How well do you know your market?
Early in my career I was a little shocked to hear marketers snidely described as ‘the colouring-in crowd’ by a few people.
It seemed these outsiders-looking-in were only seeing the more visible parts of our output – brand and campaign presentations – rather than giving us credit for all the analytical thinking we contributed to help a business grow.
That perception of what marketers do began to shift as more companies adopted digital from the later 1990s onwards: marketers could pull back the curtain and show their tactics for winning markets in play. Though I think something was lost in the translation too: market metrics became more highly prized than market insights.
Tactics alone won’t win markets
Some marketers who embraced digital early became really good at extracting data from campaign tracking systems to create eye-catching charts. They showed how certain tactics delivered X-number of interactions and transactions at different touchpoints. Some won bigger budgets for their efforts. (Yes, it helped to have great colouring-in skills so those presentations appealed to key stakeholders.)
But some stakeholders took those pretty data-led presentations as empirical proof marketers should focus more on tactics to win sales for the company, and less on dreaming up beautifully creative campaigns people will love – because in their view “advertising should sell a product, not win awards”.
Actually, the author of the opinion piece I’ve linked here makes some good points: campaign data shouldn’t be manipulated to justify rinsing and repeating the same tactics; and when a tactic doesn’t deliver immediate sales growth, the answer isn’t simply to spend more to increase reach and frequency.
Unfortunately, that is what happened too often as more marketers became obsessed with the latest shiny digital things to help them design, deliver and report on campaigns as quickly and efficiently as possible.
They got so caught up in capturing data to justify marketing spend every quarter, they seemed to forget good marketing strategy is what sets a business apart.
Now, I’ve explained this as happening in the past tense, though it’s obvious marketers today are under even more pressure to prove they’re delivering ROI neatly and efficiently. Of course, stakeholders want to see ROI from marketing. But reporting on how tactics are performing isn’t enough. It puts too much focus on winning share-of-wallet in the short term (i.e. tactic X drove Y-number of sales in channel Z), rather than showing how all the elements of a marketing strategy – including sets of tactics – are winning hearts and minds to deliver sustainable growth. Measures of ROI should include contributors to long term growth such as brand value, employee engagement, customer loyalty and market share.
Build market understanding first, then your campaign
A marketer’s job is to know the market well and help businesses win. This means looking outwards more often, beyond the biases within your own organisation. Otherwise you risk marketing myopia, a phenomenon explained in detail in 1960 by Theodore Levitt, professor at Harvard Business School.
He said businesses were too focused on making and selling products or services and didn’t spend enough time understanding what customers want – or genuinely need. He also warned that businesses won’t achieve sustainable growth if they put current marketing ROI ahead of deeply understanding how the needs in their markets are evolving.
Therefore, businesses that want to keep up with the market – or perhaps lead it – need to invest more in continuously analysing their markets. And to make sense of it all, your analytical approach needs structure.
Useful models to help you understand your markets better
Those shiny digital things that help you track the performance of your campaigns can only tell you so much about what’s happening in your market. That’s because they’re mostly useful for observing and analysing customer interactions with a brand in specific channels.
You can augment data sets from these channels with other forms of customer research, of course, though keep in mind that the customer is just one of several important sources of market insights. And you can’t have conversations about ROI if you don’t understand the forces and trends impacting your market.
I like the popular analytical model known as ‘the 5Cs’ because it gives a very useful starting point for conversations about marketing strategy. It also makes it easier for people to form habits of thinking outside the organisation (and thus avoid marketing myopia).
5Cs market analysis model (plus 3 models inside the 5Cs)
Customer – Put the customer and their need(s) first, before your product. Consider their motivations for spending money: what jobs do they need done (and how can you help them)? What desires for a better life(style) do they hope to fulfill? Next, consider the size of your market, the range of potential customer segments you can serve and the best communication channels for each segment. At each touch point, aim to analyse customer sentiment of your brand: what they think of your offerings and how they feel about your brand overall (i.e. likelihood to continue with the relationship).
Company – Build on your analysis of customer needs and desires by looking at how well your company is positioned in the market for success. What resources and capabilities does your company have (and what expertise might you need to bring in) to deliver a compelling customer value proposition? Is customer-centricity embedded in your company culture? In my experience (including with 24 Hour Marketing Plan) I’ve found the Strategyzer Business Model Canvas helps business leaders apply a customer-centric lens when designing and executing plans for growth because it puts the customer value proposition at the centre.
Collaborators – In the world of ecosystems, we can rarely go it alone. Analyse the contributions of all the different people outside your company who help you do business. Where do they best add value? And what value do you give them? Collaborators can be investors, service providers/suppliers, distributors, innovation partners (like academic or industry researchers) or strategic partners (like me!). Don’t forget: like customers, collaborators have motivations and needs too. Why do they want to work with you?
Competitors – Stay up-to-date on who – and what – you’re up against in your market at all times so you can keep on delivering a compelling customer value proposition. A useful model is Michael E. Porter’s Five Competitive Forces That Shape Strategy: 1. Competition in the industry; 2. Potential of new entrants/disruptors; 3. Power of suppliers; 4. Power of customers; and 5. Threat of substitutes. This model will help you review your strategy by thinking not only about your immediate competitors, but also competitors for time, attention, discretionary funds or experiences.
Context – Again, putting customers and their needs first, analyse the macro-environmental factors that can affect your company in the market context (sometimes also referred to as ‘climate’). In my classes at the Australian Graduate School of Management (UNSW) I teach students about the PESTLE model (along with the other models I’ve mentioned here) because it helps to focus thinking about six critical factors affecting a business: Political, Economic, Social, Technological, Legal and Environmental. I’ve also found it’s a very useful framework for management teams as it forces them to think much more expansively about trends impacting their businesses.