Marketing is dead; long live marketing: Attracting consumers in the post-mass marketing era
Director, Brand Strategy
Not so long ago, other marketers and I had it easy. Sure, there were battles—we had to fight to protect our marketing budgets from those who wanted to feed the ravenous appetites of our retail “partners.” And even if we managed to keep some of our budget, our last big battle with our advertising agencies was to try to get one, just one, creative execution for a TV campaign that was remotely connected to the brief. Ah, those halcyon days!
Consider the plight of marketers today. It’s just as tough for them to protect their budgets but now they have an added challenge—where to spend it. The media marketplace has shattered into thousands of pieces. Consumers, TiVo-armed and Internet-savvy, are an increasingly elusive prey. Where can marketers go to succeed in “holding the consumer down and burning that brand into the mind,” as Laura Ries puts it.1
Clearly, many marketers are not finding the answer and are becoming the fall guys for poor top-line performance. The oft-quoted statistic is that CMOs last an average of only 26 months (versus 44 for CEOs).2
What to do? The first thing is to stop trying to solve this issue as though it were just a media problem. The wrong approach goes like this: Let’s hire some new media experts. We’ll put them all in a new media group and tell them to put together a plan. We’ll expect to see some cool stuff—some viral ads, some social media, and perhaps some word of mouth and we’ll allocate 10 percent, scratch that, five percent of our budget. That should do it.
I used to work at Nestlé and that’s exactly how we handled an earlier disruptive shift when new retail channels such as Walmart, Costco, and Whole Foods started becoming a significant force in the ’90s. We even called them “alternative channels” just to reinforce their otherness. We dedicated a separate group of people to work on those accounts so we could get on with the job at hand. Of course, treating the likes of Walmart as an afterthought was a big mistake.
Now, more than ever, is a good time for some honest soul-searching. Do you have a product or service that’s worthy of your customers’ attention—one that adds some value to their lives or do you have what Seth Godin calls a “meatball,” that is, “a branded item of little differentiation and decent quality.”3 If you’re a seller of meatballs no amount of chasing after new media gizmos is going to help.
Outlined below are three ideas for more productive, value-generating approaches to marketing going forward:
Innovate like crazy
Larry Huston, former vice president of knowledge and innovation at Procter & Gamble, was recently interviewed by Knowledge@Wharton. He described P&G’s transformation from a company that tried to invent everything itself to one that turns to outside expertise for bringing the next big idea to consumers.4
Innovation has been the growth driver for brands such as Febreze. Its range of “air care” products has maintained a 20+ percent annual growth rate since launch and is poised to become one of P&G’s next billion dollar brands. Two new products such as Febreze Candles and NOTICEables are the drivers of this success. It’s not that P&G has given up on advertising. It hasn’t. But product lines such as Febreze are more self-sufficient and less dependent on the jolt of an advertising campaign for its success.
Another example comes from Speedo. Its new LZR swimsuit is so good that topflight swimmers sponsored by other manufacturers have demanded the right to switch suits to stay competitive.5 With 37 out of 41 world records earlier this year coming from swimmers wearing LZR suits, Nike was forced to allow seven of its own sponsored swimmers to switch to Speedo for the U.S. Olympic Trials. The Olympics has cemented Speedo’s advantage—the first 24 out of 25 gold medals went to swimmers wearing Speedo suits, including all of the golds won by Michael Phelps. News like that works its magic and finds its own way to that elusive consumer.
Stand for something
Too many companies attempt to please all the people all of the time. These companies have no specific value proposition or overall purpose and, as mass marketing becomes less effective, they’ve lost their means of broadcasting how little they have to say.
Take grocery stores, for example. Many of them have been split in two directions—pulled from below by Walmart with its lower prices and pulled from above by Whole Foods, which has led a health-oriented move toward higher quality.
Or consider a company such as Nestlé. Its mission a few years back was to be the “very best” food company. That was it—completely generic, allowing for everything, excluding nothing. But over the last few years, the company has focused its efforts on health and wellness, changing its tagline to “Good Food, Good Life.” Not every Nestlé product fits perfectly under this umbrella (Goobers, anyone?), but the company has a new sense of direction and purpose that helps it tell a more interesting consumer story.
Engage the customer
Actions speak louder than words or, alternatively, customer experiences are what really count. So how you deliver your brand promise is as important as the promise itself. Some years ago United Airlines launched its infamous “Rising” campaign, promising better times ahead. Instead, its performance and quality were worse and the campaign had to be shelved.
Companies that focus on customer experience do much better. For example, while many companies consider customer service as a cost that can be managed by building elaborate automated phone trees or through outsourcing the department overseas, Zappos, online shoe retailer, has built its business and reputation around its vision of offering the best service and best selection. In addition to relatively standard fare, such as free delivery and returns, Zappos looks for opportunities to over-deliver; for example, promising four-day delivery but often delivering the next day, to installing a phone service where call center employees actually pick up the phone and try to help rather than get rid of you. They are so dedicated to getting the right people in place that they offer a $1,000 bonus to anyone who wants to quit after the training program.6
Commerce Bank also saw an opportunity to focus on customer experience in the retail banking sector. From its beginnings in 1973, it made customer service the cornerstone of its differentiation strategy with its “WOW! The Customer” philosophy using novel (for the industry) products and services such as open seven days a week, Penny Arcade (free coin-counting machines), giveaways for the kids, and an overall commitment to do away with as many rules and fees as possible. This approach has helped the company grow consistently over 30 percent per year in assets, earnings, and stock price before being acquired by TD Bank Financial Group this year.
The more it changes
In one important way, the world of marketing hasn’t changed at all. Successful products and brands are still those that consumers find relevant and differentiated. But relying on mass marketing alone to build differentiation is becoming more and more of an uphill climb. Successful companies today are adjusting to this reality and developing new ways to connect with their customers, including aggressive innovation, building a strong value proposition, and delivering customer experiences at or above expectations. When a company is firing on these cylinders its story is one that’s worth telling and one that will find a receptive consumer audience.
1. Laura Ries, “Wal-Mart: To change or not to change, that was the question,” Ries’ Pieces (July 2008), ries.typepad.com/ries_blog/2008/07/wal-mart-to-change-or-not-to-change-that-is-the-question.html (accessed 31 July 2008).
2. CMO Tenure Study, Spencer Stuart (12 June 2007).
3. Seth Godin, Meatball Sundae: Is Your Marketing Out of Synch? (Penguin 2007); Martin Bishop, “Meatball Sundae Thought #4: The role of innovation,” Brand Mix blog (accessed 31 January 2008).
4. Larry Huston, “Finding That ‘Sweet Spot’: A New Way to Drive Innovation,” Knowledge@Wharton (June 2007), knowledge.wharton.upenn.edu/mobile/article.cfm?articleid=1765 (accessed 31 July 2008).
5. Ernest Beck, “Speedo: Innovation in the Aqua Lab,” BusinessWeek (14 April 2008), businessweek.com/innovate/content/apr2008/id20080414_823222.htm?campaign_id=rss_innovate (accessed on 31 July 2008).
6. Bill Taylor, “Why Zappos Pays New Employees to Quit—And You Should Too,” Practically Radical blog, Harvard Business Publishing (May 2008), discussionleader.hbsp.com/taylor/2008/05/wy_zappos_pays_new_employees_html (accessed 31 July 2008).
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