Direct-to-Customer Commerce

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Strategic insights into the direct commerce industry, including ecommerce, direct marketing and related fields

A simplified view of marketing

I realize that what I’m about to say is probably an over-simplification … but sometimes, we can make things so complex that we lose sight of the fundamentals.  That’s the point I’m hoping to make today.

Conceptually, business is pretty simple.  You really only need three things:

  1. a product or service that satisfies a buyer’s needs.
  2. a process to deliver the product or service to the buyer (which may include manufacturing)
  3. something to overcome the buyer’s inertia … that is, the buyer’s tendency not to buy

Point 3 is actually marketing.  And in a very real sense, marketing & sales is about getting the prospective customer to act.  It’s easier, cheaper, less risky for the prospective customer not to buy your product or service.

Perhaps, this explains why so much marketing effort is devoted to promotions.  A promotion is simply intended to provide a prospective buyer with an “out-of-the-ordinary” reason to act … lower price, free shipping, higher quantity for the same money.

JCPenney is currently engaged in an experiment (under their new CEO, Ron Johnson) to see if they can sell as much, without so many promotions, as they could with so many promotions.  It will be interesting to watch the outcome.

However, I expect, the experiment will fail.  Because JCP’s merchandise, by itself, is not a sufficient “draw” to bring in buyers, without promotions.  Promotions give buyers a reason to act … whether the reason is truly “real”, or just “perceived”, promotions provide the motivation to “act now.”  Without the promotion, there is less reason to act.

Product availability is necessary, but it’s table stakes.

Product quality is important, but varies by target market segment.

Overcoming buyer inertia is critical to all business.  Without it every business fails.

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