book.chapter Section 1 – attracting your audience

Traditionally, businesses would create a product and then search for a market to sell it to. However, the digital age has flipped this model on its head. Now, the first step is often to build a community of potential customers and then find or create products and services that meet their needs. This approach highlights the necessity of generating a strong appeal to draw customers in, helping a business to distinguish itself in the vast sea of information and competition online. Once a business has secured a large customer base, it has various paths to monetization at its disposal, including direct sales, offering additional services, or using the customer base for other profitable ventures. Amazon.com exemplifies this shift with what's known as the Magnet Effect. Starting as an online bookstore with a wide selection of titles, Amazon quickly attracted a large customer base (which had grown to 13 million by the end of 1999). This customer base served as a foundation for Amazon to broaden its product range, with the goal of becoming the ultimate online shopping destination. Given that a significant number of online shoppers have bought from Amazon.com, this goal seems increasingly attainable. The Magnet Effect signifies a profound change from traditional business strategies, akin to putting the cart before the horse. It challenges the old wisdom by suggesting that it's possible to gather a customer base before fully knowing how to profit from them. Furthermore, it implies that businesses can operate at a loss while building their customer base, with the expectation of future profits. This strategy underlies some of the most innovative and, at times, controversial business models in the e-commerce world, including those of Amazon.com and Yahoo!. To draw and keep customers online, businesses have a limited toolkit, which can be mixed and matched in various ways. Successful online businesses typically employ a combination, if not all, of these strategies. Content, or the information provided on a website, has always been a key attractor in business. For example, MTV captivates viewers with music videos, while magazines like Car & Driver and Cosmopolitan appeal to specific demographics. Since many internet users are in search of information, content serves as a vital differentiator online. Websites can obtain content through creation, acquisition, borrowing (such as user-generated content), or forming partnerships. The internet also enables the creation of online communities, connecting individuals with shared interests through forums, real-time chat rooms, and instant messaging. Quickly building a large and active community is essential for the success of this strategy. Commerce, or integrating opportunities for online purchases directly within content descriptions, benefits both the customer and the merchant by streamlining the buying process. Conveniences, or services that make daily tasks more efficient, can transform website visits into a habit, potentially leading to business transactions. Customization, or tailoring the online experience to individual preferences, strengthens the relationship between a business and its customers, as long as data collection is done transparently. Communication, including keeping customers informed about new developments and offers through email alerts, special promotions, and newsletters, is key. It's important to respect privacy and obtain consent for communication to maintain goodwill. In the digital economy, the battle is for the scarce commodity of user attention. The Magnet Effect, by focusing on attracting and retaining customer attention, represents a strategic shift in how businesses operate online. It underscores the importance of creating a compelling online presence to attract customers in an era where traditional methods of product development and marketing are becoming less effective.