The dynamics of the market place are made of small feedback loops. If we were to look at this from an economic point of view, goods and services come into existence in the presence of a demand. The characteristics of the market place are determined by a type of tug-of-war between a buyer and seller. Sometimes sellers can make a buyer, buy certain things; but sometimes a buyer can make a seller, sell a certain product.
As a business owner, when you are trying to generate business for yourself, this is the dynamic you are functioning in. Consumer decision making is dependent on the information they have access to.
In a time when digital market places are replacing the conventional physical marketplace, we have reached a new level of market efficiency. With the creation and spread of e-commerce, the incorporation of business into social media and near universal access to the internet; information exchange has become instantaneous.
When you combine the increase in the rate of information exchange with services like TPLs (Third Party Logistics Companies), this complicates things. Not only are people aware of cheaper options and greater varieties in other markets; they also have access to them.
The internet has essentially removed many of the barriers that used to restrict access to other markets. 20 years ago, no one could have imagined ordering products from China, unless they were large scale business owners. Today, however, e-commerce outlets like Amazon and Ali Express are serving individuals across the world.
For the consumer, this is possibly the best thing that could ever happen. Many businesses lose out on the monopolies they had developed and new entrants into the market emphasize the need for research and development. In all of this, one thing is for certain: the client has been raised to a new pedestal of importance. If at the end of the day, a business is supposed to sell its services, they can only sell it to a buyer. Unfortunately, or fortunately—depends on how you look at it—the buyer has way too many places they can go to for the same thing.
As the digital net encompasses a greater number of people, it seems that the customer is winning this tug of war. Existing demand can be divided between too many suppliers of the same good.
The Traditional Feedback Loop
Although it seems like there is very little room to influence the customer, the relationship between clientele and businesses needs to be understood. The need for a good arises because a customer wants it, this creates the potential for a market; a business sells the good to the customer. Ultimately, it is the consumer that requires the product who sets the demand. However, once the business sets up a relation with the consumer, it can use tools like marketing or product differentiation to make sure it retains its customers.
As a business owner, you can still compete in a market against competition by creating your own demand. You can manage that through effective marketing activities. At this point, the dynamics of the market become balanced as consumers respond to businesses and businesses to the consumer.
This entire exercise creates a feedback loop where the buy and seller begin influencing each other’s actions.
The Feedback Loop in a Digital World
In the current business landscape, the same relationship holds. It’s just that it’s become faster. An internet user comes across an overwhelming amount of information. For those who look hard enough, it is not very difficult to find what they want. However, just as the consumer has access to immense amounts of information, so do businesses.
Analytics tools incorporated into websites and e-commerce platforms allow many to judge what the next step for the business ought to be. Identification and analysis of consumer expenditure patterns is far easier.
Beyond that, businesses now have access to a greater range of measurement tools and metrics to decide the best marketing strategies. In the current scenario, a business owner can plug into the information stream to make themselves more visible to their customers. It is only a matter of realizing that if you go into the source of all the information, you can bargain for greater market influence.
As more customers come onto online marketplaces, they will not come in with a full awareness of their options. This gap in information is what many businesses seek to fill to achieve commercial success.
With this piece of analysis, it seems like maybe the tug of war is still on even grounds. It’s just that the focus shifted to outshining existing competition.
What is SEO and Digital Content Marketing?
Digital Content and Search Engine Optimization (SEO) is the tool that many use to become a part of the information stream. Actually, that is a little inaccurate; it is the tool many use to become a visible part of the information stream. Assuming you have an online business, you are already on the internet notice board; it’s just that many people cannot see you.
Although there may be many ways in which you can differentiate yourself from your competition, visibility is really what counts here.
The approaches may differ for businesses depending on the scale they work on. For someone who has already developed a market presence, it may be easier to bring out how their services or goods are better than others. For businesses that are starting up, it may be easier to create a market presence through the use of SEO and Digital Content Marketing.
The real competition is not based on a product’s pricing or its packaging anymore—it’s about who can inform their clients of the availability of a product at the earliest. When the clientele brings its demand to the market, it still needs someone to point them in the right direction.
With the modern age and technological advancement, running a business is about running the right information through the market. More specifically, you need to develop an expertise in creating the right information; you must master SEO and Digital Content creation.
Why Is Information So Important?
All human decision making is done through the information we possess. This is equally true for consumers, although the context here is a little different.
Traditionally, even though the customer may know about the same products in different markets, they could not go to different markets. Today, since access to different markets is easier, the decision to buy something is largely based on information about services and products themselves.
According to research, the longer a user stays on a webpage, the more likely it is that they would keep using it. This brings to light a new observation on consumer behaviour; it is a matter of keeping them engaged for half a minute—at least to have them spend a full two minutes with you. This is a reflection of how fast customers would switch through a page and the importance of creating immersive content. As internet speeds become faster and as more people start accessing the internet, these numbers will fall even further.
At this moment, all of us ought to take a step back to take this in. The first 30 seconds on the page really decide whether your content is successful or not. It is really not surprising that the numbers call for hyper responsiveness on part of the business. Consider the fact that since the average internet user accesses multitudes of web pages every single day, none of them really spend a significant amount of time on it.
Most people have a default preference for the type of content they would like to view; it is only on occasion where they may shift their attentions to something else. In the small window during which they do engage with different content, they will only give it a cursory glance. Which is not to say that people are not responding to new content, they in fact are. It is a mark of how intensely engaging the content has to be to get them to respond.
Having said this, consumer dynamics have the potential to constantly shift. Since the customer comes across a large amount of information, they still retain a fraction of it. That fraction is still a rather large amount of data to absorb, enough to affect behaviour patterns.
To understand your consumer, you must appreciate how effective your information must be to attract them to your business.