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Friday, June 20, 2008,1:26 AM
The Four R's – Relationships, Retrenchment, Relevancy, and Rewards.
Written by Eric J. Adams on April 19, 2004
Business books tend to fall into two categories; those that do a great job of restating the fundamentals (or the obvious, depending on your level of experience) and those that tend toward the theoretical, so much so that they make it difficult to put their prescriptions into practice. "The Next Economy" by Elliott Ettenberg is one of those rare books that falls squarely in the middle. Ettenberg is former chairman and CEO of Bozell Retail Worldwide and now a big-time marketing consultant.
Though "The Next Economy" is skewed toward retail, the lessons are valuable for creative professionals, both for their own marketing purposes and also to help deliver more effective marketing campaigns for their clients.
What is the Next Economy?
Ettenberg contends that the next economy (as opposed to the "old economy" and Internet-driven "new economy") will be shaped by a number of key factors:
The first factor is that growth is no longer a given. The next economy will be characterized by "customer infidelity" where every company faces the prospect of losing the majority of its clients. It is going to be a tougher marketplace and only those with the appropriate marketing and servicing methodologies will command the loyalty necessary to survive and succeed. Call it "the concierge economy."
The second factor, and most important new currency, will be dialogue. "Communication should not be one way. There must a procedure by which customers are able to dialogue with the sellers. Dialogue suggests that the customer initiate a discussion and brings it to a conclusion," writes Ettenberg.
As a result one-to-one marketing (a very "new economy" term) will be a must for most businesses. The winners tomorrow will be the companies that figure out how to take steps using online and other technologies to improve, enhance, personalize, and deepen customer relationships.
Here's how Ettenberg describes one-to-one: "A mass marketer tries to acquire a constant stream of new customers, while the one-to-one marketer tries to get a constant stream of new business from current customers."
That said, successful marketing campaigns in the next economy will substitute the old four P's of marketing -- product, place, price, and promotion -- with the four new R's -- relationships, retrenchment, relevancy, and reward.
The Four R's
Here's what Ettenberg has to say about the four Rs:
Relationships: We all know about service. At least we think we do. But service is about more than offering a trouble-free shopping experience or a smooth business transaction. Every contact point with your customer is a serviceable opportunity to delight that person. It is more than "please" and "thank you." It is about meeting a person's or a company's wants, not just needs.
Companies should re-learn the art of delighting the customer. The challenge is to make the experience from your company different than that of your competitors. This concept is not limited to retailers and e-tailers, companies in all sectors can develop or re-engineer this competency in powerful and creative ways.
Retrenchment: A whole generation of baby boomers are withdrawing from traditional consumption environments. They are moving from what they need to what they want. This is transforming the economy. In addition, a new generation of consumers will expect to be catered to, and that will extend into the workplace.
The strategy of retrenchment involves going to the customer rather than trying to entice the customer to come to you. Using technology, you can bring the store, the brand, the product, or service to the person's home or office. Retrenchment is a natural outgrowth of the consumer demanding what they want versus the old line push strategy of offering and trying to anticipate what consumers need.
Relevancy: Once your best clients have been identified and retained, keep them by continually reestablishing your relevancy. Do so by making your company the number one source of ideas and information about the category in which you compete. You can further extend relevancy by offering products and services that are intelligently selected to cater to your clients.
Rewards: Define strategies that reward customers for doing business with you. You can do so by knowing what your best customers value most and designing rewards that recognize, validate, and promote those values. (For creative professionals, the most valued client commodity is often time. If you can save a person or a company time, you have rewarded that person for doing business with you.)
Concierge Marketing
This new focus on marketing will lead to what Ettenberg calls "concierge marketing." A concierge is someone who represents the buyer and makes sure that his wants are met in the best possible way. While clients buy and sell products and services from many people, they have a concierge relationship with only a few, and those relationships last the longest.
For creative professionals, concierge marketing can mean brokering other products and services allied to your field -- helping your client find writers, illustrators, and Web developers, for example.
"In fact, the age of concierge marketing is ideal for small and midsized businesses. Their flexibility and ability to customize make small businesses especially suited to this style of business -- far more so than the traditional, large Fortune 500 Company." Ettenberg says.
There is a lot of marketing-ese in Ettenberg's book, but if you can read past the jargon, you'll find a strategic vision for marketing success, suitable for you, for your clients, for the next economy and certainly for this one as well.
Business books tend to fall into two categories; those that do a great job of restating the fundamentals (or the obvious, depending on your level of experience) and those that tend toward the theoretical, so much so that they make it difficult to put their prescriptions into practice. "The Next Economy" by Elliott Ettenberg is one of those rare books that falls squarely in the middle. Ettenberg is former chairman and CEO of Bozell Retail Worldwide and now a big-time marketing consultant.
Though "The Next Economy" is skewed toward retail, the lessons are valuable for creative professionals, both for their own marketing purposes and also to help deliver more effective marketing campaigns for their clients.
What is the Next Economy?
Ettenberg contends that the next economy (as opposed to the "old economy" and Internet-driven "new economy") will be shaped by a number of key factors:
The first factor is that growth is no longer a given. The next economy will be characterized by "customer infidelity" where every company faces the prospect of losing the majority of its clients. It is going to be a tougher marketplace and only those with the appropriate marketing and servicing methodologies will command the loyalty necessary to survive and succeed. Call it "the concierge economy."
The second factor, and most important new currency, will be dialogue. "Communication should not be one way. There must a procedure by which customers are able to dialogue with the sellers. Dialogue suggests that the customer initiate a discussion and brings it to a conclusion," writes Ettenberg.
As a result one-to-one marketing (a very "new economy" term) will be a must for most businesses. The winners tomorrow will be the companies that figure out how to take steps using online and other technologies to improve, enhance, personalize, and deepen customer relationships.
Here's how Ettenberg describes one-to-one: "A mass marketer tries to acquire a constant stream of new customers, while the one-to-one marketer tries to get a constant stream of new business from current customers."
That said, successful marketing campaigns in the next economy will substitute the old four P's of marketing -- product, place, price, and promotion -- with the four new R's -- relationships, retrenchment, relevancy, and reward.
The Four R's
Here's what Ettenberg has to say about the four Rs:
Relationships: We all know about service. At least we think we do. But service is about more than offering a trouble-free shopping experience or a smooth business transaction. Every contact point with your customer is a serviceable opportunity to delight that person. It is more than "please" and "thank you." It is about meeting a person's or a company's wants, not just needs.
Companies should re-learn the art of delighting the customer. The challenge is to make the experience from your company different than that of your competitors. This concept is not limited to retailers and e-tailers, companies in all sectors can develop or re-engineer this competency in powerful and creative ways.
Retrenchment: A whole generation of baby boomers are withdrawing from traditional consumption environments. They are moving from what they need to what they want. This is transforming the economy. In addition, a new generation of consumers will expect to be catered to, and that will extend into the workplace.
The strategy of retrenchment involves going to the customer rather than trying to entice the customer to come to you. Using technology, you can bring the store, the brand, the product, or service to the person's home or office. Retrenchment is a natural outgrowth of the consumer demanding what they want versus the old line push strategy of offering and trying to anticipate what consumers need.
Relevancy: Once your best clients have been identified and retained, keep them by continually reestablishing your relevancy. Do so by making your company the number one source of ideas and information about the category in which you compete. You can further extend relevancy by offering products and services that are intelligently selected to cater to your clients.
Rewards: Define strategies that reward customers for doing business with you. You can do so by knowing what your best customers value most and designing rewards that recognize, validate, and promote those values. (For creative professionals, the most valued client commodity is often time. If you can save a person or a company time, you have rewarded that person for doing business with you.)
Concierge Marketing
This new focus on marketing will lead to what Ettenberg calls "concierge marketing." A concierge is someone who represents the buyer and makes sure that his wants are met in the best possible way. While clients buy and sell products and services from many people, they have a concierge relationship with only a few, and those relationships last the longest.
For creative professionals, concierge marketing can mean brokering other products and services allied to your field -- helping your client find writers, illustrators, and Web developers, for example.
"In fact, the age of concierge marketing is ideal for small and midsized businesses. Their flexibility and ability to customize make small businesses especially suited to this style of business -- far more so than the traditional, large Fortune 500 Company." Ettenberg says.
There is a lot of marketing-ese in Ettenberg's book, but if you can read past the jargon, you'll find a strategic vision for marketing success, suitable for you, for your clients, for the next economy and certainly for this one as well.
