What You Need to Learn from the Railroads
When I say “adapt” it’s possible that a line from Darwin pops in your head… “survival of the fittest.”
And if that phrase did come to mind, you’re kind of on the right track.
Let me explain.
A few years ago I had the pleasure of meeting and listening to Kenneth Gronbach at a business networking event. He was discussing generational marketing, and how changing demographics can have a MAJOR impact on your business.
I bought his book “Common Census” after his talk and it is definitely worth the read. I can’t seem to find it in my bookcase (I may have to buy another copy — did I lend it to someone?
In any event here’s a link to Amazon…
Among other things, he predicted the demise of the US auto industry (this was back in 2005) because they were marketing their product to a shrinking demographic.
For example, here are some myths based on misunderstood demographic shifts:
- Baby Boomers represent the largest percentage of the population:
(FALSE – Gen Y is double their size) - Baby Boomers as a whole have college degrees:
(FALSE – though some have college credits under their belt, less than 30% have a college degree) - Nobody over 50 is on facebook:
(FALSE – this is the fastest growing demographic on facebook) - The “graying” of America means we need more assisted living facilities, etc.:
(FALSE – this is a shrinking demographic)
Some impacts of wrong-headed demographic thinking?
- Targeting your product or service to the wrong audience
- Misunderstanding critical factors of your target audience
- Missing or ignoring trends because of mistaken beliefs that your target audience isn’t “there”
- Failure to connect with your target audience through poor use of language or not understanding their “world-view.”
For example, anyone in financial services targeting baby-boomers is in for a rude awakening.
Why?
Because as a generation they are typically spenders, not savers.
Their 401k and other retirement plans are notoriously under-funded. On the other hand, real estate agents and mortgage brokers do well targeting a group that loves to travel and buy vacation homes.
Do you know how many boomers paid for their kids college education? Care to guess?
Cash out refinancing. Now their homes are loaded with debt (as opposed to paid off) while their kids walk away with a college degree paid for by mom and dad.
The REAL savers are (were) the PARENTS of baby-boomers.
And it makes sense if you think about it. Having survived the great depression (or hearing first-hand from THEIR parents about it) they were fanatic about saving every penny.
On the other hand, they do not trust banks or bankers.
So good luck getting one of THEM to invest or save with any institution other than their local bank.
In fact, they distrusted banks so much (remember the depression?) that they will most likely have multiple bank accounts along with cash hidden all around their home.
For example, my grandfather passed away last year. My dad and uncle spent a few weeks cleaning out his home so they could get it on the market. It took them so long because they were finding money tucked away everywhere.
They found cash stuffed under mattresses, in books, tucked into hair rollers (no doubt from my grandmother), in old coffee cans and cigar boxes.
So what does all this have to do with the railroads?
It’s about viewing trends as a threat to your business, or as an opportunity.
When the interstate highway system was created after World War II, the railroads fought tooth and nail to prevent it’s expansion and the inevitable rise of truck lines.
On the other hand, airline transportation became affordable to the average person. And the “jet set” age was born.
Now, let me ask you a question…
Why did the railroads FIGHT these trends? Why didn’t railroads start their own airlines and fleet of trucks?
Thank about this for a moment…
- Railroads were well funded
- They had tons of revenue
- Why not expand into new and growing markets?
Because they thought their business was THE RAILROAD. They didn’t think of their business as a TRANSPORTATION company. They thought their business was choo choo trains riding on ribbons of steel.
And that limited approach to their business killed them off.
Passed by.
A failure to adapt to a new environment, to a shifting world, meant that powerful companies became a dinosaurs. Sold off for scrap and the dying remnants donated to museums.
That’s what happens to a business that doesn’t know how to read the “sign of the times.”
You either adapt and thrive… or bury your head in the sand and die off. Just like the railroads, the dinosaurs and the dodo bird.
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