Six Trends That Will Change the Way You Do Business

Dec 14, 2005 5:14 AM  By

’Tis the season to count blessings, enjoy time with loved ones, and make predictions about the year to come. But let’s leave predictions regarding consumer confidence, the job market, and the stock market to the economists. Those numbers have little effect on individual businesses creating long-term relationships with their customers.

Instead, let’s focus on the six trends that will continue to change the way we do business:

1) Response from rented lists continues to decline. The formula for success in direct marketing used to be: the number of rented names x as many mailings as possible = unimaginable profits. Not anymore. The formula changed to: the number of rented names combined with names from cooperative database models x as many mailings as possible = more profits.

Now that formula is ready for replacement, as rental names generate diminishing returns. Why?

Reason one: Our world has changed. Promotional messages bombard us everywhere we turn. Our senses are so overloaded that they simply shut down. Many new catalogs go straight from the mailbox to the recycle bin. Potential customers haven’t the time, energy, or inclination to browse unless they have an immediate need for your product or service. And if that need is there, they will search the Internet for your competitors to see if they can get a better deal.

Reason two: Too much of anything is simply too much. When it was easy and profitable to replicate successful mailings, the market was saturated. If you consider the total consumer base as a goldmine, then accept that it has been stripmined. Companies seeking profitable growth must create an unbreakable bond with customers and incorporate that relationship into their marketing mix. Word of mouth is still the best form of advertising, and it travels faster in our electronic world.

2) E-mail marketing loses its effectiveness. The early predictions for e-mail marketing promised great results at minimal costs. The visionaries’ crystal ball must have clouded over before they saw profusion of spam and viruses that jeopardizes all e-mail marketing. The current solution for eliminating malicious content is to reject e-mails from unknown sources. Even if you have permission to market to an individual, your e-mails may never hit their target. They have to pass ISP filters and dodge third-party spaminators before arriving to an inbox overloaded with unopened mail. No wonder results are declining. 3) Competition for customers intensifies. Yahoo!, Amazon.com, and eBay are incubators for the next wave of competitors. These entrepreneurs have several advantages over established companies. Their overhead is low, their innovation exceeds resources, and there are no historical concrete boots (“Tried it, didn’t work”; “Too risky”) to hold them back.

If you think that your unique product protects you from the new competition, think again. Unless you have the cure for cancer, you are competing for discretionary income just like everyone else.

4) Simplicity rules. Time is a limited resource. Today’s hustle and bustle with work, family, and friends leaves consumers with little time for shopping. Yet many businesses operate as though their customers have nothing else to do. Navigating through their Websites is tricky and treacherous, “operators are standing by” means they are waiting for customers to go through 37 options to reach a live voice that recommends shopping online, and checkout lines are places to meet new friends because you will be spending the day with them.

Watch for customers to start checking out of this process, as part of the trend toward simplicity. Folks will tune out of complicated lifestyles and in to family and friends. The companies that provide service supporting this trend will thrive.

So check every step that involves a customer or a prospect to ensure that it is quick and easy. If you respect your customers’ time and energy while meeting their needs, they will be loyal to you.

5) Access to high-speed Internet connections increases. The U.S. has lagged behind other markets in the availability of high-speed Internet access. This coming year will see a jump in high-speed access. This will enable you to make your Website sing and have more people appreciate it. Just be sure to offer a low-speed version of your site as well until at least 80% of your customer base has high-speed. Otherwise you will be limiting your potential.

6) Companies that think like their customers dominate. Your customers are your lifeline. Therefore, you should make every decision with them in mind. The companies that recognize and fulfill their customers’ needs for service and products will increase their market share. Yes, I said “service” before “products.” Service comes first. Create an environment where it is easy and fun to shop, and customers will keep coming back.

Don’t fall for the better technology mousetrap. Technology is a tool that should serve instead of creating challenges for you or your customers.

There have been discussions about what constitutes a perfect order. Perfection is meeting or exceeding the customer’s expectations. It is achieved one order at a time. The factors that contribute to the perfect order are marketing, merchandising, and operations. In other words, it is a team effort where marketing generates demand, merchandising supplies quality products, and operations fulfills the orders. When they all work together, then technology can maximize their productivity. Without the team effort, technology is just another expense.

Debra Ellis is founder of Wilson & Ellis Consulting (www.wilsonellisconsulting.com), a Barnardsville, NC-based firm specializing in strategic planning, logistics, and inventory management.