How to Protect Your Organization From the Amazon of Your Industry

The trend towards consolidation in industry has become a threat to any business whose leadership has a desire to maintain its own identity and strategic path. If you think you, your company, or your industry is immune, I urge you to look at the telltale signs.

If you are one of those business owners or leaders who have invested many years of your life building a brand, then you most likely have a vision for that brand for the future that exists beyond your involvement. Sure, you could decide to sell the business or have it acquired by another organization, but the control of the decision should be yours.

So what do you do if you’d like the company to stand alone moving forward?

The Hidden Threat That Many Do Not See

Many signs of corporate consolidation are apparent; we read about them in journals and online every single day. XYZ corporation announces the acquisition of ABC LLC, etc. Mergers and acquisitions have been around forever, but there is a new legal form of conquest that is allowing organizations to steal market share from well-established businesses. Does it exist (yet) in your niche?

The menace of which I speak is the digital marketing organizations that are springing up in most industries, offering services on a pay-per-lead basis. If you are an established business, you likely have encountered one or more (or your marketing department has), and perhaps you have even paid for their services. These organizations spend their resources online, gaining a marketing edge, and then sell you (or your competition) the data on the leads. It seems like a win-win relationship at first.

But consider this. Isn’t this type of behavior, by you and your competition, outsourced marketing? No big deal, right? They spend money to generate consumer information, and then you buy it. Outsourcing frees you up to focus on things other than creating new business opportunities. It’s a true parasite-host relationship, where your organization serves as the host, and the digital marketing organization serves as a benevolent parasite.

Over time, the parasite will get large and robust. It will more than likely service many companies, not just your own. When they hit a point of market saturation, who do you think will be the most prominent brand known to the consumer? You? A competitor? No! It will be the digital marketing company that has been growing its reach across digital channels.

I believe that at this point, the digital marketing organization will have the leverage, and it is then that the parasite begins to consume the host. They raise the price on your cost per lead. If you refuse to pay, they merely sell the information to a competitor. Or worse, they quit selling information exclusively; instead, they sell the same information to multiple organizations. Once they are large enough in the eyes of consumers, they have the leverage to do this.

Would you like some real-world examples of this? Look no further than Zillow in real estate or Homeadvisor in the home services sector. These marketing-only organizations started simply with a website, but now each is the biggest name in its field. Zillow is now buying homes and working directly with home sellers. Can it be much longer before they have a buyer service available?

How To Avoid The Digital Marketing Parasite

If you own, lead, or manage an organization, acknowledge that the primary task of any business is the generation of new customers. You cannot outsource marketing, or it will put your company in a position to finance the organization that will one day put you out of business.

Take care of the parasite when it is a pest. Ensure that you run a learning organization that evolves its marketing strategy to utilize the same channels and processes that the parasite would use to unhinge you.

The parasite exists in every location and every field. Do not make the mistake of outsourcing business generation responsibilities. Instead grow your digital marketing solutions so that your company can thrive and grow into the future.

About the Author

Joe Manausa is CEO of Joe Manausa Real Estate in Tallahassee, Florida and author of The Business of Getting Business: The Digital Marketing Guide for Small Businesses. After observing industry giants move to a digital-first marketing approach, Joe made the transition within his own company, which resulted in over $10 million of revenue from the business’s website. For more information, please visit lidpublishing.com or https://www.digitalmarketingforbusinessbook.com/.