Feb 22, 2023 | Customers, Marketing
Few would disagree that the very best way to find a new customer, to build a business, is to have existing happy customers refer you to their networks.
Even anonymous referrals are better than nothing. How often have you looked up a service provider on social media, and looked at the ratings? Recognising they may be from friends, fools, and their mother, they are still a guide.
Happy customers will refer automatically.
Sadly this is not the case in a proactive sense. Happy customers may give you a wrap when they happen to be talking about whatever problem you solved for them with their friends and colleagues. That is not the same as proactively being an advocate for your product. You have to ask them to refer you, and the manner of asking is crucial.
Customers do not like referring.
In my experience, happy customers do like referring you, but as noted, they have to be asked. The psychological drive of reciprocity comes in here. When you have met and hopefully exceeded the expectations of a customer, they will feel obliged to at least be nice to you. Asking for a referral is a very easy way for them to be nice.
It is OK to pay for a referral.
No, it is not. Paying for a referral is almost an insult. Most people do not like to benefit personally from a referral where there is a friend or acquaintance involved, as it is their credibility at stake.
Potential customers do not believe in referred products.
Yes, they do. When someone who is trusted delivers a referral, that referral takes on an element of the trust that is in the relationship. Both parties know that trust will be damaged if a referral does not ‘pan out’ as promised, so they are careful. This is entirely different to the so called ‘influencer marketing’ that infests digital platforms. These influencers are no different to the talking heads we used to see all the time in ads in earlier times.
Assuming a referral will lead to a sale.
Many things must be aligned for a sale to eventuate, all a referral does is give you a credible foot in the door, the right to have that first conversation in the sales process. You still need to do the hard yards. You still need the sales process.
In a world where the first and must win commercial battle is for the attention of your potential customer, the presence of a credible referral is like getting a 20 metre start in a 100metre race.
Feb 3, 2023 | Branding, Demand chains, Marketing, Small business, Strategy
Woolworths last week announced they would close 250 of their current 300 in store butcher shops. Clearly, centralisation and opacity of the supply chain that serves customers via Woolworths is geared to the lowest common denominator, price.
At the other end of the scale is Wolki farm in Albury. This is an integrated farm to retail supply chain that innovates at every point. Rather than just trying to do the same job as always for a lesser cost, they re-engineered the whole chain. From their website: ‘We are the connector between the conscientious consumer and quality produce’
Their 24/7 retail outlet in Albury is just the end of the chain, but full of innovation. I do not normally inhabit TikTok, but this video of owner Jake Wolki’s view of the future was referred to me by a (younger) friend, who knows my views about agricultural supply chains.
The challenge both retailers are setting out to address is the core challenge of marketing: how to create and communicate value that motivates customers to a transaction facilitating longer term engagement.
Woolworths (and Coles, Aldi, et al) do it by price and convenience. They might mumble about quality, but it is at best a second order priority. As long as it is edible, legal, and delivers the category target margin, it is OK. By absolute contrast, Wolki’s (I do not know them at all, had not heard of them until last week) are clearly focussed on quality, product provenance, and integrity. The price they charge for their produce will reflect all that, but no consumer who is looking for the cheapest cut of meat is likely to find it at Wolki’s. What they do get in detail is supply chain transparency that delivers the provenance and guarantee of quality of the product they are about to buy.
That may interest only a small proportion of the market, but that proportion is significantly larger than it was just a couple of years ago, and will continue to compound.
It seems to me that Woolies are repeating the mistake they made with Thomas Dux 6 years ago. They are ignoring the messages being sent by consumers from the ‘edges’ of their customer base that ‘Mass’ was not acceptable. More probably, they are choosing to ignore those consumers in favour of low cost supply chain control, and reluctance to rock the competitive ship by innovation. Perhaps they will prove me wrong, and use the remaining few in store butchers to experiment?
Photo credit: Wolki Farm from the website
Jan 23, 2023 | Change, Communication, Marketing
Considering my definition of marketing as being: ‘The identification, development, leveraging and defence of competitive advantage’ it makes sense to consider the impact of AI, as it is happening all around us. Largely unnoticed until the explosive birth of ChatGPT in November last year following the earlier release of Dall-E, the doomsayers are at work.
I am not a data scientist, my limit is writing a formula in Excel no longer than 3 factors, but you do not need to be a data scientist to think about this stuff.
AI learns from itself by iterating with the benefit of ‘digital hindsight’, the outcomes of the previous iterations built in. Think of a radiologist reading scans. In the course of a year they might read a thousand, each time learning from the experience of the previous readings. Over the course of a professional career of 25 years, they might read 25,000, then they retire, and the experience is lost. An AI system can read hundreds of thousands in a week, each building on the previous, looking for patterns, so millions over a couple of years. They can also take data from other sources and blend it into the analysis, and they never retire, so the experience is not lost, it compounds. Importantly however, it compounds based on what has happened, making visible what is already in the data. We have yet to build an algorithm that can be creative.
The ingredients necessary are just 4:
- Input data,
- Computing power,
- Quantitative understanding of human behaviour (still evolving) and,
- An AI system.
Successful Marketing uses all four, although to date in vastly different ways and to differing degrees. It requires an intimate understanding of customer behaviour and how your behaviour and that of the customers impacts others in the supply chain. This is almost ground zero for marketing success.
The combination of the recently released ChatGPT and its stablemate from OpenAI Dall-E will do for content creation in its broadest sense, what the digital camera did for photography. Suddenly everyone became a ‘photographer’, so who needed professionals? Slowly, the gap between even good amateurs and the professionals became clearer, the value added by the real pros, as distinct from the others became more obvious, and presented the clear choices that needed to be made. A similar process will evolve with written and visual content. It has become very easy to produce stuff that will pass muster as OK, but is that good enough in a homogeneous world?
The combination of these tools and a professional will reduce the time taken to produce great work, so the costs will go down, and the quality will not suffer, but be enhanced. A great outcome for the few true professionals.
The downside will be felt by those who claim expertise, but do not genuinely have it. Their output of regurgitated marketing strategies, tactics and collateral material will resemble the thousands of templates already available, and be of little genuine competitive use.
Header cartoon credit: Tom Gauld in new Scientist
Jan 16, 2023 | Marketing, Strategy
At the intersection of the science of the brain and Artificial Intelligence, is something called ‘The Frame Problem’
This is a term used to describe the way we, subconsciously, sort the relevant from the irrelevant in any context, or ‘frame’.
It locates the inflection point between artificial intelligence, getting smarter by the day, and the sentient intelligence we humans can bring to bear without conscious effort.
Often, we just call it common sense.
For example, if we saw a 3-year-old child we did not know about to jump into a swimming pool, we would automatically try and stop them. By contrast, if we also saw the kids mother waiting a few feet away to catch them, we are unlikely to even register the fact that they are about to jump into the pool.
The resulting ‘frame’ which drives our response is different, although the scene our eyes ‘see’ is identical. It is the interpretation our subconscious makes that is entirely different. That difference is how our brains interpret the factual scene our eyes register on our retina.
Applying the ‘Frame’ to largely qualitative contexts when outcomes are variable, and derived from a host of drivers, frees up cognitive capacity to do other, more important things. In differing contexts or ‘frames’ the variables stimulate differing courses of action, as the value of experience and domain knowledge comes in.
You cannot learn this stuff from a book, as no book can adequately predict which set of variables will show up at any given time in differing contexts. That variability will have a profound influence on the resulting action we take.
For a marketer, understanding the ‘frame’ of their target customer or market will enable you to tweak the drivers that will lead to a desirable outcome. Equally, it will enable discrimination between drivers so that investment is not made in combinations of drivers and situations that will not suit the marketing objective.
The key question to ask yourself is: What did we miss?
Jan 1, 2023 | Change, Marketing
January 1st is the day we verbalise our introspection.
Usually it is called a resolution, but the irony is resolutions are things we do, and new year resolutions are usually things we would like to do, but in our hearts, know we won’t
Anyway, for a marketer, or indeed any manager, a sensible 2023 resolution will be in three parts:
What should I stop doing?
What should I start doing?
What should I do more of?
Implement that simple resolution set, and 2023 will inevitably be better than 2022, although 2022 was a pretty low bar for most of us.
Have a great 2023.
Nov 21, 2022 | Communication, Governance, Strategy
The purpose of a brief is not to be brief.
A brief, for whatever purpose it is written should be a catalyst for creative thinking, examination of options, and father of a robust solution. This applies equally to an engineering brief as it does to an advertising brief, research brief, or brief given to a head-hunter searching for a new CEO.
Failure to write a good brief will lead to a sub-optimal outcome, or at best, considerable delay and false starts that consumes resources unnecessarily.
A comprehensive, well thought out brief is not a guarantee of success, but it certainly shortens the odds.
Following is a framework for the next time you have to write a brief, for whatever purpose.
Let strategy drive the brief.
Strategy should be the primary driver of every decision taken in an enterprise, down to the daily tactical decisions. It provides the framework for the choices that need to be made. Most briefs I have seen are disconnected from strategy. Sometimes this is just poor leadership, in others it reflects the lack of any strategy, which is evidence of poor management. In the absence of a clear strategy, the choices made as an outcome of a brief of any sort may as well have been taken in a vacuum.
Define the need.
A brief will be in response to some need to be addressed. It may be a competitive challenge, it may be seeking a solution for an internal problem, or it may be seeking information, or be focussed on an opportunity of some sort.
Ensuring the need the brief is seeking to address is clearly articulated is vital to the construction of an actionable brief to experts that will enable them to bring appropriate expertise to bear to deliver the planned outcome.
Define the objectives.
As noted above, the generation of a brief presupposes there is an investment of some sort being contemplated. No investment should be made in the absence of explicitly stated outcomes the investment is expected to deliver. These are usually stated as objectives.
The best objectives are always those against which performance can be measured, SMART objectives. In some circumstances, such as an advertising brief, such clarity is challenging to achieve. It requires deep thought to indentify the drivers of the outcome, the lead indicators, that can be reliably measured. However, the effort will deliver returns, whatever the arena for the brief.
Assemble all relevant facts and informed analysis.
It should go without saying, but no brief is complete unless there is a comprehensive collection and analysis of all facts, and information relevant to the choices that will be made. Objectivity is a blessing. Sometimes it is hard to know where to draw the line, particularly when constructing a creative brief. Average will rarely deliver results, and continuation of the status quo while often ‘safe’ in a corporate environment, is bound to deliver ordinary results at best. There is a warning here for marketers, who will take this to be a licence to change advertising execution. Marketers are often way too close to their advertising and get tired of it before the average participant in the market has seen the message sufficiently to absorb and act on it.
Execute with experts.
A great brief in the hands of the summer intern will not usually deliver a useful result. No matter how great the brief, expertise in coming to grips with the nuances and options presented, requires wisdom that only comes from experience.
Simplicity.
While this post opened with the observation that the purpose of a brief was not to be brief, it is also the case that the simpler, more concise, more focused on the drivers of success the brief is, the better. Simplicity will increase the ability of those responding to make the choices they need to in order to deliver the outcomes being sought. Steve Jobs said it best when he said: ‘Simplicity is the ultimate sophistication’ about 50 years after Einstein said: ‘everything should be made as simple as possible, but not simpler’
Note to the unwary. When what should be a ‘Brief’ is called a ‘Tender’ it is a sure sign that price is the dominating consideration, and you are not the only one being invited to the party.
Header cartoon credit: Tom Gauld in ‘New Scientist’
