Recognition Marketing - Put Marketing Strategy First, Everything Else Next

Getting It Backwards Is Dounright Stupid

By David Miranda

All too often, firms get their order of priorities wrong with dangerous consequences for the business driven by budgets instead of strategy.

Let's use a travel example. Say you have a airfare budget of $1,000 for a weekend getaway so you go to the airport and say to the ticket agent, "I have $1,000. How far can I go for that?"

This is exactly what many firms do. They have a budget and say to their agency, "How far (or how much) will this get us?" Without a marketing plan and clear strategy, this is called stupid.

It is the marketing strategy that dictates (or should dictate) everything. The budget should be developed and allocated to implement the strategy. This approach assures that marketing dollars are wisely invested and prioritized. And if the budget is small, all the more reason for marketing strategy to lead the process.

Firms make two major mistakes without a strategy - they spend based on what has worked historically (driving using the rear view mirror) or they "me-too" spend (watching what everyone else is doing and follow suit).

If you are committing marketing dollars without a marketing plan and strategy, you are wasting your time and squandering your money.

Put marketing strategy first, everything else is next.

Recognition Marketing - Beware Of The Pied Piper Syndrome In Research

Research Should Be Viewed Through A Common Sense Filter

By David Miranda

It seems like every hour, a research firm is releasing a new report that this or that is happening (or will happen) in the marketplace whether it be in the public or private sector. Of course, the research typically has the caveat that it includes a "margin of error" of plus or minus X.

Although no one would argue the benefits of insightful research, it must be viewed through a common sense filter or the consumers of the research become the victims of well-intentioned pied piper. When this occurs, the implications could prove embarrassing or financially disastrous or both.

Take the recent political polls for the New Hampshire Presidential primary. Research pundits confidently stated that Barack Obama, after a win in the Iowa Caucuses, would handily beat Hillary Clinton by double digits. Senator Clinton won New Hampshire leaving the pundits with egg on their befuddle faces. Everyone, except the people that really counted, the New Hampshire voters, got it wrong.

It just doesn't happen in the political arena. It happens in private sector every day when decision makers utilize only research to determine business strategies and not allowing for the scrutiny that comes with common sense.

The private sector is a prolific consumer of research. It influences everything that business does. All this research begs the question - "Why do so many firms, so often, get things so wrong?" The simple answer is the "pied piper syndrome", i.e. following and acting on research as if it were the closest thing to a sure bet and, of course, we know there is no such thing.

The best way to use good research is to temper it with common sense that is based on practical observation and human interaction. Peter Lynch, famed financial guru at Fidelity, had an interesting way to pick stocks he invested in. He observed. One day, for example, his wife came home with a plastic egg. Curious, Mr. Lynch, asked his wife what it was and why she purchased it. She said she found it in supermarket on a free-standing display. What was it? L'Eggs. Inside the plastic egg were ladies' nylons. She told her husband that she was always snagging her nylons during a typical day and here was a simple and convenient solution. Intrigued, Mr. Lynch went down to the store and observed women, one after the other, going to the L'Eggs' display and purchasing. He went home and the next day invested in Hanes, the parent of L'Eggs. Does Mr. Lynch utilize research? Absolutely. What makes him different? Adding common sense and personal observation to the final analysis.

Lessons to marketers? Don't give up research, but temper it with good ole common sense. Get out there and take a look around. See for yourself whether the research findings have substance.

Don't follow the pied piper blindly. It could be dangerous.

Recognition Marketing - Avoid The Bland Leading The Brand

Drive Mediocrity From Your Enterprise - Pick The Right Leaders

By David Miranda

In a marketplace of uber-choice, consumers need to be given a clear reason to buy your brand over all alternatives. It is the essence of a successful marketing strategy. The inability to do this, puts considerable downward pressure on price as the "tipping point" for preference. This ultimately commoditizes the brand. This, generally, does not happen by design, but by default.

How does this occur and why does it occur so frequently in the marketplace? The simple answer is mediocrity, i.e. being risk-averse; being a "me-too" brand. This occurs when decision makers reward the status quo versus celebrating innovation. In medicore environments, the bland flourish while the innovators languish or jump ship. The problem lies in picking the wrong leaders.

It is almost impossible for a great idea to have upward mobility in an enterprise of mediocre leadership. Companies continually make the terminal mistake of putting the wrong people in charge of their brands - those that are risk-averse, protectors of the status quo, those more interested in doing things right veruses doing the right things.

Take Apple Inc., for example. Years ago the visionary members of the Apple board decided to replace one of the Apple founders, Steve Jobs, with an Pepsi executive, John Sculley. Sculley ultimately (and unbelievably) fired Mr. Jobs. After miserable results under Mr. Sculley, Apple brought back Mr. Jobs and the rest is history. (iPod, iTunes, iPhone, etc, etc.)

Take Yahoo!. Its board brought in Terry Semel from Time Warner. After being continually out-performed (and out stategized) by Google, Mr Semel was replaced as CEO by one of Yahoo's founders, Jerry Yang.

Take Dell Computers. Once considered a model of innovation, Dell fired its CEO and brought back its founder, Michael Dell to turn around the company's fortunes.

The message is clear. When a company allows the bland to lead the brand, innovation atrophies. This is the case with many companies today in many industries in the U.S. (airlines, automobile manufacturers, computers, retailing, etc.)

Success, today, demands that companies place innovators, risk takers, and those with entrepreneurial thinking in key leadership positions. Business needs innovative marketers to lead the charge.

Just because someone has a lofty title does not make them a great marketer.

The bland should never lead the brand. It's terminal.

"Catch And Release" - Good For Fishing, Bad For Marketing

Too Many Businesses Are Letting Customers "Off The Hook"

By David Miranda

I was watching a recent professional fishing tournament on ESPN.

It was clear that understanding the venue and environmental conditions played a critical role in where fishermen fished, what lure they used, and what techniques they employed to catch more (and bigger) fish than the other competitors - and it had to be the "right kind of fish". The telecast followed many anglers as they tried various locations, lures, and techniques to find the right formula. The winner was determined by the heaviest catch at the weigh-in. A deft combination of strategy, tactics, past experience, local knowledge, and state-of-the art technology were obviously keys to success.

Marketing and fishing have a lot in common.

The fishing venue reminded me of the marketplace and the fishermen were, of course, marketers. Marketers are always fishing for the right type of customers in a highly competitive environment. Depending on the prevailing conditions, they develop strategies and tactics employing a combination of lures, techniques, and technology seeking the right formula to catch the most consumers. Like fishing, good intelligence and past experience are important success factors.

There is, however, a major difference. Anglers "catch and release", but marketers need to "catch and retain".

In marketing today, there is too much emphasis on the "catching" and too little emphasis on the "retaining" since retained customers will "spawn" new ones.

Catch and retain - spawn new business.

Mental Floss - Maintaining Marketing Mental Hygiene

Old Thinking Is the "Plaque" That Causes Business Decay

By David Miranda

In today's highly competitive marketplace, old thinking can build-up and cause decay in revenue and market share. For this reason, it is vitally important that marketers practice "good mental hygiene" in order to keep their brain cells open to new ideas and methods of doing business.

This requires that marketers "mental floss" on a regular basis to remove that accumulation of dated thinking assuring fresh perspectives and open minds.

Signs that you need to "mentally floss"?

• "I'm the boss and I know better."


• "We're doing just fine, thank you very much."


• "We have no room for that in our budget this year."


• "We'll form a committee to investigate and get back to us."


• "I don't know anyone who [texts, blogs, podcasts, etc.], so why are we discussing this?"


• "Not now, but keep me posted."


• "It's not us. It's our agency."


• "It's not us. It's our client."


• "It's not us. It's the market."

This type of thinking needs to be "mentally flossed" before the decay sets in. When it does, the only cure is "personnel extraction" and new "fillings" in the corporate org chart.

This is painful for the ones extracted and the organization.

Get out the "mental floss".

Recognition Marketing - The 4 "R's" Of Marketing Success

Tips For Marketing Yourself, Your Firm, Or Your Brand

By David Miranda

The basic principles of marketing, 4 P's (product, price, place, promotion) have been taught to aspiring marketers for almost 50 years with gratitude to academics Professors Neil Borden and James McCarthy. The world, however, has changed dramatically in those five decades in ways that would mandate that Professors Borden and McCarthy revise their college textbooks.

There are a confluence of powerful forces that make marketing more challenging that ever before. These include:

• the perishability of preference
  
• time poverty


• uber-choice


• societal A.D.D.


• a wired (and wireless) world

The four P's are less relevant today in the big scheme of things. Product, price, place (channels of distribution), and promotion (advertising, promotion, etc.) are all under siege in ways and means never imagined. Who could have foreseen the impact of email, Amazon, Google, YouTube, iTunes, blogs, social networking, PDAs, cell phones, Tivo, spam filters, Do-Not-Call List, satellite broadcasting, podcasts and so on and so on?

Bottom line? Despite the proliferation of communication channels and choices, people are harder to reach than ever, hence, new thinking is warranted.

The new thinking? The 4 "R's of Marketing.

First, Recognition. "Recognize me as an individual not a statistic."

Second, Relevance. "Don't bother me with things that aren't relevant."

Third, Reward. "I know what's in it for you, but what's in it for me?"

Lastly, Relationship. " Treat me like I'm important and I'll reciprocate".

Note no mention of price, product, place, or promotion.

Why? Do the 4P's well and you have done things right. Do the 4R's well, however, and you have done the right things - those things that matter to the people who matter most - your customers.

Update those marketing text books.

Pavlovian Marketing - Good Business Or Creating Bad Behavior

The Dark Side Of Relentless Sales, Discounts, Rebates, Coupons, And Incentives

By David Miranda

In his 1992 comedy, Mr. Saturday Night, Billy Crystal's character, Buddy Young Jr., was humorously comparing his family to a Jewish version of the 1990 Academy Award winning Dances With Wolves that had Native American roles like "Stands With A Fist", "Wind In His Hair", and "Kicking Bird" to name a few. His character, Buddy, referred to one of his relatives as "Never Buys Retail".

It is an appropriate term that can be used for all consumers today.

With few exceptions, the retail price of anything today has little meaning with few consumers paying the full price for products and services. Marketers have taught consumers that the retail price is merely the starting point to discount from. Consumers are trained to wait for the inevitable sale, discount, coupon, rebate, or incentive before they purchase and marketers continually reinforce this behavior - the incentive "du jour".

Ask yourself (and your friends and family), when was the last time you paid retail for anything? The automotive industry has institutionalized rebates and discounts. The travel industry has long employed yield management techniques, that creates tiers of discounts for airline seats, hotel rooms, car rentals, cruises, and travel packages. Retailers and brands conduct relentless sales, distribute millions of coupons and promote countless mail-in rebate programs. The examples are endless.

These techniques were intended to create business during periods of soft demand. They are now utilized year round. The brutal truth is that when these incentives stop, so does the business they generated.

It is the dark side of this Pavlovian marketing - it's called "rented demand". This is high cost/low margin business.

It is important for marketers to conduct a comprehensive cost/benefit analysis of these techniques. How much of a company's revenue is rented demand? What are the true costs of this business coming from consumers who have loyalty only to the incentive du jour? And what are you doing for your loyal customers - the ones that support your business regardless of the incentives?

Pavlovian marketing can be good business if used wisely. An old dog can learn new tricks.