THE STORY
Imagine a game in which you are in your backyard and your goal is to shoot ping pong balls at targets in your neighbor’s back yard. The only problem is that there is a high wall between the two backyards so that you cannot see the targets…and, in addition, the targets are constantly moving. Since you cannot see anything, the only way you know you have hit a target is when you hear the ping pong ball bounce off the target.
Therefore, to win the game, you shoot as many ping pong
balls in as many directions as possible. When you hear a ping pong ball hit a
target, you start shooting even more in that direction until the target moves
away. Then you start randomly shooting everywhere again.
That sounds like a relatively stupid game to me. There’s no intellectual challenge. There’s no strategy. It’s just random shooting, hoping to get lucky. You could train a monkey to do that…or program a machine to do it.
Yet this is what modern marketing consists of at many
companies. The company sets up its digital business on a web site. Then the
company tries a constant stream of experiments with the site to see what works.
Colors are randomly changed, the size and placement of boxes changes, prices
and offerings randomly change. Text randomly changes. They try everything,
everywhere.
With all of this “experimentation” going on, the company “listens”
to see if they got any “hits” on the website. If so, they start doing more of
what random thing seemed to cause the hit. Eventually the customer moves away
from that approach, so the company randomly starts firing experiments in all
directions again hoping for the next hit.
You can give this approach all sorts of fancy names like “big
data” or “agile” or “digital marketing” or “listening to the customer.” But the
reality is that it is little more than that silly game with the ping pong
balls. No need to think; no need for strategy. Just program a machine to try a
lot of things and listen for hits. It sounds like a rather stupid game to me.
The principle here is that although the digital age has had a profound impact on marketing, most of the foundational principles of marketing have not been repealed. They are still valid. And if you ignore these principles, you are doing little more than shooting ping pong balls over the wall. Sure, with today’s technology, you can be more efficient with your randomness (and hear the hits better), but it still is little more than random luck. You may as well quit marketing and put all your money into lottery tickets. It takes about the same level of brainpower and strategy (virtually none) yet is a lot easier.
The only problem is that you can get VC money to make a
business out of random experiments, but you cannot get VC money just to play
the lottery. Perhaps venture capitalists would have higher success rates if
they put their money into lottery tickets. Or MAYBE they should invest in
people who still operate by the fundamentals or marketing.
Marketing Principle
#1: Successful Companies Have a Reason for Being
Successful companies do not merely exist to make their
owners wealthy. They succeed because there is a reason for them to succeed in
the marketplace. They are fulfilling a consumer need better than anyone else.
By fulfilling an unmet need, they have a reason to exist—a relevancy when it is
time for customers to spend their money.
Before starting down the path of a new business venture, smart
marketers will ask a series of relevancy questions. If the business idea is not
sufficiently relevant, then they do not pursue the venture, for it is most
likely destined for failure—because it does not have a reason for being.
Examples of relevancy questions include:
1.
Why would a consumer naturally prefer my product over
the alternatives?
2.
What benefits do I provide better than anyone else?
3.
Do customers truly have a need for what I am offering?
4.
For what problem am I offering a superior solution?
5.
Is my solution valuable enough to the consumer to get
them to pay me an amount that would provide a proper return on investment?
6.
If I didn’t exist, would I be missed in the
marketplace?
Google initially succeeded because they offered a superior
way to search the internet. It was different. It was better. Consumers could
see the superiority. It was a better solution. In other words, it had a reason
to exist—a reason to be successful—a reason to be preferred.
Compare that to a lot of other digital businesses trying to
make it in the world today. Thousands upon thousands of these ideas are dreamed
up in dorm rooms or on a sofa at Starbucks. They all look about the same and
act about the same. There is no talk about superiority, because there is none.
It’s still in beta and bull of bugs and won’t be great until version 4.0.
There’s rarely talk of real benefits or meeting needs in a
way people are willing to pay for. And there is rarely talk about why this
version would be naturally preferred over the thousands of similar pitches
being made in the same space.
Instead they talk about how fast they will be at adjusting
and adapting. It sounds to me like they are just shooting ping pong balls over
the wall and they think they will win because they can shoot more ping pong
balls more often.
Marketing
Principle #2: Successful Companies Own a Position
But even if these people bothered to develop a great
solution for an important problem, it is not enough. Others may have as good
(or better) a solution for that same problem. In addition to having a solution
for a problem, you have to OWN that solution in the mind of the customer. The
solution has to belong to you. When the customer encounters the problem, your
brand needs to be the one which comes to mind.
Google took its initial superiority in search engines and
built a brand which “owned” search in the minds of most customers. By owning
search, it became nearly impossible for anyone to take it away.
When I look at a lot of the proposed digital ideas today, I
see people going after spaces already owned by someone else. They want to be
the next “Facebook” or the next “Apple.” Well we already have Facebook and
Apple. As long as they do their job, we won’t need another one.
Don’t attack a space already owned by someone else. That
battle rarely leads to victory. Build a position that is different—one that you
can own. Imitation may be the most sincere form of flattery, but it is a lousy
way to try to win. Followers are never in the front.
How many different games do we need on our smartphones? They
all seem to be minor variations on a small handful of themes. Your odds of
being the next Angry Birds or Candy Crush are probably worse than if you put
your money into lottery tickets.
If you cannot own a position, then you cannot achieve a
winning position in the consumer’s mind for that space. And without a position,
you have no reason to exist. Owning a position usually requires being early in
the game, bringing something meaningful to the game, and out-executing the
competition. A lot of companies are competing in the smartphone business, but
only Apple and Samsung make any real money at it. Everyone else is a loser in
that space because they do not own it.
Marketing
Principle #3: Successful Companies Know Why they are Successful
Some of the literature on the “new” way of marketing say it
is a waste of time to try to figure out why a particular experiment works. If a
blue website sells more than a green one, just accept it and move on.
I’m okay with some of that as it relates to minor tactics. But
at some point, one should understand why they are in business and why a
customer should prefer them. You cannot strengthen or broaden a position if you
don’t understand why it works.
If your only success is due to discovering the advantages of
a blue website first, your advantage disappears as soon as everyone else makes
their website blue. The advantage is not sustainable.
However, if you deeply understand the “why” of your success,
you can use that knowledge to build barriers of sustainability. Apple
understands why it is successful. It creates a consumer advantage through “coolness”
and a competitive advantage through closed systems. It keeps replicating this
over and over again to make Apple ever stronger. And if the superiority in
coolness and closed systems lies outside of Apple, as in the case of Beats,
they acquire it.
The new marketers praise the value of ignorance—just go with
what works and don’t ask why. I beg to disagree.
Much of what is proposed as “New Marketing” is really “No Marketing.” It is a brainless, strategy-less approach depending upon quickness and luck. The basic laws of marketing still exist. Sure, the execution will need to adapt to the digital age, but the fundamental principles still apply. Successful businesses today still need to worry today about:
a)
Having a reason to exist in the marketplace (superior
solution);
b)
Owning their position in the marketplace
(differentiation);
c)
Knowing what is the reason for their success
(understanding why).
Even in the new digital economy, these are the
characteristics of the sustainable winners.
In that ping pong game, the successful “real” marketer would put a door in that wall and design compelling reasons why the targets would be prefer to come into my backyard and/or let me walk into their backyard. This proactive, strategic approach is superior to shooting ping pong balls and hoping for the best.
No comments:
Post a Comment