There exists a nearly forgotten yet fundamental truth about business that has resurfaced with such subtle intensity, it is transforming entire industries before our very eyes. It’s forcing companies to change the way they do business by taking old business models and turning them upside down.
There isn’t an industry or company immune to its powerful effects. This truth is nothing more and nothing less than this: Business is all about connecting.
I’ll admit that this sounds a bit too simple to be so crucial a factor in business, but certain developments have caused the business landscape to change drastically over the past decade — even prior to the recession — making this truth more relevant today than ever before.
With the proliferation of social media and instant access to the latest news, consumers are more educated now than ever. Information needed for crucial decision-making is just a click away. Consumers are less willing to conform to the standards of an outdated business model, when customization scores higher on the “connecting” scale.
And in today’s world of technological advances, if you’re going to maintain your relevance in the marketplace and truly meet the needs of your customers, you’re going to have to give them options. That’s how you connect in business today. People want choices. Why? Because the consumer rules.
The challenge for many of us in business is that we tend to resist change, yet the successful companies of the future will be the ones able to adapt to meet the changing needs of their customers. Gone are the days when an industry could dictate how consumers consumed their products or services.
As a result, entire industries are being forced to evolve in order to better meet the needs of a more-sophisticated, discriminating buyer. Why? Because the consumer rules. Just ask the music industry.
For years, no one in music had a real problem with the changes technology was forcing upon industry products. We went from buying vinyl records to buying CDs, but the industry kept recording, promoting and selling music in much the same way.
Then Napster came along, offering choices that the music industry wasn’t prepared or willing to incorporate into its business models. To make a long story short, Napster was killed. But by then it was too late. Consumers quickly took to the convenience of digital downloads, and other companies rose from Napster’s ashes.
The floodgates had been opened. There was no stopping it. Today we take it for granted, but the fact is that the entire music industry had no choice but to embrace the new digital model which consumers demanded. Why? Because the consumer rules.
The television industry experienced a similar, though less traumatic, evolution. Instead of the three major networks most of us (I'm dating myself) grew up watching, today we take for granted that the average satellite provider offers hundreds of channels. Now I can truly watch what I want to watch — not just what an industry wants to dictate I watch.
Does that have an effect on business? Absolutely. Today, advertisers have to think twice about where to spend their money to reach me, the consumer, because I might not be watching CBS or NBC — I might be watching ESPN or The Food Network (more than likely).
There’s more. With the introduction of the DVR (digital video recorder), now I not only watch what I want, but I can watch it when I want. And let’s be honest, who doesn’t fast forward through all the commercials? Does that have an effect on business? Absolutely.
Do you know what is fast becoming the most sought-after spot on television for advertisers? It’s the last five seconds of a commercial break. That’s because advertisers know that we are fast-forwarding through commercials. They also know that most DVR remotes have a “jump-back” feature that compensates for our reaction time, so when we press the play button at the end of a commercial break, the jump-back feature takes us back just far enough to catch the last five seconds of the last commercial. And so major advertisers are now producing five-second commercials for that sliver of an opportunity to reach you and me, the consumers.
Why? Because the consumer rules.
In business, change is inevitable, so be prepared. Innovation and creativity have always been, and always will be, indispensable tenets of a corporate culture focused on creating value by giving consumers better options. Look at your own business model and turn it upside down before it’s turned for you.
And whatever you do, don’t kill Napster. Every industry has its own version of it. Embrace change if it represent greater value for your customers. Why?
Do you have to ask?
Manny García-Tuñón is president of Lemartec, an international design-build firm headquartered in Miami. He can be reached at firstname.lastname@example.org.