Getting your arms around marketing

Doors and Hardware, Feb, 2007 by John Graham

MARKETERS HAVE LONG BELIEVED THAT THEY COULD INFLUENCE the buying habits of consumers. In fact, as the definers of both desire and taste, they took pride in creating demand. As Ford has discovered to its dismay, even what would normally be known as effective marketing can't persuade consumers to buy a very good product such as the Ford Five Hundred sedan. Ford is far from alone.

There's no turning back; it will never be the same. Even the staunchest Luddites must find it difficult to deny the extent to which technology has changed everything.

The Internet has turned consumers into "lowest-price" shoppers, many addicted to surfing the web to save money. Even so, we can fool ourselves when it comes to price. For example, a speaker at sales meetings has shown a particular children's shoe to dozens of groups. He presses a button and the shoe gets bigger.

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Everyone is instantly interested in the shoe. Parents of young children want to know where they can buy them. "What's the appeal of these shoes?" he asks. Anyone with two or three kids gets it instantly. "I wouldn't have to run to the shoe store every few weeks." The appeal is convenience, not price. Yet, the manufacturer positions the shoe as being easy on the family budget.

In the same way, both Kodak and Fuji, long the largest manufacturers of camera film, have been caught off guard by the lack of consumer interest in having prints made from digital cameras. Cell phone, email and computers changed all that. Prints are yesterday.

And then there's music. CDs are out, too. When you can choose and pay for the exact songs you want from iTunes, why buy a CD when you were really only interested in one or two songs?

The bottom line is that there's no way today to hold the customer captive. If you try, you're done.

Residential real estate is a good example of an industry that is attempting to do everything possible to maintain the mystique of the REALTOR[R]. For several generations of homebuyers and sellers, real estate brokers played a key role. They were the access point. If you wanted to see listed homes, it was literally necessary to "go through" them to get into the hen house. Control of the product and the process was key to maintaining their hold on the 5% commission.

The Internet has changed that, too. The iron grip is going away. The number of homes "for sale by owner" is a clue to what's happening. Certainly, some owners fail at the task, as do some brokers.

Every home is available on the World Wide Web. Homes are being sold to buyers who have never seen them except on a website.

In effect, the Internet is quickly empowering buyers and sellers. Having had plenty of practice on eBay, they now feel competent and self-assured to take on the task of selling a home. These are also the same people who have been through the refi process as many as a dozen or more times so the process doesn't intimidate them.

Google, as much as any technology, has emboldened consumers. We can find the information we need almost instantly. Far less dependent on others, they venture out on their own.

Home Depot says, "You can do it. We can help." This is another example of consumer empowerment, as is online banking, stock market transactions, managing 401(k) accounts and much more.

Then, there's making clothes. Up until the 1950s or so, every bride started married life with a sewing machine. Sewing courses were in every high school. Then came the discount stores and women working. Sewing machine sales dropped to next to nothing.

Sewing machines are now enjoying brisk sales, as Time magazine reported recently. Today's seamstresses didn't learn how to sew from their mothers. They are doing it themselves. They do not want others to decide what they're going to wear.

Customers will not and cannot be held captive. The real estate industry is fighting a losing battle to control the buying and selling of residential real estate, as is anyone who tries to thwart the "taking charge of my life" movement.

Facing such circumstances, what do marketers do to meet these challenges? Here are five principles to follow:

1. MAKE EVERYTHING TRANSPARENT. Over a three-month period, the copy equipment dealer offered a series of lease arrangements, each lower than the one before. Rather than generating increased customer interest, the process produced distrust. The company chose another vendor that provided a clear, simple, up front proposal detailing all the costs. Even when notified to pick up the old machine, the original dealer back came with yet another proposal that had a lower price. A lack of transparency kills confidence and trust.

2. COACH, DON'T SELL. The headline in the ad caught my attention, not because it was compelling but because it presumed to tell me what I was thinking. The ad was for a specialty hospital and the headline read, "The people you trust at the place you know." This is an example of the old marketing, of telling customers how and what to think. How different are the TV ads for CDW, the online electronic warehouse. A slightly nerdy IT guy faced with seemingly insurmountable issues comes through every time thanks to his empowering partnership with CDW. The difference is significant: coach, don't sell.