Rethinking Marketing

Promotion | 4 Marketing Ps

We’ve covered Product and Price. Let’s tackle Promotion this week.

What’s a Promotion?

We often think of a Promotion as a “2-for-1” or “50% off” deal, but when we talk about the 4 Ps, Promotion is much more general. Quite simply put, it’s any activity you do to promote your Product. You buy a TV spot, that’s Promotion. You Tweet, that’s Promotion. You buy LinkedIn Ads, that’s Promotion. You host a free Webinar, that’s Promotion. Anything you believe will get potential customers to notice your Product or current customers interested in purchasing again is Promotion.

Because Promotion is the way you get noticed, every company, freelancer, entrepreneur needs to get it right. The thing is, it used to be simple — you were big, you were able to buy and produce TV ads (or print ads or radio ads) and you reached most of the population. You were small so you would buy small ads in the newspaper, offer a personalized service, go door-to-door and work with neighbours. Now, in a digital world of abundance, it’s more difficult. There’s a lot of waste. A lot of things done in the name of Promotion that use up time and resources without delivering much results.

Where are we today?

Of course, like Price, Promotion has completely changed. While it’s no longer necessary to spend on advertising to get noticed, the abundance brought by the Internet has made it that much harder to reach an audience. What’s new? What has really changed? While it used to be true that to get noticed, you bought interruption from TV and radio stations, in a our digital world, it’s impossible (or much more difficult anyway) to interrupt. In a world where I can change sites in a click or fast forward TV ads, something more than interruption is needed.

Seth Godin argues what we need now is connection. What will make someone stop, listen and purchase? Connection. And that’s precisely where brands go wrong. They try to use Facebook or Twitter as interruptions tools when what they really are are connection tools. Of course as a marketer of a small shop or freelancer/entrepreneur the world has changed too.

What does that mean for you?

For the large corporation it’s changed because while, yes they can still interrupt if they spend enough, they must learn to build connections. And building a brand/person connection with clients isn’t easy, but that’s changing. For the small operation, I think it’s even trickier because while yes it’s probably easier to build person/person connections, I think many small operations forget that the goal of Promotion or connection building is ultimately to sell. So they Tweet, Facebook and LinkedIn all day. They write or shoot tons of content. They guest-post here and Webinar there because the one who can afford to give away for free is the richest person in the room. Right?

To some extent yes, you no longer need large promotion budgets to get recognized, but it’s easy to get carried away with the digital tools. Everything you do must align with what you sell. Was that last Tweet really necessary? Was the hours spent figuring out that new tool worth it? How is your Facebook Page helping you get more clients? Did that guest-post really convey that you had a Product to sell? When I land on your site, can I reach out and ask for your services?

It’s not that the posts, the Followers or Connections aren’t important, it’s simply that the “is this really working for me?” question is often forgotten. 

(Photo credit: JD Hancock)

Enhanced by Zemanta
Read more

Price | Marketing Mondays

After Products, let’s talk about Price — another of the 4 Ps of Marketing. The Price factor has been dramatically changed by digital technologies so there’s quite a bit to cover.

What’s Price?

I think Price is pretty self-explanatory. It’s what you decided to charge for your product or service. On some rare occasions, you won’t have a choice, you have to charge what government or industry dictates, but usually Price is something you or your company decides. What you charge should be a balance between what you feel your customers are willing to spend and what you need to pay your bills and strive. In other words, you want to charge more than it costs to make or deliver.

If what you sell is a service, the hard part is figuring out what your time is worth. Actually the first step is figuring out exactly what you are selling (see previous post). Consultants usually bill hours, but you can charge for results and bill commission too or you can charge a flat rate every week or month. After you’ve determined that, you need to figure out your rate. Christopher S. Penn has a great post on setting your consultant billing rate.

That choice is directly related to the Positioning you want. What’s the average your competition charges? Do you want to charge more than that? If so, what will make the extra cost make sense to your customers? Do you want to charge less than average? If so, how will you drive down your costs and how will you still give value to your customers? Are you going to charge the average price? If so, you’ll need to rely on the other Ps to distinguish yourself from the competition. Or you can ignore competition and charge what you feel you need to charge.

The trap of price

When we’re talking about services, as a personal preference, I usually prefer finding a way to charge above average by delivering more. Low-cost is a downward scale. There’s always someone willing to go cheaper. And the worst thing you can do is cut on your service quality (physical products can be a different story). When a customer buys a service, they expect something. If they go for something cheaper, and as a cost-cutting measure, you deliver less than they expect. They’ll be disappointed. Every time. And you’ll lose customers. We don’t have the same relationship with services than we do with products.

Where are we today?

Price got turned on its head because of the Internet and mobile phones. In a world where I can search Google for “Social Media Consultant” or ask my Friends, Followers and Connections, or scan a bar-code in a store with my smart-phone and buy the same product for cheaper online, Price takes on a whole new meaning. Price used to be straightforward. Customers wanted something cheap, they went to Walmart. They wanted something high-end, they went down 5th Avenue. That’s no longer the case. If I want cheap, I can go to Google or a shopping app on my phone. I want something high-end, I can use iGet.it. Every business these days is in some form of Price competition. Whether you offer a service or a product, you have to keep that in mind. You’re no longer competing with your direct peers, you’re competing against the world.

Let’s look at a quick example. I live in Montreal. If I do a quick search for “Social Media Consultant Montreal” on Google, I get just under 5,000,000 results. Not to mention the AdWords results. If you’re in that space, that’s your competition. Of course, there aren’t 5,000,000 consultants in Montreal, but you get the idea. If I’m shopping price around, the first page of results gives me 4 consultants, a couple agencies and a link to a LinkedIn search for the same query (which opens a whole other can of worms). That’s already 6 people I can reach out to for price inquiries.

What does it mean for you?

Obviously for you that means price takes on whole other meaning too. Of course some industries have been duking it out on price for years and this is nothing new. For others, it’s a whole new ball game. Just ask Best Buy or Blockbuster.

If we’re just looking at Price and ignoring the other Ps for a moment, the first place to start is to figure out your costs and your competition. Then, you need to figure out where you want to live on that competition spectrum. Then you need to whip out your calculator or Excel spreadsheet and crunch the numbers (see Christopher S. Penn’s article mentioned above).

Naturally, Price doesn’t operate in a vacuum. The other Ps mix in here. If your Product is low quality, you can’t ask for high Prices. If your Promotion isn’t done well, your Pricing will be affected. We’ll look at how each P influences each other after covering Promotion and Place.

I think the thing to remember here is you’re no longer living in a predictable space. For one, thanks to Google, social networks and mobile phones you’re competing against the world. And two, you really need to understand what it is exactly you’re selling. Is it design or is it conversions? Is it a wool scarf or is it fashion or warmth? Is it training or is it budget-filler?

Makes sense? Any questions?

(Photo credit: JD Hancock)

Enhanced by Zemanta
Read more

Product | Marketing Mondays

This is the second instalment of our review of the 4 Marketing Ps. Last week we had a brief overview and today, we’ll dive into the meat of the subject. The first P I would like to talk about is Product.

What’s a Product?

Simply put, a Product is what you sell; it can also be a service. Something like a car or consulting. You can also sell something like distribution (see last post) or you can sell payments like PayPal does. Those are easy to identify. For other companies, it’s a little more tricky. Is the Product of the Huffington Post content or is it advertising? Is LinkedIn a social network or a way for companies to reach professionals? Did you know that Bitly (the URL shortening service) can predict Internet memes, crises and hits before they happen? They do that by noticing an uptick in shortened URLs to a specific set of articles. So is their Product URL shortening or trends analysis? As Seth Godin argues, at some point the Product stops being what brought the company to be and starts being profits. As companies grow, priorities often change from product or service to profit maximization.

I think your first step is to identify what your Product really is. As a general rule if your small, what you sell is your Product — Konstantin sells design and Ray sells consulting — as long as it’s sustainable. It’s simple. When you’re bigger it gets more complicated. So yes, GM sells cars, but they’re in the profit-maximizing game too. If not, the company’s not worth it to its investors. So cars remain important, but not as an end-goal. I think things get like that because, it’s easier to manage and optimize than to create and revolutionize. We live in a world (some of us) where there’s more choice than there ever was and optimization is the only way we knew to maximize profits.

Where are we today?

I think Products — in Konstantin’s or Ray’s sense of the term — are more important than ever. The industrial revolution was all about Products, but it was never about the best Product, it’s been about the good-enough Product. Optimize and you got bigger and more profitable. That’s changing. At time likes this, when I can get “good-enough” for cheaper than you can possibly sell it, great Products make the difference. Of course, sustainable is always part of the equation.

Granted, it’s hard to qualify who the best designer or the best consultant is. It is, however, easy for you as a business to identify what its customers and prospects really want and offer that. I’m not saying, compromise on the offer, I’m saying make the offer appealing to a set of prospects.

What does it mean for you?

Again, as Seth Godin puts it, the age of the average Product for the average consumer is over. We want art. Something unique, different and personalized.

I’m not sure the average Product will completely die out because sometimes that’s precisely what the customer wants. But as a business, unless you’re ready to win the race to the bottom, you need to rethink your art. How you achieve that I guess depends on where you are. If you’re your own boss or close to it, find a way to make your product remarkable to your prospects. If you don’t have so much control, I think you need to be very honest as to what your company sells — a product? a service? profits? efficiency? — and work towards that…relentlessly and delightfully. “What’s your Product?” is not always the easiest question to answer, I’ll give you that. But the answer is important to align your efforts or change jobs.

What is your Product? What makes it that? (Answer on Twitter)

(Photo credit: JD Hancock)

Enhanced by Zemanta
Read more

Revisiting the 4 Ps of Marketing | Marketing Mondays

I’d like to do write a short series on Marketing’s 4 P’s if you’re up for it. More specifically, I’d like to look at what they mean today and in the few years to come.

Here’s a brief overview what we’ll look at over the next few Marketing Mondays:

  1. What are the 4 Ps? That’s what we’ll look at today
  2. Product. What’s the product or service are you actually marketing?
  3. Promotion. How are you promoting this product or service (advertising, social media, coupons, etc.)? By Promotion we mean more than discounts and “2 for 1” deals.
  4. Price. How much is your product or service going to cost your customer?
  5. Place (AKA Distribution). Where is this product or service of yours available to purchase?
  6. Wrap up. In the big scheme of things, where do we stand on each element?

What are the 4 Ps of Marketing

If you’ve taken any type of “Intro to marketing” class, you’ll know that the 4 Ps are: Product, Promotion, Price and Place. The idea is that each element makes up your marketing mix or all the elements of your marketing tool box. In other words, you need to work out each of these four elements when you write or think-up your marketing plan. The thinking goes if you find the right balance, you’ll have success. Together, the 4 Ps kind of make up your company or your brand’s positioning — how others think of or perceive you (Positioning is a topic we’ll look at another time).

Of course “mix” means some companies will be stronger or more dependent on one or more P. In fact, that’s their differentiating factor. For example, I once worked at a distribution company. Pricing was everything in my department. If you had the right Price, you had made the deal — that’s it, that’s all. The components we distributed were commodities. That means the clients could buy from the competition the exact same items they could buy from us. The rest was important, but always secondary to Price.

[Side note: Although we distributed other’s products, as a company our Product was distribution, the same exact type our competitors delivered. Can you see the difference?]

Another example would be Apple. It’s more Product-focused. If there’s no iPhone, then nothing else matters.

What about you? Where are you stronger or different from your competition?

Where are we now

I like the simplicity of the model. Some have tried to rework it by adding Ps or changing them altogether. If that works for you, great; but I think they’re as relevant today as ever. In fact they’re probably more so than ever. Granted technology has vastly changed how consumers think about things like Price or Place and we’ll look into some of that in the coming weeks.

Over the years, marketing has became more specialized and divided. Just like the factory worker, marketers experienced deep division of labour. Ad agencies became experts in Promotion, Business Development and Sales became Pricing experts. To some extent logistics became Place experts, and R&D became Product experts. Leaving little room for the marketer. But I think technology is forcing the company to harmonize and integrate once again — a bad Product can’t be saved by a good Promotion and bad Pricing can kill a great Product and so can awful distribution. Maybe the new role of marketing is that of Quarterback? Organizing the play.

If you’re a freelancer or consultant, you should take the time to review where you stand on each quadrant. The great thing is you’ll be able to control each one as you see fit. If you’re an employee, you might not control each (or any) of the Ps, but you’ll be able to see where your strengths and weaknesses are and try to exert influence where needed. You work with experts in the field, so if you do your job well, you can come up with interesting solutions. Granted, that can be easier said than done, so worst case, you’ll gain a better understanding of your company (as was the case for me at the distribution company).

What does it mean for you?

Take some time to look at where you stand. Let’s look at a fictitious example — the business consultant:

  • If you’re a business consultant, what’s your Product? I’m a business consultant or more specifically social media consultant. I help companies figure out this social media thing, what it means for them and what they can do with it.
  • How will you Promote? I’ll write blog posts that my potential clients will want to read and I’ll be very active on LinkedIn. I’ll do some other things too like guest post and speak at conferences.
  • How will you Price it? I want to be the cheapest available — I’d rather have a big client turnover than a few big important clients.
  • How will you distribute? Because I’m cheap I need to be able to deliver my consulting (Product) very easily. I’ll do a lot of consulting via Skype and Hangouts. I’ll still see clients in person when that makes sense. I’ll test it out.

Can you see what P is more predominant here? It’s Price. There are a lot of social media consultants out there and they all Promote in similar ways and charge similar Prices for face-to-face meetings. This consultant is smart, she’s decided to differentiate — she’ll be the cheapest. Although we can’t say if that’s sustainable, you can see how that decision affects the other Ps? To be the cheapest, she’ll need to lower expenses, by cutting down on travel (Place) and freeing up as much time as possible to do work (efficient Promotion). If the what differentiates is Price, what will the Product then look like?

Makes sense?

(Photo credit: JD Hancock)

Enhanced by Zemanta
Read more

Marketing basics

We’ve already been over the definition of marketing, let’s revisit quickly and further discuss it’s implications.

What is marketing?

Wikipedia defines marketing as “the process of communicating the value of your product to customers.” We’ve already been over this definition of marketing, but at its core it says your job as a marketer is to find a way to communicate the worth of your product or service to customers. A more imaginative way of putting it is “your job as a marketer is to understand your prospect’s worldview.” In other words, to best be able to communicate to your prospects and customers, you need to understand how they think.

Seems evident, but it’s usually forgotten. The fist instinct is to think of us.

  • “I need to find a big client to meet this quarter’s targets,”
  • “This is the last chance, we need new customers now,”
  • “I need a long-term contract with clients.”

If that’s what you think, the real question is then, do your prospects care about your targets? Do they care you need new customers now or your long-term contracts? They might; but to get there, you need to start with them and their worldview (their needs, their assumptions, their fears and concerns).

I’m not saying you can’t pick your clients based on your goals, quite the opposite in fact. But, at best, it’s a delicate balancing act.

Drawing maps

I think, as a marketer, your first task when you have your business goals is to then put yourself in your customer or prospect’s shoes. If you’re honest with yourself, you’ll notice that, more often then not, they’ll care less about your new product or targets and more about living a different or easier life. In other words, who is it interesting to? The next thing to do then, is to draw a map: I or my company is here…and my customer is there. How do I then bridge that gap?

That thinking goes for larger strategies, but can be boiled down to the smallest tactic (like choosing the visual for your site or the words for your emails).

Makes sense?

(Photo credit: GollyGforce)

Enhanced by Zemanta
Read more