"Minds are like parachutes. They only function when they are open”
- Sir James Dewar, Scottish physicist (1842-1923)
It is impossible to have any strategy, particularly a digital strategy, without a robust plan that spells out clearly why customers should buy from you rather than from a competitor with similar products.
MARKETING IN 2020
Of course, marketers today must understand blockchain, augmented reality, predictive analysis, voice biometrics, big data, artificial intelligence, 3D printing, and the like. But these technologies will succeed only if they improve, either directly or indirectly the value for the “customer.” Fortunately, all the forecasts about the role of technology for the next ten years predict a better understanding of customer needs. But even here, we have to be cautious.
Michael Brenner, writing in the Marketo report titled “Ten marketing predictions for a new decade” (Marketo Engage: https://blog.marketo.com/ December 2019), says: “Are consumers satisfied with the buying experience? The truth is that three out of four buyers are more loyal to businesses that give them the option to interact with a human than to those with fully automated digital experiences.” Gurdeep Dhillon, writing in the same Marketo report, says: “No one ever reads our content offers and then shows up the next day to say: Wow, that eBook from adobe on Digital Marketing was amazing. I can’t wait for the blog, webinar, and five days of display ads following me around on the internet!”
MOST PRODUCT LOOKS SIMILAR. WHAT TO DO?
Whenever I am privileged to have a big audience, we ask how many of them have less-than-perfect products. The answer, of course, is none. But equally, on asking how many of them have excellent products, the answer is similarly unanimous – all of them, of course. The point we are making is that today, all products are excellent, so it is unlikely that products will be the source of differential advantage.
The reality today is that it is customer engagement that is the source of differential advantage, and ultimately, this is what leads to growth in sales and profits.
Having said this, the truth is that trying to delight all your customers with all of your products will inevitably result in providing average service and delighting no-one.
It is crucial to identify your core markets and customers and to delight them. Then you will have a resilient, profitable and abiding customer base.
THE DISRUPTION ISSUE
Then of course, there is the issue of disruption that has engaged some of the best brains in the world.
But even here, we have to keep a sense of perspective and reality. Apple didn’t go out and ask stupid questions about what consumers wanted. People didn’t ask them to invent iPods, iPads, easy music downloads, and the like. They just created ways of making life easier and more enjoyable. So Apple didn’t crucify the music industry. Among other things, it was being forced to buy full-length albums.
Likewise, it wasn’t Netflix that killed Blockbusters. It was their focus on retail to the virtual exclusion of on-line convenience.
It wasn’t UBER that adversely affected the taxibusiness. It was fare control and the difficulty of ordering a taxi. Amazon didn’t kill retailers. It was lousy customer service, limited stock, inadequate size ranging and so on.
No, it is not technology, per se, that disrupts sectors.
It is a lack of understanding of needs and poor customer engagement that leaves the door open to so-called “disruptors.”
Then, with large organizations, there is the issue of high sunk costs, entrenched policies, a culture of complacency and demotivated employees, all of which leaves the door wide open to a more agile, customer-centric competitor. When they do react, it is often too late for existential challenges.
This is not to say, however, that big organizations are dead. On the contrary, the marketing factors that cause long term success are well documented, and we have 127 pieces of scholarly research that spell out what these are.
Long term successful companies have a deep understanding of how their markets work and, more importantly, how they evolve and change over time. They focus on the 20% of the market that gives them 80% of their revenue and profits. They break these markets into segments and work tirelessly at understanding the real needs of the customers and consumers that belong to each segment. Only this way is it possible to delight them and this will always be enough to prevent so-called disruptors from taking your market.
It most certainly is not all doom and gloom and we are heartened by the thousands of longstanding, very successful brand names and we don’t just mean SKF, Procter and Gamble, Unilever and the like.
Let’s remember that very rarely does one of the hundreds of thousands of start-ups become a disruptor and the factors for success are universal to all organizations, big or small:
- Think in terms of customer needs, not products
- Carry out proper needs-based segmentation and understand the different needs of each segment
- Focus on the segments you think you can serve better than your competitors
- Develop irresistible offers that create an advantage for them
- Remember the 80/20 rule. Set only a few priorities. Don’t try to be all things to everyone
- Involve your team. It is happy, motivated employees who deliver outstanding value
In spite of the criticisms of the state of marketing today, our research shows that successful marketers make a major contribution to corporate wealth by understanding markets, doing proper needs-based segmentation, developing quantified value propositions, competitive analysis, portfolio analysis and managing marketplace risk.
So, the time has come to tell the world about the real contribution that world-class marketers make to the creation of shareholder value. This will not come from econometric models - although these are important - nor from simple measures of marketing effectiveness. Top executives still don't know how to convert, for example, brand equity to "real" equity, while single numbers such as the net promoter score areopen to widespread criticism. Hence the "show-us-the-money" school at the top of most companies.
Finally, as Peter Drucker said, it must be clear to everyone that if you are doing today exactly what you did yesterday, you will not be around to do it tomorrow. Or, as Charles Darwin said, it is not the strongest of the species that survive but the ones that are most responsive to change.
The 2020 marketer has a significant role to play in this change.
Want to learn how to Create superior company value using Strategic Marketing? Then you can check our Malcolm McDonald Academy courses: