Thursday 29 July 2010

What makes marketing successful?

Having ruminated on whether business should employ marketers at all, it seems only fair to consider the people who are responsible for building great brands, and great profits. What makes a great marketer, and what do they do to enable their businesses to succeed and prosper?

A couple of marketing leaders, interviewed for Marketing Week, talk about what it takes to succeed with marketing:
Being ruthlessly focused on the consumer and making money at the end of it” – Tim Hawley, Global Marketing Director, Bacardi
World-class marketing is nearly always based on insight, whether it be from structured research, knowledge within the department or visits to the field” – Phil Chapman, Group Marketing Director, Kerry Foods. He goes on to say “To be a great marketer, you have to be comfortable with both the art and the science of your job. Marketing is about being logical and structured, but also allowing yourself to be completely creative.”
You have to remind people, and institutionalise the fact, that they must connect directly and regularly with consumers” – Helen Lewis, Consumer Insight and Marketing Strategy Director, Unilever
Marketing Week has this week published an article “The steps you must take to become a marketing leader” and stresses the importance of creating a vision:
Build belief in a clear vision of market opportunity based on a deep
understanding of potential customer needs
Marketing’s role in a business is driven by the people who work in the business. Employing people who are analytical and market-savvy doesn’t happen by accident; such people are in demand. It has to start with a belief that a market-led strategy will succeed. Then the people, the data, and the vision can be assembled.

Of course the marketing people quoted here are working for some of the world’s most market-led companies, with budgets to match. But I doubt budget is the defining factor – I suggest it is attitude of mind. Anyone can (and I have) get out there and interview people about what they think: it costs nothing. Anyone can analyse their own customer data to inform their marketing strategy. Where there is a will, there is always a way.

Wednesday 28 July 2010

Does business need marketing?

Nothing happens in business until someone sells something.
Oh, how true. At least, nothing profitable happens in business until someone sells something. Yet most businesses have so many wheels turning within wheels that people can be happily forget that businesses exist to make a profit for their shareholders. Without sales there is no revenue, and without revenue there are no profits. No business can (or should) run for very long without profit.

So businesses need people to sell their products or services. That much is clear.
But does business need marketing? What additional value does marketing bring to the profits party?

To answer that, you first have to understand what marketing is. And in true marketing style, prepare to get anything but a straight answer.

“Marketing is the battle to dominate a market niche in prospects’ minds” say Ries and Trout.
“Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably” according to the Chartered Institute of Marketing.
You would be forgiven for thinking that marketers run the business, so central is their role. And maybe they should, but they don’t. Far from it. More financiers than marketers run successful companies.

Yet it isn’t the financiers who are tasked with understanding what customers want. They are not figuring out why customers make one buying choice rather than another. It is marketers.

In theory, at least, marketing plays a central role in making sure businesses are producing the right goods and services, pricing them so the business is profitable, and ensuring customers know about them, and are able to buy them (4P’s: Product, Place, Price and Promotion).

Some of these decisions are rightly taken with the input of many aspects of the company: finance, operations, and marketing. Yet without recognising the market-led nature of these decisions, businesses may not give marketing the priority or resource necessary to help the business make the best decisions.

Marketing’s all-encompassing nature is both a strength and weakness in its role within business.

Of course there are some businesses with no need for marketing. These include:

  • Businesses with little or no competition
  • Businesses whose potential customers know who they are, what they do and why they should buy
  • Businesses in industries that do not change
Not your business? Not mine, neither ...

Friday 23 July 2010

What’s the point of loyalty points?

For reasons that are too complex to explain, I found myself being driven through the middle of Slough yesterday evening. A rare treat, you would have to agree. Slough boasts one of the largest Tescos I have ever seen. I clearly don’t get out enough because these Tesco Extra stores are a now a feature of many large towns and cities.

However, it wasn’t just the gleamingly large two-floor-ish-ness of this Tesco store that caught my eye. It was a rather aggressive message emblazoned across the front of the store. No, not Slough graffiti: this had been put there by management.

“Asda vouchers accepted here” it read (or words to that effect). It was alongside an equally pointed message: “Morrison vouchers accepted here”.

My eyebrows were raised with interest, whilst the other occupants of the car quietly wondered at my sanity at such interest in a supermarket.

What is interesting about the tactic, apart from its bare-faced cheek, is that neither Asda nor Morrisons have a loyalty scheme: both compete purely on price.

Tesco, who are offering double loyalty points this summer, have a three-pronged competitive spear, compared to Asda and Morrison’s single spear:
  1. They are keenly priced on many lines
  2. Customers are encouraged to join the loyalty scheme and then earn additional money-off rewards
  3. Customers get further targeted offers for more savings from the loyalty scheme.
Oh, and of course, Tesco are also accepting vouchers issued by rival supermarkets. Neat. They are proving themselves a thoughtful and resourceful opponent.

Which makes me wonder why more companies don’t look at the value of marketing data?

Marketing data can be generated on purpose, eg through loyalty schemes or other devices, or may just be sitting on a file server unloved and unused. Marketing data often has a relatively low cost and a surprisingly high value – when it’s used properly.

Interesting place, Slough.

Wednesday 21 July 2010

Do I miss caffeine? Not at all!

I had a lovely comment yesterday from a reader who was interested in someone else’s journey to live without caffeine. They were wondering how I was doing. Was I still caffeine free or had those green teas edged their way back in to my life?

I can report that I am 100% caffeine free and have been for about 10 months. I might occasionally accept a chocolate if it was offered to me, but I never drink coffee or tea. After I finished the London 10k I had a bottle of iced tea thrust into my hands and I admit I made an exception. I was too tired, too polite, and too much in need of a cold drink to refuse. But it’s the first caffeinated drink I’ve had since I don’t know when. And I have no intention of making caffeine part of my diet again.

But you know the strangest part? I don’t miss it at all. Not a bit. I’m sure I would enjoy a cup of green tea if I drank it, but the cravings have completely gone and I just don’t think about it anymore. When asked if I would like a cup of tea or coffee I now automatically answer that I’d like a peppermint or herb tea. I don’t have to think about it: that’s what I drink.

It’s a little like going vegetarian (or fishetarian in my case). It’s difficult at first, but once it has become a habit and you start to enjoy the benefits, it just stops being an issue.

I know there are many people who are thinking about, or have started to give up caffeine. I guess everyone has their own individual reasons. But for me, I’m glad I did it. I find I am calmer for living without caffeine (I never get that jittery sensation I used to have) and if I do get a headache, at least I know it’s not due to overdosing on caffeine. And I think I get fewer headaches overall. I also sleep better for not drinking caffeine.

This isn’t necessarily a recommendation to go caffeine-free. Some people happily drink tea and coffee and suffer no ill effects. I know some people who can have a cup of coffee in the evening and have no concerns about their sleep. But I wasn’t one of them. And the reading I did around the subject convinced me that it was a drug I could live without. So I do. Happily.

Tuesday 20 July 2010

Why email isn’t the answer

Email has revolutionised our lives. No question. The days of typing memos and sending them round to the next office in a large brown envelope have long gone. (I realise the Facebook generation have absolutely no idea what I’m talking about. You will just have to take it on trust that that’s what happened in the “old days”.)

So we’ve come a long way. In the blink of an eye my email can be in Edinburgh or Bangalore. I can even attach a document or a spreadsheet. Communication is easier than it has ever been.

But when it comes to organising information, email has a lot to answer for.

Yes, we can get our message across quickly. Yes, we can circulate documents to any number of people very quickly. But what we can’t do is order and prioritise information.

We can’t ensure everyone has remembered to read the agenda before the meeting. We don’t always send out everything for the meeting all together. And sometimes things have to be amended before the meeting.

So all you can be sure of is that your message has gone to the top of someone’s inbox - until the next message arrives. Then the next. And the next. Until your message is, well, somewhere in the pile of emails. Then it’s anyone’s guess what gets retrieved before that crucial meeting.

What’s needed is a way of organising information so everything is together:
  • The meeting objectives
  • The agenda
  • The latest version of documents relating to the meeting
  • Attendees
  • Date, time and location of the meeting
  • Minutes after the meeting
And indeed to make sure that other documents such as budgets or project plans are easily to hand.

Whilst email has revolutionised the world of work, there is still further to go.

Collaboration software complements email by adding organisation and order. It enables everything to be in one place for everyone to access. So there is one version of the objectives and agenda. And, crucially, everyone is working on the latest copy of the proposal/budget/project plan (delete as appropriate).

So there is no last minute scrabbling around wondering where the meeting is being held, or whether anyone circulated an agenda. Because it’s all there together to be reviewed when you’re ready. Cool.

Thursday 15 July 2010

8 Habits for Success

Like many people I have phases when I don’t eat well or exercise as much as I should. I’ve been making more of any effort lately as I have started running. It’s been sort of horrifying just how unfit and overweight I’ve become. So leaves are being turned, and habits examined.

Here is my wish-list for habits I think will encourage success:
  1. Eat well. Or as Michael Pollan of the New York Times puts it: “Eat food. Not too much. Mostly plants.” Excellent advice and his essay Unhappy Meals is well worth a read. Eating well promotes health and increases energy.
  2. Exercise. Make flexibility, strength and cardio exercises a part of your (and my) routine.
  3. Take less drugs. Caffeine and alcohol are the business person's drugs of choice. Neither have any nutitional value and both can have a detrimental affect on performance, depending on the degree to which they are indulged. Drinking alcohol during the day went out with the '80's, and drinking on weekday evenings has (pretty much) gone out of my routine too. A difficult one as so much socialising is done "over a drink".
  4. Personal reflection. This must be one of the most powerful, yet under-utilised habits. Reflect at the start and end of every day on what needs doing, what has gone well or not so well, and how things could be changed for the better.
  5. Sleep enough. Not getting enough sleep is miserable, and does not create the right mood for excellent work. There are lots of articles floating around (the internet) about rising early and catching worms, but we all know how much sleep we need to perform well.
  6. Get rid of clutter. Clearing clutter has a positive effect on mood and organisation. I have far too many books and need to send a load to the charity shop. Oh, so difficult! But it will be so much better when it’s done.
  7. Surround yourself with bright people. Mix with people who will challenge your ideas, and encourage better performance.
  8. Be a lifelong learner. Reading, attending courses, and writing all help to keep the mind stimulated and introduce new ideas.
So what’s on your list? What have I missed? Do tell …

Wednesday 14 July 2010

The gentle art of working together

People can be prickly sometimes, can’t they? We easily get upset when left off the email distribution list for one of our projects, or when someone doesn’t invite us to a meeting. Rightly so – work is an important part of everyone’s lives.

As work becomes more complex, and pressures build to do more, we need better ways to collaborate and share. Email gets a message from one machine to another, but does nothing to help organise and prioritise. The internet has done a great deal to put more at our finger tips, but sometimes the result is overwhelming – so much information, so much to do, and so little organisation.

Within Anatec we use Microsoft SharePoint to share information and coordinate goals. That’s not a great surprise as we are Microsoft Certified Partners. But I think everyone’s needs concerning collaboration are pretty similar. Here is my top ten list of what’s important to get the best out of other people:
  1. Be clear. Collaboration sites need to have a good hierarchical structure so information is easy to find. Colour coding by department can help orient people in a large site.
  2. Make it attractive. Just because it’s work doesn’t mean to say that the look and feel of your collaboration site isn’t important. The better it looks, the more likely it will be to be used. Have a house style so that fonts and headline sizes are used consistently: it’s a lot easier on the eye.
  3. Consistency of purpose. Make objectives consistent and visible and ensure company communications reflect current priorities.
  4. Time to think. Make key documents or discussions available to everyone involved. The more time people have to mull over a problem, the better their input will be.
  5. No surprises. Ensure key dates are visible well ahead of time. A shared company calendar with dates for exhibitions, people’s holidays, key presentations, etc. helps to keep people focused on the major events during the month.
  6. Make it inspirational. Whatever your line of work there are people who will live better lives as a result of what you do. Share the inspiration with your co-workers though words or pictures.
  7. Keep content up-to-date. Intranets are a great place to share things, but they need to be kept up-to-date and they need to keep people’s attention. If they always see the same old stuff, pretty soon they will stop reading. If there is a key report you can share though your intranet, then do. People will get familiar with the structure and content by using it more.
  8. Make it interesting. Is there a relevant RSS feed you could include on your home page? Can you use appropriate and attractive pictures to help get your message across? It all makes work more enjoyable, and collaboration more effective.
  9. Don’t make it optional. Whenever a new system is introduced, there is always resistance. Don’t be tempted to keep emailing documents, just because it’s easier. Put the document on your collaboration site and then email the link. Keep on eye on what people are accessing to make sure its being used.
  10. Get everyone involved. Collaboration is exactly that – people working together to create something more than one person could do alone. Ensure there is a structure to the way you work, then use it at every opportunity - in meetings, as a way of discussing things, even as internal presentations.
Collaboration through intranets is not new, but options are opening up for smaller companies to use tools that the big boys have enjoyed for years.

Monday 12 July 2010

“Do or do not …. there is no try”

I’ve never seen Star Wars, but Yoda’s advice rang true on Sunday morning as I waited to start the London 10K. As part of a crowd of 25,000 runners it was an amazing, if tough, experience. But I finished, and I didn’t walk a single one of those 10,000 metres, and I was very happy to have achieved a personal goal: particularly as I had been daft enough to sprain my ankle just a couple of months before.

Although I achieved it, and although I did train (but not nearly enough), the thing that made the biggest difference on Sunday morning was the voice in my head as I slogged through London’s streets. This was the voice that told me to keep my body upright, the voice that reminded me to look ahead and not to slouch, the voice that told me to lengthen my stride.

So whilst Yoda’s emphatic advice is inspirational, getting expert help to achieve my goal was what made the biggest difference. I learnt how to lace my shoes, which socks to wear and to what not to carry when I run. And it all helped enormously.

So thank you Tom, for your kind and patient help. Thank you mystery man with an inspirational quote to remind me that achieving goals is important. And thank you London for being such a wonderful city to run in. I’ll be there next year – a little fitter, a little slimmer and a little more determined!

Wednesday 7 July 2010

Respect my differences (and similarities) if you want to sell to me

Are you an individual? Of course you are. You are as unique as I am. None of us are average.

Or so we would like to think. None of us like to think we behave in ways that are anything but specific to us and our unique situation.

That may be true, up to a point. Yet the dazzling array of differences, and similarities, we display in our purchasing habits somehow have to be managed by those responsible for marketing (selling) to us. A business with over 200,000 customers cannot possibly craft 200,000 messages to all her unique customers. Nor could she use “technology” with any degree of success to somehow create messages based on characteristics held in a database. The resulting mess is likely to be highly comic.

So in order to manage complexity, and the similarities that we invariably display (I'm not nearly as unique as I'd like to think) we have to group customers and prospects together. Well, we have to if we have more than a handful of high-spending customers.

So in addition to being able to inform our business and marketing strategies, segmentation also allows us to manage complexity in a way that would not otherwise be possible.

It may not be the newest marketing kid on the block, it may not have the originality of Twitter or augmented reality, but it has the distinct advantage that it works. And if more of our marketing cousins in the financial sector had thought to segment their customer base by how profitable their customers were, maybe we wouldn’t have had the financial meltdown we had.

PS A comment on yesterday’s post suggested that we should be marketing to customers individually, and providing what they individually want. Further, that segmentation was an old-marketers notion that stood in the way of progress.

If only that were true.

Despite many companies holding a great deal of information about us, and our buying habits, they still insist on treating us as one group. Sending me samples of baby food (thanks Ocado!) or offering a free all expenses paid trip to Cardiff to someone who lives in Cardiff (not sure he will be entering that prize draw). Or sending me vouchers for steak, chicken and hamburgers when it has been at least 15 years since I have eaten any meat (forgivable if it were not from the company that benefits from my monthly grocery shop). I could go on, and no doubt will, but I hope I have made the point.

Segmentation is more economic, effective and polite than treating everyone as proud parents/thrilled at the possibility of shopping in Cardiff/eating dead animals (delete as appropriate).

Tuesday 6 July 2010

Market segmentation

A market segment is a group with shared needs. Sounds simple enough and I suppose it is.
  • Mothers-to-be have shared needs (pre-natal classes, books of children’s names).
  • Students have shared needs (low-cost food, inexpensive accommodation, text books and places to socialise with other students).
  • Business people have shared needs (cases for carrying laptop computers, well-cut suits, smart phones).
You get the idea.

But of course a market segment could be anything, depending on your business and your customers.

It could be frequent-purchasers. It could be infrequent-but-profitable purchasers. It could be people-who-influence the buying decision, but are not responsible for the purchase. It could be anything that makes sense to your business, your data, and your customers.

In other words, not only must you have data to support your idea of, say, a group who “rarely buys but spends a lot and is very profitable”. But you must also have a meaningful way of communicating with them that makes sense to them, and is profitable for your business.

So segmentation is both a science and an art:
  • Science in the analysis of the data.
  • Art in the sense-making and marketing know-how to make use of the insights.
  • Science in turning ideas into profit.
So what are the benefits of market segmentation?

Many companies that use a data-driven approach to marketing say that it has changed their business-thinking and profitability completely. Benefits include:
  • Developing promotions to appeal to a specific market segment, therefore increasing response rates, keeping costs down, and showing customers that their needs and wants are important to you. (The last point often gets overlooked in these days of email marketing.)
  • Developing products and services to appeal to a specific market segment.
  • Informing competitive positioning relative to different market segments.
  • Informing business and marketing strategies.
After all, customers buy from us as individuals (as consumers or business people). So the more we are able to treat them as individuals, whatever our business, the more successful we are likely to be.

Segmentation is one of the cornerstones of data-driven marketing, and one of the most profitable to get right.

Friday 2 July 2010

How well do you know your customers?

I guess the answer to that question will depend on what type of business you are in. If, like me, you are in a service business, the answer might be “pretty well, thank you!”

But if the question were phrased slightly differently: “What characteristics do you look for in new customers?” that might not be so easy to answer. Attracting new customers isn’t always straightforward. And all our customers are different, aren’t they? Well yes, and no.

Yes, in that we are all unique. No, in that we share characteristics that make us more or less likely to purchase from any given business. If we can understand those common characteristics then we are better placed to attract and keep profitable customers.

Most companies have a lot of data about their customers, but very little insight into what these common characteristics are. Yet with a bit of analysis these shared characteristics can be uncovered. It’s called data mining, data analysis, analytics, or segmentation depending on who you talk to. But it’s a potentially profitable part of any new business campaign.