In the E-Commerce Times, my friend John Mello published an article on Adobe’s reported massive drop in prices and the reasons for them.
The market has shrunk, and sellers in various industries are dropping prices, so the relative cost of their products to those of others has decreased. This strategy potentially inflates demand, so they can often liquidate excess inventory at a loss.
This strategy cuts across industries and can cause problems because it erodes margins, resets expected value with buyers, and can put companies out of business if they don’t have the resources to cover an extended revenue shortfall. There are not enough large reserves for
Once this crisis is over, we will have far fewer companies, but what are the options? Is there a better way to ensure revenue without unnecessarily sacrificing profits? Let’s explore that this week, and we’ll end with our product of the week: a new Thunderbolt laptop dock from the Microsoft Surface folks.
problem of price war
Because the cause of the problem is economic – recession, fear of US default, and inflation struggling – these price drops may not have a material impact on volume, especially if other sellers in the segment do the same. Price wars are ugly, and surviving them can be incredibly painful.
Businesses usually resort to this strategy when leaders lack marketing knowledge. They go with what they think. Lowering prices is a knee-jerk reaction to trying to increase sales volume and reduce inventory. They either forget or don’t realize that their competitors’ response is now a price war, and they must continue to cut prices until they reach some arbitrarily low number and tap out. Can’t do it
You may have to react to a price war, but you never want to start one, because unless you have a significant cost advantage, there is a real risk that you will not survive it.
I have many degrees, but my first degree was in merchandising, which is an applied form of marketing, and I’ve been in and out of marketing my entire career, most recently as a consultant.
The textbook response to a slump in demand is to ramp up marketing spending on effective demand-generation marketing to draw people to your product. You can bundle or tie-in and target people with what you are selling or will soon be in the market for.
However, there are traditional problems with this. The effect is not immediate. It takes time to create, test, and run a demand-generation campaign, a process that will take months when vendors are already in crisis. Also, we have some new problems due to streaming and digital content. Traditional marketing doesn’t seem to have the same impact as it used to.
People, especially younger demographics, are no longer watching ad-driven TV or radio. Print media has declined since the launch of the Internet, and Google (which dominates online advertising) and Facebook (which should be moving into targeted advertising) don’t understand how to do marketing, so their platforms don’t deliver. Conversion rates that advertisers want.
Influencer marketing has been badly damaged by influencers misbehaving and diluted by their ever-increasing numbers, and placement (where you put the product in the content) hasn’t resulted in the successes we’d hoped for.
Generative AI may be the answer
I thought Facebook and social media in general would be the answer. Facebook, over time, learns a lot about you and should be able to serve timely and effective ads. However, its approach of allowing almost anyone to advertise has resulted in so much fraud that many of us don’t trust Facebook ads anymore.
You could go straight to marketing, but staffing a call center is expensive, and pushing that call center to another part of the world with lower labor costs really pisses off potential customers.
But what if you harnessed the full power of Generative AI?
Generative AI can sound like almost anyone, respond as if you’re talking to a real person, and even develop massive relationships with them. You can train the AI with the best skills and then let it loose. If you act correctly, the subscriber may appreciate the call or message.
However, you’ll need to approach the problem like a top salesperson, which is to provide value, connect with the customer, and build a relationship. This method is easier if they are already a customer and if you can offer either information or a service for free that the customer wants in order to further the conversation and establish a deeper relationship before committing to something new.
If the AI is properly funded and conceived and the customer is profiled correctly so you know enough about them so you can build a deep relationship, this should solve the marketing issue. You can use this same technique to get feedback on what you’ve sold, market-test future product ideas, and get early warnings about product problems before they happen. That the customer throws out the product and blacklists your brand.
Generative AI is the future of marketing, but judging from what is happening, that future may have to happen now.
As John points out in his article, many, if not most, markets are in freefall due largely to strategic price constraints, resulting in unexpected price wars.
A better way would be to increase marketing. But not only has marketing talent declined over the years, but market development funds (MDFs) have also rolled into the margins and are not funding marketing, and the places we used to market are becoming less and less effective. are becoming
Generative AI is emerging as a powerful tool to better engage with customers and sell to them. I don’t think we can wait that long. Maybe it’s time to hit the gas and start funding generative AI marketing before a large number of companies become history. just saying…
Surface Thunderbolt 4 Dock
Laptop docks have gone through a lot of evolution. They began primarily as a mechanical way of securing laptops to desks and were primarily focused on theft. I personally saw their benefit when one of our overseas offices was visited by a fake tech at lunch, and our employees came back to the office with laptops surprisingly clean.
Since then, security on laptops has reduced the risk of theft, and with lower prices, the risk of having a computer stolen isn’t as high as in the office. If one gets stolen, your car is more likely to be stolen (never leave one in front), while you are traveling or you have left it somewhere.
Docks are now more devices of convenience that allow you to connect power, wired Ethernet, some peripherals, your keyboard, mouse and monitor with a single plug. They make life easier by enabling you to leave your charger at home, in your laptop bag, or backpack, and more easily connect and disconnect everything connected to the dock.
Thunderbolt docks have the added benefit of extremely fast throughput. Still, it generally only works well with Intel-based products and for those that need to work on large datasets, images, movies, or AI. The new Surface Thunderbolt 4 Dock is one example.
Surface Thunderbolt 4 Dock (Image Credit: Microsoft)
While it will likely work with other Intel-based Thunderbolt-enabled laptops and (with degraded performance) non-Thunderbolt products (such as most OEM-sourced power supplies and docks), it will work best with Microsoft Surface products: Surface Laptop 5, Surface Laptop Studio, Surface Pro 8 and the Intel-based Surface Pro 9.
Remember that Microsoft designed its Surface family to appeal to people who desire a design-forward product like Apple’s, but who, like me, don’t want to deal with Apple. With a Thunderbolt connection, this dock will support up to two 4K monitors, which is all I want now that I’m writing on a laptop on a plane and missing out on my home office screen real estate.
It has a decent port out – analogous to a desktop computer – and an audio jack if you prefer to use wired rather than wireless headphones. The power supply is remote and can sit on the floor, and you can bolt it to your desk if you’re concerned that one of your co-workers might “borrow” it.
Surface Thunderbolt 4 Dock Port (Image Credit: Microsoft)
As with most Thunderbolt docks, it’s pricey at $299.99, but for those who have a Surface Laptop with Thunderbolt support, it’s worth it (as mentioned, it will work with non-Thunderbolt laptops, but for those you’ll Can save almost $ 50. Scrambling down on the Surface Dock 2.
One of my favorite laptops is the Surface Notebook; Nice balance of design and performance, and this dock makes that laptop even more useful, so the Surface Thunderbolt 4 Dock is my product of the week.