The greatest self-delusion of marketers.

The greatest self-delusion of marketers.

Jan 24, 2017 | Marketing

We marketers are great at deluding ourselves, we do it about all sorts of things, often to justify the resources we are consuming in the absence of hard numbers.

It is one thing to ‘get away’ with convincing the corner office that the number of ‘Likes’ on Facebook is a valid measure of our success, it is quite another when we actually believe it.

However, the greatest self-delusion in my experience remains undetected most of the time.

We mistake habit for loyalty.

Our marketing strategy and activities are normally about finding those to whom we add great value, and by hook or crook, getting them to stick to us in preference to a competitor. We go through processes now often summarised as ‘the buyer journey’ trying to create order in the place of the chaotic behaviour that is normal in our lives, creating diagrams like the one above,

Those few who we call ‘heavy users’ or some such term, we would also usually call ‘Loyal’ customers.

I would propose that in most cases they are not loyal, you have just managed to make it easy for them in some way, so they are habitual users rather than loyal users.

Habitual users do not think much about you beyond the transaction, unless you change something, the price, or availability, terms of service, whatever it is that they value from you, then they will consider the purchase in the  new light.

If they choose to stay, they are loyal, if they leave, or try an alternative, they are just habitual. In addition, the loyal users will proselytise to their networks the benefits of your product, habitual users will not bother.

Make sure you know the difference.

 

Will this change finally compel you to build your own digital assets?

Will this change finally compel you to build your own digital assets?

Jan 20, 2017 | Change, Marketing

Back in June 2016 when Microsoft paid $US26 Billion for LinkedIn, we all expected there to be changes. You do not spend that sort of dosh, even when it is just change as it is for Microsoft, without a plan.

The advice from many, including myself was that it had just become even more important than ever to own your own digital real estate, a functional and attractive website, delivering your value proposition,  rather than relying on rented real estate, someone else’s platform like Facebook or LinkedIn.

All the platforms monetise by being wholesalers of eyeballs, they sell advertising by many names to those who want to reach you, and do not care much about how you feel, only that you are reachable, and they have found remarkably innovative ways to do so, and I suspect the pace of innovation is just accelerating.

Early in January, all LinkedIn members received an email from our friendly hosts at LinkedIn saying they were ‘retiring the notes and tags features’ our connections page for those using the free version. This is simply code for if you want it, you can pay for it.

As the platform is theirs, as with a rented house we live in, we have no control over the terms and conditions, we accept them or leave. Not too surprising I thought, but nevertheless, annoying as the tags feature particularly is (was at the end of March) very useful.

Now I opened up LinkedIn this morning and there is a whole new look, no doubt aimed at making my experience better, code for we are going to charge you for something else you have had for free to date.

Again, not surprising, but annoying, not just because it will start  to cost me,  but because I will have to adjust to a whole new layout. I am 65, change does not come as easily as it once did.

Never has the importance of having your own digital real estate been more important, and never has it been harder to build. No longer can you stick up a dodgy website and have people find you, there are millions of sites, and billions of posts daily, being found by chance is harder than finding a particular grain of sand on Bondi beach.

The best time to start building a digital platform you own was 10 years ago, the second best time is now.  It is a bit like the telephone in 1915, everyone had survived to date without one, it seemed that you could continue to do so, but by 1920, no business could survive without a phone.

Do not stuff around, but it is not free, there is a substantial investment of time, skill, and money involved, but like the phone 100 years ago, you cannot survive without one for long.

 

How do you set your prices

How do you set your prices

Jan 16, 2017 | Marketing, Small business

Most times people set prices as a function of three things:

  • What their costs are,
  • What margin the budget demands,
  • What the competition is charging.

All are the wrong way to go about it.

Prices should be absolutely dependent on what customers are willing to pay.

This bears no relationship whatsoever to your costs, or what the boss wants by way of margin, but has a lot to do with what the competitors are charging, assuming your product is substitutable.

The challenge therefore is to ensure that there are no substitutes for your product.

In many categories, perhaps most, this is a real challenge, one that makes marketing all that much more important, as marketing should be focussed on the delivery of value.

Most businesses set out to deliver all the bells and whistles, and the reasoning is that they are trying to help customers by giving them as much as possible, and some choice. However, looking at a product feature by feature and figuring out which ones customers are willing to  pay for, and which are just in the way, makes more sense.

The better you know your customers, it follows, the better you will be able to determine which features they are prepared to pay for, and how much they are worth to them. It also follows that the more specific the niche you are in, the easier it becomes to understand their purchase motivations. Nobody can be all things to all people, choices simply have to be made.

There is an electrician in my local area with a strong proposition.

In an environment where we do not expect tradies to come on time, and when they do turn up, they tramp through your home, and leave a mess behind them. This bloke makes several promises:

He will be there at the nominated time, + or – 15 minutes, or you do not pay him,

He leaves the work area at least as clean as he found it, or you do not pay him.

He will give you the price before he starts the job, and it is a fixed price, it will not change.

He charges a premium rate, and the biggest problem for a potential customer is the waiting list. If you cannot wait, or do not like the hourly rate, he does have the numbers of others he will give you, without any guarantee of performance.

Many people in the area would not use him, as he ‘charges too much’. They are the ones who see little value in the propositions that make him different, and he is fine with that. In fact, he seems to enjoy directing potential customers elsewhere, as it highlights the fact that he is really busy, and has become a price setter, not a price taker.

Back to the challenge of price setting.

When the cost of provision of something that adds value is less than the value customers see, then it makes sense to provide it. In my electricians case, he leaves himself some spare time to ensure he can make good on his promises, and he charges for the privilege, simply because the certainty offers great value to his client base.

Simplicity is a key, the simpler the better.

Simple to explain, deliver and understand.

 

 

 

 

Are we coming to the end of the great Australian FMCG Duopoly?

Are we coming to the end of the great Australian FMCG Duopoly?

Jan 3, 2017 | Marketing, Sales

Supermarkets in Australia have had it good for some years, having the protection of a duopoly, which is almost a licence to print money in most circumstances. Woolworths certainly did for quite a while, and the fact that Coles did not is a reflection of poor management rather than a competitive market.

Perhaps I am being overly conspiratorial, but why you should ask, did Woolworths not at least, stick a toe into the burgeoning markets to our immediate north when they were so awash with cash a few years ago? They left it to the European retailers, so presumably they did the numbers and determined that  the margins were not up to their standards, the competitive nature of those markets was beyond their ability to survive. Interestingly and perhaps tellingly, the 4 major Australian banks, now a very comfortable oligopoly have made forays into foreign markets, with a stunning 100% failure rate, and are now hunkering back down to squeeze more margin from the domestic mulch cow.  Perhaps Woolies came to the same conclusion, so opted instead for a skirmish into domestic hardware.

Look how well that worked.

Business models evolve, sometimes quickly and we appear to be in a period of extreme evolution. It may not be obvious on a day to day basis,  but I bet you will be able to look back in 5 years, and see that the changes will have been significant.  I predict that general wholesalers will be almost a museum piece, as business is done directly, enabled by digital technology. The choke hold they have held on the supply chains for the last 75 years is about to end.

Added competition has further complicated the happy duopoly. Aldi has taken a big chunk of share, and in the process changed the dominating retail model, increasing the focus on price to the detriment of proprietary brands and margin extraction by the ‘rental’ of  retail shelf space to suppliers. By another means, Cosco has also made a dent, although nowhere as marked as Aldi, and there are pointers that Aldi’s German rival Lidl, owned by Kaufland is eying an entry to the Australian market. In addition, AFN,  reporting on the Woolworths AGM is highlighting the rumoured entry of Amazon Fresh into the Australian market.

Changing consumer habits. The trip into the supermarket is just one point in the process of urban dwellers feeding themselves.  Not only are there many alternate sources of products they can cook themselves now available, but eating food prepared for you is increasing, from a high priced restaurant to the lunch van that turns up in the area at 12.30 every day and sells you a sandwich.

Fragmenting consumer lives. Eating together as families has been a part of the human DNA since we came out of the trees. It plays a social role as well as one that delivers safety and acts as a medium to pass on the knowledge and experience  gathered that day, and from a lifetime, but that habit is fragmenting rapidly, along with all other aspects of our work and social lives.

Technology is the enabler and often cause of all that is going on above, and the one thing we know for sure about tech, is that the pace of development is always  accelerating, and that if for no other reason is the reason that the FMCG landscape will be very different in 5 years. For evidence, look no further than the Amazon Go  test in Seattle, just one store, accessible by Amazon staff only at this stage, but perhaps the way of the future.

My conclusion to the opening question therefore is ‘Yes’ we are coming to  the end of the duopoly, and not just in FMCG.

 

How to make your website really work for you

How to make your website really work for you

Dec 7, 2016 | Communication, Small business, Social Media

A friend of mine recently drafted a website for a product he is launching, and asked me to have a look before publishing it. Not a great thing to be doing, as by the time I had finished commenting, he had tuned out. There was just too much bad news.

There are millions of websites out there, so the question  now is not just how to get your website seen by those to whom it is targeted, but how do you then get them to take some sort of action, without which, it all has little point.

A few simple rules

Clarity of purpose. Ensure it is crystal clear what you do, in essence why the site exists. The simpler the better, remove all the detail, all the jargon and fancy words, opting instead for simple statements and graphics that illustrate why you are there.

What problem do you solve. Customers buy solutions to problems, not products. The purchase of everything from the groceries to expensive luxuries are in some way connected to a problem, real or perceived that the customer has. Tell them which one you are solving, how, and why they should buy from you.

They are not interested in you. Almost every site has an ‘About us’ page. It is useful to give some background, demonstration of expertise, and how you care deeply about the ‘bilbies’, but less is more. People are interested in you only to the extent that it confirms their decision to purchase from you. The fact that your grandfather who founded the business was apprentice of the year in 1935 is supremely irrelevant, as are the awards you may have won in 2000.

Demonstrate that your solution works. This can take many forms from testimonials to statistics and demonstrations, but is an important component of building trust and credibility.

Have a designer design. The look of a site says a lot about you, and it is a designers job to interpret the important things visually. The choice of images, layout, use of white space, location of icons of various types are all done better by a pro. It does not have to cost a lot, and most of those who design websites who may be good technically are not necessarily good at visual and creative design. The bit of extra investment is almost always well worth it.

Tell them what to do now. Ask for the action you want a visitor to your site to take. Download something, watch a video, follow a link, whatever it may be, make it clear, easy to do, and ask.

My friend was sorry he asked, but a week or so later, showed me a way better version that will now be published as a part of his product launch in a few months.

9 strategies for social media marketing success

9 strategies for social media marketing success

Dec 5, 2016 | Marketing, Social Media

Social media is the ‘shiny new thing’ of marketing. Everyone seems to want one, whatever it is, and everyone has a view.

There is plenty of advice around on how to do it, I just put the term ‘How to manage social media’ into Google and got 54.5 million responses in a millisecond.

At the risk of adding to the dog-pile, after a conversation a couple of weeks ago with a so called expert who clearly had only picking pockets on her mind, I thought I would add to the list, and try and keep it sufficiently simple to be of use.

Be original.

Pretty hard when there is so much already out there, but so much of it is the same, just in a different dress. Being able to throw a light into a dark corner is always useful. I am reminded of my kids soccer games when they were little. 10 kids all around the ball, kicking it at the same time, with 95% of the field empty. Commentary on Social media is similar, everyone follows the ball, is in the one place, but there is so much space elsewhere, that seeing it for what it is, opportunity rather than barren space is useful.

Be focused.

 Knowing who you are writing for, and speaking to them about things they are worrying about, see as threats or opportunities, and speaking in their language, in the first person, in an individual way, makes a huge difference to the results you will get.

Writing quality.

Pretty obvious, nobody will willingly read crap, so follow the rules of grammar, be interesting, entertaining, remove bullshit and weasel words, and deliver ideas worth sharing. This applies irrespective of the medium. A written blog post, video, email, twitter post, whatever it is, make it quality to suit the medium.

Eye-catching layouts.

 We are visual animals, blocks of text are not attractive, and not how we scan material. Have a good header photo or illustration, a headline that demands more attention, paragraph headers, and plenty of white space. As a test, go into your local newsagent and look at the magazines on display. These guys are the experts at this stuff, those that have survived are very good at grabbing and keeping your attention, and leading you to a purchase.

Linking.

As you build a library of content, it makes sense to link it in relevant places to post you have written in the past, and other places you may have posted. It is also vital to build credibility by linking to good content others post, and in time some of them may link back to posts you write, which gives your google rankings a real goosing. When a so called ‘influencer’ links to something you have posted, some of their google cred rubs off on you, and that is gold.

Cross posting.

This is as essential as linking, as it enables a wider audience to have the chance of finding your content. Much of this can now be automated, but it also pays to personalise and tailor the content to the platform to which you are cross posting to better suit the way that platform interacts with its users. In my case, there are hundreds of people who have subscribed to my blog posts, not a lot by some standards, but plenty by mine as they are a pretty selective bunch, and there are hundreds more who see the posts via LinkedIn, and there are very few multiples, those who are both blog subscribers and subscribers to the LinkedIn posts.

Be observant.

I can only go by my experience here. When I started, 1500 posts ago, I wondered where the next one would come from, but they just started to flow as I looked at the world through a different lens. I also found it necessary to keep a log of ideas, post drafts, links, and all the other supporting stuff, which I do in a huge file on One Note, an essential tool to record being observant.

Be patient.

There are millions of blog posts published every day, 60 hours of video uploaded onto YouTube every minute, just being seen is a major achievement. Believing it can happen overnight as promised by many with a product to sell is delusional, it takes time, effort, and persistence, on top of those elements above.

Never steal.

There is so much stuff out there, who would ever know?? Everyone. It is obvious pretty quickly when you just plagiarise, and there are multiple software solutions that crawl the web looking for copied material, so you will be found out, However, more importantly, being original, genuine, authentic, whatever you choose to call it, is essential to success. The exception is attribution, but that is not stealing, just the opposite, it is acknowledging the expertise of others, and you may find tnhat they in turn will acknowledge yours. More google gold.

Tell me what works for you.