Market like a Farmer
Marketing is a lot like farming. You tend to reap what you sow. Planning based on research helps you make informed decisions e.g. what crops to plant and animals to raise to achieve the best prices. For farmers, knowledge and experience combine with technology and science to achieve the best yields. In marketing, we use a similar formula. Most marketing activity can be divided into two: long term brand development and short term lead generation. The ratio will vary from business to business but typically, it’s a 60/40 or 70/30 split.
Brand development takes time, patience and money. It’s an investment in your long term future, just like the seeds a farmer plants in hope and expectation. However, business owners, unlike farmers and marketers, have little patience with brand development. They want to spend little and see immediate results. No surprise that four of every ten UK small businesses go under within five years.
Brand development is about engagement, building trust and loyalty with your target customers. A common misconception is that people make rational, logical purchase decisions. In reality, we make purchase decisions largely unconsciously and emotionally. In research, consumers might eloquently explain why they chose this or that product, and even believe it. In reality, this is something called choice-supportive bias or post-purchase rationalisation. It’s the tendency to retrospectively ascribe positive attributes to an item, product or service one has selected.
Brand development activities can take many different forms, but share some common attributes. It might seem obvious, but the brand and organisation must be customer-focused. There must be continuous customer interaction, high levels of service and a long term view of the relationship. Typically, customer relationship management, a structured loyalty scheme, preferential pricing and rewards are key elements of a brand development strategy.
Transactional marketing is all about making the sale. However, it would be wrong to say you should not consider the longer term implications. Transactional marketing tends to focus on the features of a product or service. Pricing is used to grab the attention of prospective customers and to get the deal done. You might use discounting, time limited offers, coupons and promotional codes to push sales. However, customer interaction and customer service is usually minimal. Passive online sales are a good example, where the customer and algorithms do most of the legwork. You just have to have the right ad, in the right place and the right price. Chatbots take care of any customer service issues. Customers tend to buy once and move on. The moment you reduce or switch off your AdWord campaigns your sales tank.
Having decided on our overall marketing approach, we can use another popular marketing model to help us identify the right market segments and audiences within them. The Segmentation, Targeting and Positioning (STP) model will enable you to create audience appropriate marketing communications.
Segmentation is the process of dividing or segmenting prospects into distinct groups who respond similarly to marketing activities. We can then present our products, services and brands in the most attractive way to those specific groups. Segmentation enables companies to focus limited resources where they are most likely to generate a return on investment. Markets can be segmented in different ways such as geographically, demographically and behaviourally.
Having identified significantly different market segments, the next piece of the puzzle is to decide who to target. The target segment must be large enough to justify the marketing effort and prospect of sales. A mature market segment might be large enough, for example, but simply too oversubscribed with competitors to make it viable. Next, each segment must be accessible to your marketing messages and activity. Finally, you will need to be able to clearly differentiate the benefits of your products or services by segment.
Having chosen what segments to target, you will need to decide where to position your brand, products and services in relation to your competitors and in the minds’ of your target customers. Marketing tools such as positioning maps and Porter’s five forces model of competitive analysis can help you find your niche and point of difference. In turn, your positioning informs your choice of marketing message and means of communication. Finally, you will want to test the validity of your brand positioning before you run with it.
There’s a lot of hogwash around marketing communications today. People will tell you there is a big difference between traditional and digital marketing, and that traditional is dead. Well, mostly, that’s just bullshit to paraphrase the great Mark Ritson. Traditional and digital media are all just media. Radio, for example, went digital years ago. Radio audiences are more likely to be listening through their computer or smartphone than an actual radio. What newspaper or magazine doesn’t have a website and social media presence? In research conduct by Ebiquity for the UK’s Radiocentre, there was a yawning gap between the perceived performance of media channels by marketers versus the realities. The advertisers and marketing agencies will tell you to spend your budget on social media (paid) and online video. However, TV, radio, newspapers and magazines outperform them for targeting, emotional response, salience and return on investment (ROI). Of course, the real point here is that if you’ve done your segmentation, targeting and positioning then you will know what media channels to use for brand development and lead generation.
Media Multiplier Effect
Integrated marketing campaigns are nothing new. You use multiple media channels to deliver a clear, consistent brand message to the maximum number of your target audiences. However, integrated marketing comes with a little bonus: the media multiplier effect. This is where using multiple media together, such as TV, radio, print and online produces better results than if you were to use any of these media in isolation. In fact, you can often increase reach, improve engagement, generate a higher return on investment and drive down costs.
So there we have it, your marketing should be like farming. No, I don’t mean you should buy the magic beans and hollow promises that many of the agencies and advertisers will try and sell you. For some strange reason, marketers have always been particularly susceptible to snakeoil marketing. Mobile, social, apps, content and augmented reality are just some of the cure-alls hailed as the “next big thing” that promised much but delivered little. Instead, like the farmer, you need to get up early, put the work in and be thinking about the next quarter and following year. You need to use the tools that marketing provides to help you segment, target and position your brand wisely to ensure long term growth and prosperity.