An analysis of Nielsen data over the past two decades indicates nine out of 10 new products failed in the first year of commercialization. Therefore, one can expect that the interactive failure rates of tomorrow will be higher than failure rates experienced with the simple new products of yesterday. Why?
With digital convergence, customers who took years to find, develop and eventually "own" can now be lost in a matter of nano-seconds. What a customer will buy, why a customer will buy and where that customer will buy will be fundamentally different.
Hence, the marketing imperatives must change, and only those interactive marketers who can anticipate, identify and then translate these few forces for change into new products, services or experiences will have the best chance at success.
The expectation of high failure rates for interactive ventures is not based upon current delays or poor market test results for ventures now in place.
Those tests will not be able to predict what will and will not succeed because they will be testing "yesterday" issues against "tomorrow" customer needs and wants.
Time will become the currency of choice
Yesterday, the currency was discretionary money (i.e., can I afford to buy it?). Tomorrow, the currency will be discretionary time (i.e., can I afford the time to buy it?).
Discretionary income, the currency of the past, was expandable. People could expect to earn more as they moved into the future. Consumers could, and often did, double or triple their discretionary income overnight by simply borrowing more.
Discretionary time-for traditional entertainment, shopping, etc.-is expected to be fixed or even diminish, however, just as software choices begin to multiply. Therefore, simply being on an interactive medium with a me-too product or service can be hazardous to one's business health.
The global society of tomorrow
Thirty years ago, Marshall McLuhan used a mixed metaphor to describe TV's impact on populations throughout the world. He called it a global village. Today, the Internet has vastly superseded Mr. McLuhan's vision of a global village.
People's latent desire to interact with individuals anywhere in the world with similar interests, attitudes, values and behavior patterns will form the base for many global societies. Global societies may well become an economic, social and political force for change in the marketplace of the products of tomorrow.
Both the utility and the life cycle of different global societies will be driven by the changing values, interests, needs and behavior of their own members. Hence, each society will be a self-improving and self-correcting one in a continuous mode.
Individuals could be members of one society or several hundred societies simultaneously depending upon the availability of their discretionary time. The Internet has unleashed today a powerful microcosm on how societies may begin to transform themselves in the 21st century.
Keys to interactive success
Success on the information freeway will go to those marketers who can invent programs to meet consumer needs-needs the consumer is not aware of today, and that competitors have yet to identify and pursue. Interactive profits will be earned in what others can't see-not in what is visible to the whole world.
Some marketers expect that their new interactive ventures will be automatically successful for two reasons:
First, some marketers believe that they are in the midst of an information revolution. Since it is assumed that every prospect wants more information and more choices on demand in shopping, entertainment, learning, working, etc., marketers assume that interactive success will be virtually assured.
Marketers also believe that by getting a list of "best" prospects to identify themselves either through previous purchases or through previous expressions of interests, interactive marketing success would be assured.
The record suggests, however, that we are not in the midst of an information revolution. Secondly, while interactivity makes selling, paying and shipping very easy and convenient, it is just not suited to gaining and keeping customers who will repeat again and again over time. Therefore, lists of "best" prospects will not be sufficient to renew old consumer franchises nor build new quality consumer franchises, both essential for corporate growth and survival.
To succeed, interactive marketers will need to develop an in-house capability to anticipate, identify and translate future change and then understand how such change will impact the why, what and where people will buy in the future. Interactive marketers who creatively embrace the new marketing imperatives of the future will turn out to be winners. However, marketers who believe that the future is merely an update or a new flavor of the past will likely fail.
Successful interactive marketers will continually challenge their own successes. They will likely ask the right questions about the right issues at the right time. Then, they will determine where and how to get the essential empirical answers at an affordable cost.
Understanding how long and how wide each window of opportunity will remain open for a new interactive marketing venture will be a critical determinant to go or not to go.
In the '80s, the average life cycle for a successful new product was approximately three years. In the new world with instant information, instant communications, instant action and commodity price knockoffs, average product life cycles could drop as low as one year or less.
Interactive success in a changing world will depend on a continuous audit of the communication processes-what may have worked yesterday may be a failure tomorrow.
Unfortunately, today's sales figures do not always provide an accurate early warning signal on just when to take action. Only an analysis of the quality of the sales data, including the repeat purchase patterns, the switching patterns and the reasons why, can begin to shed light on when to act.
Despite the high odds of failure, the pursuit of interactive success can still be achieved. Raise creative questions, challenge everything, harness the power of change and demand meta-creativity in all communications. Then, be prepared to do it all over again and again-before the competitor does it for you.
Murray Hillman is president of the Strategy Workshop, a New York-based management and marketing consultancy.