I wrote this sometime back for a friend of mine, who took the plunge and started an e-commerce business, after leaving his cushy job at a Global Technology giant. Though the background of the article, mirrors the Indian Retail/ E-tail ecosystem, that is yet to come up to world standards in terms of customer centricity, the fundamentals are the same anywhere in the world.
From the poster boy of the Internet to just another Internet entrepreneur, this image doesn’t seem appropriate for Mark Zuckerberg to have in the History books of the future. It is this profound thought which led me to embark on a journey to conjure up visions of a grand Facebook comeback and suddenly the future of Facebook looked bright and shiny, all at once. And mark my words, Zuckerberg will save face and this is how.
My fundamental assumption is that Facebook is the virtual hangout place of people and hence, we need to identify ways by which we can keep people there and ensure that they keep coming back often. Till today, Facebook had been all about sharing opinions, thoughts, images and pictures, while trying to discover long lost friends and family. If you look at the list of things that I have just mentioned, they are all discretionary activities that one can live without doing and not lose much in life. Now, what Facebook needs to do is to move into the next level of human sustenance and create a ‘need’ for people to come back more often than earlier. How can that be achieved?
The world of advertising will have to undergo a serious change if it has to survive. Though Facebook’s ascent as a viable alternative to the traditional media has been temporarily quelled, it is only a matter of time before they are back to challenge the domination of television as the primary medium of reaching out to the masses. To ensure that television ads are less of a drain on the advertiser’s pockets and also to ensure that there is less customer fatigue, there needs to be a number of changes made to the conventions of advertising, and ensure that advertising creates a pull rather that the push it receives now. But beyond these problems, which can be discussed separately, is the big challenge that brand managers continue to face on a daily basis, which is of shrinking budgets for advertising expenditures. If the last problem is solved creatively, it could address parts of the other problems that were mentioned earlier.
Recently, purists were pained to see the exit of Ron Johnson from J.C. Penney. Johnson tried to carry out an experiment of fixing J.C. Penney’s pricing, which had been using too many discounts. Johnson perhaps believed that offering discounts on artificially inflated prices was simply not ethical and diluted the brand of J.C. Penney. But alas! The brand Penney had already been diluted and customers came to Penney precisely because of the large discounts on offer. So, when Johnson came up with a clean and clear cut pricing, sales dropped. Many people believe that Johnson did not listen to the customer, which is why his new pricing strategy failed. Customers are mostly lured by discounts, which leads to a very interesting conclusion (amongst many others) - is price always about perception?