subject: Hitting The Target In The Age Of New Media - Part 1 [print this page] Akira Mori, president and chief executive officer of Mori Trust Company, Limited, said, Past success stories are generally not applicable to new situations. We must continually reinvent ourselves, responding to changing times with innovative new business models.
Nothing could ring truer in this New Economy where seemingly every attempt to draw on past success strategies is met with less than stellar performances. The reason for that result is that economic change, while appearing to be the same, is always based on a different set of circumstances than ever before; the flaw is to assume a recession is a recession just like the last one and that the results are the same each time. They are not.
Our current economic crisis is the modern-day economic equivalent of the perfect storm in which multiple disparate factors collide to create something different, something unexpected, something that doesnt react very well to the old traditional forms of economic stimulus.
The reason for the slow recovery of the economy is because we are not just seeing an economic crisis, we are seeing a fundamental shift in the nature of how business works; and the recovery, when it happens, will not come from the same old stimulus methods but instead will sprout from a more fundamental change of the very nature of business growth. For the economy to return to a healthy status and for business to resume the mode of successful commerce, the consumer must be listened to and catered to like never before. Todays consumers are no longer bound by the offerings of their neighborhood store. What the consumer wants may be thousands of miles away but must be deliverable tomorrow on the buyers doorstep without the frustration or cost of time and travel.
Jack Welch, chairman and CEO of General Electric between 1981-2001, faced facts when he said, The Internet is the V**gra of big business. Just like that, the guy who increased GEs market value from $14 billion to more than $410 billionand was named Manager of the Century by Fortune in 1999recognized that where he had taken GE in the past was no longer the route for the future.
The reality is, the Internet has changed the fundamental nature of competition and doing business. And although it has teased us for many years with its false promises and failed attempts at success, including its own industry meltdown and economic crash, that fall was just the foundation being laid for what has emerged in what now seems like the blink of an eye. New ways of building and delivering online products and services have emerged and, whether you know it or not, instantly your competition has increased exponentially. Your established competitors are now joined by new companies, fresh innovations and ideas, and ever-improving processes and products.
This is the real crisis that faces most businesses today, and unfortunately most havent even realized it yet. Instead of trying to rapidly adapt, they are desperately clinging to old ways of running a business that wont work in the New Economy. And it isnt event the issue of bricks and mortar that was the center of cocktail discussions prior to the dot-com crash; it is a case of best practices for the industry or sector you are in.
For example, if you are in the haircut business, bricks and mortar will still prevail because you need to physically go to a location to get the service performed. But if there is any opportunity for you to do your business or service in the virtual world, the preference for most consumers will be towards thatunless they can somehow otherwise be enticed by an element of experience or entertainment.
When it comes to reaching consumers today, its clear that you cant just go on doing same old, same old and hope for the best.
The wired world is a universe in constant flux. Bill Gates once called the new Internet era an environment of constant change and, more incisively, punctuated chaos. As all financial players are digitally connected, any downturn or upturn in a major market creates overnight reverberations in other markets. The digital world is demanding that companies react to change, but the good news is that it includes the tools they can use to stay ahead of the curve. The key is connecting your business strategy with a streamlined response.
So how is business to survive? By understanding the fact that as business climates change, the methods of marketing for those businesses are also upside down and in need of change if success is what you are after. Where, normally, you would think global economies would mean larger markets, in reality, for small companies, entrepreneurs, and professionals, the opposite is true because they simply do not have the economic firepower to try and reach everyone or satisfy everybody. In fact, the media has become so fractured it is almost impossible to reach the masses.
Therefore, to be successful in the New Economy, you must think in terms of specialties or niches within broad markets where you can be a difference maker. In fact, the more narrow your focus, the more power you can yield within that niche; and based on this fact, your financial leverage can be multiplied.
A Change of Focus
Instead of the reliance on mass media, your focus needs to be on targeted media. Businesses havent stopped using traditional media to get the word out, and indeed, its often an effective launch point for an ad campaign if you can control the cost and monitor your return on investment (ROI). Clearly, however, the gulf between traditional advertising and online advertising has widened over the past few years as audiences fragment and the Web grows to provide a new media approach.
Mass media of the last century offered a relatively simple structure, with large audiences congregated at a few outlets for a few kinds of programs. But the Internet provides seemingly infinite choices, and it appears difficult to capture the attention of an individual user when that person has split him or herself among a number of destinations for very brief periods of time. One of the biggest challenges for marketers is understanding this self-fragmentation and how to overcome it.
Reaching the individual who is your target customer first requires your understanding of who your target consumer is, and then your application of market segmentation, the process of pulling apart the entire market as a whole and separating it into manageable, disparate units based on demographics. The market segmentation process includes:
1. Determining the characteristics of your target market, then separating these segments in the market based on these characteristics.
2. Analyzing whether the market segments are large enough to support your product or service. If not, you must return to step one (or review its product to see if its viable).
3. Once youve chosen a target market that has the size to produce your needed sales levels, you can develop your marketing strategy to target that specific market. Your focus is smaller, but you are reaching the specific buyers you want.
After creating this group of prospects, you must develop your markets buying metrics to learn how many prospects it takes to produce a sale, what your conversion ratio is, and how that affects your bottom line.
