Finding victory over the deceptive demons of the marketing mind

Finding victory over the deceptive demons of the marketing mind

 

Years ago I heard the great social researcher and author Hugh McKay describe every persons view of the world as the sight they see from behind the bars of their own experience, background, training and ideas.

The more developed are all these barriers, the more and thicker the bars between you and the outside world.

For marketers setting out to engage those who are most unlikely to be like them, this creates a dilemma.

How do you remove the bars, and see the world as your prospective customer would?

The demons in your mind will try and convince you that the world is as you see it, and at the very least, they will allow only a modest number of modifications without a significant level of discomfort to you.

Human beings connect easily to those who are most like  them. This is a unifying factor of evolutionary biology. It ensures that as we evolved, the small communities in which we evolved could be secure, or at least as secure as possible from the beasties lurking in the undergrowth.

While we may understand at a logical level the nature of those we are setting out to influence, at a primal level, we struggle to align our thoughts and words to theirs, we remain wedded to our own instinctive patterns and prejudices.

We all value truth, love, and life, but the means of expressing those values will be different. In understanding and relating to the differences, despite our own deeply held views, lies the marketing gold of true empathy. It all comes down to the language you use. Not just the verbal one, which is  the default, but the whole range of non-verbal channels, which according to many studies contributes more than 50% to the interpretation the receiver makes of the message.

Trying to sell renewable energy technology to someone who believes fossil fuel is the only answer to the consistent delivery of baseload power is challenging, as is trying to convince a conservative Christian that same sex marriage is OK.  

Overpowering that lurking demon that demands you see the world of your customer in a particular way is fundamental to being successful.

 

Photo credit: Sculptures lurking the shadows collection

 

 

 

The four crucial cornerstones of a successful marketing plan

The four crucial cornerstones of a successful marketing plan

 

It is February, budget time again, that time of the year when planning comes to the fore, usually as an added job that is just a pain in the rear.

A common question at this time, facing this challenge, is ‘How do I write a marketing plan’?.

I am not going to tell you ‘how’ to do it, as it will change every time, instead, I am going to give you some signposts, cornerstones, parameters, that I have seen over my 40 years of experience.

There is an easy way, and a hard way.

The easy way is to download a template and get the intern to spend a day filling in the gaps. About as useful as an umbrella in a cyclone.

Better than nothing, but only just.

Then there is the hard way, because it takes time, and requires you to use your brain, and the collective brains of others, and can be an emotional as much as analytical exercise, requiring time, energy, critical thinking, and collaboration, and making really challenging choices.

Let’s define what we mean by marketing, useful if you are going to plan for it.

My definition of marketing is the ‘generation, development, leveraging and protection of competitive advantage’.

Not a definition you will find in any textbook, but mine, evolved over 40 years of practical marketing. None of the others are wrong, they just, to my mind, do not reflect the whole task.

Competitive advantage evolves, and comes in many forms, but without it, you are in a commodity, price driven market, and you cannot win in that. The pace of evolution is these days frenetic, so writing a plan, and leaving to an occasional reference before the next budget session is useless, it has to be an evolving document.

If you can find a template that helps you do that, let me know.

Marketing is about the future, you are trying to shape it, so you are dealing with unknowns that can be sometimes qualified…. not quantified, by the use of mental models, cause and effect, domain knowledge, customer intimacy, competitive understanding, tactical agility, and a whole range of other things.

It is a jigsaw puzzle, to which you do not have the picture, and many of the pieces you do have are wrong, and many are missing, so you have to experiment, make up your own, use someone else’s cast-offs, try making your own pieces to fit.

At the end it is about making choices with imperfect information.

That is hard.

When faced with a choice that appears to be between two sub optimal outcomes, step back, and find another way. That is in itself a valid choice, and often a very good one, as it makes you think.

The greatest two problems most corporates have in planning marketing are extrapolation and confirmation bias. Add 3% to last year, and only seeing what they want to see.

That is what you get when you use a downloaded template in place of using your brain to critically assess options, information resources and market and trend sensitive antennae.

To develop a successful marketing plan, you need to find the 18th horse!

A contract drover west of Bourke, with 17 horses, his only asset, dies, and leaves them to his sons.

1/2 to the eldest, who wants to carry on the family business,

1/3 to the second, who is a great son, but has other ambitions,

1/9 to the third son, whose life revolves around the Royal Hotel in Bourke.

Think about it: None of these goes into 17.

The lawyer at the will reading sees the problem, and lends them one of his horses. Now they have 18.

9, and 6 and 2 to each son.

9 + 6 + 2 = 17, so the lawyer takes back his horse, and everyone is happy.

Your task planning marketing is to find the 18th horse

Successful Marketing is like having a great hand of cards.

Each card has a value by itself, but in isolation, that is very limited, the value of a hand is in the combination of cards you have, and in particular the combination you have compared to the combination your opponent, and how you leverage that combination. Sometimes as in bridge, the combination of your hand with that of your partner is crucial.

 

Context of a marketing plan

Every business will be different, the point is that a marketing plan does not, ever, evolve in isolation, it is a part of the overall strategy, and must be aligned with all the other functional responsibilities to deliver on the strategic priorities

The marketing component will also look different in each case. It may be product based, geography, market segment, and many others. These choices should be driven by strategy!

Trying to build a worthwhile marketing plan without clear, unambiguous and understood strategy with the appropriate strategic foundation in place is destined to be nothing more than a useless file stored somewhere, for no particular reason.

 

Cornerstones of a marketing plan

Some of the specifics within the perimeters of a marketing plan are always determined by the strategic choices that should have been made.

However, the cornerstones will generically remain the same:

Your Objective, Current position, Customer Value Proposition, and your Ideal customer.

Once you have these four, the rest of the plan becomes easier, to some extent, a matter of mechanics, trial and error, choices between the options that will best deliver the outcome.

Each is mutually reinforcing, making a mistake with one, either in the formulation or execution of the marketing plan will have implications beyond the immediate.

However, overriding the mechanics, you need leadership, the whole process requires leadership, as difficult choices will always be necessary.

In the absence of genuine marketing leadership, just go back to the template, and save yourself a lot of time and effort.

You will find at the intersection of the four perimeters is a little pot of gold!!

Very hard to find, very valuable when you do.

 

Current situation: the marketing audit

You have to have a starting point, and it is worth remembering at all times that you are not the only one in the race.

You have to have done some sort of marketing audit to determine the manner in which you can best deploy the limited resources available.

Who is currently buying your product, why, how, instead of what, are they happy with it, and what about those customers who have left you, why did they leave, what can you learn from the leaving, and so on.

In most cases, what others do will have some impact on you, some you can anticipate and accommodate, but you cannot control what others do, just your reaction to it.  However insufficient consideration of the impact of competitive activity is perhaps the most common mistake I see across all the marketing plans I have ever seen, and to be fair, those I wrote going back 30 or 40 years.

A long time ago I was with Cerebos, one of the brands I managed was Cerola muesli, at that time a successful brand, and I was keen to expand the brand footprint. I saw a gap in the market between muesli and corn flakes, this was 35 years ago, and there was not the wide choice we have now. We developed a half way product we called ‘Cerola Light and Crunchy’  and launched a test market in Adelaide.

At first we did remarkably well. The logic we employed was well accepted, the retailer sell in easily achieved targets, and consumer off-take was strong after the initial burst of advertising.

Then in came Kellogg’s with a look-a-like product, ‘Just Right’, and their resources just blew us away, Light &Crunchy never had a chance in the face of the weight of the competitive reaction by Kellogg’s.

That is a lesson I did not forget. With the benefit of hindsight, it was obvious, poke a bear in the arse and he is going to turn around and give you a whack, and I did not anticipate the power of it, and I should have. Never made that mistake again.

 

What success looks like

Unless you know where you are going, how can you plan to get there?

Are you setting out to build a brand, expand product range, geography, actively evolve your business model, whatever it is, unless it is articulated, you have no hope of making the right choices along the way, that build cumulatively to the planned outcome.

The strategic choices that need to be made to deliver the outcomes will be different depending on the desired outcome.

Describing what success looks like as if you were already there is a way more powerful way of articulating an objective that just extrapolating it from your current position. 

By putting yourself in the position of describing what it looks like, you generate an emotional commitment to achieving it much greater that if you had just extrapolated.

I am going to get myself in trouble here by shooting a sacred marketing cow.

Building a brand, or ‘branding’ used as a verb is bullshit.

Build my brand’ is a response I hear a lot when I ask the question ‘what is your objective, what does success look like?  

It usually is associated with a significant advertising expenditure. More often than not these days it is also tied to a digital platform. ‘I am going to build my brand on Instagram’  and some general babbling about ‘content’.  

I hate them both equally. If I walk past a lump of dogshit on the pavement, it is a lump of dogshit. If I take a photo of it and upload it to the web, it suddenly, miraculously becomes content.  To my mind it remains a photo of a pile of dogshit.

Using ‘Branding’ as a verb is a fallacy foisted on businesses by those who do not understand the process.  

Building a brand is not like building a wall, where you just put one brick on top of another.

Building a brand is a little like building a church.

A church is just a building until it becomes a place for people to come for reassurance, solace, and to encounter the rituals that make us human, then they might come back, they might bring their friends. You do not need a building for that!

The brand is the outcome, not the building. 

 

Tomb of the unknown customer

More money is thrown at the tomb of the unknown customer than any other source of marketing waste.

Unless you can define very well indeed who your customer is, you will be wasting most of any time, effort, and money you spend.

Defining who your ideal customer is involves choices, as you also  have to determine who is not, and therefore you will not spend resources trying to reach and influence them. This is really difficult for most, especially smaller businesses, to whom turning away a potential customer is an appalling thought.

Over 35 years ago I took over as Marketing Manager of the newly formed General Products Division of Dairy farmers.

The brand of yoghurt we had was Ski, and Yoplait had just launched, and the market exploded. Ski’s volumes remained about the same, but share was reduced to single figures as Yoplait had taken all the growth for itself.

During a qualitative research project aimed at understanding who was buying yoghurt, which brands they preferred and why, the researcher asked the respondents to describe each of the major brands in human terms.

Yoplait was an educated, hip, self-reliant, confident young woman, who had her life in order the way she wanted it.

Ski was a reliable 50 year old farmer in wellies.

The advertising plan that was in place when I arrived was just more of the same old stuff, trying to convince ‘Miss Yoplait’ that the wellie wearing farmer was a good choice for her.

Might not have worked very well, so it was changed.

 

Customer value proposition

Peter Drucker said many things, amongst which was ‘The only purpose of an enterprise is to create a customer’

And he was right.

To create a customer you must offer them value they cannot get anywhere else.

How you define value is a key part of the game here, and once everyone else is offering the same set of things, the only discriminator becomes price, and then everyone loses.

The value you add has to be differentiated, and differentiated in a way that adds value to the customer.

The ideal differentiator is one that stimulates a customer to buy something they can only get from you.

Differentiation also allows you to innovate where you will get the most value for the investment. Innovate where you are differentiated!!

If I go back to  the Ski example, we focused on the fact that Ski had discrete pieces of fruit in it, rather than fruit mashed up into a homogeneous mix that was the offer of Yoplait. We knew Yoplait could not offer pieces of fruit, their processing would not allow it, and neither would the brand rules inherited from the French franchisor. Not everyone in our target market wanted fruit pieces, but those who did, came to us. While it was only 1 piece of the puzzle, Ski was the market leader in a hugely expanded market 4 years later.

The key question to ask yourself about your value proposition is: ‘How likely is it to convert a potential customer’?

Putting a number against this is challenging, but an extremely useful exercise.

 

A few final words

First: How do you measure it?

Anyone who knows me knows I am a bit of a measurement Nazi, who subscribes to the cliché that you get what you measure.

You don’t always, at least as an entirety, you don’t. Some things like ‘Leadership’ and ‘Culture’ are vital but very hard to measure except over time and in hindsight.

A marketing plan is a set of predictions about the future. The only thing you know for sure is that you will be wrong, question is by how much, and how much you can learn and adjust as you go to mitigate the errors and leverage the unexpected.

Feedback loops are essential at every stage, for every activity, as implementation proceeds.

It is simply a Continuous Improvement cycle, and every CI tool that is used in factories is applicable to  marketing.

Ensure you are measuring each of the components of the plan that compound to deliver what you set out to achieve, but always remember that the marketing plan is a compass, not a roadmap to be followed in detail at all times in defiance of new and localised information.

If your marketing objective was to extend your geographic footprint, then  that is the right measure. secondary measures may be margin and customer acquisition costs, but if they become the primary ones, you will not extend your footprint because it takes investment.

Second: Marketing Investment.

Let me give a hobby horse a run………..

Marketing is an investment in telling the future, but is treated in the books as an expense, incurred in a period, reflected in the P&L.

Therefore short term thinking absolutely dominates the manner in which marketing is considered in the corner office.

This is the single greatest institutional barrier to sensible marketing, after finding people in marketing who know what they are talking about, and can do so without the jargon and cliché so beloved because they cover their basic ignorance, or perhaps  the ignorance of the basics.

Third: Success is a Pareto distribution, not a normal curve.

I noted that Drucker observed that the sole job of an enterprise was to create a customer, and he was right.

Therefore, marketing is essential.

Commercial success does not come in the normal curve we are all familiar with, where most of the outcomes are within 1 standard deviation from the mean.

Great success comes to a very few, moderate success to a few more, and most enterprises are distributed across a ‘long tail’. It is a Pareto distribution, where 5% of firms take 95% of the outcomes.

Therefore, if you are to be in the 5%, you had better get your marketing in order, and to do that, you need the four cornerstones in place.  

This is a link to a verbal version of this post delivered to a group of SME owners.

The hidden magic of the triggering event

The hidden magic of the triggering event

What is it that acts as the catalyst that initiates the journey a customer will undertake that may end up with a transaction?

If you knew this, you would be in a situation to be very specific about your marketing, both the nature of the offer, the way you make it, and to whom you communicate it.

Customer personas are a great way to focus resources in a manner that delivers productivity of your marketing efforts. The more details and representative the persona the  better.

It works, and works well, but is not the whole story.

There are events and interactions that occur in peoples lives that are not logically accommodated within a persona. There is a point in the journey a customer makes towards that purchase not considered with anywhere near enough weight.

That is the situation, the event, the ‘thing’ that acts as a catalyst to create the beginning of the customer journey. The event that suddenly creates an awareness that there might be value in considering options, and that the current solution, whatever that may be is inadequate.

This is a ‘triggering’ event. 

A friend is a real estate agent.

She knows the market cycles very well, not just the economic ones, the seasonal ones that tell you that there will be a lull in activity in the market over Christmas, which will pick up again when things get back to normal in February.

Seasonal.

However, over Christmas lots of people will find themselves with family and friends staying over, for the night, for a week, and suddenly, the house they have is too small, the kids no longer can sleep two to a bed,  and one bathroom is no longer enough. That becomes a triggering event for some to start the process of thinking that perhaps a bigger house is necessary, or that they really need to do a tree change. As a result they start being unconsciously sensitive to any real estate ads that may pop up, where before they would not have even seen them.

Is my friend better off starting her advertising in February, when all the other agents are starting, in the expectation that the market is waking up? Or should she advertise in January, when there is  no activity, nobody else is advertising, but the possible users of her service are in the middle of their ‘triggering event’ and highly sensitive to suddenly relevant messages?

I know where my money would be.

 

 

 

The cost of a fact free media

The cost of a fact free media

EEEERRRRHHHHH

Excuse me, I just threw up on myself after being assaulted by another ad by a fat billionaire exhorting me to ‘Make Australia Great Again’ by voting for him and his dodgy party.

That nasty experience got me wondering about the nature of advertising in the digital world.

While we have people in Canberra who still think that regulating for diversity in media ownership is a thing on which they should  be spending time, Google, Facebook , and Alibaba (the latter almost exclusively in China) have sucked up 62% of the worlds digital ad spend of US 327 billion, last year.  Bringing up the rear is a rapidly improving Amazon, aggressively chasing a bigger share of this largess. These huge numbers leave what is left of the rest of the media, particularly the ‘old media’,  scrabbling to pay the rent.

The owners of the ‘Old’ media which interrupted me with the ad that started this thought are no doubt pleased to have the fat billionaire as a paying customer. Their priority is to  get the dollars in any way they can, to pay the rent, not make judgements on the veracity of the claims made by their advertisers. Facebook also faces this problem of fact neutrality, magnified geometrically by the reach and ‘stickiness’ of the platform, combined with its capacity to target and deliver messages to a very specific audience . 

However, our society has been built, at least to some extent, on the foundation of a free and diverse press that has the funds and bottle to be the ‘policemen’ of the standards and performance of those in power, political and corporate.

These media businesses have largely disappeared in the last decade, overwhelmed by the shift of advertising dollars, the foundations of their business, to digital outlets.

This has left the place without any police.

Look no further than the 2 recent Royal Commissions for any evidence you may need. If it was not for Kate McClymont, and a very few other investigative journalists with a passion for the truth, and the now defunct Sydney Morning Herald, these two rocks would not have been kicked over. The roaches hiding underneath would still be free to engage in their brand of hyper-hypocrisy, with most of us unaware of their corrosive and immoral activities.

Advertising funded investigative journalism via a neutral and responsible press is almost dead in this country. Without it we are deprived of the major driver of publicly minded behaviour.  We want, and need corporations to be publicly minded, to act in the best interests of  the community they serve. However nice those words may be, the officers of corporations are charged with the responsibility to deliver shareholder returns, and generally they do so without reference to the long term public good. The corollary is that personal agendas, and greed,  also get a very solid run.

We have conferences and forums where these corporate officers and politicians tell us what they are doing for us. However, the reality is they are mostly reading from a PR script, while attending a firefighting conference that only invites arsonists.

Advertising is increasingly becoming a tax on the poor, those who cannot afford to pay to be ad free. All this does is add weight to the confirmation bias we all have by removing any contrary voice that we may have seen and heard in the past.

That emasculation of media, the demise of a broad based, investigative and community minded press has consequences for the amount, type and quality of public debate, none of which I like.

Cartoon credit: Hugh McLeod at gapingvoid.com

How to quantify your Customer Value Proposition

How to quantify your Customer Value Proposition

 

 

The value proposition to a customer is the means by which you converted them to being a customer.

Unless you can demonstrate value to them, in excess of any alternative, including doing nothing, you will not convert.

When you think about it, there are some pretty consistent variables that can  be massaged into some sort of quantification of a proposition. While it will never be perfect, it will be better than nothing when assessing the power of your marketing collateral, or perhaps assessing alternative wording.

Having a powerful value proposition is not enough, you must communicate it clearly and effectively to those who may be interested. You also must understand that ‘Value’ is a qualitative term, and will change with context and circumstances.

There are 7 variables I commonly see:

  • The strength of the purchase intent of the lead. This will vary enormously on a whole series of parameters, and will vary from time to time. For example, a need expressed to convert IT processes to the cloud from your own server might be a good idea, whose time has come, but when your server blows up, the need increases geometrically. The better you understand the drivers of the purchase intent the better able you will be to make a judgement,
  • How closely your proposition matches the need being expressed. When you are trying to sell a 4X4 and the lead is a single bloke who hates camping, you will have a challenge on your hands. Better to offer him the sports car.
  • Differentiation. When you are the only one in the market niche, selling to those who need your product becomes easier. When you are one of a number of undifferentiated alternatives, price becomes the major distinguishing factor, and that is never good. Conversion becomes a race to the bottom, and the greatest risk is that you win too often and go broke.
  • The clarity of the value proposition to the lead. This is where most fall down in the execution. Look at 100 websites, and see if you can locate the value proposition. While we are learning, the clarity of the proposition to a visitor to a website, which is now the first port of call in almost every purchase beyond the regular and mundane, will be terrible. The key to remember is that the lead, after reading the headline copy on the site, must be able to tell you why they should buy from you, and not someone else, assuming they are in the market you service.
  • The level of friction in the sales process. Increasingly as we go on line, friction in the process is becoming more and more important. Off line purchasers are increasingly expecting on line frictionless processes. In B2B sales, the friction is often institutional, the bureaucracy of procurement simply gets in the way. Effective Key Account Management is essential in these circumstances.
  • The incentives used to counter the friction. Most often financial incentives are the primary ones used, but tying them to another is common, for example ‘this special lasts only until Sunday’ or ‘Only 5 left’
  • Uncertainty caused by the purchase process. Human psychology seeks safety, and that resides in the known, and with the crowd. Asking a lead to do something different increases the risk to them, and the riskier they perceive the solution, the less likely they will be to convert.

So, to the equation.

Conversion potential = Purchase intent + need satisfaction + Differentiation + proposition clarity + (process friction – incentives) + uncertainty.

The way to put numbers on each of these parameters would be to weight each of the parameters in your particular circumstance, then score your lead on a 1-5 scale. The ‘w’ in the formula is the weight you give to each of the variables.

CP = wPI +wNS +wD + WPC + (wPF – wI) + U.

As an exercise, look at your own landing page and score it as a potential customer would when seeking a solution to an itch.

Image credit, again, to Gapingvoid.com

Modern Marketing’s dark underbelly.

Modern Marketing’s dark underbelly.

 

On hearing the term ‘Modern Marketing,’ most would immediately imagine something digital.

That was my intention.

Marketing used to be about delivering meaningful information to potential and current customers in order that they become or remain customers, despite the flirtatious approaches of competitors.

The more appealing the information,  the greater the chance of some sort of engagement that might lead at some point to a consummation.

Bit like the University bar in 1970, when I was young(er).

Advertising used to be, and still is a crucial component, however, this is where it has changed.

Advertising in my day used to be the means by which the information was communicated.

In todays marketing, advertising is often the way people are identified, tracked, stalked, and targeted for  offers, sometimes genuine, sometimes outrageous, increasingly fraudulent, and usually unwanted.

This is the dark side of the digital advertising component  of modern marketing.

I have yet to hear anyone complaining that they do not receive sufficient numbers of unsolicited digital offers.  

No wonder we do  not trust anyone or anything anymore.

While it is counter intuitive, limiting your ‘digital reach’ to those who have actively demonstrated they welcome your approach, will become a valuable tactic. By ‘actively demonstrated’, I do  not mean just filled in one landing page email address to access a lead bait, I mean meaningful interaction.

Back to the Uni bar.

There was one rather unprepossessing bloke we all made some fun of, as he would sometimes turn up with a bunch of flowers. His ‘transaction’ rate was impressive indeed, and few of us ever figured out how that was the case until much later.

Perhaps being truly generous with our knowledge rather than demanding an email address in return for some valueless rubbish is the new digital bunch of flowers.