May 25, 2011 | Change, Customers, Marketing, Social Media, Strategy
Retailers have spent 50 years offering a wide range of options to scratch any shopping itch. They have trained consumers to expect, indeed demand, a wide range, but given their walls are not elastic, is it any wonder that that when the elastic walls of the e-tailer comes along, we do what they have trained us to do, check out all the options and buy the one that best meets our needs.
Another perspective is that retailers to date have had all the power, what got stocked had a chance of sale, so retailers charged suppliers to have their product on shelf, and charged more for the best sales positions, in effect mixing the picking of winners with extraction of cash from suppliers. Now, suppliers have another option, one where the usurious practices of bricks and mortar retailers is mitigated, and a product has the opportunity for sale on its merits, not just on the pocket size of the supplier.
Is it any wonder the shift to net shopping is gaining momentum, the retailers have only themselves to blame that they did not see the shift happening, or just wished it would go away, and failed to use their capital and position to carve out a position for themselves.
May 19, 2011 | Communication, Customers, Marketing, Social Media, Strategy
It will be worth watching the way Microsoft goes about leveraging their $8.5 Billion (should have paid Aussie dollars?) purchase of Skype, there will be a swarm of lessons to be learnt:
- Integration of a “free” service into a product/profit business model. This challenge will create sufficient tensions and cultural speed bumps to keep the academics busy for a long time. History is against Microsoft, most purchases like this that seek to integrate differing cultures fail to add value in the long term.
- Skype has a huge customer base, but is only marginally profitable, turning that around without risking the loss of the existing customer base who want a free service will be problematical
- To what extent is this the foundation of a marketing effort by Microsoft to protect their hugely profitable Office franchise from cloud based competitors like Google Docs, and how will this all pan out?
- Will the existing Skype customers continue to support the service now it is part of the “evil empire”
- How will Apple and Google react, both appeared to have been beaten in an auction for Skype. They both have communication products that compete with Skype, but few users.
- Can Microsoft assemble the capabilities to build new, risky, communication products that undergo a process of continuous improvement in the market with the input from users.
As a user of Skype’s free service, I am not sure how I would react to being charged, probably just “suck it up” but the commercial opportunities for conferencing calls using video must be immense, and the free service is a great entry point with a huge existing user base. Hopefully Microsoft sees it that way
May 12, 2011 | Collaboration, Leadership, Management, Marketing
I have been surprised a couple of times recently when I realised that two B2B businesses I was working with really had no idea how their ultimate customers used the products they bought from us. In both cases the products were sold through distributors, whose paranoia about both parallel competition and losing the businesses to a slicker option, because the distribution grass is always greener, prevented them sharing information.
Both the clients concerned were spending significant resources dreaming up new products and technologies, considering process, distribution and marketing options, but were flying blind because they had no idea of what was happening currently in the labs of the final customers .
Asking them how prepared they would be to endorse a pilot putting the flaps on the plane down when he did not know how high they were now brought the obvious response, but where is the difference?
OK, you may not hit the dirt in any way other than commercially doing it in a business, but it is just as stupid.
Blind-flying appears to often be a result of the pressure of the “just do something” attitude, appear busy and stressed, and then boss will leave you alone, but doing anything without understanding the starting point is just plain dumb.
May 10, 2011 | Customers, Marketing, Social Media, Strategy
Pretty big aspiration, to outcompete the two businesses that have consistently demonstrated the power of innovation as the core competitive tool over the past 10 years, and have reaped the rewards by creating and redefining markets and then taking all the gravy. The story of Skype since the company was initially bought by Ebay is enlightening, and shows how it has been done.
Ben Horowitz, a tech entrepreneur and angel investor got into the act by being part of a consortium that bought Skype for just over 2 Billion $18 months ago. They withstood full frontal assaults from both Google and Apple, who both have a habit of winning, and have just announced the on-sale of Skype to Microsoft for 8.5 Billion. Reasonable return.
In Bens blog entry, where he announces the sale, and articulates the short history that netted$ 6.5 billion in the time it takes my local council to consider an application to build a fence, the key to this stunning outcome is in the first sentence in the second last paragraph, where Ben referrs to the quality of the people, and the network effect of existing Skype users as being the key to the success.
The power of an idea whose time has come, coupled with the best of the collaborative and networking tools of the net 2.0, and great customer service.
May 10, 2011 | Branding, Change, Marketing, Social Media
Branding and brand marketing has always been about finding customers for a product, a “build it and they will come” approach. But life, and the world has changed from just 20 years ago.
I remember the day I saw my first fax, an astonishing tool, but I have not used one in 10 years. At that time I worked for a large company, and the “Boss” got anxious if he could not walk down the corridor and talk at (deliberate grammatical error there) anyone he wanted to, at any time, without the risk of anyone either contradicting him, or not doing as they were told.
Now.. That boss is as relevant as a dinosaur, the world of marketing is all about the individual, “find a customer, and build what they want!” It is products for customers, and the tools of the last 20 years have made the middlemen of previous generations, that command and control boss I had, the advertising agencies, promotional consultants, creepy blokes from universities who you just knew could never have sold a box of matches to a freezing man, irrelevant. The difference is the e-tools that have emerged over the last 20 years, transparency, and the flexibility and opportunity they bring is brings is king, although most institutions hate it, as they survive by hiding things.
When everyone can be a publisher of news, books, photos, ideas, the barrier to entry of needing a printing press is gone, all it takes is $600 for a computer and connection, and if you are really skint, go to the local public library and publish for free.
Morgan Spurlock has made his point in several independent films very differently, he now does it again, by selling naming rights to his TED talk, as he says, probably the only time it will happen. Worth a look.
May 4, 2011 | Communication, Customers, Marketing, Small business, Social Media
The technical solutions emerging are fantastic, but how often do you see the technology get in the way of genuine interaction with a customer?.
Like any tool, the tech-tools of the 21st century are only as good as their users, and if their users are technology obsessed, as many seem to be, so what? How does that add value to the consumer?
The great opportunity is to use the tools to become customer obsessed, and genuinely deliver value and benefit to customers by intimately engaging with them and their needs.
It takes effort, and the right culture to support the effort, but “micro-marketing” to consumers, meeting their individual needs via the tech tools will become the driver of success in the future.
