When it comes to the marketing function, many of business owners, executives, and yes, even those of us who are marketing professionals tend to be very diminutive in our thinking. Marketing is about tools and how to use them rather than a concise game plan that drives marketing decisions. When tools take precedence to strategy, the marketing function becomes no more than the process of developing content to fill brochures, ads, web sites and tweets rather than a deliberate and planned process where the strategy not only determines which tools to use, but how to use them as well as how to deliver a concise, integrated message.
Tier I Marketing: Tools Drive Strategy
For example, we frequently run into companies that engage in marketing activities of many sorts. I applaud them for taking the first steps. However, rather than developing a concise marketing strategy that serves as a game plan, they simply divine tools to help them convey an incoherent message to the individuals to whom they market. We recently worked with a company that had been in business for approximately 30 years and had reached some levels of success. While analyzing their previous marketing efforts, we found nothing more than flurry of piecemeal marketing collateral. The collateral consisted of a web site, brochures and proposals, all of which contained differing messaging and design. If you had seen the collection without seeing the name or the logo, you’d guess that it each piece came from a different company. We call this Tier I marketing (more to come on that later).
Tier II Marketing: Strategy Drives Tools
Compare that to a situation where a company makes the effort to develop out a strategy. Rather than simply thinking about the marketing function as a compilation of tools, they understand their customer segments, how their product or services aligns with those segments, and how to communicate their key differentiators. How to communicate that key differentiator becomes the axis of their marketing & sales efforts. Rather than straining to develop content for their marketing tools, the tools and the content are derived from the strategy. Instead of providing feature lists, all of the marketing tools are easier to integrate with one another to deliver one clear, concise message that resonates with the target audiences. Furthermore, marketing is mapped to the sales process. We call this Tier II marketing (again, more to come).
For example, rather than simply handing out brochures or developing a cool web site, Nike’s strategy is to position itself as the provider of equipment for optimal sports performance. As such, you won’t find a feature list of their running shoes until you’ve gone through their process on helping decide which is the most appropriate running shoe for you, which takes approximately five or six clicks. Although that may seem like a lot upon first glance, responding to your preferred running surface as well as your arch and pronation is refreshing change to purchasing shoes.
Furthermore, instead of just talking about running, Nike has set up the Nike+ site/service that tracks your runs with a slick iPod integration, allows you to set goals, and participate in challenges against other runners. Coincidentally enough, the whole system allows Nike to further extend the reach of its brand by upselling additional products.
Additionally, Nike has moved beyond features and benefits. Their site contains a progressive photography of professional athletes known for being at the top of their game (e.g. Kobe Bryant) as well as grizzled models in the heat of some sort of performance moment. Once again, the strategy drives the marketing.
So how does tier II marketing effect performance? Consider this case study. We recently worked with a Salt Lake-based hair salon to develop their marketing strategy. By analyzing their previous performance we were able to not only identify their key success indicators, but we were also able to identify the focus of their marketing efforts. Rather than marketing to everyone who could possibly use a hair cut, we found that the first step was to increase their retention rate. Suddenly our marketing efforts became far more focused (on existing rather than new customers), not to mention less expensive. Our competitive and customer research provided the data that elucidated the creative component to the campaign. After knowing who are customers were, how to reach them and establishing quantitative goals we were ready to go to market.
After just a couple of months of implementing the campaign, the salon was already reaching significantly high levels of revenue. In the first six months, they had already realized a 300% return on marketing investment. Had we stuck with tier I marketing, we would have been doing nothing more than guessing. We also would have never known if we were saying the right message to the right people or when or if any of our marketing efforts had paid off.
In conclusion, as marketers, business owners and executives, we need to move beyond thinking of marketing a series of tools. Instead, we need to understand our markets (products/services, customers, competition, industry, etc.) to the point where we can develop strategies that drive tools.
You may continue to learn about taking the next marketing step in your organization by learning about Tier II marketing.
