Thursday, 30 August 2007

Zero Budget Marketing

Zero budget marketing seems to be an oxymoron… and yet, in today's Web 2.0 world, it is more than ever possible…Let us just define what we mean here- this post is about how we create disproportionate impact from limited (or almost zero) budgets, leveraging the power of the newer forms of influence and reach that are made available to us?

Consider the following:

  • To build awareness, have you considered creating a profile of your company on facebook/ myspace- given that the accountants already consider a company an entity , this notion of looking at your brand as a "personality" is not entirely illogical, , so why shouldn't you consider? Particularly with the ability to customise platforms like facebook, you can pretty much endow your profile with exactly the right characteristics you are looking for. And it costs you nothing (well a little bit of time, perhaps?)
  • Brand influence is being built disproportionately thro non traditional channels…Did you know that edmunds.com, an automotive website, has more influence on automotive purchase decisions in the US than the combined budgets of the entire US automotive industry?
  • Have you really leveraged blogs enough? Having a blog is like having your own newspaper (I read that in a blog, interestingly enough)…and just think about the amount of publicity you could get if you had your own newspaper.
  • Have you thought about podcasts enough? Ever since the phenomenon called i-pod, and more importantly, the community called i-tunes came into being (not too long ago, as recently as 2003, and they have sold 3 Billion songs already), you can get your "podcasts" out to the audience…
  • You-tube, a Google property, reaches millions, and is probably the best channel to recruit fresh talent, and hey, do you really think you need to pay ad fees? Think again. If you could create a few videos of your workplace that you could publish (all they have to be is cool and trendy), you could start a movement on your own.
  • Do you really need to have all those events? Events tend to be resource and effort intensive, and take a lot of planning effort and time- rather than doing that, can you substitute a part of the interface ( it is never really possible to substitute completely for face to face), and move that online (eg an event on Second Life, or if you would like things a little simpler, a webinar), it saves you the effort, saves them the trouble of budgeting and planning for travel, and finally, is good for the environment. (compared to the cost of a physical events, you are looking at a fraction (say ¼ ) of the cost
  • Search engine marketing, a term that basically is about second guessing search engine rules with intent to get your website to be on page 1 of as many searches as you can get to can be not only done on very limited budgets (think £100 and multiples) but can also be sharply focused and be very effective, if you have thought through who you want to attract ,and who you don't.
  • You have something to sell? Why do you need to invest in bricks (or even in clicks)? In the initial stages, it is relatively simple enough to avail of free website creations/ free blog creations/ free (well nearly free) e-marketplaces to start your own store at zero cost.

What does the Green Agenda mean to Marketing?

As Martin Wolf from the FT argues, it is reasonably clear that the tide of the scientific argument has turned decisively towards mankind's culpability in creating climate change. What is not clear though, is how we move to reverse this. What this has pointed to is that climate change (and the green agenda) is a subject that is gathering steam, be it in the echelons of the World Economic Forum annual meeting in Davos, or in the coffee table conversations of countless meetings, and has become a serious agenda for business. I argue, through this post, that marketing is well placed to take actions on this front.

  • Your business has to be on the right side of green. In today's world, particularly in continental Europe, anything from 30-60% (depending on the country) of consumers vote with their feet if they believe your business is not acting sustainably- creating a clear business case for your green credentials. The best way to ensure this is to initiate business programs that aim at being carbon neutral, and tackle other parts of the sustainability argument as well- use of fair-trade commodities, ethics and sustainability audits etc
  • You may have opportunities to create newer products/servicelines that are able to bring this benefit to bear with your customers. Eg- if you are in retail, it is relatively easy to create products/brands/services that appeal to the green consumer- think Prius, think Fairtrade coffee, think BP's ultimate petrol.
  • Bring down the "carbon footprint" in marketing activities- eg- can you reduce usage of paper, can you look at your event venues that are "greener", can you bring down travel through your campaigns etc… (in many ways, this stuff actually reduces your costs, hence creating a double benefit)

Thought Leadership- What it is and how can you build it?

To me, the essence of thought leadership lies in the way the client sees you. Are you positioned as a "guru" to your customers or not? The line of reasoning from the customer's perspective is thus- if these chaps know more than I do about the problem I am faced with, I am more likely to believe that the solution they present to me will indeed sort me out- the "guru" positioning. Thought leadership is about being seen as the Guru.

This rationale works well with highly amorphous products or services (high intangibility) -the more amorphous, the more difficult to quantify the benefits, hence more the need for you to appear as the guru= you require to be seen as the "thought leader". Particular examples are high-expertise, intangible industries- eg business consultants, eg Public Relations consultants…

How do you build it though?

Most arguments at this point emphasise bringing out thought leadership through "thought papers"… i.e., create white papers that present a differentiated point of view on the subject to the audience. I would however argue, this is possibly not the best route to building thought leadership. There are not that many "different" solutions to a problem, after all isn't it all about common sense anyway?

To me building thought leadership is about having an informed and experienced view on most issues that vex customers around the subject, it is not about having a unique view i.e., it is not important to have an alternate take on every thing, but it is important to have a reasonably enlightened view on most things that matter on the subject. Think about how you would look at a Guru- it is not that the guru's solutions are totally different from other solutions out there, but it is that the guru will be the best placed to give you the right solution in the first place, because they know so much about the subject.

Take the example of a strategic consultancy- which wants to be seen as a guru of <say> business transformation- I would argue that it is more important for this consultancy to have an experience based view on all key elements – eg., business transformation through process improvements, through leveraging new technology, through portfolio optimisation, through mergers and acquisitions, through reemphasising competitive advantage, through restructuring, through building alliances etc… rather than have a unique take on any or all of the above.

In short, creating an entire library of white papers on the subject is more important than focusing on that "brilliant" prize winning article alone.

Marketing in the Context of Business

Rather than looking at what the boundaries of marketing are, the focus of this particular post will be on what do you leverage marketing for. Marketing folks have done enough self-promotion for business to believe that marketing is crucial to business (I agree, in principle), but some are not quite sure what to do with it- where do you use it, when do you need more of it, when can you make do with less?

Marketing is a force multiplier to business- having a great product (service) which can be sold at a reasonable price and still make reasonable margins is probably the most crucial thing for business, and nothing can substitute that, but what is also important is to be able to quickly spread the word to enable the business to capture all that revenue left untapped, and be able to create a "respect" that allows you to command premiums over competition (differentiation)- with the first, you accelerate revenues, and with the second, you improve profits.

Who owns marketing? That is an easy one to answer, and it is not the marketing department. I would argue, depending on which business you are in and what the specific leverage points are, that it is clearly a direct business leadership responsibility. Think of marketing as a way of thinking, and be cognisant of marketing's role in every single business transaction (many of which tend to be outside of the scope of the traditional marketing department)- every sales call, every hr presentation, every results presentation, every governmental interface- so please do not lock responsibility for marketing into a black box left to marketing people.

When do you need marketing? Why don't I focus on the easier question to answer? When don't you need it? A few circumstances, but the following would probably be important:

  • When you cannot scale up to meet current demand- now what's the point in creating further revenue demand if you cannot fulfil existing demand? But even in this, there are mitigating circumstances- eg in a services business, the crimp on demand is sometimes due to a non availability of employees, and hence the marketing emphasis is on building the employee brand.
  • When you have an absolute monopoly and are in no particular hurry to rival a certain William H Gates. The monopoly need not only be about governmental regulation (where you have been clever enough to get the government to shut every one else out of the market), it could also be because you have been frightfully clever and have created intellectual property ( patent/ copyright/ r&d led monopoly)
  • When you are a large business that has been consistently investing in your brand and have created a sufficient base of goodwill, so you can weather a couple of seasons of base-level investment, because you need to cut costs to weather the coming squalls. But don't make a habit of it…

But, please note, the key point is that marketing is a force multiplier- it cannot, make up for weak business fundamentals.

Marketing in a Flat World

As Tom Friedman puts it, the flattening of the world presents us with entirely new sets of challenges and opportunities- and he goes on to emphasise how nation states and individuals should react. I argue, in this post, that this trend has an interesting set of implications for marketing too…

Setting guiding principles straight- the integration of countries such as China and India into the global economy presents the marketing function with a fundamentally great opportunity to leverage the benefits those markets have to offer. Specifically, 2+ billion very competitive people has a way of filtering the very best of brains/talent to the top, and this talent is available at a very low price point. I argue that marketing is well poised to take advantage.

How? Consider the following:

  • Marketing innovation blowback- implementing marketing campaigns in emerging markets present challenges that are very local- presence or absence of media channels and resources mean that you have to think different about how you reach and influence. But, what has been built for emerging markets, can arguably be brought back to the home/ mature markets with little customisaiton required.
  • Leverage emerging markets for cost reduction in your budgets- look at your traditional campaigns- everything from DM, to emails, to database administration etc can be done out of one of these markets, at a fraction of the cost in these economies- what parts of your campaign can you move there? (the answer by the way, is not all!)
  • Focus on analytics and insight building in emerging economies- did you know that a significant chunk of McKinsey's knowledge management resources reside in emerging markets? Their job is to build and manage those insights for all of Mckinsey to benefit from, not just for those emerging markets.
  • Leverage those online assets more- with the emergence of a huge technology business, countries such as India have a very sophisticated technology talent pool- which can be leveraged to create newer forms of marketing value creation, with things like website analytics for instance, or with other forms of online outreach and accountability.
  • Creating more accountability- marketing, it has been argued, does not give a very good account of itself when it comes to results accounting- a part of this has to do with the amorphous nature of what marketing does, but a bigger part is due to the difficult in implementing accounting and measurement processes, which can be very skills intensive- which is where the emerging markets and the leverage they bring come in- put your accountability processes elsewhere…

Marketing: B2B vs B2C

Marketing to businesses and Marketing to consumers, are two different things really, aren't they? To my mind, there are 3 primary differences between B2B and B2C marketing, keeping in mind these could be sweeping generalisations, and may apply only in some cases. Inherently, the B2C business tends to focus on a large number of customers, and the volume/value of each transaction tends to be small, as compared to the B2B business. This tends to be different the following ways:

  • The relative simplicity of the message- In a B2C environment, one tries to influence customers in a very cluttered environment (one ad amongst 15 in that break) – hence the need for a simple message which becomes very important. Hence the entire notion of a USP and the statistical analysis and sampling techniques that sharpen how well it is communicated
  • The size and magnitude of "target audience" the business needs to reach and hence the implications -think about the FMCG business, owing to the fact that it is impossible for this business to physically reach all their customers, so they have figured out the best ways to reach them through other channels- hence advertising- and the specialisation of creating a 15 second or a 30 second ad that will do the job of getting a proportion of the billion customers to buy at the retail store.
  • The relative complexity of the decision making- in a B2B business, we need to figure out the main decision maker, the influencers, the end users etc… in a B2C business, things tend to be relatively simpler.

Marketing and Private Equity

It is a reality of today that hedge funds and private equity groups are building up portfolios of businesses, as the nature of the relationship between the owner and the manager changes in a capitalist society going global (please search for Martin Wolf on Global Financial capitalism). What does marketing have to do with this?

I argue here that marketing has the following specific roles to play in this context:

  • A big issue, highlighted in the recent UK debate on the private equity industry, is a lot of misinformation that pervades the market- eg, these groups have unfair advantages, which is exacerbated by a lack of transparency from the players. If the groups started to look at their reputation and their brand perception amongst key audiences, and started to take active steps towards mitigating this mis-information, I would argue they would not be subject to as much negativity as they are today. They need more marketing think.
  • I would also argue that just as you would integrate a portfolio of businesses along the lines of finance (cashflows, revenues, demand spikes etc), there is an opportunity to manage marketing across the portfolio as well- think about the cross- leverage between B2B and B2C businesses in your portfolio, and how a broader marketing footprint would be able to multiply the valuation across the portfolio- there are serious benefits to be gained.

Developed Markets vs Emerging markets : The difference(s) in Marketing to…

Fundamentally, marketing is about enabling behaviour change (you want your audience to do something differently than they do today), and that dictates that things, at an abstracted level, can be the same- after all you are dealing with one species. So the basics, such as market research, advertising, channels of reach and influence cannot be all that different. However there are major differences which fit into the following buckets:

  • The basic stimuli for behaviour change are bound to be different-depending on how society has evolved (religion, government, economic prosperity, openness and competitiveness of the economy, language, cultural icons are some different factors), the role models and the reasons why people will do things will be fundamentally different- for instance Green issues may dominate consumer behaviour in Europe, but may have less relevance in Japan. It is important that one gets to the insight that is going to drive behaviour change.
  • The channels may behave fundamentally differently- consider the implications of marketing to customers that have access to 3 government owned TV channels vs marketing to customers in a highly segmented 100s of media channels environment
  • The measurement and statistics may not be as your system is used to- the world does not have your AC Nielsons and the Gallup data available to back up your business/consumer demand case. You will need to think alternate "proxies" for measurement, and tracking
  • The broader ecosystem, that we tend to take for granted, may not be as used to working with our systems and processes (ad agencies, research companies, panel data, creative and production facilities etc), and will take a significant rethink, possibly a more strategic in-source/ or creation of the broader ecosystem, depending on how much your business is dependant on this
  • Finally, and this from the heart- managing your team is going to be significantly different- drivers of motivation in different markets are different- for instance, a pink slip in the US may not be as serious as in Asia. Make no mistake, in a high-skilled function like marketing, you need the best talent from that market to be successful.

Communities- creating and managing them

It takes multiple interactions, over a period of time before they can trust you enough to try you out -one transaction or interface with the customer hardly ever results in the outcome we are looking for However, the challenge is, how do you continue to engage with them and build trust whilst they are making their mind up? Through this post, I make the case for creating communities as a way to sustain this engagement.

Wikipedia says- "A community is a social group of organisms sharing an environment, normally with shared interests"

The benefits of building and managing communities are relatively easy to explain. If you can attract a group of your audience to continue to interact with you, you can learn from them about your products , your competition, and, as you build trust over multiple interactions, have a higher chance of influencing them to be more favourable towards you. Think of this as a club run by you- the members in this club are your audiences.

But the difficult part is, what's in it for them? For them to engage with you, you need to be able to give them something they are interested in. In general, this tends to be access to something - perhaps access to expertise they are looking for , perhaps access to other people who are in similar situations as they are in (your other customers), perhaps the feeling of belonging to an exclusive club (CEO/CIO conclaves), perhaps making them feel as if they were pioneers in something …

In general, your start-point tends to be subjects that are relevant to the audience that you want to be associated with, and create a "club" experience that brings some new insight (something they don't know already) to them. The criticality lies in your ability to invest in building this community- this is one of those, longer run, not immediate impact things, but the benefits over the longer run are apparent to see.

By the way, creating a community does not necessarily need to be a start from scratch. There may be existing congregations with high focus on your target audience that you could work with, and/or you may already have a community and not know it- the best place to look is amongst the users of your products/services- which is why customer forums tend to be so irresistible.

Tuesday, 28 August 2007

Working Marketing Qtr by Qtr- the reality of the 3 month budgets

Today, more than ever, as organisational p&ls are more and more subject to vagaries of quarterly flows, it is crucial for marketing to adapt to this change Traditionally, marketing's lifeblood has been its planning and hence, its ability to have budgets-remember the notion-marketing spending that is start and stop is worse than a low but steady flow of spending… … the following suggestions may help:

  • Rather than try and hang onto budgets, voluntarily contribute back what you can to the corporate kitty- it is really important that business success comes first, and if it means low or no marketing spends, so be it. hey, they will cut it anyway, and this way, you have the first right to propose spends when the going gets better.
  • Be prepared to move really fast- invariably it does happen that you find that $50000 that you need to spend but in 15 days. Please build in short term/ quick move plans that are able to leverage such opportunities that open up suddenly.
  • Look at these as "spring cleaning" opportunities- is it really important that you hang onto that PR agency in that obscure country that gives your business < 3% revenues? Is it really that essential that you be present in full force in a large event only because "what will others say if we are not there"?
  • Get creative- you will find more appetite for creativity and risk in these circumstances-afterall, it does not take much marketing brains to create traction from huge budgets- it is always tougher to do this with zero or little money
  • See what parts of your function you can offload to other functions- can some of the sales or the consulting chappies take on a part of the marketing function (Eg creating white papers? Eg creating own events rather than sponsoring them)
  • Hunker down and build infrastructure- if you do not have a lot going on outside, arguably, your team could be building other, more vital systems/ processes/relationships that are beneficial when things go full steam again? Put in place that collaboration platform, or that financial budgetary control system, or that database cleanse that is important?
  • Look for new value-add channels- I have already laid out a bit of this in an earlier post.