December 4, 2005

Old Marketing vs New Marketing

by Brian Turner

Information and the New Economy

The internet has radically changed the marketing world in a number of key ways. Chief among these is the increased accessibility of information for customers.

Customers can now not only compare products and services more easily, but also communicate with one another more.

This means that selling on price alone, and ignoring the opinion of customers, is becoming increasingly difficult on the internet.

Customer-focused marketing

In 1999, Doc Searls, David Weinberger, Christopher Locke, and Rick Levine, all contributed on a short book called The Cluetrain Manifesto.

A keystone of their thesis was that the internet would bring a profound change in the company-customer relationship, not least that companies would have to become much more customer focused.

This has become a major theme in modern marketing, and marketing evangelists such as Seth Godin have made a point of bringing this message to the business masses.

A core issue that Seth Godin emphasises is that the marketer must have a communicative relationship with the customer – a two-way conversation where the marketer listens, learns, then having built up trust, provides the customer only with a quality product/service that is needed.

New marketing for niche markets

This shouldn’t be seen as a simple idealism – the introduction of the internet means that mass markets are now fragmenting into a dazzling array of niche markets.

Mass advertising is becoming less effective – and careful targeting is becoming more effective.

Nowhere is this more clearly illustrated than in Chris Anderson’s exploration of The Long Tail.

A key illustration was that early dotcoms such as Amazon are not simply surviving, but thriving, because rather than focus on a narrow market segment – ie, bestsellers – they instead allowed themselves to profitably cover almost every conceivable niche market in a way that no bricks and mortar store could rival.

There is now a huge emphasis in marketing to tap into the dynamics of this new economy – with New Marketing.

Defining New Marketing

Making distinctions sometimes requires generalisations, but here are a couple of important and useful reference points:

Creating Passionate Users

New marketing is essentially entrepreneurial, according to Creating Passionate Users:

Focus on how the user kicks ass
Evangelize
Users have power
Users “own” the brand
Two-way conversation
Personal service
Word of mouth over advertising

This can too easily look like a small business-only approach, but consider the above points in relation to Apple Computers, who have built a very brand-centred customer base, and with it, powerful market authority.

Radical Marketing

In their book Radical Marketing, Glen Rifkin and Sam Hill lay out their own set of rules for what they term Radical Marketing:

The company CEO is the primary marketer
Simplify marketing management
Direct interaction with customers
Don’t rely on the averages of market research
Use only passionate marketers
Treat customers as individuals, not numbers
Permission build a community to market to
Rethink your targeting methods
Use common sense
Keep focused on your brand identity

Although that can look primarily as a corporate approach, it emphasises the need to adapt marketing method to customer needs.

Marketing Management

In the 11th edition of Kotler’s Marketing Management, a set of differences between “Old Economy versus New Economy” are set out, which underline the customer-centric nature of New Marketing:

Organize by customer segments
Focus on customer lifetime value
Look at the marketing scorecard
Focus on stakeholders (ie, customers and employees)
Everyone does the marketing
Build brands through performance
Focus on customer retention
Measure customer satisfaction
Under-promise, over-deliver

Primarily, the approach for this new economy – this New Marketing – is to shift away a company focus from simply throwing money at mass advertising to enrich shareholders through profits, and instead to invest in forming real customer relationships which generate long-term brand loyalty and referrals.

What Every Marketer Should Know

Returning to New Marketing evangelist Seth Godin – in What Every Marketer Should Know, he provides a key list, of which the following are core elements:

Conversations among the members of your marketplace happen whether you like it or not. Good marketing encourages the right sort of conversations.
Making promises and keeping them is a great way to build a brand.
Marketing is the way your people answer the phone, the typesetting on your bills and your returns policy.
You can’t fool all the people, not even most of the time. And people, once unfooled, talk about the experience.
People all over the world, and of every income level, respond to marketing that promises and delivers basic human wants.
Living and breathing an authentic story is the best way to survive in an conversation-rich world
One disappointed customer is worth ten delighted ones.

Conclusion

Once upon a time, small business at the end of the street did what they could to serve customer needs with a friendly, customer-centred role.

Then corporate business moved in, offered choices – and pricing – beyond what the corner shops could offer. Corporations grew, and unable to compete, small businesses died.

But corporations are built on economies of scale to deliver to mass markets – as the internet creates a huge platform of fragmented niche markets, new tools are required to better serve those niche markets most profitably.

The irony is that marketing is moving full circle – to create the small corner shop approach to customer-centred marketing.

The difference this time is that in today’s new economy, small business can afford to become very specialised.

With specialisation comes the need to focus on customer relationships, and remain in a dynamic relationship with them – listening to customer needs and wants, and developing accordingly to supply them.

Welcome to New Marketing.

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Story link: Old Marketing vs New Marketing

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