Wednesday, February 25, 2015

Niche Marketing

One of the more peculiar stories currently covered in the financial news concerns the shakeups at MSNBC. Over the years this network, noted for its hard left attack journalism, has steadily lost viewer share until it has become a very serious financial problem. The more conservative news outlets seem to be enjoying a moment of guilty pleasure during their old enemy’s time of distress. The liberal media is mourning the death of their champion when they report that an MSNBC spokesperson wrote in an email, "We have a great brand," and "we will be staying true to our progressive voice while broadening out the issues we cover through that lens."

Some analysis seems to indicate that MSNBC was a great brand because they consciously and consistently appealed to a niche market, hard left progressives, during the Bush years and the election of 2008 relentlessly attacking anything and anybody in power. Once the Democrats swept the House, Senate, and the Presidency, they could no longer do what they did best. As MSBC mellowed they lost audience share. They were now competing with the more mainstream left leaning networks like PBS, CNN, the three majors, and major metropolitan newspapers like the Washington Post and the New York Times.

Charles Cooke notes that FOX Broadcasting is doing well because they have remained true to their customer base, “Contrary to its favored claim, Fox is not in fact “Fair and Balanced” but is a rightward-leaning station with an ideologically driven owner, a clear target audience, and an obvious and pronounced set of political biases. Or, as one wag has put it, Fox is designed to appeal to “a niche market called half the country.” This being so the problem is less that Fox is “extreme” or that it is “out of touch,” and more that it is geared rather unsubtly toward serving one of America’s two philosophical poles.”

In Tribes, Seth Godin puts forth the argument that the proliferation of cable TV stations catering to particular market niches and especially the Internet have ended the power of mass marketing as we have known it. He believes that “tribes” of individuals interconnected by specific interests and ideas are out there waiting to find a leader. Whether that tribe rides Harley Davidson motorcycles or is patiently waiting for the second coming of the Occupy protests, Godin believes there are dragons to be slain and money to be made by the heretic brave enough to step in front of a tribe that is already on the move.

I have written that I believe the two most valuable abilities for the new millennium are entrepreneurial and sales skills. The era of the “good job” seems to be over forever. The future self created opportunities seem to lie with tribes not with government bureaucracies or major corporations. Although a tribe can become the most valuable corporation in the world (Apple) they all seem to start small. I remember when Apple sold computers to weird people who lived in their parents’ garage, playing with toys like expensive cameras and computers that couldn’t do much of anything. Responsible people used the Digital VAX or the IBM 360 to perform real tasks in the real world. Digital is bankrupt. They abandoned their “tribe,” engineers and scientists in favor of the business market. As far as I know, IBM is no longer in the computer business. They are primarily a computer services enterprise like their illegitimate offspring EDS and SAP.

Apple would do well to remember that what the tribe giveth the tribe can taketh away. I am just beginning to hear the first rumblings of discontent from long time, hard core, Apple customers. This does not bode well for the future of that great company if it becomes a trend.

Niche marketing is not limited to high tech. My mother-in-law lived in a senior high rise for about seven years before she died. During this time my wife would fly down to Atlanta to help, sometimes staying for as long as six or seven weeks at a shot depending on her mother’s medical situation. She didn’t want to drive a rental car in Atlanta traffic so she obtained rides from family, her mother’s friends, or she hired a taxi. The old people in the senior high rise really needed taxi service since many of them couldn’t drive or at least they shouldn’t be driving a car, especially after dark. The high rise only provided limited scheduled shuttle service. These old people were afraid that cab drivers would rob and kill them (don’t ask me why). Over time, some of the old people discovered a husband/wife cab company. They grew to like and trust these people, recommending their cab service to one another. Finally the management of the senior high rise started endorsing this cab service. My wife used this company for most all of her trips that weren’t covered by family or friends. I would guess, most of the old people in this facility were upper middle class to modestly wealthy. A cab company found a nice market of people who needed their service and were willing and able to pay for it.

They found their tribe.

“Yes, I think it's okay to abandon the big, established, stuck tribe. It's okay to say to them, "You're not going where I need to go, and there's no way I'm going to persuade all of you to follow me. So rather than standing here watching the opportunities fade away, I'm heading off. I'm betting some of you, the best of you, will follow me.” Seth Godin

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