Nov 23, 2012 | Customers, Management, Marketing, Operations
Sales forecasting is a common activity, you need to know how much revenue is going to be generated in the coming months. Usually it is done by sales, usually by a straight extrapolation with a few adjustments, and the only thing you know for sure is that it will be wrong.
How cool would it be if your marketing people were able to forecast revenue with some accuracy?
Marketing is an investment in revenue generation, which is an outcome of demand, so it would seem sensible to focus attention on demand in the market, not what sales you did last month. Mindset is important. When you treat something as an expense, it is easy to chop and change based on short term conditions, but when it is an investment, it has longer term implications, and what could be more important than an investment in revenue generation???
To truly be treated as an investment, there must be a reliable ROI calculation that can be made, which means the collection of data, and the agreement on a set of metrics to be applied.
There are lots of tools emerging that claim to automate the marketing process, and generally they do it well, using the traditional sales tunnel metaphor connected to the marketing tools of the net. Whilst it is creating another source of operational complication necessary to get the data, it should be seen as a part of the investment strategy.
However, the mindset change is simple. Recognize that the role of marketing is to create demand, and the cost of using all the tools of branding, innovation, channel selections, and all the rest, are the costs implementing those investment decisions.
Nov 22, 2012 | Communication, Innovation
Innovation is all about seeing beyond the obvious answer, making the connections others miss, recognising cause and effect relationships differently.
Most also accept that with training, our bodies perform better, we run faster, further, jump higher, etc.
Surely it is the same with our brains? The more we stretch the boundaries in our nuts, the better we become at doing it. Therefore, it seems to be pretty sensible to do some training. The cryptic crossword in the local paper, deliberately inserting yourself into situations that are different and uncomfortable, and even, yes I am assured by my 30 year old son with a couple of degrees, playing some of the more creative video games (cannot bring myself to do that one).
I often start a workshop, presentation, and even casual conversation with a conundrum of some sort to try and get the juices going, so these two posts from Holly Green are gold.
Nov 15, 2012 | Change, Communication, Marketing, Social Media
Comment on digital media, the opportunities, challenges, and pay-offs is largely made by people engaged in the business, and they are different.
In a previous life, I dealt with a series of advertising agencies in the great days of the radio/mag/TV triumvirate of advertising, spending a “shedload” of money.
In those days, the personnel engaged in the industry all seemed to live, work, and play east of St. Leonards (in Sydney, Australia), while most of my consumers lived west of Lidcombe. Whilst these may locations may not be as different as night and day geographically, there were fundamental demographic, ethnic, cultural, and economic differences that, had to impact on their consumption behavior, and the manner in which they consumed and responded to advertising.
It is a reasonable assumption to think that the democratisation of media enabled by the internet would change these demarcation lines, at least blurr them, but instead they have seemed to have redefined them as obsessed, or otherwise by digital media, as noted by Bob Hoffman.
Consumers use the net as a tool, and like all tools, they use them differently depending on their skills, inclinations, experience, and where they are. However, the tool now understands how, where, when, and why it is being used, by whom, and responds accordingly. In this terrific post by Avinash Kaushink, consumer purchase behaviour, and the manner in which the data can be leveraged is examined, with Ash’s usual forensic eye.
Nov 9, 2012 | Change, Innovation, Marketing
Much effort, particularly by public bodies, is focused on invention, in the mistaken belief that by inventing, patenting, and just being first to do something new, will lead to some great outcome.
Not so.
It is a bit like supply side economics, make the rich richer, and some will trickle down to the less well off, not a great outcome there.
Innovation is driven by different things, a perceived need in the market, an opportunity to improve something, two bits of existing technology combined in a different way, something from one market applied to another unrelated market, and many more. Invention is generally driven by curiosity more than anything else.
Don’t confuse the two, the technologies that have changed the world have largely been commercialised by entrepreneurs, or innovators who saw the opportunities, not by the inventors who conceived the technology.
Invention and innovation are not the same thing.
Nov 7, 2012 | Branding, Change, Communication, Marketing, Social Media, Strategy
“Change behavior, before you try and change attitudes”.
These were the wise words delivered to me by Hugh McKay, 30 years ago, and I have never forgotten them, and am constantly reminded as I see people justify something they have done that is different, unexpected, or inconsistent.
Behavior is easier to change than attitudes, so get to the behavior first, then again, and slowly, attitudes will alter to accommodate the altered behavior.
Therefore if you want to have effective advertising, focus on which behaviors you want to change, and worry about attitude later, but generally, you need not worry, it will take care of itself.
People are the same as they were 50 years ago, 500 years ago, the things they own and want have changed absolutely, but what motivates people has not. Just look at the behavior that Shakespeare wrote about, greed, jealousy, love, ambition and regret, they are still all with us.
The net is just like an electronic yellow pages. When you know you want something, you go to it to find the best buy, what meets your specs, etc, but you do not create demand in the yellow pages, similarly, you do not create demand on the net, the best you can do is generate awareness of your offer.
Make sure that the two fundamental purposes of advertising are not mixed.
The first is to create awareness,
The second is to create demand.
These two things are not the same, and the communication strategy used must be consistent with the potential of the medium and the manner of the message to achieve it.
Nov 6, 2012 | Branding, Communication, Marketing
Red Bull founder Deitrich Mateshitz deliberately priced Red Bull, the fizzy, nasty tasting tonic imbibed by would be racing drivers, balloonists, and skateboarders because” it makes them fly,” at 4 times the price of a can of Coke, so no comparison would be drawn by consumers.
When you compare the price of a cup of coffee from a bottle of instant coffee, to a cup made from one of the new “pods” that are around, you are not comparing price, the first is a couple of cents, the latter closer to a dollar, you are comparing the cost of a coffee pod to the price of a coffee in the local café of $3.50, so 0.80 seems to be a pretty good price. Rory Sutherland uses this coffee metaphor beautifully to make the point.
Similarly, a drink of water at home has little value, but try getting a drink when lost in the dessert, that’s when a cup of water really has a value.
To consumer marketers struggling with the commoditization of markets, and bricks and mortar retailers battling on line retailers, the key to success is to differentiate, to manage the context in which your product is seen, and to back the differentiation with absolute determination to ensure it remains relevant to consumers.
