Every year, hundreds of thousands of businesses are started with nothing more than a whim and a prayer and website. Most will fail. Some will muddle through, doing nothing particularly amazing, beyond staying afloat. But a few will rise to meteoric success and become iconic brands. (Think Zappos)
What’s the difference? Why do some e-biz start-ups succeed while so many others come and go faster than a bad Chinese restaurant?
Often it’s for the same reason that traditional, brick and mortar businesses fail: They ignore the most basic tenets of internet marketing and brand management.
Many people in the on-line world seem to think you should abandon everything you learned in Marketing 101. Apparently, the rules no longer apply.
Nonsense. You don’t have to reinvent the wheel just because there’s a new kind of superhighway. You just have to take a little different route.
Take, for example, the 4Ps of marketing: Product, Price, Place & Promotion. It’s an old- school notion that’s just as applicable today as it was in the heyday of Madison Avenue. However, there’s at least one new P you should seriously consider.
But first, let’s look at the originals that make up the marketing mix:
There’s an old saying in advertising circles… “nothing kills a crummy product faster than great advertising.” In 2012, it’ll happen in hyper time.
Blogs, tweets, and consumer generated reviews will quickly doom products that don’t deliver as promised. So the first P is more important than it’s ever been.
Thirty years ago, if you had pockets deep enough for a sustained mass media campaign and a good creative team, you could you could go to market with a mediocre, me-too product.
Not anymore. These days your product or service has to be among the best in class Because people expect more. They’re looking for something compelling — and genuinely different — that’s built right in to your core product or service.
Seth Godin talks about a Purple Cow or a “Free prize inside.”
Tom Peters talks about the pursuit of WOW!
Whatever. The fact is, Product still is, and always will be, the single most important aspect of marketing. Doesn’t matter if your business is providing the latest, greatest mobile web technology, or an old-fashioned widget, the Product comes first and all the other P’s fall in line from there.
I’m no expert on pricing, but I know this: Smart pricing strategies are more important than ever. Here are just a few of the reasons:
First, there’s the economy. Consumers are being forced to pinch pennies and embrace the new frugality.
2. The internet enables us to make more intelligent purchases than we did 15 years ago. We’re doing more research and minimizing “bad”purchases. We’re still willing to pay a little more for premium brands, but we’re not going to get gouged.
3. In the world of e-Business you can’t just apply the old “cost-plus” pricing model. It’s way more complicated than that. Even though internet-based businesses tend to have high margins you have to work really hard to develop sustainable revenue streams. In order to build a loyal following and, ultimately, generate revenues, many companies can’t charge anything.
4. It’s harder than ever to compete on price. Unless you’re the size of Amazon or Wal Mart, forget about it! There’s always someone waiting to undercut your price. You might be the low price leader in your little town, but now people are searching the world for a measly little discount.
So you have to go back to the first P. You have to devise a product or service that’s worth more than your competitor’s.
Apple has adamantly stuck to their premium pricing strategy. It keeps them honest. They know they have to keep launching products that are superior in design and function. They understand price elasticity and the value of their brand. And no economic downturn should ever change that.
The traditional third “P” refers to distribution channels and the placement of your product in stores. Basically, where and how you sell your product.
This is still one of the most fundamental elements of any solid business plan. Look at Costco… They said, we’re a wholesaler, but we’re going to open our warehouses to the public.
That’s a big idea. A purple cow.
Even though you may be selling your product strictly over the internet, Place is still an important consideration. In fact, you could argue that the internet, as a distribution channel, has actually added complexity to the decision…
Will you sell on Amazon? Start an affiliate program and let other web merchants sell your products? Will you warehouse some products, or drop-ship everything? Sell directly to consumers? Thanks to the internet, there are all sorts of possibilities.
Historically, the fourth P hinged mostly on mass media advertising. Sure, there were other elements such as sales, telemarketing, PR and sales promotions, but advertising was the heart of it. And many businesspeople equated advertising with marketing.
These days, a lot of people seem to think SEO is synonymous with marketing.
But SEO is just another marketing tactic… Just another way to spread the word about your product or service. There are dozens of others you should consider.
Once again, the internet complicates matters… Where there used to be just four choices — TV, radio, print or outdoor — you now have blogging, You Tube, Facebook, Twitter and a hundred other online options to throw into the mix.
And don’t forget packaging, which has always been lumped into this category. If you’re doing business exclusively online, your website is, essentially, the packaging.
But here’s the good news about the 4th P: The internet offers advertisers what they’ve always wanted: definitive, trackable ROI on every ad placement.
So that’s a brief on the traditional 4P’s of the marketing mix. Think you can afford to ignore any of them? What about the new one I mentioned?
The biggest complaint against the original 4 P’s was this: They’re designed around what the company wants, rather than what the consumer really needs. Too inwardly focused.
So here’s a new P for your consideration: Perspective. The consumer’s perspective, to be precise.
Companies that thrive today are the ones that embrace the perspective of the consumer. Not the 1960’s idea of the consumer as one, massive heard of lemmings. We’re talking about individuals. Real people. Mom and Pop.
How do you do that?
It’s market research in its most basic, fundamental form. It’s what Tom Peters calls “strategic listening,” and he contends it’s the most important job of any C-level exec or business owner.
Strategic listening requires that you set aside your existing perspective and listen without prejudice. You can do it in person with your front-line employees. On the phone. In focus groups. In on-line chats. On Twitter or Facebook. Doesn’t matter.
The point is, you’ll come away with a new perspective about the genuine wants and needs of your potential customers. And that’s what weaves all the other Ps together.
You may have to change your product or revise your service. You might have to rethink your pricing structure, shift your promotional strategy or adopt an entirely new business model, but it’ll be worth it.
Because then you’ll have a business built on a foundation of solid marketing fundamentals… five P’s and one capital B: Branding.
It’s all Branding.
Need help getting that new perspective you need for the new year? Call me. 541-815-0075. You can also follow the Brand Insight Blog on Twitter: Brandsight.