Marketing Today - The Sky Is Full Of Dogs

There's A Smarter Way To "Bag" Consumers

By David Miranda

An inexperienced bird hunter bought some prized bird dogs from a breeder for, what would be, his first ever bird hunt. After several hours of futility, he returned to the breeder quite disgruntled and demanded his money back. The stunned breeder inquired what the problem was. "Didn't get one bird!", replied the hunter, "not even close." "That's impossible," responded the breeder, "those are my best performing bird dogs." "Well," said the hunter, "perhaps I wasn't tossing the dogs up high enough."

The same can be said for a great deal of the marketing done today. There are consumers everywhere and marketers futily "toss up" marketing effort after marketing effort in hopes of bagging their prey. In fact, the marketing "sky" is full of "dogs".

To "bag" consumers today, marketers must be smarter hunters. The first step is to understand the media consumption behavior of their target audience and design a campaign accordingly. The mass market has given way to many niche markets each with its own unique characteristics. The proof can be seen in the audience erosion of traditional media such as broadcast television, newspapers, magazines, and terrestial radio and the exponential growth of the internet including social networking sites, user-generated content, and mobile.

Here is some advice to smarter hunting:

• Zero-base your marketing. The marketing landscape is morphing very fast. New channels are emerging that can be more effective and efficient. Don't be married, therefore, to the status quo.
• Feed what works; starve what doesn't. Set performance benchmarks for marketing efforts. Have a clear R.O.M.I. (return on marketing investment) and hold people accountable.
• Avoid I.G.T.D.T.T. (I've Got To Do That To). This is the infamous me-too approach when a marketer observes a competitor's marketing initiative and copies it irregardless whether the initiative worked or not.
• "Do" outside the box, not to be confused with "think" outside the box. Observe consumer trends and behavior in the marketplace and adapt accordingly and quickly. Today, preference is perishable and consumers are literally only a mouse click away from a competitor's offerings.

Here's to smarter hunting!

Do You "Rent Or Own" Your Customers?

Understanding The Difference Can Improve Return On Marketing Investment

By David Miranda

Is it better to buy or rent?

Normally, this question is one generally associated with major capital expenditure decisions in categories such as real estate and automotive. The question is also appropriate in making marketing expenditure decisions.

Today, with few exceptions, preference is perishable. This is primarily the result of two key factors - the relentless promotional landscape and the commoditization of brands. The synergy of these two factors encourages consumers to expect, all others things being equal, to purchase on price incented by continuous sales, widespread couponing, and other incentives. This promotes a high level of switching as consumers gravitate back and forth for the latest promotional offer. This is rented revenue. No sooner that the promotion ends, however, this consumer goes away.

Promotional offers may move the revenue needle in the short term, but they do not sustain growth or create brand loyalty - unless, however, you are Wal-Mart, Southwest Airlines, Costco, or Target and your brand strategy is "everyday low pricing". These companies share something in common with brands who forego relentless promotions for a strategy to "own" the consumer such as Apple and Starbucks.

There is nothing wrong with promotions. There is something very wrong with continuous promotions. Financially promotions are expensive, thereby, increasing the cost of marketing at a discounted price. The result is reduced margins. Many marketers justify promotions by arguing it generates increased traffic to stores or web sites which can then be converted from a promotional shopper to a loyal shopper. This is, however, wishful thinking. To prove the point one only has to conduct analyses on how many promotional shoppers continue to shop after the promotion. And like Pavlov's dog, once you have trained consumers to buy during promotional periods or with a coupon, they will do just that.

Marketers should carefully consider the use of the promotional tool. It should be the exception rather than the rule in tweaking revenue.

In marketing, it is far better to own rather than rent the consumer.