A revolution is happening in this country and others, and it will continue to spread through all developed nations and beyond. A definition of revolution that fits the situation is “a drastic and far-reaching change in ways of thinking and behaving.”
The Seeds Of The Revolution
The time is the late ’60s—the audio cassette tape and the players/recorders to use it have just been introduced, and almost overnight (well, within a couple of years anyway) the old and cumbersome reel-to-reel tape recorders have all but disappeared from the marketplace. Why? Three words: convenience, simplicity, control.
The thought running through every teenager’s mind was: “I can record anything from the radio, my old LP’s or even pre-recorded cassettes, and listen to whatever I want, whenever I want, wherever I want. That’s cool!” Those teenagers are now adults in their 40s and 50s, and they love the convenience, simplicity and control that technology gives them.
The reel-to-reel tape decks of the ’50s and ’60s gave way to cassette recorders. And look at the long list of tech toys that have followed: answering machines, caller ID, call block, call forwarding, three-way calling, video phones, cell phones, the PC, the Internet, Tivo, MP3, the walkman, the video recorder, the CD recorder, the digital camera and PDAs. All of these, and more, satisfy the desire for convenience, simplicity and control—especially control! Consumers are demanding more and more control over the frequency and content of communication entering their private space. Technology gives them the power to take that control. Much of this control has been in the area of entertainment, but now. . .
The Revolution Is In Full Swing
Consumers are beginning to demand that same level of control over any and all marketing messages entering their space. By the time this issue of PPB hits your mailbox, the National Do-Not-Call List should have been in force for three or four weeks. In the 31 days from July 1 to August 1, nearly one eighth of the population of the entire country registered a phone number. It is estimated that one-fifth of all residential and cell phone numbers will be registered within the first year.
Why such a revolutionary response? One word: control! “Don’t call me, I’ll call you.” “Don’t interrupt me during dinner time!” “If I want to buy from you, I’ll let you know.” Unsolicited faxes and e-mails will be two more victims of this revolution. The warning to marketers: “Not without my consent!” and “I’ve got the power!” That power is not just about telemarketing. With the telephone, fax machine, e-mail, television, radio, newspapers, magazines and Web-enabled PDAs, consumers have the power to turn off, turn on, opt in, opt out, subscribe, unsubscribe, list, delist, answer or ignore. Yes, “a drastic and far-reaching change in ways of thinking and behaving” is underway.
With that kind of control in every consumer’s hands, marketers need to take a fresh look at every thing they do.
Results Of The Revolution—Out With The Old, In With The New
First, marketing has been the sum of activities connected with the traditional marketing mix—product, price, place and promotion. This view of things is product- and company-centered, and the new marketing view is customer-centered. In place of product, there is customer. In place of price, there is cost. Instead of place, there is convenience. And rather than promotion, there is communication.
Four C’s in place of four P’s! It’s not how can we sell this product or service, but what does the customer want? It’s not what is the price (and margin, etc.) but what is the total cost to the customer, and is the customer willing to bear it? It’s not how do we (the company) want to distribute our products, but how can we satisfy the customer’s desire for convenience of purchase? It’s not how can we promote our product or service, but what kind of communication does the customer demand? This view of marketing fits well with the CRM mantra—the right message at the right time in the right way to the right person.
Second, technology is giving this incredible power to consumers who are loving it, and the revolution will continue. But that same technology gives marketers amazing advantages if they learn how to use it and not abuse it. Rather than being limited by time, place and manner restrictions, technology gives marketers the opportunity to talk with customers in the time, place and manner the customers demand.
Third, a common way to define a market is to segment it into groups with similar characteristics. For example, the most popular market segment with advertisers has traditionally been 18- to 44-year-old women. Okay, that is a segment of the market. But look how huge it is! There may be some similarities between an 18-year-old college freshman and a 44-year-old divorced working mother of three, but . . .
Let’s refine the segment a little. How about 18- to 22-year-old women? The next step—how about 18- to 22-year-old women who are attending college? Let’s take it all the way—18- to 22-year-old women, attending college on a partial scholarship, who have been married and divorced, have one child, have at least one credit card, drive a Toyota Corolla more than three years old, took at least one flight within the past year for pleasure, have two parents living, are descended from Italian immigrants, hold a black belt in Tae Kwon Do and play backgammon every Thursday night. That’s what you call micro-segmentation!
Now we are getting somewhere. What if some of these consumers like classical music, play the piano and wear pearls every chance they get and others are into heavy metal and tattoos? Now what? How far do we take this argument? The logical conclusion is this: the ultimate market segment is a segment of one! One-to-one marketing!
How Does This Revolution Affect Our Industry?
First, suppliers and distributors must listen to the voice of the customer—both the end user who pays our bills and the end user’s customers. What do they want and need in a promotional product or service? Is the cost and value of our products and services acceptable to them? How can we make it easy for them to do business with us? When, how and how often do they want us to communicate with them?
Second, we must seize the opportunity this revolution is handing us. Advertising Age estimates that $28 billion will be diverted from telemarketing to other forms of advertising and direct marketing methods! How much of that money will flow into our industry is up to us. We already know how to develop relationships. We know how to do one-to-one marketing. We can and must capitalize on that knowledge and experience. Long live the Revolution! PPB
Jeryl G. Wray, CPIM, CIRM, president and CEO of Lindon, Utah-based distributor Zoom! (UPIC: zoomzoom), is an instructor in resource management for APICS, The Educational Society for Resource Management, and a member of the PPB Editorial Advisory Council. He can be reached at Jeryl@zoombiz.biz.