When I launched my company in 2002, it was called a fad by many. The Dot-Com bubble had burst just a couple of years prior and highly-touted, well funded Internet start-ups, like Pets.com (revived later by PetSmart under an entirely different revenue model), were dying in droves. The remaining good money in retail was going back to brick and mortar outlets.
Here’s the thing some pundits of the time missed; most of those e-commerce stores didn’t provide any value in the first place.
Bankruptcy courts are littered with remnants of companies touted as “revolutionary” and “cutting edge” only to be gone almost as fast as they arrived. Some came on the scene with much fanfare and interest thanks to very successful advertising campaigns. Believe me, I’m all for developing and executing good marketing programs, but not when organizations can’t live up to the expectations that they set. That’s exactly what happened for many Dot-Coms in the late 1990s and early 2000s.
This problem is not a new phenomenon. There are many well-documented examples dating back far earlier in the 20th Century. Take Piels for instance; a regional lager beer producer that was based in my hometown of Brooklyn, New York. In the 1950s, the company launched a very successful ad program featuring Bert and Harry Piel, the brewer’s fictitious animated owners and pitchmen. Sales shot up in rapid fashion after the print and TV spots ran, but revenues quickly receded by the middle of the decade, in part because the new customers soon discovered that the beer actually wasn’t very good, and began switching to better tasting products offered by Miller and Anheuser-Busch. Today, Piels exists in name only; with the brand being purchased several times over since the 1970s, and is now owned by the Pabst Blue Ribbon Company.
Creating a sustainable, competitive company in any industry takes due care and consideration on many fronts. Entrepreneurs who are starting up new companies can be well served by keeping these points in mind:
* Remember ALL four “P’s.” No one marketing element – be it price, promotion, placement or product – are any more important than the other. Focusing on one at the expense of the others will almost certainly result in a failed venture. You could have the cheapest prices in town, but customers won’t buy if they have an extraordinarily hard time ordering them or if the products are not of acceptable quality.
* Ask and listen. Companies are more successful if they can engage their patrons in meaningful conversations to get feedback on things that they like and don’t like. Not only will this keep customers involved, but will provide insights as to how to stay ahead of rivals.
* Stay true to your core values. While product lines may change over time, long-standing organizations stick around because they stay true to their mission and guiding principles. Disney’s mission statement, for instance, is simple – “To Make People Happy.” While their services and products may change – such as the mid 1990s when Disney acquired two major league sports teams, the one thing that has remained consistent is the company’s commitment to serving people.
Fads most certainly come and go, but not without good reasons. More to the point; many of them die for the same basic reason – their bottom line benefits to customers were minimal when compared to established competitors. It has little to do with being a Dot-Com or brick and mortar outfit, and more to do with possessing a strong value proposition.
About the author: Bobby Brannigan is the founder and CEO of ValoreBooks, a fast-growing online provider of cheap college textbooks. He can be reached at firstname.lastname@example.org.