Jun 10, 2010 | Customers, Management, Marketing
Most marketers equate success to more; more ads, more locations, more customers, more Sku’s, more appearances in the press, and so on.
However, the quest for “more” leaves a lot on the table, as it disregards the value of what you have.
Would you rather have an extra customer that delivers an extra $10,000, or an extra 10,000 from an existing customer?
In most circumstances, it will be the latter, because there are no acquisition costs, a deepened relationship with an exisiting customer that creates barriers to exit for them, and a more predictable operational and logistic chain that inevitably costs less than one set up, even if it is entirely routine, to service a new customer.
Share of wallet is a powerful driver of performance, as it implies that as you get more of a customers wallet, you become more engaged with their key processes, and become core to their efforts to add value in turn to their customers.
Being excellent with a few is usually a better approach than being average with a lot.
May 25, 2010 | Customers, Marketing, Social Media
A newish term to describe the capacity of consumers to respond, and to initiate change, and it is having a huge impact on the demands on the people running the marketing efforts of all organisations, and the breadth of their responsibility within those organisations.
Suddenly, because of the reach of the net, marketers are being asked to create startlingly different products in order to remain differentiated from the competition, whilst being socially and ecologically responsible, but still meeting the financial metrics that dominate organisations.
In most cases, this is a very big ask, marketers are usually as bound by the successes of the past as anyone else, consumers need to push them to new solutions by rejecting the old ones.
Apr 27, 2010 | Category, Customers, Innovation, Sales
Running a qualitative consumer research group recently, one of the participants surprised me with a metaphor that made great sense.
She said that the web had taught her to “forage”, her term, looking for stuff of interest, checking out the Sku’s available in a category far more widely than previously, when she had a modest “basket” of regulars, with a pecking order, and that did not change much from month to month. This reminded her of the behavior of the farm dogs she had as a kid, always looking for something to eat, in different places, and always nuzzling something new when it became available, and then deciding if it had any interest.
The implications are pretty clear. Experimentation within categories, and into adjacent categories may have been encouraged by the transfer of the “nuzzling” behavior we undertake every day as we cruise the web, looking for tit-bits of interest.
Sku numbers in supermarkets have exploded over the last 20 years, and I always thought it was just the drive for shelf presence and often minor differentiation in an effort to attract consumers that had driven it, but perhaps there is something more primal in our reaction to variety.
Apr 21, 2010 | Customers, Demand chains, Leadership
Integrated value chains are nothing new. IBM had one before it started “outsourcing” what turned out to be the future to Microsoft and Intel, Ford had one at centered around the Dearborn factory, from where the company controlled by owning everything from growing the cattle to supply the leather for the T model seats, to the end of the production line, and beyond, and even the Venetian shipyards way back in the 1400’s was an integrated chain.
What has changed are the tools by which we can manage integrated value chains, and the recognition that they do not necessarily need to be controlled by equity, the power of the customer is far more potent.
