Buzz!Words

Out on the Bleeding Edge

Summary: Marketing is overwhelming the average small and medium size business.  The sheer amount of information, technology and tools is astonishing.  It's more necessary than ever for these businesses to have a clearly articulated marketing plan. 

As I've been working with small and medium size businesses, I've noticed a trend:

• Business owners are feeling overwhelmed trying to run their businesses, and, at the same time, keep up with the marketing technology and consumer expectations.
• As costs come down for technology based marketing applications, the Do It Yourself (DIY) element increases significantly.  This means that websites, blogs, email marketing, viral marketing are all within the reach of the average small business person.  At the same time, they have neither the time, knowledge nor inclination to make it happen. 
• The amount of information about any one industry is exploding.  The number of directories, search engines, portals and blogs about any one industry is astounding.  Just remembering where all paid links are sitting is an interesting challenge for some customers. 

Lesson Learned: The only way to keep focus and ensure that marketing expenditures are managed it to spend the time to plan.  The sense of being overwhelmed comes from not having control of the activity, budget.  Have objectives, budgets, timelines and activities outlined in one place.  Then, work the plan. 

Competing on Price

It turns out that price isn't everything. As I stated in a recent post on Trust and Relationships, price is a relatively small driver of customer loyalty. Only 13% of customer loyalty is determined by price, while relationship is 30% and experience is 20% of the loyalty puzzle.

So when I came across a HBS Working Knowledge article on the Cheap Chic strategy at Target, a major US discount store player, I was interested in how Target is competing with the godzilla of price, Walmart.

It turns out that Target has successfully competed with Walmart by being different, and having a strong communication strategy, even though they are perceived to be worse than Walmart on pricing.

In another article in HBS, Your Customers, Use them or Lose Them, a case study of Commerce Bank, shows that competing on service rather than price can be very successful. Some people are willing to pay more for better service.

Lesson Learned: Price is important, but it's not everything in the competitive arena. If you can differentiate on service, quality or experience do so, but make sure you deliver against that promise, or you'll be charging more for the same thing -- which really alienates customers.

Writing Good Messages

There is a lot of bad writing out there. Just look at the number of ads, website and other materials that scream about the person, and about their company, and about their solutions, but don't ever address the customer's problem. I recently read a great article Three Psychological Triggers in Your Message, on MarketingProfs.com

One in particular "trigger" that I find missing in my own writing is "relating to the problem". You have to demonstrate the problem effectively before you can move the reader on to the solution. If the reader doesn't agree that there is a problem, then it's likely they'll edit out the message, with a quick, "that's not for me", and move on to the next website, ad or article.

I try to have a quick set of is that so facts at the beginning of each piece that people can relate to the problem. To quote Dr. Phil, you can't resolve what you don't acknowledge.

Painful Marketing Lessons

I was reading the Grocery Manufacturers of America daily newsletter today and learned that Kraft is considering putting Post cereals up for sale.

Well, this is no great surprise. When Kraft bought Nabisco cereals in 1992, they increased their market share by over ten points. At the time, it was pretty clear that they didn't know what they were doing with the cereal category. Kraft is a company that's very good at being number one or two in a category, competing primarily with private label. But they don't know how to compete particularly well with aggressive, creative marketers. An old friend once called Kraft a "coffee and cheese company with hobbies". I'll come clean here. I worked at Kraft Canada for three years, although not on the cereal category.

In the ten years since Kraft's purchase of Nabisco cereals, they have lost every single share point they gained in the Canadian market. That's because Kraft runs its operations with a tight focus on productivity. While that may be admirable, it lead to things like removing the capability to drop those great little toys inside the package (known as "inpacks"). Not having inpacks meant that the cost of producing the cereal was a bit lower. But at the same time, the bean counters eliminated one of the most powerful motivators in cereal sales -- those goofy little prizes in the cereal box.

Lesson learned: You can't save your way into a profit, you have to sell your way there.

Marketing 101 - Marketing Jargon

As I've been writing my Marketing 101 posts it has occurred to me that we as marketers have done exactly the opposite of what we preach. Let me be specific. We have created mountains of jargon that depersonalizes and de-empathizes the consumer. No wonder Kevin Roberts, the author of Love Marks, says,

Brands Can't understand the new consumer. The new consumer is better informed, more critical, less loyal and harder to read.

I think that brands can't understand the new consumer all right. It's because marketers can't understand the new consumer. Because we've distanced ourselves from consumers very efficiently from consumers.

Distanced ourselves through language. I hate talking about "target markets". It sounds like we should point a gun at a target. It sure doesn't sound like we want to have a conversation with our most important customers about what we offer.

I also hate talking about positioning statements, brand visions, brand characters and the like. How about who we are, how we are different and why you will like us? The minute we start using jargon, we depersonalize the consumer. (See, I just did it - the consumer? - talk about depersonalized!). I love to think about my customer as a TV show character. For example, when I worked on Bulls Eye BBQ Sauce, I used the character Tim Taylor, from the TV Show Tool Time, as a representative of the consumers that we were trying to reach. It personified the target and the brand for everyone working on the business in a way that everyone could relate to.

As marketers we really have to be able to visualize walking in the shoes of our customer. I learned this the hard way, when as a 33 year old, I was assigned to work on Total cereal. The average consumer age was in the early 60s. Somehow, I had to start to understand the needs of the average 60 year old, rather than try to push my views, perceptions and values. That was how I learned that seniors are not a single group. For example, someone in their 50s could be marrying for the first time, be a new father, be a new grandfather, or a new widower. They could be retiring, or starting a 3rd career. They could be a fitness addict, or someone experiencing their first life threatening illness.

As marketers, we have to go beyond thinking about our customers as "seniors" or "targets", and start thinking about them as people. Josh Weidman made a great comment in response to my post about marketers' responsibility to educate consumers. He quoted a former president of Merck, who said that if the business was about the patients, then the money would follow. The more we put labels on our customers, the more we think of them in abstract terms, the less we build the Love and Respect that Kevin Roberts so effectively outlines in his book, Love Marks.

How Do You Educate Consumers?

I watched the documentary Supersize Me last night on DVD. It was a great movie - I highly recommend watching it. Aside from the enormous health implications of the fast food industry, the movie got me thinking about the importance of both personal responsibility and the responsibility of marketers.

I've also recently read two books, Fast Food Nation, by Eric Schlosser and Food Politics, by Marion Nestle. Both point a long finger of blame toward industy, and marketers in particular for the health crisis that we are facing in North America. So what is the responsibility of marketing?

Here's the glitch. The capitalist system is based on offering customers what they want, when and where they want it. The company that can do this best, at the best value will become very profitable. Consumers want salt, fat, sugar and caffeine. They taste good. Fast Food companies and food manufacturers (let's not let the grocery companies off the hook here), deliver those things in a convenient package inexpensively. So, marketers are doing exactly what the consumer wants them to do. Is there anything unethical about that?

Now I have to come clean. I worked for two large food manufacturers - Kraft and General Mills - for a number of years. I never saw myself or my peers as unethical, or as manipulative. I always believed that the consumer has a choice whether to purchase a product or not. The rationale I always heard for not educating consumers has always been, "that's not our job" or "it would cost too much" or "we trust the consumer to make informed choices".

The problem is, the consumer is not always informed. They may not care, they may not have access to information, or the information may be hidden from them (big tobacco is a case in point). They may not have the inclination to get the full information because it seems like a relatively harmless, low risk choice.

So how much responsibility does the marketer have to educate a consumer? Well, I don't know. What I do know is that marketing is evolving into a conversation with consumers. Maybe we just have to have ongoing conversations, through media like blogs, websites, emails and traditional TV and radio, to figure out what consumers don't know, and need to know, how and why they might change their behaviour. So how do you educate a consumer about the complex subject of nutrition? Well, that's the challenge for food marketers to figure out. And a challenge for health professionals.

Closing our eyes to increasing consumer dissatisfaction with corporate behaviour (aside from the Fast Food companies, you have Big Tobacco, Enron, Tyco, the list is endless) will only lead to long term cynicism and growing distrust. So, despite the costs, complexity and risks, marketers have got to start having conversations with consumers, about both the benefits and the risks of their products. It's time to be authentic.