It's Back to Basics for Dot-Coms
Old-economy rules of business (and disbelief) were suspended and supplanted by dot-com ideas. The traditional goals of profitability gave way to notions of gaining site traffic. The traditional goals of giving customers what they want and need gave way to giving customers the next coolest thing, while you worked in the newest, coolest environment. Companies that did talk to their customers did so only to confirm what they wanted to hear. It was the "age of the Internet."
Now it is a new era. Businesses that disregarded the old rules have paid dearly, spending years and millions of dollars on solutions in search of a problem - and in search of paying customers. It is time to take off the lamp shade, get back to work and acknowledge that maybe the old-economy fogeys knew a thing or two after all.
Customers of technology products and services are taking a hard look at where they spend money and are asking whether they get the return on investment they want and need. Technology companies hoping to reach these customers need to go back to business basics.
So if you run into any reformed dot-commers, gazing longingly at their old, cool digs, pass along this lesson in Business 101: Next time, with your help, maybe they will be able to make their money the old-fashioned way - by earning it.
Begin by advising your friends to start finding out basic information about their customers and markets, such as:
• Who are their customers?
• What problems do their target customers need to solve? What keeps them awake at night? Is that likely to change within the time frame they plan to ship their products? Business people do not adopt products because they are cool; they do so because they offer mission-critical business solutions.
• What are the main benefits of the product that will help clinch the sale?
• How is the purchase decision made? Do any of them have a budget for what they are selling? Can they get one? Will they have one when the product is ready for market?
• How much will they pay, and will it be enough to build a sustainable business?
The list goes on. It might take awhile to find the answers, but your dot-com friends need to start filling in the blanks. Of course, once they get that information, they need to read between the lines - after all, marketing is as much an art as it is a science. But they need the lines of data before they can read between them and before they can understand how the winds of change will affect them.
Once the former dot-commers have divined a business model and have started developing a product that solves a real business problem, they need to communicate the message effectively. Customers are bombarded by companies claiming to do the same things - regardless of market segment. To cut through the hype, your friends should do the following:
Secure proof points. A company will be far more convincing to customers if it not only claims to help them, but also can demonstrate how it impacts their bottom line and solves their business-critical problems. So it should sell stuff to customers, the sooner the better. Cut deals with them to help develop case studies. Document before and after. Get customers to vouch for the company. Use this everywhere they get a chance.
Shape the conversation. Get to opinion leaders with case studies, white papers, customer testimonials, market data and vision. Help them create the checklist for solving the problem. Then show them how the product will be the one that conveniently solves it.
Once the proof points are in place and the company has started to shape the conversation, it is time to test the market communications strategy derived from the market validation and from selling to customers. Carefully tailor integrated programs, including direct mail, online promotions, seminars and telemarketing.
Set clear, measurable goals. Too many marketing people believe creativity is marketing nirvana and that analytics are for the bean counters. That is simply not true. Marketing people need their work to achieve clear, measurable objectives. To do that, they must test, analyze, and see what works and what does not work, then go deeper when something pans out.
Then start the process all over again. Companies need to continually evolve their marketing strategy and tactics as their understanding of their customers evolves, their market changes, and their company and products mature. The key is to learn constantly, set goals and analyze results.
Now dot-commers have to turn to the old economy. Success today depends on returning to business basics. Luckily, business basics are just that - basic. A company needs to know its customers better than anyone else does. Develop products that solve real customer problems. Clearly communicate the benefits. Measure the results of marketing and other programs to determine how the program impacted the business at both a macro and a micro level and its implications for subsequent steps.
All this may sound boring and slow. But it is the only game in town when it comes to making a company's advertising and marketing dollars work hard for both the company and its investors.