by Brian Hemsworth | October 28, 2013 11:22 am
As a CEO, a president, a managing partner, you are the figurehead for your company. You are the leader, the north star, and the light to which your employees look to show the way.
Today’s business leader is under great pressure to grow revenues and profits. The economy, the Internet, globalization, and deregulation have teamed up to push us to move faster and grow more quickly, something much easier said than done.
So how does today’s business leader embark on a path of growth? Where does here or she turn for the science, strategy and support to move the company forward? It the past, the first step was leaning on sales. Maybe you push them a little harder. Maybe you try to incentivize them a bit more. These strategies can and do typically work—temporarily. We’ve learned that you can only push sales departments so far before they break, and then you’re worse off than you started. A quick read of Daniel Pink’s Drive, a great book about what really motivates people, teaches us that the old “carrot and stick” approach is quite limited in its effectiveness. In fact, it can train employees to actually perform worse.
During the recent economic down turn CEOs increasingly turned to the CFO for assistance. When the top line isn’t growing, squeeze the books to improve the bottom line. Cut here, cut there. Heck, slash and burn if you have to. Many companies were able to increase profits, but those profits did come at a price to the firm. In the wake of cuts, company morale, benefits, inventories, R&D, and vendor relationships paid a dear price.
At a certain point, the business leader really must find a way to steer the ship toward more profitable waters, where revenues can grow and so can the company as a whole. That path is most direct when the CEO focuses his or her efforts on strategic marketing as a growth initiative. (Marketing, in this sense, is different than sales. Sales is the direct action of interacting with clients and customers to generate a sale. Marketing is the collective set of all activities, short term and long, that creative all of your business activities and driving revenue.)
The challenge for many CEOs, company presidents, and business leaders, is the same as that in our schools. Great teaches know how to teach, but when they are “promoted” to become school administrators, they often lack the skills necessary to run a school. They’re out of their element.
Today’s business leader has most likely come up through either the financial ranks or sales. While bringing lots of important and valuable knowledge and experience to the C-suite, those resumes also have their downfalls, and we’re witnessing that more and more in today’s business world.
As CEO, president, or managing partner, you rely on your management team to help you execute plans and assist with strategic decisions. To work with your financial team, you need to know how to read financial documents, balance sheets, cash flow projections. To work with sales, you need to know your accounts, your products, services, and pricing.
But to create, initiate, and drive a successful marketing strategy in today’s business world, you really have to understand three key marketing factors.
There was a time when a great new product or service could “sell itself.” Word of mouth was all it took. In the past there were fewer product offerings, less marketplace clutter, and less opportunities to advertise.
Not so much anymore. There are new products, new services, new companies popping up all the time. Some are near, and some are far, but thanks to the Internet, they all seem just a click away.
This has force everyone to have to fight harder to get customers and clients. Some professions, such as medicine, law, and accounting, have learned this in painful measure. For a long time, marketing and advertising in these professionals was frowned upon, unethical, and even illegal. Now we see these fields “catching up.” Who hasn’t seen the banner across a bus saying, “Accident?” or the magazine ad offering to reduce wrinkles, increase bust size, or restore sexual vitality.
As people rush to advertise products and services, unfortunately it creates huge amounts of wasted expenditure. John Wannamaker’s famous quote, “half of all my advertising is wasted…I just don’t know which half,” comes to mind. Without research, knowledge, or a good strategy, I’d bet that more than half is waste.
Rather than “just trying something,” today’s business needs to have a specific marketing strategy. Where as “advertising” refers to just placing an ad, marketing is sum of all your marketing activities, including advertising, PR, promotions, networking, pricing, R&D, and distribution.
A good marketing strategy will look at both the short term and longer needs and goals of the company. All to often CEOs are reactive with short term tactics, which sometimes harm long term strategies. Done correctly, research into customer needs and wants should dictate a clear marketing strategy that is then implemented through specific tactics. Jumping prematurely into tactics results in the classic “Ready, Fire, Aim” mentality.
Another common error that often accompanies a lack of strategy is the lack of action. Many companies that are playing marketing “catch up” become confused, indecisive, and slow to implement. It’s the “paralysis by analysis” syndrome.
In my experience as a marketing and brand consultant, almost any strategy is better than no strategy. Companies with wrong strategies are often disciplined enough to change and improve strategies, while companies lacking a clear strategy tend to wander aimlessly in the marketplace.
Jack Welch, when asked about strategy and vision, admitted it was important, and that GE had worked hard on it. He then went on to say that once you have the strategy you’ve got to, “implement like hell.”
A good marketing strategy should identify who your target audience(s) is/are, and how your product or service will address a want or a need of that target audience. It should also identify key strengths and weaknesses, both yours and those of your competitors. And finally, it should reflect what makes you and your brand different, interesting, and valuable to your target audience. Once you’ve determined these important bits of data, your marketing strategy needs to find the best way(s) of communicating that with your customers.
James Carvel will forever be remembered as the guy who orchestrated Bill Clinton’s presidential election strategy with the simple line, “It’s about the economy, stupid.” In marketing a product or service, we just need to change it to, “It’s about the customer, stupid.”
Companies tend to focus too much on themselves. They focus on what they have done, what they want, and how they want to do things. Well, again, the Internet has made that attitude a death wish for many companies.
Today’s customer controls the information flow. The public, via the Internet, chooses where they go, what they read, and what information they want to find. They have also found a voice that formerly didn’t exist. Now they can write, post, blog, comment, and review just about any kind of product or service. And don’t think those don’t matter. Reading those customer comments have become an very important part of the customer “shopping” experience.
Today’s successful companies have adopted a customer-centric point of view. Rather than creating a product or service and trying to sell it to the public, they do research into what the public wants and needs, then delivers. Today’s marketing posture is about solving problems, filling needs, and delivering upon wants.
While we’re on the subject of wants and needs, lets be clear. Most companies try to sell things people need. Most people buy things that they want. Only sometimes do the two intersect. Selling needs is about logic, whereas wants are about emotion. We may need socks, but if we’re not emotionally attached to them, we just buy the first pair that fills the need. But shoes? Marketing shoes is all about fashion, and fashion is about emotion. We want them to look good, feel good, and most importantly, we want to feel good in them!
To create a customer-centric marketing strategy, you must learn everything you can about your customers (and potential customers). What do they like? What do they need? How old are they? How and where do they shop? At then end of purchasing your product or service, what will make the transaction successful?
A recent survey of investment professionals revealed something most brokers didn’t know. When the economy tanked, many investors began switching brokers and wealth managers—not because of losses, but because their trusted advisors didn’t return phone calls on a timely basis! The study also found that most investors would gladly give up a little in earnings in exchange for a bit more security. Those are critical bits of information you would want before creating a marketing plan for wealth managers.
One more aspect to becoming customer-centric is to provide customers with ways of communicating with you. Having an 800 number and a street address are just not enough. Communications through websites, Facebook, LinkedIn, and Twitter are becoming the preferred places for customers to begin conversations Today’s marketing is less about telling, and more about two-way conversation. Make sure your strategy involves listening to what your customers have to say.
It’s a sad truth for many, but a truth nonetheless: perception is reality, even if it’s not the truth. Are you perceived as being a top lawyer or accountant, of making a better product, or delivering a better service experience? If you are, that’s great. If not, can you achieve that position before your competition does?
I recently saw a demonstration of this. A speaker told a group that Apple was coming out with a new coffee cup. It was going to be made by Apple, and would cost around $20. When asked who would buy it, without any additional information, most people in the audience raised their hands to say they’d purchase it. When asked why, one response summed it up: “Because it’s Apple, I know it would be the coolest coffee cup made.” That coffee cup doesn’t exist, and no one had ever seen one, but they all had the perception that it would be worth $20.
I had the recent experience of consulting with a law firm about websites. I identified competitive firms, as listed by the local business journal. I then showed the managing partner a few of the best competitive websites. He saw one, and jumped out of his skin shouting, “You can’t compare us to them. I know that firm and they’re half our size.” I then showed him how his large firm’s “little” website was dwarfed by the size, content, and design of the smaller firm’s website. The perception was that the smaller firm was much bigger, much better, and much more progressive than the older, larger firm. It was perception, not reality, but to those looking at the website, that perception became their reality.
So how do you control perception? For one thing, you need to have a significant “share of voice”. People who don’t do marketing aren’t heard in the marketplace. In today’s business world, customers what to see you, hear you, find you, and reach out and touch you. So make it easy by letting your voice be heard. Websites, blogs, press releases, articles, and social media are great at keeping your voice in the marketplace.
One way of boosting perception is to find ways of gaining “3rd party” endorsement. You can say how good your product or service is, but it will be much more believable if someone else says it for you. Getting testimonials, write-ups, and endorsements from experts are incredibly powerful ways of gaining perceived stature.
Another way of controlling perception is “shape” conversations. People don’t want to be dominated in conversations, but they do like learning and being guided to new understanding. A family law mediator, for example, may write an article or blog on the high cost of litigation, and discuss advantages about mediation. Accountants can talk about changes in tax laws. Product manufacturers can have engineers or researchers create white papers or reports on product issues customers are concerned with.
Shaping perception is easier when you are able to position yourself of your company as experts. If you become a source or information or insight, customers and potential customers are much more likely to listen to you. Writing articles, teaching, and public speaking are good ways you push information out, and they typically help you gain perceived because the magazine, school, or organization sponsoring it is, effectively, endorsing you.
As a business leader, you don’t have to be an expert at marketing, provided you have a good marketing director or a good marketing consultant, and provided you have a good understanding of what these three key forces that are affecting today’s marketing efforts. By using them, you can put the power of marketing on your side. •
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