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The Best of Times … The Worst of Times

In many ways, these may be the best of times for marketers. Not only are there new worlds to conquer — utility deregulation and direct-to-consumer prescription drug opportunities, for example — but also old worlds to protect.

The old worlds are better known to marketers by the term “share” and by products that resemble one another so precisely — long-distance services, coffee makers, sneakers, cable channels, to name but a few — that they are virtually indistinguishable from one another. And this is where marketers excel: persuading, cajoling, convincing and demonstrating that buying or using a particular product conveys a benefit not possible with another product or service that seems to duplicate those benefits.

However, a recent New York Times article pointed out that although the economy is generating new jobs every year, most Americans' standard of living hasn't shown much improvement (the exception, of course, are those whose incomes are tied to the stock market).

In fact, while increased productivity — producing more without adding more labor — seems to be a national goal, many companies are adding more labor to convince their customers to remain their customers. The Times called what happens when an economy adds more jobs rather than increasing efficiency the “treadmill” effect, pointing out that though unemployment is low, it is increased productivity that produces raises and elevates standard of living.

The upside, of course, is that more Americans are working, even if many of them are working at being nicer, politer and more chipper customer service reps than the other guys' customer service reps. It still means more profits, if not products, for a company to maintain its share and retain its customers or stem churn. But it does give one pause …

… Just as last week's bankruptcy filing by Kleid Co., a list company in the business since the 1940s, gives pause and more. One of the issues involved there was churn.

As Richard Vergara, president of Kleid, said, “You're seeing more volatility in list management, less loyalty than on the brokerage side. If a list manager has a bad year, it's very easy for clients to move somewhere else.”

And in Kleid's case, they did. For a small company that couldn't rely on a powerful parent to bail it out of a jam, losing clients meant losing the business altogether.

It's always sobering when “consolidation” in an industry means fewer players. The effect of fewer players is to diminish the effect of the whole field.

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