How to not mess up your marketing

By John Graham

While driving down Boston’s Massachusetts Avenue one Saturday afternoon, it dawned on me that every bus stop shelter along this popular main artery sported advertising for Apple’s iPad 2. Assuming that many bus riders were not target customers for a product selling between $500 and $900, the two of us in the car thought that spending advertising dollars at bus stops seemed like a waste of money.

We were wrong. Just get on any type of public transportation and what do you see? Almost everyone is a prospective iPad customer. Thumbs are texting at incredible speeds, people are talking on their cell phones and playing games on smartphones, or watching movies on hand held devices. Rather than a marketing mistake, bus stops can be a perfect advertising venue for promoting the iPad.

Contrast this with the huge number of businesses that don’t have a clue about marketing. Companies feeling desperate about marketing sign up for the latest sales pitch that offers a magical way of getting more customers. They write a check — and nothing happens.

The truth is that the communications environment is so dynamic today there are no firm marketing answers. This makes it very important to avoid wasting marketing dollars. Here are some useful thoughts:

1. Don’t get mauled in the discount trap. One of the unintended consequences of the recent recession is a discount mindset that continues to shape consumer behavior. Groupon and its imitators thrive on consumer demand for discount deals and, as might be expected, there are apps for managing them.

One retailer who had signed up for a Groupon-type deal was constantly checking sales on his iPad while attending a meeting. He was only interested in the number of sales, rather than the impact they had on his bottom line, even though the net was rather small.

As a Harvard Business Review article stated, “… Merchants should be cautious and skeptical about these innovations. Even when sweetened with incentives for repeat purchasers, jazzed up with time- or item-specific discounts, or offered through location-aware mobile devices, all daily deals are simply price promotions. A steep price promotion can make consumers permanently price sensitive by lowering the reference price they expect to pay, and price promotions can distract customers from products’ benefits, causing irreversible damage to brands.”

Making an intense effort to portray the value of a product or service can create value without cutting price.

2. Stay away from “ego-driven” marketing. I recently heard about the owner of a service company who was fascinated with the idea of a 30-second video commercial, in which he’d be the “star.” It was too much for him to resist, even though there was no plan for using it.

When something catches a CEO’s fancy, that’s it, whether or not it plays a role in the company’s marketing. This is called “ego-driven marketing.” In the same way, questions about the purpose of the ad, the message, or how it might be used are pushed aside and deliberately ignored.

Failing to have a marketing plan or to spend time thinking through how each component fits into the overall picture is a tragic and costly mistake. This wastes valuable marketing dollars.

3. All marketing is individual. The late U.S. House Speaker Tip O’Neil held that “all politics is local.” Such advice applies to marketing.

For decades, much of marketing was done with a broad brush: advertise in major daily newspapers, network TV stations, and national magazines, and toss billboards and direct mail into the mix just to be sure.

By 2000, such an approach was dead and technology threw in the last shovel of dirt. The ability to gather, analyze, and use enormous amounts of consumer data has pushed the bar to the point where all marketing is individual.

With companies empowering customers to manage their individual marketing protocols, it’s all about the individual. Today’s customers aren’t flooded with random marketing messages. The only messages Amazon.com customers receive are those that fit their profile.

4. The longer a company has been in business, the more it needs marketing. This runs contrary to the popular view that the longer a company is in business the less it needs marketing. The assumption is clear: they are well known to their customers, and their constituency believes in the brand. Based on that, spending money on marketing is a waste.

Yet Coca-Cola, a very old brand, has one of the largest marketing budgets. So do Heinz ketchup, Levi’s, and a host of others.

It’s a specious argument if there ever was one, since it’s easy to forget that the longer a company is in business, the greater the need to replace existing customers. It’s also easy to ignore the fact that new competitors enter the picture, and many consumers are easily lured by “new and better.”

Without marketing, companies can become “dated” in the minds of even loyal customers.

5. Basing decisions on common sense is trouble. Common sense is untrustworthy and dangerous. “We don’t need to survey our customers,” said an organization leader who takes pride in knowing his customers. “If I ask a handful, they’ll tell me what we need to know.” When the issue of continuing attrition is raised, he explains it away with a “common sense” explanation such as a downturn in the economy.

As so many marketing professionals know from experience, it’s difficult to challenge the marketing views of those who are successful, since their success serves to validate their views. This is why a book by Duncan J. Watts, Ph.D., the principal research scientist at Yahoo!, helps set the record straight. His subtitle to “Everything is Obvious: Once You Know the Answer” says it clearly — “How Common Sense Fails Us.”

Duncan contends, “Common sense is a shockingly unreliable guide to truth and yet we rely on it virtually to the exclusion of other methods of reasoning.” He points out that relying on common sense puts us in the position of dismissing and rejecting out of hand the objective testing of our decisions — including marketing and sales initiatives. When that happens, marketing dollars are wasted.

Far too much of today’s marketing is based on what was popular in the past or what worked a few years ago. These five principles provide guidelines for developing programs that produce positive results instead of wasting money.

John R. Graham is president of Graham Communications, a marketing services and sales consulting firm. He writes for a variety of business publications and speaks on business, marketing, and sales issues. Contact him at 40 Oval Road, Quincy, MA 02170, 617-328-0069, or [email protected].