Thanks to the rapidly changing online landscape, good marketing is more difficult than ever. Marketing hed: Up up and away dek: many online marketers have crashed and burned. new approaches have a better chance of taking flight. dek: personalized pages and other gimmicks won’t impress customers as much as sound products and services. dek: if you can’t be the best, be better-or at least distinctive. dek: thanks to the rapidly changing online landscape, good marketing is more difficult than ever. by Cass Brewer
Marketing in the information age is like Douglas Adams’ description of flying: The knack lies in learning how to throw yourself at the ground and miss. Both sound easy, but in practice are difficult and prone to producing wreckage. Still, if you can figure out the technique, your horizons broaden considerably.
Like early aviation, early online marketing efforts seem a little ridiculous in retrospect: clumsy efforts to imitate working examples in other media. In the case of the plane it was machines with flapping wings. In the case of online marketing it was, among other gaffes, the attempt to reproduce the offline shopping experience, under the premise that the average consumer wouldn’t notice the difference. (Attention, Kmart shoppers! The Web is not a holodeck.)
Of course, marketers and marketing theory have come a long way over the last couple of years sort of. New commercial opportunities exist, and new ways to tap them. Armed with experience and a fresh perspective, it’s possible to survey the wreckage of failed flights and avoid the errors that led to free fall. Here are some of the most common errors in marketing judgment that can send your stock price plummeting:
Losing your bearings
Artificial-intelligence researchers are struggling to create a robotic cockroach. This should tell you something about how far we’ve come in automating intelligence. Technology “solutions” hawkers will tell you that the hum of your server room is a siren song to your customers. That customers, partners, suppliers, and distributors will flock to your site, surrendering any amount of information (and money) to your perfectly integrated, out-of-the-box business platforms. That your cross-platform, dynamic collaboration system can process, format, and distribute relevant data to every e-enabled manager and worker in your business network, empowering them with X-ray vision. That in six months, Wall Street will be your oyster.
Now come back to earth. Technology isn’t a panacea. In the real world, business rules can give CIOs seizures, and 360-degree customer views can leave you wondering whether you’re dealing with dogs or humans. “Out-of-the-box” often means a 70/30 service-to-product billing ratio, and e-management will still be hampered by the fact that a CTO is looking forward to her 10-year high-school reunion and the marketing manager lacks that critical M before his B.A.
Technology cannot replace experience, expertise, and horse sense. Sure, choosing the right technology tools can give your organization the information it needs to perform critical business processes. In particular, systems support for customer-relationship management (CRM) has exploded in the last year. E-business platforms such as BEA, Blue Martini, ATG Dynamo, and BroadVision underpin some of the world’s leading companies, streamlining transactions and billing, enriching customer relationships, and improving retention rates. E-marketplace tools from Commerce One and Ariba have raised B2B collaboration and Net exchanges to new heights.
But these “solutions” are just so many lines of code without business knowledge to support them.
Very bad things happen when your mouth works without your brain’s approval. As your business’s mouth, marketing must be tightly integrated with the organization. The role of marketing is to know the business you’re in, understand the perceptions of your customers, partners, and distributors, and support your sales efforts with materials that communicate your compelling story. Rather than being a passive player in the company, marketing is the best connection you have to the relationships that support your business. Go ahead, let it contribute directly to your business strategy.
Consider all business relationships to be partnerships. Customers are sales partners. Suppliers are procurement partners. Shippers are logistics partners. Dealers are channel partners. As partner managers, marketing people maintain the company’s face to your entire business network, and only full organizational support can keep that face from crushing. This good-face effort is just part of CRM, also a business-wide commitment. No matter what your marketers say, unless your company-from customer service to sales practices to logistics to systems integration to partner-relationship management-helps sustain relationships, your network partners will know they’re in the cold and will respond accordingly.
A real-world example: loyalty programs. Now largely passé, loyalty programs were for a while the heart of many online CRM efforts. Their failure wasn’t in sucking in lots of data, it was in retailers’ failure to capture and use that data as an organizational asset. Says PricewaterhouseCoopers (PWC) in a recent report on CRM in retail: “Enterprise-wide use of data that differentiates among customers and is difficult for competitors to duplicate can be created by adopting a more comprehensive approach to CRM than most retailers have yet undertaken.” Translation: Knowing your customer is not enough. You also have to get that knowledge to the marketing department, so it can use that navigational data to chart the right course.
Beautiful wings, but no lift
You’re online. So what? From the customer’s perspective, your lack of Web presence or bad Web site is a liability, but just being online doesn’t necessarily earn you brownie points, especially if you can’t conduct transactions online. Snazzy interactive features don’t necessarily impress potential customers, either. A PWC study released earlier this year shows that wish lists, live customer service, personalized pages, and other fancy features don’t tempt most shoppers to buy more on e-commerce sites.
Apply the “so what” test to your site or risk blowing your e-commerce budget on underused functionality with no hope of measuring your return on investment (ROI). Each bell and whistle on your site should strongly correlate with a customer benefit, such as added value or speed in the buying process.
Finally, unless you’re an e-service provider or hosting company, focus your messaging on your products and services, not your online initiatives. In most cases, you get just a few seconds to impress a potential customer, time best applied to promoting your product’s or service’s benefits.
Great takeoff, but no payload
You’ve heard of Pets.com and eToys? Well, name recognition didn’t save them. Pets.com spent more than $21 million in advertising. Almost $3 million of that went towards its 2000 Super Bowl ad. Widely known and acclaimed for its catchy ads and trademark sock puppet, it became a high profile dot-bomb last November. Why? Home delivery of pet food and supplies wasn’t a compelling reason for consumers to shop online, especially if they had to wait seven days to receive a product available immediately at most neighborhood groceries.
Don’t let marketers fool you: Your name isn’t your business. Though branding can be a very effective way to attract customers and keep them coming back, make sure you have a marketable concept and a compelling story before going on massive propaganda bombing sorties.
Seeing marketing mirages
Hope springs eternal that online experiences will mirror their offline counterparts, but it’s time for a reality check. Multichannel commerce still sucks, networked services are still on the launch pad, and the spread of broadband is glacial. Where’s the virtual reality? Where’s the wireless market? They aren’t there, and you won’t be, either, if you try to market technological capability that may one day come to pass, instead of what your customers can use today.
A recent Forrester report on luxury e-tailing provides a case in point. Sellers in that segment are trying to replicate the look and feel of bricks-and-mortar shops, focusing on exclusivity, opulence, and entertainment. Unfortunately, broken downloads, bad links, and strange errors make for a harrowing shopping experience–a far cry from Tiffany.
Another example is the wireless Web. Having waited years in vain, hoping that wireless devices would match the utility of desktops, users are wary of promises and tired of hype. Response is even more dismal among non-users. According to a report by Context-Based Research Group, “Non-users are mystified by wireless ads and other marketing messages, making them reluctant to buy into wireless.” The same report says consumers are frustrated by the disparity between promotional messages and actual device functionality. And let’s not even talk about M-commerce.
In the real world, buying habits change slowly, and consumers are smart enough to sense the differences between real-world and online shopping. You can’t fake an in-store shopping experience with an online storefront, you can’t fake a desktop with a palmtop, and you can’t pretend your prop plane is a jet, even if you pipe in the high whine of the turbines.
Who’s your daddy? Sales. The guys in sales are the bread winners, the spearheads, the front line, the legs of your business. They do the dirty work and bring in the green. While marketing amasses research, sales takes it from raw data to prospects, and turns prospects into deals. The feedback that sales passes on about your products and services should be the thrust of your marketing efforts.
Shooting at the moon
Get a grip, already. Online marketing is still marketing, and the fundamentals apply. Figure out what you do best, who else does it, and why your target customers should care. In other words, position your products and educate your customers. These days it’s common for companies to forge ahead in marketing without a marketing plan, an overarching strategy, or even a serious business plan. This is not ideal. Demand for short-term results, ignorance of real customer needs, and inadequate knowledge when making decisions can spawn bad habits.
If you have to market off the cuff, at least research comprehensively, plan concisely, and plug heavily your single most saleable attribute. Position yourself as the best at something and quantify your claim any way you can. If you can’t be best, be better than most or distinctive. Scattershot marketing is aggravated when companies won’t commit to marketing a message, a plan, or a premise. To be meaningful, marketing must be based on a business vision that guides all departments and business relationships.
Got ROI? Even with research and strong intuition, trial and tweaking is the name of the marketing game. Although it’s notoriously difficult to calculate the value of a customer relationship or attach dollar values to lost sales, a good CRM strategy can incorporate effective measures of investment soundness.
Accordingly, many companies are coming up with new criteria for investment. In fast-paced and groundbreaking projects, for which it’s impossible to attach a meaningful dollar value to returns, success might be measured against strategic benefits. These benefits might include targeting a valuable customer segment, improving customer interactions, leveraging existing IT infrastructure, providing more and relevant customer information, or complementing other business initiatives.
The boom in Internet-based marketing has made it easier to quantify some marketing metrics, such as customer interactions and response to marketing campaigns. Other measures, such as the value of an e-mail direct-marketing campaign versus a snail-mail campaign, are harder to interpret.
Unlike physical interactions, online interactions enable companies to minutely adjust the way they analyze and interact with customers, letting them respond more nimbly and appropriately to market demands. A CRM plan supported by strategic metrics is more likely to further business goals.
Straying too far from base
If you spend all of your time and energy trying to attract new customers, you’ll develop a failure complex. It costs 10 times as much to gain a new customer as it does to retain a current one, and on average customers spend 67 percent more on second transactions than initial ones. Scrambling for one-hit transactions is a losing proposition. Fortunately, there are many ways to improve customer retention, and not all are expensive. Keeping customers can be as simple as tweaking site design for usability, perking up your online content, enlivening your customer support staff, or emphasizing opt-in marketing campaigns.
Adding useful and valuable functionality to your Web site also can do wonders for retention. Consider, for example, promotions that not only target previous customers by their purchases but predict their preferences, such as a school sale promo that goes out in midsummer and recommends sizes based on predicted child growth. The goal here is a customer intelligence system, built around CRM strategies, that meets and anticipates customer needs.
It’s also important to recognize wrong customers. Short-term, time- and labor-intensive sales that aren’t likely to result in a good referral are business liabilities. When you’re thinking about which customers to retain, consider who costs you the most and make sure you’re not marketing to the loss leaders.
Is your Web site a commerce driver or an intelligence test? The most successful marketing strategies focus on customer satisfaction, part of which is giving customers what they want and expect. Site design plays a large part in this equation, ensuring that site visitors can get to where they want to go, accomplish their mission, and encounter as few obstacles and frustrations as possible along the way.
Sound IT infrastructure is imperative for good customer support. Success hinges on optimal site speed and efficiency, and your business must ensure that back-end hardware, software, and bandwidth will scale to handle peak usage and future functionality. Integrated back-end systems are also key to strong customer support. From call center automation to database integration to intuitive front-office applications, all business systems should support any appointed employee’s ability to get the right customer information at the right time in order to address customer needs.
Unfortunately, the customers you lose are the ones you don’t hear from, but accurate click-through tracking and other online analysis tools can help pinpoint customer-leakage areas and resolve problems. Offline, marketing, and other business units should work together to develop ways to measure the satisfaction of all business network members, including customers, partners, employees, and suppliers. Each of these network elements contributes to the business, and poor relationships in any area will affect all of them. For customers in particular, it’s a good idea to implement and publish a customer complaint policy, supported by an organizational procedure for handling customer issues.
To be fair, good marketing is harder today than ever before. With the changing nature of e-business, shifts in the marketing landscape, instability of the markets themselves, and a constant outpouring of new technology products, services, and systems, it can make aeronautics look like a cake bake. After all, as a famous physicist said, “The universe is simple; it’s the explanation that’s complex.”
The thing to remember in marketing is that markets are harsh mistresses, unyielding to the ignorant and unforgiving to the careless. Bear that and the tips above in mind while throwing your company into the market, and you might live to see your business fly.