The Death of Business
The Death Of CPM , The Death Of The Retail Store , The Death of Affiliate Marketing , The Death of the Open Web , The Death of Video Rental Stores , The Death of the Landline , The Death of the Book , The Death of the Desktop , The Death of Newspapers , The Death of the Press Release , The Death of Advertising , The Death of the Pageview
What’s going on here? More importantly what can we learn from it? After studying these articles I have come to the conclusion that no, business isn’t dying…but it is evolving. We’re evolving; as consumers and as marketers.
As consumers, we want to be marketed to as the individuals we are. “Technology is fueling the consumer’s desire for personalization.1” As marketers, we are seeing that treating people as ‘the masses’ is no longer appropriate. It’s no longer about measuring our audience size but about how relevant we are to our audience1. We must become more sophisticated in our targeting efforts. One-to-one marketing is the key now, whether we are talking to other businesses or to consumers.
In One-to-One Marketing: The true promise of Dynamic Offer-Content Customization it states: “Customizing offers based on customer segments involves a sequence of steps, beginning with identification of meaningful customer segments. Any method of customer-specific message optimization requires knowing ‘who’ your customers are, beyond just their names and email addresses. You must also have some insight into what they ‘want,’ how they think, the words, terms and images that attract and inspire them (as well as those that repel them), and ‘how’ they think.”
There are two ways I know of to develop customer segments. One involves analyzing the people who come to your website, or who you want to come to your website, and developing it around their needs. In Online Customer Segmentation Made Easy it says “the easiest approach is to ask the five basic questions that all news reporters know: Who, What, Where, Why and How. By taking time to answer these five questions up front, you will be able to make the most effective use of limited resources, as you build a website that meets the needs and wants of all your customers.” While creating segments based on online behavior may yield actionable insights for your website, it also doesn’t truly represent your customer base if you sell in other ways, such as direct and retail.
In that case, there is another method that involves surveying your customers. The company I work with, C.A. Walker, does this type of segmentation analysis. We design a questionnaire that allows us to group customers as similar or dissimilar based on their attitudes, behaviors and demographics, yielding those segments that are most valuable to target. Segmentations are a valuable look into customer groups’ beliefs, lifestyles and habits.
Another point I picked up from these articles is to not be afraid to launch evolutionary products and services, even if a larger company could launch a competitive product/service with greater advantages. Far too often “industry leaders are usually so focused on maintaining existing profit centers and business practices…they ignore the threat.”4
Lastly, measures of marketing ROI are evolving also. In The Death of the Pageview it makes a great point: “The most important thing is that you are gathering actionable data. By this I mean that you have to be able to use the information you gather to make a decision and take action. If you’re not going to use it to make a decision, it’s a waste of time to even look at it.” Consolidating what these articles are saying, the important ROI metrics to gather and take action on are:
- Cost Per Customer (CPC)1
- Customer Lifetime Value (LTV)1 (links to my prior post on how to calculate and increase Lifetime Value)
- Value delivered — e.g. customers or inquiries1, less stress2, saves time2, original products3
- Average Revenue Per User (ARPU)5
In summary, it is my belief that businesses don’t truly die; they simply evolve and may become a stepping stone into something more relevant to people’s lives. Marketers must become savvier in order to evolve with these trends and must monitor only those marketing metrics that can assist to improve conversion rates and gain a deeper understanding of customer behavior.