Marketing and Communications
Data Mining for High Performance Marketing
The 10 Commandments of Great Marketing; What your MBA training should have taught you but didn’t – Part 4
Written by Tom Barak – November 25, 2021
Our 10 commandments of great marketing continues with an examination of right/left brain thinking.
4. Whole Brain Marketing – Create Potent Marketing Through Right Left Brain Equilibrium
“When the brain is whole, the unified consciousness of the left and right hemispheres adds up to more than the individual properties of the separate hemispheres.” – Roger Wolcott Sperry
Of all business functional areas, marketing is arguably the most challenging since it requires balancing two distinct and diametrically opposed disciplines. Effective marketing is where business and art intersect, where the non-linear, free and unabashed nature of abstraction, imagination and creativity harmonize with the analytical, cerebral and calculated demands of business.
It is therefore common practice for creative professionals including musicians, artists, and writers to employ business managers. The creative can then concentrate on what they do best, unencumbered by time-consuming and mundane business aspects which nonetheless play a vital role in supporting and undergirding their creative efforts. Unfortunately, marketing professionals do not have the luxury of delegating the “business-side” to others. Their efforts must satiate the watchful eye of the penny-counters in finance and accounting, while still dazzling and persuading customers with original creative, clever tag lines and irresistible imagery.
In other words, to be successful, marketing professionals must figure out how bend the laws of nature; in our world, water and oil do mix, and negative and positive wires can be connected without blowing up the circuit. So how do we tame this Ying/Yang monster and bring it to heel? It all starts within our brains.
Left and right brain theory (LRBT) has evolved from medical research which suggests the two hemispheres of the human brain control different functions. The left hemisphere is associated with sequencing, analysis, linear thinking, math, language, and logic. That is, when we speak or solve a math problem, it is our left hemisphere that is most active. It is also why speech is impaired when the left side of the brain is injured or otherwise damaged by disease or infection. Alternatively, the right hemisphere is where intuition, creativity, emotions, rhythms and imagination reside, ergo artists are often referred to as “right brain thinkers”.
It is immediately apparent that marketing management bridges left/right brain functions. Copywriting, budgeting, scheduling, and messaging fall to the right, while graphic design, ideation, style and colour tug on the left. As effective marketers we must be equally comfortable working in Photoshop as we are in Excel. Our wordplay and campaign creative must reconcile with our budget and schedule. We must be equally comfortable discussing composition, colour theory and music as we are ROI, contribution and EBITDA.
The debate continues, however, since recent findings suggest that parts of the brain interact in more complex ways, within a holistic architecture rather than through clearly delineated areas of specialization. Controversy aside, LRBT in its most simple form provides us with a useful framework for introspection and assessment of our own skills as marketers, and as a means of constructing our marketing efforts to appeal to the largest swath of our target audience.
To be an effective marketer we must first qualify ourselves as either a right or left brain thinker. If we are overly creative it would serve us well to strengthen our business knowledge, so when our client’s accounting department questions our proposal’s ROI or how it breaks out economically, we can articulate our creative in terms the finance department can understand and approve of. Similarly, if we are overtly business oriented, our creative may lack the panache or style to capture our customer’s imagination and appetite for beauty. Satiating both our customer’s right and left brain expectations also ensures we win both their hearts and minds, and we can emphasize the data which most corresponds with our target audience. For example if we are marketing to engineers, scientists or accountants, our marketing may skew to include more data, statistics and analysis. Alternatively, if our audience contains artists, craftspeople, and youngsters, our creative should emphasize colour, imagination, originality and fun. When marketing to the general public where the target audience is more general, balancing the right left brain appeal is the best bet, blending the cerebral and artistic to ensure our material appeals to all types of thinkers.
The 10 Commandments of Great Marketing; What your MBA training should have taught you but didn’t – Part 3
Written by Tom Barak – November 21, 2021
Our exploration of the top 10 marketing edicts continues as we look at the importance and benefits of adopting customer-centric principles to our marketing efforts.
3. Put customers at the centre of your universe
“Happiness is a by-product of an effort to make someone else happy.” – Gretta Palmer, Author and Editor.
“A satisfied customer is the best business strategy of all.” – Michael LeBoeuf, Business author and management professor”
I attended a marketing workshop some years ago and the host began his presentation by asking, “What is the single most important aspect of running a successful business?”. Answers from the audience varied; a strong corporate culture, brilliant employees, open lines of inter-corporate communication, an amazing product, great service, price, competitor research, profit and shareholder return, adequate financing, location, R&D, technology, and a favorable business environment (via good government policies and regulations). While the importance of these aspects is irrefutable, I would argue that each is a corollary of a single critical perquisite which was, surprisingly, absent from the audience’s responses.
While operating a successful business is an enormously complex endeavor, at its heart is one single, relatively simple concept from which all other aspects flow; a business will succeed only if it pleases customers. In other words, customers and their interests are the sole reason companies exist. Still this seemingly self-evident truth sometimes gets lost in the cacophony of challenges managers face daily.
If we look at the mission statements of a handful of America’s top companies by revenue, we see how mindful their executives are of the importance of pleasing customers:
“Our mission is to bring the best personal computing products and support to students, educators, designers, scientists, engineers, businesspersons and consumers in over 140 countries around the world.” – Apple Incorporation
“We will provide branded products and services of superior quality and value that improve the lives of the world’s consumers, now and for generations to come. As a result, consumers will reward us with leadership sales, profit and value creation, allowing our people, our shareholders and the communities in which we live and work to prosper.” – Procter & Gamble
”Our mission is to help people live healthier lives and to help make the health system work better for everyone.” – United Health Group
“Our credo stems from a belief that consumers, employees and the community are all equally important.” – Johnson and Johnson
Without exception, these corporate titans all embrace a customer-centric credo – note how each statement explicitly mentions customers. Also note how Proctor and Gamble associates customer satisfaction with sales and profits. Undeniably a customer-first approach has been very profitable for these companies. Indeed a recent Deloitte study found that customer-centric companies were 60% more profitable than competitors that lacked a customer-focus. A similar study by The Economist Magazine found that 64% of companies with a customer-focused CEO are more profitable than their competitors.
Here are a few more reasons why customer-focus should be at the top of your corporate strategy:
- Adopting a customer focus offers a great starting point for business decisions.
- Customer-centricity ensures all our efforts have a focused and effective purpose.
- A satisfied customer provides great advertising and referrals, especially important today with the proliferation of review sites, social media and peer-to-peer referrals.
- Pleasing people and making their lives better is enormously satisfying and spiritually enriching – it provides us with meaningful work and personal satisfaction.
- Satisfied customers can translate into lifelong, loyal customers and will likely influence their relatives and friends to become customers.
- Creates a positive work environment – dealing with satisfied and happy customers is inspirational and motivating whereas constant complaints and dealing with angry customers can destroy moral and contribute to high staff turn-over.
- In highly competitive markets where product and service offerings are homogeneous, a company can differentiate itself by providing superior service.
I would encourage readers to explore the subject of customer service further and there are many books and articles available on the subject. In the meantime, here are a few tips to get you going on your journey to become a customer-focused enterprise:
- Establish management buy-in; take a top-down approach and ensure that your top managers prioritize customers over everything else. Create brand champions and allow the enthusiasm to flow down throughout all branches of the company.
- Believe it, live it – It’s not enough to mouth the words and go through the motions. An organization must fully embrace the commitment to customer service. It’s a good idea to start each day by saying, “Today I’m going to make someone’s life a little bit better”.
- Establish strong and open lines of communications with customers and all branches of the company. Regular feedback and adjustment ensures the company is aligned with customer sentiments which are at times fickle and subject to change, and we must ensure the information gets to everyone in the firm.
- Emphasize retention and increasing sales from current customers – many companies over-emphasize new sales rather than focusing on current customers. It is far more expensive to acquire new customers than it is to increase consumption from current ones.
- Create incentives for employees – service excellence awards, bonuses and promotions are an effective way to stimulate interest and commitment to customer service excellence.
- Empower front-line staff and give them authority to take action – offering immediate remediation to problems leaves a customer with the impression that the company cares enough to deal with problems in a timely way.
- If your company has not already, devise strategies to develop and implement customer-centric systems into your operations. Re-working your mission and vision statements to reflect your customer-centered approach, implement reward protocols to employees that advance the cause, provide staff training, and open lines of communications with your customers through surveys, focus groups, and social media monitoring and response are all great ways to promote customer-focused thinking within your organization.
In a sense, running a business is an altruistic, self-less endeavor which concerns itself with the interests of others. Do this job well and the financial rewards will come. By adopting customer-obsessed principles, values and beliefs, all the other aspects of your business are sure to fall in place. In other words, please people and they will reward you for it handsomely.
The 10 Commandments of Great Marketing; What your MBA training should have taught you but didn’t – Part 2
Written by Tom Barak – November 16, 2021
Never before in history have marketers been presented with so many channel options that enable them to get their message out. While ideas and concepts are where campaigns begin, without a medium to express and share our ideas, even the most brilliant concepts run the risk of being still born. In this week’s installment of The Top 10 Commandments of Great Marketing we explore what is perhaps the most important foundational pre-requisite to becoming a marketing star.
2. Become an expert writer
“If I had more time, I would have written a shorter letter.” – Marcus Tullius Cicero
Writing to marketing and communications is as sure as horses to carts. From creative briefs to proposals, from marketing plans to ad copy, writing is an integral part of the marketing professional’s day. So it follows that developing expert writing skills is crucial to effective marketing. Most marketers know this golden rule; so why is it that we still find shoddy writing practically everywhere? Consider these troubling statistics:
- A study conducted by CollegeBoard – a panel established by the National Commission on Writing – found that American blue chip firms are spending as much as $3.1B on remedial writing training annually. Of this amount, $2.9B was spent on current employees, not new hires.
- A report from Partnership for 21st-Century Skills revealed that employers found 26.2 per cent of college students had deficient writing skills. The same report stated that more than one-fourth of college graduates were not only poor writers, but also lacked sufficient communication skills all around.
- In his Harvard Business Review article, Bad Writing is Destroying Your Company’s Productivity, Josh Bernoff surveyed 547 businesspeople and found 81 per cent agreed that poorly written material wastes a lot of their time, with a majority saying that what they read is “frequently ineffective because it’s too long, poorly organized, unclear, filled with jargon, and imprecise.”
We may draw several conclusions from such observations but perhaps the most useful one is that possessing strong writing skills is a sure way to stand out, not only as an employee, but as an effective marketer. But if only it were that easy. Let’s face it, writing is hard, and it requires mastering two basic disciplines; writing mechanics and thought structuring.
Writing Mechanics
Writing mechanics encompasses the nuts and bolts or fundamentals of writing. Proper sentence structure, syntax, spelling, punctuation and other of the more mundane and decidedly uncreative aspects of writing constitute a critical foundation upon which all other aspects of good writing are built upon. A great craftsperson must master their medium and this holds true for writers. There are many resources we may draw upon to sharpen our writing skills but if I were to recommend just one book it would be Elements of Style, by William Strunk Jr. and E.B. White. This little book is just over 100 pages long and can be purchased for under two dollars on Kindle, or for a paltry 10 dollars for a new paperback copy. I guarantee that as a writer, it is the best 10 dollars you will ever spend.
Thought Structuring
The second aspect – thought structuring – is in my opinion far more challenging than learning and mastering the mechanics of writing. Albert Einstein is quoted as saying, “if you can’t explain it to a six year-old, you don’t understand it yourself.”, and we’ve often heard that great communicators have the ability to express complex ideas in a way that anyone can understand. In a sense, for writers, putting the letters on to the page is the easy part. Rather the silent and often hidden and under-appreciated process behind the writing is the real struggle most writers must overcome. In other words, great writing is not only about great ideas, it’s about how these ideas are presented, so it follows that great writers must also be great thinkers.
To illustrate the challenge, consider this thought experiment;
Chose any complex topic, be it quantum mechanics, World War Two or economics, and sum this topic up in a single, easy-to-understand paragraph assuming the reader has no knowledge of the topic. Unless you happen to be an expert on these subjects already, we can readily see the amount of research and thought that would be involved before we are ready to put a single word on the page. What are the salient points, what should be included, what should be excluded, what are the key take-aways, and how should the information be structured? These are just some of the nagging questions we must wrestle with even before we may begin putting words on the page.
Becoming a great writer is no easy task and it requires dedication, hard work and perseverance. Writing effectively is all about bringing order to chaos, giving form to the abstract and wrestling the expanse of the imagination to tame and hammer it in to a form that is recognizable, interesting and persuasive. Unfortunately there are no short-cuts and no magic bullets when developing our writing skills. Therefore, to close, we’ll list a few recommendations to get you on your way and if you keep at it, you too can become an outstanding writer and by extension, an outstanding marketer!
Tips for developing your writing skills:
- Think before you write
- Keep your audience in mind as you write
- Read a lot
- Write every day
- Edit ruthlessly
- Make every word on the page count
- Think before you write
- Keep your audience in mind as you write
- Read a lot
- Write every day
- Edit ruthlessly
- Make every word on the page count
The 10 Commandments of Great Marketing; What your MBA training should have taught you but didn’t – Part 1
Written by Tom Barak – November 11, 2021
With tightening consumer spending and an increasingly fierce competitive landscape, marketers are always looking to give their clients and brands an edge. While creativity, originality, stunning graphics and irresistible tag lines attract attention, truly effective marketing remains a holistic discipline, which requires the amalgamation of several key concepts all integrated to form a unified and focused strategy.
We have developed a top 10 list of the most significant aspects of marketing. Since each point requires some fleshing out, rather than presenting a single epic article, we will break it down into periodic posts which present each point in bite-size, easy-to-digest segments.
And thus our journey of discovery into the top 10 edicts of great marketing begins;
1. Tell a story
“At its very core, marketing is storytelling. The best advertising campaigns take us on an emotional journey – appealing to our wants, needs and desires – while at the same time telling us about a product or service.” – Melinda Partin
Communication is our primary task as marketers and given the cacophony of messaging that consumers are bombarded with daily, getting a consumer’s attention – let alone persuading or influencing them – is becoming ever increasingly difficult. A great deal of research has gone into the psychology of how people learn – that is how humans receive and process information – and many books and articles are available on the topic. A review of the literature reveals one consistent theme throughout; and that is the power of storytelling. Here are some interesting facts:
- studies suggest information is recalled more accurately and retained longer if presented as part of story rather than just as facts and figures.
- another study found facts were 20 times more likely to be recalled if contained in a story.
- while observing human interaction, researchers found that 65% of our daily conversations are based on storytelling.
- listening to stories stimulates certain chemical production within our brains, which assists in memory retention, attentiveness and empathy.
So what makes stories so powerful?
Presenting our information in the form of a story permits the listener to learn vicariously, to discover the message on their own so to speak; this results in a connection that seems more authentic and stronger to the listener. In her Psychology Today article entitled, The Psychological Power of Storytelling, Pamela Rutledge explains, “Stories are how we are wired. Stores take place in the imagination. To the human brain, imagined experiences are processed the same as real experiences. Stories create genuine emotions, presence (the sense of being somewhere), and behavioral responses.” In other words well-crafted storytelling has the ability to elevate our messaging to an experiential level, rather than being processed as simply passive listening. This creates a more personal and meaningful connection with our audience, far more powerful than fact presentation accomplishes.
Indeed we can draw upon neuroscientific research to affirm our hypothesis. In a Harvard Business Publishing article entitled, The Science Behind the Art of Storytelling, author Lani Peterson references a fascinating study where scientists found that chemicals cortisol, dopamine and oxytocin are released in the brain when we’re told a story. This is significant since cortisol assists in the process of memory formation. In humans, dopamine helps us regulate our emotional responses, which keeps us engaged during the absorption of information. Further, oxytocin is associated with empathy, a very important foundation upon which to build trust and a sense of relationship – two crucial aspects of effective marketing and brand-building.
Shahram Heshmat Ph.D., in his article for Psychology Today, Why Do We Remember Certain Things, But Forget Others?, notes, “To make our memory stronger, it helps to attach emotional significance to the objects and actions we experience.” Most adults can remember certain milestones in their lives; perhaps it was the birth of their first child, the 9/11 World Trade Centre terrorist attack, or the death of a parent or close friend. Indeed when reflecting on these events, many people even remember where they were when they heard the news, and what they were doing at the time. Why is it that we can recall these situations so vividly and with such accuracy and power?
Dr. Heshmat explains, “The stress hormones epinephrine and cortisol enhance and consolidate memory. In evolutionary terms, it’s logical for us to imprint dangerous situations with extra clarity so that we may avoid them in the future.” The psychology and physiology at work here is pretty complicated but it has to do with how the brain processes information, and how neuro-pathways (or links) are created within the brain with an intensity and permanency that is proportional to the perceived significance of the information. For example, if advertising an alarm system, an image of a ransacked house would create far more impact than would an image of the alarm system itself. Or compare an image of a police officer taking a report from a distraught family while they sit among broken family heirlooms and a ransacked house – a much more powerful image (and emotional experience for the viewer) than the alarm product shot. Also note how the house and family images tell a story we can all relate to, while the product shot is neutral and in-of-itself somewhat meaningless without context.
That is not say our advertising, depending on the product or service, must necessarily be frightening, shocking or traumatizing as uplifting, positive and happy imagery can be just as powerful – as the memory of a first-born child for example. But again, tell a story! We recently worked on a marketing campaign for a private school and our social media imagery depicted graduating students, proud parents, and images of accomplished graduates working upscale jobs. Any parent with children and students themselves can relate to these images since graduation and eventual career success are immensely important and significant to these groups. The joy, relief and expectation fulfillment these life altering events inherently possess are key triggers for life-long memories, so tapping into their potential for our advertising results in greater message significance, impact and retention.
Even a brief overview into the mechanics of storytelling, and why it works, illustrates just a single albeit powerful tool we can bring to bear in our marketing work. Aside from the science, empirically and anecdotally, it is undeniable that people love stories. From the fairy tales we cherished in childhood, to water cooler chatter and binge-watching our favorite TV series as adults, there is something about a good story that we just can’t resist. This is why astute marketers will always integrate great story-telling into their campaigns.
Cost and Feasibility Studies and Business Plans – Stacking the Odds in Favour of Success
Written by Tom Barak – March 20, 2021
It is said that failing to plan is planning to fail and in business, where entrepreneurs can face potentially huge risks, planning is a vital part of the business cycle. Considering the high cost for new business and product launches, expansions and acquisitions – which can run into billions of dollars – controlling risk is vital to a firm’s survival. Even when launching a small business, first-time entrepreneurs may find themselves investing their life savings or re-mortgaging their homes to fund their ventures. With so much at stake managers must engage in a thorough and dispassionate study of their business idea before investing their hard-earned money on a yet-untried venture. Same as NASA wouldn’t have ever sent men to the moon without a plan, starts-ups must take the time to vet their ideas prior to their own launch (apologies for the pun) to ensure their investments have a fighting chance at success. In this article we examine two tools which business owners may employ to mitigate the dangers and risks inherent in launching a new business or expanding an existing one.
The Difference between a Cost and Feasibility Study (C&FS) and Business Plan (BP)
Put basically a C&FS is the “if it will work” while a BP is the “how it will work”. Clearly one follows the other in a logical sequence and one proceeds to the BP stage if and only if the idea has been tested for viability and has been deemed a “go”. I often call the C&FS the “heartbreak phase” since many an entrepreneur’s balloon has no doubt burst when their idea proves unrealistic or unprofitable. Still, it is better to detect problems early and on paper rather than investing hard-earned money and precious time into an idea that simply will not work. Tragically far too many new-entrepreneurs either ignore the C&FS and BP stages or gloss over them. This is normally due to passion, inexperience, impatience or over exuberance for their business idea. While I hope this article will help to close some of the inexperience gap, the other temptations are solely in the hands of the budding entrepreneur. We must resist the temptation of falling victim to emotion since relying on passion or enthusiasm alone, in a business context, is a recipe for disaster.
Not Necessarily All or Nothing
A C&FS is not necessarily a binary outcome; that is if the idea is deemed a no-go in its current state it doesn’t necessarily mean we automatically abandon it. A properly prepared C&FS may also reveal ways to tweak the initial idea such that the business model may work if certain changes are undertaken. For example our study may reveal that our product’s price at a given volume of sales and cost may not yield enough profit to sustain our operations. Perhaps the region we wanted to do business in doesn’t support enough demand for our service. Each of these findings may suggest ways that we can adjust our business model such that it may indeed work. Perhaps raising prices may put our profits in the sweet spot, or if we can generate higher sales volumes than our initial forecast adequate cash flow will follow. Of course reducing costs will also balance the equation as will increasing price or sales volume. In terms of territory, perhaps relocating our place of business to a region where more demand exists may address the lack of local demand. Perhaps our product or service is suited to remote selling via the internet which allows us to expand our territory without much additional costs. However, we must be aware that building a business is like a house of cards where factors are interdependent. For example raising our prices may yield enough profit on paper but how will it affect demand? What prices are competitors charging? Relocating may sound simple but what hidden liabilities lurk in the regions where more demand exists; there may be regulatory or cultural issues specific to that region which may impede our efforts, or perhaps too many competitors are located there.
What the Experts Suggest Regarding C&FS Preparation
Although reviewing the many scholarly textbooks and articles regarding C&FS preparation reveal valuable information while uncovering many hidden landmines, two major stumbling blocks seem fairly consistent throughout the literature. The first bit of advice we consistently encounter is that of the importance of seeking professional help when undertaking the C&FS process. I agree to an extent. If the project is complex – for example if we are examining the potential of building a new plant – clearly we will require the services of architects and engineers among others. If we are contemplating selling a new financial vehicle (such as a derivative) or a new insurance policy we may have to call on the expertise of accountants, mathematicians, lawyers and the like to ensure the new products are properly vetted. Further, employing a third-party to prepare your C&FS can also ensure an unbiased and detached review of the proposal at hand. The only caveat – avoid hiring “yes men”, or a team of people who will tell you what you want to hear. If your consultant is established, experienced and profession it is unlikely they will deceive you for the sake of pleasantry. At this critical stage the last thing one needs is mendacity.
On the other hand if your business idea is modest there is no reason why you shouldn’t undertake the C&FS process yourself as long as best practices are followed. There are literally thousands of great informational resources available for first-timers and many free templates are available to assist in the process. If the purpose of your C&FS – or later your business plan – is to raise money from a bank it is best to set-up an appointment with your lender to find out what information they need to properly assess – and hopefully approve – your business idea. A business-owner will learn incredibly valuable information regarding their industry if they undertake their own study and I know of no better way to get started in a venture than to undergo this wonderfully revealing process.
The second issue we see popping up in the literature time-and-time again is the danger of glossing over negative realities. The capacity of the human mind to ignore facts and logic when pursuing a passion are indeed boundless and we must resist the temptation to shrug off our findings if they do not comport with our hopes and aspirations. Of course some of the world’s most successful entrepreneurs had to overcome incredible odds but there comes a time when we must accept defeat – or at least alter our plans to take into account harsh realities. It is understandable when a new entrepreneur, one that has harboured a certain dream all their lives, stubbornly clings to an idea which the data doesn’t support. Sadly sometimes it takes a dreadful crash to awaken someone to reality – unfortunately I’ve seen it first-hand when I was shouted at by a client when I presented our research findings which showed his idea was a stinker. Unfortunately this individual ploughed ahead despite our advice and I found out later that he had gambled his house on his untenable business idea. Sadly he lost his home in a foreclosure as a result. This information is not intended to dissuade anyone from pursuing their passion, however, never, and I mean never, let your judgement be clouded. There is simply too much at risk.
Business Plans
If our C&FS yields a “green light” or a “go” the next step is to prepare a business plan (BP). Wikipedia provides a good definition; “A business plan is a formal statement of business goals, reasons they are attainable, and plans for reaching them.” BPs may serve different functions as they may be used to raise capital from investors or financial institutions, they may map out how a physical expansion to current operations will unfold, or how a new business, product or service will be brought to market and how it will evolve over the business cycle. Irrespective of its actual purpose the form a BP takes rarely changes as certain blanks must be filled in to create a thorough and cogent case as to how the business idea will be successfully realized. The level of detail and thoroughness is dependent on the scope of any particular project, however, the purpose is to build confidence in the business idea so investors are convinced that the researchers have done their due diligence and built a rock solid case in support of the idea.
A typical BP will contain the following:
Executive Summary – a few easy-to-read paragraphs so readers may immediately grasp the salient points of your BP;
An elevator pitch – a brief 30 second summary of the business idea;
Mission, vision and positioning statements
A company or product description – don’t assume your readers are familiar with your industry, product or service although investors may employ the services of experienced engineers, scientists, actuaries, etc. to further vet technical business ventures. Always write with your audience in mind.
Management and/or owner biographies – detailing their experience, credentials and any past successes they have had with similar business ventures. Some business plans also include biographies of board members, mentors or advisors which have been assigned to assist management (especially important to have if the entrepreneur is inexperienced).
Market analysis – including industry statistics, customer segment details, competitor profiles, trend and situational analysis, regulatory environment assessment, your expected market share and your company’s positioning. This section signals that the researcher thoroughly understands the situation and environment in which the proposed business will operate in. This if often called “situational awareness”
A marketing plan – explaining how the business will be advertised, promoted and distributed;
A SWOT analysis – which realistically assess the various blockers your venture may face as well as the special attributes your firm possess which may give you an edge over competitors.
Pro-forma financial statements – including revenue projections, a revenue and expense statement, a balance sheet and cash flow statement. These documents are called “pro-forma” since they are predications and not actually based on past events. Typically investors like to see projections out to five to 10 years. Irrespective of the scope or complexity of your business venture it is essential to get the assistance of a qualified accountant to either do this portion of the BP for you, or to at least audit and sign off on the statements should you prepare them yourself. The detail and thoroughness of this portion of your business plan will often make or break your pitch. Since most funders are most concerned with the money aspect of your venture take special care in the preparation of your pro-forma statements.
Now on to Success
Today’s new entrepreneurs are blessed by the enormous body of free resources that are available to them via the internet, books, magazines and other resources. For example there are many government agencies that assist entrepreneurs by providing free advice and templates for preparing C&FSs and BPs. There are also many consulting firms which may be engaged varying from accountants, lawyers, engineers and business analysts all which may be called upon should we need some of the gaps filled in. With a little searching on-line one quickly discovers there are literally thousands of articles and free templates which may assist us in our planning activities. Regardless of the size and scope of our new venture one would be well advised to do their research before launching their business idea. It is important to note that even the best C&FS and BP will not necessarily ensure success since many other factors influence how a venture will evolve over time. The best we can hope for is a solid foundation to build upon and well researched and thoughtful C&FSs and BPs are the key to providing that foundation.
Posted by Tomas Barak on May 28, 2016
The second issue we see popping up in the literature time-and-time again is the danger of glossing over negative realities. The capacity of the human mind to ignore facts and logic when pursuing a passion are indeed boundless and we must resist the temptation to shrug off our findings if they do not comport with our hopes and aspirations. Of course some of the world’s most successful entrepreneurs had to overcome incredible odds but there comes a time when we must accept defeat – or at least alter our plans to take into account harsh realities. It is understandable when a new entrepreneur, one that has harboured a certain dream all their lives, stubbornly clings to an idea which the data doesn’t support. Sadly sometimes it takes a dreadful crash to awaken someone to reality – unfortunately I’ve seen it first-hand when I was shouted at by a client when I presented our research findings which showed his idea was a stinker. Unfortunately this individual ploughed ahead despite our advice and I found out later that he had gambled his house on his untenable business idea. Sadly he lost his home in a foreclosure as a result. This information is not intended to dissuade anyone from pursuing their passion, however, never, and I mean never, let your judgement be clouded. There is simply too much at risk.
Business Plans
If our C&FS yields a “green light” or a “go” the next step is to prepare a business plan (BP). Wikipedia provides a good definition; “A business plan is a formal statement of business goals, reasons they are attainable, and plans for reaching them.” BPs may serve different functions as they may be used to raise capital from investors or financial institutions, they may map out how a physical expansion to current operations will unfold, or how a new business, product or service will be brought to market and how it will evolve over the business cycle. Irrespective of its actual purpose the form a BP takes rarely changes as certain blanks must be filled in to create a thorough and cogent case as to how the business idea will be successfully realized. The level of detail and thoroughness is dependent on the scope of any particular project, however, the purpose is to build confidence in the business idea so investors are convinced that the researchers have done their due diligence and built a rock solid case in support of the idea.
A typical BP will contain the following:
Executive Summary – a few easy-to-read paragraphs so readers may immediately grasp the salient points of your BP;
An elevator pitch – a brief 30 second summary of the business idea;
Mission, vision and positioning statements
A company or product description – don’t assume your readers are familiar with your industry, product or service although investors may employ the services of experienced engineers, scientists, actuaries, etc. to further vet technical business ventures. Always write with your audience in mind.
Management and/or owner biographies – detailing their experience, credentials and any past successes they have had with similar business ventures. Some business plans also include biographies of board members, mentors or advisors which have been assigned to assist management (especially important to have if the entrepreneur is inexperienced).
Market analysis – including industry statistics, customer segment details, competitor profiles, trend and situational analysis, regulatory environment assessment, your expected market share and your company’s positioning. This section signals that the researcher thoroughly understands the situation and environment in which the proposed business will operate in. This if often called “situational awareness”
A marketing plan – explaining how the business will be advertised, promoted and distributed;
A SWOT analysis – which realistically assess the various blockers your venture may face as well as the special attributes your firm possess which may give you an edge over competitors.
Pro-forma financial statements – including revenue projections, a revenue and expense statement, a balance sheet and cash flow statement. These documents are called “pro-forma” since they are predications and not actually based on past events. Typically investors like to see projections out to five to 10 years. Irrespective of the scope or complexity of your business venture it is essential to get the assistance of a qualified accountant to either do this portion of the BP for you, or to at least audit and sign off on the statements should you prepare them yourself. The detail and thoroughness of this portion of your business plan will often make or break your pitch. Since most funders are most concerned with the money aspect of your venture take special care in the preparation of your pro-forma statements.
Now on to Success
Today’s new entrepreneurs are blessed by the enormous body of free resources that are available to them via the internet, books, magazines and other resources. For example there are many government agencies that assist entrepreneurs by providing free advice and templates for preparing C&FSs and BPs. There are also many consulting firms which may be engaged varying from accountants, lawyers, engineers and business analysts all which may be called upon should we need some of the gaps filled in. With a little searching on-line one quickly discovers there are literally thousands of articles and free templates which may assist us in our planning activities. Regardless of the size and scope of our new venture one would be well advised to do their research before launching their business idea. It is important to note that even the best C&FS and BP will not necessarily ensure success since many other factors influence how a venture will evolve over time. The best we can hope for is a solid foundation to build upon and well researched and thoughtful C&FSs and BPs are the key to providing that foundation.
Posted by Tomas Barak on May 28, 2016
TV Advertising Innovation – The “Documercial”
Written by Tom Barak – March 15, 2021
A few years back we were hired by the Hamilton Air Show (HAS) to look after some of their advertising. Given the exciting visual nature of the event – which was one of its strongest selling points – we included television ads in the marketing mix. Unfortunately the organization had no commercials and no stock footage. And while many performers had demonstration reels that we could pull footage from the quality of their material often fell short of broadcast quality. Consequently our choice of stock footage was severely limited when it came time to produce the air show’s commercials. Being that my business partner and I at the time were aviation enthusiasts we decided to take our camera gear and hang out at the event for a few days. We came back with hours of fantastic footage.
Eager to commercialize the reams of great video we had recorded several interesting ideas were discussed: producing a half hour made-for-TV documentary, a HAS corporate promotion video, the basis to pitch demonstration reels to air show performers (our footage was far better than what appeared in their demonstration reels), in addition to future HAS commercials. Satisfyingly we were re-hired by HAS the following year (and a couple of more years after that) and we were able to put practically every one of our ideas in motion.
Concept Leveraging
Then one insomnia-fueled, up late reading, sleepless nights the infomercial that was droning wearily in the background gave way to inspiration. What about a documercial? Instead of purchasing short-format, relatively expensive 30-second spots, why not purchase airtime to broadcast our documentary
Instead of the traditional clobber- you-over-the-head sales pitch of an infomercial, why not present a documentary as a more subtle – but no less effective – sales pitch? If we bought the airtime we could also control when the show aired so we could broadcast in the days preceding the event. We immediately knocked together our documentary.
Inspired by those garish infomercials, rather than selling our program to television we purchased 30 minute blocks of weekend afternoon airtime on regional stations. We chose stations that were near the greater Toronto area. The rates were surprisingly inexpensive and the regional stations’ broadcast range extended into the dense and lucrative GTA market. We were also permitted to sell commercial space within the program as well as sponsor billboards in pre and post rolls of the broadcast. This certainly helped to reduce our production costs. We ran the programs in the days preceding air show event day and got lucky one weekend when foul weather resulted in a surge of viewers who stayed indoors and watched television. Seemed our air show program was a welcome change from the typical weekend afternoon line-up of fishing shows. Our program received a considerable amount of free advertising and promotion including listings in local and regional TV Guides, show reviews in several newspapers, and the stations we aired on ran many commercials – free of charge – advertising the show.
Our documentary, and other marketing efforts, helped drive up attendance at the air show steadily for three years running. As well as earning another satisfied client, our four day investment of shooting at the air show paid off in many other ways.
A Successful Franchise
We were able to repeat the HAS advertising model for the Toronto Air Show and others in Manitoba and British Columbia. Corporate promotional videos followed for these shows as well. We also wrung several air show performer demonstration reels out of our treasure trove of footage. What started out as a simple shoot to gather footage for a television commercial blossomed into a profitable franchise that returned profit not only to the client, but also to our production company. In a sense we dabbled in reality television long before the form became a hugely popular staple for broadcast television. In its heyday the documercial was innovative and effective, just the kind of edge marketers are always looking for.
State of the Art Today
Back in the day when we were producing television programming the going rate was about $1,000 a minute for a finished, bare-bones documentary program. In other words a 24 minute program (which fits into a half hour slot on broadcast television accounting for commercial breaks) would typically cost about $24K to produce. Today, given the low prices of HD video cameras and software editing packages, practically anyone can knock together programming. With the advent of YouTube producers also have a free medium to broadcast their work on. In other words the long-form video format is now available to practically everyone. While major brand marketing still includes broadcast television advertising, other venues have emerged which assist marketers to get the word out to customers. And while our documercial idea may seem commonplace today, it was certainly an innovation when we first employed it. And that’s the point of this article; to highlight the importance of innovation in our marketing efforts. We must always be on the lookout for fresh and novel ways to spread our client’s message in a way that audiences find interesting and irresistible. If your product or service is interesting and could form the basis for a compelling documentary, one would be wise to explore this advertising option.
Posted by Tomas Barak on March 15, 2021
Customer Surveys – Taking the Guess Work out of Marketing
Written by Tom Barak – March 12, 2021
The decision-making process which helps us determine our marketing mix should never be dependent on intuition, passive observation, or dare we say it – guessing. Our brands are just too precious, and when thousands or even millions of dollars are riding on our marketing decisions, we must let the customers tell us what they want before we allocate scarce resources in an effort to earn their business.
I had prepared a marketing plan for a rather large client recently, and upon reviewing their past year’s activities I noticed considerable spending on magazine advertising. When I asked the V.P. of operations about the purchases – inexplicably the company had no marketing department, instead the V.P. and in-house graphic designer were moonlighting as the firm’s marketing department – he had a less than adequate answer. I expected the firm to have mountains of customer data but was flabbergasted to learn that most of the “data” took the form of his own industry experience and anecdotes from his sales staff. His decision to target certain publications over others was based on their circulation, “We advertised in these because they’re the biggest and most popular in the industry”, was the explanation for his decision. Many of his other marketing decisions were based on similar reasoning; for instance he wanted to purchase outdoor advertising because his competitors had billboards.
Now don’t get me wrong; industry experience and details provided by sales staff – who are in constant contact with customers and who generally know their segments – are a good source of customer data. However, at the end of the day, the picture these sources provide is subjective, opinionated and based on whatever biases are inherent in the source. In other words the data gathered is based on passive observation and is, for the most part, interpretive guess work. For example when we hire a new employee, do we base our final decision on what others say about the candidate, or do we interview them in person? The later is the generally accepted method. When I asked the V.P. whether he had ever surveyed his customers, whether he had ever undertaken focus groups, or had spent extended periods of time, one-on-one, with customers, the answer to all of these questions was, surprisingly, no. While he had lunched with certain larger clients, the conversations were generally social in nature, and not really structured as strictly fact-finding missions. These types of customer-relations activities have their place but are limited unless carefully planned and executed.
Justify Those Advertising Purchases
Regarding the magazine purchases the V.P. could not answer a few key questions. Are you sure your customers are reading these magazines? If so, do they notice the adverts and if so, are they influenced by them? Unfortunately no amount of passive observation can definitively answer these questions. To be sure there are round about ways of finding this information out, but none as conclusive or accurate as simply asking the customers themselves.
Therefore, before allocating a single penny of the marketing budget I suggested the firm either conduct a customer survey, host focus groups, or treat certain clients to a special event (such as an evening in a corporate box at a sporting event) with the express purpose of gathering detailed and specific information as it pertains to our planned marketing initiatives. For instance a survey could ask the customer which trade magazines, if any, they read? Do they notice the adverts and are they influenced by them? This could extend to other issues, such as trade shows – do they attend them, do they find them helpful to make purchasing decisions? Even though appearing in a trade magazine may seem glamorous, and even though competitors are also advertising in them, if your customers aren’t reading these magazines, or if they don’t notice the ads, then what is the use of paying hard-earned money to buy adverts in them?
Again, attending trade shows and advertising in trade magazines are proven tactics which intuitively, make sense. However, the more guess-work we can drive out of our decision-making process the better. If we are to make a commitment to being truly customer-centric, then why don’t we give our customers a voice, so they can speak for themselves? There are customers out there who likely want to buy from us, but they have certain preferences, behaviour and buying habits. And the better attuned our marketing efforts are are to these characteristics, the more effective our sales efforts will be.
The Power of Surveys
Customer surveys are my preferred method of gathering first-hand customer intelligence since the cost is low and the benefits are high. However, we must promote the survey and provide incentives since just plopping a survey on our website and attaching an annoying pop-up asking people to complete it just won’t do. At every opportunity we must ask customers to complete the survey – be that through an email campaign, mail-outs, or personal calls to action whenever we interact with customers. Attaching a raffle and giving away prizes to survey-takers doesn’t hurt either – research confirms higher participation rates when rewards or incentives are offered. Furthermore, be thorough; if practical, survey every one of your customers since the more data – and the more detailed it is – the better. Also repeat the survey from time-to-time since customer behaviour/opinion changes over time, and new customers may have come on board since the first survey. Also polling past customers – people who no longer do business with you – is also revealing since we can ask the magic question: why are you no longer doing business with us? If we can fix the problem we may even be able to reclaim them as a customer. By far the most convenient and effective way of conducting a survey is to publish the form on your website. That way customers have access 24/7 from anywhere in the world – they may even complete the form on their mobile devices. On-line forms should be linked to a database to ease collection, collating, analysis and dissemination throughout your organization. Developing a customer data base is helpful to companies which hire outside consultants, especially if they change agencies frequently. That way incoming consultants have access to customer data without having to spend time gathering it themselves. There are many pre-packaged software polling and survey solutions available and many feature powerful tools which help to organize data in useful ways. The data may be shared with everyone in the organization from product development, to sales, to marketing, to executive management.
It is said that marketers must know customers better than customers know themselves and one way to assist the discovery process is through surveys. The better your organization’s efforts are aligned with customer behaviour and preference, the better your chances are to earn their business. Otherwise you’ll be left guessing why your sales and marketing efforts are not as effective as they could be.
Useful Resources
I have put a few links below that will get you started. I’ve also recommended a couple of books which are excellent reads on the topic of customer polling:
How to design a customer surveyCreating winning surveys
Types of survey questions
Designing and Conducting Survey Research: A Comprehensive Guide; Rea and Parker
Survey Research Methods (Applied Social Research Methods); Floyd J. Fowler
Posted by Tom Barak on March 12, 2021
The 7 Ps of Effective Marketing
Written by Tom Barak – March 9, 2021
Ask any first-year commerce student to define marketing and they’re sure to reference the obligatory “4Ps”: product, price, place and promotion. While these components are useful in describing what makes up marketing, the 4Ps are rather the ingredients of the marketing mix rather than actually describing what marketing is. Furthermore, the 4P model has since been revised since its inception in 1960 by marketer Jerome McCarthy, since in our increasingly service-based society the traditional 4P model fails to account for subtleties and nuances unique to companies that are service-based. Although for a time the expanded 7P model was the new kid on the block, as marketing sciences evolve to keep pace with our ever-changing world, new models have emerged to change with the times.
To be clear, marketing is not the four or seven Ps. While inexorably linked to marketing, the Ps are simply part of the marketing mix, ingredients in a complex and evolving matrix of activities that assist marketers in planning and evaluating their sales efforts. So what is marketing? Over the years I’ve seen many definitions of varying value, and the best one I’ve found is, unfortunately, from an unknown source, but it goes something like; Marketing is connecting customers with products or services in a profitable way.
Now that we’ve established a working definition for marketing, let’s drill down to the 4Ps.
The Simple 4P model
Product: it is not hard to understand the importance of a product since many hugely successful companies were built on the strength of a single product or group of products. Mircosoft, McDonald’s, Apple, Google and Facebook are all examples. Put basically a product is a good or service which customers want – it can be tangible or intangible. Generally a product or service improves our lives in some way, or they do things better than what was available prior. For example Facebook provided an easy-to-use platform that allowed practically anyone to establish a presence on the internet without having to know any code. For a while the compact disc became hugely popular because it replaced the clunky magnetic tape and older media (VHS tape, vinyl records and cassette tapes) that we were all using to store our movies and music on. Given that companies spend billions of dollars in product development gives us an indication of the importance of products in our marketing mix.
Price: having a great product doesn’t necessarily guarantee success, especially if very few people can afford to purchase it. When mobile phones first came out they were revolutionary but at a cost of about $5,000 a month to run, only elite customers could afford them. It wasn’t until the technology evolved and mobile phone prices dropped to practically nothing before just about everyone could own one. While pricing theory is rather complex, suffice it say that what price you select for your product weighs heavily on its potential success. While it’s true that a small group of so-called early adopters are sure to gobble up any new great product irrespective of its initial price, to reach a broader customer base, not only do products have to be attractive and affordable to customers, the price must also be comparable with what the competition – if any – is charging. Other factors pull on a customer’s buying decision –for example Apple has a rabidly loyal customer-base even though in general their products are more expensive and in many ways proprietary to those of PC products. Still, given Apples’ success its customers evidently value their products to the point where they will pay a little more to own them. Either way, when launching a new product or service a great deal of thought must be given to its price.
Promotion: There’s an age-old debate in marketing; if you build a better mousetrap will the world beat a path to your door? Experienced marketers know this to be false. Let’s say I live in a cabin in the remote north and discover a cure for cancer. How would anyone know about it? Of course the first thing to do is to let someone know about it – perhaps a phone call to the American Medical Association or a news outlet would do. Of course with the internet and social media news travels fast but even if it’s a simple phone call to the AMA, promoting the cure is crucial if the world is to find out about it. This is why promotion takes a spot within our 4P model since getting the word out about our product or service is crucial to its success. But only if it were that easy! Of course a cure for cancer would mostly sell itself but chances are most products are not revolutionary game-changers. And even then there are likely competitor products out there, if not at first, then in no time they will spring up. Needless to say we must promote our offering but what form this takes requires much research, thought and planning. Do we advertise on TV, radio, or in magazines? Do we put up a website, do tradeshows or rely on social media and word-of-mouth? Like pricing, promotion is an expansive topic which we discuss in other articles in more detail. However, like the other Ps, promotion is a vital component in our marketing mix and as such it demands due diligence.
Place: It used to be that launching a business was a pricey prospect, and even opening a small store, after renovations, furnishings, purchasing a cash register, and complying with endless government regulations can send costs into the hundreds of thousands of dollars. In the past start-up costs were simply out of reach for too many new entrepreneurs. But with the internet entry barriers have fallen away and for the cost of a website and Visa vendor account just about any person can start an e-commerce site these days. Yet in spite of the internet many bricks and mortar stores still run successfully – why? Although on-line sales grow each year, visiting stores and “shopping” are still popular activities in North American culture. But it’s not just nostalgia or habit that keeps people visiting brick and mortar stores. Many customers rely on being able to handle the product before they plop their hard-earned money down to purchase it. For example we can buy clothes such as caps, tee-shirts and even underwear on-line, but many of us would prefer trying on a suit, dress or shoes before we purchase them. We can therefore see that deciding where to conduct our business is another important factor which will determine the success of our venture.
The Extended 7 Ps Model
So let’s say you’ve opened a residential plumbing service. Your plumbers are the best around, your prices are competitive and you have a pretty store. Yet much to your chagrin the business is losing money even though you’ve followed the 4P model to a tee. Then an angry customer calls to complain that the plumber that showed up at this home was rude and looked very unkempt. His uniform was ripped and soiled, he trudged mud throughout the house, he was rude and obnoxious and left a mess after himself. The customer also complained that he had to call several times in order to book an appointment and the receptionist was just as rude and apathetic as was the plumber that showed up at his door. Clearly the 4P model had not helped to mitigate the problems since in general the model does not provide an adequate framework for planning a service-based business. Enter the expanded 7P model.
People: The 7P model adds people to the mix and this makes sense since most service delivery – be it a help desk, plumbing or electrical services and so on – require an exchange, usually between an expert and a customer. Therefore, paying attention to the “people” – or those who deliver the services – is of utmost importance. These days, when products are becoming nearly homogeneous, often companies will compete on the customer service they provide. McDonald’s asks their counter employees to be friendly and courteous and most plumbing services require their staff to wear clean uniforms, to give priority to cleanliness and to be courteous and professional at all times when dealing with customers. Since employees are the chief point of contact for many businesses, paying attention to the “people” aspect of a business is of utmost importance.
Process: Like the people in your firm, the process that customers must go through to get your product or service will also determine how successful your venture will be. Is your product or service readily available? Is it easy to purchase – can a simple swipe of my credit card get your product or service in my hands quickly and easily? If I visit your store, is there parking available, are there long lines I must contend with? What kind of return or complaint process do you have? There is a whole raft of other considerations but the point is that the buying experience must be fast, efficient and pleasant otherwise customers – especially in the customer-centric world we live in these days – will not patronize you. For anyone operating a service-based business, process is an important factor to consider.
Physical evidence: The final P in our 7P model is physical evidence which deals mostly with intangible services. For example legal services are not something we can readily see and touch, and perhaps when we receive a large bill from our lawyer we likely don’t appreciate the many hours of legal research, not to mention the experience the lawyer brings to bear on your case, that go into that bill. Of course a favourable court outcome can bring some value to our lawyer’s service but we can also expect to receive a brief which outlines precisely how many hours were spent on the case, what expenses were incurred, an outline of the lawyer’s strategy and so on. Normally outcomes are the evidence of services rendered as is the court case in our lawyer example. At times it is hard for some services to justify their costs – for example in the case of marriage counselling, psychologists, and even business and marketing consulting, the value and benefits these services render are often difficult to quantify. This is why, for example, these types of service industries often publish case studies in an effort to show evidence of the efficacy of their offerings. Of course for marketing services other measures including increased brand awareness, units sold, media coverage and of course revenue gains are all indicators of the success of any marketing initiatives. If we are marketing an intangible service it is often very important to show some evidence of that service to justify why a customer ought to purchase it.
Conclusion
When designing our marketing mix the details seem overwhelming, with options stretching into infinity. The 4 and 7P models provide us with a useful framework for planning and evaluating our marketing mix, to help us drill down and find that elusive magical recipe that will deliver the results we want. Other models are emerging as marketing sciences evolve – including the “4C” model (Consumer, Cost, Communication and Convenience) and the so-called 7 Compass Model (Needs, Wants, Security, Education, National and International, Weather, Social and Cultural, and Economic). I’m a traditionalist, believing the 4 and 7P models remain pertinent today simply because they work.
Posted by Tomas Barak on May 8, 2016
