Tags: B2B, B2C, cost model
So, I was having cocktails with this chap from EMI, and he said to me that online has changed many things about the way organisations market products and services, and the biggest, prickliest thing for him was how to charge for accessing stuff online. And this is a biggie.
This isn’t marketing I hear you say (I can hear you as this site has a special built-in listening feature) – why is he going on about business models? Weren’t you listening on the second day at marketing school when they said the five Ps? Price is in there. Not Katy Price in this instance.
If your product can be consumed online then it is time to have a drains up about your marketing and business model. You know it’s funny how many organisations think that their product is one thing and it turns out to be another one entirely. The record industry. What’s the product? Ah, you see it’s not the record industry it’s the music industry and their product is…music. Not to be confused with wax cylinders or acetate 78s or CDs. The old business model and all the marketing in the old days of the music industry was about the medium. They forgot that it was music people were buying. Their customers didn’t want records or CDs for the sake of it. Otherwise I would have started a blankrecordsforsale.com years ago. Lesson 342 is ‘don’t forget what your selling’. It’s back to our old friend value. The value is the music not the disc.
When prospects can get your product or service elsewhere online for free then your options are:
a) celebrate the openness of society
b) call in the boys to duff ‘em up
c) refine your proposition, positioning and model to take account of this new reality and find where you can add more value, so going somewhere else is not perceived as more valuable.
Many online companies say (a) a lot. Many offline companies have gone for option (b) but it ultimately makes you look a bit silly, not to mention the brand damage (I told you not to mention the brand damage…). Option (c) is harder of course but probably best if you want to stay in business.
You know, it’s an irony that the single record started off as a marketing gimmick to sell LPs. All the margin was in the long playing records. Then over the years the single became the product, not the song.
By the way the outcome of the EMI chat was that they were thinking that their product was moving to become live performance, and all the recorded products were low/no margin and aimed at promoting the concerts. Great plan! And then Susan Boyle got to number 1 in the USA with 90% of sales via…CD. Doohhh!
