Tuesday, August 02, 2005

"Mass-Marketing is Dying, Here's How Your Business Can Survive"

Isn't it true that we all love to have new things? However, most people, wouldn't you agree, dislike the idea of being sold by a salesman?

Derived from the obvious answers to the questions above, I've come up with this theory:

No one likes to be sold, but everyone loves to buy.

Profits lie in helping your customers buy what they want, not in shoving your products down their throats. The easiest way to help your customers to buy, is to develop products around your customer's individualized needs.

This requires a one-on-one approach which defies the laws of mass-marketing. (Where a product is developed and then promoted to thousands of people to reach the few who will purchase it.) Wouldn't it make sense then, to look at the customers first, manage them (before we manage the product), find out what they want to buy, and help them buy it? Essentially, we could find something for everybody.

In previous times, it was not cost-effective to gather detailed information about individual customers and develop products around individual needs in big business. This would have taken billions of sheets of paper, and hundreds of dedicated researchers. There would be other people required to search through the billions of names and preferences of their customers, all making millions of recommendations about what a company should do next. A market-share approach of finding a generalized geographic or demographic pattern and providing whatever products sold well in that area was the most cost-effective way to market something. However now with the computer, a world of individual customer information can be stored, sorted, and even gathered automatically into an easily manageable database.

Could we not set up a system then that would recommend certain products to certain customers, helping them to buy what they really want to buy? Or a system that individualized products for customers based on preferences, such as color or style?

With technology, we can now set up a more efficient product recommendation system individualized per customer, rather than by a geograhic area. For example, with the old mass-marketing approach, one might develop 10 products and run a direct mail campaign within the neighborhood promoting the store brand name, or general product line. They would try to reach as many people as possible, hoping that 2% come in and eventually purchase a product.

Now however, with the advancement in computers and technology, one can now look into their customer database, which can be purchased if they haven't set one up, and find that product #6 fits customer #567 better than any other product they have, based on the customer's preferences. One could then make a recommendation to that customer about that specific product, available in their favorite color.

Instead of sending out a mass-marketing direct mail campaign, the business owner could send out an individualized post card or letter with the customer's name on it, promoting the product which best suits them. (We could apply this to several other mediums as well, such as sending the customer to a specific web page on the internet, or certain telemarketing script over the phone, etc.)

This might cost a bit more to set up in the beginning, designing several different post cards, letters, web pages, scripts, setting up the computer system to automatically gather information and match specific products with specific customers, printing their personal names on each letter, etc., but it can be done, and in the end you will have a more qualified, more personalized, cost-effective marketing tool which will generate more business than the old mass-marketing strategy, for the following reasons:

1. It is personalized to the customer.

2. It promotes a product which satisfies their specific need, and eliminates the fluff.

3. You found the product for them, so you're helping the customer to buy, which they love to do.

4. You're not trying to sell someone something they don't want.

All-in-all, the theory remains the same; find a need and satisfy it. The more targeted your target market is (down to each customer's personal preferences), the better your results will be. The point is, technology is making it easier and easier (and cheaper and cheaper) to take a one-on-one customer oriented approach to developing, promoting, and selling your products. The crazy noise in today's society makes it almost impossible for a mass-marketing campaign to achieve the same results as a fine-tuned and targeted, personalized, customer specific approach. Begin to manage your customers before you manage your products, and you could see your business taking a new direction, with new product developments - one that will prove more profitable on your bottom line.


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