The Old Economy is dead. The New Economy in which speed meant everything and customers were forgotten has collapsed. During the dot-com mania, customers weren’t even necessary because Venture capitalists poured millions into startup companies based only on concepts or unusual company names.

Hudson Valley customers grew frustrated with products and services that didn’t work. The New Economy was just a bridge between two more significant eras, the Old Economy and the Next Economy.

The New Economy resembled the California gold rush of 1849. Only a few of the hundreds of thousands lured west struck gold. However, the mass movement of the population to California opened the territory to new industries that generated enormous wealth, such as agriculture, movies, and computers.

Similarly, the Internet gold rush of the New Economy has paved the path to the riches of the Next Economy. The progress made in developing and exploiting Internet technology and the productivity gains it brings will make the leaders of the Next Economy more efficient, more powerful, and wealthy.

The Next Economy will be driven by knowledge. Success will be measured by profit and share of a customer’s wallet. The focus will be on serving customers and forming strong bonds with them.

The New Economy’s biggest failure was that it didn’t engage the largest segment of consumers in history: baby boomers. The dot-com oriented New Economy was a generation-X phenomenon.

A 22-year-old, used to new technologies that don’t always work the first time, may shrug when his computer crashes or his cell phone loses a connection. Boomers expect their PCs and cell phones to work as smoothly as their traditional telephones always did.

The New Economy failed because the marketers used the technology simply to make connections between computers; they never make the connection between brands and customers.

Recent statistics show 63 percent of people buying something on the Internet cancelled because they couldn’t find the right information and 42 percent had to wait longer than five days for a response to an e-mail question.

The Next Economy will be demand-driven. Hudson Valley businesses will need to develop far better knowledge of customers and carefully build relationships with them to regain lost trust.

This is a tremendous opportunity and will require us to master the new tools for the Next Economy such as “want segmentation”. Customer spending is driven by what people want, not what they need. We’ll have to know their values, associations, and loyalties.

The Old Economy is dead. The New Economy simply created a bridge to the Next Economy in which Hudson Valley organizations must learn to target fewer, but better, customers. Profit in the Next Economy will demand focus on relationships, retrenching, customer relevancy, and rewards. Only by delighting customers will we win them back and develop true and lasting relationships.

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