credit: roland

Jeff Bezos, the CEO of Amazon.com once voiced this sentiment:

“We want to be the world’s most consumer-centric company… We focus incessantly on trying to get the customer experience right… See we’re not a book company. We’re not a music company. We’re not a video company. We’re not an auctions company. We’re a customer company.”

That was back in 1999 during an interview with BusinessWeek. Amazon is now an undisputed leader in online shopping and the reviews on their website make Amazon the world’s most trusted source.

The traditional mass marketing funnel looked like this: Create an an ad broadcasted to one million people.  Get a 1%  response on a $100 product. Then collect $1 million dollars. Finish.

This is what mass marketers do – throw as large a net as possible. The Internet would be perfect for such a model, right?

Wrong. If you are a small business, can you afford to spend the average of $1 million dollars per website by Fortune 1000 companies to market online? The answer is a resounding No.

If you want to differentiate and ensure that price is not an issue between you and your target market, you need to deepen your relationship with them. They need to trust that you are the in-depth expert on what they want. You never abuse the relationship so when you talk, your customers listen.

The deeper your relationship with customers, they will pull from you more products, services and information at higher and higher prices. They will not care that someone else in another country is pushing the product / service at 10% less.

Trust is your most powerful tool and abusing that for a quick buck will undermine your long-term business.

In this Harvard Business article: Why Small Companies Will Win, it becomes clearer that the company that does business with people rather than with organizations will win. Perhaps it is a new trend, but what is clear is that people will do businesses with people – and all the better if it comes from people that they know are passionate about what they do.

Remember the most ultimate product you can produce is a satisfied customer.

credit: Matt McGee

Giving out discount coupons are so passe. Now to promote spending and prop up the economy, giving out cash is another strategy to increase your customer base and push them to spend more. We see this from the Taiwan government giving out shopping vouchers that are equal to cash to its citizens to promote consumer spending. Economists believes that Asia should spend to push the economy out of the gloom.

I’m all for spending and stimulating the economy. And when I drop by the shopping centres in Singapore, the empty walkways / footpaths plus really great discounts make shopping such a great experience. But the truth is – now the fight is for consumers to open their wallets when in reality – most are keeping it very close to their pockets. Job losses, lack of jobs available – these are worrying times that do not encourage spending.

That was until I came across the Equatorial Hotel advertisement.

I love this great marketing strategy by a Malaysian hotel. It is really a fantastic idea -  I’m thinking of packing my bags to go over this weekend.

For each night you spend there you’ll get RM88 (SGD 36)  to spend at their 7 F&B outlets. If you are staying alone or with another person – this means that your meals are free for the duration of your stay.  I’m not sure whether it is possible for me alone to spend RM88 per day in meals – but for couples I think it is just enough – perhaps just need to top up a bit more.

Appears in The Straits Times
Life(9 March 2009)

Plus even if you don’t spend the RM88 – 50% of what’s left over is refunded back to you upon checkout.

Nah, I rather spend the money fully – and maybe a bit more.

I think giving pure hard cash is better but if you are a hotel looking to make sure your guests spend their money at your hotel – then this ensures they do so.

A competing hotel -  located near shopping centres can easily trump this offer. If you are looking to push up your room occupation rate, do a promotion with your next-door shopping centre neighbour by giving out shopping vouchers to cooperating retail outlets. Why not?

It is all about the perception of value – Value Perceived is Value Achieved.

Host-beneficiary relationships are hard to build though but win-win situations should always be explored. In such an economy the most innovative ideas will triumph and not the largest marketing budgets.

P.S I do think the advertisement can be improved upon. A headline like “We Are Giving Money Away!”  will draw my eyes – the location of the ad at the bottom also doesn’t help much.