Hitting the Target in the Age of New Media
by J. W. Dicks, Esq. & Nick Nanton, Esq.
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 doesn't 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. Today's 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 buyer's 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 Viagra of big business." Just like that, the guy who increased GE's market value from $14 billion to more than $410 billion—and was named "Manager of the Century" by Fortune in 1999—recognized 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 haven't even realized it yet. Instead of trying to rapidly adapt, they are desperately clinging to old ways of running a business that won't work in the New Economy. And it isn't 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 that—unless they can somehow otherwise be enticed by an element of experience or entertainment.
When it comes to reaching consumers today, it's clear that you can't 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 haven't stopped using traditional media to get the word out, and indeed, it's 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 it's viable).
3. Once you’ve 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 market's 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.
Shotgun vs. Specialists
So how does this apply to today's online realities? In the past, advertisers had only one choice—they took the shotgun approach, scattered themselves to every mass media outlet they could afford, and hoped a percentage of those people might pay attention. It was about trying to be all things to all people. It was spending money on local newspaper ads, cable television spots, etc., and hoping potential customers would catch a glimpse of them as they turned the page.
It's the equivalent of the long-ago era of the general practitioner whom everyone would go to no matter what his or her medical condition. Just as patients now go to specialists who can help them treat their specific injuries and illnesses, consumers have become selective about where they go to get their goods and services. Online it looks something like this: health conscious individuals who might have subscribed to a general magazine on health are now signing up for blogs, newsletters, podcasts, user groups, e-mail lists, membership sites, and more to address their exercise regimen, a preventative medicine program that suits their lifestyle, their specific heart condition, their type of diabetes, etc. More and more people are taking advantage of outlets with increasingly specialized information.
With so much out there floating around and vying for consumer attention, today's savvy marketers are likewise getting more specific in order to forge a competitive advantage. They're identifying who their potential customers are, cultivating these relationships, and in many cases even charging them for the privileges of membership. Let's say you have a dance studio in town that offers salsa lessons. In the past, you'd put a medium-size print ad in the local paper, maybe shoot a local TV commercial, and hope for the best. Now, you can create a sizzling, colorful Web site with step-by-step instructions and high-energy videos of those lessons that "students" can pay an online subscription fee to see. Seeing is believing. Even if folks never step into your studio for the real deal, you get them to subscribe to your service to learn how to dance from home.
It can work the same in the sports world. If you give golf lessons in real life, you have to hope people see those local classified ads, right? But if you give golf lessons online and charge a fee to help your students’ progress, you've taken the world in your hands without paying any attention to geographical boundaries. You can now teach at any level you want, whether that market exists in your locale or not! Someone might buy an issue of Car and Driver for five bucks, but fans who want to go behind the scenes and into the pits of NASCAR can probably find a better outlet, which they're willing to pay more for, to really get them into the action and on the inside of the sport they are ravenous fans of. The list of industries and examples goes on and on!
A lot of these opportunities lend themselves to a virtual delivery with cutting-edge technologies, but some of this ongoing flow of information extends to tangible media as well. There has been a resurgence, for example, of paper newsletters and, although still virtual, teleseminars as well, neither of which are considered new technology. Most of these models of selling information, or ideas, offer the basics for free up front, but if they want what you've got to offer, and you promise to go deeper, they'll be happy to pay for the privilege of regular updates and insider opportunities.
The key to setting the world (or at least your bank account and profit margins) on fire in this world of new media is niche-ing down your market to create value in the people you've niched into. By building your audience, you build your value, and that in turn increases your roster of consumers who will be willing to pay top dollar for the incredible things you offer. Remember—the power is all in the presentation to the right audience.
So, when thinking about growing your business during the current economic shift, think big; but then make sure you think small with regards to what niche you can ultimately serve to prosper the most. After you figure that out, if you take the time to determine the best format or combination of formats to deliver your products and services to your audience, you will find a formula that is wildly profitable!