The Press, February 2006
Losing weight, getting fit, saving more money, being nicer to the mother-in-law. Most people start the year with resolutions aimed at life improvement. For a business, New Years' resolutions usually take the form of wanting to grow, make more money, get greater recognition. Marketing is at the heart of these resolutions, but will be as ineffective as that new exercise programme unless you can answer some fundamental questions about your market.
Marketing is not just about wondering whether the yellow pages or the local newspaper is most effective, or if you can afford that mass mail shot. It is about standing out from the crowd i.e. how you help your customers choose your brand from the many that confront them every day.
Apply this to some local markets. New Zealand's major trading banks would have spent hundreds upon hundreds of millions in advertising over recent years. They have no problem affording to mount lavish TV advertising campaigns and other clever tactics. But which one stands out from the crowd to you - which one says "I'm special and you, Owen Scott, should come to me because ...".
ASB Bank owned the technology space for a while but seem to have moved away from it. Largely it seems a battle of attrition in the banking sector, heavyweights slugging it out to gain some minimal attention.
Electricity retail companies are worse. I struggle to even remember who my provider is, let alone perceive any difference between the retailers. Meridian Energy spent an inordinate amount of money on TV advertisements last year, which were beautiful but left me struggling to understand how they make a contribution that was different or special for me.
On the other side of the equation are those that do stand out from the crowd.
In the fast food business who owns the healthiest tag? Subway have done a great job and even forced the others to go with them.
You don't have much trouble saying how they differ from McDonalds, KFC or Pizza Hut.
Local mountain bike clothing company Ground Effect stand out in the cycle clothing area. They created a brand mountain bikers could identify with - at a time when the choice was either skintight lycra or your old rugby jersey.
So how do you stand out from the crowd? By knowing who your 'crowd' is and what makes you different.
Who is my crowd?
Defining your market as tightly as possible is a key to success. The more defined your market the greater your ability to use your limited resources to create intensity i.e. to build awareness and attraction amongst the 'crowd' most likely to buy your product.
You get this definition by understanding that people don't buy your product for what it is, but what it does for them. So you're not really in the electric blanket business but the warm bed business, you're not really in the finance business but the realizing the dream business.
Too many businesses talk about their firm, their products, their people, their achievements. But the customer wants to quickly understand what you can do for them, not try and interpret this from descriptions of what your product is.
This sort of thinking can deliver significant insights to your business. A fast food company discovered through research that their biggest competitor for a teenagers' disposable income was not other fast food outlets but spending on mobile phones. Teens would text each other to organize a rendezvous rather than meeting at their outlet. The company discovered they were in the 'teenage bonding' industry, with big implications for their marketing approach.
Once you have determined the purpose of your product in the customer's mind, you have a powerful tool for segmenting your market. If you're in the warm bed business, who needs warm beds the most and therefore would be most attracted to the product.
How can I stand out by standing for something?
No matter how unique your product is, from the customer's point of view they always have another choice, another way of satisfying their needs. There is only one gondola in Christchurch, but that doesn't mean it has no competitors. As a consumer I have hundreds of alternatives for entertaining myself.
You need to uncover the promise of unique value you can make to your customer. For example, Mike Pero Mortgages experienced explosive growth from inception with a strong proposition. Traditionally people had gone to banks directly, without the expertise to know whether they were getting the best mortgage deal. Along came Mike Pero offering, for no cost, the confidence that you would get the best financing for your situation.
To grow you need to give your customer a reason to notice you and to buy your product. No matter how unique you think your product is, the customer always has choices. Without this clear understanding you'll fade into the crowd, and be forgotten just like that New Year's resolution.