There is no consensus around when the formal discipline of marketing actually began. For British marketers it is common to cite 18th Century businessman and potter Josiah Wedgwood as the inventor of modern marketing. More accurately, most scholars point to America where the first marketing courses were offered back in 1905 and where the first marketing textbook was published a year later.
Irrespective of the exact date, it’s clear that marketing is now more than a century old. Age confers many advantages – not least acceptance. Thirty years on, I can still remember the look on my beloved English teacher’s face when I told him I was off to Lancaster University to study Marketing and not Oxbridge to read English. “Marketing!” he exclaimed with the horrified look one might use on being told of an intended career as a heroin dealer or African warlord. “Marketing!”
Those days are thankfully over. But gentrifying marketing confers other risks. As our discipline ages and the concepts of marketing become established and embedded into the lexicon of everyday life, we risk forgetting what their original definitions meant and how we were supposed to apply them. Let me give you three very real examples.
Exclusive. It’s a word so beloved of modern marketing it has become paradoxically widespread. Traditionally the term has come to be associated with anything that carries a premium price. Now, you can buy exclusive ice creams or children’s toys or doorknobs (as I discovered last weekend). It’s all patent nonsense, of course. An exclusive brand is not simply one that fancies itself as such or one that attempts to charge more than its rivals. To be truly exclusive a brand must only appeal to a tiny minority of the market and then steadfastly reject all others. To be exclusive, at least in its original meaning, is to say to vast swathes of the market: ‘I reject you from my brand and will do everything in my power to keep you out.’ Exclusivity demands that the traditional four Ps of marketing are not harnessed to generally maximize sales across the whole market but rather as a weapon that turns off, shuts down and closes out most potential buyers. There are very few genuinely exclusive brands left in the world but Ferrari is certainly one of them. I say that not because of its high prices or high quality, but because its most recent offering – LaFerrari – was only available to customers who already owned at least five previous models. That’s exclusivity for you.
There are some brands we are stuck on, others we’re stuck with. Brands we’re stuck on are those where we’ve developed a relationship out of our own free will (Apple, Starbucks, Zappos). Brands we’re stuck with are those where we’ve become trapped through contracts (phone carriers, cable companies), switching costs (banks, software) or incentives (airlines via their loyalty programs).
If consumer loyalty is measured by repeat purchases alone, both sets of brands look pretty similar. But throw in some measures around sentiment and you’ll see a clear difference between the loved and the unloved. Consumers’ feelings about the two types of brands couldn’t be more different.
As marketers it’s important that we know what kind of consumer loyalty we are getting and act accordingly. Brands that are loved can tap into the wells of existing consumer passion and spread that love around. If you ask passionate consumers for their help, they will give it and become even more engaged as a result.
Brands that are not loved need to be more careful especially when it comes to their relationship with their consumers and how to engage with them. These consumers, given the opportunity, are more likely to vent their frustrations than show support. Marketing activities for these brands are often more about damage control and placating consumers so they don’t try and escape. That can come in the form of reselling the benefits that locked the consumers in to begin with (See all the great places you can go with these miles you’ve earned), building even higher walls to make sure the captive consumers don’t get out (Now, triple miles with every flight), breaking down the walls of the competitors (Switch today and we’ll pay the penalty fees) or adding cognitive dissonance by pointing out some good things that they do (Here’s how we’ve given back to the community).
A recent conversation with a client looking for an ad agency was a reminder of just how little of its own dog food the industry eats. Her assertion that “they all look the same and say the same things” highlighted just how difficult brand differentiation is. It’s so hard in fact that even those who claim to do it for a living struggle to do it for themselves.
Marketers come to ad agencies for what they hope will be clear brand strategy, distinctive brand positioning and brilliant storytelling. Ad agencies should be the living proof of what is possible, and the work they do to position their own agencies should be the exemplars – and yet many seem, on review, to display an underwhelming ability to position their own agency brands in ways that make the choices clear and valuable for clients.
It’s not about the work – Visit umpteen traditional and digital agency websites and the first thing you’ll see is a plethora of projects, with Cannes winnings and other awards displayed proudly. The work is the product for agencies. Get that. The awards are the certificates of excellence. Get that too. But when everyone claims to do great work, when everyone wins awards (one year or another) and/or when you can’t see the relevance of any of the work to what you need, it fails as a differentiating factor.
It’s not about the people – Advertising, like all professional services, is a knowledge sector. It’s powered by people, and a great number of those people are very, very good at what they do. So having great people, or even a large number of people, is unlikely to transform your agency into the go-to – because there are thousands of great teams globally. Industry insiders get very excited about who is where and what they’ve done. To everyone else, it’s a hygiene factor. Again, marketers expect top flight agencies to have top flight people. It’s important for marketers to know who they are going to work with, obviously – but is it a compelling reason to prefer? Probably not unless they know the industry from the inside very well indeed. (They also know that the chances of them ever working directly with the creative ‘stars’ are close to zero unless they have a very, very large account.)
It’s not about the process – The methodology is the methodology. It’s how the agency gets you to the end point. It should be robust and measurable. But is it a point of difference? Absolutely not. Because, again, most agencies have robust and proven methodologies. It’s not a secret sauce anymore. It’s expected.
It seems everywhere you look these days there is a marketer proclaiming the death of demographics. From experts at Mindshare to JD Power and from publications as diverse as CMO.com and Brand Quarterly, it would appear that the era of demographic targeting has come to a close.
Unsurprisingly, much of the criticism has come from the US. In a year in which Caitlyn Jenner (pictured) has highlighted the transgender issue and Rachel Dolezal has done the same for the transracial discussion, the continued use of demographics to portray and predict a consumer’s references was always going to be contentious.
On a superficial level these critics have a point. Targeting the 28- to 40-year-old moms is clearly not the optimum way to market any product or service. But that was always the case. There have always been weak marketers who don’t do any research or segmentation and just conjure up a broad, stereotypical ‘target segment’ to make their marketing plan look more professional. In that sense, demographics have always been dead. A point I would encourage those obsessed with so-called ‘millennials’ to thoroughly contemplate.
To be fair, most decent marketers never used demographics this way. They recruited a representative sample of the market and asked for demographic questions along with a bunch of attitudinal and behavioral questions. Then they did behavioral segmentation in which the market was sorted into distinct sub-groups based on how they thought and what they bought. Only then, with a small distinct segment of consumers identified, did we apply the demographics and examine if a segment was demonstratively more likely to be older, female, urban etc. There’s a huge difference between assuming girls like pink and boys prefer blue and a representative survey of the population showing a statistically significant skew in color choice between male and female respondents. The difference between stereotypes and segments is data.
My defense of demographics may be outdated, however. The entire approach to marketing in which you commission research and segment the market may be going the way of the dodo if experts are to be believed. In the era of digital marketing, the premise of needing to segment and target in the traditional manner is transformed. Once you have a mountain of big data attached to a specific consumer derived from past search activity or from Facebook interactions, the relevance of a consumer’s gender or age becomes relegated to an afterthought. Despite what the financial services industry might warn, past performance of consumer behavior really does predict future performance. Marketers can buy eyeballs based on what they have previously looked at, rather than the age or gender of the skull that they happen to reside within.
Recently Budweiser has been taking flak for its continuing aggressive stance against craft beers. Social media reaction at least seems to be that this is an unfair fight and that the big corporate should not be competing in this way. I’m a long-time advocate of challenger brand strategy. I’m of the view that if you can goad the incumbent into a fight and portray your brand as the much smaller player with principles, then it’s game-on. But what if you’re on the other side of the counter? If you’re a major brand and you’re being hounded by an upstart smaller player, how can you respond without drawing flak or encouraging buyers to support the underdog-that-dared?
Start by recognizing the strengths that you have to play with: an established place in the market; the reach that comes with your networks; the reserves to play the long game; and the resources to at least match, and at best overpower, anything that others may throw at you. Chances are you also have history (and therefore track record) on your side and hopefully that history proves your commitment, experience and expertise. Those are a lot of attributes to work with. The key is to use them carefully.
If you don’t want to take a direct approach in response to what you are being challenged on because you are concerned, probably quite rightly, that it will play straight into the hands of those throwing stones, here are four oblique but highly effective ways to minimize the effectiveness of the insurgent.
1. Counter-offer rather than counter-attack – In the short term, go to market with a great offer that simply makes choosing you so much more attractive. In the longer term, take the opportunity to discreetly re-shape your positioning so that you are less vulnerable to the position that the challenger is taking. Be careful in both cases not to make what you are doing appear as a response to what the challenger is claiming or a competitive strike.
2. Congratulate your customers – Mount a charm offensive. Be humble and grateful. Acknowledge. Remind the market just how popular you are as the leader and what that means in terms of what you deliver every day. Position this as a key benefit for your customers that the challenger brand will simply be unable to match. This approach is an excellent way to first recognize and then galvanize those who continue to be loyal to you. It’s also a quiet but effective way of using the pressures of scale and footprint to remind your distributors of why they should continue to prioritize you and not chase the sector’s latest bright shiny object.