being tested again in the credit
crunch. In fact, the recent admission by the Bank of England that
they didn't understand the financial markets anymore, in light of the
Northern Rock collapse, is shocking. When the regulators and
co-ordinators of the financial markets lose their understanding,
something has to change. Buyology: knowing the why, how, what and when ingredients of buying, and ensuring you position your business to always be there at the right time, with the right words ... there's a song with that phrase and the next line is "and you'll be mine". That's not far from what this is all about as buyology focuses upon creating strong relationships, and that's a tough call. The
future buyer will not buy from those they do not trust or understand.
They will instead use the power of social networks to find the truth
and will morph towards those who deal with integrity. A little like the Unilever's Dove product range is gaining plaudits and awards from consumers for their campaign for real beauty, we will soon see banks campaign for real banking: In
fact, the word 'fair' is interesting. We have a campaign in the UK for
"Treating Customers Fairly" created by the FSA. Is that because banks
treat customers unfairly? We have "Know Your Customer" rules. Is that
because banks don't know their customers? Buyology: knowing your customer so well that they are no longer a customer, they're a partner. In
relationships, you cannot have one side treated unfairly and, although
on the first date you may not know each other, if you don't get to know
each other well sooner or later that relationship ends. That's the
one-sale stand approach to business. A bit like a one-night stand, if
you have no interest or empathy then the relationship stops there. Relationships
are based upon understanding and compromise. We talk CRM, but you
don't have relationships with customers. Customers are sold to;
partners have relationships. Banks that turn tellers into sellers
or have big swinging d**ks in the dealing room will soon find that the
truth will out. Instead of sustainable sales, they'll get lots of
one-sale stands. The real partnerships based upon fair dealings with
trust will be the long-term sustainable relationship businesses. Buyology: the Science of Understanding Business Relationships The future of banking will be based upon which banks are the best buyological scientists.
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