Scott Morgan writes: Budgets continue to be slashed. Brands are disappearing. Media is getting more fragmented. The only thing getting bigger is our federal deficit. So as a marketer, how do you capitalize on a world that is getting smaller in so many respects?
What marketers are starting to discover is that the target universe is smaller than originally thought. So small, in fact, that 4% of a brand’s consumer base is driving most of the business. This deeper dive into audience targeting is what I call the 4% Factor. Simply stated, it is another level down from the typical 80/20 rule of prioritizing (80% drive, 20% of the business) because, well, everything is getting smaller.
So what do you do about it? Embrace it. Start thinking about ways to employ addressable media, digital media, one-to-one marketing and, of course, social media to reach that core 4% of consumers who have the greatest propensity to identify and recruit others to your brand franchise.
The 4% Factor goes well beyond a loyalty strategy — it is a penetration strategy — designed as a competitive approach to protecting and growing your business. Simply put, start smaller to get bigger faster. It also tends to be a much more sustainable approach than traditional strategies of casting a really wide net, going through trial and then hoping to retain a percentage of new customers.
This concept might not sound new, but this way of thinking used to be categorized with “below the line” strategies. It needs to become “above the line” to enable social media, mobile marketing, proximity marketing and other one-to-one approaches to be viewed as critical to brand and business building, as broadcast and print used to be. Call it a reordering and rethinking of the marketing-tool hierarchy. That is what I would call a smarter and faster way to grow, particularly in these economic times.
Try Something Different
The holy grail of social media is discovering how to engage people whom have an affinity to your product or service. The rules of innovation say “stop doing what you’ve always done and do something out of the box.” Out of the box may mean stop marketing and advertising in the traditional sense. Innovation may mean finding ways to engage “people” which is appreciated and considered social.
The innovative ways in doing things differently and offering things differently may simply mean “trust the customer” and they will become your biggest advocate. Trusting word of mouth means stop advertising and marketing and let the customer experience speak for itself. Of course that also means you have to trust your company, your product or service, to be a great experience for the customer.
Instead of 4%, while applicable, how about 100% of your customers sharing in the value they received from you. Impossible? Think again. What if your brand actually trusted the customer. Instead of spending money on advertising and marketing, that doesn’t engage specific customers, why not give the customer that money and then trust in their experience to propagate further sales.
Whether you trust the customer or not they are indeed sharing their experience. However, they are loosing their trust in you because you continue to spend advertising dollars to reach the wrong customer while existing customers pay for it. Instead of paying for advertising the customer would rather give it freely, both good and bad.
There is a better way. Stay tuned for a new model called conversational currency.
What say you?