From New Labour to No Logo, public cynicism about marketing techniques has never been higher. I went on a three-month search for businesses that go against the trend. I wanted to find out how companies can do marketing better.
The new marketing
It’s marketing, but not as we know it. For a few business revolutionaries, advertising is defunct and branding is bankrupt. This new and improved world of marketing has three elements: creating a memorable customer experience; data-driven financial analysis of customers; and non-traditional advertising. If they’re right, these techniques will become the hallmarks of successful businesses. If they’re wrong, we’re heading for a world of ‘me-too’ products, so-so service, stick-on logos and aimless advertising.
Lucie Storrs would be surprised to hear that she’s a revolutionary - she is the Nigella Lawson of enamel teapots, Bakelite switches and reeded brass escutcheons. Yet her Staffordshire shop and website, Period Features, is the perfect example of what we might call ‘the new marketing’.
A memorable customer experience? How about wrapping each online order with brown paper packaging tied up with string and a handwritten address label? Non-traditional advertising? She does her own public relations and pays a firm to continually optimise her website to improve its presence on internet search engines. Financial analysis? She can quantify the value of ecommerce customers to her business to the nearest farthing.
A memorable customer experience
Why is this obsession with the customer experience so important? Professor Merlin Stone talks about the failure of most brands to keep their promises: “Name me one supplier with whom you have a good relationship.” According to Robert Jones, a consultant at brand gurus Wolff Olins, consumers can see through superficial rebranding exercises. This is why they say it is important to improve what is done rather than how it is presented. It is the antidote to consumer cynicism.
DRP Group is a small firm that has taken this message to heart. 25 years after he started the presentations and events specialist, Dale Parmenter decided to refocus the company on his customer needs. The company’s slogan is ‘anything’s possible’, but to make it a reality he ran an intensive months-long programme of customer interviews and surveys. This shaped the company’s investment in new technology and equipment, refurbished studios and editing suites.
Employees tell stories
Linking customer satisfaction to staff motivation is “the holy grail” according to Julian Grice, managing director of marketing agency The Team. This was one of the challenges facing Michael Day when he took over as chief executive at Historic Royal Palaces. The charity was doing a good job of selling visits to palaces but a poorer job in securing donors, support and members. He called on Wolff Olins, but instead of a brand makeover they started an 18 month project, calling upon large numbers of employees from across the organisation to redefine what their mission was.
One of the most rewarding discoveries was the “real joy” people in the organisation had in telling stories. It was a small part of the whole process but emblematic. Day adds, “Now we talk about everybody being storytellers.”
Done properly, the new marketing is not accidental; nor is it cynical. If it doesn’t sound too schmaltzy, heartfelt is probably the right word. In any case, it starts with the employees, not with the management - and certainly not with a glitzy firm of consultants.
The value of marketing
If all this sounds like a lot of motherhood and apple pie, the new marketing has a cash value. David Haigh, chief executive of Brand Value, is ready to calculate it. Brands, particularly when embodied in trademarks, can account for “anything from zero to twenty percent of sales.” Increasingly, these intangibles must be accounted for in annual reports, and this is part of Brand Value’s work.
However, the company also analyses the future value of a brand. For example, six years ago Isis, a venture capital firm, was considering the purchase of Fat Face, a clothing company. Brand Value did the due diligence for the original acquisition. Could the firm transcend their surfer dude niche and become a high street presence, and could it attract female shoppers? On the basis of financial forecasts and market research, Haigh thought it could. The deal went ahead and Fat Face floated four years ago, making the investors a tidy profit.
“Most mid-size companies are quoted, want to be quoted or want to be bought,” says Brand Value’s Haigh. He says that businesses should be asking themselves how they preen and develop their brand to attract the highest possible value.
Return on customer
This kind of analysis underpins the new marketing. Companies need to think about their customers in financial terms, say Don Peppers and Martha Rogers in their new book “Return on Customer.” They argue that businesses should think of customers as a productive resource, like capital or labour. Indeed, it’s self-evident that you can’t make money without customers, and for most businesses they are the scarcest resource.
This has implications for how to run a business. Research has shown that companies with the highest reputation for putting the customer first have a good record of customer retention and profitability. In other words, says Peppers, “You need to think about earning customer trust.” Calculating the lifetime value of a customer and recognising the signs of change in this value – satisfaction, churn rates, referrals and so on – would avoid the widespread “maniacal focus on the short-term [which] is very destructive.”
“The problem is that lots of companies are still very transactional,” says Moira Clark, Professor of Strategic Marketing at Henley Management College. They’re losing disillusioned customers while, at the same, time, they’re out there chasing new customers. It’s like filling up a leaky bucket. She believes that it is much more profitable to cherry-pick your existing customers and address your marketing towards keeping them.
However, Clark believes that most companies are unable to identify which are their attractive customers, let alone figure out what is needed to retain them. The new marketing combines data-driven analysis of existing customers, drawing on information from across the company plus subjective research into what customers actually want.
Talking to customers
One way to find out what they want is – unsurprisingly – to talk to them. This is one reason why The Welsh Whisky Company built a visitors centre rather than spend money on an expensive advertising campaign. The company is the first distillery in Wales for over a century, and their Penderyn single malt has won critical acclaim. However, a “very, very low” marketing budget has forced Steven Davies to be creative with his marketing. He has focused on enthusiasts and connoisseurs (including the Prince of Wales), a sponsorship deal to become the official whisky of the Welsh Rugby Union and the visitors centre.
This ‘show me, don’t tell me’ approach works for companies with very large marketing budgets too. Microsoft took over an old art school in Fulham, London and converted it into a kind of theme park called Life2 where visitors can experience current and future Microsoft technology. Peopled by actors, it has a coffee shop, a small business and a New York loft-style apartment. Nick Barley, Microsoft’s chief marketing office in the UK, says that it is part of a campaign to show the impact of Microsoft technology on people’s lives in a positive way. It is about winning the brand back from critics.
You might think that a large company like Pret A Manger might eschew Welsh Whisky’s marketing minimalism, but in fact they take a very similar approach. There are no PR people, no focus groups, and no brand meetings. It’s almost Zen-like. “Thinking too hard is a mistake,” says commercial director Simon Hargreaves. “You just know what the brand should say.” The result, evident in the company’s packaging and writing, is their trademark combination of irony and evangelism.
Professional firms, such as lawyers, accountants and engineers, wrestle with how to market themselves. Arup, the leading engineering firm, is typical. “The world of the engineer is very new to the concept of marketing,” says Olivia Gadd, head of corporate communications, and for several years the only marketing professional on a staff of 7,000.
Rather than try to turn engineers into salesmen, she has tapped into their enthusiasm for explaining what they do. “Their ideas shine and with a little help about how to articulate them, they get real pleasure from sharing their knowledge,” she says. For example, last summer Arup ran a series of high-level seminars about building physics in association with the major universities in Shanghai and Beijing. These seminars provided a way for the company to introduce itself to the Chinese market.
For companies like these, traditional advertising is increasingly unattractive. How do they know they’re reaching the right people? How do they have a relationship with the customer if they’re always intruding? Instead, companies are experimenting with new forms of advertising.
For example, online advertising is “the fastest growing area of marketing spending,” according to Andrew Pinkess, strategy director at Rufus Leonard, a brand and digital media consultancy. Opt-in email and text message advertising also promise “touch of a button measurability” and customer can chose when (or if) they see them. “Engagement rather than interruption is the modus operandi,” says Richard Pinder, president of advertising agency Leo Burnett Europe.
So should people scrap their print and TV campaigns? “Not yet,” says Pinder. After all, there are customers who don’t sit in front of a PC all day. However, there are new opportunities for non-interruptive, screen-based advertising beyond the PC and TV. Many consumers have screens on the dashboard of their car, in their iPod or mobile phone, on video games as well as their computer and TV. For small and medium-sized firms these new media are very attractive, combining as they do the emotional appeal of the moving image, the measurability and targeting of online advertising and, of course, its price.
Phoenix Coaching, a London firm of personal trainers, is a good example. Most of their new customers find them using internet search engines, so they optimised their site to improve their ranking when people searched for phrases like “exercise coaching” and they ran a Google advertising campaign. They only pay for an advert when a potential customer clicks on the link to go to their site. In December 2005, they improved their site by adding a simple video that describes their service and introduces their staff. It may not have the highest production values, but it is a perfect illustration of on-demand advertising.
Business logic plus creativity
Smart companies are out-thinking and out-manoeuvring their bigger rivals and even some firms of professional advisors. This is unsurprising because success today requires a more intimate understanding of each individual business and their customers than traditional agencies have managed. Creativity has to be tempered with business logic, and business should look for advisors that understand this.
However, businesses themselves must undergo the greatest transformation. New technology and new marketing techniques mean that small companies can overtake long-established names. “Brands have no right of tenure,” says Leo Burnett’s Richard Pinder. “David can beat Goliath most days of the week.”
See also: what is marketing
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