Shortly after I got up this morning, I strolled over to Marketing Over Coffee for a quick shot before heading off to work and found this great article, entitled How to restore the faded luster to marketing by Rich Guha.  In my opinion, it’s a “must read” for anyone looking to build a business or aiming to build a career in marketing.

It’s about the big picture

Referencing management heroes such as Peter Drucker and Ted Leavitt, the article discusses what companies have lost as marketing becomes more specialized. Guha advises marketers that wish to add significant value to the business to:

• Step back from tactics and understand the “theory of the business.”
• Understand what are the ways to measure performance which drive market value.
• Understand which levers in the business will increase market value.
• Regard tactics as components that can only be used with an understanding of the entire business plan.
• Understand the customer and end user intimately.
• Focus on Product, how it is priced, presented, and where it is available to customers.

It takes intimacy and integration to hit the mark

In short, he emphasizes the importance to successful businesses of a) understanding customers’ needs across the spectrum (yes, back to the 6 Ps*) and b) understanding which levers in the business will increase market value.  Without these important capabilities, front and center, companies often end up missing the mark and spending way too much on “marketing”.

Guha quotes Drucker as saying, “If Marketing were to do its job perfectly, Sales would not be needed.”  In other words, if you really understand all aspects of a prospects’ needs , products would sell themselves.

This is not the same as “build it and they will come”.  The needs to which Guha and Drucker are referring, go way beyond the product features and benefits.

Upfront investments in market intelligence save money

Nevertheless, Marketing can’t do the job perfectly.  That would require mind reading.   Still, an upfront investment in marketing research can save a lot of money down the road–if either the product, or its promotion and distribution, will cost a lot to accomplish.

There  are many ways to gather prospect  information from surveys to customer shadowing to watching click streams.  The key is knowing what you’re looking for, and how to use the information you get.

Else, you’re likely to miss the market window.  Or, if you’re “lucky” spend a lot of money on  rework until you get it right.

Start with deep customer insights

Therefore, a lot of companies are investing in developing buyer and user personae before making the much larger investments in product development and content. They capture the “voice of the customer” and then create archetypes for the three to five most important roles at the companies in their target market.

To bring these archetypes to life, many companies give them names.  These examples help multidisciplinary teams discuss and figure out “What Jane would do” or how “Mike would like to receive information”.

Test, iterate, refine

The most successful companies do this in an iterative fashion.  They gather information, form hypotheses, test their hypotheses, and then refine their hypotheses until they hit the measures they’ve set as goals.

Use high-fidelity prototypes

In the development world, see Eric Ries and Cindy Alvarez’ work on lean start-ups (although there is broad applicability for other product development groups).  In the usability world, see Jared Spool’s and Carolyn Snyder’s work on high-fidelity prototyping.

Watch customer behavior

As for communications, hypothesis testing is now the province of analysts that study click streams.  There, however, companies are still working out the timing .

Since digital communications are relatively inexpensive to produce and deliver,  many companies delay testing until after they launch.  It’s too early to have definitive data on how early missteps affect branding, or the extent to which upfront research could have prevented extensive rework.

Marketing never stops, always changes

Nevertheless, it’s not a perfect world.  You can’t anticipate all customer needs upfront.

Things are always in flux.  Economic conditions improve. Regulators introduce new rules.

Technology innovations make the improbable possible. Competitors’ actions cause priorities to shift.  For these reasons and others, it’s essential to gather information on an ongoing basis.

Assess which actions will have the greatest impact

As mentioned above, however, it’s equally important to know how to use the information you gather–or as Guha notes know which levers will increase business value.  This is especially important in a tight economy where companies can only afford to take the most effective actions.

Too often, companies focus too much on one of the “P’s”, to the detriment of the overall marketing effort.  Engineering firms will sometimes focus all their efforts on fine tuning the product, while “marketing organizations” expend too much on a particular type of promotion, relative to the return they’ll get on that investment.

Embrace diversity

This is where true marketers, who work with multidisciplinary teams, add their greatest value.  By understanding the whole customer, his/her environment, and impending change, he/she can help the company optimize the resources it takes to unite customer and solution.

Wondering where to start?  Test your preparedness by drawing on your market knowledge to create a compelling value proposition.  Or, learn more about the value creation process, first.

*Product, positioning, packaging, pricing, promotion, placement (sales channels or distribution)

No related posts.

In this article, I discussed how one mid-sized company was using market intelligence to maintain its competitive edge and then asked readers if they had made similar marketing investment decisions.   The article concluded with some questions to which I’d welcome your comments.   They are:

How about your company? Where do you turn for market information and why? How do you use it?

How are you reacting to the tight economy? Have you cut back your marketing resources or increased them?

Are you spending more money on pinpointing your most promising prospects and understanding what induces them to buy? Or are placing your bets on extending your reach–and/or reiterating your current messages?

If you choose to comment, please include the size of your company and the industries and geographies you target to help others interpret your responses.

Thanks in advance for any perspectives you can provide.

Related posts:

1. Follow the money: How to capitalize on opportunity in a tough economy

Where there’s sales activity, there’s an unmet need

Our clients find that one of the best ways to find out where to concentrate their firepower is to follow the money. They do this by studying recent activity—their own, the competitions’, or those of the companies that are succeeding under current market conditions. Why? Because where there’s activity, there’s an unmet need.

Use knowledge about wins and losses to replicate success

Next our clients look at outcomes. Who won? Who lost? Why? Once they have the answers to these important questions, they know what they need to do to replicate success–their own or that of others who were more savvy or more fortunate.

Follow the money

Here are concrete actions you can take to follow the money and capitalize on opportunity in a tough economy. Start with your own experiences, but don’t stop there.

If your business has won any deals recently, find out what caused these accounts to purchase when everyone else is sitting on the sidelines. What about their situation was different? What compelled them to act now? How did they find your company? What caused them to seek you out? How did they justify their investment?

From market intelligence to marketing strategy

Depending on what you hear, the answers to these questions may shed light on what characteristics separate the prospects that are likely to buy, from those that are not. You may also find out who you need to reach at these companies, where you need to place your marketing messages, or what you need to emphasize in your marketing literature and on your sales calls to capture attention and motivate action.

Competitive intelligence can uncover opportunity

If you haven’t won any deals recently, try to find out whether anyone in your target market has bought from anyone else. If so, you may be able to turn to them for answers to these important questions. Then, you can use that information to remove obstacles to the sale—and replicate their successes.

If neither you, nor your competition, have won any deals lately, don’t despair. You may just be targeting the wrong prospects or using the wrong message.

Validate assumptions to uncover new value propositions

The next line of attack is to go back to your existing accounts—especially those that are actively using your goods or services. Find out not what caused them to buy originally, but how they are deriving value from your solutions today.

It’s not uncommon for companies to buy for one reason, only to learn later that their purchase is more valuable when deployed to meet an entirely different need. If you find that’s the case, ask them how they discovered the new application—and try to quantify the value that they’re deriving. Then, if the value is significant, you’ll want to figure out who else might have similar needs—and rewrite your marketing messages to reflect the value these accounts have discovered.

Keep following the money

Still no success? Then, it’s time to go further a field. Where are companies in the industries you target spending money? Which ones are spending? What needs do they believe their purchases will address?

Once you know which needs are at the top of prospective buyers’ lists, you’ll know where to focus your efforts. Perhaps you can reword your messaging to demonstrate how you address these same needs—or perhaps you can develop a solution that does. If not, you may be able to partner with someone who is addressing those needs to enhance—and add value to their solution.

Change can create market opportunity

When times get tough, the business environment changes, and buyers’ needs and priorities change. Approaches that worked last year—or even six months ago—may no longer work. Nevertheless, strategies that never worked before may be effective now.

But you can only capitalize on market opportunities if you know where they are

The only way to find out what those strategies are is to turn to those that are still spending. Only they have needs that are so pressing that they bought in this economy. Only they know what worked—and what didn’t at every stage of the buying process. And only they know what ultimately caused them to purchase—and why they selected the vendor they did. On the other hand, once you know what they know, you may just be able to get a leg up on the competition.

Where is the money?

Let us know what you’re seeing. Are businesses still spending? Are they spending on similar solutions—but just cutting back? Or are they spending to address entirely different needs?

Related posts:

1. What role does market intelligence play in your company?