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The New E-Marketing Rules

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You've seen them all around the Internet. The new marketing rules for the Internet age - the secrets you need to know to survive.

With so much uncertainty surrounding the Internet and e-commerce, it's no wonder there's a thirst for new rules. Internet companies are collapsing, witness Boo.com (now Fashionmall.com) and Toysmart.com as recent famous examples. Forget that these collapses are typically due to company hubris or just bad implementation. Instead, these debacles seem to fuel the idea that failure must come from not really knowing some mysterious new rules.

But what are the new marketing rules? Well, there's no shortage of that. The January cover for PC Computing magazine from Ziff-Davis (ZD), for example, said "Marketing Secrets for the New Economy: Everything you thought you knew about marketing is wrong!" Nice headline.....pretty scary, huh?

In my opinion these so-called new marketing rules are just repackaging some timeless and far more useful broad marketing ideas.

Consider, for example, a recent book excerpt that appeared in Business 2.0 called "Relationships Rule", by Don Tapscott, David Ticoll, and Alex Lowy. Here are some of their so-called new rules of marketing.


THE NEW RULE: CUSTOMERS PARTICIPATE IN CREATING PRODUCTS.

Before, firms marketed one way to customers, not listening to them, pushing products on them. "The old industrial approaches to product definition and product marketing die."

The Reality: This is actually an old rule of marketing. Both marketing professors and professionals have long argued that marketing is fundamentally about fulfilling needs, not creating them, and that customers must be involved in product creation. That many Internet companies haven't heeded this advice doesn't indicate a new rule, just a poor adherence to a long existing idea.

Many companies have long used customer participation in creating products. For example, 3M (MMM) uses "lead users" - people who have created prototypes of desired products - to develop several of their new products.

Talk to any old-line packaged goods company like Proctor and Gamble (PG) or Kellogg (K) and I believe they'd laugh at this so-called new rule. Why do you think they spend so much money on focus groups? They've been fighting commodity battles since the early 1900s and know they need customers involved in creating products if they're going to find a differential advantage.

I've even worked with newer companies like MS2.com who from the beginning used customers in their product development, but don't view this as a novel exercise.

The point is that older and even some newer companies have understood the importance of involving customers in creating products. This is an important idea for Internet companies to understand, but it isn't a new rule.

THE NEW RULE: RELATIONSHIPS ARE NEW ASSETS.

"The customer-facing aspects of relationship capital cause a profound rethinking of marketing."

The Reality: Unenlightened firms in the both the old and so-called new economy have not realized that customer relationships are important assets. But enlightened companies throughout time have known this idea. Talk to any small business owner, most firms in the traditional service sector, or even many defense contractors like Northrop Grumman (NOC) about customer relationships (I have) and they know their value.

In fact, the basic theory of marketing as taught in most MBA programs is that marketing is about an exchange relationship between buyers and sellers. No rethinking required here.

THE NEW RULE: NO MORE 4PS OF MARKETING.

Instead, the authors say, we need new ideas such as "customers pay for experiences, not products." Or "Anyplace, anytime, any way shopping replaces place" – where "place" means the channel of distribution.

The Reality: Over 30 years ago, Theodore Levitt spoke about customers not buying products, but experiences. Revlon (REV) said "customers don't buy perfume, they buy dreams." Disney (DIS) knows they sell fantasies and entertainment. Auto companies like Ford (F) and General Motors (GM) have also known for years the value of thinking in terms of customer experiences.

And let's be clear, go back to very old articles in marketing and you'll see that the concept of "place" was just a simple way of explaining shopping when and wherever customers want. No, the 4P's of marketing have not been replaced (unless of course, you don't understand what they meant in the first place!).

THE NEW RULE: BRANDS ARE NOT SAFE AS KEYS TO SUCCESS.

New brands can be created instantaneously. As the authors say "The experience of Netscape flips traditional branding on its head. It became an instant brand through "word of mouse".

The Reality: This doesn't flip anything. Companies have long sought ways to get extensive word of mouth and have done it successfully long before Netscape. Good product placements on big films have always provided instant word of mouth - remember Reese's Pieces in E.T.?

INSTANCES AND HISTORY

What makes this interesting is that many of these so-called "new rules" of marketing are what we academics call "instances"; broad marketing ideas that are being applied to the specific instance of the Internet. For example, viral marketing and other such ideas are just age old marketing concepts applied to the Internet as new buzzwords. Kudos to the PR companies for making some people believe these are original ideas.

When it comes to breaking out of thinking by way of instances, a good example is Scott McNealy of Sun Microsystems (SUNW). He noted back in 1997 in Fortune Magazine that the "Network is the Computer" concept is based on "a business model that was stolen from every other large utility on the planet. You don't have a power-generating plant in your home; you're connected to a power grid." McNealy can see beyond the instance and therefore I doubt he would be impressed with these new marketing rules.

The other thing about these new rules is they often have no sense of broad business history. Not realizing that other industries have typically intimately involved customers in product development is just one example. Having no sense of history is fine if you want to reinvent the wheel. But in the Internet Age where time is so precious, why bother reinventing marketing with cute new buzzwords? All right, I understand it sells books, but you get the point!

The trouble is that specific instances and a lack of historical understanding don't get you far when the context changes, and the Internet will surely change. For example, when we have ubiquitous digital voice recognition, will we need another buzzword to replace "word of mouse"? Undoubtedly some new marketing guru will appear and name it, well, I guess, "word of mouth".

No, there are no new e-marketing rules for the Internet. If you don't believe me, fine. As Jim Cramer from TheStreet.com (TSCM) says in his television commercials, "send me a nasty email and I'll debate you on it - I know I'm right."


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Allen Weiss is the founder and publisher of MarketingProfs.com. He can be reached at amw@marketingprofs.com.

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