Tuesday, August 18, 2009

How to Thrive in a Changing Business World: Part 2

Challenges Deterring Business Success

Before the advent of the Internet, finding customers was straightforward. Sales and marketing processes were highly predictable. With repeatable advertising, companies could typically deliver consistent results. Customers
remained loyal because a select few businesses held the answers, products and solutions people needed. Then the Internet came along. Like a wrecking ball, the web began crushing predictable business models. All of a sudden, consumers had unbridled access to information—and a large pool of new shopping sources. Sales and marketing processes fundamentally shifted as people gravitated to the Internet for bargains. As a result, many business owners were forced to rethink nearly everything they took for granted when they started their businesses. Today the only certainty is uncertainty. The perceptions that customers aren't spending, marketing isn't working and there seems to be no time to do anything about it seems to be rampant.

The "We Can't Afford That" Syndrome
People have more choices than ever before, creating a shift in power. In real estate terms, it's a buyers market for everything. So why aren't shoppers spending? According to a new study of 30,000 consumers, 90 percent are
sacrificing spending and nearly half are tapping fewer discretionary dollars. An uncertain future has prevented many consumers from purchasing or investing in nonessential goods."We may not at a conscious level be able to explain why we're cutting back. We're just doing it. You will just do it by intuition. And if you start to save
money by intuition, you will never ever question it again," said Martin Lindstrom, author of Buyology: Truth and Lies About Why We Buy. When businesses do attract new customers, it's a lot harder to keep them.
The web has enabled consumers to shop the entire planet for the best deal. This means businesses must work harder to keep their customers. Studies show that consumers have a low tolerance for bad service. After an
average of about three negative experiences, customers will abandon retailers, an IBM study found.8 Often subjective issues related to service or support will break the loyalty chain between a consumer and a business.
"Shoppers are calling the shots," said Fred Balboni, global retail industry leader at IBM. "Those [businesses] that can strengthen relationships with new and existing customers will differentiate and dominate as the economy

Why "Old Marketing" Is Dead
The marketing of eras past was simple. Place an ad in the newspaper, send a direct mail piece, attend a trade show and repeat. Marketing results were predictable. To grow the business, owners simply invested more in
marketing. Today, however, many of these "rules" are null and void."Now people don't care about products. But that's what most advertising is—product messages. People do care about themselves and care deeply about solving problems. Marketers need to stop the egotistical approach of talking up products and instead provide valuable information that people want to consume," said David Meerman Scott, author of The New Rules of Marketing and PR.

Today people get their news and mail online. The old method of broadcasting a generic message to the masses has been replaced with laser-focused marketing efforts. For example, finding people in Alaska looking to travel to beach towns has never been easier with online marketing. However, this effective marketing road is frequented by many competitors, creating an ultra-noisy marketing landscape where small businesses struggle to stand out.

Add that many consumers ignore much of what they see online. For example, people only read about 18 percent of what's on a web page, spending only 4.4 seconds for every hundred words, found a comprehensive Nielsen study.
One thing people like to do is socialize, and this represents a new marketing opportunity for businesses. In 2008, 41 percent of U.S. web users frequented social media sites at least monthly and 93.9 percent of U.S.
adults will rely on social media sites like Facebook by 2013, found an eMarketer report. "Consumers may say the primary reason they use social networks is to connect and communicate with friends, but the stream of
status updates and posts contains myriad nuggets of information about the products they use, the media they consume and what they plan to buy," stated the report.For small businesses, connecting with customers at the relational level will be a key way to stand out in a competitive marketplace.

Finding Time to Change
Keeping the company operational is clearly a full-time task for most business owners. The overwhelming variety of daily tasks often takes executives down paths they don't enjoy. Activities like accounting and managing people
are often time sinks that can prevent business owners from innovating. The motivations that led to the birth of the business are often forgotten. The risks of trying new ideas might seem to outweigh the perceived benefits.
Often business owners are stuck in a pit of uncertainty. Businesses do spend time and resources updating their systems and equipment. But what about a thinking update? With the right ideas, is it possible to alter the
course of the business?

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