The next five years will be about direct relationships. Several years ago a leading brand contacted us (Twist Image) about a new business opportunity in the digital space. The brand’s reality was this: as the years wane on, the amount of retailers that they sell to were diminishing. As the major big box outlets continue to grow and as consolidation rifles through the retail sector, the bigger brands only have a handful of outlets to sell their wares. With these retailers’ size and growth comes another reality: they begin to dictate everything from quantity and terms to acceptable margins. For some businesses, this is a dream come true because it secures significant sales, but for others (like this brand), their business was becoming a game of diminishing returns. It gets ugly fast when you run the numbers: eventually this brand will only have their product on the shelves of one or two retailers who are constantly dictating and changing the terms of sale… and the brand has no direct relationship with the consumer. How do you win? The brand’s idea was to create a new e-commerce brand online that housed only their own brand name products. This was the last chance. This was the hope and prayer to save the business: start a direct relationship with the consumer… today. Notwithstanding how the major retailers might feel about this project, it was a smart and wise play. For a brand to truly shape its own destiny, it must lead the relationship with the consumer as well. This must have been a huge factor in Apple’s decision to build out retail stores and not work exclusively with the major consumer electronic retailers. How are your direct relationships? Some brands do this well… most fail at it with spectacular fashion. Is it possible to be so judgmental? It is. One of the reasons I still enjoy the conversation and debate about the efficacy of Social Media marketing is that the majority of brands that struggle with ROI are comparing it to traditional push advertising instead of treating it as an opportunity to have real interactions between real people. A consumer that hits a "like" or "follow" button is opening up the opportunity to have a direct relationship with a brand. If all the brand does is blast back offers and specials, we’re not pushing towards direct relationships… we’re pushing towards broadcast advertising (in a new channel). The opportunity is now. I’m often reminded of an event I took part in called, The Art Of Marketing (sidebar: I’ll be speaking at an upcoming Art of Marketing event in Vancouver on June 9th, 2011 – it will also feature Gary Vaynerchuk, Guy Kawasaki, Avinash Kaushik and William Taylor). Also speaking on the bill was Seth Godin (Poke The Box, Linchpin, Purple Cow). Seth doesn’t hold any punches and made it very clear to the 1500 marketing professionals in attendance that this unique moment in time is not only a revolution in marketing – one that we will probably never again see in our lifetime – but that it was ours to either capitalize on or squander. The next fives years are going to be about these direct relationships. The next five years are going to about how well a brand can actually change the relationship from one that looks at how many people are in their database to who these individuals are and how the brand can make the connections and loyalty stronger. The stars are aligned. We have the technology. We have the data. We have the new media channels and platforms. We have the opportunity to publish whatever we want – in text, images, audio and video – instantly (and for free) to the world. What we do with this moment will be telling. It will also set the pace for everything that flows out of our marketing departments for the next decade. That big brand I talked about earlier? They never pulled the trigger on their e-commerce project and wouldn’t you guess it: they’re busy scrambling for "likes" on Facebook and are selling their products through the handful of big box retailers left. No direct relationships. No future.
I love business analogies. Connecting familiar, yet very different, concepts helps to bring about greater understanding to complicated topics. For example, I compare my marketing services of “Second Opinions” to that of a doctor. I’ve also compared the growth problems Starbucks is having to that of a garden needing weeding and pruning before it can achieve healthy growth again.
A credit union I know uses an interesting analogy to describe how they prep for future growth of opening new branches by saying, “Before we put up branches, we put down roots.” In other words, they lay down a foundation of community involvement long before they build a new branch of their credit union.
It’s a smart perspective and perfect for inclusion in my on-going series of business book summaries in less than 300 words.
If you thought fragmentation was changing the way a brand buys media, just wait until you see what it’s going to do to the Digital Marketing space.
Are the days of big websites and long website builds numbered? It could well be. If you think about how people find and connect to most brands, it’s not just through a search engine anymore. In fact, more and more people are having their first brand interaction on their mobile device. There are many people who are also connecting to brands for the first time in spaces like Twitter, Facebookand YouTube.
Does this mean that the website is going the way of the dodo bird?
Not exactly, but it does mean that the overall Digital Marketing strategy is going to change dramatically in the next little while. Instead of one, big and centralized website with many digital marketing outposts in the appropriate platforms, it is more than likely that we’re going to see more and more brands create multiple spaces and platforms to ensure that they’re connecting with the right people in the right communities.
Imagine a world…
Where a Digital Marketing strategy focuses less on one big website and more on creating engaging "things" like iPhone apps, a mobile website, a Facebook page along with a Blog (or whatever), and it’s all supported with a simple website that acts more like a hub for all of the other spokes. Yes, there are some (only a few) brands already playing with creating Facebook pages in lieu of micro-sites for promotions and experiential marketing initiatives, but it has not become a commonplace activity where you find a brand doing multiple things in multiple channels and focusing less on driving consumers to their marketing-riddled jargony websites.
It becomes a more complex Digital Marketing play.
The "game" used to be about always driving people back to your own, controlled, website, and the truth is that the more vibrant community for a brand may be happening more through a mobile app or online social network platform… or something else or something in addition to it. Does this mean we need to trim websites back to WordPress Blog-shaped platforms or micro-site sizes? Not really, but it does mean that if a brand’s vibrant community is happening in a place like Facebook, they won’t have much control or ownership over the content, but they might be able to do things (in terms of connecting and growing that community) that they could not scale to with a big, towering website of their own.
This is just further proof that the conversations are everywhere (and maybe not where we always want them to be).