by Ezinne Enyinnaya
Originally published on
LinkedIn
16 January 2019
In the early 20th
century, Merrill (co-founder of Merrill Lynch) turned the investment world on
its head with the concept of selling stocks and bonds to middle-class retail
customers. With Merrill as the advocate, securities became a consumer product
that held as important a place in America’s commercial culture as automobiles
and insurance policies.
During that same period,
when a Forbes survey identified the nation’s fifty outstanding business
leaders, most of them ran large manufacturing concerns, like General Motors.
Only Charles E. Merrill, a sixty-two-year-old college dropout, made his living
on Wall Street.
Taking a deeper look into
how Charles Merrill was able to achieve this, the international bestseller
‘’Forbes Greatest Business Stories of All Time’’ highlights the fact that the
firm’s strategy was first to educate and second to attract people to the
store. In an uncommon practice for a
brokerage house, Merrill created awareness through pamphlets and platforms like
the New York Times with articles such as ‘’what everybody ought to know about
the stock and bond business’’, giving information on definition of ‘stocks’,
‘bear’ and ‘bull’ markets as well as how to do business with a broker.
A paraphrased excerpt
from the book reads:
‘’… These efforts earned Charles Merrill and
his company acclaim as the company was said to have brought more respect to the
business of marketing securities than any other person. Merrill criticized his
peers in the securities industry for having little interest in ‘spreading the
good word’. That year, his 106 offices with about 3,300 employees went on to
service 104,800 accounts…’’
Charles Merrill’s
‘democratization of stock ownership’ was one of the events that shaped the
evolution of Wall Street in the 1940s. It is interesting how a passionate
stockbroker believed that if he educated his customers, they would be more
willing to invest in securities. This gave rise to a movement of ‘’spreading
the good word’’ to potential customers, which in turn multiplied his customer
base.
In today’s business
world, there is the opportunity to develop the market for many
products/services if adequate information is communicated to potential
customers about the solution being created. This is why today, blogging is a
desired skill because it offers the opportunity to enlighten customers,
position a product/service and shape a whole industry. Wall Street’s market
development strategy of ‘’educating first’’ and then ‘’attracting customers’’
has been proven to be effective and fortunately, can be easily adopted in most
industries.
When faced with a market
development problem, answering questions like ‘’How much understanding does my
potential customer have about the solutions I offer?’’ can help make the
difference between success and failure.
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