Originally posted on 30 Dec 2013
Increasingly, the distinctions between differently sized businesses are disappearing; David Amerland explains why in an interesting article on Forbes. He says that today’s marketplace resembles a murky, unforgiving ocean where everyone’s invited to fish, but without any charts or protection from hidden rocks.
Why do so many businesses founder? What can be done about it? Mr Amerland says that to understand, we need to examine what’s changed. In the traditional world, businesses split into three neatly segregated groups:
· Enterprises, with their deep pockets and copious staffing,
· Mid-size businesses, which vied with enterprises at the edges, and
· Small start-ups, which had ideas and agility on their side, but little else.
In the world before social media, marketing revolved around two very specific strategies. First, the companies created marketing personas, allowing a business to “identify” its average audience and target its demographics. It then segmented that audience, allowing the division of a broad target market into subsets of consumers with common needs.
The first strategy was used to create a branding approach broad enough to appeal to a large audience, while the second was intended to personalize the marketing experience, so that each targeted subset of consumers felt that they mattered.
The practice would carve the marketplace into different reservations. While there was some overlap in the type of consumer that each player placed their sights on, there was also sufficient differentiation to create a wide margin of safety for each company.
The reason lay in the marketing channels they used. When each brand had to choose from direct mail, newspapers, magazines, TV, radio and billboards, money talked. Those who had money moved to the top of the marketing pyramid, and those who didn’t sank lower.
With a few notable exceptions, the position of each company determined the worth of their brand and the amount of money the company made. By lowering the expensive barriers to entry, social media has changed marketing to the point where every company, irrespective of size, is fishing in the same pond, and using the same tools.
To make matters worse their audience also appears to have changed. The new, social customer values engagement, interaction and authenticity in marketing. They’re much less impressed by expensive ads and professional advertising.
Adept at doing their own research and soliciting opinion from friends and experts in their social networks, they make purchasing decisions based upon the oldest criterion of all: trust.
In the digital age, trust is hard to earn, because authenticity is hard to fake. When you only have a screen to work from, and can only use content and your own distinct voice to market with, you tend to put more of yourself in each piece of content you create or share: This is what psychologists call overcompensation.
Cumulatively, this tends to create a deeper sense of who you are and what you value. When it comes to connecting with your target audience, this makes a huge difference. Edelman’s 2012 Goodpurpose study showed that when quality and price were roughly equal, the leading purchase driver for more than half of consumers was social purpose.
So authenticity is key to creating trust. And the socially aware, empowered, vocal consumers of today are hard to fool.
Similar Problems Need Similar Solutions
The traditional ecosystem power pyramid placed the enterprise at the apex, midsize businesses in the middle, and start-ups at the bottom. But when it comes to solving questions of trust and authenticity in marketing, that pyramid is now reversed.
Ironically, the scale and manpower that traditionally helped large businesses succeed now make them slow to respond to change—and therefore cumbersome in making much-needed adjustments to their marketing.
In fact, as Google has repeatedly demonstrated, success for any large company in today’s fast-moving marketplace lies in focusing your energies to work like a start-up. Being nimble, transparent, communicative and personable go a long way towards establishing the kind of social-media presence that allows your audience to know who you are.
Companies also need to be able to show the kind of flexibility and responsiveness in their marketing messages that a real person would: Just like a person, they need to choose the right tone of communication for the social media channel, be consistent in their values, be engaging, and display a vision that goes beyond selling products or services.
None of this is possible if a company doesn’t have real values, a real vision, and a real sense of purpose And for all this to happen you need trust.
Companies that work to achieve this internally also find that authenticity is their greatest asset.
The Bottom Line
Your customer base is changing—and quickly. The disruption this causes is immense.
If you simply pay lip-service to the idea, you will fall.
For more information, view the full news story (dated 23 December) on Bizezia News at: http://bizezia.com/newsindex/index/12-2013-18