The New Bottom Line

The New Bottom Line, published by Capstone and authored by Alan Mitchell, Andreas W. Bauer and Gerhard Hausruckinger is an important addition to the research that is currently fuelling the debate that Stephen J. Gould would describe as a period of punctuated equilibrium.
For many years, the authors argue

traditional old bottom line businesses have created the richest, most extensive and dynamic wealth creating system the world has ever seen. Wherever there are new economies of scale to unleash or old technologies to apply, this model still has enormous potential.

However, our world has changed which requires a new response. New information technologies offer up the very real possibility of richness and reach. And this has contributed to placing the consumer at the beginning of the value chain rather than at the end perhaps for the very first time.
This challenges the fundamental principles of how businesses go to market, as they can no longer attempt to align large audience to their own agendas. Today business growth will be delivered by businesses aligning themselves with the customers needs.
The second key issue, is marketing. SMLXL has published a whitepaper entitled The Long Goodbye exploring what are the key and fundamental issues facing all marketers today.
In the New Bottom Line the authors comment:

A hundred years ago, roughly a quarter of all economic activity was taken up with the core marketing tasks of matching supply to demand and connecting buyers to sellers. The other three quarters was invested in actually making stuff. Since then this 3:1 ratio of 'making' to 'matching and connecting' has been transformed into a 1:1 ratio. The costs of matching and connecting now account for half, or more, of all economic activity.
This is why A.G.Lafley, CEO of Proctor & Gamble now says that marketing has to be 'reinvented'

Add to that the 56 million Americans who have signed the "do not call me" register and the knowledge that interruptive marketing overload makes us more resistant to these forms of communication.
One can see that we need marketing 2.0. Or in simple words a more smarter, more intelligent way to do things. That adds value to customers and exploits the latent assets residing in some many companies.
New information technologies offer up great opportunities for businesses to talk and engage with their customers in more meaningful ways. As Tesco have so successfully done. As have Apple, as have Dell.
SMLXL think that too often companies are from Mars and customers are from Venus.
Each have their own P&L account. But the customer P&L is based upon value.
For example, critical contributors to this 'personal' P&L include:

• Value for money
• Value for time
• Return on attention (was it worthwhile paying attention to this?)
• Emotional return (was it a cause of happiness or hassle?)
• Return on labour (I worked hard to realise this experience - was it worth it?)

"Was that experience worth it or not?" should be the question customers asking themselves.
Value for money as a yardstick simply isn't adequate.
Our research tells us there is a staggering amount of activity going on in certain industries. But often we observe in talking to a considerable number of businesses that, there are many that seem to be waiting to arrive at the cliff before they decide to alter or change their business and marketing strategies.

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