Remaining Profitable in a Consumer-Driven World

Here’s a recent experience I had that may serve as a tool for determining how your customers will respond when faced with a similar challenge. Learn how you can profit from thinking this way for a new world and a new way of doing business.

Maybe something like this has happened to you on an unsuspecting day. So there I was, just minding my own business when suddenly it happened. I wasn’t thinking about much of anything when I suddenly had the desire to hear a particular song. The song started going through my head, over and over. You know the feeling; it’s there and you just can’t shake it. I wanted to hear that song. And I wanted to hear it right now! It was an obscure one that I hadn’t heard since I was a child. I remember it playing on the radio as my father had us kids outside sanding the paint off an old fishing boat. It was a popular song back then, so it played on the radio often.

Flash forward to the present. Being the tech-savvy guy that I try to be, I jumped over to my computer, pulled up iTunes and clicked on the iTunes store. I didn’t even know if they would have such an old song. “There’s hardly enough demand to carry that kind of thing,” I reasoned to myself.

Soon after that, I was brought into the world of technology almost as new as a person seeing a sunrise on a picture-perfect day. As Chris Anderson tells us in The Long Tail, we have a virtually unlimited potential to acquire goods through technology, even items that are very old.

Well, sure enough, they had it — and in several different versions. I clicked on the 30-second sample and guess what? It was exactly the same song, with the same artist, from the original hit that I remembered as a kid. For the very reasonable sum of 99 cents, I downloaded it onto my computer, and in less than 60 seconds, I had that song saved on my computer hard-drive!

Like a bouncing kid seeing presents around the tree early on Christmas morning, I clicked on the song and played it. It was exactly what I wanted. I was amazed how much of it I remembered. Hearing that song brought back a flood of positive memories of my childhood. And I listen to it now (on my iPod) as I bounce around Orlando or when I’m on an airplane.

Think with me for a moment. How would I have satisfied my longing for that song just 10 years ago? I would have had to endure the frustration of not getting it that evening when I wanted it (stores were closed that Sunday evening). I probably would have gone to the local Tower Records store (remember them?). Then I would have had to describe to the teenager working there this song from long ago (yeah, and he would know about the song I wanted from my childhood), maybe try to sing a few bars that I could remember (thus driving all other customers out of the store) and perhaps still not get what I wanted. If I could get it, I’d have to purchase a full CD with other stuff I really didn’t want, and then I could only listen to it on my stereo at home (I didn’t have a portable CD player back then, and my car CD wasn’t very useful). Ugh!

Today, things are quite different. Consumers are driving the marketing rather than companies. Consumers get what consumers want. Consumers said loud and clear that they didn’t want to buy a full CD just to get one song. Record companies tenaciously held on for as long as they could to the “We determine what you buy and when” model. The free market had a few words to say about that. Words like “Napster,” Kazaa, Limewire and other less-than-legal first attempts to get music out. Finally Apple and other companies made it available for us to legally purchase music for a reasonable price. We can buy the songs we want and disregard the ones we don’t.

So, what does this have to do with your business? Ask yourself what models you are embracing that were put in place years ago? Are they still standing but only valuable from a, “Look honey, that old thing has been there a long time” point of view?

Innovate. Find out what the customer wants and provide brilliantly fresh, new ways for them to access what you have. Yes, it might be less profitable when viewed one way. A 99-cent purchase is not as profitable as a $19 full-CD purchase — at first glance. However, because we can legally purchase songs for 99 cents, we buy more songs of what we like and listen to them in a variety of ways.

Flexibility and innovation are not just good ideas from seminar leaders. In a consumer-driven marketing world, it is the only way to think — at least if you want to remain profitable. Or, you could hold on to your old ways.

I think Tower Records did that.