Yesterday, the blog post was on the value of social media inputs in marketing strategy and planning. The core thought was engaging your target market. Once you figure out why consumers like your brand, you can focus on how to give them what they want faster and easier.
Jeff Hoffman, who was on the founding team of both Priceline and Ubid, tells the story of a road trip with the pop wonder band ‘N Sync: (He was in a huge Times Square music store and had the following observation.)
As the CEO of a start-up entertainment company, I was trying to remake the movie Grease with ‘N Sync in the starring role. And while my friendship with the band didn’t make me one ounce cooler, it did give me a unique view into the inner workings of the music industry. Because of the immense popularity of the band at that time, the owners of the major music store chain were with us in the room. Watching people come in and out of the giant store to buy music, I asked those owners why they thought people bought music from them.
“To buy CDs,” they told me. I replied: “I don’t think so.”
They looked at me like I was nuts. “Nobody anywhere wants to buy a CD,” I offered.
They responded indignantly. “Do you have any idea how many millions of CDs we sell a year?”
I pushed further, adding, “Nobody in the world wakes up in the morning thinking to themselves, ‘Wow, I wish I was holding a round piece of plastic with a hole in it right now.’ They wake up in the morning thinking, ‘I want to hear that new song in my ear! Right now!’ They have to buy a CD, but what they want is to put a song in their ear. Right now!”
Walking away in disgust at my apparent stupidity, the CEO said to me: “What’s the difference?”
Clearly, the CEO did not understand how to give customers what they wanted faster and easier. Napster was the first to try and harness the power of the customer preference, but they ran into legal snags. Apple, through the iTunes brand and a legal approach, came up with a service, then tied it to a proprietary device and made money on both. In the meantime, record companies and music stores have seen declining margins and top line revenues lost.
Pandora took the iTunes model and provided music on demand. More recently, Spotify began offering streaming music from playlists that consumers could create. Hoffman says that the music chain of stores he was visiting with ‘N Sync in New York City eventually filed for bankruptcy. Why? Their executive team did not understand why customers came in to buy records.
Take a look at your own situation. Have you clearly identified your business objective and target market? What motivates your customers? Hoffman shares that, in the early days of Priceline, when a group of the founding executives and he discussed the fact that they were not selling airline tickets for a living. Instead, the team saw their “product” as helping someone get you to a sister’s wedding, at an affordable price. The difference in perception resulted in an improvement in service.
You too can improve your service by paying better attention to what motivates and engages your target audience. Think through how you can connect with them. How can you make it as easy as possible for them to do business with you instead of the other company? What can you do to help them get what they want faster, at a competitive price?