How to target high-value sources of growth

This post is the first of a series that will address the biggest problems that marketers face today (as identified by AMA). The purpose is to make you think . . . and hopefully help you address these problems in a new way.

A couple of years ago, I heard an interesting talk from Lars Wulff, CEO of Mud Bay at a PSAMA South Sound meeting.  Lars told us the story of how he and his sister have led the growth of their company from one store to twenty-five, with plans to add 4-5 more stores in the coming year.

Start by asking the right questions.

Lars began his talk by asking the audience some questions - who owns pets? who has ever shopped at a Mud Bay store? Who considers Mud Bay their primary pet store choice?  He then asked the most important question – why?

Lars reminded me of Simon Sinek, author of "Start with Why", one of the best approaches to business and leadership I have ever heard.  Simon believes that “People don’t buy you make . . .  they buy why you make it”. He cites Apple as a great example of understanding that most companies tell you what they do, and how they do it.  But the key to success is to answer “why they do it”.   If you don't know Simon Sinek, take the next few minutes to view this condensed explanation of how innovative companies differentiate and grow their business and how great leaders inspire action.

Find a niche and own it.

I have always believed that your positioning strategy must be unique, believable, relevant and true.  In today’s hyper-competitive, global marketplace, unique becomes the true differentiator.  With so many options to choose from, and the ease of buying through e-commerce, without a unique niche, you are primarily competing on price or availability.  And neither of those strategies is sustainable in the long term.

Focus on serving your customer.

During his low-key, interactive presentation, Lars Wulff was interrupted several times with questions, and one of those questions was 'Have you considered other growth avenues beyond simply opening new stores?".  His response was immediate and genuine.  He replied “I am planning a session with my key management team to explore ways to enhance the customer experience, and that will determine any new directions we move".

Notice that he didn't say we will "explore ways to grow the business".  His response was to look for "ways to enhance the customer experience".

What a great way to approach business and growth!  Every company wants to grow.  How many approach growth from the customer's perspective?  How many companies have made missteps because they added new services instead of customer benefits to grow their business?   How many agencies have added new services or digital marketing departments or capabilities to "enhance their customer's experience" vs. just to gain more revenue?

Lars had a lot of good things to say about the importance of understanding and maintaining a consistent and strong corporate culture.  And the necessity of having a differentiating benefit that would build customer loyalty.

But the real strength of his organization is his basic approach to business growth "How do we enhance the customer experience?"

In a world with so much competition and so many options, asking the right questions, finding your niche and focusing on your customers can be the difference between success and failure.

Are you asking the right questions to identify those high value targets?  Isn't that a good place to start?

Ten Marketing Trends You Can't Afford To Ignore

It will come as no surprise to marketers in almost every business category that 2008 will be a difficult year. The economy appears headed for a recession, whether we use the “r” word or not. The credit industry is facing the repercussions of too many years of questionable decisions on credit-worthiness, and we’ve all discovered that the keyword “sub-prime” doesn’t really have anything to do with the prime interest rate. Fuel prices continue to rise, with no relief in the immediate future, no matter how much more corn we grow. The healthcare industry continues to be a mess, and the current political discourse hasn’t revealed any plausible solutions to the issues.

But even with all of these caution flags waving high, opportunities are still available for marketers that are willing to try new things and take advantage of the changes that continue to occur in our media consumption habits and attitudes toward marketing.

Here are some of the key trends that we believe will play an important role in marketing during 2008 and beyond:

1. The shift from traditional media to online and other new media alternatives will accelerate to the point that online will become a traditional medium. For several years, marketing giants like P & G, Kraft and Unilever have simple dipped their toes in the water of online marketing, with less than 10% of their marketing budgets (and their marketing efforts) devoted to alternative media. I believe that advertising in traditional broadcast and print vehicles will continue to be a staple for many advertisers, but the astounding growth of social media and the availability of broadband connections in the home environment will shift online advertising from being a secondary, or even tertiary, afterthought to one of the most important elements of a marketing program. The Internet is now used extensively by every major demographic group for information, communication and entertainment. According to Forrester, online marketing spending will triple to $61 billion over the next few years, and experts predict that online spending will account for 25 -30% of all marketing dollars by 2015.

2. The integration of off-line support for online campaigns will continue, with television playing a major role in developing that synergy. Over the past two years, we have seen an increasing use of television and other off-line media to drive customers to a web site where they can find more in-depth information. Once there, a longer form sales message can be used to tell the story and build customer loyalty. A great example of this is the current Burger King Whopper Freakout campaign. Thirty second television commercials and selected print ads direct consumers to a special web site http://www.whopperfreakout.com/, where an eight-minute, documentary-style video tells the story of how real customers reacted to a staged situation of a Burger King that no longer offered the Whopper on its menu. It is a very creative way to demonstrate a taste preference for the Whopper versus the Big Mac and other alternatives, and according to Burger King has received over 1.5 million views in its first month, about five times what a company spokesman said is considered successful.

3. E-mail marketing will continue to grow in importance, but will evolve from its current context. Consumer fatigue from mailboxes overloaded with too many unsolicited and irrelevant offers will force marketers to focus their efforts on delivering relevant messages when they are most willing to listen to them. In order to avoid consumer shutdown and rejection, marketers will need to take advantage of increased use of behavioral targeting and other analytic tools to deliver e-mail that is triggered by consumer actions, not their own promotion activity.

4. Brand loyalty and customer retention will eclipse brand awareness and customer acquisition as primary marketing goals and evaluation metrics. Past marketing tactics have focused on building broad scale awareness with a resulting belief that the more people you reach, the greater chance you have of converting a sale and acquiring a new customer. In today’s multiple-choice world, simply knowing that a product or service exists isn’t enough. In this environment, product relevance to niche market segments is a much more powerful marketing tool, and marketers should focus their efforts on building loyalty and retaining the customers they already have.

5. Word-of-mouth marketing will become more intentional as a primary marketing tool. While marketers have always hoped to achieve positive word-of-mouth due to its presumed greater credibility, word-of-mouth can no longer be a happenstance event but rather an important part of an integrated marketing program. Deliberate efforts to generate beneficial consumer conversations through viral marketing and other buzz marketing tactics will grow in importance. WOMMA, the Word-of-Mouth Marketing Association, reported the results of a national survey in their November conference that identified word-of-mouth marketing as the "fastest-growing segment of the $254 billion marketing services sector," and reported that "Brand marketers are responding, and have begun to increase their WoM media budgets, moving from test phase to implementations that support their integrated marketing campaigns." We caution marketers, though, to be transparent and honest in their efforts, or they will face the wrath of the FTC who has announced they will pay close attention to "unfair or deceptive acts or practices" such as the recently reported scandal created by John P. Mackay, co-founder of Whole Foods Market. Mr. Mackay has admitted that he used a pseudonym to log more than 1,100 entries on Yahoo Finance’s bulletin board to champion his company’s stock and to blasting a rival – Wild Oats Market. In an era where corporate greed and ethics are so top-of-mind, this was not only illegal, it was stupid.

6. SEO and SEM will become SOP. A recent study by Anderson Analytics ranked search engine optimization as one of the more significant tools to create bottom line impact for a company. As more marketers become aware of the power of complementing organic search with a proactive use of keywords and keyword ads that link to specific landing pages on their website, this use of search engine optimization and search engine marketing will become standard elements of their marketing program.

7. Social marketing will continue to grow dramatically as targeted consumer networked communities become more popular. Web 2.0 has opened the door for unprecedented interaction and consumer-generated content, and marketers should pay attention to new ways that consumers are interfacing across the web. Facebook was the darling in 2007, grabbing attention from MySpace and YouTube, but the real growth in social marketing will come from social network sites that are targeted to consumer niches from teens (e.g. Pizco and Tagged) to seniors (e.g. Eons) to photographers (e.g. Flickr) to mothers with children (e.g. momseasychair) to business networking and job seekers (e.g. LinkedIn and Plaxo).

8. Blogging may be right for some companies, but only if they do it right and are willing to accept the consequences. As we noted earlier, transparency will be crucial to avoid any backlash from disgruntled consumers who can smell manipulation a mile away. Companies must be careful when using tools like blogs, vlogs and Podcasts or face the wrath of a networked audience that can love you one minute and hate you the next. Some forward-thinking companies have created a new executive position of Blog Monitor to be able to respond quickly to new issues as they arise, or to correct misinformation that can damage a company unfairly.

9. Going Green is no longer a luxury or an option; it must be addressed by every marketer in every category. Since the original Earth Day in 1967, marketing periodicals have been saying that green marketing was the next big thing. It wasn’t then, but it is now. Every day, another brand finds both direct and indirect ways to commit to a sustainable future. A recent national study among marketing executives at a VP-level or higher listed “green marketing” as one of the most important emerging concepts. Once again, we want to caution marketers to avoid over-hyping any half-hearted efforts. If you are committed, flaunt it. If you aren’t, don’t try to fake it.

10. Consumer engagement will displace the traditional interruption-disruption model as the order of the day in all categories. For decades, consumers have understood that if they wanted to experience free content in the form of television entertainment, radio broadcasts, and news and weather reports in their daily newspaper, they would have to put up with ads. Ads were seen as a necessary evil to support the content consumers really wanted to see. But the rise of broadband connections, satellite radio, cell-phones, TIVO, and other forms of digital communication now allow consumers to control their media content and easily avoid advertising they don’t want to see. When this is combined with less trust in advertisers and their messages, and a greater ability to create their own content with the help of blogs, social networks, wikis and other digital-communication platforms, irrelevant content will not be tolerated. This doesn’t mean that advertising is doomed. It simply means that as marketers we must do a better job of engaging consumers with content that is so compelling, relevant and entertaining that they will seek it out and even share it with others. As Geoff Ramsey, CEO and co-founder of New York-based eMarketer.com put it in a recent article, “the new ad model is about creating great content and finding clever ways to embed it in the fabric of communities and content platforms where consumers are hanging out and actively participating”.


Understanding and responding to the aforementioned trends will have little effect if we, as marketers, can’t find better ways to truly engage our customers. 2008 offers great challenges, but will also offer unprecedented opportunities. A.G. Lafley, chairman – CEO, Procter & Gamble had this to say about 2008, “We need to reinvent the way we market to consumers. We need a new model. It does not exist. No one else has one yet. But we need to get going now.”

For marketers to answer that call-to-action challenge, they must “get going now” to look for new ways to connect with their customers. The future belongs to those marketers who can out-smart their competition rather than out-spend them.


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Looking Ahead: How the Changing Social Landscape is Affecting Marketing

We know that technology continues to encroach on every aspect of modern life. Innovations like Bluetooth, social marketing, blogs and mobile marketing are no longer just being used by the young technorati; they are being used by almost everyone, regardless of age and technology comfort and are rapidly becoming a part of the mainstream of American life. The Blackberry is an essential business tool, regardless of your age. Snapfish allows me to share photos of my children and grandchildren with my 80+ year old mother in Tennessee. The recent iPhone introduction is another example of the mass appeal that new technology can generate.

Perhaps just as important for marketers is to recognize that changing social behaviors, attitudes and mores are also affecting marketing. Here are ten things I believe will have major impact on how we market in the future.

1. Corporate greed is not good. In a world of increasing corporate transparency, consumers will reject companies and their products if they do not live up to proper ethical standards. Marketers need to examine every aspect of their business, not just the boardroom. Not every brand is as strong as Nike, and able to withstand the negative publicity of child labor exploitation.

2. In a multiple-choice world, you must differentiate or die. Jack Trout was right on target when he said that in today’s ultra-competitive world there are so many choices that companies will be hard pressed to survive without a point of difference. The average supermarket has over 45,000 branded items. There are now over 3,000 brands of bottled water. Huh?

3. To blog or not to blog, that is the question. Social networking is a fact that cannot be ignored. But companies must be careful when using tools like blogs, vlogs and Podcasts or face the wrath of a networked audience that can love you one minute and hate you the next. Some forward-thinking companies have created a new executive position of Blog Monitor to be able to respond quickly to new issues as they arise, or to correct misinformation that can damage a company unfairly.

4. “Word of mouth” can no longer be a happenstance event but rather an important part of an integrated marketing program. In today’s world, “word of mouth” can travel around the world instantly via the web. Viral marketing efforts like the Subservient Chicken and Lonelygirl15 have gotten millions of exposures for little to no cost. Social marketing and Web 2.0 will impact your business, whether you want it to or not. The next wave of “word of mouth” will be user-generated reviews of everything from restaurants to shopping to hair salons. One disappointing entrée or a surly waiter has the potential to ruin a restaurant’s reputation. Is that scary, or what?

5. Video messaging still rules, it’s just the delivery methods that are changing. Everything we learned in marketing class about sight, sound and motion still holds true. It is unquestionably the most powerful way to inform and persuade. But the continued fragmentation and decline in viewership of traditional television is being replaced by on-line video. We can’t all afford to back something as ambitious as Bud TV, but keep a close watch on YouTube as the next mass medium. Politicians have certainly jumped on that bandwagon. Are you one of the 2 million plus viewers of Obama Girl?

6. It’s not easy being green. Kermit was right. But if you aren’t looking for ways to include some form of green marketing or sustainability (the next great marketing buzzword), then you will be left behind, choking on ethanol exhaust fumes. Wal-Mart is touting itself as the world's largest buyer of organic cotton, fair trade coffee, and energy-efficient light bulbs. Companies across America are looking for ways to “green” their products, their manufacturing, and their distribution processes. Let’s face it. When a slide show can win an Oscar, it must be real. Since the original Earth Day in 1967, marketing periodicals have been saying that green marketing was the next big thing. It wasn’t then. It is now. Better get with the program.

7. Go organic. Go natural. Go anything but artificial. Organic foods. Organic skin care. Organic pants. Organic pants??? That’s right. A recent TV spot for Wal-Mart featured an on-camera spokesperson talking about her new organic pajama pants. The idea behind this spot shows just how deeply rooted the organic movement has become. It’s all part of the get real, get healthy, and environmentally-conscious world of today, not tomorrow.

8. CRM are the three most important letters you should know. Customer relationship management should be part of every marketing plan. We have always known that it is more expensive to recruit new customers than it is to retain existing ones. With ever-increasing expectations, and lower tolerance levels, consumers are demanding instant gratification at every turn. Retailers like Nordstrom are a great example of the power of being customer-centric – they continue to prove that people will pay more for better service.

9. East or west, home is best. A global economy, mass production and outsourcing, are contributing to a growing backlash against imported products and services that are putting American workers out of business. Many consumers are willing to pay more to get local goods that are presumably made with more care. With the recent product contamination scares from China, we may even see a resurgence of Made in America.

10. The era of “one size fits all” marketing is over, and niche marketing is the future of our business. If you haven’t read The Long Tail by Chris Anderson, buy it today. It’s one of the most thought-provoking books I have read in a long time. It makes a strong case for an entirely new economic model for business that is being created through digital technology. The Internet opens a new world of possibilities for niche products that never existed before and the primary economic value of the Internet to consumers comes from providing access to products that might never have been made available in a mass market economy. In a digital world where everything is available to everyone, niche marketing is the natural and inevitable wave of the future.

I’m sure you can find many other issues, trends, and social behaviors in your own business categories. The important thing to remember is to keep looking ahead if you don’t want to get left behind.