
Contents

Chapter 1

Introduction

Chapter 2

Why brand strategy matters

Chapter 3

A brand development methodology

Chapter 4

The good, the bad, and the ugly

Chapter 5

Building an effective organisation

Chapter 6

Who are you marketing to?

Chapter 7

How your customers make decisions

Chapter 8

The secret behind successful marketing

Chapter 9

To assume makes an ass of you and me

Chapter 10

It's all about being unique

Chapter 11

A few thoughts on pricing

Chapter 12

Competition and your market position

Chapter 13

Own a hill then defend it

Chapter 14

Brand storytelling that sells

Chapter 15

Validating your unique proposition

Chapter 16

Did your customer have a brand orgasm?

Chapter 17

Online is different, but exactly the same

Chapter 18

Engagement platforms—theories and models

Chapter 19

Our world is changing

Chapter 20

It won't happen by magic

Chapter 21

About the author

Chapter 22

Glossary

Smart Marketing

Build a powerful brand through

Need Satisfaction MarketingTM

wayne Attwell

SMART BOOKS | NEW ZEALAND

SMART MARKETING

Build a powerful brand through Need Satisfaction Marketing™

Wayne Attwell

Published by Smart Books, New Zealand. Smashwords Edition.

Copyright 2013 Wayne Attwell. All rights reserved.

**Smashwords Edition, Licence Notes**

This eBook is licensed for your personal enjoyment only and may not be resold or given away to other people. If you would like to share this book with another person, please purchase an additional copy for each recipient. If you're reading this book and did not purchase it, or it was not purchased for your use only, then please return it to Smashwords.com and purchase your own copy. Thank you for respecting the hard work of this author.

The author asserts his moral right to be identified as the author of this work. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted by any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the author.

While the author has made every effort to provide accurate information, neither the publisher nor the author assumes any responsibility for changes that occur after publication. The advice and strategies contained herein may not be suitable for your situation. Neither the publisher nor the author shall be liable for any loss of profit or any other commercial damages including but not limited to special, incidental, consequential, or other damages. Any use of the information in this book is at the reader's discretion.

All trademarks are the property of their respective owners.

Cover design: Annette Crowther, Bold Horizon Creative

ISBN 978-0-473-25398-1

No trees were harmed in the production of this eBook.

Smart Marketing is also available in softcover print - visit www.wayneattwell.com

Acknowledgements

Writing a book is a long, lonely and difficult road and it cannot be achieved without the support and help of a great team. My deepest gratitude and thanks to Petr Adamek and Geoff Greenwood for their technical review and useful suggestions; to Dr Sasha Boer for her professional review and valuable edits; to my business partner at Marketing Brainiacs, Kay Spencer, for her diligent approach to the subtleties and nuances of the book as well as her insightful input; to Sandra "The Scribe" Clark for her incisively intelligent edits and for remaining faithful to the flow and style of the book. I'm also deeply grateful to my beautiful partner Annette Crowther, for her unswerving support, encouragement, patience, thoughtful feedback and outstanding cover design. My sincere thanks to my peers who have generously allowed me to include their words in this book, and to my clients, who allowed me to learn with them and earn a living at the same time.

Need Satisfaction Marketing™

"Understand what your customers REALLY want, not what you THINK they want, then offer them unique benefits that satisfy their needs, better than anyone else can."

Wayne Attwell—brand strategist

Chapter 1

Introduction

Introduction

As we move out of the worst recession since the Great Depression of the late 1920s, the focus of business is changing; and it needs to. If you asked businesses over the past few years what their priority was, many would have said that survival was foremost in their minds. But as the world economy starts to stabilise and pick up momentum there's a need for a shift of focus from survival to growth and expansion.

The reality is that, both in periods of recession and in prosperous times, many businesses fail to achieve their full potential. There are numerous reasons for this, but in a large number of cases they don't fully understand their market and the real needs that motivate their customers to buy. To make matters worse, they're often unable to develop and then communicate a unique value proposition that resonates positively with their customers and differentiates them from competitors. As a result they're unable to make enough sales at a sufficiently high profit margin to grow and achieve their full potential and promise.

When I started my brand marketing agency in 2004 my purpose was not only to build a successful business of my own, but also to develop a robust marketing model that would help my clients to substantially improve the effectiveness of their marketing, in turn improving their bottom-line profitability and ability to grow.

Smart Marketing is the result of that journey. It's a pragmatic book illustrated with real-life examples and practical models to help smaller businesses to become better marketers and thereby improve their overall business performance. By means of a logical and easy-to-understand planning process it will show you how to rapidly create a powerfully different and successful brand, and how to present it to the market in an engaging and memorable way.

I believe you'll find the material and ideas effective whether you're a start-up creating a new brand from the ground up, or an organisation re-inventing itself or looking to invigorate an existing brand. By understanding the structure and mechanisms that underpin marketing and strategy, it's possible to apply a methodology and framework to ANY organisation, including commercial businesses, social enterprises, quasi-state organisations, even cities and regions.

The theories and methodologies presented are the same as the big guys use. There are no mysteries—they're right here for you to take and make your own. Successful mega brands don't achieve their lofty market positions by luck. They apply best practice to every aspect of their businesses and make smart marketing decisions based on deep customer insights and a clear understanding of how customers make decisions. It's easy (and common) for smaller businesses to look at the big brands and conclude that, although these good business practices work for large corporations, they often seem unachievable and possibly less relevant in the small business context.

Truth be told, the big guys succeed because they do a lot of things well, and many smaller businesses falter because they don't.

So where exactly does brand strategy, as it's discussed in this book, fit into the overall marketing and business planning process? Applying the principles of the Lean Business movement, which is revolutionising the way businesses and brands are created, Smart Marketing strips down the traditional marketing model and strategy process to the most important elements needed to build a powerful brand.

Brand strategy is a critical subset of the marketing plan–it focuses mainly on uncovering and satisfying valid customer needs through a unique value proposition, and effectively communicating and delivering this value promise to the market. The complete marketing plan (incorporating product, pricing and distribution strategies) is in turn a component of the overall business plan.

Fig 1.2—Brand strategy is a subset of the overall business and marketing plans

Fig 1.2 illustrates this hierarchy. The smaller business with no internal marketing department or dedicated and suitably qualified marketing resources will probably get the most out of this book. I don't consider marketing and sales administrators who have simple marketing-related responsibilities, such as ordering brochure reprints or updating website content, to be suitably qualified marketing resources, certainly not at the brand strategy level. Smart Marketing was written with the smaller business in mind, although I believe that marketing practitioners at all levels are likely to find valuable nuggets throughout the pages.

Smart Marketing doesn't limit itself exclusively to either consumer or commercial and industrial markets. Whilst some examples may be based on one or the other, the fact is that in marketing we engage with and sell to people, making much of the content of this book equally applicable and important to either group. There are of course some differences and varying levels of applicability, so I'll rely on you to use common sense in determining how best to apply the material in your own situation. To simplify things, I use the phrase 'customers' to refer to potential customers or prospects within your target market, as well as existing customers. 'Brand', 'company', 'business' and 'organisation' should be seen as interchangeable terms. I also use the broad term 'products' to mean products, services and offerings.

It's impossible to remove theory from marketing, but I've tried to present it at a level that any business manager can grasp and act upon, given some effort and application. The elements and aspects I've chosen to include have all proven themselves to be highly effective in the real world. Wherever possible I've tried to provide insight and logic behind what I say to give you a working understanding of marketing and why things are done in a particular way. As you'll discover throughout the book, insight is a fundamental requirement for all successful marketing.

My interest is for your marketing efforts to rapidly translate into tangible bottom-line value; to this end, Smart Marketing will show you how to develop an effective brand strategy that can be quite easily implemented without having to re-invent your organisation. Winston Churchill summed up this approach when he said:

"However beautiful the strategy, you should occasionally look at the results."

Where you see the 'Downloadable resource' icon, you'll be able to access the template and other useful resources at www.WayneAttwell.com. The login details are available at the end of chapter 20.

Chapter 2

WHY BRAND STRATEGY MATTERS

"Strategy is about setting yourself apart from the competition. It's not a matter of being better at what you do—it's a matter of being different at what you do."

Michael Porter—management guru

WHY BRAND STRATEGY MATTERS

Brands are intangible. You cannot touch them, nor can you hold them. They exist in an emotional context in the minds of your customers and in the hearts of your staff. If both are not perfectly aligned then the brand cannot and will not be a star performer. The relevance of this is explained in later chapters, but I'd like you to keep this thought in mind as we work through the elements of brand strategy.

The benefits of brand strategy

An effective brand strategy provides many valuable benefits. Most importantly, good strategy creates a solid foundation for all marketing and promotional campaigns and improves bottom-line profitability. This is driven through the resulting brand message being presented as a compelling and unique value proposition based on accurate insights into the customers' needs and buying behaviour, and not on guesswork or hunches.

Brand strategy is not only about the product or service, but threads itself through the entire organisation. Great brands create an authentic brand experience—from within the organisation right through to the end customer. This is a by-product of consciously building a culture within the organisation that's in step with the brand promise. This concept will be explained in more detail in Chapter 5, The Organisational Brand DNA.

The business world is becoming more complex, competitive and challenging every day. Without a well-defined strategy it will become increasingly difficult to perform and prosper, or even survive for that matter. Through your brand strategy you determine how to communicate the value that you offer, and through the customer experience you actually deliver that promised value.

A long-standing concern I've had is that many smaller businesses don't participate in strategy development or even formalized marketing for that matter. Some business owners are ignorant and some are just lazy. Others are probably just lucky that the stars have aligned for them. It's not surprising that most businesses fail!

On the other hand, what excites me about this situation is that, if the majority of these businesses are not developing their strategies in an orderly and thoughtful fashion, a pot of gold awaits those who do make the effort. In business, the harder things are to do, the more I like them, because that means there's likely to be less real competition. Thankfully, there are more inept and lazy business owners than smart ones, so you can quite easily create a competitive advantage through the development of an effective brand strategy. But remember, strategy has no value unless it's followed up by action. Even the smartest and most carefully planned strategy will fail if no action plan is put in place and then implemented.

Brands can add meaning to our lives

The need to find meaning in life is one of the essential human traits that distinguish us from other species. Too many people wait for life to give them meaning rather than finding their own source of meaning. Viktor Frankl, in Man's Search for Meaning, relates how the harrowing ordeals he suffered and observed in the German concentration camps during the Holocaust caused him to postulate that the prisoners who survived the camps were all motivated by clinging to some form of meaning within their pitiful lives. This may have been as simple as carrying a photo of a loved one whom they dreamed of seeing again, or the driving need to survive to tell their personal story.

Realising and understanding this innate human need for meaning is a key factor in developing an effective brand strategy. Powerful brands create an emotional connection, which can offer at least some degree of personal meaning to our customers (and staff). For example, fans of a sports team derive a great deal of shared personal meaning from the club's heritage, performance, heroes, colours, and traditions. Customers buy more than a product or service. They buy and experience the aura of association with the brand and enjoy belonging to the brand community.

Whether it's enjoying a cup of your favourite coffee, buying your favourite pair of jeans or test-driving your dream car, each of these brand interactions creates a 'critical moment of meaning', for at least a short interval. The intensity of this experience will naturally diminish over time, but each positive interaction with a valued brand creates a small inventory of meaning, which, over time and depending on the nature of the brand interaction, could become increasingly relevant and meaningful to the customer. This is where brand loyalty and long-lasting brand relationships are forged, an intrinsic goal of a brand. Of course, what is meaningful to one person may not necessarily be meaningful to another.

At a fundamental level, how we create meaning within our lives is unique to each of us. However, if we group segments of the population together we find there are shared sources of meaning, albeit at a micro-level. I would add at this stage that not all brands have the potential to add similar levels of meaning. Generally speaking, the more a brand appeals to the emotional needs of the customer, the greater the potential for it to add meaning in some way.

Interestingly, many people think of a brand in the context of a logo. Without doubt a logo and its visual representation of the brand is important, but it's only one element of the entire brand. The full expression of a brand can only be experienced through exposure and interaction with the messaging and brand culture, as well as through the actual brand experience. A brand is... the visual, verbal and behavioural expression of an organisation or a product's unique value proposition, which is empowered through the purpose, brand promise, culture, brand messaging and customer experience.

Organisational brands

In cases of single product organisations, it's impossible to divorce the product brand from the organisational brand. The brand reflects the organisation and the organisation reflects the brand. In such cases we need to shape the brand strategy from an organisational strategy outwards, extending meaning not only to the customer, but also to staff and stakeholders.

Whilst the underlying premise of this book is Need Satisfaction MarketingTM, I've devoted an entire chapter to the development of the internal or organisational brand DNA, a critical and often overlooked brand component. An important driver in creating memorable customer experiences, it also gives staff a sense of purpose, meaning and direction. Research shows that remuneration is no longer the key determinant of job satisfaction and organisations have to look beyond money to motivate and retain their staff. By providing some degree of meaning you add value to the work lives of your team. Fig 2.1 shows how great brand strategy can be a powerful reinforcing cycle of improvement and success.

Fig 2.1—Brand strategy is a reinforcing cycle with numerous benefits

Strategic planning is an investment

Declining sales, reduced profit margins and increased competition are common issues facing businesses. There are more products, suppliers and choices in every market today than at any other time in history, and it isn't getting any easier. Yet despite this, some companies manage to thrive and grow while others fail. What sets them apart?

Many struggling companies do commit funds to marketing and advertising programmes, yet the anticipated benefits seem to elude them. In many cases their marketing strategies are weak or non-existent, rendering their well-meant efforts and promotional investments ineffective. As we saw earlier, successful companies do a lot of things well. Amongst the array of good business practices, they invest in developing well-researched and thoughtfully planned marketing strategies. Although there's no guarantee of success, at least they know they've applied best practice thinking and given their marketing programme the greatest chance of succeeding. Armed with this they can confidently roll out their advertising and promotional programmes, knowing potential risks have been mitigated as much as is practicably possible.

In Fig 2.2 we see that all marketing requires investment in the form of a marketing budget (a) before it (hopefully, but not always) generates a profit (b). The marketing budget in this example reflects the typical costs associated with promotion, including direct sales, design, media placement and other promotional costs. The premise is that if you underpin your promotional marketing activity with a well-developed strategy (c) that's based on satisfying the needs of your customers, this added effort (and financial investment if you engage an agency to assist) will potentially produce incremental value (d) over the return ordinarily expected with no underlying strategy. This increased return on investment (ROI) will usually be a multiplier, adding a magnitude of value well in excess of the original investment made in marketing activities. Overall brand profitability is also extended as a result of the brand performing more effectively against competitors over a longer period of time.

Fig 2.2—Strategy improves the ROI of marketing and extends brand profitability

How much should you invest in marketing?

Strategic planning should be seen as an investment and not an expense. There are a number of ways to look at this question and, to be honest, none of them is an exact science but rather a guideline based on what other companies do. Numerous factors can influence how much you invest in marketing. For example, companies in product launch phase will spend a substantial percentage of revenue on validation and marketing, whilst companies in mature markets might spend a lot less than the average. That said, there are popular theories based on business surveys and other data:

  1. A commonly accepted investment in marketing promotion is around 4% of sales revenue, remembering that this could be higher or lower depending on several factors. 
  2. As a percentage of revenue, including the cost of staff involved in marketing (e.g. sales people, marketing assistants and others), it could be around 10%.

Based on either of these models, the potential investment in the marketing process, including staff and promotional activity, can be substantial. Let's say you own a business with annual sales of $3m. Your marketing budget (including the cost of direct sales) could be between $120,000 and $300,000 per annum, depending on how much of it you manage in-house and how much is contracted out.

Over a five-year period that amounts to between $600,000 and $1.5m. For that money you could build a rather nice house in the suburbs! Now could you imagine spending that sort of money building a new house without consulting a designer or architect, and having no blueprint or plans to work from? Of course you wouldn't! The remarkable thing is that I've seen many intelligent business people do exactly that—spend hundreds of thousands of dollars on their marketing and promotion with no clear strategy or adequate insight into their customers' needs.

Brand strategy isn't rocket science, but it does require a thoughtful, structured approach and an investment in time and money in order to create a strong foundation upon which you can confidently roll out your marketing and promotional programme.

Whichever road you choose, you're going to spend your marketing budget, either badly with poor results, or smartly with long-term benefits. It makes sense therefore to invest some time and money to ensure you spend your $600,000 to $1.5m wisely.

Fig 2.3—Brand strategy creates a solid foundation for your marketing programme

Over the ensuing chapters I'll show you in a practical and easy-to-understand fashion how you can develop and implement your own effective brand strategy, and generate additional value for your business in the process.

Marketing Takeaways

  * Brand strategy improves the performance of all marketing and promotional programmes and increases bottom-line profitability.
  * Great brands create an authentic brand experience from within the organisation, right through to the end-customer.
  * The more a brand appeals to emotional needs, the greater the potential for it to impart personal meaning for customers and staff.
  * Good brand strategy creates a strong foundation for your marketing and promotional programme. It requires a thoughtful, structured approach and an investment in time and money.

Chapter 3

A BRAND DEVELOPMENT   
METHODOLOGY

"Art and science have their meeting point in method."

Edward G. Bulwer-Lytton—politician and novelist.

A BRAND DEVELOPMENT METHODOLOGY

Some believe that brand strategy is a purely academic exercise carried out according to a clear set of processes and strict models. That's the science of marketing and it most definitely owns a valuable place in the development of brand strategy. Today's fast-changing social-economy presents demands that mere academic models can't satisfy. I like to think of strategy development as a iterative creative process of overlaying the base academic models with deep customer insight, and adding knowledge, practical experience and gut instinct gained from doing it at the coalface. The real marketing battle takes place in the minds of the customers, and being able to 'get inside their heads', understand what makes them tick and convincingly appeal to them with your offering is the art of marketing science.

The purpose of developing a brand strategy is to create value that didn't exist before. The results can be manifested in a number of ways, for example:

  * Increased sales and improved profits 
  * Enhanced overall brand value
  * Higher customer satisfaction

  * Improved organisational performance 
  * Happier and more motivated staff

My goal throughout this book is to help you develop meaningful organisational and product brand strategies that will redefine your business performance. An effective brand strategy is one of the most critical business investments your organisation can make and will determine its future success or failure. Developing strategy is easy. Implementing it is hard. Even the best strategies need smart tactics and outstanding execution to be effective.

The 5 Ps of modern marketing

"Art is the elimination of the unnecessary." Pablo Picasso—artist

The common theory of marketing, or at least what I was formally taught, was that there are four Ps that make up the marketing mix: Product, Price, Promotion and Place (distribution). More recently, however, there's been a growing awareness and broad level of acceptance that a fifth 'P' should be included in the mix—People. I couldn't agree more with this shift in thinking and welcome its inclusion in marketing theory. No machine ever made a purchase decision. People are the only buying agents, whether in their own capacity or on behalf of their companies. In addition, businesses are made up of people whose role is to serve the people who are their customers.

I don't cover Product strategy in this book. In my years of working with small and medium-sized companies, I found that it was seldom the quality of the product or a limitation of features causing a lack of commercial success, but rather the inability to identify which of the attributes their customers valued, and present them as unique value propositions or relevant customer benefits. In no way am I suggesting that Product strategy is not a critical component of the marketing mix; however it's a substantial and complex subject, worthy of its own book. The important factor in the context of brand strategy is to develop products with attributes (functional and emotional) that satisfy validated customer needs.

How do we actually develop a brand strategy?

Effective marketing requires a systematic or model-based approach that, when applied across any market sector or business type, produces consistently good results. I'm a big fan of Michael Gerber, author of The E-Myth. If you haven't read it yet, it's an excellent book about the importance that repeatable systems and methodologies play in successful businesses.

Having read The E-Myth, I then had the good fortune to attend one of Mr Gerber's seminars. It was a great experience, with many valuable insights and examples shared by him. The thing that stands out in my mind is his premise that the system runs the business, and people run the system. It's such a simple yet incredibly powerful concept. Through this insight I started to search for a model or set of methodologies that I could consistently apply in my role as a brand strategist and marketing consultant. Having a proven and repeatable model has been a critical tool for me over the past ten or so years in developing marketing strategies for clients across many different industries.

The process, models and methodologies that I originally developed have been constantly revised and improved as my colleagues and I encounter new situations and challenges. Keeping your mind open to new ideas is a valuable skill of the successful marketer, and has never been as important as it is today with the explosion of social media, mobile computing and digital marketing. I don't have a particular name for my brand development process, but I can say that one of its key features is that it's a holistic methodology that incorporates some of the most successful and proven international practices. It's a logical end-to-end process that ensures all elements are considered in their correct context and sequence within the overall strategy development process.

In addition to my own personal experiences, my team has used this process for many years. It has worked consistently for us in developing successful brand strategies by diligently applying the concepts that underpin the process. I believe that anyone with the interest and necessary commitment to learning and implementing can develop a powerful brand. One of my goals is to prevent you from becoming a slave to consultants by showing you how to build your own marketing capability. It's quite possible and likely that from time to time you may need to engage a professional marketing agency or consultant but, by understanding the material, concepts and methodologies in this book, you'll be better prepared to work more productively with them, and will also know when they're spinning you a line of crap.

Fig 3.1 illustrates the planning journey that we'll follow in developing your brand strategy. In the theoretical context it's a

Fig 3.1—The brand development journey

linear and logical progression; however, in reality, developing and then implementing your brand strategy doesn't necessarily follow such a perfectly linear path. The various stages are interconnected; they relate to and rely on each other constantly. The process is more like a matrix or jigsaw puzzle with a number of pieces that, when interlocked correctly, build up a complete and successful strategy, as illustrated in Fig 3.2.

Fig 3.2—Brand strategy is like a jigsaw consisting of various interconnected elements

The structure of this book follows the model, although using slightly different chapter titles. At the start of each chapter, you'll find a key that associates the chapter with the relevant part of the process.

Arranging and visualising your information

It's always helpful if you can see everything in one place. To visualise your entire brand strategy would require a complex mind map, but I've developed a practical step-by-step tool that will help you to work on and visualise the key elements of your brand strategy, called The Need Satisfaction Worksheet™. It's detailed on pages 29 and 30.

At this stage the worksheet may not make a great deal of sense to you, but don't worry about that. Each section will start to fall into its rightful place as you work your way through the brand development process covered in the ensuing chapters. For best results I suggest you populate the worksheet as you progress with your planning. Although it's intended to be a work-in-progress planning tool, you will get maximum value by tidying it up once your strategy is finalised and keeping it as a handy reference.

The worksheet template can be downloaded from www.WayneAttwell.com using the login details provided at the end of chapter 20.

Marketing Takeaways

  * Good marketing requires analytical thinking combined with creativity in solution design. 
  * Strategy development is the process of overlaying theoretical models with deep customer insight, adding knowledge, practical experience and gut instinct gained from doing it at the coalface.

  * Developing and implementing your brand strategy doesn't necessarily follow a perfectly linear path. The various stages are interconnected; they relate to and rely on each other constantly. The process is more like a matrix or jigsaw puzzle with a number of pieces that, when interlocked correctly, build up a complete and successful strategy.

Chapter 4

THE GOOD, THE BAD,   
AND THE UGLY

"Success is achieved by developing our strengths, not by eliminating our weaknesses."

Marilyn vos Savant—acknowledged genius, 190 IQ

THE GOOD, THE BAD, AND THE UGLY

To magnify or to mitigate? That is the question.

In most marketing workshops, business books and academic texts, the SWOT analysis is almost always a mandatory feature. I value the benefits of SWOT analysis, but for the purposes for which this book is intended we'll focus our attention primarily on Strengths and Weaknesses. However, I will touch on Opportunities and Threats in order to place them into perspective within the overall model and to ensure that you're aware of and attending to them as part of your broader business planning.

In short, Strengths and Weaknesses address internal or micro-issues that are within your control and over which you have some ability to exert influence in one way or another. Opportunities and Threats are external macro-factors that are outside your control, other than in the respect that you can react to them and plan accordingly. However, you can't influence them in any meaningful way. Fig 4.1 illustrates this fundamental difference in SWOT dynamics.

Fig 4.1—The relative inward and outward-looking dynamics of Strengths, Weaknesses, Opportunities and Threats

Are those your Strengths under the magnifying glass?

One of the basic strategies for Strengths is to emphasise or magnify the benefits and unique advantages in order to create a perception that the benefit is greater than it actually is. Your focus should be to present the most positive aspects of the brand, so Strengths are by necessity your primary weapons. An example of this is when a product or service offers a relatively small advantage over a competitor.

Let's imagine that the financial advantage of a product is $30 per month. Depending on the context, $30 may not be very much, so let's stick with that as our premise. By multiplying this competitive advantage by the largest factor possible, for example over the expected lifespan of the product, you can magnify it into something more meaningful and attention grabbing. The $30 monthly advantage x 60 months = $1,800. Suddenly the prospect of being $1,800 better off seems much more attractive than $30 per month. In marketing, perception is reality; don't be afraid to take advantage of this fact.

This magnification of benefits strategy was used extensively in a campaign conducted by the New Zealand Electricity Commission. In the interest of encouraging healthy competition in an oligopoly, they wanted to encourage power consumers to check how much they were paying each month for power and to compare their costs against a range of alternative suppliers. The Commission built a website that incorporated a calculator where consumers could type in their usage and be presented with a range of competitive prices.

The New Zealand power industry is very competitive so there's generally very little difference in cost between providers, probably not much more than $5 to $10 per month. In order to get traction for the concept and drive traffic to the website calculator, the Commission extrapolated a potential $10 per month saving and presented its argument that by changing providers you could potentially save $120 per annum. By multiplying the savings over an extended period and focusing on the largest possible benefit, the perception of the amount to be saved became a lot more compelling. This proved to be a very powerful and successful strategy, with many consumers switching providers and ultimately saving money.

My, what a small Weakness you have!

The strategy for managing Weaknesses is the reverse of what you might employ for your Strengths. Unless you can eliminate your Weaknesses (easier said than done) you will more than likely have to mitigate or minimise them. You want to reduce the importance of negative factors by de-emphasising them, thereby making the disadvantages appear smaller than they really are (by changing the perception of the disadvantage). We'll revisit the example we used in the Strengths section and imagine that your product or service presents a relatively large disadvantage against a competitor's product. Let's imagine that the financial disadvantage is $1,800 based on the upfront purchase price. That's pretty sizeable so it would most likely be quite a major buying objection. Of course, one of the core strategies would be to present a compelling and unique value proposition so that you would already have discounted the price premium to some degree in the customer's mind by demonstrating the additional value that your product provides. Let's imagine that even such a compelling offer is unable to fully overcome the financial disadvantage.

If we projected the $1,800 price premium across the likely lifespan of the product, which we previously established was 60 months, we could then argue that the premium would only be $30 per month. Even that still sounds like quite a chunky premium to pay, so why don't we go all the way and suggest that the premium is only a dollar per day. After all, what can you buy for a dollar! There's no guarantee that this minimising strategy will knock them dead and win every sale, but combined with a compelling (and valued) unique offering, you give yourself a fighting chance.

The Stewart Dawsons retail jewellery chain has applied this price-perception strategy. They typically present three versions of price on their price tags; outright purchase price, weekly repayment and daily repayment. For example, a diamond ring costing $5,000 has a daily repayment of around $4.50. Now that certainly sounds a lot more affordable than $5,000! I do however think they could extend the effectiveness of this strategy by making a direct comparison against other products that could be bought with $4.50 per day. They could easily compare a cup of coffee that typically sells for around $4.50 against the daily cost of the ring, which now appears to be similar. The decision to spend up large on a diamond ring is thereby shifted into a completely different set of decision parameters, and the anxiety of such a major purchase is substantially reduced (and becomes more justifiable).

Carpe diem and make the most of your Opportunities

It's unrealistic to assume that your business and hence your brand strategy will function in a commercial vacuum. As explained earlier, Opportunities and Threats are certainly an important element in your overall strategic business planning and I certainly recommend you spend quality time addressing them. For the purposes of developing your brand strategy, identifying any potential market Opportunities may possibly encourage you to develop and launch a new product, or to take advantage of special circumstances that provide a good opportunity to conduct an advertising campaign. Perhaps an unexpected opportunity may arise to outshine your competitor. Whatever the circumstances, if you don't have your brand strategy in place, any attempt to take advantage of Opportunities will be diluted.

> Is your product earthquake proof?   
> 
> 
> After the devastation of the 2011 earthquakes in Christchurch, New Zealand, where most of the city was destroyed, a unique marketing opportunity presented itself. Some of the homes in the city had been constructed using clay roof tiles, others were built with lightweight pressed-steel tiles. The manufacturer of pressed-steel roof tiles seized the opportunity and ran an advertising campaign showing an elephant sitting on the roof of a house. The basis of the messaging was asking whether you would like to have the weight of an elephant sitting on your roof? This really resonated with homeowners, even with those who lived outside the Christchurch region and had seen the devastation on TV. 
> 
> The reality of this cheeky advertising campaign was that not a single roof, clay or steel, had actually collapsed and injured anyone, despite the severity of the quakes that peaked at 6.3 on the Richter scale. Even though there was no difference in the relative safety records between clay and steel roofs, sales of clay roof tiles faltered badly, whilst pressed steel roofing sales took off like a rocket. Not only did the quake offer a great short-term sales opportunity, but a strong perception was also created that clay roofing is akin to having an elephant on your roof. I expect this will take a very long time for clay tile manufacturers to overcome, if they ever do. Brand value lives in the minds of the customer and not just in facts, which will make it very difficult to change this negative perception.

Don't threaten me!

As we saw in the Christchurch roof tile example, what was a great opportunity for pressed-steel roofing manufacturers became a major threat to the clay tile manufacturers, who seemed powerless in countering the aggression of their rivals. With the nature of Threats being macro and outside our control, there is little you can do to change these problems other than to try and work through each threat as best you can. Keeping your eyes and ears open is an important way to identify Threats as they appear on the horizon. If you have advance notice you can at least put in your best effort to minimise the downside, and perhaps even find a silver lining in the cloud, turning the Threat into an Opportunity. Unfortunately the clay tile manufacturers had no effective response ready to counter the Threat and just took it on the chin. Ouch!

Brainstorm now, analyse later

I like to document Strengths and Weaknesses (and Opportunities and Threats if you so wish) early on in the planning process so that you can return to them at a later stage to see how the strategy you're developing aligns with and supports these important factors. It's of no value to rush off and create a theoretically good strategy that doesn't take account of your strengths and weaknesses.

During the initial SWOT analysis I don't immediately detail strategies to deal with these aspects, as is common practice. I prefer to leave them simply as brainstormed ideas and flesh them out once the strategy has been completed in draft form. Remember, developing a brand strategy is an iterative process and you'll need to review and revisit aspects during the course of planning in order to ensure that all elements are completely in sync.

Marketing Takeaways

  * Strengths and Weaknesses address internal or micro-issues within your control, i.e. you can exert influence on them. 
  * Opportunities and Threats are external macro-factors that are outside your control. You can't influence them but you can react to them and plan accordingly.
  * Strengths—emphasise or magnify the benefits and unique advantages in order to create a perception that the benefit is greater than it actually is. 
  * Weaknesses—reduce the importance of negative factors by de-emphasising them, thereby making the disadvantages appear smaller than they really are.
  * You should document Strengths and Weaknesses early in the planning process. Leave them as brainstormed ideas and further develop them once your draft strategy has been completed.

Chapter 5

BUILDING AN EFFECTIVE   
ORGANISATION

"Culture drives great results."

Jack Welch—former CEO, General Electric

BUILDING AN EFFECTIVE ORGANISATION

The brand is not only about products or services

As we read in an earlier chapter, brand strategy threads itself through the entire organisation. Great brands create an authentic (and positively memorable) brand experience from within the organisation, right through to the end customer. This is the result of consciously building a culture within the organisation that's aligned to the brand promise and one that constantly reinforces it. Everyone in the organisation, from the CEO down through all employee levels, should be aware of, believe in and share the common purpose in order to become fervent (and compelling) brand champions. It provides the critical direction and inspiration that motivates the team to be passionate and committed enough to achieve the Big Hairy Audacious Goal through all the challenges and potential adversities. US retail giant, Whole Foods, understands this only too well. Their internal brand philosophy says, "Happy, enthusiastic employees satisfy customers, who produce the sales and profits that drive the stock price, which rewards shareholders".

Teamwork works

Babe Ruth, the famous baseball star, made a good point about the importance of every individual team member when he said, "The way a team plays as a whole determines its success. You may have the greatest bunch of individual stars in the world, but if they don't play together, the club won't be worth a dime".

Your internal organisation is not exempt from the concepts of Need Satisfaction MarketingTM. Just as customers have needs, so do the people you employ. The context may be different, but they are just as likely to have unmet personal needs. It's not possible to separate the needs of your people within their professional careers and jobs from their personal needs. Whilst it's not the company's responsibility to satisfy all their needs, there are some very fundamental ones that are within the bounds of what businesses can positively influence, and to some degree, satisfy. In order to achieve this we make use of an Organisational Brand DNA. Its purpose is to capture the key elements of an organisational brand through a set of clearly defined statements that can easily be used to guide and measure what you do as a company and as a brand.

I use a simplified, single-page tool called the Brand DNA Canvas to map out a set of brand statements that form the entire core (DNA) of your organisation. It's more effective to distil your thoughts and ideas into a single page than to write pages and pages of expansive prose that no one ever refers to or actually uses at a practical level. Once completed, you should be able to overlay your Brand DNA onto any action, initiative or customer/brand interaction to ensure authenticity and alignment with your strategy.

Developing the Organisational Brand DNA sounds great in theory, but there are potential problems that prevent companies from building great brands from within. Some of the more common ones are as follows:

  * The senior management team is not genuinely focused on building a brand. As a result there's no time, resource or financial commitment given to creating or celebrating internal brand excellence.
  * Organisations are often fragmented across departments, with staff exclusively focused on their own functional areas.
  * Staff, especially those who have worked in the business for a long time can be resistant to change, making the introduction of new initiatives a major challenge.
  * The organisation's methodologies, systems and processes don't align with or support the brand promise.
  * There's no distinctive or engaging brand story for staff to resonate with.

A key benefit of developing an Organisational Brand DNA is that it helps to create an environment where all members of the group can contribute to the best of their ability towards building a truly powerful brand. For a brand implementation to be genuinely successful, it must be embraced by everyone in the organisation and extended to the stakeholders, brand champions, advocates and customers. Broadly speaking, the Organisational Brand DNA...

  * Defines how you think and act as a business.
  * Emotionally connects everyone to the organisation, including staff, stakeholders and customers.
  * Provides clear direction and priorities for staff and the business in general.

  * Enables all team members to understand how they can contribute to the overall objectives of the company.
  * Drives an authentic customer brand experience that emanates from within the company.

The key components of the Organisational Brand DNA are presented and determined in the context of the company, and don't reflect the Brand DNA of any one single person (despite the frequent use of the term 'you' and 'your'). There are six main components:

  * Purpose Statement—what drives you
  * Brand Promise—why customers love you
  * Culture—who you are, comprising:
  * Beliefs—your worldviews
  * Values—what you stand for
  * BHAG—Big Hairy Audacious Goal (what you want to achieve)
  * Major Challenges—what's in the way of achieving your BHAG
  * Strategic Focus—how you'll get there

Fig 5.1 presents the format and logical structure of the Organisational Brand DNA Canvas. You need to be honest with yourself and capture the basic tenets of what you stand for as an organisation and what gets you out of bed each day. Don't worry about trying to make your Brand DNA sound corporate or fancy—it's designed to be a practical tool that everyone in your company can read, understand and implement (and maybe even print out and stick on the office wall as a constant reminder).

Fig 5.1—The Organisational Brand DNA Canvas

All for one and one for all

You may wonder how, within the structure of the Brand DNA, we account for differences between, on the one hand a company and its product brand which are one and the same (for example Starbucks and Avis), and on the other hand a company with multiple unique brands, for example Proctor & Gamble or General Motors. In the single-product brand company, the organisational and product brands are fundamentally the same and would share the same Brand DNA. In the case of companies like General Motors that have multiple unique product brands, the organisational brand is treated as an overarching brand that transcends individual product brands. In this context, the Organisational Brand DNA primarily deals with the internal performance of the company, whereas a Product Brand DNA primarily deals with the customer-facing performance of the product brand.

By aligning the organisational and product Brand DNA in multi-brand companies, the overall market performance becomes more consistent and authentic, and will perform better at all levels. The following pages relate to the development of the Organisational Brand DNA, but you can very easily use the same canvas model to develop a Brand DNA for each of your top-level product brands. Fig 5.2 illustrates the difference in Brand DNA structure between Starbucks (single brand) and General Motors (multi-brand).

Fig 5.2—Brand DNA structures are different for single and multi-brand companies

Many smaller businesses tend to dismiss this type of structured planning as theoretical stuff that only corporates do. The reason corporates do it is because the larger an organisation becomes, the less direct influence the founder or key executive can exert in terms of driving a particular organisational brand in a preferred direction. By following a well-defined Brand DNA, everyone shares the same clear directives, no matter the size of the company. The Brand DNA model has wide applicability and is just as effective as a corporate brand development tool as it is for even the smallest of micro-businesses.

Purpose statement

I personally don't like mission and vision statements. Through many years of being exposed to them I have found them almost universally to be similarly clichéd, generic and meaningless pieces of drivel. In my less enlightened corporate days I was press-ganged into writing them, much to my embarrassment today. In my defence, I was an enthusiastic young manager with big corporate ambitions at the time. These statements typically say that your vision/mission is to become a market leader, to be the preferred supplier, to ensure the customer is at the centre of everything you do, to strive for perfection, deliver quality first time, blah, blah, blah. They generally say nothing about what gets you and your team out of bed in the morning and what you can actually do each day to make your brand the one that your customers will love, cherish and obey.

The Purpose statement asks the question,"What drives your brand and your organisation?" It makes your staff and customers want to 'believe and belong' because it provides a sense of recognition, importance and meaning in their lives in some context or another.It defines the very reason for your collective existence and captures the big picture of what you're trying to achieve. This Purpose may be the single most important statement that your organisation constructs.

As an example, my Purpose statement for this book is—To help smaller businesses become better marketers in order to increase sales and improve bottom line profits. Nothing too fancy, just a clear statement of what I'm trying to achieve. Following on from my purpose statement is how I expect to achieve this—...by demystifying marketing through this pragmatic and practical resource.

Brand promise

Your Brand Promise is essentially the embodiment of your unique value proposition. Developing your unique value proposition is addressed in detail in later chapters, so don't stress about it at this stage. What I want you to keep in mind when we get to the stage of developing your unique value proposition is that it must relate to the organisational Purpose. Alignment between your external brand promise and your internal organisational DNA is essential if you want to build an authentic brand that performs well in the market. In addition, it's critical that you openly share your brand promise with your entire team so that everyone is 'singing from the same song sheet' and presenting a consistent message to your customers.

Culture

Your culture is a collection of your Beliefs and Values and describes who you are as an organisation. Through your beliefs and values, your overarching organisational brand takes on its own distinct personality.

Beliefs

At this stage you will need to think about your brand as a living, breathing entity in order for the Brand DNA to make sense. Beliefs reflect your worldview; how as brand owners you interpret the world around you. This influences how you plan for and structure your business. At a market level your customers don't necessarily see the face of every individual working in your company, but rather they see an amorphous brand that embodies everyone in the company. Beliefs or worldviews are not the sort of things you artificially conjure up in order to impress someone. They are deep-seated views that have developed over time and reflect the authentic state of your 'brand mind'. If you try to artificially manipulate these views, you then introduce a degree of tension that will ultimately erode the integrity of your brand. The customer will almost certainly realise in due course that your brand isn't authentic.

One of my professional brand beliefs is—'Deep customer insight is the cornerstone of good marketing'. Other examples of beliefs or worldviews might be:

  * There is beauty in simplicity
  * Strategy always precedes tactics
  * There is always a better way to do things
  * Business has a responsibility to society
  * The customer isn't always right but we always treat him or her with respect

Values

Whereas beliefs are formulated statements of your worldviews, values are typically a list of words or succinct statements that immediately describe what your brand stands for. Values differ from beliefs in as much as they influence your decisions and offer insights into how you're likely to behave in a variety of situations and circumstances. When you draft your list of values don't be put off if they sound generic or obvious. The important thing is to define the ones that truly reflect your brand or how you want it to be experienced.

Values could already exist or they could be aspirational. There's nothing wrong with working towards a particular value if it will improve your brand. In this case the key is to ensure that everyone in your organisation is aware that the brand is trying to shift towards a new place and that they're all committed to taking it there.

Some of the values you might aspire to could be: integrity in all dealings, fairness, strategic thinking, visionary, accountable, customer-centric and a raft of others. One of the most valuable and important attributes of values is that everything that you do as an organisation or brand should be measured against them for alignment and congruency. It's easy to make a list of values but infinitely harder to live by them!

BHAG (Big Hairy Audacious Goal)

This is the BIG ONE and details your aspirations at a very high level. Don't be afraid to think big or dream. Even if your goal is outrageously big and you only get part way there, you'll probably have achieved more than you ordinarily would have.

When Arnold Schwarzenegger first arrived in America and burst onto the bodybuilding scene, his mentor advised him to use his money to open a gym so that he'd have something to fall back on after his glory days of bodybuilding were over. Arnie was adamant that he didn't want to simply run a gym, but was going to be a movie star and ultimately the President of the USA, even though he could hardly speak English at the time! Nonetheless, his BHAG has almost eventuated in its entirety. The only thing left to do is challenge for the presidency. I wonder how far Arnie would have got if his BHAG had been to own a successful gym in Los Angeles? I'm sure that Arnie continues to stretch himself by reformulating his BHAG as he achieves each stage, just as you should with yours.

Major challenges

Nothing worthwhile is easy so don't expect a smooth road to achieving your BHAG. I love the opening statement in The Road Less Travelled by M. Scott Peck. He simply states, "Life is difficult". At no stage does he suggest that success is plain sailing, but the entire book illustrates how anything that is worthwhile and valued takes an enormous amount of conscious effort to achieve, overcoming many obstacles and challenges on the way.

Life doesn't show any special favour to brands either, so it's just as hard to create and build a great brand that is authentic and successful. There are likely to be a myriad of challenges in the way of achieving your BHAG, but I suggest you apply Pareto's 80/20 rule and restrict your focus to the top five or six at any one time. Beyond that you risk losing focus and may be less effective across all of them as a result. Of course you should review them each year so that you can identify any emerging challenges, or challenges you didn't have time to tackle previously.

One of my professional challenges is: To show clients the value of investing in strategic brand planning in order for their marketing programmes to be more successful. At this stage of the planning process I wouldn't get too involved in developing detailed strategies to overcome your challenges. Once we get to chapter 20, which deals with the implementation of your brand strategy, I'll provide you with a framework against which you can flesh out your major challenges by determining strategies and tactics to overcome them.

Strategic focus

It's easy to get caught up in business issues that suck up all your time and intellectual capacity. This may give you a comfortingly masochistic sense of putting in a good day's work, but the result is that you don't really achieve a great deal. Focus is the food of success. If you don't believe me just read any number of the self-development books that abound. At the top level you need a singular focus that will drive the achievement of your BHAG and provide support for your Purpose. This strategic focus broadly encompasses everything you're trying to achieve, and if applied will move you closer to your goal. When things get hectic and it feels like you're being pulled in every direction, you can and should refer to your Brand DNA for strategic direction and a healthy dose of re-focus.

> Playing one shot at a time
> 
> In my younger years I played a lot of golf and was pretty fixated on it, bordering on obsessive! I managed to get my handicap down to two, which took an enormous amount of work and effort. The problem is that when you only have two shots to play with in an entire round, it's very hard not to notice if you've made more than a couple of bogeys and dropped more shots than your handicap affords. I struggled so much with this mental barrier that it had the nasty habit of spoiling a decent round of golf, as a result of my focus on the score and how many shots I had available. I recall playing a round with my late father where I dropped two shots in succession in the first two holes. Standing on the 3rd tee with no more shots in hand, I thought of the next sixteen holes and wondered what the point of carrying on was. However, it was a stunning summer day and I was enjoying spending time with Dad. 
> 
> At that moment I decided to stop counting the shots I'd played and leave it for Dad to keep count and mark the card. Instead I decided to simply enjoy the act of hitting the golf ball. As I holed my final putt Dad congratulated me on shooting 74, only two over par! Despite having used up my available shots by the second hole I still managed a great score. And on top of it I really enjoyed the game and the pleasure of hitting one good shot after the other. This round of golf had a profoundly important effect on me. From that day forward I tried to direct my focus towards playing one shot at a time, believing that if I executed each shot to the best of my ability, I would end up with a good score. It wasn't always that simple, mind you, and many times my emotion challenged my logic. But when I managed to focus on each shot I always played well and had fun. So in my personal Brand DNA, my strategic focus for everything I do is to try and play one shot at a time.

Sharing the dream

"Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion."   
Jack Welch—former CEO, General Electric

Whilst Jack uses the term vision, I think it's reasonable to use a bit of strategic licence and interpret that to mean the same as Purpose. I believe that sharing the Purpose and overall Brand DNA with your team is essential, but involving them in its creation is just as important. Few of us enjoy being told what to do, so involving as wide a group as is practical in the initial planning steps will create 'buy-in' and improve the likelihood of effective implementation. Depending on the size of your company and the levels of management, it may only be practical to involve your department heads or supervisors in the planning activities, but in all cases a representative of the team is vital.

The Brand DNA is not designed to be crafted then filed away until the next year, but rather to be a living, breathing document that you refer to constantly. I'd suggest you print it out as an A3 or larger document and stick it on your office wall. I'd go so far as to stick copies onto the walls of every department in your company as a reminder to your entire team of what they should be working towards. This laser-like focus will help clarify priorities and establish a common direction for everyone to follow.

Marketing Takeaways

  * Great brands create an authentic and memorable brand experience from within the organisation right through to the customer. 
  * The Organisational Brand DNA is a set of statements that guide and measure what you do as a company and as a brand. It helps to create an environment where everyone can contribute towards building a powerful brand. 
  * The Purpose statement asks the question, "What drives your brand and your organisation?"
  * Brand Promise is the embodiment of your unique value proposition.
  * Culture is a collection of Beliefs and Values.
  * Beliefs are deep-seated worldviews that reflect the true state of your 'brand mind'.
  * Values describe what your brand stands for.
  * Don't be afraid to think big or dream.
  * Restrict your focus to the top five or six challenges at any one time.
  * Stick copies of your Brand DNA onto the walls of every department as a reminder of what everyone is working towards.

Chapter 6

WHO ARE YOU MARKETING TO?

"I don't know the key to success, but the key to failure is trying to please everybody."

Bill Cosby—entertainer and successful entrepreneur

WHO ARE YOU MARKETING TO?

Identifying and clearly describing your target market is one of the most important steps in the development of your brand strategy. But just who is this amorphous group you call your target market? What do they think? What is their buying behaviour? What are their interests, likes and dislikes? Where do they hang out?

A common failing of smaller, less sophisticated businesses is to try and target a market that is simply too large and too hard to reach cost-effectively. Perhaps they feel that by throwing a lot of mud on the wall, at least some of it will stick. Whilst it may feel comforting to try and sell to a large market, it's not an effective marketing strategy. At first glance it may seem counter-intuitive to reduce your target market to a pinhead, but it gives you a very clearly defined target to aim for. Once you've mastered your niche market and are throwing bulls-eyes every time, you can start to look for market expansion.

Bigger isn't always better

An interesting dynamic I observed during my time as a sales manager in the office automation industry was that when a salesperson was given an unrestricted geographic sales territory, he didn't necessarily perform any better than another salesperson who was restricted to a small territory. In fact, quite often the one with the restricted area would outperform the one with the unrestricted area. This may appear to be slightly illogical; however, in practice the salesperson with the restricted area tended to work through it in a methodical and thorough manner, getting to know every last corner, who the customers were and when competitive units were due for replacement; this salesperson was aware of every sales opportunity as a function of necessity.

On the other hand, salespeople with unrestricted areas tended to become overwhelmed with the unlimited opportunities and struggled to focus on any particular area or business segment. They ran around like headless chickens, never really making any meaningful impact on any parts of their territory. Ultimately their lack of focus and their failure to develop deeper insight into their territory and upcoming sales opportunities took their toll and were reflected in the average sales results they turned in. For the record, I've been involved in both situations and as a result have become a big fan of Focus For Results.

Defining your target market

The traditional way of defining a target market was to consider demographic data as a means of identifying and segmenting it. But today's consumer is a complex being and doesn't necessarily fit into these neatly defined boxes. Sophisticated marketers realise they need to also appeal to the emotional and personal interests of buyers, a practice collectively known as psychographics (or behavioural profiling). In addition, there's an emerging new category called socialgraphics, which enables you to understand the specific online behaviours of your target group.

Creating customer personas and archetypes

A practical and useful categorising method used extensively in B2C (Business to Consumer) marketing is to describe your typical target customer in the form of a persona or archetype. The use of personas and archetypes has become increasingly popular as a method of breathing life into otherwise hypothetical customers, and enables simulation and modelling of their typical behaviour and buying habits. You can describe who these people are, how they behave, what they enjoy doing, their dislikes, where they hang out, what they read, their worldviews, opinions on important issues as well as demographic facts and more. In consumer marketing it's quite common to develop several customer personas or archetypes that represent the various segments of the target market. Personas and archetypes typically have less relevance in B2B (Business to Business) marketing; however it is possible and practically useful to develop business archetypes that represent your typical business customer.

Demographics

Demographics are commonly used to segment consumer groups for B2C brands, and usually include age, gender, life stage, education and income. In the context of B2B brands they can include industry type and life-cycle stage, sales revenue, ownership structure, staff numbers, geographic location, existing or new customer for example. It's not uncommon to combine several variables when you define a demographic profile. This may be necessary in order to provide enough information about the typical member of this group to create your customer personas. The demographic profile is then used to determine whom the marketing and advertising activities should be targeted at, and how best to reach them in order to achieve maximum results. Therefore careful attention must be given to matching the demographic profile of the promotional medium you're using to that of your target market.

Psychographics and behavioural profiling

Psychographics deals with attitudes and behavioural factors and is mostly relevant to B2C consumer brands. It asks what defining characteristics are present that provide you with an understanding of your customers' situations, their needs, the way they process information and how they're likely to react to marketing appeals.

Some of the more typical segmentation variables are social class, lifestyle, personality, opinions, interests, hobbies, benefits sought, occasions and degree of loyalty. Within each of these top-level variables can be a number of more granular sub-segments that enable marketers to tightly home in on their target. You can use this method to build depth and colour into your target market personas.

Socialgraphics

Social media adoption by consumers in particular is no longer nascent. It has matured to the stage that it's most definitely considered to be a mainstream channel within the marketing mix. Socialgraphics is an updated framework of the traditional market segmentation model, but it takes into consideration the online habits and behaviours of customers. Whilst some of the well-known profiling factors are still valid for online strategy, it's essential to consider the emerging socialgraphic factors.

To be effective in your social strategy you need to know and understand the specific online behaviours of your target market. There's a degree of existing data that can be used upfront to determine an expected pattern of engagement, but owing to the nature of social networks much of your learning will come through participation and observation. This will require ongoing analysis, adjustment and re-evaluation of your online strategy in order to maximise its performance and ROI (Return on Investment).

Socialgraphics asks the following questions...

  * Where do your customers hang out online?
  * What are their online social behaviours?
  * What social information or people do your customers rely on?
  * What is your brand's social influence? 
  * How do your customers use social technologies in the context of your offering?

Geographics

This simply defines the geographic areas that you might operate in and has a direct bearing on the planning of promotional activities and distribution strategy. For the most part this categorisation relates more closely to the logistics of reaching your market.

The underlying premise behind identifying your target markets is to gather as much information as you possibly can about them in order to understand them more completely, and hence be more fully prepared to satisfy their needs better than your competitor can. Being armed with clear insights and factual knowledge about the customers you want to sell to will enable you to maximise the return on your marketing efforts and deliver the best possible sales performance.

Marketing Takeaways

  * Identifying and describing your target market is one of the most important steps in developing your brand strategy.
  * Create personas and archetypes that describe your typical customer.
  * Selling to a large market is not necessarily an effective marketing strategy. Master a niche before expanding.
  * Today's customer is a complex being; gather as much information about him as you possibly can in order to gain a deep understanding.
  * Match the profile of your customer to the demographic profile of the promotional medium.
  * Know and understand the online behaviours of your target customer.

Chapter 7

HOW YOUR CUSTOMERS   
MAKE DECISIONS

"Most of the decisions you make aren't based on conscious reasoning."

Alex Pouget—Associate Professor of Brain and Cognitive Sciences, University of Rochester

HOW YOUR CUSTOMERS MAKE DECISIONS

One of the aspects that make big brands successful is their intimate understanding of how customers make buying decisions at the conscious and unconscious level. This is one of the gaping chasms between big brand and small business marketing.

Decision-making has become an increasingly important area of research in the field of cognitive neuroscience and numerous sophisticated models have been developed as a result. Over the past few years these findings have infiltrated the world of marketing, and we now have greater insight than ever before into the mechanisms at work when our customers make buying decisions. This is the new frontier for improving marketing performance and there's no reason why smaller business can't make effective use of the findings and fresh insights that this research has uncovered. Let's start by taking a look at the widely accepted decision-making model. Fig 7.1 shows it as a simplified linear process.

Fig 7.1—The stages in the decision-making process

Whilst the decision-making model forces marketers to consider the entire buying process through to post-sale, not every buying decision necessarily follows the full process. Depending on the complexity, emotional importance, inherent risk or regularity of the decision, customers may follow the process differently in certain cases.

Understanding how and why customers make the decisions they do enables us to be more effective at satisfying their true needs. Broadly speaking, our thought processes operate on two levels:

  1. Conscious or cognitive thinking
  2. Unconscious thinking

The two levels can be likened to a tree; above the ground in full public view you see the leaves and branches but not the roots (unless you dig deep into the ground to uncover them). The leaves and branches are like your conscious mind, from which we can easily identify what tree it is and a number of other known facts about it. At the visible level there are few mysteries.

The roots are where the secrets of the tree lie. We know they're there but it's not easy to gain access to them or to understand exactly how they function. The deeper we go, the more difficult it is to see the roots and the mysteries they hold. The fact is that the roots feed the leaves and branches that we do see, and no matter how much we might like to ignore them, they fundamentally influence the well-being and existence of the visible parts. This is exactly how our unconscious mind functions.

Our unconscious mind has several levels. At the shallowest level we can quite easily access thoughts and emotions from recent events. As we move deeper into our unconscious mind we find concepts, beliefs and values that may have been formed a long time before and may not have even had any strong conscious connections as they were formed. For example, when you were a child your teacher may have commented that you were not particularly good at creative problem-solving. At the time it would probably have gone unnoticed, but that concept may have been stored away permanently in your unconscious mind. As an adult, when you're faced with a task or problem that requires creativity, you may believe for some unknown reason that you're not creative and will be ineffective in creative problem-solving situations. This belief may have no substance and you could indeed have the necessary ability for creative thinking. However, somewhere inside your mind you're led to believe you're not creative, so that's how you behave.

Conscious and unconscious thought processes operate in different areas of the brain and don't necessarily work harmoniously in tandem. Although we may believe or convince ourselves at the conscious level that a decision we're about to make is based on logic, it isn't necessarily so. Neuroscientists have shown that the conscious mind provides less than 5% of our cognitive or thinking activity, and that most of our decisions, actions, emotions and behaviour depend on the 95% of brain activity that is beyond our conscious awareness, because it takes place in our unconscious mind.

At the conscious cognitive level we're aware of and in control of our thoughts. This is where rational thinking and decision-making takes place as we compare product attributes and functional benefits and attach relative value to each of them.

Our unconscious thinking takes place without our even knowing. In fact it's activated milliseconds before our conscious mind kicks in. Whilst our conscious mind is working hard on making logical choices, our unconscious is beavering away at trying to reconcile our logical thinking with our stored beliefs, values and experiences, and not necessarily sharing the information. Our brain makes immediate and unconscious connections between these deep-seated, and often emotionally-embedded thoughts, and the information that our conscious mind is being presented with. Our brains have been pre-programmed through evolution with simple decision-making rules that are inherent in all human minds. This pre-defined pattern of thinking is known as heuristics, and is a reliable predictor of how we're likely to think and make decisions in certain situations.

Our innate ability to take mental short cuts and make connections between disparate pieces of information is a critical aspect of ensuring that we can function and indeed survive. Without this amazing mechanism we would have to rationalise every decision that we're faced with, from the simplest task to life-threatening situations. Life would be unbearably complex and demanding!

Let's look at how heuristics operate at the most basic of human levels. When we hear a loud noise it gives us a fright and engages our fight or flight response, the same effect that a lion's roar had on early man. Can you imagine what would have happened if that prehistoric fellow had to rationalise the lion's roar and then carefully work out his escape plan! No, his deep unconscious immediately recognised danger and instantly made critical connections that told the muscles in his legs to run like crazy, milliseconds before he'd even realised what was happening.

Modern man hasn't lost the capacity for unconscious thought, and it plays fiddle with every decision we make. This is how we account for unexplained phenomena such as gut feel, instinct and intuition. There are a number of defined heuristic patterns that have relevance to marketers:

Price heuristic—Customers (and consumers in particular) are more likely to judge higher-priced products as having higher quality than lower-priced products. Of course it's not hard to see how luxury brands have made spectacular use of this concept.

Representative heuristic—If two things are presented to customers, they are most likely to choose the one they recognise most. Without actively promoting and advertising your product and brand, you can't expect customers to buy from you when their natural predisposition works against you? Our exposure (and unconscious attachment) to recent brand messaging has a direct influence on our decision-making at this level.

Availability heuristic—People are inclined to attach more importance to information that is most easily retrieved, when making a decision. Again, without regular and recent exposure to your brand message your customer will have nothing to recall about your brand or product at decision time.

Affect heuristic—Judgements and decisions are directly guided by our feelings of liking and disliking, with little consideration for reasoning. This poses the question of how effective your brand will be at the point of purchase if your customer has a pre-determined view of it. The importance of positive brand consistency before, during and after the sale is important in order to take advantage of this naturally occurring thought pattern.

Some heuristic patterns are created through our experiences and others are deep-rooted inherited human behaviours. These patterns of belief strongly influence our decision-making. Our past personal experiences build up belief models in our unconscious mind over time, which are either enhanced or dissipated, depending on whether they're reinforced through repetitive exposure or experience.

Long-term exposure to marketing and brand messaging, as well as actual brand experiences eventually start to make their mark in our unconscious, which then influences our thinking one way or the other. This can often take place as a form of subliminal influence or suggestion, without our even recognising or realising it's happening. This is one of the underlying drivers behind the theory that it's essential to expose customers to your marketing message consistently over an extended period of time, and importantly, in a positive context.

Marketers take full advantage of the subliminal suggestive influence by making extensive use of movies for product placement. In fact, this is one of the primary promotional tools of the tobacco giants, who are banned from advertising in most markets. Seeing your favourite actor puffing away on a cigarette creates a positive unconscious connection with the act of smoking.

Marketers can also reach their customers through functionally unrelated but emotionally associated avenues. For example, a wine brand may target sophisticated consumers who also happen to enjoy the arts. The wine brand might choose to sponsor the symphony orchestra for several seasons. Although the brand will be associated with an activity unrelated to wine or drinking wine, through repetitive positive association, the brand builds a positive emotional connection with the target market that is likely to add to its desirability or preference at purchase time.

This emotional phenomenon is a function of our physiology and is caused through chemical functions within our brain, rather than through some conscious effort. Whenever we encounter an enjoyable situation, the pleasure chemical dopamine is released. With each subsequent positive and enjoyable experience our minds become accustomed to the dopamine rush, and in due course it begins to occur simply through association with the pleasurable activity. Eventually, we don't necessarily need to physically engage in the experience, but only need to think about it to enjoy the positive associations that have been built up over time. And so it is with brand interaction. Successful brands clearly understand how this works and ensure that the customer's brand experience is a consistently positive one.

Extended brand exposure thus enables the unconscious mind to develop an opinion of the brand based on whether it was experienced within a positive or negative context. At decision time, the unconscious mind either supports or argues against the decision being made by the conscious mind by drawing on the stored emotional context. This theory supports the notion that, to be a successful and powerful brand, every customer interaction must be positive so that it builds the brand perception at both the conscious and unconscious levels.

Once is never enough

One of the common mistakes smaller businesses make is to run a single advert in the local press, and if the phone doesn't ring off the hook right away they're inclined to pull the campaign and stop advertising. That's one of the novice mistakes that big successful brands never make. The rule of thumb is that an advert needs to be viewed at least three or more times before it starts to resonate with viewers, and even more exposure for it to achieve full effectiveness.

With the first few viewings customers will scan the advert without really paying much conscious attention to it, unless they're looking for or are specifically interested in the type of product you're offering. But, during repeated viewing over time the messages will be stored in their unconscious mind. The reader may not be consciously aware of them but they will certainly be an influence at decision-making time, as we discovered in the section about heuristics. In other words, if you can't get your message embedded into your customers' unconscious mind, and in a positive context, it will not be in a position to support their purchase decision. Even though we're not aware of these underlying mental processes, the unconscious mind continually influences our conscious decisions.

Unfortunately, not all the models and decisions our unconscious mind comes up with are correct. In many cases our wonderful short-cut mechanism can overlook important facts, leading to poor judgements and decisions. This propensity for errors is known as a decision bias and it can influence our buying decision in a positive or negative direction, depending on the connection our unconscious makes with the impending decision.

At a fundamental level, our unconscious mind determines whether a particular decision is good or bad, depending on the nature of our past experiences. If you have no preconceived beliefs about the decision at hand then your conscious mind can process and rationally evaluate features and resulting benefits and whether a possible decision will satisfy your needs. If your unconscious is in agreement, then you get to buy. If it isn't, you might then automatically engage in an internal debate as to why your conscious thinking supports the decision, yet you somehow have a nagging doubt that suggests you might be wrong. It's impossible to have no preconceived beliefs or values because from the time we're born we are constantly subjected to various situational, societal, cultural, interpersonal and even genetic influencing factors.

Let me illustrate this point further. When my eldest son was two years old he had a spate of mouth ulcers. During this time he ate some tomatoes, which understandably made his ulcers and mouth burn. Throughout his childhood and into adult life he never touched a tomato again. It's not that he consciously recalls the ulcer incident, in fact quite the reverse. As he grew up I tried to find out why he didn't eat tomatoes, to which he had no answer other than, "I just don't like them". Only when I recalled the tomato vs. ulcer incident did it even begin to make sense to him, although he still couldn't recall it happening. But for him, his unconscious mind gave out such strong signals that it overpowered any logical or conscious thoughts he might have towards tomatoes.

So what's the significance for marketers?

By understanding that decisions are made at both the conscious and unconscious levels, we can start to shape our brand strategy to reach into both parts of the mind and more effectively influence buying decisions in our favour. The ideal situation would be for a customer to rationalise the features and benefits on offer, believe that your product is truly unique and adds meaningful value, and to have their unconscious mind support the decision. A perfect recipe for strong sales and long-term brand success!

Generally speaking, the more significant or complex a decision (or the greater the potential risk involved), the more anxiety and emotional tension will arise in the decision process. This is when proof sources such as testimonial, awards, qualifications and ROI calculations, for example, become invaluable tools in convincing skeptical customers.

The reputation or image of a product brand or company held by a customer may have been developed a long time ago through any number of interactions or exposures, but it now sits invisibly in judgement. The importance of a unified and encompassing brand strategy is essential if you want to tap into both decision-making functions of the mind. Practically, you should be addressing immediate promotional and campaign activities as well as considering larger issues and how your brand can position itself positively at a higher and more emotional level. An example of a topic rightfully increasing its influence on the unconscious decision process is that of sustainability and environmental policy.

Companies and brands that are consistently seen to be acting responsibly over an extended period are more likely to develop a positive association within the unconscious mind than those brands that abuse the planet. At the unconscious level of brand development there's no short cut or quick fix. You can rapidly roll out a media campaign or public relations programme to influence conscious thinking within your market, but creating a deep and sincere connection to a brand takes time and sustained effort. Remember, the unconscious is a reservoir of past experiences (feelings, thoughts, beliefs and memories) that accumulate over time and that are outside our conscious awareness. This suggests that having a short-term brand strategy as well as a long-term one is critical. In many respects this brings us back to the Organisational Brand DNA where we created a long-term plan for the organisational brand, so critical in driving market success from within the company.

> Don't tell porkies!
> 
> Brands that succeed or fail on an emotional level will stick in our minds more strongly. There are many examples of this, but a high-profile case in New Zealand was where Ribena, the nutritional drink made from blackcurrants and allegedly packed with Vitamin C, was found by two high-school students to have no detectable Vitamin C at all! The company subsequently admitted to 15 charges of misleading advertising as a result. This revelation almost destroyed the brand and caused significant damage to its reputation.
> 
> Over time the Ribena brand may well manage to claw its way back into the market and the minds of consumers, but it's this sort of negative episode that creates a deep-seated distrust within the unconscious mind. This may only manifest itself when the consumer is faced with a buying decision between Ribena and a competing brand. Irrespective of how appealing the Ribena product and its value proposition might be, the instinctive feeling of distrust may continue to sway the buying decision in favour of their competitors.

Eeek...did I make the best decision?

After a purchase decision is made, customers commonly experience a variety of emotional reactions. Typically they will either feel some degree of anxiety about their decision or a great sense of satisfaction. The intensity of these feelings is influenced by a number of factors; for example, the amount of money spent, potential risks and how important the decision was to them. Anxiety is magnified when customers revisit the other available options and consider whether the alternative choice would have been preferable. This anxiety response is commonly known as buyer's remorse, (cognitive dissonance in technical terms). In the instance of buyer's remorse, the customer is not likely to repurchase immediately, but may well switch brands next time if the cause of the concern is not overcome.

To manage this critical post-purchase stage effectively, we need to reassure the customer that they've made the right decision and that the product will satisfy their needs in exactly the way they originally envisaged. This is more challenging in service industries where there is no tangible product, only a service promise.

The insurance industry manages this really well. Life insurance must surely be the most intangible product you could ever buy. You don't even get to experience it when you die! Once you sign the policy you're sent a big folder with tons of papers, brochures and other materials. This not only satisfies the practical need for you to have details of your policy, but it also provides you with a tangible representation of the intangible product. In the absence of a tangible product, after-sales service and support becomes a critical component in living up to your brand promise. This is an area where your Organisational Brand DNA will pay dividends.

Marketing Takeaways

  * Thought processes operate on two levels, conscious and unconscious thinking, but most decisions take place in our unconscious mind.
  * Pre-defined beliefs or heuristics influence buying decisions:
  * Price heuristic—customers believe higher-priced products have higher quality
  * Representative heuristic—if two things are presented to the customer, they are likely to choose the one they recognise most
  * Availability heuristic—people will retrieve information that is most readily available in making a decision
  * Affect heuristic—judgements and decisions are directly guided by feelings of liking and disliking, with little consideration for reasoning
  * Recent AND long-term brand messaging influences buying decisions.
  * Proof sources are invaluable for convincing skeptical customers.
  * Customers often experience buyer's remorse after a purchase. Reassure them that they've made the right decision.

Chapter 8

THE SECRET BEHIND   
SUCCESSFUL MARKETING

"The aim of marketing is to know and understand the customer so well that the product or service fits her and sells itself."

Peter Drucker—business and management guru

THE SECRET BEHIND SUCCESSFUL MARKETING

Am I buying for me or for you?

Consumer marketers use psychographic profiling as a means of understanding customers because they realise they're selling to people in their individual consumer capacities. But consumers also have jobs and many of them make buying decisions on behalf of their companies.

In a marketing context it's important to realise that most human beings are driven to a greater or lesser degree by the desire to reduce or remove pain, to improve their personal situation or to achieve some higher-level gratification. It's normal human behaviour to want a little more, to make our lives a bit easier and to get ahead. That's why we don't still live in caves! When we talk about 'pain', we don't specifically refer to the physical pain experienced when we get injured, but rather to a problem that we want resolved or perhaps avoided. It could also be an issue that is causing emotional discomfort.

You may have heard of the acronym, WiiFM. It's not a radio station, but rather it stands for What's in it For Me, which sums up our instinct for personal gain or pain eradication. As marketers we should have this concept at the forefront of our minds when we're thinking about delivering value to our customers. In addition, I'd like to throw in a new one, WiiFC—What's in it For the Company. This is an important distinction, as people who are buying on behalf of their companies have multiple and complex needs that they seek to satisfy.

In Fig 8.1 we see that buyers purchasing on behalf of their companies (B2B) have two independent levels of needs. At the FUNCTIONAL level they're interested in how the attributes of your product will satisfy the functional or operational needs of their company. These needs are seldom emotional, although there are times when emotional needs may come into play, as can be seen where the choice of a particular brand might enhance their company's image. At the EMOTIONAL level, buyers are looking out for themselves by satisfying one of their own personal needs. The caveat is where owners or operators purchase on behalf of their own companies. In this case their FUNCTIONAL needs are still related to the same operational benefits as we see in 'buying on behalf of', but their EMOTIONAL needs vary to a significant degree.

Conversely, consumers generally purchase for themselves, and all their needs relate to their personal requirements, which can of course be FUNCTIONAL or EMOTIONAL (or a combination of both).

Fig 8.1—There are fundamental differences in the way businesses and consumers make buying decisions

Outside of functional needs, which are simpler to satisfy, some of the typical latent and unspoken buying considerations in the minds of customers buying on behalf of their company (as opposed to buying on their own account) include:

  * Does it make my life easier?
  * Could the purchase put my job at risk?
  * Will it make me look good in front of my supervisor and peers?
  * Could it improve my chances of promotion or enhance my career?

Financial considerations in this instance are usually restricted to how they might impact positively or negatively on these personal needs. Ignoring these unspoken personal needs may find you losing business that was deemed to be a 'no brainer', leaving you scratching your head in dismay.

In addition to adding personal value, part of the corporate buyer's motivation is driven by fear. Back when IBM was the king of mainframe computing, it was a commonly held belief amongst corporate buyers that you would never lose your job if you bought an IBM, even if it failed to perform. Despite the numerous compelling disadvantages of buying IBM computers, such as being locked into proprietary software and paying a huge price premium over other equally capable brands, buyers still bought 'Big Blue' in droves. You see, the balance of risk (using an unproven brand) versus return (perceived safety in the IBM brand) was tipped in favour of personal 'security', for the reasons we've discussed earlier.

However, business owners making purchase decisions on their own account have a different set of FUNCTIONAL and EMOTIONAL needs to satisfy, for example:

  * Can I make more money as a result?
  * Could this decision lose me money?
  * Does this improve the way my company operates?
  * How will this decision impact on my company or brand reputation?
  * Does it make my life easier or free me up?
  * Will the purchase support or conflict with my personal beliefs and values?

So why is it that we so often forget to appeal to the human and emotional needs of our commercial and industrial buyers? Instead, we try to bombard them with long lists of technical product features and a million reasons why our product is better than our competitors', forgetting to appreciate and satisfy their personal decision-making criteria and differences in personality type. It can be a fine balance between trying to satisfy functional needs along with the deft touch of appealing to their personal needs. In the world of corporate buying, simply satisfying a functional need is no guarantee of a sale. You have to also satisfy the personal emotional needs of the company representative making the buying decision.

Many of the needs described above are not necessarily suitable for direct validation through research. Can you imagine asking a research respondent if buying your product will enhance his career prospects! Suffice to say that you can count on the fact that these needs do exist in the real world and that they have to be considered (and mitigated or satisfied) by your offer.

A technology start-up venture that I consulted with found this out the hard way. They had been in extensive discussions with a major fast food chain to implement a technology solution that offered tremendous brand building potential through social media integration and consumer engagement. They had worked closely with the chain executives on the value proposition and potential benefits, which were quite outstanding. The one issue that they just couldn't overcome was a small possibility that a disgruntled consumer might use their social media platform to discredit the brand. Unfortunately my client had no way to mitigate the possibility of this happening or prevent it at the technology level. The fast food executives feared that if this did happen, their jobs would most certainly be in jeopardy! Ultimately, despite a powerful product offering and compelling value proposition, the obstacle in the way of satisfying the customer's need was immovable and the potential deal fell over.

What customer need does your product satisfy?

If you don't clearly understand the need or problem your customer has, how can you provide an effective solution? Many companies, whether start-ups or those developing and launching new products or services, have difficulty defining exactly what market problem or underlying need their product will address. Too often it's something that the entrepreneur or business owner sees as a need, and in most cases they're unlikely to have validated whether their target market agrees with them. Additionally, even if customers do care about satisfying their needs or solving the problem, are they willing to spend the amount of money you're asking them to pay to make it go away?

You must understand at the most basic level what need your product satisfies and clearly define it. Does a car manufacturer satisfy the need for transport, personal prestige or the need for association? Depending on the price range, various brands and models may exclusively satisfy only one of these needs, or they might satisfy several of them. For example, an economy model such as a Toyota hatch may simply be a form of transport for a student, whilst a Mercedes may represent a symbol of success and prestige for a business manager or owner. For yet another driver, a Porsche may represent the desire to belong to an exclusive group of motorsport enthusiasts that treasure the German marque's proud racing heritage. Before you can fully explore and validate the needs of your customers, you need to define exactly what problem your product actually solves or need it satisfies. Through research and validation you can then test your theory and make changes if necessary.

Uncovering and satisfying customer needs is the underlying theory behind Need Satisfaction MarketingTM.

One of the most critical elements of brand strategy is to fully understand your customers and discover their needs. These are the reasons why they buy, and unless you can satisfy these needs with attributes of your product or service, you won't get the sale. You have to ask yourself the question, "What's most important to my customers when they're buying what I'm selling?" Needs can be functional or emotional, or a combination of both. The thing to bear in mind is that both are equally important.

There are two universal marketing truths at the core of Need Satisfaction MarketingTM:

  1. People buy, companies don't
  2. Customers must have UNMET needs to trigger a purchase decision

> It all began a long time ago
> 
> Back in the early 1980s, my first real job was as a junior sales consultant with Xerox. In those early days Xerox had a very robust sales training programme and all new recruits spent three full weeks in the classroom at head office. 
> 
> Xerox had developed some spectacularly effective sales training materials. The core sales course was titled Professional Selling Skills, or PSS as we referred to it in the acronym-crazy world of Xerox. At the very heart of PSS was a concept known as need satisfaction selling. Basically, it revolved around understanding the needs of the prospect and satisfying these with some of the unique and valued attributes of our Xerox products. 
> 
> I can safely say that the sales capabilities and market success that Xerox was highly respected for back in those days can be directly attributed to need satisfaction selling. In fact our sales staff were so revered in the industry that we regularly received unsolicited job offers, even though the companies head-hunting us hadn't the foggiest idea who we were or what our capabilities were. 
> 
> When you're peddling products that cost upwards of 40% more and service charges that were at times double that of the competition, you'd better have some serious sales tricks unless you want to eat dry crackers every month. Need satisfaction selling was just that competitive edge. It enabled us to overcome or at least mitigate the apparent disadvantage of our higher price and helped us to sell truckloads of Xerox machines, even during the market crash of the late 80s and through other economic downturns. So committed and believing was I towards need satisfaction selling that it became the core of my marketing beliefs and practices. It's never let me down in sales or marketing, nor has it failed any of my clients.

Understanding the psychology behind human needs

Let's start digging a little deeper to understand exactly what it is that motivates people to buy. To simplify, let's assume that all buying decisions are driven by Maslow's Hierarchy of Needs. There are other models describing the basis of human needs and one could argue their individual merits and demerits. As a marketer I look for models that give me practical and effective ways of understanding why and how people make decisions. I believe that Maslow's Hierarchy provides such a model. It's logical, easy to comprehend and has proven itself to be very accurate and effective in my experience as a need satisfaction marketer.

Maslow's Hierarchy of Needs was proposed by Abraham Maslow in his 1943 paper, A Theory of Human Motivation. Maslow used the terms Physiological, Safety, Social, Esteem, and Self-Actualisation to describe the pattern of needs that human motivations generally move through.

The hierarchy is generally portrayed as a pyramid with the largest and most fundamental level of need at the bottom (Physiological) and the loftiest need for Self-Actualisation at the top (see Fig 8.2). Maslow's theory suggests that the most basic level of needs must be met before the individual will strongly desire (or be motivated towards) the next level of higher needs.

Fig 8.2—Maslow's Hierarchy of Needs

Whilst Maslow's Hierarchy is represented as a pyramid with linear relationships between levels or stages, our brains don't necessarily function that way. The human mind is indeed a complex mechanism and doesn't operate in a linear fashion. It has multiple parallel processes running at the same time. As a result, several levels of motivation within Maslow's hierarchy can be activated simultaneously. However, what I do like about Maslow's theory is that it addresses the complex relationship between functional and emotional needs and places it in a context or model that we can all understand and make practical use of.

In the quest for more effective brand marketing, you should strive to address multiple levels of human needs in your value proposition wherever possible. Ideally you want your brand to appeal to customers in a way that satisfies the emotional needs that lie deep down in their unconscious mind, in addition to satisfying their functional needs. If you can achieve this, you strengthen the likelihood of generating a positive decision in your favour. I use the term 'positive decision' as it may not always be a sale that you're looking for, especially in the context of social media. In social media you may well want to develop your followers into Brand Ambassadors; customers who may have already purchased your product and whom you now want to use to positively influence and encourage new customers.

Apple has thus far been incredibly skilled and effective in satisfying multiple levels of need by appealing to functional as well as emotional needs. This is undoubtedly one of the major factors contributing to their phenomenal rise and accompanying financial success. In Fig 8.3 we can see how Apple has positioned its product and brand offering in order to appeal to the functional and emotional needs of its fiercely loyal customer base.

Fig 8.3—Apple successfully addresses emotional and functional needs simultaneously.

Whilst I use Apple as a present day exemplar of the ultimate brand, its application of the theories of branding have lessons for even the smallest business. Even though your absolute results will obviously not remotely compare with those of Apple, there is no doubt in my mind that the relative benefits and value your company can and will enjoy through the thoughtful development of your brand will be equally impressive in the context of your market.

In the quest to uncover and understand the needs of customers, we're interested in discovering certain key factors:

  * PAIN—customers want us to take away their pain and make their lives easier and better (not necessarily physical pain)
  * NEEDS—these can be functional or emotional
  * ASPIRATIONS—a high level within Maslow's Hierarchy where customers seek status, affiliation and personal gratification (emotional)

In order for customers to make a buying decision, there needs to be two conditions present at all times:

  * Their needs must presently be UNMET
  * They must have an INTENT to satisfy their needs

Without both conditions being present, it's unlikely that any sale will be made, either by you or your competitors. Satisfying both conditions may ensure a sale is made; however, it may not necessarily be your sale. In order for customers to buy from you, they must perceive yours to be the best (or only) solution available. The reality is that customers don't walk around with stickers on their foreheads alerting us to their needs. In fact many customers aren't even aware that they have a need for your product, which doesn't exactly make your job any easier, does it? So how do you create or uncover needs?

  1. Identify and satisfy recognised, but unmet needs
  2. Uncover unrecognised latent needs that you can satisfy
  3. Create a brand new set of needs

Let's explore each of these strategies in more detail.

1. Identify and satisfy recognised, but unmet needs

At any one time all of us have needs in some form or another. The thing is that you don't know what you don't know, so the only needs we're aware of are those that are conscious in our thinking. These needs can sit anywhere within Maslow's hierarchy, depending on the personal circumstances, social standing or life stage of our target customers. An example of a recognised but unmet need could be when your old 2G mobile phone dies on you (or you inadvertently drop it into the swimming pool during a wild party). At that moment, and for some days after, you definitely have a functional need that you recognise all too well. At that stage it's UNMET, which is a good thing for mobile phone retailers.

When you head down to your nearest mobile phone store you start your buying process, effectively gearing towards eventually satisfying your need. The other good news for mobile phone retailers is that you have INTENT to purchase a new phone. Perhaps at this stage you believe that what you need is a mobile phone, nothing more, nothing less. You could pick up any mobile in the store and your functional needs would most likely be fully satisfied. But perhaps you have a strong preference and you don't want just any old brand. You may want to identify with a particular group of individuals with whom you share the same values and psychographics. For example, you may choose an Apple iPhone for its coolness and simplicity. For many years business executives favoured the Blackberry. To them it wasn't just a phone—it represented a degree of business status and professionalism. When you had a Blackberry, you had arrived! In both cases you're satisfying emotional needs.

2. Uncover unrecognised latent needs that you can satisfy

The problem is that the sales assistant shows you the latest smartphone with all its bells and whistles. Although you started off with the single intention of replacing your old phone, you now discover that you can access Facebook, search the web, tweet, and stream Spotify on the new smartphone, not to mention being able to download apps and do virtually anything that has ever been thought of. You never had this capability before because you had an old crud of a phone and lived under a rock. But suddenly you realise how absolutely fabulous they are and how completely necessary it has become that you own a smartphone.

3. Create a brand new set of needs

Just before you pay for your new phone at the checkout, the sales assistant asks you how you plan to back up the data on it. Of course you've never had a smartphone and didn't even know there was data inside one, so you act nonchalant and say that your 10-year-old nephew will be doing it for you. Being well trained, the sales assistant wants to upsell you, so shows you the latest wireless backup device. The only backups you've ever done were onto CD on your PC. Suddenly you're faced with two issues: for one, you didn't know you needed to backup your phone, and now there's a device that you never even know existed until a few moments ago. With your head spinning you suddenly start to realise that you cannot possibly survive without this essential device, so you throw it onto your credit card along with the new phone.

Creation of needs that we never previously had is happening every day and we commonly refer to these as disruptive technologies. Their sheer presence creates a new set of needs that in due course become important to us, possibly as recognised needs or perhaps as unrecognised, but latent ones.

> Multi-purposing the same product 
> 
> When my family and I first moved to New Zealand in the mid 90s we started a small business importing and marketing a range of specialised commercial floor mats. One of our most basic and unspectacular products was the humble machine-washable dust mat. You've probably seen these in many business premises—flexible rubber backing with a short pile surface, often emblazoned with a logo or message. The commercial laundry companies swop them out every few weeks and clean them in their giant washing machines. 
> 
> I had sent out a direct mail flyer to rest homes as part of our regular mailing programme. The mailer targeted the entrance and hallway application and we'd received a number of good enquiries. So in the first instance our product offering and value proposition had successfully addressed a recognised, but unmet need with the customers who responded. During my follow-up sales visits I noticed a number of small carpets hanging from the washing lines at many of the rest homes. I was advised that these were placed alongside the beds of incontinent residents so that they wouldn't soil the fitted carpets, which would have been much more difficult to clean. I immediately had a brainwave!
> 
> My next mailer introduced a brand new mat to the rest homes—the machine-washable Incontinence Mat! The soft pile had already proven to be highly absorbent and they could be simply sprayed off with a hose or thrown into any decent-sized washing machine. The offering, value proposition and messaging targeted this single application in great detail, and the phone nearly rang off the hook! Through keen observation I'd stumbled onto a latent and unrecognised need that my product could satisfy. And satisfy it did. We sold a truckload of Incontinence Mats right across the country. Same mat, different application (and value proposition).

Could direct sales be the ultimate marketing tool?

Whilst it's widely acknowledged and accepted marketing theory that sales is a subset of marketing promotion, direct face-to-face selling is in quite possibly the ultimate marketing channel. A sales person has the opportunity to connect directly with the customer and to uncover and validate their needs through a range of carefully crafted questions. Being able to pick up on subtle nuances and buying cues, and to sense the right time to close the sale cannot be reliably or effectively replicated through any other marketing medium. From that insight and validation the skilled sales person can assemble and present an offering or a set of product attributes and associated benefit statements that will resonate with customers, satisfying their needs in their mind (and their hearts). All things being equal, the sales person can then close for the sale, and if the job has been done properly it will result in a nice juicy order!

The challenge is that once you move away from direct engagement with customers, you lose the opportunity to ask questions in order to uncover and validate their needs. You have to conduct customer research in place of the sales interaction in order to gain insights into customer needs before you can present your value proposition and associated benefits.

Marketing Takeaways

  * Define what customer problem your product satisfies.
  * Uncover your customers' unmet needs and determine what product attributes and benefits they value most.
  * Consumers have jobs and many make buying decisions on behalf of their companies.
  * What's in it For Me and What's in it For the Company? There is an important distinction; people who are buying on behalf of their company have multiple and more complex needs that must be satisfied.
  * Strive to address multiple levels of human need in your value proposition wherever possible. This strengthens the likelihood of generating a positive decision in your favour.

Chapter 9

TO ASSUME MAKES AN   
ASS OF YOU AND ME

"The best vision is insight."

Malcolm Forbes—publisher

TO ASSUME MAKES AN ASS OF YOU AND ME

Discovering your customers' true needs

How much do you know about the potential customers you're trying to reach? What will make them buy from you in preference to your competitor, how do they perceive your company, what are their buying criteria and habits, what levels of service do they expect, how do you match up to their expectations, where do they 'hang out'? These are just some of the fundamental questions that need to be answered before you can craft your brand strategy. Without understanding and insight it's hard to pretend that marketing can be successful, other than by luck.

Many smaller businesses don't even have a full understanding of their present customers let alone the large group that have never bought from them before. If you don't understand your customers how will you know what to say to them in your marketing and advertising message? Without a deep and clear insight into your target market your messaging becomes a conversation between two people who speak different languages...not very persuasive.

Walking a mile in your customer's shoes

I love the marketing saying: "To be a bullfighter you must first be a bull". It's like walking a mile in another man's shoes. One of the most critical elements of any brand strategy is to understand your customers in depth and to find their 'sweet spots' or the factors and criteria that make them buy. Clear understanding and insight of customer needs and behaviours can only be truly uncovered through research.

Entrepreneurs and inventors are amongst the most likely to be caught in the inward-looking trap, having conceptualised and nurtured their business dream. The streets are littered with examples of brilliant ideas that have crashed and burnt, leaving a long trail of ruin. Sadly, many of these failures could have been averted with some market research and an honest acceptance that just maybe the entrepreneur or inventor didn't have all the answers.

Don't allow yourself to be a victim of your own enthusiasm or let your ego get in the way of doing things properly. Whilst you may feel obliged to have all the answers and be anxious that you may appear less than capable by having to resort to 'finding out', I can assure you it will be a lot less painful or embarrassing than having your new business idea or product fail. Market research is a critical activity that must be robustly applied. Remember, insight is the cornerstone of effective marketing.

For the purposes of this section I'll ignore the fact that you could engage a professional research agency to conduct research on your behalf if you wished. The material in this chapter will assist you in saving a bunch of money by conducting your own research programme. Research is a complex and challenging subject, but I believe it's possible to carry out a meaningful survey without the help of an agency, provided you apply common sense, plan your project and take heed of the suggestions and guidance that follow.

The customer insight and survey process

In an ideal world we'd conduct a survey of around a thousand customers in order to get a statistically accurate result. That's typically what major consumer research projects do, delivering a very low error rate of around a few percent. Unfortunately the cost of conducting a research programme of that size is very high and is usually only affordable for big brands.

At the other end of the scale, you could talk to only a handful of customers, which would be dead cheap but you'd have to question the accuracy and validity of the results. In this case the information would be of absolutely zero statistical value and would simply give you some 'soft' insights. As you scale up from just a handful of surveys the accuracy increases, as does the ability to extract meaningful statistics.

There's no hard or fast rule as to what the ideal number of surveys to conduct are. I have found that to get a decent insight and eliminate the outliers (results at both extremes), you usually need to run a minimum of 50 surveys per customer segment. Anything less and you may struggle to recognise patterns.

Let's imagine for a moment that you sell ingredients to the food processing sector. In this situation where you have a single target market, around 50 surveys might be adequate. However, if you sell to food processors as well as to consumers via supermarkets, you will immediately have at least two segments to survey, requiring 2x50 surveys each for a total of 100. However, within the supermarket channel, the trade buyer as well as the end consumer will necessarily have a different set of needs and buying criteria. As a result you would need to conduct 150 surveys: 50 with processors, 50 with supermarket trade buyers and 50 with consumers. It gets even more complicated if you have sub-segments within each segment! My advice is that if you have a complex target market model then you may be better off engaging a professional research agency because it can run away from you very easily.

Crafting the research survey form

There are some key pieces of information that you're trying to uncover and understand through the research process:

  * Basic demographic information—this will enable you to identify any nuances or differences by specific demographic factor.
  * Emotional needs—it's not only functional product benefits that cause customers to buy, so the more insight you can develop into their emotional needs, the better prepared you'll be.
  * Which product or service attributes they value—by understanding their decision-making criteria and what attributes of your product they value (in priority order), you'll be able to more effectively develop and present your unique value proposition.
  * What is their buying behaviour and buying process—it's essential to know how customers conduct pre-purchase research, how they buy and what factors influence their behaviour.
  * Where do they hang out—by this I mean where will you engage with them. For example, what magazines they read, TV programmes they watch, social media platforms they use.

Determine dimensions and attributes requiring validation and insight

It may seem obvious that you need to know what dimensions you're looking for insight on, but without planning it's very easy to slip into the mode of asking a range of unrelated questions that may not necessarily provide insightful answers. Brainstorm an initial list of aspects that you want to gain insight on with key members of your team, but don't forget the golden rule of brainstorming—no immediate judging, discussing or criticising of ideas. You should go through this exercise at a fast pace in order to keep the ideas flowing, not even providing enough time to pause and discuss. Once you have your base list, go through the various ideas and group them into higher-level dimensions. Don't discard the list of individual ideas as they may be used as the basis for specific questions.

It's often not practical to revisit the same research respondent group to ask further questions or to gain deeper insight, so careful thought and planning at this stage will enable you to gain the information you need for your strategy in a single survey pass. An example of dimensions and associated attributes may be as follows:

  * High-level dimension
  * affordability
  * Associated attributes
  * purchase price vs. lifetime cost
  * preferred financing methods
  * perceived value for money

Determine methodology and construct questionnaire

The next thing to consider is how you're physically going to conduct the research. There are many methods of doing this and no one option is obviously better than the next. It's a case of what is most appropriate for the nature of the research project, the type of respondents you're talking to, the nature of the information you're seeking and how easy or difficult it will be to complete the survey. Some of the more common methods are:

  * Face-to-face interviews
  * Mailing out survey forms for respondents to complete and mail back
  * Telephone interviews
  * Focus groups consisting of people who represent your target market
  * Online surveys through the likes of SurveyMonkey and other online tools

When you conduct face-to-face or telephone interviews, you'll either get through to the respondent and, if you're lucky, conduct the interview, or they'll simply fob you off. When you use a less direct method such as mailed-out forms, you can expect your response rate to drop dramatically. If you target your group carefully you may receive 10 percent of the forms back, perhaps a few more or a few less. In this research model you basically have to 'buy' their attention and effort through some form of incentive. There are numerous options for motivating them, so I won't go into detail. Just put on your creative hat and imagine you were one of the respondents—what would motivate you to fill in the survey form?

With focus groups there's an inherent risk of group dynamics influencing the outcome and resulting information. A strong group member may unduly influence a less assertive person, for example. My advice would be to leave focus group research for professional practitioners to facilitate on your behalf, as they have the necessary experience and skills to manage group dynamics and extract meaningful insights in these challenging situations.

People have limited time and attention spans, especially if they don't perceive any personal value in what you're asking them to do. Unless you've made it significantly worth their while to complete the survey, they'll be doing it out of kindness or courtesy. So don't make the survey too long with multitudes of complex questions. I like to restrict the entire interview process to around 12 to 15 minutes. If you can't extract adequate information and insight within this time, then you may need to revisit the number of dimensions you're looking for insight on or reduce the number of questions.

Cross-reference questions for certainty

It's advisable to try and cross-reference the key dimensions requiring insight by reframing the same question several times. I'm not suggesting you blatantly repeat the question, but try to reconstruct it in a less obvious way in order to get confirmation on the insight. A potential failing of research is that respondents sometimes try to provide responses they think the researcher is looking for, thereby distorting the results. By asking the same thing from a few different angles you can minimise the impact of this inherent flaw.

Ask open and closed questions

As in the art of selling, the basic premise is to ask questions, both open-ended and more specific or closed questions. Open-ended questions solicit expansive answers that provide broad insight. This is known as qualitative research. Closed questions tend to generate simple yes/no type answers, commonly known as quantitative research. Whilst definitive answers are valuable, they provide no deeper insight into why the respondent answered in a particular manner. So a practical way to structure your questions is to ask a closed question to solicit a fact and then follow with an open-ended question to gain further 'soft' insights. For example, your question might be:

  1. Do you prefer product attribute 'A' over 'B'?

This would be followed by an open-ended question such as:

  1. Can you explain why?

From this example you would be able to develop valuable statistical data such as what percentage of the target market prefer attribute 'A' vs. 'B'. In addition, you will also have a range of insights into how your customers think and why they made that particular choice. Your questionnaire may consist of a number of these closed and open question sets, which does make the analysis a little more complicated.

Analysing the results

Once you have all survey forms completed the fun begins! This can be a tedious process, so you may want to get an intern or marketing student in to compile the results and prepare the statistics.

A good way to manage the 'soft' data is to simply write up all the responses to each question on a whiteboard. From that list you can start to group them according to a higher level of ideas or concepts, then refine them further until you have a manageable group of perhaps five or six reasons. There's no hard or fast rule dictating how many final groups you should end up with, but the more you have, the more difficult it will be to distil them into meaningful strategies. Let common sense prevail!

To analyse the statistical data, a spreadsheet package like Excel is quite adequate. Create a standard x/y axis data table and then visualise the results as pie charts or bar graphs, whichever you prefer. Fig 9.1 shows an example of a raw data table as well as the visualisation presented as a bar chart.

Fig 9.1—Example of results visualisation

Introduce findings and insights back into the strategy planning process

Once you've assembled your findings and completed your analysis, you need to complete the loop and introduce the new insights back into your brand strategy. In some cases this may simply confirm that your assumptions or hunches were correct, which will then give you the confidence to move ahead with your plan. In other cases the new insights may contradict your original beliefs and you'll need to evaluate how this will affect your thinking and proposed strategy.

If your survey process is adequately robust then you should be able to press on by accepting the facts uncovered in the research; however, if you're still uncertain, you may need to construct a second research project that is more narrowly focused on determining additional detailed facts about the uncertain dimensions. In this case, you just follow the same planning and implementation process as you did for the initial survey. Fig 9.2 illustrates the main stages of the research process.

Fig 9.2—The main stages of a customer-needs research project

Marketing Takeaways

  * Insight is the cornerstone of effective marketing.
  * Conduct customer research to gain insight into how your customers make buying decisions.
  * In your survey you need to capture:
  * Basic demographic information
  * Product or service attributes customers value
  * Their buying behaviour and buying process
  * Where they hang out
  * Before crafting the research survey form, determine dimensions and attributes requiring validation and insight, including high-level dimensions and specific attributes.
  * Ask open-ended and specific or closed questions.
  * Cross-reference key dimensions by reframing the same question several times.
  * If you're still uncertain, construct a follow-up research survey that is more narrowly focused on determining additional facts about the uncertain dimensions.

Chapter 10

IT'S ALL ABOUT BEING UNIQUE

"A strategy delineates a territory in which a company seeks to be unique."

Michael Porter—management guru

IT'S ALL ABOUT BEING UNIQUE

Creating a unique value proposition that resonates strongly with your target customers, whilst differentiating you against competitors is a somewhat complex and iterative process. I like to treat the process as a two-part exercise. You already started Part One of the process in the previous chapter where you identified a range of attributes that you initially believed your customers might be interested in. From that initial list you tested them through research surveys in order to gain deeper insight into how your customers actually think and make buying decisions, as well as understanding the relative importance they attach to each attribute.

From this analysis and insight you're now faced with two options:

  1. Your offering is able to satisfy the needs that your customers identified as being important. This is your ideal result and what you're striving for.

  1. Your offering doesn't match the customers' needs. Ouch! In this case you have to either make changes to your offering in order to satisfy their identified needs, or you have to look for a different target market where your offering and attributes more closely match their needs. Neither of these is ideal and it would be very unusual for a business that is currently trading to find itself in this situation. This is a far more likely scenario for start-ups that are still in the idea stage. If you can't satisfy any of the above options you'll have to go back to the drawing board or go fishing!

A strong and compelling value proposition is a collection of reasons why customers buy from you. There are three factors that must be satisfied in order to successfully make a sale:

  1. Resonate: your offering must resonate positively with the customers (at an emotional and functional level). They need to place sufficient value in your offering in order to want to pay for it (and hopefully pay a premium).

  1. Differentiate: customers must see your offering as distinct from your competitors' and it should ideally be difficult to substitute. The more you can differentiate your offering, the more likely you will achieve a price premium. Conversely, the less differentiation available, the more generic or homogenised your offer becomes; this makes things really tough.

  1. Substantiate: customers must believe that you can deliver what you promise.

Aligning customer needs so they resonate

In the early 2000s I ran an ISP (Internet Service Provider) that was one of the very first to offer internet access to Waikato subscribers. Each year the New Zealand Internet Society conducted a survey of thousands of internet users from ISPs across the country. Once completed, the survey results were shared with the participating ISPs, showing each ISPs results benchmarked against the national average. Whilst they surveyed a wide range of topics and factors, the ones that really interested us were the decision-making criteria of internet users. The respondents were given a list of various factors and asked to rank them in order of importance.

At the time, the local internet access market was involved in a major price war, with the only winner being the consumer. Top of mind for us was not whether we should drop our prices, but rather how much we could afford to drop them. The financial impact of reduced prices across our large customer base didn't excite our directors!

The left column in Fig 10.1 shows in order of priority, what we thought our customers' needs were. When the survey results were published we were more than a bit surprised. What our customers actually said they wanted was not exactly what we thought they did. We had the list of needs right, but our presumed order of priority was a little out.

Fig 10.1—A classic mismatch of needs

So what did we do?

For one, we didn't reduce our prices! Rather we looked at ways that we could offset the higher price by adding perceived value. This is what we did:

  1. We introduced a new 'add-on' offering that we called SpamBusta. By making some relatively minor changes to our system we were able to provide customers with an enhanced level of spam protection, which they were happy to pay a little extra for each month. Not only did we retain our current price point but we also increased our ARPU (Average Revenue Per User), a key metric for most subscription businesses. Our launch of SpamBusta was so successful that we signed up thousands of existing and new clients to the add-on service almost overnight, with very limited advertising activity. It reminded us that the key to successful marketing is to give the people what they want, a pretty simple, but easily overlooked concept.

  1. Our system architecture prevented us from implementing server-side virus filtering. Instead, we created tutorials and other helpful information for our customers on how to protect their PCs from viruses, which we added to the technical support section of our website. Problem solved and lots of happy customers.

  1. At the time of the survey our help desk support was manned from 8am to 7pm, not exactly extensive by comparison with other larger ISPs, many of whom offered 24/7 support. We studied the activity logs and noticed that most of our customers were already connected by around 9pm, which was when they were most likely to experience technical issues. So our response to the new insight was to extend our support hours through to 10pm, which provided an acceptable level of support for most of our subscriber base. An interesting lesson learned here was that it wasn't necessary to match our competitors by implementing 24/7 support, which not only causes substantial logistical challenges but also hammers the bottom line to death. The fact was that whilst our customers would LIKE to have had 24/7 support, the reality was that extended hours were enough to satisfy their needs to an acceptable standard. It's very easy (and tempting) to over-engineer an offering under the premise of satisfying needs, but you should also test the level at which your customer will be accepting (satisfying their NEEDS) as opposed to satisfying their WANTS.

  1. Our monthly subscriber plans at that stage generally had a 'hard' data limit. In other words, when you exceeded your allocation your internet access would be suspended. This in itself wasn't a big deal for our customers because they could subscribe immediately for additional data; however, there's nothing more irritating than having your internet access suspended in the middle of a session when you may be making a purchase or something equally as compelling. By improving and extending our automated overuse warnings we were able to provide an acceptable level of service at no sacrifice to profit margin.

  1. We made no changes to our pricing and no one seemed to care either. Proof was that we saw no noticeable change at all in our account cancellation rate, a normal function of subscription businesses.

  1. We made no changes to our data allowances either; raising these allowances would have increased our cost base.

The key lesson we learned from this experience was how imperative it is to align your brand proposition with validated customer needs. When the unique capabilities of your product are aligned with your customers' needs, you have a guaranteed recipe for success (and increased profits). The long and short of this is that you have to clearly understand what benefits your customers care about and present the more valued ones ahead of the less desired ones. It's also important to differentiate your value proposition from that of competitors, so, all going well, if you've crafted your list based on unique features and benefits, you'll end up with a compelling and differentiated offering that is highly valued by your customer.

It's worth noting, however, that not all your value propositions have to be unique. In some cases it may simply be a 'must-have' attribute that doesn't necessarily give you any competitive advantage, but rather something that must be in place to meet a base-level requirement. For example, many larger organisations, especially quasi-government and government departments, require suppliers to have a robust and audited sustainability policy.

Although this has absolutely nothing to do with the supplier's ability to carry out the job at hand, it's a barrier to entry and must be overcome. Having such a policy provides the supplier with no competitive advantage over its competitors, but satisfies a pre-requisite to being considered as a supplier to these organisations.

Differentiating your brand

As Jack Welch, former CEO of General Electric said, "If you don't have a competitive advantage, don't compete".

In Part Two of the process of creating your unique value proposition, you compare the proposition that you've developed and validated through research against the value proposition and unique market position of your competitors. After all, your brand doesn't compete in a market vacuum. Simply crafting a value proposition that resonates with your customers, but doesn't differentiate you is unlikely to result in sustained success.

It's possible that competitors' offerings and value propositions may be similar to yours, forcing you to adjust how you present yours. The subject of competitive analysis and creating a unique market position is addressed in more detail in a later chapter. The purpose of introducing the concept of competitive advantage and market position into this section is to illustrate that you can't develop your value proposition without due consideration of competitors.

Your objective at this stage is to craft a unique value proposition to match and satisfy the most highly valued and prioritised need that emerged from the customer research survey, be that functional or emotional. If this ideal position has been snapped up by a stronger competitor then you'll need to look further down the list of prioritised customer needs in order to find your unique point of difference.

Unfortunately, the further down the list you're forced to go, the weaker your value proposition becomes. This is seldom a problem for a market leader or an early entrant into a market, but if you're a Johnny-come-lately it's unlikely that you'll be able to 'own' a highly regarded position. In any event, the attribute that you decide to base your value proposition on should be one in which you have demonstrable capabilities and advantages over your competitors. Remember, it's not necessarily what you're best at, but rather what you're BETTER at than your competitors.

However you look at it, successful products and brands MUST have advantages over competitors, whether these advantages are actual or merely perceived. The exciting thing about a competitive advantage is that it enables a company to create superior value for its customers and increased profits for itself. This win/win is how you build brand equity. The fundamental basis of success for a company or brand is the development of a competitive advantage and market differentiation. So the key question you have to ask yourself is, "What sets my business or brand apart from my competitors?"

Why should they buy from you?

Creating an EFFECTIVE value proposition is the art and science of taking the features and benefits of your product, determining the ones that your target customers value the most, ensuring that they differentiate you adequately from your competitors by providing greater PERCEIVED value, and then being able to convey this in a compelling and believable way.

Broadly speaking, benefits can be functional, emotional or a combination of both. Interestingly, research into consumer behaviour confirms that in order to drive sales growth and a price premium (both useful outcomes), your brand needs to occupy an emotionally meaningful place in the minds of your customers.

A typical list of product features and related customer benefits might be:

  1. Guaranteed two-hour delivery allows you to plan and schedule accurately and with confidence (functional)
  2. Lower operating costs help to generate a payback within six months (functional)
  3. The smooth external finish prevents it from snagging and becoming damaged (functional)
  4. Low levels of carbon emission reduce damage to the ozone and ensures you're doing your share to preserve our planet (functional and emotional)
  5. When you subscribe to service X you qualify for membership to the exclusive user group where you will rub shoulders with other leaders in your industry (emotional)

Although these are all valuable benefits in their own right, not all customers attach similar value or priority to the same features. For example, customers who value performance would select benefit (a), whereas customers who are financially driven would most likely value benefit (b). Customers who are interested in product attributes might select benefit (c), whereas those who feel very strongly about the environment would most likely value benefit (d). Those with a need for belonging and recognition might select (e). It's for these reasons that careful selection and validation of your target market is critical. You cannot satisfy everyone's needs. The only person in history who claimed to be all things to all men was Julius Caesar!

Whilst it's great to have a bag full of unique value propositions that completely satisfy every need of your customer, throwing too many at them in the hope that some gain traction can be detrimental and may even cost you a sale. As a rule of thumb, your primary unique proposition is what you 'hang your hat on'; it should differentiate you from your competitors and underwrite your Brand Promise (the intangible contract your brand has with your customer). You will ultimately be measured against your brand promise, and that performance will determine if you live or die, commercially. Following on from your unique value proposition you may have a further two or three value propositions, which may or may not be unique.

> Only cats have more than three chances
> 
> A few years ago a prospective client came to see me with a trade magazine advert that the magazine's in-house designer had prepared for him. He'd run the full-page advert a few times and had no enquiries at all. He asked my creative team to redesign it, hoping to generate better results. The problem with his advert, notwithstanding the poor design, was that it was crammed full with every possible benefit and value proposition that he could muster up, as well as a bunch of complicated and unengaging technical drawings. Up to that stage I had no involvement in the development of his brand strategy and no real insight into his product, other than a broad understanding of how it worked. 
> 
> Our approach was based on the fact that when too much information is presented the brain simply can't process it, and it tends to miss or ignore ALL of it. So the first challenge I posed was for the client to identify the three most valuable benefits of the product. He argued that they were all equally important and that it would be irresponsible to exclude any. I tactfully reminded him of the lack of success thus far with every allegedly valued benefit included in his advert. After a bit of arm wrestling we agreed on the most important three and the studio got stuck into designing a new advert. We also added a bona fide customer endorsement that supported the primary value proposition. 
> 
> The new advert ran as a full page exactly as its predecessor had, and in the same two trade media titles. The first flighting generated eight qualified leads and each subsequent issue generated further high quality leads. We continued to develop a range of adverts that retained the same overall look, feel and messaging, but we replaced the customer endorsement for each issue. Over time the endorsement element created a very credible success story for the brand and product. Eventually my client was acquired by one of the largest players in the industry, so a great success all round!

It's not true until you prove it

It's not enough to simply make claims about your offering. Customers generally distrust marketing messages, having been duped once too often. To build credibility you need to support your brand promise with some form of credible proof before customers will be ready to part with their hard-earned cash. Understanding whether you're trying to satisfy functional or emotional needs will dictate the form and nature of your proof source. The more complex and extreme the claims you make in your value proposition, the more proving you'll need to do.

At the extreme end of the scale is the marketing of medicines. You cannot simply invent a medicine and send a few boxes to your local pharmacist. Can you just imagine the havoc that would ensue! Before medicines can be sold they have to pass an enormous battery of clinical trials that could cost hundreds of millions of dollars and may take ten years or longer. Only then, once all product benefit claims have been verified over and over a multitude of times, can a medicine be approved for sale to the public. It's this rigorous process that gives doctors and patients the confidence that what the manufacturers claim, is in fact the truth (in most cases at least).

At the other end of the scale, a value proposition may be as simple as 'lower operating costs that help to generate a payback within six months'. Sounds credible on the face of it and your customer may be really keen on the product, but they'll almost certainly want to know exactly how the operating costs are calculated. Considering they would have to own the product for at least six months before they could personally prove the payback claim, you would need to assure them of the benefit upfront or risk losing a potential sale. By presenting proof sources that substantiate your claims you provide compelling evidence that your value proposition is indeed genuine. In this case it may be as simple as a spreadsheet showing how running costs are calculated with working sums, just like we used to do in junior school. The claim may even be supported by customer testimonials, an old trick but always effective. As long as people continue to make buying decisions, credible user testimonials will remain a cornerstone of evidential proof.

A word of advice regarding personal testimonials—get permission from the people providing the testimonials to use their names (obviously), include the city each lives in, and if possible, a photo of them. The more information you can provide, the more credible your testimonials will be. It's so easy to fake testimonials that customers have become wary about their origin and authenticity. However, if you present testimonials effectively and in a believable way, they can be a very powerful addition to your marketing toolbox. You don't need many of them either—just recycle a few through your website, brochure, sales presentation and other promotional material. Another excellent proof source is to include a calculator on your website, where visitors and prospects can enter their own data and immediately see the result (and hopefully a big fat benefit).

It's easy when you're close to your product and very familiar with its performance, to take the benefits for granted. But just remember that the customer may have never seen or used your product and they may not even be aware of who you are. They will therefore be suspicious of the performance and benefit claims you make. On the subject of making claims, be careful not to over-present your value proposition. You've heard the saying that if it sounds too good to be true it probably is! I've seen instances where the benefits of a product are genuinely extremely good, perhaps crossing into the unbelievable zone. My advice in this situation is to play down the benefits to a more credible level, perhaps taking the lowest performing or median metric rather than the highest as your benchmark.

Marketing Takeaways

  * Your unique value proposition must satisfy your customers' needs and differentiate you from your competitors.
  * Not all customers attach similar value or priority to the same product features or benefits. Understand which ones they care more about and present them ahead of the less desired ones. 
  * Simply crafting a value proposition that resonates with your customers, but doesn't differentiate you is unlikely to result in success. You need to differentiate your value proposition from that of your competitors.
  * Unique advantages can be functional, emotional or a combination of both.

Chapter 11

A FEW THOUGHTS ON PRICING

"Pricing is actually a pretty simple and straightforward thing.

Customers will literally not pay a cent more than the true value of the product."

Ron Johnson—CEO J.C. Penney

A FEW THOUGHTS ON PRICING

In the context of this book, our primary interest regarding price is how it relates to your market position and the presentation of your value proposition. We won't go into detail on how to determine your selling price; however, it's worth including some basics of pricing strategy as a backdrop.

Price as a perception

In the earlier quote by Ron Johnson, he states that customers won't pay a cent more than the true value of the product. I like to think of the 'true value' being what the customer PERCEIVES the value of the product to be and not necessarily its intrinsic value. In marketing, perception is reality and customers often have distorted views of relative value. In some cases it may work in your favour and you can enjoy an unnatural premium, whilst in other cases your product's intrinsic value may not be fully appreciated.

Luxury brands generally provide only a nominal product advantage over lower-priced or less glamorous brands; however, they still manage to command premium prices that far outstrip their actual added value. The key to their success is through the creation of PERCEIVED added-value, usually in the form of compelling emotional benefits. For example, a Gucci handbag may cost hundreds, perhaps even thousands of dollars more than a utility brand, but the Gucci brand and the privilege of being associated with it create the added value required for customers to part with ridiculous sums of money.

In the earlier chapter dealing with how customers make decisions, we talked about the price heuristic. It suggested consumers are more likely to judge higher-priced products as having higher quality than lower-priced products. In the words of the legendary investor Warren Buffett, "Price is what you pay, value is what you get." Whilst luxury brands generate embarrassingly large profit margins, their cost of sale is also much higher, to be fair, with expensive premises in the most exclusive business and tourist districts, expensive advertising campaigns and well-paid staff. It's a lot harder to unseat a brand that has a strong premium position than to remove an also-ran that sits in the middle of the price/value equation.

The challenge for any premium brand is that it has to create and effectively convey a very high level of uniqueness and additional value to the customer. This is not always possible owing to functional product limitations, existing brand reputation, sales and distribution channels, and a myriad of other reasons. Apple is obviously an exceptional case of selling products that are arguably comparable to competitors' products in performance (depending whose side you're on), but at a handsome premium. It's not by chance that it has become the most profitable brand in the world. When did you last see an Apple product on discounted special? Other than possibly for run-out lines or refurbished models, it simply doesn't discount. The message this sends out to the market is that the products are so good, there's no need to engage in the lowly practice of price-matching or discounting. This is not a short-term strategy and it has taken Apple many years of pain (and failure) to achieve this; however, its unswerving commitment to a premium market position and product innovation is nothing short of fanatical, and it stops at nothing to protect it. Only time will tell if Apple can sustain its premium market leadership position in the face of aggressive challenger brands.

Price positioning

How do you want to position your product or brand in the marketplace? Price position has a direct bearing on the way you implement the rest of the marketing strategy. Fig 11.1 illustrates some examples of pricing positions.

Fig 11.1—Three primary price position strategies

The above positions indicate where your price level will sit relative to your competitors. In acheiving your overall market-price position there are a number of pricing models that can be used.

Cost-plus or market-based?

Pricing can be structured based on numerous individual methods or a combination of these. The cost-plus method is the simplest but it doesn't take into consideration any competitive or market conditions. It simply implies that a markup is added to the actual cost. At the other end of the scale is market-based pricing, which only considers the price levels that the market will accept and has no consideration for production cost or cost-of-sale. In addition, ROI levels required by your company may also have a direct influence on pricing strategy. In many cases a combination of cost-plus and market-based methods can produce an acceptable pricing structure that adequately addresses both ends of the pricing spectrum, a somewhat necessary compromise. This is typically where market price equilibrium is struck (see Fig 11.2).

Fig 11.2—Price equilibrium achieved between Cost-Plus and Market-Based pricing

Value-based pricing

This is an interesting and controversial price strategy. It's not based on the cost-plus nor market-based models. In essence, you charge different prices to various customers for the same product, based on how much value it delivers in their specific situation. Value can be measured in financial terms or in other less tangible ways, such as brand equity or image. Let me try to put this into perspective. Nike's famous Swoosh logo was designed by Carolyn Davidson in 1975, for which she was paid $35! Is that a fair price to pay for one of the world's most recognisable logos that is worth around US$16 billion in brand equity, or should the designer have been paid a more commensurate rate based on the value the logo has created? Thankfully Nike is an ethical company and later gave the designer 500 shares of stock, now worth over $600,000.

Let's look at it in a different context and imagine that you supplied a product that increased the output of a production process by a constant percentage. When used across different industries where the financial value of the output varied greatly, the absolute dollar improvement could vary by millions of dollars. Would it be right to charge the same price for the product across all industries or should you price it according to the amount of value it added? This is a particularly challenging pricing strategy to devise, implement and then manage, especially when customers discover the variances. However, in its defence, it can be very profitable if you get it right.

Fremium pricing

The Fremium pricing model is a relatively new concept, appearing most frequently with online SaaS offerings (Software as a Service). In this model, a range of basic features is made available to the public free of charge. In order to access more advanced features or capabilities you're required to subscribe at a cost. To the more conservative business owner it may seem illogical for a business to give away anything for free, especially on an indefinite basis. The truth is that a high percentage of fremium subscribers will never actually pay for the service, leaving only a small percentage of paying subscribers. It's not unusual for the paying subscribers to number less than 10% of the total subscriber base. Realistically, the cost of providing the de-featured offerings is relatively low, considering that all product development costs have been amortised in the development of the chargeable version, as well as the fact that in the era of cloud computing, online usage has a very small provisioning cost. The upside is that some fremium users do actually migrate up to chargeable models as their needs naturally expand. However, it's the nature of the free offer that creates huge market awareness, which ultimately drives demand and take-up. The lost revenue from the free users effectively replaces the cost of advertising and promotion, substantially mitigating actual costs.

Some of the more prevalent brands using the fremium model today are cloud data storage solutions like DropBox, SendSpace, YouSendIt, Evernote and Vimeo (as well as Apple, Google, Yahoo and Amazon). They work on the assumption (or hope) that, as you become more comfortable using cloud storage, you will in due course load more of your data up to their cloud. Once you reach the level of complete trust and commit all your data to cloud storage, it's more than likely that the data storage allocated to the free accounts will be inadequate for a bona fide commercial user. The next step is pretty easy to figure out.

Looking into the crystal ball

Like most things in life, nothing will stay the same for long. Market pricing levels are no different and can be influenced by a range of factors and events. Recessions have a very marked influence on price levels, with many companies cutting prices in a desperate attempt to keep afloat and keep their workers busy. What do you expect market price levels in your industry to do over your product's lifecycle? This is often closely related to where the product falls within the market lifecycle, with typical pricing strategies and profit margin levels coming into play at the various stages. Fig 11.3 illustrates some of the main phases and typical associated pricing dynamics.

Fig 11.3—Product lifecycle phases and related pricing strategies.

The myth of price

One of the most common marketing myths is that customers are most concerned about price. In reality price is seldom near the top of the criteria list, as evidenced by many research studies. It's usually other aspects of added value that customers most want. Unfortunately, if you're unable to differentiate and align your offering to satisfy these needs, price becomes the lowest common denominator and you'll most likely end up having to 'buy' the business through low price. It's the absence of compelling customer benefits and added value that forces buyers to resort to price as their primary buying criteria.

If low price was genuinely the only or always the most important buying criteria, there would be only one player in each market—the lowest-priced supplier. Obviously this isn't the case and there are many premium-priced product brands that are very successful. It's no mistake, coincidence or fluke. It's because they understand exactly what their customers want and value, and are ready and able to provide it. Their sales pitch, brand story and unique value proposition are aligned to their customers' buying criteria, a strategy that resonates convincingly with their market.

> Discounting... the downward death spiral? 
> 
> A common marketing response to recession is to cut prices when sales become scarcer, competitors become more aggressive and deals are harder to capture. Although a reduction in prices in a recession can provide short-term sales gains, the reduced profit margins consequently necessitate a reduction in resource, ultimately leading to the deterioration of service delivery. And thus the death spiral begins!
> 
>   
> 
> 
> Here are some interesting and rather sobering numbers...
> 
>   
> 
> 
> Roughly speaking, based on an initial profit margin of 33%, a 5% price reduction requires around 15-20% increase in sales to make the same total dollar profit. More startlingly, a 15% price cut could require up to 60% increase in sales to make the same dollar profit! Now 5% isn't exactly a showstopper and it's unlikely to do much for sales volumes. Even a 15% price drop won't generate additional sales revenues anywhere close to what is required to recover the lost profit margin.
> 
> If you were prepared to sacrifice 15% profit margin to get sales (a conservative recessionary discount strategy) then you'd be better off keeping prices at current levels and rather lose 60% of sales—the net financial result is the same. However, if you cut prices now you will find it much harder (maybe impossible) to lift them again when the economy recovers. In effect, you erode your brand's value and trap yourself forever into a low-cost market position.
> 
> Discounting may generate some short-term gains, but it places you in a weak position to take advantage of or to maximise the inevitable economic recovery. Economic recovery is a given. It may take a few years or longer, but it will always happen. What shape will your brand be in when it does?  
>

Marketing Takeaways

  * Price is often a function of perception and doesn't necessarily reflect a product's intrinsic value. 
  * The higher your price position, the more convincingly you need to convey a high level of uniqueness and added value. 
  * Price position has a direct bearing on how you implement the rest of your marketing strategy.
  * Common pricing models:
  * Cost-plus—the simplest model but it doesn't take into consideration any competitive or market pricing conditions
  * Market-based—only considers the price levels that the market will accept and has no consideration for production cost or cost-of-sale
  * Value-based—you charge a different price to various customers based on how much value your product delivers
  * Fremium—basic features are provided free, advanced features are paid for
  * Discounting during a recession generates short-term gains, but makes it harder to lift prices when the economy recovers. Brand value is eroded and it can trap you into a low-price market position.

Chapter 12

COMPETITION AND YOUR   
MARKET POSITION

"Know your enemy and know yourself and you can fight a hundred battles without disaster."

Sun Tzu—military strategist, fourth century B.C.

COMPETITION AND YOUR MARKET POSITION

This book shows you how to create a sustainable competitive edge that will outwit your competitors. Sounds like the tagline from the popular reality TV series Survivor—Outwit, Outplay, Outlast! Competition is here to stay so you really have no choice but to acknowledge this and prepare for it (or pack up and go home). Other than in socialist countries with their central command and control economies, every free market incurs and involves competition. In fact the nature of free markets encourages it.

It's interesting and somewhat amusing how many of the companies I've consulted with believe their industry to be the most competitive imaginable. I can't think of a single company that I've worked in as an employee or worked with as a consultant that didn't face intense competitive pressures. James Cash Penney, founder of the famous J.C. Penney brand had an unsophisticated but effective approach to competition. He once said, "A merchant who approaches business with the idea of serving the public well has nothing to fear from competition". Sounds easy, but in practice there's a lot more to it than this simple philosophy.

I recognise them, but who are they?

OK, so if competitors are an unavoidable part of your business landscape then how much do you know about them? You can't defeat your competitors unless you get inside their heads. In a military context no one would expect a general to commit troops and resources to a battle without a clear understanding of what he's up against: understanding the enemy's strengths and weaknesses, what he's expected to deploy and how best to outmanoeuvre him.

But how often do companies throw money into marketing promotion or advertising campaigns in the hope of success, without really understanding (more likely not even considering) what their competitors' responses will be, and often with a limited grasp of their own capabilities. A deep understanding of your competitors should be an essential part of your marketing strategy. It's not particularly difficult to do but it does require ongoing effort and commitment. It's not just a one-off exercise.

Once you have a clear understanding of whom and what you're up against, you can begin to develop your marketing plan and competitive strategy in a way that sets you apart from your competitors. You'll also then be able to more accurately predict how they'll most likely react to your marketing initiatives and be in a position to develop effective contingency plans to deal with any counteroffensive that they might launch.

The most common and simple method of researching your competitors is to jump onto their websites and check out what they have to say about themselves. Your competitors share a common dilemma with you in this respect—how much information you should present on your site. On the one hand you want to entice new customers so you feel compelled to put your value proposition and brand promise out there for all to see, including your competitors. If you hold back on key information that differentiates you in order to keep prying eyes away, you run the risk of not connecting with interested prospects. Unfortunately I can't give you a definitive solution to this dilemma, but will leave it up to you to make a judgement call based on your particular market and competitive situation.

You can also ask customers who have recently purchased from you whether they have any competitive proposals, quotes, or brochures and whether they would mind letting you take a look at them. There's no harm in asking, and if you've delighted them in their brand experience with your company they may very well oblige. I've done this often and have gathered a lot of valuable competitive intelligence as a result.

Another slightly devious option is the Reverse Mystery Shopper. It's actually one of my favourites because I believe that in business all's fair in love and war. If your competitor doesn't know who you are and won't recognise you, you can pose as a potential customer, sit back, take notes and dig deep for information. If they do know who you are, get a friend or colleague to be your mystery shopper. Whichever method of information gathering you use, once the facts are in your grubby paws it's time to deconstruct their strategy. I like to use the same format and templates to do this as I use to develop my own strategy. That way I get a totally comparative view from which I can draw smart conclusions.

Your competitors are unlikely to describe their unique value proposition with the same technical clarity that you will have done for yours, but this is where a bit of creative thinking comes in. Use your newly acquired marketing nous to try and interpret what they're saying in terms of their view of customer needs, what product attributes they present to satisfy these needs, and what customer benefit statements they've crafted to satisfy them. At this stage it's important to review your own value proposition and customer benefit statements to ensure you haven't inadvertently mirrored theirs. Remember, differentiation is essential for effective marketing. Before reading this book you may have found this exercise a tough assignment, but once you've worked your way through each chapter and have become familiar with the concepts of Need Satisfaction MarketingTM you'll find competitor analysis quite easy, as well as a valuable marketing tool.

The art of being different, and better

Compared with other competitive offerings, where will your product be positioned? What value proposition message will it present to the market? You need to determine the position your product or brand will 'own' in relation to your competitors' brands and products in order to take advantage of any available gaps in the current market. But before you can begin to determine your market position you need to clearly understand and define what market you're actually operating in. It sounds obvious but let's see if you're on the money with your product. Imagine your company makes muesli bars: are you in the confectionery market, the muesli bar market, the health snack market or the meal replacement market? They may seem similar, but within each of these segments there are different competitors and very specific customer needs that may or may not overlap.

> You are what you think you are
> 
> In the pre-television era the motion picture studios saw themselves as movie makers. They were narrowly focused on this activity and didn't pay enough attention to the rapid rise in popularity and ensuing ubiquity of television. Almost overnight their entire business model came under threat. It was only once they redefined their business activity as 'entertainment' that they were able to break free from their self-imposed shackles and begin to take profitable advantage of emerging media channels and changing consumer entertainment habits.
> 
> Blockbuster Video is a more recent example of a company not accurately (or too narrowly) defining their business activity. They saw themselves as operators of video rental stores. They came to dominate this market by being the outright best at what they did. Unfortunately a start-up company called Netflix saw their own business a little differently. They saw themselves as operating in the video rental business and didn't have a fixation on brick and mortar retail premises. Netflix now dominates the video rental market and Blockbuster is a shadow if its former self, having filed for bankruptcy in 2010. However, Netflix is coming under pressure from video-on-demand providers who are taking advantage of new digital technologies to deliver content to consumers. So even Netflix's view of their business activity may be too narrow. Perhaps they need to reconsider themselves as being in the 'entertainment' business, just as the movie studios had to do in order to survive.

Once you've clearly defined what market you're in, you can start to develop your unique market position, taking into consideration a number of factors:

  * What are the relative market positions of your key competitors?
  * What market position will imply a unique quality of your product?
  * What valuable (and profitable) market position is not currently represented or being exploited?
  * Common market positions may be low price, technical innovation, unique feature offerings, high quality, durability, user friendliness, service delivery or a combination of some of these.

> But I'm not very good running up hills!
> 
> David Parrish, a successful business consultant from the UK made an excellent point at one of his workshops that I attended. He stated that it's not necessarily what you're good at that matters, but rather what you can do better than everyone else can that makes the real difference. On the surface this statement may seem a little confusing; however, he provided a personal example that made a great deal of sense and illustrated the concept perfectly. 
> 
> In his youth David was a good downhill runner, so naturally that was his athletic point of difference. The problem was that he never actually won any downhill races, despite this being his strength. Conversely, he thought of himself as a relatively average uphill runner. However, in races that included a significant uphill element, he would regularly beat his opponents. The moral of his story was that, when he stopped playing to what he thought was his unique value proposition and repositioned himself against what he actually could do better than his competitors, he started to win races and enjoy his new-found success.

And so it is with brand positioning. Too often we're fixated on our own internal assessment of our strengths. Often strengths have been imagined and internally nurtured by the entrepreneur without a great deal of insight into either the competitive landscape or, even worse, into what prospective customers want and value. It's ultimately what you can do better than your competitor that counts in the sales stakes.

What does a unique market position look like? Here are some examples of brands that have developed very distinctive and unique market positions. Some are well known global brands whereas others are local New Zealand brands. But in all cases their taglines represent their unique value propositions and primary market positions based on emotional or functional attributes.

  * Volvo—Safety
  * Audi—Progress through technology
  * Adidas—Impossible is nothing
  * Nissan GTR 35—Affordable supercar performance
  * The Warehouse—Where everyone gets a bargain
  * Auckland—Big little city

What's your primary positioning requirement?

How you position your brand can be strongly influenced by your specific requirements. For example, you could position your value proposition to address a specific valued customer need (functional or emotional) or you could position it to directly differentiate your offering against the competitors. Both are acceptable methods and can only be determined by thoughtful consideration of your immediate marketing challenges and what your strategy is likely to be. Let's say you own a lawn mowing service. Two potential positioning options could be:

  1. Position to address a specific customer need—If you're targeting homeowners who currently mow their own lawns, your positioning statement could be something like, 'Why spend your life mowing lawns'. The inference here is that homeowners could be doing something more constructive or more enjoyable with their time than mowing lawns. The statement suggests that homeowners should leave mowing to a professional service.

  1. Position to differentiate against a competitor (and satisfy a customer need of course)—If your target customers currently employ a lawn mowing service, then your market position would need to be quite different. Your positioning statement might be, 'We treat your lawn like our own'. This implies a unique benefit of your service and says something important about other lawn mowing services. If you're at all like me and are particular about presentation, then simply having my lawns mowed is not good enough. I want them to be carefully manicured, just as I would do it myself. Not every homeowner feels this way, but if you decided to narrow your target market down to homeowners that are particularly fussy about their lawns, then you could build a very strong position in a niche market. Of course you would need to have a sufficient number of potential fussy customers in order to generate an acceptable financial return.

> A clear case of emotion vs. function
> 
> Red Bull is a global brand phenomenon that is positioned exclusively against an emotional value proposition (the functional thirst factor is probably the least compelling reason why so many people consume Red Bull). Their energy drink is aligned and associated with extreme sports events, which by their nature engender a strong emotional connection with followers (based on the release of the pleasure chemical dopamine in the brain). In addition, the caffeine content increases levels of excitement, which also enhances the perceived emotional enjoyment of an activity (or brand interaction as is the case here). So, Red Bull gets the best of both worlds—alignment with the emotionally popular extreme sports movement as well as artificial emotional brand enhancement through chemical additives.
> 
> At the other end of the brand positioning spectrum would be the new light-proof milk bottles recently introduced by New Zealand dairy giant, Fonterra. The brand story and value proposition is squarely built around the fact that milk goes off faster when exposed to light, and that light-proof bottles help to extend the fresh lifespan of their product. There is no emotional element in their pitch, just a compelling functional product benefit. This gives them an immediate clear (excuse the pun!) product advantage over competing products, but that will only endure until their competitors introduce their own light-proof bottles, which is inevitable. 
> 
> It's extremely difficult to create a sustainable advantage based only on functional attributes, but brands that incorporate an emotional aspect with a functional advantage have a better chance of sustained differentiation. The phenomenal ongoing success of Red Bull in the face of a multitude of copy-cat brands is testimony to the strength of building a brand around a positive emotional experience.

But can you sustain your advantage?

A sustainable competitive advantage allows you to maintain, and even improve, your competitive position over the long term and keep ahead of the pack. Unfortunately advantages can sometimes have a very limited 'shelf life', especially if they're based on product features or technology. In this case a projected improvement or version upgrade plan needs to be developed to at least retain your short-term advantage. Ask yourself whether the advantage is a temporary one, arising from early access to a technology or a fresh idea? How sustainable is your advantage? How easily can competitors copy your product/technology/service or business model?

Whilst a product that has an initial functional advantage over competition may look impressive, the longer-term cost of retaining a competitive position could render the product financially non-viable. This needs to be carefully considered before you commit funds to product development, production and market launch.

Make use of visualisation tools

The Positioning Matrix is a valuable tool for visualising the relative market positions of yourself and your competitors against a set of factors. An example matrix based on the functional attributes of purchase price vs. cost of ownership is shown in Fig 12.1.

Fig 12.1—A typical positioning matrix

If we were to consider Fig 12.1 in the context of the automotive industry then 'Brand A' might be a Toyota Prius hybrid, which has a high purchase price but low running costs. At the other end of the scale we could consider 'Brand F' to be any number of petrol cars, with an inherently lower price tag than a Prius but markedly higher running costs. There would also be a place in the matrix for diesels, LPG-fuelled cars and other forms of hybrids.

It may be necessary to develop a number of matrixes in order to determine your relative position across a number of attributes. The dimensions that you use in your positioning matrix don't necessarily need to be based on high and low extremes. You could use a pair of matched opposites. For example, if you were a microbrewery you could use the following matrix to compare relative features within your segment, as demonstrated in Fig 12.2. This matrix may represent a comparison within your own range of beers or across your competition. This type of comparison is particularly useful when you have a number of product sub-brands within your master brand that target the same market, beer drinkers in this case.

Fig 12.2—Alternate functional positioning dimensions for a microbrewery

The objective of market positioning is to identify a profitable segment that is not particularly well serviced or represented by your competitors, and one that you have demonstratable advantages in. That said, there are certain segments that you simply don't want to participate in, segments I refer to as Quadrants of Death. These quadrants often include pricing as an axis, and, by extrapolation, a profitability dimension. Fig 12.3 shows an example that compares price vs. value. In this example, trying to achieve a premium sales price, whilst delivering low value, is highly unlikely to make for a very successful strategy. Theoretically it would be highly profitable, but in reality no one in his or her sane mind pays an extremely high price for extremely low value.

Whilst the matrix shows the entire upper left segment as the Quadrant of Death, as you move inwards towards the Price/Value intersection, the more likely success becomes. It's possible, with remarkable marketing (and a bit of smoke and mirrors) to market a slightly lower-than-average value product at a slightly higher-than-average price, but the tolerance level in this case is very limited and death can be quick!

Fig 12.3—The Quadrant of Death

There are usually multiple conflicting criteria that customers need to evaluate when making decisions. The x and y axes of the positioning matrix can be chosen based on these criteria and often reflect the fact that tradeoffs are required. I recommend that you develop a positioning matrix for each of the attributes that you intend to use to build your market position upon. These are likely to come from the dimensions you identified and validated during your research project. The ease of visualisation in the matrix will add a degree of clarity not entirely possible in the written format.

Purchase price or operating costs are often criteria that are offset against a product attribute. For example, it would be unusual for the cheapest car to be the most comfortable or the safest. In the service industry, customer satisfaction and the associated cost of providing a high level of service are two conflicting criteria that would be useful to consider.

Don't make too much noise if you're a newbie

If the target market is lucrative enough to justify your investment in it, then there's every likelihood that a number of existing players are in the same space too (unless you develop some form of unique and patented technology or application). Competitors are unlikely to surrender their position to a newcomer and will usually have the market share or dominant position from which to fight back.

Potential retaliatory actions by competitors need to be carefully considered and contingency plans developed to overcome them. In some instances, an overly aggressive approach to the market by a newcomer can prematurely elevate the competitive reaction, whereas a low-key entry strategy may not be regarded as posing much of a threat to them. By the time they realise their market position is being threatened, you will most likely be well established and in a stronger position to defend your position. Never underestimate the ferocity of your competitors or the lengths they'll go to in order to protect their market position or to take you out of business if necessary, even at the expense of their short-term profit.

Gaining a competitive advantage in a recession

Recessions are a regular and likely occurrence in the natural economic cycle. During recessions many business crash and burn, yet despite the hardships some businesses manage to thrive and prosper! What is it that separates these stars from the also-rans? The typical reaction of many business owners or managers will be to cut costs wherever possible. Whilst this is good business practice, it's where you make the cuts that can either damage or save your business. Too often the advertising or marketing budget is sacrificed right up front.

The macro result of this widespread reduction by the majority of companies is less advertising and promotional clutter in the market. Marketers with vision see this dynamic of reduced marketing spend and corresponding reduction in clutter as a golden opportunity to leap ahead of their competitors by exposing their brand message or product with reduced interference from competing brands.

If competitors reduce their advertising but you keep yours at your going rate, your returned value will be greater than if they had continued advertising at their previous rate. By the time the recession bottoms out and your competitors start thinking again about advertising and marketing, you'll have had plenty of time (months or years) to entrench yourself as the bold player in your industry. Consistent marketing shows strength, optimism and confidence, factors that will be positively appreciated and valued by your customers.

I believe you should exhaust all cost-reduction avenues before you cut your marketing budget. By torturing every cost element in your business you'll most likely find a number of areas where you can reduce expenditure, without having to resort to retrenchments or major reductions in marketing activity. Prudent spending and close attention to marketing results will also ensure that every dollar is well spent. The benefits of continued marketing and promotion will be felt not only in the short term but in the long term as well. The fact is that customers will continue to make purchases through the recession, although possibly in smaller quantities. They will buy from someone, so why not put on your best face and become their chosen supplier? Every sale YOU make is one that your COMPETITOR doesn't, and making no sales means they're likely to go out of business fast!

Marketing Takeaways

  * A deep understanding of your competition is an essential part of your marketing strategy.
  * Define exactly what market you're actually operating in before you determine the position you want to occupy.
  * Occupy a profitable segment that's not well serviced or represented by your competitors, and one in which you have a demonstrable advantage.
  * It's what you do better than your competitor that counts, not necessarily what you think you're good at.
  * Never underestimate the ferocity of your competitors or the lengths they'll go to in order to protect their market position or to take you out of business if necessary, even at the expense of their short-term profit.
  * Consistent marketing activity shows your strength, optimism and confidence.

Chapter 13

OWN A HILL THEN   
DEFEND IT

"They defended the grains of sand in the desert to the last drop of their blood."

Gamal Abdel Nasser—Egyptian President

OWN A HILL THEN DEFEND IT

In the early 1990s during my years at Xerox, we were the undisputed market leader in high-volume copiers and laser printers, a position that has subsequently been eroded to a degree by a number of capable competitors. Since the early 1980s, Xerox's market share of low-volume copiers had been continuously eroded by the influx of Japanese competitors offering lower-cost models that were fashioned on Xerox technology, whose patents around the xerographic copying process had expired. Thankfully our high-volume products dominated the market and generated substantial service revenues via click charges that kept Xerox ticking over profitably. The company philosophy was that it was better (and more profitable) to have one printer generating a million copies every month than to have 200 small units generating 5,000 copies each.

The managing director at the time was an outstanding marketing strategist, and could clearly see the increasing competitive pressures and subsequent risks as new entrants tried to pry our high-volume customers away from us. I remember him assembling the sales management team (in which I was a major account sales manager with numerous high-volume customers). He was rather blunt and quite explicit in explaining to us that high volume was our 'hill', and that as a company we would protect it to the death. He drew our hill on a whiteboard with the competitors at the bottom trying to scramble their way up. He explained that our vantage position at the top of our hill was the ideal spot to defend from, which was what he was demanding of all of us and our sales teams.

Losing deals on low-volume products was tolerable (provided we'd given it our best sales effort of course), but when it came to high volume, failure was an unacceptable option. If we were coming unstuck on a deal and a competitor was starting to make inroads, we were to call on him or even the senior executives of our listed holding company. They might have contacts inside the customer's company, and could perhaps help to persuade them that Xerox was the best option. Now, considering that Xerox employed over 800 staff and our listed parent over 25,000 staff, this level of executive involvement was almost unheard of.

As a company we would stop at virtually nothing to ensure our competitors didn't get so much as a whiff of our high-volume business, and, if one of us did have the misfortune to lose a deal, that sales person and manager would be on the carpet in no time explaining the details to the managing director and the executive team. During my time at Xerox I can thankfully say that I never had the misfortune to experience this and my team had an unblemished track record for sales of high-volume products. Our success was driven by a sheer determination to win, rather than by fear. Our efforts were ably supported by extensive product and sales training, which gave us the tools and skills to be effective in defending our hill.

Too many companies make the error of trying to be good at a lot of things, but end up being average at all of them. Find out what you do better than anyone else, ensure it's something your customers want and value, and then protect it. A common trait of enduringly successful brands is that they all defend their hills with passion, resource and energy. Even the smallest crack will eventually start to grow until your competitors have your back against the wall. Don't even give them the smallest whiff of your hill!

You may find that in order to sustain your command of the hill, it becomes necessary to break your current model and re-invent yourself. One view of common logic suggests that you shouldn't break what's not broken, but sometimes it may be the most effective (though painful) way to keep ahead of competitors.

If you're a market leader your competitors will be watching you closely, trying to match and improve on what you offer. However, their first target is to pull up alongside you, so if you continually innovate and make smart changes, they will forever be trailing you, waiting to pick up on your next move. In fast moving technology businesses, a well-defined product development roadmap is essential to sustaining an advantage.

Marketing Takeaways

  * Successful brands defend their hills with passion, resource and energy. 
  * Support your defence with adequate product and sales training.
  * Don't try to be good at a lot of things and end up being average at all of them.
  * To sustain command of your hill, it may become necessary to break your current model and re-invent yourself.
  * Through continual innovation and by making smart changes, you can ensure your competitors will always be trailing you.

Chapter 14

BRAND STORYTELLING   
THAT SELLS

"Storytelling is the most powerful way to put ideas into the world today."

Robert McAfee Brown—theologian

BRAND STORYTELLING THAT SELLS

The art of being able to tell a compelling story about your product or service is really the 'sweet spot' of being an effective marketer. It's not enough to simply define your unique value proposition—you also need to communicate it in a way that makes your customers take notice and care about what you're saying. If you consider most of the pre-eminent leaders throughout history they all share one thing in common—the ability to emotionally engage their audience through storytelling. Developing and then being able to communicate your value proposition and brand promise convincingly is arguably the most critical part of your marketing strategy and should precede any tactical programmes.

The first question every marketer should ask is, "How does the customer benefit from the product or service attribute that I'm presenting?" A product attribute without a resulting customer benefit is simply a feature and has no relevance in the quest to satisfy needs. By explaining clearly how your product or service satisfies customers' needs, you make the critical connection in their minds between NEED and SOLUTION. Without this 'solving of my problem', a sale won't be made.

The following example in Fig 14.1 shows how a customer benefit statement is built around an identified and validated customer need, satisfied by a product or service attribute and then completed with a conversational customer benefit statement.

Fig 14.1—Building customer benefit statements is the core of brand messaging

The 'SO WHAT?' test

Unless you're reasonably familiar with and practised in developing customer benefit statements, a common mistake is to present features and not the resulting benefits. This is also the most common mistake made by untrained or inexperienced sales people. They fall into the trap of rolling out as many product features as they can remember (or can read off the brochure), hoping that somewhere in the long list the customer might latch onto one. Unfortunately this 'shotgun' approach rarely works because no one buys features for the sake of features. They always buy the benefit that the feature provides. The old cliché that you don't buy a drill bit, you buy the hole that it produces is absolutely correct.

Unfortunately it's usually a bit harder to build compelling benefit statements in practice than it might seem. A useful technique I like to use is to ask the question, "So what?" when reviewing a value proposition or benefit statement. If there's nothing in the answer that tells you how customers will benefit from your product, then you haven't dug deep enough into the benefits and are not really presenting a compelling value-based statement. The following examples illustrate poor benefit statements that don't adequately convey the value proposition, accompanied by improved and more effective versions:

1a. "Our latest model has the most extensive array of electronic user aids" (so what does that mean for me?)

1b. "Our latest model has the most extensive array of electronic user aids, which enables you to complete your work more accurately and consistently" (improved version with benefit statement)

2a. "We always strive to provide great service" (so what does great service actually mean?)

2b. "We always strive to provide great service by responding to email requests within 30 minutes" (clearly explains exactly what the dimension of good service is in a more relevant and meaningful manner)

The great service example also illustrates how important it is to scratch beneath the surface of the obvious when you develop your customer benefit statements. Don't feel bad if you recognise some of your own marketing efforts in the previous weak examples. Most of the new clients I engage with haven't scratched the surface nearly enough to uncover the granular and more relevant benefits.

Developing strong benefit statements for your value proposition isn't difficult, but you do have to consciously apply the concept of Features and Benefits in order to create effective messaging. Having digested this idea, why not keep your eyes open for examples of poor messaging, analysing them in the context of customer benefits and suggesting to yourself how you would improve them. Being a marketer at heart (and in my DNA), I can't help myself from continually analysing and critiquing marketing messages.

Do I have a story to tell you!

A great brand is most clearly expressed, not by the logo, but by its Brand Story. Every brand should have a unique story to tell and this is what really defines your unique value proposition and builds lasting recognition. An important function of the brand story is to engage your customer at an emotional level, in addition to presenting the functional capabilities and resulting customer benefits.

Storytelling is a powerful brand-building tool and shouldn't be overlooked or underestimated. In the consumer segment, brand storytelling is a well-practised art and is used by successful consumer brands across the world. Sadly, it's less common for industrial and commercial marketers to use brand storytelling, to their detriment I believe. I don't know of anyone who doesn't enjoy listening to a well-told story, even as adults. However, on the flipside, a poor storyline or badly presented one is a sure-fire recipe for boredom! Remember that ALL buyers are people and we must appeal to them as individuals in our marketing approach.

The full extent of a brand story starts with the brand name, is expanded upon through the tagline, and is completed through the presentation of your unique capabilities (which should be aligned to validated customer needs). Your brand story should powerfully embody your brand promise and forms the basis of messaging in ALL marketing material. Typically, it's likely to be found on the homepage of your website, the featured message in your brochure, key messaging in media adverts, your social media platform description and as an essential part of your sales pitch. Internally, it also enables your staff to more easily become familiar with the unique factors that differentiate their company, product or brand.

As a general rule of thumb I prefer to keep the brand story short and concise, removing any unnecessary words. After all, we're trying to develop a piece of messaging that will stick in people's minds and be easily recalled. Less is definitely more in this case. The challenge is to capture and convey the essence of your unique value proposition in a limited number of words... easier said than done! Long-winded prose doesn't fit the bill unfortunately. Sometimes this concise brand story is referred to as an elevator pitch. The theory behind the term elevator pitch is that it should be short and informative enough to be told during a short ride in an elevator.

Your brand story can consist of multiple elements, depending on the complexity of your offering. If you have a complex set of attributes and customer benefits, you may need to expand your brand story to include a wider group of value propositions. Even so, you should still develop the shorter, more concise elevator pitch as an introduction to your expanded brand story. The key is to try and include your top three value propositions and related customer benefits. If you've done your research correctly, these are the MAIN reasons why MOST of your customers will buy from you. Remember the 80/20 rule?

Here's an example of a brand story we developed for a client who provides a website transaction monitoring solution...

> Relax, we've got you covered! (tagline)
> 
> Research shows that a website with slow response times or transaction failures, not only results in decreased sales revenues, but can have a profoundly negative impact on your brand. Brand X is an automated digital mystery shopper that provides real-time status updates on website and online transaction availability. 
> 
> Using round the clock, 365-days-a-year process simulation and monitoring, Brand X provides true online customer experience insight and management. SMS text and email alerts are sent immediately in the event of a problem, enabling you to take remedial action to rapidly fix the issue and get the site up and running again. By minimising customer disruption and maximising transactability, the risk of lost sales is significantly reduced.

In this example, further expanded messages were developed in order to present the full suite of product attributes and related customer benefits in their marketing collaterals and on their website. Having captured the customer's initial attention through the brand story, the expanded content and more detailed explanation of the propositions enable the interested customer to gain a deeper insight. All the attributes that form the basis of this client's value proposition and resulting message were uncovered through an extensive market research survey. The scope of the research project covered current and past customers in order to understand not only why they use the service but also to uncover why some no longer used the service.

> This is a brand story we developed for the city of Brno and the South Moravian Region in the Czech Republic...
> 
>   
> 
> 
> Make a difference
> 
> Today's global citizens yearn for a meaningful work/life balance, with a vibrant career to satisfy their professional aspirations and a healthy environment in which to bring up family and live their personal dreams. Sadly it's an elusive dream for many.
> 
> Right in the heart of cultural Central Europe is Brno, a vibrant and progressive city where world-class science, technology and innovation intersects with the rich tradition, family values and lifestyle of the stunning South Moravian Region. 
> 
> Brno is a city of contrasts. Its rich tradition and culture belies the advanced technological capability of its five universities with over 80,000 students, a vibrant, world-class research and development sector, and an innovative technology environment that boasts numerous global brand leaders. 
> 
> If you haven't considered Brno and the amazing lifestyle of South Moravia, perhaps it's time for some fresh thinking. After all, that's what we've been doing for over 1,000 years.

Taglines, slogans and straplines

Taglines, slogans and straplines are all common terms for a short statement or group of words used to create a memorable phrase that will embody your unique brand promise, or it could simply describe functionally what your brand or company does. The tagline is typically used in marketing materials and advertising in conjunction with the logo. It may be permanently appended to the logo or used as a separate messaging element—either approach is quite acceptable. After your brand name, the tagline is the first introduction to your brand story.

Many business owners and marketers believe that a tagline is a mandatory element. This isn't necessarily my view. I believe that if you can't say something that builds on your brand story or unique value proposition, say nothing. There are too many clichéd taglines floating around that add absolutely no value to the brand. Here are a few of my favourites:

  * 'No job too big or too small'
  * 'Second to none'
  * 'We deliver'
  * 'Service with a smile'
  * 'We pride ourselves on service'
  * 'You've tried the rest, now try the best' 
  * Anything that includes gratuitous use of the words 'solutions specialist'

And so the list goes on ad nauseam. Not one of these taglines actually says anything constructive about the value proposition of the brand, yet I've seen all of them in use. Do yourself a favour; if you have anything like these as your tagline, get rid of it right away until you can craft something more relevant. It's doing your brand and image no good at all.

Some companies try to be more than they really are. There's nothing wrong with a bit of embellishment to make your brand sound professional or more important, but don't let yourself slip into the twilight zone like a taxi company in my home town did. Their tagline is a functional statement, which is an acceptable alternative to the value proposition if the brand name is abstract and doesn't convey the nature of what you do. This taxi company describes itself as being 'Commuter Solution Specialists'. Do me a favour! Can anyone explain to me what a 'Commuter Solution Specialist' does? Are taxi drivers now to be referred to as 'Commuter Solution Integrators'? Mind you, they do integrate vehicle and passenger, but somehow 'Cabby' sounds just fine to me.

The following list of tagline examples all manage to effectively capture a unique value proposition for their respective brands, and are not simply token statements. Some taglines convey a double meaning, adding an interesting and thought-provoking twist. This could potentially be the single magic factor that causes the customer to remember your tagline (and unique value proposition).

  * Club Med—The antidote for civilization
  * Energizer Batteries—It keeps going, and going, and going...
  * General Electric—We bring good things to life
  * Expedia.com—Don't just travel. Travel right
  * Carlsberg—Probably the best beer in the world
  * Avis—We try harder

Needs, attributes and benefits

When you're building up your messaging you should use the cascading approach shown in Fig 14.2. You start with your validated customer needs, append the appropriate associated product attributes and then craft compelling customer benefit statements (the most important part in this stage of the process). I really like this structured approach because it gives us the ability to clearly see the underlying structure and basis of each statement. Of course your customer doesn't see your 'workings', only the final output which is the Customer Benefit Statement. Collectively these statements form the basis of your Unique Value Proposition.

Fig 14.2—The cascading approach to marketing message development

Tagline—For the next level, you're trying to capture your single most unique and important value proposition (as voted for by your customers through the customer research survey) in a short statement of a few words only. As we discussed earlier, your tagline could also be a functional statement describing what you do, rather than how you do it. It could just as easily be an emotional statement. At the Brand DNA level, this key proposition is embodied in your Brand Promise.

Brand story—From here the brand story is relatively easy to craft with a little 'wordsmithing'. After all it's just a montage of your key value propositions and customer benefit statements. At this important stage you may want to engage a professional copywriter to review and edit your brand story so that it flows and reads well. It's a small investment that will pay dividends.

Here are two hypothetical examples to illustrate the structured process behind applying the brand name, functional statement and tagline (if applicable) using the cascading model in Fig 14.2.

EXAMPLE A—Functional brand name

Brand name—ABC Lawncare Services (it's obvious what they do)

Functional statement—not required in this case

Tagline—'We treat your lawn like our own' (unique value proposition and brand promise)

EXAMPLE B—Abstract brand name

Brand name—ABC & Co. (brand name says nothing about what they do)

Functional statement—Lawncare Specialists (explains clearly what the company does but doesn't allude to what makes it different or unique)

Tagline—'We treat your lawn like our own' (unique value proposition and brand promise)

Interestingly, when you look at taglines of the biggest global brands, some have never seen any need or reason to make any changes. For example, Nike 'Just do it' and Avis 'We try harder' have endured for decades, adding extensive value to the brands. On the other hand, Coca Cola changes its tagline almost every other season. I'm not sure if it has some greater insight whereby its customer needs and consequently its value proposition change every other season. Perhaps it's a lack of commitment to an enduring central value proposition? I use Coca Cola critically as an example with much reservation, considering that it's a global giant and obviously knows how to do lots of stuff very well, but as you'll see in the next chapter, even the mighty can make mistakes.

Marketing Takeaways

  * It's vitally important that you define your unique value proposition and brand promise, and openly share it with your team.
  * Customers buy the benefit that a product provides, and not the feature. By explaining clearly how your product satisfies their needs, you make the crucial mental connection between their need and your solution.
  * You start with your validated customer needs, append the appropriate product attributes and then craft compelling customer benefit statements.
  * You should try to tell a unique brand story that engages the customer at an emotional level, in addition to presenting the functional capabilities and benefits.
  * Taglines, slogans and straplines can embody your unique brand promise, or may simply describe functionally what your brand or company does.
  * The brand story embodies your brand promise and forms the basis of messaging in all marketing material. It should concisely convey the essence of your unique value proposition.

Chapter 15

VALIDATING YOUR UNIQUE   
PROPOSITION

"Developing a brand strategy without market validation is like skydiving without a parachute."

Author unknown

VALIDATING YOUR UNIQUE PROPOSITION

In his highly respected book on market validation, If You Build it, Will They Come? Dr Rob Adams talks about how most companies go about marketing their new offerings. He describes the common, flawed approach as: Ready, Fire, Fire, Fire, Aim. He contends that the only effective way to do it is: Ready, Aim, Fire, and he has plenty of evidence to support his postulation. In essence, what Rob is saying is that most companies jump into product development, product launch and marketing activity without adequate, or any, market validation and research. He suggests strongly that this is one of the reasons that 90% of new businesses fail and 65% of new products fail. Of all product failures, his research attributes 85% of them to market-related issues, not product deficiencies. This is wholeheartedly supported by my own experiences as a marketing and brand consultant.

However, it's not enough to test your value proposition once upfront only. The market is constantly evolving and changing, so consequently your customers' preferences and the available competitive offerings will also change. You should revisit your value proposition from time to time and conduct fresh validation to ensure that it's still 'on the money'. If no need for change is evident then great, you can confidently press on with your marketing and promotional activities. If you do discover a shift, even a small one, you can quickly make an adjustment and be confident that your marketing investment will still be in good shape.

Products usually fail because they don't sell and seldom because they don't perform functionally. Sure there are examples of poorly designed products that have failed miserably, but there are squillions of examples of great products that simply flopped at market level. A famous and highly publicised failure (or major disappointment to be kind, as the product is actually still being sold on the market) is the Segway personal transportation device. Dean Kamen, the inventor, had a great vision of everyone riding around silently on his incredible device. But for many reasons it just didn't get the take-up or widespread acceptance that he had expected, despite its solving some really challenging personal transportation problems and delivering an outstanding customer experience.

> Even the big guys stuff up
> 
> One of the most expensive and embarrassing product failures of all time was New Coke. Despite spending millions of dollars on research and a very high profile launch, the new flavour bombed spectacularly in the market. The fundamental flaw in the research was not the lack of it, as is the case in many product failures, but rather the research methodology. You see, they conducted blind tastings at which the test subjects took sips from both Classic and New Coke. 
> 
> The results of the blind taste tests indicated an overwhelming preference for New Coke. The thing was, when consumers started to drink entire cans of New Coke, they found it to be too sweet and too much like Pepsi. Coca Cola rather rapidly relaunched the original recipe as Classic Coke, but alas the damage was done, not only to their bottom line but also to their fierce pride as a savvy marketing brand. The moral of the New Coke story is that it's not adequate to simply 'do research'; you need to do the CORRECT research.

There are many capable professional research agencies in the market whose advice and input you may want to seek. If cost is an issue and you choose to run your own research project, then spend adequate time planning. You'll also need to do some initial testing to see if the data and feedback you're getting is providing an adequate level of insight for you to use to formulate your strategy. Remember, once you integrate the findings into your strategy and start rolling out your marketing programme, the cost of getting it wrong can be very high (just ask Coca Cola!).

As we discussed in the earlier chapter on conducting customer research, you will once again need to carefully consider how large your validation sample will be. You don't want to spend more time or money digging past a level that gives you adequate feedback, but you also need to have a sense that the results accurately reflect your target market.

Marketing Takeaways

  * Don't launch into new products or marketing activity without conducting market validation and research.
  * Revisit your value proposition from time to time and conduct fresh validation to ensure that it's still 'on the money'.
  * Conduct some initial testing to see if the data and feedback you're getting is providing an adequate level of insight.
  * It's not adequate to simply do research; you need to do the CORRECT research.
  * Consider the extent of your validation sample. You need to conduct enough surveys to get a sense that the results accurately reflect your target market.

Chapter 16

DID YOUR CUSTOMER HAVE A   
BRAND ORGASM?

"A lot of brands, you can't touch them. When you're dealing with Snoop Dogg, he brings you closer to the brand and it feels like it's a part of you."

Snoop Dogg—rapper and successful entrepreneur

DID YOUR CUSTOMER HAVE A BRAND ORGASM?

You know what it's like. You look forward to it with excited anticipation, it feels amazing at the time, you want to tell someone about it after, and you can't wait for next time. If this is how your customers feel about their experience with your brand then you're onto a winner! Read no more. But if this isn't how it is for your customers, then this chapter is for you.

I like to think of the customer brand experience as where the rubber hits the road. This is where all the research, planning and investment in brand strategy lives and dies. It's the very moment when your unique value proposition becomes the living, breathing brand promise to your customer, which is what you'll ultimately be judged against. Positively capturing the customer at this critical moment of meaning is essential to building a powerful brand.

The critical moment of meaning could be any number of interactions, and depends entirely on your engagement strategy and how your products are marketed. You really want to win every encounter with your customer. Not in an adversarial or competitive way, but in the context of achieving the objective of creating a positive and memorable experience and delighting your customer.

The Unique Starbucks Experience

I was on a trip through Hong Kong back to Auckland and had about seven hours to kill in transit. Rather than sitting in the transit lounge I decided to catch a train into the city. It was around 9am when I arrived in the CBD, and being mid-summer the ambient temperature was already well over 30 degrees C, with sweltering humidity. I wasn't exactly dressed for summer, having just left a winter climate, so it didn't take long before I was starting to melt!

I headed for the nearest Starbucks and dived into the beautifully air-conditioned store. It was like an oasis; I immediately felt transformed and completely at home. The menu had the recognisable fare of hot and cold beverages and I settled for my usual Caramel Macchiato. I sat down to enjoy my coffee and quickly slipped into a world within a world. It all felt so familiar that I could have sworn I was back at the Starbucks store in my hometown in New Zealand.

My macchiato tasted comfortingly familiar, the cool air inside the store felt exactly as it did back home, and the décor and furniture were just as I had expected. Despite being thousands of kilometres from home, I had been transported to a place that had no geographic or cultural boundaries. I was at home.

In the book Brand Promise by Duane E. Knapp, retired Starbucks CEO Orin Smith explains that Starbuck's guiding purpose was instrumental in driving its shift back to market and financial success. He further explains that Starbucks had long been guided by a promise, known internally as its purpose. The purpose was to provide customers with an uplifting experience that enriched their lives, in his words, The Unique Starbuck's Experience. He goes on to say that the consistent fulfilment of the purpose was the essence of the Starbuck's brand, and the primary reason for its customers' loyalty and strong emotional connection to the brand.

But how can this be?

Research has shown that emotionally significant events are more readily remembered because they are associated with higher levels of arousal in our brains. This is supported by a physiological reaction that increases blood glucose in the brain, which promotes the memory process. The pleasure chemical dopamine is also released, which, as we saw in an earlier chapter, creates a positive connection with the event.

In a marketing context, there is a direct correlation between the intensity and emotional enjoyment of a brand interaction and the degree to which it is remembered and valued. The more frequent these experiences are, the more powerful and permanent the emotional brand connection becomes. It's worth considering that it's also possible for negative experiences to become entrenched in the same manner as positive ones.

The more tangible and emotionally engaging the brand experience, the more likely a strong emotional association and positive long-term memory will be developed. We experience and capture emotion though our senses, so it's important to try and involve as many senses into the brand experience as possible. For example, being exposed to brand messaging on a digital device will have less impact on you than if you were physically engaged in the experience, for instance in a Starbucks store that has an ambience and other sensory experiences.

If you apply my philosophy of playing one shot at a time, then you should design every customer interaction with your brand in a way that maximises the opportunity to create a memorable and positive experience. The concept of designing an exceptional customer experience is equally applicable in B2C consumer marketing as it is in B2B industrial commercial marketing.

Brand experience is not just about the destination or ultimate sale, but the journey itself. Every brand interaction with the customer is important, no matter how insignificant it may seem. There are many touch-points where your company interfaces with your target market and customers, and they all need to support your brand promise, messaging, graphic elements and service ethos in a consistent manner.

It's pointless making grand promises around service and performance only to have a staff member make a slip-up during an interaction and destroy all the hard work and money you've invested in building your brand. Conversely, when these interactions are handled well they positively reinforce your brand promise and improve your chances of making a sale (and creating a Brand Advocate). The entire organisation from the CEO down to the lowest worker needs to understand the brand promise and how to deliver the perfect customer experience. Simply doing a good job isn't enough; it's how your customers feel about their brand experience that really counts.

The underlying principle to follow when you're designing the customer experience is to try to imagine what it would be like to be your own customer, and put yourself in their shoes. You may find it helpful to visually map out the engagement process on a large sheet of paper or whiteboard in order to provide top-level clarity and insight. It's really no different from how you placed yourself in the position of the customers when you wanted to uncover and understand their needs. You always want to look at your business and market through the eyes of your customer. Think also about how you can provide some form of tangible takeaway that will re-connect your customer with your brand once the interaction has passed. The trusty brochure can still play a valuable role as a reminder of the interaction and as a re-connecting device.

If you're already a mature organisation with a refined marketing and sales programme in place, then a customer experience audit won't do any harm. I favour the mystery shopper model where you have a mole masquerade as a genuine customer. You could run several iterations and separate exercises in order to test all customer touch-points. This can be an amazingly insightful experience, but at the same time it can also be rather distressing when you discover trusted staff aren't performing to the expected standard. In most cases, your staff are probably doing their best, but they may lack formal training or a proper induction into what makes the company or brand unique and successful. Do they know the Brand Promise and what it means to them at the front line? Can they repeat the Brand Story? Have they bought into the Purpose of the organisation?

Designing the customer experience

> The customer experience audit revealed all
> 
> Some years ago I designed and implemented a customer experience audit for one of New Zealand's largest PC manufacturers that operated its own chain of retail outlets. The project was instigated as a result of falling sales figures and underperforming retail stores. I visited a number of the stores, posing as a potential customer looking for a PC. I didn't try to trick the sales staff nor was my alias anything untoward—I was just Joe Ordinary buying a computer. 
> 
> The experience was so immediately revealing that even a blind man on a galloping horse could see why this company was in dire trouble! The level of service was abysmal; retail assistants appeared to be so intent on moving customers through the store that they gave the distinct impression that customers were interfering with their work. On top of the bad service, not one of the retail assistants even bothered to take down my name after giving me their token sales pitch and distracted attention. How on earth were they going to follow up on leads! This is the stuff of Sales 101 and I was appalled by the experience. 
> 
> I duly completed the audit and convened a meeting with the managing director and his sales manager. The managing director was a really nice guy and was the one who had engaged me to conduct the audit. The sales manager was an arrogant fellow who looked like he never got out of his office chair except to go home at the end of the day. As you can imagine, my feedback about his retail sales department went down like a lead balloon! Not surprisingly, no changes were made in the retail sales channel. The company eventually folded about a year later, the retail sales problems no doubt contributing to their demise.

Henry Ford once said, "A business absolutely devoted to service will have only one worry about profits. They will be embarrassingly large".

It's essential that the customer experience is viewed and designed as a complete journey, from initial brand awareness and contact, through the sales process and beyond the sale. Every touch-point in the journey has to be carefully mapped out and considered, with individual interactions designed so that the customer feels great every time. The importance of brand consistency cannot be overemphasised.

The ability to repeat the performance and experience consistently, irrespective of who you have working for you is the premise of Michael Gerber's bestseller, The E-Myth, that I introduced in Chapter 3. His theory that the system runs the business and the people run the system is never more evident than in the major fast food outlets. If you think about any of the major fast food brands, they're virtually all operated by teenagers. Yet, with almost no experience and limited training, these young folk manage to churn out a consistent product and customer experience. There's no luck involved here—these franchise models are highly developed and sophisticated, with processes and systems in place for every aspect of the business, even down to how many seeds go onto a burger bun!

The only thing that counts is what the customer thinks

Now I'm not suggesting that customers are always right, but they are the reason you're in business and their opinion is what rings the tills (sounds clichéd but it's a fact). You just need to be sensible and ensure that everyone on your team is thinking from the perspective of the customer. No matter how well you design the customer experience and how much you systemise it, there will always be some degree of personal interaction between customers and staff. If your staff members don't run the system correctly, your customers are going to have a negative experience. Sam Walton, founder of Wal-Mart, the world's largest retailer said, "There is only one boss, the customer. She can fire everybody from the chairman down, simply by spending her money somewhere else".

Fig 16.1—Where the 'rubber meets the road'

Can you tell a compelling story?

A potential point of failure is the ability (or lack thereof) by customer-facing staff to present a consistent and effective message and positive experience to the customer. It starts with everyone on the team knowing and understanding the brand's value proposition or brand promise and the brand story. Once you've taken the time to develop your own value proposition, messaging and brand story, I sincerely hope that you share it openly with your entire team, even those members who don't interact with customers in their daily duties. Why I say this, is that these folk may meet a potential or existing customer in an informal or unexpected situation, such as at a BBQ for instance. Someone may ask them about their company and if they aren't adequately versed in the brand promise and brand story, they're unlikely to create a positive impression of your brand—opportunity lost. In fact, they may even do more harm than good.

A practical way to ensure a consistent message and brand story is presented by all staff that are involved in customer touch-points, is to develop standard scripts that can be learned, adapted and used consistently. This is possibly even more important in non-sales roles than for your salespeople.

It's not exactly common practice to train an accounts receivable clerk in the art of the brand conversation. The focus with them is usually on the mechanics of ensuring payments roll in on time. I recall a client project where we had done extensive work in developing a compelling value proposition through market research, and had trained the sales and technical staff in the art of delivering the brand story. Sales were going really well, but a number of customers were calling the CEO and cancelling orders, usually after receiving a phone call from the accounts receivable clerk. Although she was a lovely lady, her phone manner was abrupt and got the customers' backs up. We developed a set of simple scripts for her to follow at the various interactions of the collection process, which overcame the difficulties caused by her personality. All she had to do was learn the script and deliver it in her own style. Viola, the end of cancelled orders!

Marketing Takeaways

  * The brand experience is where the rubber hits the road for your brand and the customer, and winning every encounter is essential to building a powerful brand.
  * Put yourself in your customer's shoes and imagine what it would be like. The only thing that counts is what your customer thinks.
  * The customer experience is a complete journey, from brand awareness, through the sale and beyond.
  * Provide tangible takeaways that will re-connect your customer with your brand.
  * Everyone on your team should know and understand the brand promise and brand story.
  * Develop standard scripts that can be learned, adapted and used consistently.

Chapter 17

ONLINE IS DIFFERENT, BUT   
EXACTLY THE SAME

"No matter which marketing platform you choose to use, people always buy from people. It's just how it is."

Author unknown

ONLINE IS DIFFERENT, BUT EXACTLY THE SAME

Marketing in the online space is somewhat of a mystery to many people, but I'll attempt to unravel its secrets and clear up some of the confusion so that you can understand at a strategic level how to use online as a marketing channel. I often tell clients that they don't have to necessarily like digital and social media, but they do have to accept the growing role it's playing in modern marketing.

With the explosion of digital, online and social media into the marketing mix, many marketers tend to see these platforms and their marketing premise as being fundamentally different from that of traditional marketing channels. Actually, I don't really agree with this notion. Sure the functionality of the platforms and nature of the interactions are very different from traditional marketing, but, as I discussed earlier in the book, people buy from people.

I firmly believe that, whether you're engaging with customers through traditional 'push' channels or through the emerging digital 'pull' channels, people are, and will always be, centre-stage in the process. If you subscribe to this philosophy, then it's important to never forget that behind the digital façade and apparent anonymity of social media you must still appeal to the fundamental needs of people as described by Maslow's Hierarchy of Needs.

I see many brands treating social media and online as the marketing silver bullet, capable of fixing all their problems and solving their marketing challenges. If you have a weak value proposition or don't fully understand and appeal to the ACTUAL needs of your online customers, you WILL fail. The difference is that you'll fail publicly and in a more exposed manner. Michael Porter, the highly respected marketing academic, stated it rather well when he said that the underlying principles of strategy are enduring, regardless of technology or the pace of change.

A bit of this and a bit of that

Reaching customers through a combination of traditional and digital media platforms can be very successful indeed, so don't be afraid of developing a multi-platform strategy. The promotional channel mix is likely to be unique to your situation and is certainly not a 'one size fits all' choice. Organisations across different industries (and in different market life-stages) could apply a varying mix of social-media networking, keyword marketing and traditional offline media.

Which promotional vehicle should I drive?

Today's consumer and industrial buyer is faced with an incredible volume and array of marketing messages that are seemingly thrust at us from all angles. The number of vehicles available for promoting your products, services and offerings is growing by the day. As each new medium emerges it places additional strain and pressure on the traditional media that were yesterday's 'kings of the heap'.

Promotional channels that worked for us in the past may not necessarily work for us today, and those that work today may not necessarily work in the future. What doesn't change and should remain constant irrespective of the promotional channel is your brand promise, unique value proposition and organisational brand DNA. These are not technology or channel dependent, but are based on the intrinsic functionality of the human brain and our insight into how people make decisions. The ongoing challenge for the marketer is to identify new and innovative ways to communicate the core brand benefits to their market.

Traditional advertising media such as television, radio and print are increasingly struggling to achieve cut-through in an overcrowded and noisy marketplace in order to capture the attention of the customer. To achieve any degree of cut-through, the marketer must have an outstanding advert that captures Attention, generates Interest (perhaps owing to its clever or catchy nature), creates Desire for the product and triggers the required Action. This classic approach to developing effective advertising material is embodied in the famous acronym, AIDA. Alternatively, the product has to be so 'gee-whiz-bang' that customers seeing the advert can't help but take notice of it. But simply grabbing customers' attention is no guarantee of success. Many great award-winning advertising campaigns have proven to be lame ducks when it comes to generating sales, whilst many basic, low-budget campaigns have generated outstanding sales performances. It's all about the strength of the value proposition and how effectively it's presented.

Marketers around the world are using online advertising and promotional vehicles that sit outside the traditional media, focusing on the basic principle of trying to achieve more personal interaction with their customers. Some examples of available platforms are illustrated in Fig 17.1, which segments them into non-keyword or keyword-based channels.

Fig 17.1—A sample of some of the available marketing tools.

Statistics clearly show that traditional media continue to lose ground to digital channels each year, and the trend is expected to continue. For some 'old school' marketers, the thought of having to relinquish their love of traditional media (TV, press, magazines, outdoor, and radio, among others) is like asking Linus from the Peanuts comic strip to throw away his blanket. They're oblivious, or choose to turn a blind eye, to the diminishing efficacy of traditional advertising media and methods. But facts are facts—mass-market advertising as we knew it (and as Proctor & Gamble mastered in the consumer products space), whilst playing an important role, is no longer the marketing silver bullet. Consumers have the power to very easily switch off to marketing messages and are doing it. Besides, we're all tired of being sold to with carefully constructed product and brand propaganda that gets forced down our throats.

At the other extreme you have the online zealots who believe and preach that traditional media channels are dead and buried and that the answer lies exclusively on the web and in online communities. They're no better than the 'old school' marketers, believing theirs to be the only way.

Marketing success today, and certainly as we move forward, will come to those who effectively integrate the new social-networking media with traditional media and mainstream advertising. Building an online community of followers or a tribe of like-minded individuals will add significant value and extension to any traditional advertising campaign. Whilst it's the new online digital channels that get the most attention these days, the bottom line is that a well-considered combination of traditional and online media as illustrated in Fig 17.2 can generate excellent results.

Fig 17.2—The integrated lead-generation model

The frustrating thing about social media is that it can take a long time to build up a following before you can actively market to it. The upside of traditional mass-media channels is that you can very easily and quickly reach a large market. I've seen very successful social-media campaigns that achieved a critical mass of followers and participants by using traditional media channels in the early stages of the campaign. Once critical mass was achieved, the costly traditional media was turned off and the viral nature of social media left to take over, at very little ongoing cost. There really is no right or wrong answer to developing your promotional channel mix. Don't feel pressured by popular opinion or by the fear of being left behind into putting all your eggs into the social-media or digital basket without due consideration.

Business owners and marketers are turning to social networking and online marketing, anxious for better ROI on their advertising spend. You must be patient and may need to give your online and social-networking efforts six to twelve months to develop credibility and gain a meaningful following before you see measurable results. However, once you gather momentum and achieve critical mass, the longevity of your efforts will be stunning. A word of caution though—there are many online digital platforms available; unfortunately, each requires a substantial commitment of time and energy to make them work effectively. A pragmatic strategy is to apply the 80/20 rule by selecting the key platforms that will deliver the best return and performance, and then focusing your time and attention on this shortlist.

In my personal case I dabble with all the main social-media channels, primarily to understand from a professional point of view how they work and what marketing value they could offer. But when the going gets tough and I run out of time, I refocus my efforts onto platforms and channels that deliver the best value and bang for buck for my specific objectives. For me, that means website optimisation and regular blogging; however, this mix will be different in other organisations and at different stages of your brand's lifecycle.

How effective is your lead generation programme?

In my own marketing agency we used the local Yellow Pages directory extensively during our early years. Sure we spent up large to ensure we always had a dominant advert in our chosen categories, but our incoming leads through this channel made for a very good ROI. At that stage customers were still using Yellow Pages extensively, especially to find less-than-obvious services such as Marketing Consultants. Around 2005 we started to optimise our website in order to improve our Google ranking in the search results. Over time we started to move up Google's rankings until our website became #1 on Page 1 for a number of our targeted keywords. This premium position started to generate well-qualified leads through organic keyword search.

> Don't be misled by your enthusiasm
> 
> When you check your own Google rankings, turn off your search history because Google will customise your search results based on your preferences, i.e. which sites you visit and how often. If you visit your own website more than occasionally, you will eventually be placed at the top of the search results that YOU see on your screen. This DOES NOT mean you're #1 on Google, only that YOUR results have been personalised. Unfortunately you're the only person seeing them in this form. I've had clients call a week or two after their new website has been launched, proclaiming that they're #1, which is impossible so early on. Not surprisingly, they had enthusiastically visited their website a bit too often, causing this 'false positive' result.

Since the day I started the agency I kept an incoming-leads log in a simple Excel sheet. Nothing fancy, just the company name, contact details, date, source of lead and final result—did they engage us or not? Over time and through our regular analysis of incoming leads, we started to identify the emergence of an interesting pattern.

Our single largest lead source in volume terms was Yellow Pages, second was Google organic search, and third was personal referrals. At first glance it would be easy to say that Yellow Pages was our best lead-generating vehicle, but once we overlaid our success metrics the picture changed completely. Based on our lead-closing rate, referrals had the highest success rate (not surprising due to the positive and personal endorsement factor), but Google organic search showed a markedly higher success rate than Yellow Pages.

Our deduction from this data was one of relative qualification. Prospects searching in Yellow Pages had a very broad concept of what they might be looking for. In fact, many of the callers said that they didn't really know what they needed, just that they didn't think an advertising agency was the solution. However, when prospects found us through Google organic search they would naturally click through to our website, where they would visit and read a number of pages. By that stage they had self-qualified themselves, and those that did call us after that were genuine leads. Finally, those that came to us through referrals already had a positive impression of the agency and the type of marketing assistance we could provide, so it's no surprise that they did, and still do, deliver the highest success rate with infinite ROI (the cost to generate a referral is theoretically zero).

One might argue that there's nothing wrong with lots of incoming Yellow Pages leads even if they only result in a limited number of actual sales or engagements. That's quite true, but if you have a limited sales enquiry management resource and you make your money by charging for your time, it isn't ideal to have lots of time-wasters. When we overlaid our revenue-per-lead data over the incoming enquiry statistics, we discovered that Google organic was also our highest revenue generator.

Over time we started to notice a reduction in absolute enquiries generated through the printed Yellow Pages directory and online listing. The net result of this insight was that we reduced our annual Yellow Pages budget from $24,000 to less than $1,000! The saved money was channelled into other lead-generating activities and we aggressively worked on improving our Google ranking through various website optimisation techniques. Website optimisation has no direct cost to us as we do it ourselves, but we do account for it as a lost-opportunity cost. The moral of this story is that, had we not diligently tracked our leads, we would never have been in a position to make an informed decision that has added well over $20,000 to our bottom line each year! Now if that isn't enough encouragement and reason to track leads, I don't know what is.

Tracking and analysis

Digital marketing provides unprecedented levels of analytics and insight into customer behaviour. There are many tracking and monitoring tools available, but beware of the 'paralysis by analysis' trap! Keep the number of tracking and alert tools to a manageable level by determining upfront the key success metrics you want to measure. Data collection and analysis are critical components in measuring and improving the performance of your marketing activities, so don't be afraid to use them.

In the traditional offline marketing model, marketers would commit money and creativity towards a marketing programme and hope like crazy that some leads would pop out at the other end. Depending on the results, changes might then be made to the messaging, media titles and so on, but in all cases these changes would be based on guesswork and gut feel. I refer to this model as Blindfold Marketing. In traditional offline media there are no means to see the underlying dynamic of how customers are responding to what you're presenting to them. Sure you can uncover broad basic metrics such as how many people read the magazine or newspaper, but there's no way to determine how many viewed your advert, passed it to a friend or cut it out for future reference. The first indication of success is the phone ringing or a website enquiry coming through.

In the new online model, you can use the available tracking and monitoring tools to gain a detailed and in-depth understanding of how your message was received and what subsequent actions the customers took. From this rich insight you're able to make informed decisions about changes in order to improve the overall performance of your marketing programme. I call this Insight Marketing, which is a fundamental benefit of all online platforms. This concept is visualised in Fig 17.3.

Fig 17.3—Online marketing enables you to see inside the 'box'

It's marketing, Jim, but not as we know it

There are some fundamental differences between the model of traditional media and the online model. Traditional marketing and advertising was very much a hands-off process. What I mean by that is you could write out a cheque to your advertising agency, give their experts a brief and let them loose on a campaign. All you had to do was sit back, criticise a few design concepts and wait for the phone to ring (or not). This was the era of marketing by delegation.

In today's online model, it's very difficult to excuse yourself completely from the room and let an agency or other third party run your entire social media and digital activity. To achieve success you will need to be involved to some degree, not necessarily as the business owner or manager, but certainly as an organisation.

On the other hand it's just not practical for most people to become experts in online media. The opportunity cost is high due to the very specialised and rapidly changing nature of social media and the web. You'll probably find more value in working with a digital agency, dividing up responsibilities and activities.

Another key feature of traditional marketing is that it's a time-based, linear event model. Marketing and promotional activities generally run on a campaign-by-campaign basis, with coordinated bursts of media exposure creating immediate awareness. Campaigns usually run for a finite period of time and are repeated at a later stage to revive awareness and interest. In between campaigns you hope like hell that the market remembers you and your previous marketing message.

The online model, however, never sleeps. It's running 24/7 whether you like it or not. Sure you can start and stop your PPC (Pay per Click) campaigns as you wish, but you can't switch off Facebook, Twitter and LinkedIn. As with Google, all information is indexed and made available to the world, day and night. You simply can't think of your online activity as an event-based model like traditional marketing. You either participate properly or get out of the game and give your place to another more deserving participant (like your competitor). In the online model your market presence is interconnected and is evolving all the time. Once you get your head around the differences between traditional and online you can start to align your marketing activities to dovetail more effectively at the appropriate moments.

Marketing Takeaways

  * The underlying principles of strategy are enduring, regardless of technology or the pace of change.
  * Reaching customers through a combination of traditional channels and digital platforms can be very successful.
  * Select the key online and social networking platforms that will deliver the best return and performance. Don't try to use them all.
  * Be patient with your online and social networking efforts. It takes time to develop credibility and a following before you see results.
  * Track incoming leads so you can make informed marketing investment decisions. 
  * In social media you must still appeal to customer needs according to Maslow's Hierarchy of Needs.

Chapter 18

ENGAGEMENT PLATFORMS   
—THEORIES AND MODELS

"He who loves practice without theory is like the sailor who boards a ship without a rudder and compass and never knows where he may cast."

Leonardo da Vinci—all-round genius

ENGAGEMENT PLATFORMS—THEORIES AND MODELS

Think, then do

As I suggested in the introduction chapter, the essence of this book is to present a framework and set of methodologies with which you, the reader and aspiring marketer, can develop an effective brand marketing strategy. Remember, strategy and tactical implementation are two separate activities. In this chapter I will provide an engagement framework that you can use to map out your own customer engagement strategy.

I encourage you to invest time into researching the various platforms that are presented in this section. This will enable you to determine which are appropriate to your situation and to then transform your market engagement strategy into an implementable action plan. Before you jump into social media or online marketing particularly, research your chosen channels to become familiar with the latest trends and usage characteristics, and then match them to the nature of your product and online behaviour (socialgraphics) of your customers. The online market is changing very rapidly so today's news is tomorrow's fish and chips wrapper!

The web—There's no shortage of information on the web, but be careful to filter your search so that you only get the latest information. If you're researching digital and social media, I'd suggest you refine your search for the past three to six months' results only. These channels are part of such a fast-moving landscape that, beyond this recent timeframe, what you read may already have become outdated.

Specialist subject books—There are many exceptional books that cover traditional and online marketing. I don't recommend relying on books for online or social media advice or insights, because the market changes too rapidly for any printed book to be helpful at a tactical level. I do, however, recommend that you look out for e-books that cover the latest topics and dynamics of online, but remember that they also have a very short shelf-life. A useful source I often use is HubSpot.com. You can sign up for their excellent email newsletters and topical e-books. Another valuable resource is Mashable.com.

Specialist agencies—Although specialist agencies and consultants can be expensive, they can also add a great deal of value to your efforts. Even if you choose to engage an agency or consultant, I would still encourage you to do your own research in order to have a base level of subject knowledge. This enables you to more fully understand and appreciate any professional advice that you'll be paying for.

Workshops and seminars—These are also a great place to develop additional knowledge and skills, especially if they're interactive rather than lecture-based.

Let's move onto the strategy of how and where we engage with our customers. Multi-channel messaging using a number of online and traditional platforms is an effective strategy to increase customer engagement with your brand. When customers receive your value proposition message through a number of channels you increase the likelihood that they'll take notice, respond and ultimately engage with you. What you're trying to do is hang out where they hang out, befriend them and let them buy from you on their terms and in their time, rather than interrupting them and trying to do a sell job. It's the 'pull' versus 'push' approach.

The highly respected digital-thought leader and author Seth Godin coined the phrase permission marketing, a theory based on the premise that the most effective way to engage and ultimately sell to your customers is to earn the right to engage with them, to obtain their permission. Once you've earned their permission to engage, they'll be receptive to your marketing messages and more likely to buy from you. Permission marketing is only practically viable in the online digital world, as the bulk of traditional advertising and promotion employs the 'push' method.

Over the past few years I have developed and refined the Circle of Engagement™, a model that allows you to easily and visually map out the engagement platforms that will be most effective for your brand. The model clearly presents the continuum of available channels, from traditional media through to online digital and social media. Fig 18.1 illustrates the Circle as it stands today, incorporating the current major platforms and channels. There are other channel options that I've deliberately excluded from the Circle. The reason is that, for smaller businesses, the channels and platforms in the Circle represent the key ones that will generally give you the best bang for your buck. However, feel free to consider any other platforms that might be appropriate to your situation or new ones that will no doubt appear over time.

Fig 18.1—Circle of Engagement™ model (unpopulated)

How to use the Circle of Engagement™

The Circle is made up of five top-level segments: Passive Offline (primarily traditional media), Customer Experience, Direct Response, Social Media and Passive Online. It has no specific start or end point. These top-level segments reflect the broad nature and dynamic of the platforms and channels within their sector. At the centre of the Circle is your brand.

Fig 18.2 shows an example of a populated Circle of Engagement™ in which the connecting lines from your brand extend out to the example channels that might be appropriate in your particular situation. Your Circle will start with no connecting lines, so you have complete freedom to select whichever channels and platforms are best suited to your situation, bearing in mind the underlying concept of multi-channel engagement.

Fig 18.2—Circle of Engagement™ model showing example connections

The following tables present the broad dynamics of each segment with some insight into their value in the promotional mix. They also highlight some important negatives to be aware of.

Keyword search or social media?

One of the most common questions I'm asked by smaller businesses is whether they should be involved in social media or keyword marketing, which platforms they should use and to what degree. There's no hard and fast rule that dictates to what degree you should use either or both. A rough rule of thumb is that the less frequently your target market purchases your product, or the less obvious the product is, the more suitable and effective keyword search becomes. 'Top of mind' products that are regularly purchased and consumed are well suited to social media with its community and active engagement nature. Between these two extremes lies the more typical balance where both tools have a valuable role to play, preferably in an integrated manner. This is NOT a definitive model, but rather a broad guideline. You should always consider your particular situation carefully and engage a professional if you're not confident of making the best decisions in this regard.

Extending the reach of your brand

By utilising a range of appropriate online and social media platforms you can substantially increase the reach of your brand, to the point where your followers and brand advocates effectively become a valuable (and free) extension of your promotional arm. If you were to think of your followers or fans as distinct groups that don't necessarily overlap to a large degree, it becomes obvious how important it is to engage across a number of platforms in order to maximise reach. Don't be afraid of the obvious overlaps—they will simply reinforce your message and presence. Fig 18.3 illustrates the overlap of communities and how you can extend the reach of your brand.

Fig 18.3—Marketing across a range of online platforms extends the reach of your brand

Building a lasting online presence

One of the reasons I'm a fan of online marketing, especially keyword search, is that everything on the web is indexed in due course and then sits there indefinitely waiting to be found through organic keyword search. In the traditional offline media model, content created through advertising, editorial and media releases has a very limited shelf life. Typically, these blocks of content have a high profile so long as the campaign is active but, as soon as the campaign concludes, the recall and relevance of the material and messaging diminishes over a relatively short period of time. In order to rekindle the awareness, more money has to be thrown at it.

Conversely, in the new online media model, every piece of content that is created, whether it's a web page, blog post, tweet, article comment or review, is indexed by the search engines and retained for an indefinite period. Over time these snippets of information accumulate and your inventory of marketing messages grows. When a search is made for a keyword that relates to a piece of your content, it's retrieved from the database and presented to the searcher. In this instance you haven't had to pay a cent for your content to be presented, whereas in traditional media you pay for every exposure of your message.

To put this cumulative content model into perspective, imagine that you paid to run a half-page advert in your local newspaper. Each consecutive time you ran an updated version of the advert, the previous advert appeared next to it free of charge, effectively giving you a full page for the price of the half-page you've paid for. Now extend this along a timeline and imagine EVERY previous advert appearing alongside the newest one. Eventually you would fill every page of the newspaper with every advert that you had ever run, but without having to pay for them again. Sounds absurd doesn't it? Well that's exactly what happens with online media. Fig 18.4 illustrates the cumulative nature of online content.

Fig 18.4—Building a lasting online presence

Marketing Takeaways

  * Become familiar with the latest trends and usage characteristics of your engagement channels (especially for online), and then match them to the nature of your product and buying behaviour of your customers.
  * Hang out where your customers hang out. 
  * Increase the reach of your brand by utilising a range of online and social media platforms.
  * Over time your snippets of online marketing content accumulate and your inventory of marketing messages grows.
  * Earn your customers' permission to engage and they'll be receptive to your marketing messages and more likely to buy from you.
  * Generally speaking, the less frequently your target market purchases your type of product, or the less obvious the product is, the more suitable and effective keyword search becomes. 'Top of mind' products that are regularly purchased and consumed are well suited to social media.

Chapter 19

OUR WORLD IS CHANGING

"Because things are the way they are, things will not stay the way they are."

Bertolt Brecht—playwright

OUR WORLD IS CHANGING

There is a fundamental shift in the way consumers, in particular, interact with brands. Increasingly, more pre-purchase research is taking place online through search engines. In parallel, substantially more products are being purchased online via e-commerce, with online sales volumes growing at an exponential rate.

In addition to keyword search, social media has introduced a new and potentially powerful dimension to marketing across all market sectors. Today, as marketers, we have to evolve and adapt to the new and emerging digital platforms. Connecting with your customers and participating in the online conversation are no longer luxuries reserved for the 'big brands'. We all have to participate if we expect to achieve marketing, and indeed business, success into the future. It's becoming increasingly important to develop a robust brand strategy for a number of reasons. As Bob Dylan said, "The times they are a-changin".

1990 and the public World Wide Web is born

In 1990 Tim Berners-Lee (now Sir Tim) invented the World Wide Web, which for the first time gave the public instant access to masses of information. Nothing would ever be the same again. Arguably, no technology has had such a fundamental impact on our lives as the internet has. From its modest roots in around 1983 when the internet was simply a large network of connected computers in the exclusive domain of the military and universities, it now pervades every facet of our modern lives. And the pace at which it changes how we live is unlikely to slow down either. Buckle up, we're all on for the ride whether we like it or not!

Search engines and social media own the world's information

Google in particular has changed information discovery forever. Its mission is to ORGANISE the world's information and make it universally accessible, which has far-reaching implications for all organisations, whether commercial, government or non-profit. Facebook, although not considered to be a classic search engine, does play in the same space. Its vision is slightly different from Google's, but equally pervasive. Facebook is striving to CONNECT the world's information by making the connections between people and their personal information.

Digital platforms and social media

Traditional marketing channels and methods are being disrupted like never before, thanks to digital and social media. Not since the invention of television has any technology been as influential in changing the nature of marketing. When television first appeared in American households in the early 1950s, it gave marketers their first opportunity to reach the masses via a single communications medium. Marketing and advertising pioneers like David Ogilvy invented the concept of mass marketing, bringing consumer products into the homes of customers across every possible social stratum. There had never been anything as cost-effective or as effective, until now! It's interesting when you track the trend of marketing spend on traditional media. It's not relevant to quote actual numbers as it's such a fast-moving target, but all data indicates unequivocally that marketing investment in traditional media such as television, radio and print is being eroded by an increasing investment in digital marketing. It will be interesting to see, over the next decade, whether social media indeed retains and validates its perceived position as the new television.

Consumers interact differently with brands

According to the GlobalWebIndex research project, online consumers want brands to provide services that fit with their lifestyle. They want brands to listen to their views and comments and take notice of them. It's becoming more important that businesses across all sectors look at ways to engage with their customers online and meet their changing needs in the online space.

B2B (Business to Business) industrial commercial brands can no longer hide behind the pretence that industrial commercial customers don't use social media. It's true that, at the time of writing, the uptake of social media by industrial commercial brands is lower than for consumer brands, but that's constantly changing. They may not use platforms such as Facebook, Twitter and Pinterest to the extent that consumer brands do, but in their professional capacities they're actively involved in LinkedIn, blogging and YouTube.

Fig 19.1 illustrates how the control and influence on brands has changed irreversibly as a result of social media and the opportunity it provides for brands to engage online with their customers.

Fig 19.1—The powershift in control and influence on brands

In the pre-social-media era companies had complete ownership and control of their brands, what was said about them and how consumers interacted with them. In the age of social media, businesses still own the brand, but customers control the outcome of the brand in an indisputable manner. The dynamic of how companies connect and engage with today's online customer has changed.

Advertisers on traditional media channels such as television, radio and print base their campaigns on reach and frequency, essentially a numbers game. The premise is that, in due course, you can reach a large percentage of your target market if you repeat your promotional message frequently enough. The fact that an advert has to be presented between three to seven times before the recipient takes any notice of it, makes it very expensive if you're using a wide range of media. In today's online economy, the focus is on quality and relevance, not quantity.

Today, consumers talk to each other and share views and opinions far more widely and readily than they used to, enabling negative feedback or sentiment to spread like wildfire. You only need to look at the impact that travel review sites like TripAdvisor have had on hotels and restaurants. Many have been forced to close their doors because of negative reviews, often posted by mean, self-appointed critics.

This extreme level of public control over the outcome of brands is a double-edged sword. If you perform well then the mechanism will reward you, but if you fail it will punish you publicly. It harkens back to the dark ages of public executions that were designed not only to punish, but also to humiliate the offender and the family. On the other hand, when we wear our consumer hat we wield the power, which is of course a great feeling. However, it behoves each of us to consider carefully when we place online feedback and reviews; would we still say it to their faces if we couldn't hide behind the comfort of relative online anonymity? Let's collectively never forget that the bedfellow of power is responsibility.

> Power to the people!
> 
> I recall an experience I had back in the eighties when I was treated rather shabbily by airline staff during a local flight from Johannesburg to Cape Town. It really aggravated me and I vented my frustration to a small circle of friends at a BBQ soon after the incident. It's probably fair to assume that I created a negative perception of the airline brand in the minds of the ten or so people who had the patience to listen to my diatribe, but not enough to cause any meaningful economic impact on the financial performance of the airline. 
> 
> In contrast, you may well recall the story of Canadian musician Dave Carroll, who in 2008 had his $3,500 Taylor guitar destroyed by baggage handlers during a United Airlines flight. After United repeatedly declined to reimburse him for the damage, he wrote a now-famous song decrying their customer service and their brand. By the end of 2012 nearly 13 million people had watched the 'United Breaks Guitars' video on YouTube. Within four days of the video launching on YouTube, United Airlines stock plunged 10%, resulting in a reputed $180m being wiped off their stock. That could have bought over 51,000 replacement guitars! Such is the power of social media and the immense brand power it has passed across to the 'man in the street'.

The market explosion of smart mobile devices

Mobile computing is redefining the models of customer engagement, with people no longer using the internet as a discrete event or activity. Through our 'always-connected' smart mobile devices (phones and tablets) that we carry with us nearly all the time, the internet and web is evolving to become an integral part of our lives. Leading technology research firm IDC forecasts that, by 2015, more consumers in the USA will access the internet through their mobile phones than through their desktop computers. According to predictions by Cisco, global leaders in internet technology, by 2016:

  * There will be 1.4 mobile devices per capita—all your customers will be able to receive your marketing message via mobile.
  * Mobile network connection speeds will increase 9-fold, enabling extensive and ubiquitous use of data-heavy applications such as video and other streamed media.
  * Two-thirds of the world's mobile data traffic will be video, which indicates where substantial chunks of promotional budget should be spent in the future.
  * Global mobile data traffic will increase 18-fold between 2011 and 2016.

It's fair to say that mobile is the future of internet access, and for many years it always appeared to be the likely case. I remember back in the very early 2000s presenting a lecture on emerging technologies to a post-grad class at Waikato University. At that time, 54kbps dial-up access was the best technology on offer and broadband was considered to be 'futureware'.

I talked to the group about the convergence of technology and described a single mobile device in the future where you could access the internet through an 'always on' connection, make online credit card purchases, receive and send emails, instant message friends, take photos, and of course, make the odd phone call. By today's standard this sounds like a pretty basic phone, but at the time of the lecture, mobile phones were simple devices only able to text and make very expensive calls.

Now I don't suggest for one moment that I was smarter than Steve Jobs by envisioning the modern smartphone. Working at the time in an industry that was at the cutting edge of technology, this information was prematurely available to us. I was reminded recently of the startling impact my alleged epiphany had on the students in the lecture when one of them reminisced with me about the talk and remarked how incredulous and far-fetched it had all sounded. Honestly, they must have thought I'd been smoking the good stuff!

Today, our smartphones and other connected devices such as tablets have become the single most important new technology platform, at least as important, if not more so, than the advent of the personal computer.

We don't find prospects. They find us

Back in the good old days when television was king, queen and everything in between, the only thing marketers had to do was advertise on television and, hey presto, they were in the lounges and minds of millions of brand-loyal and eager consumers. At that stage it was still a novelty and viewers weren't quite as jaded and tired of adverts as they are today. You could say that advertising was like stealing candy from kids.

These days it's infinitely harder for advertisers to cut through the advertising clutter to reach their market. With our on-demand personal digital recorders, we seldom if ever need to endure endless minutes (seems like hours) of mind-numbing adverts. Yet, despite this, millions of dollars are still poured into this medium. Traditional media are not dead and buried, but they are certainly losing their effectiveness and consequently it's costing advertisers more to reach their markets.

Today's marketers are increasingly turning to the more subtle and sophisticated digital channels to find prospects. In fact they don't actually find the prospects; prospects find them. It's a bit like fishing really—you bait your hook with something tasty that your target 'fish' like, cast it into the water and wait for them to bite. Keyword search, pay-per-click advertising, blogging, email marketing, social networking platforms like Facebook, Twitter, Google+, Instagram, Pinterest et al (the list continues to grow at an ever-increasing pace) are starting to become the backbone of 21st century marketing.

Geography no longer matters as much

The world has become a single online marketplace where distance is no longer a barrier to trade. I remember my dear late father, who owned a successful import agency. As a young boy, I can remember him writing out his orders at the end of each week and posting them to his overseas suppliers. After many weeks, a reply would be received confirming the order and requesting payment by means of Letter of Credit. The bank would then arrange finance and would mail confirmation to the supplier. Only then would the supplier ship the goods, which took several months to arrive by sea.

All up it took many months to execute an order, and we were all blissfully happy! The sheer complexity of the process protected local businesses from unwanted overseas competition, kept at bay mainly by logistical and geographical challenges.

Competition is intensifying, with new offshore competitors invading our traditional local markets. No business or industry is safe. You can take a pessimist's view and mourn the good old days, or you can fight back with modern marketing weapons. If they're on your turf there's no reason why you can't occupy theirs. They may be so intent on expanding into new markets that they might be neglecting their local customer base, making them ripe for picking off.

An important aspect to keep top-of-mind is that not every country participates in the same way on the internet. This is driven by factors such as cultural differences, social norms, government regulations, degrees of internet uptake and speed of broadband access. In addition, different age groups within your target market use social media and digital platforms differently and look for different results from them. For example, according to the GlobalWebIndex research study, older consumers want brands to keep them informed and improve their knowledge, but younger consumers want to be entertained in addition to being informed. They also want to be connected with like-minded people.

If your business targets multiple countries or major geographic regions, you need to carefully consider the specific online dynamics and requirements of each of them. For example, Google, Facebook and YouTube are banned in China, one of the fastest growing online economies. In China and other second-tier digital markets, local platforms have cemented their place as first choice ahead of the global mega-platforms.

Marketing Takeaways

  * More pre-purchase research is taking place online through search engines. Brands need to have a strong search engine presence.
  * All businesses should consider how they could connect with online customers and participate in social media conversations. 
  * Today the focus of customer engagement is more on quality and relevance rather than quantity, as it was with traditional media.
  * Consumers talk to each other and share views and opinions more widely and readily than before. Brands need to ensure a consistently positive brand experience.
  * Mobile is the future of internet access and marketers must adapt to the changing models of information delivery and customer engagement.
  * The world has become a single online marketplace where distance is no longer a barrier. Today you can trade globally more easily if you so wish.
  * Not every country participates the same way on the internet. Many local platforms have cemented their place as first choice ahead of the global mega-platforms.

Chapter 20

IT WON'T HAPPEN BY MAGIC

"Our goals can only be reached through a vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success."

Pablo Picasso—artist

IT WON'T HAPPEN BY MAGIC

I wouldn't be surprised if you were aware of many of the ideas we've covered thus far. In fact, in my consulting practice I've often had clients say that they knew about many of the elements and concepts, but that they never really had a context or framework in which to place the pieces of the brand puzzle. I believe (and hope) that I've managed to present what can often be complex marketing ideas in an easily understood manner, so that any business owner or manager can comprehend and apply them to their own brand.

It's my intent to help smaller businesses to become better marketers by demystifying the 'black art' of marketing, and offering you a pragmatic and practical resource which you can use to improve the effectiveness of your marketing programme. I sincerely hope that I've delivered on the book's promise.

By following the steps of the process and developing your brand strategy, you'll be doing what most businesses don't bother to do. That, in itself, is a unique point of difference. If you decide to embark along the path of developing your own brand strategy, there's one single idea that, if you remember to apply it diligently, will keep you on the right track. I'm referring to the underlying concept of Need Satisfaction MarketingTM—Understand what your customers really want, not what you think they want, and offer them unique benefits that satisfy their needs, better than anyone else can.

The rest of the strategy development process supports this basic premise. It's built around clearly defining your target markets, discovering their needs, presenting appropriate emotional and product benefits that satisfy them, crafting compelling messaging around your differentiated offer and then delivering it cost-effectively where your customers 'hang out'. It's not a complicated process, but it does require you to work through each stage methodically in order to build the next stage on the back of the one before. Your brand strategy is the jigsaw puzzle, where all the pieces, when fitted correctly, become a beautiful picture.

Early on, I suggested that this book's purpose was not to provide detailed tactical information on how to 'do' marketing, but rather to provide a framework and a set of methodologies that smaller businesses could easily use to develop a great brand strategy that will underpin their promotional marketing activity and help them to be more successful. Strategy always precedes tactics. Without a carefully crafted strategy your tactical efforts will almost certainly fail to deliver anything more than mediocre results.

Of course nothing worthwhile comes easy. Simply reading a book won't magically result in a marvellous brand strategy and an effective promotional plan. You need to make the effort and do something about it. No Olympic athlete ever won a medal without hard work and a plan of how to get to the highest level of peak performance. I can guarantee that by working through all the stages of the brand strategy process presented in this book and then putting them into practice, your brand WILL be more effective (unless your product is a really bad idea, in which case, bury it).

At this stage you should revisit your Brand DNA model to remind yourself of the major challenges you identified as being in the way of achieving your Big Hairy Audacious Goal. Your tactical plan should be practical with definite actions and deadlines included. A simple Excel sheet such as the example in Fig 20.2 will suffice for your tactical plan and it's easy to regularly reference and check to see if you're on track or not.

Fig 20.2—An excerpt of a sample tactical plan

Building your marketing toolbox

At the various stages of the customer journey you'll need a range of tools to support your marketing and sales process. These tools can be any number of elements such as brochures, proof sources, spec sheets, presentation materials, free samples, training materials for channel partners, gifts and handouts.

The starting point for conceptualising and then designing these items is to think about what the ideal outcome from each interaction might be, both from a customer and a brand perspective. In many cases these support tools provide a good 'take-away' for the customer, which in due course act as a reminder of the positive interaction and key value proposition messages presented. There are no rules in this regard so I'm not going to tell you to do this or to do that, as every situation is different and requires fresh thinking. Don't be afraid to be creative and think outside the square.

Of more significance is the diligent and thoughtful replication of your unique value proposition and brand story across all the marketing elements in your toolbox. No matter what physical form the tools take, consistency of messaging is what builds brand power and reinforces your market position as a brand that delivers value to customers that none of your competitors can match. This is a critically important stage in transforming your brand strategy into a practical and implementable marketing programme. By now your brand strategy should be well defined and validated. Failing to 'put it out there' in a compelling manner will make all your hard work worth nothing.

I would love to hear whether you've improved the performance of your brand through the application of Need Satisfaction MarketingTM. You can email me at w@ayneattwell.com. Best wishes and good luck.

Templates presented in this book and other useful marketing resources are available for free download from my website www.WayneAttwell.com. These are constantly updated and new material added from time to time. To login to the RESOURCES section, please use the following details:

www.wayneattwell.com/resources

Username—1KeenMarketer

Password—Strategy46

Chapter 21

ABOUT THE AUTHOR

ABOUT THE AUTHOR

WAYNE ATTWELL studied industrial design, but chose early on in his career to follow his natural affinity for marketing. Internationally trained in business management and marketing strategy, he has held numerous senior marketing, sales and general management positions. He has also been involved in several business start-ups, mergers, acquisitions and disposals.

In 2004 he started a specialist brand marketing agency. Boasting a client list that included some of the most successful and recognisable brands in New Zealand, it came to be recognised as a leading integrated marketing agency.

Wayne has consulted extensively to start-ups and to many established businesses across a wide range of industries such as software, technology, e-commerce, consumer, pharmaceutical, local government, non-profit, social enterprise, utilities, infrastructure, education, arts, tourism and travel, manufacturing and agriculture. These organisations range from small privately held companies through to large corporate enterprises. Wayne's international experience covers New Zealand, North America, Central Europe, Japan, the United Kingdom and South Africa.

A regular seminar speaker, Wayne has also presented marketing workshops to many commercial and non-profit organisations. As a sought-after commentator on brand strategy by the mainstream media and business press, his views and opinions have been widely published. He is a member of the executive leadership team of the Waikato Digital Industry Forum and is principal marketing consultant to Soda Inc., one of New Zealand's leading business incubators.

If you're interested in having Wayne facilitate a brand strategy workshop for your organisation or wish to have him address your group, visit www.WayneAttwell.com or email w@ayneattwell.com.

LinkedIn - nz.linkedin.com/in/wayneattwell

Twitter - twitter.com/wayneattwell

Copyright © 2013 Wayne Attwell

Chapter 22

GLOSSARY

AdWords—Google's Pay per Click advertising product

ARPU—Average Revenue Per User

B2B—Business to Business

B2C—Business to Consumer

BHAG—Big Hairy Audacious Goal

Brand DNA—The core intrinsic components of a brand

CRM—Customer Relationship Management system e.g. 'Salesforce'

F2F—Face to Face

Google Analytics—A program that tracks visitor activity within a website

Organic traffic—Search traffic originating from a general keyword query in Google

ISP—Internet Service Provider

PPC—Pay per Click

PSS—Professional Selling Skills

ROI—Return on Investment

SaaS—Software as a Service

SEO—Search Engine Optimisation

SERPS—Search Engine Results Pages

SOHO—Small Office, Home Office

SME—Small and Medium-Size Enterprises

SWOT—Strengths, Weaknesses, Opportunities and Threats

WiiFC—What's in it For the Company

WiiFM—What's in it For Me
