I’ve just started a book called Niche Envy- Marketing Discrimination in the Digital Age by Joseph Turow. Even the introduction has me thinking and generating new ideas and questions I hope will be answered, in some way, as I go further through the book. I wanted to blog about some of this in advance of finishing the book, just to work out some of my thoughts on the subject before I hear everything the author has to say on the subject, and see what you think as well.
With good database management, companies can market closer and closer to what they hope is a personal, resonant message that will motivate an individual to take action. An offer I might get from Staples will be based on my perceived value as a customer and the volume of my purchases, for example. This seems like a great idea- best customers get the best deals and continue to be the best customers. But what about attracting new customers? After all, there’s only so much printer ink I am going to buy or horde. Likewise, I may never actually switch to another competitor, like OfficeMax, if I get the best deals from Staples. However, if you were a competitor like OfficeMax, wouldn’t you want to woo Staples best customers away from them and make them your own? Should your strategy then mix keeping the best customers satisfied while encouraging defections from the competition? How do you offer everybody the best deal, all the time, yet stay in business?
While businesses may want to fight over the best customers (however you decide to measure that), what does that mean for the rest of us? Why should my neighbor get a better deal than I do? And in the age of niche marketing, what happens if they get better cable shows, better ads, better everything? How do I become like them? Are companies starting to differentiate between us as individuals to such an extent that they will generate competition between individual consumers for the best content? That’s gotta be good for business, but it’s also just as likely to start annoying the crap out of most consumers.
The bottom line is that database manipulation can swing both ways in the days of transparency. As Chris Penn, Michelle Wolverton, @Ninjarunner and others showed with the Bum Rush the Charts campaign a few years ago, a bit of organization can get people to make a small purchase and manipulate the best sellers charts on a variety of services. Authors are more frequently asking their fan base to go out and pre-order or buy their new book all at once on the same day, to make sure the book shows up in the best sellers list. (I think JC Hutchins has done this, but I’m not 100% sure.) Consumers now can have controland manipulate the data as well, if they decide to organize and act en masse.
Does this mean that best sellers lists are silly? Does it mean the most popular thing is the best? I doubt either of these positions is true, actually. Popular items and best sellers lists are just one more datapoint for consumers to factor in to the daily decisions for everything that are becoming about as complicated as the choices required at Starbucks. Grande or Venti? Decaf, half caff or fully loaded? Soy, Skim, 1%, 2%, whole, half & Half, cream? Whip or not whip? Sugar free? Flavor?
Tthe decision making process for virtually everything has become more complicated than mere price differentiation. Couple that with the differentiation businesses are trying to make between consumers and you either get a growing consumer class so fed up with this stuff that they simply stop caring altogether, or decide to make a choice based on simpler metrics like “Can I get it now?”
When I think about the ability to mass customize goods, part of me thinks “This is terrific- I can get everything made to my own specifications, just for me. ” The other part of me says “I simply am too busy to care that much about the 25 shades of blue this thing comes in- let me go to the store and I’ll get something that is good enough.” Perfection is a luxury that you can afford if you have extra money or time on your hands. (Think Martha Stewart and her excellent entertaining – she can make you a centerpiece at little or no cost, but the time involved can be astounding if you do it yourself.) But if money or time are tight, good enough frequently rules the day. Any old t-shirt will do if there’s someone knocking at the door, but the same does not hold true if you’re heading to a business meeting, where there’s a lot of money and business on the line.
The ability to both create and market niche products will make many people tons of money- but if the niche is just not big enough, can the amount of money generated sustain a real business? Does fragmentation of a market ultimately lead to a slip and downfall where only a few monopolistic winners take over?
And then what happens if the winners start to tumble? What do we have left? We’re seeing this now when big businesses have to close- bad times shut down stores all over the country- people lose their jobs even if their individual store was doing well, and we all lose in the process. Less jobs, less competition. Big companies are still vulnerable, and their downfall is much more catastrophic to us all than a diverse infrastructure of many smaller businesses.
Niche, by defiunition, markets to the few. It can best meet their needs. But the volume and profit associated may not make each niche sustainable, unless it meets some sort of critical mass. And this is the sweet spot where all business wants to be- sustainability and profitability. Growth is not always the answer. It’s certainly not the only answer.
What do you think?