The grassroots essentials of marketing

Feb 19, 2020 | Branding, Customers, Marketing

 

What do we mean by the term ‘marketing’?

I suspect if I did a poll, there would be a scarily wide range of responses. So, let me repeat the definition I have evolved over 45 years, which would not be found in any textbook.

‘Marketing is the identification, development, protection and leveraging of competitive advantage that adds value’

This is different from the ‘purpose’ of marketing, which to my mind is to create the opportunity and motivation that, when conditions are right, will build relationships and create opportunities, that lead to transactions. That transaction might be a sale, a subscription, a vote, a referral; it can be many things, with the common element that it is an outcome of the so called marketing activity.

Let me use the metaphor of the expert gardener. 

This gardener has a process by which he/she manages their gardens.

  • They decide what it is they want, what the end product should look like, at least in general terms.
  • They pick the ground they will cultivate.
  • They prepare the ground in the manner appropriate for the outcome they have visualised.
  • When conditions are right, they plant the seeds.
  • They nurture the seeds and resultant seedlings until they are ready to harvest.
  • They repeat the process, incorporating the things they learnt on the way through.

This process is the same for growing broadacre grain as it is for growing a few decorative flowers in the back yard. As it is for marketing. The process is the same whether the product is a tub of yoghurt or a power station, a national effort, or a local one. Only the scale of the investment, implementation details, and time frame differ. Try to take a shortcut, and you end up with dead flowers, or at best, substandard ones.

So how does that rather vague stuff translate into your world of marketing the products and services of your SME?

When I first encountered ‘Marketing’ at University, 50 years ago, the core of it was ‘The 4 P’s of marketing’. Product, Price, Place, Promotion. Everything sprang from those 4 elements. A lot of water has passed under the bridge since then, and the expressions used may have changed a bit,  the processes of achieving them changed radically, but the core remains.

The architecture of the 4 p’s of marketing are a bit like the Model T Ford. It redefined the notion of the car, and how to manufacture it. Over time, the expression of the car has changed enormously, but the basic architecture remains.    

However, to me it makes sense to see ‘marketing’ from the perspective of the customer, and to do so, we need to answer a few simple questions:

  • What is the problem my customer has that I can solve with my product/service? This will answer the further question of why should my customer do business with me and not my opposition, which is all about the value you can create while being differentiated from the competition. You need to define it from the perspective of the customer. The costs, of all types, created by the problem, and the benefit to them of a solution.
  • Who is my ideal customer? Your ideal customer will see your differentiated value proposition, as being made for them. This takes focus and always hard choices about who you will service, and who you will not; it is the customer Pareto at work. If you have defined both the problem and the ideal customer, i.e. the one who has more of the problem, or feels it more acutely than most, when they see your value proposition, their instinctive response is ‘at last, this is for me’, or something similar.
  • How do I apply leverage to my marketing investment? It is at this point you are considering which messages, delivered to who, via what media, and how do you do that while getting the biggest bang for your buck possible. It is where the marketing rubber hits the road.
  • How do I make a profit? Profit is a simple equation: revenue minus cost.

Still the same four items, or ‘P’s, it is only the articulation and perspective that has changed. The primacy of the ‘p’s remains.

The common denominators in each of the four, required for success, are choice and iteration. You must make often very difficult choices, implement, learn from that experience, and apply the learning for the next iteration. This need to make choices, and enable the manner in which you deploy your modest marketing resources to evolve based on the experience, is perhaps the largest marketing hurdle for every SME I have ever seen. Many SME owners have had a bad experience with marketing snake oil, and are reluctant to try again, and others who have hit on something that seems to work are reluctant to change anything, so you get a lack of optimisation, not as much leverage as you could.  

As you consider your marketing, given the small scale of business, and budgets available, do not let your thinking be dominated by the mass models of the past. These are simply not appropriate for you. Way more appropriate are small, niche models, an artisanal approach. Why? We have become sceptical, untrusting, demand to know the real provenance, and only rely on those we know personally, and trust because they have earned that trust.

The original social media, word of mouth, subsumed by digital for the past 15 years is making itself heard again. Therefore it follows that you, the business owner, need to be seen and heard, tell your story, use the digital tools, but be personal and human. However, this does not mean you should turn your back on digital, by any means. The data and tools we have now could not have even been imagined 15 years ago, let alone 50 years ago. The practise of marketing has changed radically, the foundations remain the same, just way more exposed and subject to interrogation and automation than they were, and you have to be in there just to keep up.

As Einstein said, ‘Everything should be as simple as possible, no simpler’. What could be simpler than providing a great product and service that solves a problem, and having those problem liberated people tell their friends, and most particularly those with a similar problem? That is how to market at the grass roots.

 

 

 

Why most enterprises fail at cost effective marketing

Feb 17, 2020 | Management, Marketing

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

There is an easy way, and a hard way.

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

Better than nothing, but only just.

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

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

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

Not a definition you will find in any textbook, but mine evolved over 40 years of doing this stuff.

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

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

Marketing is about the future, you are trying to shape it, so you are dealing with unknowns that can be qualified, but rarely quantified. With the use of various mental models, cause and effect, domain knowledge, customer intimacy, competitive understanding, tactical agility, and a whole range of other things, you can build a level of confidence that justifies the risks being taken.

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

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

That is hard.

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

The greatest two problems most corporates have in planning marketing are:

Extrapolation.

Confirmation bias.

Add 3% to last year, and, only seeing what they want to see.

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

How to make better decisions, more often.

Feb 13, 2020 | Governance, Management, Strategy

 

 

A decision is a choice, made in the face of a problem.

Problems, at their core, have only two sources:

Uncontrollable events.

Flawed processes and their application.

These two sources have entirely different paths to a solution.

Flawed processes need to be subjected  to some sort of continuous improvement program, resulting in a clearly articulated process that can be taught. This improvement process can become a normal part of activity, given the appropriate leadership and focus. A key part of the improvement process is the application of critical and creative thinking. Having a highly optimised process is not the same as having a truly effective one.

Uncontrollable events are entirely different, by their nature, are very difficult to unable to be forecast. They emerge with little if any warning, generally from the outside of an enterprise, so the solutions need to be arrived at in an entirely different manner.

Two factors contribute to the options facing us as we set out to address these random events:

  1. People put far more weight on the problem directly facing them, than even a much more serious problem that has little short term impact. It is also true that most people have a better idea of the dimensions of a problem that directly impacts on them, than others that may carry more corporate clout, but are do not directly affect them.
  2. We can only deal with a very few problems at once, we simply do not have the cognitive bandwidth to deal effectively with a number at the same time.

Therefore, considering these two factors, it makes sense to democratise the manner in which we deal with problems. In other words, enable those who face the problems to deal with them by giving them the resources and responsibility to do so, within clearly understood boundaries.

Two mental models to consider.

The first is a pyramid, full of problems. If the only person who has the power to address the problem, is the one or two at the top, only a few will be addressed at all. Democratising the power to address them enables others at lower levels to address those problems they directly face, so it follows that many more will be addressed. There may be some stuff ups on the way through, but overall the outcome will be beneficial. However, most corporate cultures make this very challenging, built as they are on a hierarchical structure.

The second is also a pyramid, but turned on its head. In this case, the base of the pyramid is facing outwards, towards the customer and various elements in the supply chain with whom the operating personnel have contact. This is where most of the operational problems occur, so give them the resources and power to fix them.

Do these seemingly simple things, and those usually seen as the bottom of the hierarchy have the opportunity to address the emerging problems as they are molehills, before they turn into mountains. It does however necessitate the devolution of power from the top of the organisations structure, and all the way down through and across the functional silos. This may be a scary prospect for most, but it enables the enterprise to be agile and efficient.

The impact of this sort of culture shift cannot be underestimated. It does however take a special and unusual strength of leadership to enable the change to evolve.

US general Stanley McCrystal achieved  stunning results in Iraq with one of the most rigidly hierarchical of organisations, the military, so you should be able to do it. General McCrystal’s experience is recorded in his book ‘Team of Teams’ which is a compelling account of a culture being turned on its head.

 

How do you reconcile conflicting statements by geniuses?

Feb 10, 2020 | Governance, Strategy

 

‘If you cannot measure it, you cannot manage it.’ Peter Drucker.

‘Not everything that can be counted counts, and not everything that counts can be counted.’  Albert Einstein.

How can both be true?

The first is half true, the second is absolutely true, which leaves us with a problem, if it is not measured, how can we manage it?

A lot of things cannot be measured, good parenting, the enjoyment you get from watching a great game of football, business culture, the likelihood of a new product succeeding in a non-existent market.

Take that game of football, the statistics tell one story, the game as watched may tell another entirely. The stats do not reflect the quality of the game.

What about the future, how do you measure that?

Tough call.

You cannot measure what has not happened, but you can draw inferences from all sorts of variables, quantitative and qualitative.

Digital has driven a bias towards quantitative, all we hear about is A/B testing to the point where we feel diminished if we do not do it. However, this mad reliance on the quantitative is a nasty illusion,  a mirage, leading many astray. Qualitative has a huge place in telling the future,  it is a way to fill in the behavioural blanks, to imagine what may happen  in a given situation.

Qualitative research can be an aid to the intuition born of experience, and domain knowledge, factors not able to be quantified. It is also a great way to surface the questions that need to be asked in a following quantitative process, which is useless without the questions that go to the heart of the drivers of the behaviours being quantified.

Qualitative research when done well, and unfortunately I have seen it done poorly more often than well, digs into  the psychological and motivational aspects of behaviour. Not just what we do, but why we do it, and what might we do in the future.

The missing ingredient in most ‘future-telling’ exercises, usually called ‘forecasting,’ is the wisdom born of experience. Frederico Fellini once quipped that ‘experience is what you get while looking for  something else’.

It seems to me that wisdom, and the insights that emerge from that wisdom, come from a lot of experience.

 

The biggest broom in town: #Scotty

Feb 8, 2020 | Personal Rant

 

Occam’s Razor is now a relatively well understood term, coming from the 14th century philosopher and monk William of Ockham. It is a discipline that demands that facts about a situation be distilled down to their simplest form, and the extraneous cut out.

Just prior to the last election that saw #scottyfrommarketing scrape in to retain the government seats by one seat, I wondered at the emergence of ‘Occam’s Broom‘, the phenomenon of anything but facts being shunted around, and any politically unhelpful fact, smelly deal,  or outright dodgy behaviour, ‘broomed’ under the carpet.

Some of my friends thought my association with inner city, soy latte and chardonnay sipping  lefties had finally got to me.

Now we seem to have the broom working double time, sweeping away the things we should be thinking about in a welter of activity seemingly designed to help us settle back and think #scotty and his crew have it all under control, and it is OK to go back to being apathetic.

Let’s look at the list.

  • There will be a royal commission on the cause of the fires. Hello, we already know because there have been previous royal commissions and senate reports that told us. We also had Ross Garnaut in 2008 nominate 2020 as the point of great inflexion, when the climate forces he saw would coalesce into an inferno. Our governments response: Activity for the sake of activity to misdirect attention.
  • Angus Taylor. Dear Angus, son of the  born to rule class who can do no wrong, except send off dumb, really, really dumb emails based in falsified information designed to throw dirt on a political opponent. The police inquiry has been dropped, and Taylors statement included the words ‘The Leader of the Opposition and Shadow Attorney-General’s pursuit of this matter is a shameful abuse of their office and a waste of our policing agencies’ time.”  What abject hypocrisy when the Federal Police are still investigating several journalists for publishing stuff the pollies  wanted to keep secret, presumably at the direction of those same pollies.
  • #Scotty will now meet with the group of former fire commissioners, lambasted as irrelevant just a few months ago. Meanwhile, Scotties language has subtly changed to recognise the reality of climate change, but not enough to do anything more that try and rort the Paris agreement for so called carry over credits. What is he going to do with that pesky and sometimes terminally idiotic group of back benchers who seem hell bent on building a few new coal fired power stations?
  • The Royal Commission into the aged seems to have been swept away by the fires, but I am sure will come back to haunt pretty soon. Having an ageing and now frail mother, this item is of close, personal interest.
  • Adani has been fined $20,000 for lying to the QLD environmental agencies assessing their applications to dig a big hole in central Queensland, and flog off the coal. It seems they are running true to the form set in India, where Mr Adani is regarded highly as a dodgy dealer, but 20 grand will barely make a dent in petty cash. Laughable. At least their chances of commercial funding appear to be dim to zero after Larry Fink, chairman of Blackrock had his say. This debacle of Yes/No/maybe that  has plagued this project, weather you support it or not, is a symptom of our collective inability to make a decision based on principal and fact, and then stick to it. Federal and State governments duplicate each other endlessly, then point fingers, while capital markets shake their collective heads.
  • Then there is the National party. What a party they are, now Mr. Invisible has seen off the challenge (for now) that was never going to happen from Barnaby, hell bent on a resurrection. Meanwhile the Senator who caused the kerfuffle, former Nats deputy Bridget McKenzie, while on the back bench in disgrace, remains the Nat’s leader in the senate, with all the benefits that entails. Go figure.
  • Now we have the son of sports rorts, $150 million bucks to the Female Facilities and Water Safety Stream program, details of which are still emerging, but it seems the whole lot went to marginal seats the Libs had to win, sometimes for things they did not know they had asked for, needed, or in a few cases, even wanted. I guess the only saving grace is that the public outcry should be so loud that much of the money allocated will be withdrawn, and put towards saving the Treasurers much vaunted surplus.
  • I simply cannot believe that #scotty and his henchmen did  not know intimately of these two ‘sports rorts programs’, as they all seemed to have had their snouts deeply in the trough I am surprised they did not drown. I will admit to being a bit more than usually narky, as a sporting club I chair missed out.  I wonder if it is because we are in a safe Labor seat?
  • The economy is in the shitter, and circling. Our trusty treasurer continues to tell us that all will be well, the plan is working, there may be some short term aggravations because of the fires and the money needed to help, but they are on the job. Groan: I suspect they need a new plan!.
  • What about the ongoing poor management, seemingly across the board? The NDIS, costing billions, but many of those it was supposed to help are still in desperate need of help. And, what about the submarines, again, billions over budget already, and probably a decade behind, meaning the Collins class will remain in service until well after I am dead. Not only that, the whole sub program as it stands was created to shore up a few seats in Adelaide, which will end up costing probably 10 billion a seat. Puts a few swimming pools and unwanted change rooms to shame, a lousy 250 million, petty cash to this lot. Remember ‘Robodebt’? State and Local government and its agencies are no better, they all seem to think the  tax revenues are for their entertainment and to purchase votes, rather than improving the lives of those from whom it was ripped. Need I go on, I will just depress myself.

Listening to the statements coming from the government about all this, and the other stuff going on, you would think they are utterly confident that it will all be swept under the carpet. Occam’s Broom doing some great work. However, their credibility is so terminally damaged, I cannot see how they can possibly recover. Unless of course, the other lot really stuff it up, as they did last time.

I am reminded again of Churchill’s observation that: “Democracy is the worst form of government, except for all those other forms that have been tried from time to time”, but am tempted to reconsider my agreement.