I don’t know how to write the headline of today’s post. There is an argument that marketing cannot make you rich if your product is not unique and competitive. I agree with this argument. I once read somewhere that advising is a tax you pay on your unattractive (or mediocre) product.
Having said that what if you, a marketer, don’t have a choice. It’s your job and you are not ready to move on. So, you get stuck with this mediocre product. I am in this situation. And, my solution is I apply 2 principles of marketing which are 1) no product is designed for everyone (search for the right target market), and 2) create a minimal viable audience.
Everyone has to adapt and everything has a life cycle. Every story has an ending moment. A restrictive product is difficult to market. It requires a great understanding from the top. But, I believe marketers can make a difference.
We recently communicated to our customers about how our industry is structured. Many customers shared their thoughts that the industry needs to changed, which is not the response we wanted to hear. This conversation was posted in our social media channels. Our marketing team responded and managed this conversation (and social media overall). There was a push from the top that PR should manage social media, not marketing (we seperate the 2 units).
I disagreed, not because I want to keep social media in marketing, especially the service-related aspects. My main reason is PR is one-way communication. The PR function prepare press releases and send them out to journalists. I know this function does more than that but this is the nature of PR – a one-way communication.
Social media on the contrary, is a two-way conversation. We engage in conversations with everyone, customers, employees, suppliers, etc. It’s a one to many conversational structure. You say something to a group of followers and they say something back. Some would agree with you and some wouldn’t.
And, my final point is PR might have a better writing skill. However, social media is not just about grammatically correct grammar. It’s important but the ability to communicate in the simplest form and to manage an online community is much more important.
We will talk about an economic concept today. Boring, I heard. Not really. I think if you continue reading you might find it interesting. I talked in the past about discounting, fixed cost, branding, etc. But, I never explained those marketing approaches from an economic perspective. Please allow me to.
Price elasticity of demand (PED) is a way to measure a sensitivity of a change in price when a quantity demanded change. The formula is simple – % change in quantity divided by % change in price. There are 3 possible outcomes:
- Elastic – if the change in quantity is greater than the change in price
- Unitary – if the change in quantity equal to the change in price
- Inelastic – if the change in quantity is less than the change in price
The interesting part that could apply in the marketing world is that most of the goods out there (my company’s product included) are price elastic, meaning when the price drops, the quantity demanded increases. There are a few important points to note here:
- If it’s easy for your customers to substitute your product with another (e.g. substitute products or lots of offers from competitors), when you increase your price your demand will drop. This is because customers simply buy from your competitors or buy a substitute product.
- The more discretionary a purchase is, the more its quantity will fall in response to price rises.
- The less discretionary a good is, the less its quantity demanded will fall. It means the price is inelastic i.e. customers agree to pay premium prices for brand named items, additive products (e.g. alcohol, cigarette), and required add-on products (e.g. iPhones to use iTunes).
From an economic perspective, to get out of the discounting game, we have to find a way to move our product’s price from being elastic to being inelastic. Building a brand is one way. Making your product additive is another.
Not too boring? Interesting?
Which one do you think is more important between intensity and consistency? You might answer it depends on context. You are right. But, what if the context is about leadership, branding, and marketing? Which one is more important?
It’s not new but after listening to Simon Sinek’s videos, he made me think about them very seriously. In leadership, intensity looks like this – many companies think having a leadership workshop once a year would be sufficient to generate good leaders or changing culture. I attended those workshops in the past 10 years and haven’t seen much difference. Consistency is the opposite. You nurture your team about how to be a good leader every day, even a few minutes a day.
It’s like going to a gym. You cannot go to the gym twice a year and spend 10 hours each time then expect something to change. It doesn’t work like that. You have to go the the gym consistently, at least 3-4 times/week for 20-30 minutes at each time.
Being consistent is far more important than being intense, at least in the leadership, marketing, and branding areas. You have to be consistent in your messages, your designs, and your tones so customers can recognise your pieces.
It has been more than 5 years now that some marketing experts have predicted about the end of the email marketing. Their primary reason is because the widespread usage of social media. And, here we are, 5 years later, we still receive a lot of emails. Will email marketing be dead?
In my humble opinion, the email marketing would never die as long as we still have to use our email address as a login to many online services. Facebook, Google, Apple, etc require users to use an email address as a login. Things will change if one day we can use our finger print or facial recognition to login to our accounts. We start to see this trend already. I would say in about 2 years from today, the usage of the email address as the login will change. And, by that time, the email marketing as we know it will also change.
For marketers, we can continue emailing people in the next 2 years. The open rate and the click through rate will decline more and more. Things will get harder if we continue bombarding our customers with cheap deals. Having said that I don’t believe email marketing will be dead. But, it will be in a zombie stage in 2 year.
It’s about time to change.
It’s getting harder and harder to have a product that stands out of the crowd. Some companies like mine have a product that lasts for a long time and it’s not easy to come up with a new product. What are we going to do if we have to stick with our existing, non-attractive product?
In my opinion, there are 2 options to deal with this situation:
1. Repositioning the product: it means looking for the minimal viable audience and reposition your product to suit them. It is the same product but you create reasons for this group of people to buy your product.
2. Partner with other products: for example, if you are selling hotel rooms and your hotel doesn’t have a unique proposition, you may partner with a cooking company and offer a cooking package while staying at your hotel.
Remember this – there is always a solution to every business problem.
Do we, marketers, understand branding enough? I am not sure. And, if I am not sure, best of luck to explain it to an executive team. What is marketing then? This is too much for some people.
One of my team members share the below quote with me the other day. It says “Marketing is the equivalent of asking someone on a date. Branding is the reason they say yes.” This is very cool. I recently used a speed dating analogy to explain to my team of what we should not do – asking someone to marry you in the first date. I call all of our discount campaigns, a speed dating campaign. We lure customers in with cheap deals. Then, we sell them with our product.
Because the likelihood of that ‘someone’ to say yes I will marry you in the first date, our conversion rate is very low. The speed dating era has gone. Customers are very smart today. There are also a zillion solutions out there in the market. It’s arrogant to think customers have to buy just from us.
Branding is a long term investment. Yes, it’s unlikely you will get the results you want in a short term. However, it’s not an excuse why you cannot start doing it now. Branding is about building trust. I ask my team all the time – why should customers care about us? If we disappear, would they miss us? They are simple questions but hard to answer.