Former British Prime Minister John Major was famously described as the only boy to ever run away from the circus to become an accountant. Marketers have the opposite problem, they are too busy running away from the accounting side of things to do circus tricks.
Like all good lines, there is a grain of truth in the Major story, who served as the UK’s leader from 1990 to 1997, after the reign of Margaret Thatcher. He was the son of a retired circus performer, and carved out a successful career as an accountant.
Good ‘marketing’ is too often seen as the performance of a few ‘circus tricks’ i.e. gimmicks to gain attention and help secure sales, a marginal contribution to a business. Exercised correctly, with more of an ‘accounting’ focus, marketing can transform a company’s ability to sell their products profitably.
New Zealand’s hi-tech industries, gaining worldwide media attention after the contribution of our innovators to both sides of the recent America’s Cup, are particularly relevant in this regard.
The New Zealand business people selling these innovations are typically very good at doing so, combining that natural Kiwi capability to engage with a broad cross-section, coming up with solutions to the most difficult of problems and simply being able to get things done. One-on-one they could probably outsell the slickest of slick sales people from the world’s most powerful tech firms.
What they don’t do is back this talented sales force with a marketing programme. Inefficiency is the flaw in this approach. For each sale they have to take a prospect through a whole buying cycle, from having not heard about their product, to becoming aware, starting to understand and appreciate its benefits, wanting to try it out and so on.
It is a lot more efficient if the sales person arrives at a prospective customer’s door with them already aware of the product and its main benefits, and wanting to engage in a serious discussion about it. The sales cycle is shortened and the chance of achieving a premium price is enhanced.
This more efficient method of selling is where marketing comes in. Effective marketing is about establishing a system of activity that herds prospects enmasse through the early stages of the buying process. It creates awareness of your company brand and its product, conveys its benefits, and differentiates it from competitor’s offerings.
How do you create this efficient marketing ‘system’?
It has three core parts, the first being the construction of a firm foundation. Unless you have a very clear understanding of your target market, the problem your product solves for them, and what is unique about the way you achieve that result, you can’t build an effective marketing programme.
Secondly, it is building an intense set of activities focussed on this tightly defined target market. With good knowledge of your market, and a clear story to tell them, you can choose what sort of tactics will be most effective at building brand awareness and generating interest for your sales force to convert. It might involve advertising, trade shows, direct marketing, sponsorships etc.
Particularly though for Kiwi firms exporting technology it will involve using online marketing channels, particularly the concept of ‘inbound marketing.’ This involves a raft of online mediums (optimising your website for Google searches, pay-per-click advertising, social media such as LinkedIn, Facebook, Twitter, Slideshare or Pinterest) driving prospects to your website to be converted into sales leads.
Thirdly, like any good accountant, it is about measuring the effectiveness of all of this activity. With online channels especially measurement can be instant and accurate – to assess web traffic, conversions, followers and to calculate the relative marketing costs of acquiring each one.
Where your metrics can become a lot more useful to the business overall though is reflecting the costs of acquiring new customers. For example, determining your customer acquisition cost, the total cost of your sales and marketing activity divided by the number of new customers acquired in a set period (the average spend on sales and marketing by Kiwi hi-tech firms, according to the Market Measures study, is 30% of turnover).
Watching this number over time can help determine the effectiveness of your sales and marketing activity, and gain some confidence about what investments in this area can deliver in terms of new customers.
A further refinement can be tracking the marketing portion of that customer acquisition cost so you assess over time the effectiveness of your spend at generating new customers. Gathering any of this data pre-supposes having a structure in place around your marketing, which in turn requires you take it more seriously than a bunch of circus tricks to garner attention from a very crowded market.
To use marketing more effectively we need to do a ‘John Major’ - run away from this circus approach and become a bit more accountant-like, to see marketing not as something waffly and creative, but as a system for efficient customer acquisition.