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Strategy Frameworks

What is Performance Marketing? Here’s a 2-minute strategy refresher.

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Strategy Strategy Frameworks

Ansoff Matrix

WHAT IS IT?

Ansoff matrix, also called product/market expansion grid, is a marketing planning model that helps a business determine its product and market strategy. It serves as a tool to device revenue growth strategies and analyzes the risks associated with these strategies.

Ansoff matrix shows four business strategies that firms can use:
• Market Penetration – Focuses on increasing the market share of existing products in existing markets. Again, this is the least risky among the four strategies.
• Product Development – Focuses on introducing new products in existing markets
• Market Development – Focuses on developing new markets for existing products
• Diversification – Focuses on entering new markets with new products. The riskiest among the four strategies.

WHY DO IT?

Ansoff’s product/market growth matrix offers four strategies you can use to grow your business. These strategies are often called “strategies for diversification.” Ansoff matrix also helps you identify the risks associated with each of the strategies. The idea is that each time you move to a new quadrant, the risk associated with that strategy increases. For years now, the Ansoff matrix has served as a simple strategic framework for business leaders and marketers to evaluate risks associated with their business growth strategies.

HOW TO DO IT?

Step 1: Examine your options
Let’s take Coca-Cola as an example to examine different strategies.

Market Penetration: In this quadrant, you are trying to sell more of your existing products to your current customers. This could be achieved using promotions through discounts or loyalty programs. For example, for Coca-Cola, this could mean a holiday special edition of coke promoted through topical ads.

Product Development: Here, you are trying to sell new products to your existing customers. These new products also could be variants of your existing products or repackaged products. A good example of this would be various flavours that Coca-Cola launched over the years, including Cherry Coke and orange vanilla.

Market Development: Market development entails targeting new markets or new areas of existing markets. That is, you are trying to sell more of your existing products to different customers. For example, you may target different geographical markets, different marketing channels, or different demographics to achieve this. Coca-Cola launching Coke Zero to cater to the male demographic, alongside the already existing Diet Coke, which serves the female demographic, is a classic example of market development.

Diversification: In this quadrant, you are trying to sell completely different products to different customers. Diversification can be related to – production of a new category of goods that complements your product portfolio or can be unrelated – entry into a different industry altogether. For example, Coca-Cola acquiring Glaceau, a vitamin water brand, can be considered related diversification. And Coke’s official merchandise, including glasses and T-shirts, can be viewed as unrelated diversification.

Step 2: Analyse risks
Conduct risk analysis on the different strategies offered by the Ansoff model and prioritize the options based on the risk impact. It is important to identify which strategies can be implemented in the short term and saved for later, based on the risks associated with them.

Step 3: Choose the best option for implementation
After a thorough evaluation of each of the strategies, you will be fully equipped to choose the best strategy for your company’s growth. Decision matrix analysis might be useful in evaluating the strategies and determining the best choice for implementation.

Lastly, please note that even though we mentioned products in this article, the same strategies apply to services. So you are all set now to embark upon your business growth journey!

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Strategy

What is Growth Marketing?

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How to build a brand presence online

Most business owners are focused on building a business and not a brand. This myopic view of selling products/services and making profits rather than building a strong brand will lead to an inevitable exit. The products/services that a business offers are only relevant till there are better substitutes in the market. And in the current competitive world, there are new and improved products hitting the market every couple of years.

On the other hand, brands are more resilient to short-term market changes and stand the test of time. In a report published by the Bank of Korea that looked at 41 countries, there were 5,586 companies older than two centuries. Moreover, your brand identity will serve as your key competitive advantage. Focusing your efforts on increasing brand awareness can help the target users recall your brand, leading to the purchase of your products/services. In addition, your brand will add intangible value to your business with the reputation, feel and experience that the customers associate with it.

So, how do you build a solid online brand presence? Below are a few tips that can help you systemically approach this process:
• Identify your business goals and strategize your brand positioning
• Personify your brand
• Build a captivating website
• Create value-adding, high-quality content consistently
• Take advantage of infographics and video content for visual storytelling
• Demonstrate your expertise or unique offering(s) through your content
• Devise a solid social media strategy
• Use different social media tools to achieve specific actions from your customers
• Be responsive online and show up on forums where your audience is present
• Optimize your site for search engines using SEO techniques
• Encourage customers to write online reviews
• Include paid advertising as a part of your marketing strategy
• Ask for signups on your site and build an email list
• Experiment with referral programs and influencer marketing
• Analyze the results from your online marketing efforts to optimize them regularly

What are some steps you have taken to boost your brand awareness? Let us know in the comments below.

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Explainer 3: BCG Matrix

BCG Matrix

WHAT IS IT?
Boston Consulting Group’s growth-share matrix, popularly known as BCG matrix, is designed to help companies in portfolio management. This four-celled matrix helps companies prioritize their different businesses as a function of market share and market potential. The matrix is divided into four quadrants based on each portfolio’s market growth and relative market share, as shown in the figure.
Dogs: Products with low growth and market share
Question marks (problem child): Products in high growth markets with low market share
Stars: Products in high growth markets with high market share
Cash cows: Products in low growth markets with low market share

WHY DO IT?

BCG matrix serves as a strategic management tool that is highly relevant to larger businesses with multiple products or services. However, smaller businesses can still use BCG analysis to explore the potential of new products and to provide an overview of all their products. If the market share is small, you may base the ‘Market share’ axis on your competitors rather than the entire market.
The BCG portfolio matrix uses the logic that market leadership results in sustainable superior returns. The market leader ultimately obtains a cost advantage that sets them apart from their competition. Thus, high growth rates examined in the BCG growth-share matrix can signal which markets have the most growth potential for decision-makers to manage the product portfolios.

HOW TO DO IT?

Step 1: Identify the products or services you would like to analyze using the BCG growth matrix strategic framework.
Let’s take Google as an example for our analysis. Google has many products in their product portfolio beyond their dominant search engine, including web-based tools, advertising tools, developer tools, operating systems, mobile and desktop applications, hardware, and other assisting services.

Step 2: Analyse the expected growth rate and the relative market share to fill in the BCG matrix.
Let’s inspect each quadrant of the BCG matrix for Google’s products and services
Cash cows: Google’s advertising business is a revenue cash cow. Google’s search engine and Android OS have a high market share, but there is little scope for further market growth. Therefore, we can categorize them as Cash cows.
Stars: Stars are fast-growing market leaders who have the highest profit potential. Apps like Google Maps, YouTube, and Google assistant (for mobiles and home automation systems) are some of the stars generating large profits and demanding huge investments from Google.
Question mark products: Google Drive and Docs are examples of question mark products. There is a high market growth potential for these products, but the scope to generate profits is low due to the higher market share of their competitors.
Dog products: Hardware products like Google glass and social networking sites like Google Plus can be labelled as dog products, as they have less market growth and low market share.

Step 3: Understand the potential for each of your products and evaluate them objectively to make investment decisions. Based on the results from your BCG matrix, you can make the following decisions:
• Build – Increase investment in a product to increase its market share (e.g., Push a product in question mark quadrant to star quadrant)
• Hold – Stop investing in a product if you cannot afford further investment (e.g., Products in any of the four quadrants)
• Harvest – Decrease the investment in a product with low market growth potential (e.g., Products in the cash cow quadrant)
• Divest – Divert the investment to other products from a product that is not profitable (e.g., Terminating products in dog quadrant)

The BCG model can also be applied to areas other than product portfolio strategy. For instance, it can be applied to plan investments in marketing channels to divest the dogs or invest in the stars.

How does the BCG matrix apply to your product portfolio? Let us know in the comments below.

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Strategy

Porter’s Five Forces: Strategy Framework Explainer

Porter’s 5 forces model helps analyze an industry by understanding the attractiveness, profitability and intensity of competition in the industry. 

WHAT IT IS

While every industry is different, the underlying drivers of profit are the same. The industry structure and the company’s relative position within the industry are two key drivers of company profitability.
First described by Michael Porter in his 1979 Harvard Business Review article, Porter’s five forces is a strategic planning framework for understanding the competitive forces at work in an industry and how they drive the way economic value is divided among industry players.
According to Porter’s five forces model, an industry’s competitiveness does not only come from the competitors. Porter’s five forces template is a tool for analyzing a company’s competitive environment, including the number and power of a company’s competitive rivals, potential new market entrants, suppliers, customers, and substitute products that influence a company’s profitability.

WHY DO IT

The structure of an industry is not static. Over time, buyers or suppliers within an industry can become more powerful or less powerful. Innovations in an industry can make new entry or substitution more likely or less likely. Regulatory changes can impact competitive intensity or affect barriers to entry. New pricing or distribution approaches taken by competitors can also affect the path of industry competition.
Porter’s five forces model serves as a competitive strategy that helps companies anticipate shifts in competition, shape how industry structure evolves, and find better strategic positions. Thus, companies can make informed decisions about which industries they should compete in and how to position themselves for success within those industries.

HOW TO DO IT

Step 1: Preparation for the analysis
Porter’s five forces analysis requires detailed knowledge of the external environment. It should be done by a cross-functional team of experts from operations, product development, sales and marketing, customer service and finance. Before starting the process, you should be ready with answers to most, if not all, of the questions pertaining to each section of the five forces.

Step 2: Threat of New entry
The threat of new entry maps out the degree of difficulty for a new player to enter the market and make a profit. The less time and resources it would take for a competitor to enter your market, the easier it is for your company’s position to weaken. An industry with a strong barrier to entry is ideal for an existing company since it would charge higher prices and negotiate better terms. The airline industry is an example of an industry with a strong barrier to entry.

Step 3: Threat of substitution
This refers to the potential for your product or service being replaced by an entirely new product or service, like electric-powered vehicles to internal combustion engines. Companies that sell goods or services with no close substitutes will have more power to increase prices and lock in favourable terms. Currently, electric vehicles (EVs) are posing a threat of substitution to Autogas vehicles.

Step 4: Supplier power
This factor addresses how easily suppliers can drive up the cost of inputs. It is affected by the number of suppliers of core inputs, the uniqueness of these inputs, and the switching cost to another supplier. The fewer suppliers in an industry, the more power they would have to charge more or push other advantages. An industry with high bargaining power of suppliers is computer hardware manufacturers who need specific microchips from their suppliers.

Step 5: Buyer power
This factor determines how much power customers have to drive prices lower. It is affected by how many customers a company has, its significance, and the cost of acquiring new customers. The smaller the customer base, the more power customers have to negotiate for lower prices and better deals. An example of an industry with low bargaining power of buyers is the pharmaceutical industry.

Step 6: Competitive rivalry
The larger the number of competitors and their offering, the lesser the power a company has. In a highly competitive category, both suppliers and customers can shop around, which puts downward pressure on prices and profits. Hair shampoo production is a highly competitive industry with several players in the market.

 

Threat of New EntryThreat of substitutionBuyer power





Competitive rivalry
Economies of scaleNumber of substitute products availableBuyer volume (number of customers)Number of competitors
Product differentiationBuyer's propensity to substituteSize of each buyer's orderDiversity of competitors
Brand identity/loyaltyRelative price performance of substitutesBuyer concentrationIndustry concentration and balance
Access to distribution channelsPerceived level of product differentiationBuyer's ability to substituteIndustry growth
Capital requirementsSwitching costsBuyer's switching costsIndustry life cycle
Access to the latest technologySubstitute producer's profitability & aggressiveness
Buyer's information availabilityQuality differences
Access to necessary inputsBuyer's threat of backward integrationProduct differentiation
Absolute cost advantagesIndustry threat of forward integrationBrand identity/loyalty
Experience and learning effectsPrice sensitivity
Switching costs
Government policiesIntermittent overcapacity
Switching costsInformational complexity
Expected retaliation from existing playersBarriers to exit

Step 7: Decision making
Now analyze each of the factors for the industry of your choice and rate them as high, low or medium. Look out for any quick wins, flag internally any concerns, and consider what it teaches you about your future direction. You can then make a decision about how you are going to position yourselves to take advantage of the market, equipped with porter’s five forces framework.

#strategicframework #businessstrategy #competitivestrategy #marketingstrategy

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What we can learn from the world’s greatest marketer.

I think #DonaldTrump is the greatest #marketer that has ever lived.

And I bet this isn’t the first time you’ve heard of his marketing prowess.

To be clear, this case study is not about Donald Trump, the Politician; this is about Donald Trump, the Marketing Genius. So, forget your politics; put your marketer’s hat on and think about this objectively.

Trump may not be a self-made man, but he is a self-made #brand. Whatever our politics may be, that much is true.

Humour me.

He is a human brand. Unlike entertainment and sports celebrities whose talent and conscious lifestyle fuel their image, Trump’s brand is entirely cultivated.

 

Branding is his superpower.

Donald J. Trump understands branding like Obi-Wan Kenobi knew lightsaber skills.

He studied economics and finance at Wharton, not marketing. He didn’t need to; he was born with this marketing superpower. To his credit, he didn’t take this gift for granted. He practiced branding skills, experimenting and optimizing in real-time with direct feedback from his followers, fans, detractors and media.

Not only can he brand himself, but he can also brand his opponents. Once he brands you, it sticks—”Sleepy Joe,” “Mini Mike”, “Low Energy Jeb.”[i]  I could go on, but you get the point.

He brands his fans too. They’re all “great people.”

Base your message on a grain of truth; keep it short; keep it catchy.

A fundamental rule of branding.

What was North Korea’s comeback to “Rocket Man”? They called  Trump a “dotard,” [ii]which means ‘an old person, exhibiting a decline in mental faculties.

Not so sticky, eh? Taking on  Trump in a branding battle is like bringing at a toy knife to a gunfight.

Once he has given you a moniker, he will repeat it along with his key messages frequently, whether an opportunity presents itself or not. “Crooked Hillary,” “Perfect letter,” “Fake News.” [iii]

What are the three laws of branding? Consistency, reach, and frequency.

D.J.T. is the Michael Jordan of marketing.

 

Why pay for media when you can control it?

Trump does not have to pay for media, he can get it for free whenever or wherever he wants. POTUS is the master of Newsjacking.

You’d say, “of course, he can get free media. He’s is the President of the United States!”

Sure, that helps, but he could control the media even before he formally declared his candidacy for President. Remember the Obama birth certificate year-long news cycle?

That’s how it’s done.

Throw the media a bone by saying something provocative or outrageous.

Let the competition defend itself. Watch the media frenzy.

POTUS is the Wayne Gretzky of newscasting.

 

Any publicity is good publicity.

Oscar Wilde once remarked that “the only thing worse than being talked about is not being talked about.” You cannot help but talk about Trump, from the lunchroom to cocktail parties, to Christmas dinners.

How much free publicity has Trump managed to accumulate?

The New York Times estimates Trump rode to the White House on $2 billion worth of free media.[iv] Some estimates are higher. For context, Apple, one of the world’s biggest electronics brands, spent $1.8 billion in advertising globally, not just in the U.S. [v]

Since becoming President, his reach and frequency have amplified and multiplied many folds. He has monopolized every medium in every country that has internet.

No further proof is required to prove Trump’s media dominance, but I did a Google search for fun to compare the 45th and 44th President. Unsurprisingly,  Trump wins hands down over  Obama by a factor of 3.

These raw search results are a mix of reliable and unreliable sources. While they are not an accurate measure of notability, they are indicative.

“Obama” 472,000,000 results. “Trump” 1,280,000,000 results.

“Donald Trump” 844,000,000” “Barak Obama” 144,000,000”

 

Trump beats  Obama by over a billion more search results. He also beats his holiness’ Pope Francis and the Dalai Lama, as well as superstar influencer Opera Winfrey and celebrities like Lady Gaga, Beyoncé, and Taylor Swift combined.

Only Queen Elizabeth comes close, but she has reigned for over 68 years and has subjects across the commonwealth. To be fair, Trump is still in his first term and “rules” just one country.

 

Measure and brag

Like any good marketer,  Trump keeps a keen eye on his poll numbers, approval ratings, and the competition. He never fails to point out his poll numbers, the size of his rallies and tv ratings on camera as an endorsement of his popularity and “greatness.”

Marketers use a tactical variation of this same “bragging” strategy to create the aura of demand—”sold out,” “offer open till stocks last,” and “back by popular demand.” Watching shoppers queuing up the night before to be the first to buy a new Apple product is a similar “bragging” strategy to amplify demand.

Takeaway: Perception of success fuels success. Your brand’s perception can create demand, but the brand must deliver on its promise.

And the brand delivered on his promises. Trump has  “kept many more promises than he has made.” [vi]

Trump has no equal in deploying the “bragging” strategy. Trump is better at this than Roger Federer is at tennis.

 

How did  Trump become a brand?

He followed his father into the real estate world, building and acquiring skyscrapers, casinos, hotels and golf courses.

From early on, Trump has remained focused on building the TRUMP brand as an icon of corporate success, wealth, and an opulent lifestyle.

TRUMP is the brand of his luxury properties, products and services from resorts and casinos to wineries, steaks and, infamously, a university. His brand supports his properties, and his lavish properties support his brand.

He has authored over 10 books like: “The Art of the Deal,” “Think Big and Kick Ass in Business and Life,” “Think Like a Billionaire,” “‘Surviving at the Top,” “Think Like a Champion,” “Trump 101: The Way to Success”, to name just a few.

 

 

Notice the book titles, they clearly support his carefully crafted ‘savvy, self-made billionaire businessman’ image. Even his reality T.V. show “The Apprentice” cultivated the same image, and the ‘Miss Universe’ pageant adds some glitz and glamour to his brand.

Trump is a hard-working marketer, always shinning his brand.

As a young man, he would call radio stations pretending to be his own publicist.

During the pandemic, he got Treasury to print his name on stimulus checks. Those checks are his brand’s touchpoints in American homes!

Trump will not miss a photo opportunity or a chance to create one. A recent example was the one outside St. John’s Church[vii]

He is a prolific content publisher and social media guru. Trump is continuously engaging his audience, even at night, with a tweet or two or a storm.

Every marketer and thought leader should learn from this.

 

Everything  Trump does is in support of his brand.

Trump’s net worth is estimated to be around US$3 billion despite six bankruptcies. He is not what his billionaire peers would call a superstar businessman.

However, his genius shines “bigly” in branding and licensing. Which is why there are more buildings around the world branded TRUMP than he owns.

He pegs the TRUMP brand’s value at $4 billion.[viii] Whatever the real TRUMP brand value is, it is easily worth more than the sum of his tangible assets, like in the case of Coke, Apple and Louis Vuitton.

His brand value was more than enough to let him slide down a golden escalator and declare his candidacy for the American presidency.

That the power of branding.

How did he get there? His share of voice (SOV) has always exceeded his market share.

A proven strategy. According to a study by Les Binet and Peter Field, for the I.P.A. Effectiveness Awards, brands that invest in ‘excess share of voice’ (ESOV), defined as SOV above the business’s market share, are likely to see long-term base sales growth.[ix]

 

Licensing Maestro

Companies spend millions of their marketing dollars to put their name on iconic buildings, arenas, hospitals, and education and research institutions. The price tag can range from a few hundred thousand for a library a year to about forty million for a sports arena. MetLife paid about $625 for the MetLife field.[x] Canada’s Scotiabank paid USD 638 million for a 20-year deal to brand the home of the Raptors and the Leafs.[xi]

On the other hand,  Trump gets paid a million or more for the use of his name on luxurious and iconic buildings that he does not own.

Here’s the brand mastery, these opulent sky-high TRUMP branded billboards not only pay  Trump but also promote his image for free.

That’s the Art of The Deal. Genius eh? Trump is better at branding than Bruce Lee was at Kungfu.

As per Forbes,  Trump is the 275th richest person in America,[xii] yet he is better known in the global mainstream than at least 270 of his wealthier peers. Ask a citizen of an obscure country like Kiribati if they have heard of  Trump, and you’d be surprised by the awareness and recall.

 

Crazy loyal customers

The loyalty of his base is unshakeable. “He could shoot someone on New York’s Fifth Avenue, and still not lose voters.” [xiii]

A marketer would give their left arm for this kind of brand loyalty.

So how does  Trump command this Rockstar like adulation? By staying true to his brand promise

Trump is no different as a president than he was as a candidate on the campaign trail. With Trump, it is WYSIWYG. His voters like his straight talk. They voted for him in to shake things up, and he has done just that and more.

Like any good marketer, Trump built his campaign promises on an intimate understanding of a sizable segment’s frustrations.

Enter Cambridge Analytica. Exit Hillary Clinton.

He used “big data” to find a population segment that was missing a voice in federal politics. Non-college educated, low income, conservative, older, white males.

Trump heard and addressed their frustrations. Immigration (“build a wall”), Terrorism (“Muslim ban”), Tax Cuts, Job losses to China, trade and climate deals.[xiv]

 

Hyper-focus

Trump is exclusively focused on his audience, and he knows which buttons to press and when. He is talking to his audience, even when he is talking to others. Some call this a “dog whistle”. Marketers call it targeting.

He can get his message across to his audience in the language they understand. Unlike his scholarly and “elitist” predecessor,  Trump speaks like everybody else. He uses simple words like “great,” “big,” “nice,” and “stupid” in bite-sized headlines with no unique words or difficult concepts. His Flesch-Kincaid score is the highest of any American president; at best, you only need a fifth-grade level of education to understand him. [xv]

To build a brand, you need a relevant and consistent message that you frequently echo in front of as many members of your audience as possible.

Trump applies these messaging, reach and frequency principles like the Yoda of Marketing.

Staying true to the brand

While I was doing research for this article, two Whitehouse staff tested positive for COVID-19; those not in self-quarantine were to wear masks.  Trump did not wear a mask, although the fatality rate for someone in their 70s is 28 times that of someone in their 40s.[xvi]

Wearing a mask would dilute his message and project fear, a trait not in sync with Trump’s brand personality. He even took on the medical establishment by advocating for Hydroxychloroquine against their advice, and because he did, he backed it up by taking it. End of argument.

Like Trump, a brand must be belief-driven. A study by @Edelman shows that the majority of consumers buy on beliefs. They expect brands to reveal where they stand on social, ethical or political issues and back it up with meaningful action. 64% of consumers will buy or boycott a brand solely based on its position or political issues.[xvii]

Trump knows his:

#marketingfunnel and #touchpoints – What to say, where, when and how through the customer journey.

#messaging – Catchy zingers #SleepyJoe and a core message like Make. America Great Again (#MAGA), A complete message in four simple words. It identifies the problem and presents the solution.

#Segmentation and #profiling – Mexicans, Muslims and Immigrants

#Bigdata – Two words, Cambridge Analytica.

#Media — #FakeNews, #TheFailingNewYorkTimes.

#Social Media – His tweets at an average of over 28 tweets a day.[xviii] Check out Trump’s tweeting stats at NYTimes.com. [xix]

#Provocative marketing — #BuildTheWall, #LockHerUp.

#Earnedmedia – see Newsjacking.

#Newsjacking – CNN alone gave 430% more airtime to Trump’s campaign compared to Obama’s.

#Spin – Remember the “sarcastic” disinfectant and light prescription?

#Crisiscommunication — Deflect blame. “I barely know the guy,” “the W.H.O.’s fault,” “Perfect letter,” “Russia Hoax.” “No Collusion”

#Guerrillamarketing – COVID press briefings.

#Experientialmarketing, we’ve seen clips of his rallies, they are scary good!

#Reciprocalmarketing – If you promote  Trump, he endorses you, “Great people,” “Terrific job.” If you don’t, you are branded as “Doing a poor job,” “Never Trumper,” or “FakeNews.”

#Geotargeting, focusing where there is the best chance to win, “Wisconsin,” “Michigan.”

#Omnichannel – He is everywhere. I don’t remember a day in the last four years without contact with the TRUMP brand, do you?

Here is the ultimate proof of his marketing genius.

Trump can do what even advertising legends like #davidogilvy #billbernbach and #leoburnett may have found challenging.

Unlike them, Trump can sell an obviously flawed product: himself.

The only thing  Trump is guilty of, from a marketing perspective, is overselling his product and perhaps embellishing the truth. But then, who can cast the first stone?

Here are some of Trump’s proven marketing strategies.

  1. Invest in your brand. It is not an expense; it is an investment that grows and pays back by supporting sales over the long term.
  2. Know your audience. Utilize both operational and experience data to identify the best customer segment for your brand and develop robust data-driven profiles.
  3. Stay focused on your segment and message, even at the risk of alienating others.
  4. Keep it simple; simple messages and tactics are stickier than complex.
  5. Be unexpected – It is easier to stand out by being different, and it also helps earn media impressions.
  6. Tap into emotions. In an increasing parity landscape, personalize your message at scale.
  7. Do more inbound marketing; it is less expensive than outbound marketing.
  8. Use repetition – Be consistent with your message and repeat it frequently every chance you get.
  9. Omnichannel works better than multichannel. Customers expect their journey to be seamless across your touchpoints and channels.
  10. Superlatives claims are useful if you can back them up believably.

The problem with a human brand is that, when the human fails, the brand fails.

Since becoming President, his politics, leadership style, and accusations of being a sexist and racist have negatively impacted his brand. Some landlords have taken down the TRUMP name from their buildings for “security” reasons.

Trump was a brand before he became President, and he is President because of it. Whether he wins a second term or not, his marketing genius is beyond doubt.

This essay is a work in progress, and I need your help to build this into a more robust case study for future marketers to learn from.

[i] https://www.rollcall.com/2018/08/02/top-10-trump-nicknames-and-why-they-stick-to-his-foes/

[ii] https://www.nytimes.com/2019/12/05/world/asia/north-korea-trump-dotard.html

[iii] https://thehill.com/homenews/administration/421948-18-nicknames-trump-invented-in-2018

[iv] https://www.nytimes.com/2016/03/16/upshot/measuring-donald-trumps-mammoth-advantage-in-free-media.html

[v] https://www.campaignlive.com/article/apple-ad-spend-rises-50-record-18-billion/1370742

[vi] https://www.newsweek.com/trump-tells-rally-hes-kept-more-promises-hes-made-1198181

[vii] https://www.theatlantic.com/politics/archive/2020/06/trumps-biblical-spectacle-outside-st-johns-church/612529/

[viii] https://qz.com/1561523/donald-trump-says-brand-value-doubled-his-net-worth-by-4-billion/

[ix] https://effworks.co.uk/wp-content/uploads/2017/10/MEDIA_IN_FOCUS_FINAL_PDF_909.pdf

[x] https://www.signsofthetimes.com/content/metlife-inks-400-million-naming-rights-deal-meadowlands-stadium

[xi] https://globalnews.ca/news/3708528/scotiabank-air-canada-centre-naming-rights/

[xii] https://www.forbes.com/sites/chasewithorn/2019/10/02/donald-trump-falls-another-16-spots-on-the-forbes-400-list/#2e069aac291b

[xiii] https://www.theguardian.com/us-news/2016/jan/24/donald-trump-says-he-could-shoot-somebody-and-still-not-lose-voters

[xiv] https://www.bbc.com/news/world-us-canada-37982000

[xv] https://www.newsweek.com/trump-fire-and-fury-smart-genius-obama-774169

[xvi] https://www.statnews.com/2020/03/30/what-explains-coronavirus-lethality-for-elderly/

[xvii] https://www.edelman.com/news-awards/two-thirds-consumers-worldwide-now-buy-beliefs

[xviii] https://www.statista.com/chart/19561/total-number-of-tweets-from-donald-trump/

[xix] https://www.nytimes.com/interactive/2019/11/02/us/politics/trump-twitter-presidency.html

 

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Are your marketing touchpoints delivering the desired customer experience?

A touchpoint is any contact or interaction that a customer has with your product or service that might change how they feel about it.

These critical interactions within the customer journey can positively or negatively change the way customers perceive a brand, product, business, or service. They can create interest, inform, educate, impress, persuade, invite, help, delight or annoy the prospect or the customer.

Touchpoints

Touchpoints are any physical or virtual component of your brand and its marketing that a customer may encounter before, during or after the purchase.

Every touchpoint in the customer journey is an opportunity to deliver positive experiences that encourage prospects to become customers, and customers to become loyal brand advocates.

Touchpoints include advertising, communication, a web page, blog posts, app, customer ratings, product reviews, word of mouth, FAQs, the physical store, point of sale, packaging, instructions, customer service, return policy or the warranty process. This is not a comprehensive list, but you get the idea.

Touchpoints are sometimes confused as channels, but they are two different things. A touchpoint is a customer interaction with your brand, a channel is where the interaction happens, like on TV, on your website or in the store.

Touchpoints provide the brand experience

Brand experience can create loyalty or defection. A salesforce study titled “State of the Connected Customer” found that 80% of customers say that the experience a company provides is as important as its products and services, and 57% of the customers stopped buying from a company because a competitor provided a better experience[i]

Grouping all the touchpoints chronologically presents a complete picture of the experience an average customer has with your business.

Individually, touchpoints nudge the customer down the funnel toward the path to purchase, collectively they tell your brand’s story, and provide the desired brand experience.

Each touchpoint has a role to play individually and collectively, just like the individual pieces of a symphony. When all the instruments are in sync, hitting the right cords at the right time, the collective experience is as desired by the composer.

Brand experience in a non-linear customer journey.

At the beginning of the 21st century, the average customer typically used two touch-points when buying an item, today over half of all customers regularly use more than four touchpoints.[ii]

A Google and IPSOS study revealed that customers who bought laptops on an average used 3.4 touchpoints.  Adding to the challenge of providing a coordinated customer experience across the customer journey, is that a typical customer journey is less likely to be a straight line. It is non-linear and involves a complex network of touchpoints, both online and offline across multiple channels. Customers can go straight from awareness to purchase, skipping the in-between stages of the funnel or they can go online, offline and back again.  On average, only about 11% of consumers can be treated strictly as online customers,12% as exclusively offline customers and the balance as both online and offline customers. [iii]

This mix of digital and physical interactions make it important and more difficult to deliver a synchronized and relevant brand experience across touchpoint, channels and devices that customers want.

Customers seek a tailored brand experience

The same Salesforce study mentioned earlier  (Salesforce, 2018) found that customers are looking for contextualized and connected interactions at every turn. 59% of customers would choose companies that provide tailored engagement based on past interaction, from product recommendations to proactive service.[iv]

Company’s don’t have much control over touchpoints like word of mouth and reviews, but most are in their power. Yet marketers can often annoy customers with disconnected and irrelevant communications touchpoints and channels.

To provide a synchronized customer experience, it is vital to discover all your online and offline touchpoints, understand their individual and collective impact on customer experience and identify points at which customers are most open to influence.

Doing a touchpoint analysis requires data.  However, most marketers only have access to data at some touchpoints because not all physical and digital touchpoints are easily measurable.  Further, the available data may reside in disparate data silos, making it difficult to combine and analyze.

In the absence of available data, here’s how to identify, understanding and prioritizing your touchpoints.

Step1: Audit your existing touchpoints

List and categorize your known touchpoints according to when they occur, before purchase, during purchase and after purchase.

Marketing Touchpoints - Salt Strategy

Step 2: Walk the customer journey

Adopt a customer mindset and walk in your customer’s shoes through the customer journey (link). Work with your marketing, sales and customer service people and answer the following questions.

  1. How your customers seek solutions to a problem that your product/service category can solve.
  2. How they go about identifying available solutions to their problem?
  3. How do they evaluate the solutions?
  4. How they make a purchase decision?
  5. How they encounter the business after the purchase?

Walking through the customer’s journey step-by-step will help identify gaps in your existing touchpoints.

Step 3: Ask your customers

Have your customer, and that of your competition, walk you through their customer journey. Qualitative research techniques like individual or group interviews with your target audience work well in identifying the touchpoints on the path to purchase.

Step 4: Map and plot your customer journeys

Compare the three lists of touchpoints generated in the first three steps to help identify any missing and redundant touchpoints in your customer journey before, during and after purchase.

Recurring patterns indicate the relative importance of each touchpoint in the customer journey. These findings can be further validated using quantitative surveys to better understand and confirm the points where customers are most open to influence and how you can interact with them at those points.

Turning insight into action

Knowing your touchpoints and understanding their influence allows you to prioritize your touchpoints and allocate resources and spending, but that is not enough. The end goal is to optimize the customer experience at every point to ensure that the customer journey as a whole delivers the desired customer experience.

To optimize touchpoints requires measuring customer satisfaction at every interaction. This can be done by running customer feedback surveys at each critical touchpoint or by deploying customer experience management software.  With this information, you can measure results and make improvements to enable a better customer experience across every touchpoint to boost customer satisfaction.

Understanding the influence of each touchpoint in moving the potential customer further down the funnel helps marketers realign strategy and resources to where they have the most impact, thereby improving marketing effectiveness.

[i] “State of the Connected Customer Report Outlines Changing Standards for Customer Engagement.” Salesforce.com, Salesforce Research, 2019, www.salesforce.com/company/news-press/stories/2019/06/061219-g/.

[ii] Marketing Week. “Omnichannel Stats You Don’t Want To Miss.” Knexus, Marketing Week, 20 Aug. 2018, www.knexusgroup.com/show/blog/Five-Omnichannel-Statistics-You-Need-to-Know/.

[iii] Google CEE & IPSOS. “Study Reveals the Complexity of Modern Consumer Paths to Purchase and How Brands Can Make Inroads.” Google, Google, 2019, www.thinkwithgoogle.com/intl/en-cee/insights-trends/research-data/study-reveals-complexity-modern-consumer-paths-purchase-and-how-brands-can-make-inroads/.

[iv] “State of the Connected Customer Report Outlines Changing Standards for Customer Engagement.” Salesforce.com, Salesforce Research, 2019, www.salesforce.com/company/news-press/stories/2019/06/061219-g/.

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Eight golden rules for improving Marketing Effectiveness.

Effectiveness in marketing is simply the ability to prove that marketing has delivered on its stated objectives. Different brands respond differently to the same strategy or tactic, but there are some golden rules-of-thumb in marketing that are almost universal.

One: According to a study by Les Binet and Peter Field, for the IPA Effectiveness Awards, “Brand share of voice must exceed its share of the market if it is to grow.” Brands that invest in excess share of voice (ESOV), defined as SOV above the business’s market share, are likely to see long-term base sales growth. Therefore, invest sufficiently relative to your market share to see long-term sales growth and improved marketing effectiveness. [I]

Two: Big brands drive higher marketing return on investment (MROI). The size of the brand and the size of the market is the largest determining factor of MROI. Why? Because big brands are better known. They have higher mental (awareness) and physical (distribution) availability, which drives results more efficiently.  Therefore, base your marketing objectives realistically on the brand size and size of the market.

Three: Spend more on long-term brand building than on short-term sales growth. The ‘Profit Ability’ report suggests that over half of marketing’s profit impact happens over the long term (delayed effect) and that immediate short-term effects decay quickly.[ii] Therefore,  numerous landmark studies by the IPA suggest that the best split of marketing investment is 60% for long-term brand building and 40% for short terms sales activation. [iii] The ratio can vary by sector and situation, but significant brand-building investment is needed to deliver a strong brand over the long term.  Brand building advertising will still drive financial performance in the short term.

Four: Work with absolute numbers, not ratios. An objective of maximizing MROI signals prioritization of marketing efficiency over marketing effectiveness, which can be achieved by simply cutting the budget. However, this focus on efficiency erodes brand equity in the long run. Instead, Marketers should focus on goals in the absolute terms, like the quantum of sales instead of MROI ratios.

Five: Creativity makes a difference. There is wide-spread evidence that creativity drives marketing effectiveness. A study by Data2Decsions found that after brand and market size, creativity is the biggest determinant of marketing profitability and more potent than other controllable marketing levers. Creative that has emotional appeal drives long-term effectiveness.[iv]  Neuroscience suggests that emotional intensity is connected to memory encoding, which is crucial for long-term brand building. A  P&G analysis of 300 TV ads, 85 online videos, 100 Facebook posts and 50 in-store displays showed that creative eliciting an emotional response was 8x more likely to be successful than work eliciting indifference.[v]

Six: Media reach strongly correlated with media effectiveness. Analysis of the IPA database found that campaigns that use of high reach media like TV, Outdoor and Radio were much more likely to generate significant business effects than those that did not.[vi]  The 2018 Profit Ability report suggests that  TV enjoys the benefits of scale, which enables it to deliver efficient, profitable returns at higher spend volume than other media before diminishing returns take effect.  Online video and radio also provided profitable returns.[vii]

Seven: Integration drives better results. Multi-channel integrated campaigns deliver significantly higher ROI than single-channel campaigns, particularly when they work together to increase reach. Just going from one platform to two increases marketing ROI by 19%, TV supported by digital improves media effectiveness by 61%.[viii] A study by Kantar showed that cross-platform campaigns efficiently add reach and deliver a ‘synergy effect’ which makes them 31% more effective at building brands. For example, digital video and TV working together can generate an additional 25% of ROI.[ix]  In another study by Kantar Millward Brown shows that TV is also an excellent platform for digital and other media; it helps improve the effectiveness of other media by a factor of 3x.

Eight: Easily recognizable brands that leverage distinctive brand assets have an advantage. Brand assets like colour, logo, symbol, font, character, slogan, jingle, or a signature tune like ‘intel inside’ can trigger easy brand recognition and related memories. A study by Kantar showed that brands with the strongest assets are, on average, 52% more likely to come to mind when consumers are shopping within the category.[x]

[i] Binet, Les, and Peter Field. “Binet and Field Outline Key Formulas for Brand Building in Context.” IPA, ipa.co.uk/news/binet-and-field-outline-key-formulas-for-brand-building-in-context.

[ii] Profit Ability: the Business Case for Advertising.” Thinkbox, Ebiquity, Gain Theory and Thinkbox, 2018, www.thinkbox.tv/research/thinkbox-research/profit-ability-the-business-case-for-advertising/.

[iii] Binet, Les, and Peter Field. “Binet and Field Outline Key Formulas for Brand Building in Context.” IPA, ipa.co.uk/news/binet-and-field-outline-key-formulas-for-brand-building-in-context.

[iv] Dyson, Paul, and Karl Weaver. “The Top 10 Drivers of Profitable Advertising.” Data2Decisions, 25 May 2016, data2decisions.com/the-top-10-drivers-of-profitable-advertising/.

[v] Whiteside, Stephen. “Emotional Ads Pay off for P&G.” WARC, Events Reports, South by Southwest, Mar. 2015, www.warc.com/NewsAndOpinion/News/34492.

[vi] Binet, Les, and Peter Field. “Binet and Field Outline Key Formulas for Brand Building in Context.” IPA, ipa.co.uk/news/binet-and-field-outline-key-formulas-for-brand-building-in-context.

[vii] Profit Ability: the Business Case for Advertising.” Thinkbox, Ebiquity, Gain Theory and Thinkbox, 2018, www.thinkbox.tv/research/thinkbox-research/profit-ability-the-business-case-for-advertising/.

[viii] Goodbuzz Inc. “White Paper: Anatomy Of Effectiveness.” LinkedIn SlideShare, WARC, 18 June 2019, www.slideshare.net/Goodbuzz/white-paper-anatomy-of-effectiveness.

[ix] AdReaction: The Art of Integration.” Kantar, Kantar Millward Brown, Nov. 2017, www.millwardbrown.com/documents/Reports/The_Art_of_Integration/default.aspx?access=yes.

[x] WARC from Home: Distinctive Brand Assets – What They Are and Why They Matter.” WARC, 2018, www.warc.com/newsandopinion/opinion/warc-from-home-distinctive-brand-assets–what-they-are-and-why-they-matter/3484.

 

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Are your marketing decisions accurately informed by your marketing attribution model?

John Wanamaker, a 19th century American Merchant and political figure once famously said: “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.”  Marketing attribution was a problem even then.

Now fast forward to the 21st century, and we see that marketing is so much more sophisticated, and most marketing decisions are data-driven. Given the access to mountains of aggregate and customer-level data, it would be reasonable to assume that we have solved the problem of attribution. Not really, attribution is more difficult today than during Wanamaker’s era, which was dominated by a few marketing channels, namely print, out of home and radio.

Today brands are marketed across a vast number of channels and platforms, both analog (offline) and digital (online), generating data exposing almost every aspect of consumer behaviour. However, organizing this data and making sense of consumers increasingly non-linear paths to purchase is extremely complicated.

Despite the improvements in the “science” of marketing attribution, there continues to be confusion around the best way to quantify the impact of omnichannel marketing activities on financial outcomes. CMO’s struggle to provide an accurate demonstration of marketing ROI.

It would be great if marketers could drill down into insights from attribution tools in multiple ways. Some work with web analytics, third party analytics platforms; some develop proprietary attribution models, and some focus on a hand full of metrics. However, the holy grail of attribution would be the ability to accurately track the customer’s journey at all touchpoints through the entire marketing funnel from brand awareness down to conversions.

Three different approaches common today are A/B Testing, Market-Mix Models (MMM) and Multi-Touch Attribution (MTA).

Marketing Mix Modeling (MMM)

 The IAB defines Marketing Mix Modeling (MMM) as a statistical analysis of aggregate sales, marketing, and business driver data that quantifies the impact of different marketing channels and tactics (the marketing mix) on financial outcomes over time.  [i]

Marketing-mix models typically rely on market-level data and perform better with at least three years of marketing data (input) and sales data (output). Input data include measures of economic vitality and competitive activity, price promotions, distribution media channels and impressions and other on and offline tactics. Output data consists of the sales volume and value. 

The resulting insights can be used to optimize marketing by reallocating spends to more productive channels and tactics and also predict future outcomes.

MMM attempts to answer critical questions like, what was the marketing ROI from a specific channel, and what would be the impact on sales if the spend was reallocated. 

Multi-Touch Attribution (MTA)

In today’s omnichannel marketing era, customers interact with multiple touchpoints of the same brand on their path towards purchase. Attribution models let marketers decide how much credit each digital touchpoint gets for a conversion. Multi-touch Attribution models (MTA) provide a better understanding of how your ads perform and can help you optimize across conversion journeys. 

The objective of the Multi-Touch Attribution model is to measure the impact of marketing activities on the metric associated with conversion and generate insights to guide decisions about future marketing spend allocation by tactic at an individual granular level. 

The critical question MTA seeks to answer is, what is the expected incremental change in propensity to convert as the result of an impression of a specific touchpoint in the customer journey.

There are several attribution models, but not models are multi-touch. For example, first and last touch models are forms of single-touch attribution. Single-touch attribution models only factor in the first or last touchpoint encountered before a conversion, while multi-touch models evaluate the impact of several touchpoints. 

  • The Linear attribution model credits each touchpoint equally across the customer journey. 
  • The U-shaped Model attributes most of the credit to the first and last touchpoint the least to the touchpoints encountered in between.
  • Time Decay Model provides higher credits to touchpoints closer to the conversion. 
  • W-shaped Model credits the first touch lead conversion and opportunity creation with 30% of the credit each and the balance among the remaining touchpoints. 
  • The full Path Model is like a W-shaped model but includes an additional touchpoint—the customer close touchpoint. 22.5% of the credit is allocated to each of the key touchpoints: first touch, lead creation, opportunity creation, and close, with 10% going to any additional touchpoints.
  • Custom Models are tailored by companies that have a unique path to purchase.
  • Multi-Channel attribution weighs attribution credit by channel (social, paid, organic), and unlike Multi-touch Attribution, it does not factor in the granularity of specific touchpoints, messaging, or sequence.  

Which model should you use, MMA or MTA?

Neither technique may be a complete solution in every case; there will be some blind spots. Both the advanced statistical methods provide value, their value may differ by the sector in which the brand operates and the channels the marketers deploy.

MMM works with historical market-level data and guides significant strategic decisions like spend allocation across the marketing mix. Whereas MTA primarily evaluates digital touchpoints, but at an individual level and in real-time.

For all the benefits, the MMM and MTA do no adequately measure the impact of the exogenous micro and macro environment factors, nor segmentation, brand and messaging strategy.

Omnichannel marketers with substantial investments across many channels and tactics may try the hybrid approach and develop a Unified Measurement Model (UMM) or Unified Marketing Measurement (UMM) as it is also known. 

UMM integrates more than just MMM and MTA. It does this by assigning a business value to each strategic and tactical factor that influences marketing performance across all analogue and digital customer touchpoints, including messaging at the individual level. UMM is still new, and its complexity is better suited to the marketer with more significant resources.

How do you know your marketing is working for you?

[i] IAB. (2019). The Essential Guide to Marketing Mix Modeling and Multi-Touch Attribution. IAB. Retrieved from https://www.iab.com/insights/the-essential-guide-to-marketing-mix-modeling-and-multi-touch-attribution/