Rethinking Marketing Strategy For The Digital Age
Steve Jobs liked to say that it’s not enough to kill bad ideas, you have to kill good ones too. That’s because good strategy is about making choices and it takes more than intelligence or even instinct, it takes discipline, one of Jobs’ most overlooked qualities.
Marketing strategy is particularly difficult because, as I’ve noted before, the rules have changed. A generation ago, brands mostly strove to create buzz and “drive awareness,” now they need to build compelling experiences that keep consumers engaged.
However, the old tasks have not gone away. We still need to run TV ads and in-store promotions, man conference booths and hand out brochures, but now on top of that we have a whole new world of algorithms, apps and devices to master. To meet the new challenges, we need a new strategic approach, a new mindset and new organizations.
It used to be that marketing strategy focused on the sales funnel. You would get people’s attention, tell them about your product or service, convince them why it should be their preferred option and then drive them to action.
While there were important steps along the way, the thinking was that the more people you put in the front, the more would come out the back. That model, although it wasn’t 100% accurate, was true enough to build the great brands of the 20th century.
Now it’s broken. Put up an attention grabbing TV campaign today and consumers won’t flock to the stores, but to the Internet. Their activity will leave a data trail, which your competitors will use to retarget your consumers with competing messages before a purchase event can occur.
So, by spending money to build brand awareness and walking away, you’re much more likely to enrich your competition than yourself. In the digital age, marketers must change their focus from grabbing attention to holding attention by focusing on three core business objectives: Awareness, sales and advocacy.
While there are more elaborate path-to-purchase models available, I’ve found that complexity often obscures principle. Excess sophistication leads nowhere unless it leads to greater understanding.
Simple metrics such as awareness, sales and advocacy will give you an accurate snapshot of your brand’s health and how you can best improve it. In some high involvement categories with longer sales cycles, consideration and loyalty can also play a role, but research has shown that loyalty especially can be misleading.
Most importantly, clarifying marketing objectives is an analytical process, not a conceptual one. You are not trying to understand the “consumer mindset” or the “brand essence.” While those are worthy activities for developing positioning and executional concepts, they have no place in a discussion of business strategy.
What you want to know is where you’re winning, where you’re losing and where you have an opportunity to improve your competitive position. Period. Once you’ve achieved that, you can move on.
Forming a Tactical Approach
Identifying clear objectives is important, because it allows us to set priorities. No budget is unlimited and identifying a particular area of need not only allows us to focus our creative energies, but budget money as well, to where we can best improve our business.
However, simply identifying priorities is less helpful in forming a tactical approach, so the next step is to overlay the basic objectives model with tactical strategies that will help us create solutions targeted to a particular brands needs:
The above chart shows the three core brand objectives aligned with six tactical strategies. Mere platitudes and a “one size fits all” approach will not do, so once we’ve identified a particular area of need, we want to focus on building an approach designed for that specific task, rather than chasing the latest fad.
Perhaps not surprisingly, awareness and sales problems can largely be solved with conventional strategies augmented with new digital tools. Advocacy, however, is a largely new area and requires new thinking.
Let’s look at each area in brief:
Attention and Evaluation: While awareness has been de-emphasized in the digital age, it’s still extremely important, especially during a launch or when there is a particular brand attribute that needs to be communicated.
For example, when Mercedes wanted to promote their new zero emission “F-Cell” hydrogen fuel technology they got people talking about it by driving an “invisible car” across Germany,
Consumers who were intrigued by the campaign and searched the Internet for more information would inevitably be led to the company’s promotional page for green initiatives, the Wikipedia page or one of the glowing reviews about their revolutionary new car.
It’s important to note that while Mercedes is a well known brand, very few people know anything about hydrogen fuel technology and even fewer are actively considering a purchase. Mercedes’ goal here is not necessarily to drive consumers directly to dealerships, but to get them to start thinking seriously about hydrogen cars.
Recency and Proximity: Marketers have long known that to drive sales, you need to reach people at the point of purchase. Digital retail solutions, however, are taking the concept to a whole new level as Tesco showed with their virtual stores at Korean subway stations.
Rather than trying to drive consumers into their stores, Tesco was able to insert the shopping experience into their daily commute. The strategy helped catapult Tesco to a leadership position in the Korean market.
Value Exchange and Community: While building awareness and driving sales are objectives that most firms are familiar with and know how to manage successfully, advocacy is a relatively new area and one in which many marketers falter.
Brands that seek to increase advocacy need to create product, social and content experiences that increase perceived value. Nike’s Fuelband program is great example of how a brand can connect with consumers by building a unique marketing asset:
A crucial point here is how Nike not only creates a value exchange with consumers, but how it builds a community. A vibrant community has nothing to do with how many followers you have, but how they interact with each other.
The genius of Fuelband is not in the technology, but how it allows consumers to cheer their friends on and receive encouragement themselves.
Small, Scalable Bets
While all of the strategies above have won awards for their creativity, what’s most impressive about them is their complexity.
These are not simply the product of an exciting brainstorming session followed by a few caffeine and adrenaline fueled all-night sessions in order to get the tapes on air by deadline. They are the results of years of testing and learning.
Mercedes has been experimenting with experiential marketing for years. Tesco had its share of trials and tribulations as it built up its web fulfillment operations in Korea to the point where the virtual store idea could actually be made to work. Nike’s Fuelband isn’t a one-off, but an evolution from Nike+iPod.
All of these involved the entire organization, not just the marketing department and a few partner agencies. They required a series of small, scalable bets across the enterprise that were integrated into a seamless whole.
The implications are clear, the era of the big idea is over. The future belongs to organizations that can create effective collaboration across a wide variety of skills and capabilities.
The New Marketing Organization
There is probably no greater creative organization in the world today than Pixar, which has won over two dozen Academy Awards and whose average gross for a film (over $600 million) puts every other studio to shame.
In a classic HBR article, Pixar founder Ed Catmull, explains that the secret to the company’s success is an open non-hierarchical environment where it’s safe for everyone to offer ideas across boundaries of position or functional discipline. Feedback is frank, but not vicious and there are no stars at Pixar (can you name even one?).
Now think about the typical corporate marketing organization, with often adversarial relationships between departments, partner agencies and suppliers, glorified turf wars and personality cults. Clearly we need a new paradigm.
If marketing practice has changed so fundamentally, why do our marketing organizations look so much the same?