Monday, April 25, 2016
CRITICAL MARKETING MISTAKES –
Peter Drucker, the father of modern management, says, “Because the purpose of business is to create a customer, the business enterprise has two, and only two, basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs.” However, most corporations view marketing as a cost center as opposed to producer of results. Unfortunately (and, more realistically, unprofessionally) marketing is failing to provide a clear line of sight in creating customers and driving sales outcomes.
Poor marketing practices are at the root of the decline of marketing relevance in building the business. Slip-ups, oversights and a lack of predictability of marketing results contribute to retarding versus optimizing brand and corporate performance. This results in deep and frequent cuts in marketing funding.
This is the second in a series of articles that will tackle critical marketing mistakes, those slip-ups, oversights and poor practices, and address what needs to be done to make marketing matter (more). The first article started at the beginning with, what we believe is the most important “P" in marketing, “Positioning.” (If you haven’t read it click here …) This article deals with the Target-Customer, more specifically miss-targeting and inadequately defining Target-Customers.
Target – goal, somebody aimed at
Customer – supporter and benefactor
The Target-Customer refers to whom we intend our brand to appeal. It represents those people with whom we want to establish an ongoing, mutually beneficial relationship, not just of a transactional nature but a transformational one. These are the people we want to win over; those we intend to serve better than our competitors so we might earn their financial support in the form of purchasing, or usage, and devotion. It’s a mutually beneficial and binding relationship. They receive a relevant, meaningful and perceived unique benefit from the brand experience in the form of physical and/or emotional pay-off and we, in turn, reap financial reward and the expectation that they will return again, and again.
It’s rather simple when you think about it. It’s the people with whom we will form a connection. It’s all about mutual attraction and beneficial relationship. While the brand is undoubtedly a significantly important asset we should not take lightly that so is the customer; for without the customer there is no brand. Dismiss, ignore or mistreat customers and the health of the brand will deteriorate, brand loyalty will erode and sales will shrink.
Critical Targeting-Customer Mistakes
There are a number of mistakes and oversights marketers and their organizations make with regard to targeting customers. Here are two of the most significant:
- Trying to be all things to all people – As Northwestern Marketing Professor Philip Kotler, whose textbooks you probably studied in college, says, “If you’re not thinking segments, you’re not thinking marketing.” We must segment to identify those prospects with which we have the best chance of establishing a mutually productive and beneficial relationship. It’s both a matter of appeal and economics. When we don’t segment but, instead, try to appeal to everyone our message and many marketing activities are instantly diluted. Instead of spurring the passion of Target-Customers we elicit apathy, making them indifferent to our brand, which retards the growth acceleration rate, and causing them to be susceptible to the lure of competitive activities. The growth acceleration rate refers to the speed of growth. A slower growth rate means it takes us longer to realize the sales and market share potential for the brand. This slower growth rate translates to opportunity losses of sales and profits that could have been used to fund additional marketing initiatives and organization developments. Moreover, when the brand’s appeal is diluted, particularly when it lacks perceived differentiation, we are forced to provide discount pricing or exert more muscle in terms of higher levels of sales and marketing support, which reduce margins and profitability.
There’s also a drag on efficiency. For example, when we ask Pharmaceutical sales personnel how many calls they need to make on average before they effect a change in customer behavior they typically respond “8 – 11.” The accuracy of the actual average number isn’t important (e.g., 8 or 9) as it is a starting point for this example. (Certainly, if you average 11 calls when your competitor takes only 8 calls on average then they are 27.7% more efficient and you are 37.5% less effective!) What is important for marketers to understand is that there will be a wide range within whatever the average is for your brand. For purpose of illustration let’s say that the number varies from 1 – 20-calls for a given customer to achieve an average of 8 for a group of customers. Some customers will change behavior on the first call whereas it may take 20 or more calls for other customers before a behavior change occurs – if ever. This is dependent upon the appeal of our brand to them, which differs by customer segment, and even customer to customer within a given segment. It’s both irresponsible and foolhardy if we cannot identify and do not first approach the low hanging fruit since the brand’s growth acceleration rate and ROI (from our sales calls, messaging, marketing activities) is significantly impacted by our ability match our brand with the most appropriate customers.
- Superficial understanding of the customer – Data regarding the Target-Customer is helpful. But, it is not enough. It mostly deals with demographics, which can be very misleading. For example, it we were to talk about men 18 – 49-years of age earning $40-50,000 we could be encompassing a schoolteacher, truck driver, technician, etc. They all have very different lifestyles, values, beliefs, needs, etc. The same goes for thinking about HCPs (i.e., Health Care Practitioners) practices (e.g., oncologists versus internists, or number of patients treated, etc.). We need to get below the surface of the skin (i.e., go beyond the numbers) to understand: what our Target-Customer thinks and feels; her/his journey; choices available to her/him; dissatisfactions we might exploit and needs that we might capitalize upon; and how s/he perceives the world in which we compete, and address them. So many Target-Customer profiles are vague or too broad and do little to help us understand who it is, at heart, that we intend to serve and win.
BOATS & HELICOPTERS:
Here are a few suggested actions regarding what we should do to fix these significant blunders to make our Target-Customer selection and profile more productive:
- Get to work on Target-Customer segmentation. What we are looking for are those potential customers who, in the words of executive coach, Simon Sinek, “believe what we believe.” In other words we are looking for those segments of the target-market population who find our Brand Idea appealing. (For more on the Brand Idea click here …)
- Choose to be and not to be. Okay so we’re trying to be a little cute here. What we mean is that it is essential for us to make choices regarding whom we will target AND whom we will not target. Keep in mind that we are targeting those potential customers for whom our brand will have strong appeal, with the anticipated impact of a faster growth acceleration rate and more favorable ROI. Also, this means making choices regarding the reason for our brand’s existence (the Brand Idea and positioning strategy) and what we will not stand for, what we will message and what we won’t, and what marketing activities we will undertake and what we will not. Not making clear choices will undermine marketing effectiveness.
- Identifying the Bull’s-Eye Target-Customer of One. Addressing the Target-Customer profile can be rather abstract, particularly if one is merely addressing data. So we approach this by answering the following question: “Who do we know, a living being, that finds our Brand Idea and messaging to be so highly compelling such that it will trigger achievement of the Brand’s behavior objective (e.g., switching, adoption, etc.)?” This Target-Customer will undoubtedly be at the heart of your segment. What we can’t tell you is how large that segment will be. That’s a job for your marketing intelligence personnel.
- Define the Target-Customer clearly and completely. This is about displaying and communicating our Target-Customer in such a way that everyone on the brand team understands her/him. Importantly, we should know and understand our target so well that we can predict how s/he will respond to stimulus we develop, and all our marketing activities are stimulus, to achieve our stated behavior objective (e.g., switching). In defining the (Bull’s Eye) Target-Customer (of One) we need to identify the following;
- Condition and/or Lifestage and/or Usage Occasion
- Attitudes regarding (treating) Condition/Lifestage/Occasion
- Current Usage & Dissatisfactions
- Telling Behaviors
- Needs (both Physical and Emotional)
- Be faithful to your Target-Customer. Ultimately we need to better serve our Target-Customer than the competition. It is absolutely essential that we work to win them over, and over, each and every day. Be very mindful that it is more costly to win a new customer than to keep one. So keep the Target-Customer in the forefront of all your thinking and actions. Whenever you are about to make a decision on strategies or (marketing) initiatives of any kind (e.g., change of packaging, campaign, etc.) ask, “What would ‘Sue’ or ‘Dr. Prescott’ (our Target-Customer identified and profiled in the previous point) think and do as a result of our proposed action?” S/he is the only one to be concerned about. It’s a good idea to buy insurance; namely, check out the answer using marketing research.
- Measure everything against your Target-Customer. The Target-Customer and her/his needs, concerns and satisfaction must be our major concern. Remember without a cadre of loyal customers there cannot be a brand. All actions and intended actions should be measured against our selected Target-Customer. We should not be concerned with those people outside of our target as they represent an energy drain and potential distraction that could knock us off our single-minded pursuit for those we’ve chosen to serve.
- Let us help. We can be a very valuable resource to you and your team. Here are a few ways BDNI might serve you:
- If you haven’t already done so read our book, COMPETITIVE POSITIONING. You can order it from amazon or www.competitivepositioning.info It will provide you will an instructive tutorial, reference and/or thought provoker for your work on selecting and defining your Target-Customer.
- Check out articles on the Target-Customer at www.bdn-intl.com All our DISPATCHES’ articles are archived. We’ve written in-depth about the Target-Customer in a number of different contexts.
- Consider calling-us in to develop a customized training program for your organization. Clients we serve consistently rate our training programs as “extremely useful” and the best programs of their careers. By the way, we don’t use theoretical cases. All our training programs are “live action” training. In other words, we have participants work on their own brand development.
- Finally, we can also serve to assist you in conducting due diligence in auditing your Target-Customer, and more, for technical accuracy and strategic appropriateness with recommendations for what to do next.
Choose your Target-Customer carefully; get below the surface of the skin to really know and appreciate her/him so well that you can predict how s/he will respond to stimuli you provide; and define her/him to everyone so there is a complete understanding of who the Brand is targeting and who we are not. It’s important to choose wisely if we are going to create brand loyalty. Peter Drucker also said, “The aim of marketing is to know the customer so well the product or service fits him and sells itself.”
If we can be of service to you in any of the aforementioned ways, please don’t hesitate to let us know. All you need to do click reply and we’ll start a dialogue.
Best wishes in overcoming critical mistakes in Target-Customer selection and defining her/him in making your marketing matter more,
Richard Czerniawski and Mike Maloney
430 Abbotsford Road
Kenilworth, Illinois 60043
reply to Richard:
1506 West 13th
Austin, Texas 78703
reply to Mike:
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