The Market Implications of Generational Divergence

The industrial age is grinding, painfully and reluctantly, to a halt. Executives and small business owners struggle to connect with consumers, and traditional marketing tactics are no longer effective. Relentless in the pursuit of their lost market share, many turn to advertising such as Google ad words, banner ads, and pay-per-click advertisements. The sad truth about these tactics, however, is that they quickly drain marketing budgets, are rarely effective, and devalue the very product they seek to promote. Today, the most successful marketing campaigns are centered on value-added social engagements, and cost very little, if any, money.

Traditional economic models are fundamentally flawed, as they assume consumers respond rationally to the marketplace. Consumers, are in fact, quite irrational in their decision making, but thanks to ground-breaking research performed by MIT Professor of Behavioral Economics, Dan Ariely, they are still remarkably predictable. Concepts such as, arbitrary price coherence and the subjectivity of supply & demand, reframe the way we think about the field of marketing, and product/price relativity.

Why are some companies thriving, while others fail? The answer to this question is counter-intuitive, and consequently, often rejected by many. Before this question can be answered, we must have a clear understanding of the socioeconomic framework at play:

There are three generational groups that comprise today’s marketplace: the baby boomers, generation x, and generation y. Baby boomers came of age during a time when the market was primed, and capable of supporting the growing industrial complex. As a result, many were able to start and grow their businesses, or find a “good” job that payed well and had room for growth. Subsequently, many executives and business owners today are of the baby boomer generation, and have built a successful career without the influence of technology. Enter generation x, and the advent of the internet. Generation x is unique, in the sense that they spent much of their childhood without technology, but were introduced to it early enough that it became engrained in their culture. Generation x sitson the fence between the industrial age and the technological age, and for this reason, they play a key role in strategicmarketing. Generation x has the power to bridge time-honored business knowledge (baby boomers), and technological innovation (gen y). Generation y is widely misunderstood, namely by the baby boomer generation. To understand why, consider the following: one generation was taught math on an abacus, and the other was taught on an iPad; one generation came of age at a time when families saved their money to invest in a set of encyclopedias, the other carries all the information the world has to offer, in their pocket… and have never known any different. To say there is a generational disconnect, is a gross understatement. Never before, has there been a larger chasm separating existing world views.

In light of the aforementioned observations, and as a generation X’er, I feel compelled to be a catalyst for change. I recognize the value in both generation y and the baby boomer generation; however, polarization in either direction, is not sustainable. For this reason, I volunteer my time on behalf of the Small Business Administration (via the SCORE Association) to work with business owners and entrepreneurs, to develop effective marketing strategies that will position them for long term growth and sustainability (and with very little monetary investment). The SCORE program is a National economic stimulus initiative funded by the US Congress, and is responsible for saving or starting thousands of small businesses (our Fort Wayne chapter helped get Vera Bradley started). The majority of the advisors at SCORE are well past retirement age, but the amount of wisdom they have to offer is unparalleled. So, why did I choose to join a group of retired executives doing free consulting work? You guessed it… to bridge the chasm!

Perhaps, the answer lies in the wisdom of Ralph Waldo Emerson: “Every man that I meet is my superior in some way”.

HIT YOUR TARGET market

 The following concepts are from the SCORE Foundation’s free ebook, “10 Simple Steps to Finding Customers… and Delivering the Goods” , and is supported by the Small Business Administration

Every business has at least one target market. By defining the specific portion of all potential buyers that would benefit most from your product or service, you will gain an understanding of how you should promote your business.

Before you can define your market, you will need to define yourself. Your USP, or Unique Selling Proposition, will be what sets you apart from the competition. These are your key strengths or the unique qualities of your business. For Example: your turnaround is faster than your competitors; or, your level of service far exceeds that of your competitors. When you promote your USP, frame your message around the “what’s in it for me” principle. For example, an advertising firm may offer a broad range of services, but the benefit for your customers would be a headache-free service for all of their marketing needs. Examples of “features” vs. “benefits“:

• Wide range of services vs. All the options you want
• Knowledgeable staff vs. Free advice
• Convenient hours vs. Open when you need us
• We have business experience vs. You benefit from our business know-how

Answering the following questions will get you started in defining your target market. Note, that your answers to these questions won’t remain the same forever, they will change as your business does.

1. Are my best customers local, national or international?

2. What are the characteristics of my best customers? (e.g. are they midsized businesses located in downtown centers who need information technology  assistance?; are they middle income, health-conscious consumers within 30 miles of my store?) Remember to be as specific as possible.

3. What do these customers have in common? Do they read similar magazines or newspapers, have similar interests, engage in similar activities, or participate in social networking, such as LinkedIn or Facebook? 

4. How can I reach these customers?

5. Who are my competitors?

6. Why should customers buy from my business rather than my competition? 

Crossing the Chasm: How good ideas turn into great ideas

A foreword about the following article: All of the concepts discussed below are from the brilliant book, “Made to Stick”, by Chip and Dan Heath. An essential read for all entrepreneurs and marketers.  

Great ideas are like proverbs. They encapsulate an entire lifetime’s worth of wisdom in less than a sentence, and have the power to influence the decisions we make when faced with new or difficult situations. For example, “a bird in hand, is worth two in the bush”. This bit of wisdom can be applied to a wide variety of life’s conundrums, and idiosyncratic colloquialisms. Not only do proverbs like this allow me to use big words, but they provide a basis for understanding the ways in which we can make our ideas stickier. Consider SW Airlines; their goal is to be the “low fair airline”. When you have a mission statement this clear, employees are empowered to make decisions on behalf of the company, simply by asking themselves: “does this help us be the low fair airline?” If the answer is no, then they don’t do it.

A small amount of ideas just work, but for the majority, there are proven methods for developing them into profound statements that speak to the masses. The acronym, S.U.C.C.E.S., provides a foundation for understanding the key attributes found in all great ideas. *Note: I’m typically skeptical of acronyms that “happen” to spell out words… but this one actually makes sense. 

1) Simplicity – Ideas stated in the simplest of terms, have the biggest impact. Some parts may have to be left out, to make room for the “core” of the message. Former advisor to President Clinton, James Carville, famously said: “if you say three things, you say nothing”. If a remote control has 50 buttons, you can’t change the channel. The goal is to take a complex idea, and compact it. Consider the iPhone, and its complex simplicity; it can perform almost any task, yet has a user-interface that even a child can navigate.

2) Unexpectedness – Counter intuitive ideas engage the audience and arouse curiosity. Fifteen years ago, the concept of a smartphone was unnecessary and implausible. People were content using cell phones the size of their forearm. They didn’t know they needed an iPhone until someone gave it to them. This created a need that was unexpected.

3) Concreteness – Make your idea clear, and avoid the abstract. Example: An abstract description of an engine would be “high performance”; a concrete description would be “V8”. Experts communicate with each other through abstract concepts, they communicate to the rest of us through concreteness.

4) Credibility – This is the trustworthiness of an idea. Ideas that attach to preexisting schemas naturally feel more credible to us. However, If you’re a really lame company, you may use your BBB accreditation (which is laughable) as a source of credibility. This is forced, and it’s obvious. The meaning of “credibility” here, refers more to the contextual plausibility of an idea, and the authenticity of its creator.

5) Emotions – This one should be obvious. Emotional connections are always the strongest. People act on emotion, not facts and figures. People know smoking is bad for them, yet they still do it. Lung cancer survivors, on the other hand, are emotionally connected to the dangers of smoking and are less likely to continue doing it. Correctly harnessing the emotions of your audience can make or break a good idea.

6) Stories – Telling a story about a specific individual, overcoming the odds, can have a profound impact on the audience. Consider the Subway campaign featuring Jared Fogle; a normal guy that overcame the odds and lost hundreds of pounds, by eating sandwiches. Stories like Jared’s are everywhere, the key is finding them. Don’t try to fabricate a story to fit your campaign, people will see through it. Great stories inspire an ever-changing and ongoing narrative that the audience can relate to.