Geeks and Shrinks

May 8, 2008

Plugging the holes

Filed under: Customer dialog, Reputation — Tags: , , , — rvenkate @ 10:20 am

Mark Brownlow writes that “email marketing is like trying to fill a bucket with holes in it,” and describes the two schools of thought on how to solve the problem – either fill the holes (better retention), or use more water (faster acquisition).

In my experience, it’s not limited to email marketing. The “new economy” forces companies to make a choice – either supply superior products designed based on deep customer understanding at the best price, or move to a commodity business and supply products at the lowest price through those with deeper customer relationships.  The former requires a sustained trustful brand relationship, and (surprise) fits best with better retention, rather than faster and faster acquisition.

There’s another aspect to consider: good advertising inventory (online or offline) is scarce, and as a result the real price has tended to increase, even online. If a marketer pursues the “faster acquisition” path, is it sustainable under these conditions?

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May 5, 2008

Trustworthy brands

Filed under: Reputation — Tags: , — rvenkate @ 11:57 am

Robert Reich, in The Future of Success, describes two essential roles in the new economy: the geek, who understands technology in depth, and the shrink, who understands users in depth. As someone who aspires to be proficient at both, I’m sure I will have more to say about those roles, but I’d like to start with a quote from the same book about the role of large enterprises instead:

Trustworthy brands are becoming consumer guides through the jungle of the new economy… in the new economy, businesses depend on economies of trustworthiness. Their economic value comes not from assets they own, or employees they supervise, but from the domain of trust they’ve established with buyers. The only thing the new large enterprise needs to control and continuously enhance is its most valuable asset – its reputation for getting customers the best buy. The more customers who come to rely on it, and are delighted by what they receive, the greater is its reputation for leading buyers to the best deals, which in turn attracts more buyers. The largest enterprises will thus be the brands that enjoy the largest economies of trust, which translate into large profits and high market value.

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