The modern world, as a result of globalization, has been changing in a way that we had not previously dreamed of. The world is moving, what worked yesterday today may no longer apply. Approach to customers has become a major challenge for companies.
So who can win the race against the competition?
Let me present the answer in this article. I will show you how an approach to a customer has evolved. We will look back to the old times , the People's Republic of Poland period, until the present day. At the end I will discuss the nearest future.
Quite a few years ago a lot of people were engaged in agriculture and animal husbandry. Food production took place on a small scale. Primarily it met the needs of a family. The system was very simple. It was suffice to produce enough to meet the needs of the family, and to sow the remaining seeds next season. The system was simple, but as we know it has changed.
With time, thanks to new technology the production of food was bigger than the family could consume. The surpluses were exchanged through barter agreements for other products or sold for money. People began to specialize in the production.
This was a period in which there was neither product nor services marketing. No one advertised their products, used discounts or special ways of reaching customers.When we wanted to buy eggs or milk, it was enough to go to the farmer and purchase the products.
As the time passed, the first stores, in no way resembling the present ones, appeared. Then, stores became more trade-associated – food, clothing ones, etc. In the communist era in Central and Eastern Europe, it was enough to produce something that people would buy, because there was lack of articles.
The entrepreneur dod not have to worry about competition, marketing, or even care about quality. Some of us remember the queues for the goods of poor quality.
As the time passed, something has changed. The market opened. A lot of companies were launched and began to compete. As a result of competition unprofitable enterprises have gone bankrupt. Companies began to compete for customers. A new word – Marketing appeared among managers.
Even more effective ways to attract customers were invented. Some used advertising, prices lowering, selling two products in the price of one, etc. Then, the supermarkets appeared which changed the market forever. They had one major advantage, namely, low price and large selection. Companies started to look for the most attractive shelves for their goods.
Smaller shops in the area, unfortunately, did not live up to the competition. Speciality stores and luxury goods companies moved to the malls which have adjusted themselves to the architecture of cities for a long time.
Rents in shopping malls are not the cheapest, just like the rent of space on the supermarket shelves. The companies spend huge amounts of money on promoting their products and services. The cost of marketing is very often more than 50% of the price of the product. The question is, where is it heading for. Is the customer going to pay higher prices for the same products?
It results in less trust in advertising. People stopped to believe in the artificially lowered prices. So, the companies are looking for a way to reach the largest possible spectrum of clients. The multi-level marketing gave a hand. Thanks to the MLM the company reduced costs by the amount spent on advertising, warehousing, freight transport, employment of employees, administration and many more. The saved money the company earmarked for remunerationof its representatives. The representatives offer products which they frequently use themselves.
Time of the Internet has come. Internet companies, which did not have their shops located on the street, were launched. Then, the companies having traditional stores also appeared there. At present, there are no companies which do not have their sites on the Internet. The companies have their sites, shops, web portals, etc.
The same thing happened to MLM companies. They simply came into the Internet and they have been here on a permanent basis. The distributors order products electronically, participate in webinars, offer their products via Internet. Co-workers are involved in recruiting, finding candidates in the network.
Let us have a look at financial institutions. They deal with the management of our money, so they first know where they can earn it. In the past, banks were establishing their seats on the prestigious streets of big cities. Then, they rapidly began to expand the chains and employ an increasing number of field representatives.
The customer prefers to talk about his finances in his home or office because it is more convenient. The bank representative is, in a sense, a friend of a family.
The client does not want to go to the bank to transfer his money or settle a minor matter. Who likes the crowds and queues nowadays? Only pickpockets, I guess. Note that banks recognized the change in customers' behavior and they quickly adapted the offer and their actions. It is estimated that the number of bank branches will fall, not rise.
As we can see, the world is changing just like the approach to the customer is. We went through evolution. A farm, a shop, speciality stores, large stores, shopping malls, the MLM and Internet sales. Which one from the current methods appears to be the most effective? To answer this question, let us have a look at the customers' preferences and their life style.
Some time ago, people visited each other without invitation very often. To visit family and friends was a natural thing. As time passed, we shut ourselvesin our homes, contacting with family and friends by telephone and the Internet. We are bombarded with ads, which often do not get to us effectively. We cease to believe in promotions and discounts because we know that there is often something behind them. How will the distribution look like in the future?
The answer is obvious – the Internet and the personal recommendation of our friends. We will desire to use the products that our friends are happy with. We will order them from our friends or online distributors. In order to save time, we will rarely go shopping. Those companies will win which will offer the comfort and high quality products, those one which have applied different approach to the customer. We will appreciate the representative, the adviser who will be able to get to us at the address indicated.
It is time to answer – who will win the competition. I am convinced that those companies which will join the system of direct marketing with the Internet. A lot of hybrids like this will be launched. They will develop well. Co-workers of the enterprises will gain a significant competitive advantage. This will mean a revenue higher than average for such companies and their distributors.
These companies fully exploit the society's trend. The customers will be able to do the shopping in the store which was recommended by their friend. They will order products and services of those companies which are recommended by their friends.
For this, cherishing all the comfort, they will order online and receive the ordered goods directly to their houses. Having recommended the proven company to their friends, they will receive remuneration from their purchases. This system is more motivating to do the shopping and promote the company and its products than the next promotion in a store.
Daniel Kubach
The author of this article is an entrepreneur and investor in the MLM industry. He is a shareholder of numerous companies. He has been doing business in Poland and abroad. Mr Kubach is a member of the Business Centre Club. http://www.bcc.org.pl/
