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Some people like to write out marketing plans, full-bore, with a table of contents to boot. If that’s your style, carry on. No shade from me. Feeling prepared for action is better than the alternative any day of the week.
But when I do planning, I usually focus more on capabilities and synergy than I do the fine grains of a traditional plan—especially when it comes to marketing. After all, the fates tend to burst into laughter when they happen upon the plans of us mere mortals.
Or in other words : when things don’t go according to plan, you’ll need to adapt. Having a deep understanding of systems and capabilities is far more helpful than a having a deep understanding of a plan when things start to go sideways on you.
So, let’s talk about that dynamic when it comes to marketing. But first, some context.
What is marketing, anyway?
…the activity or business of promoting and selling products or services, including market research and advertising.
(according to the Oxford English Dictionary)
There’s more to marketing than that, of course, but there is one thing that I want to lay clear :
Marketing and advertising are not the same thing. Some folks use the words interchangeably, but they’re entirely different.
Marketing builds customer demand for your products or services. That’s the core of what the function is all about, and there are a lot of ways to go about it—including by using advertising.
Advertising amplifies the messages which are intended to create customer demand, and is just one appetizer in the marketing picnic basket. There are many others alongside it. Knowing what the right tool is for the right situation is the value that seasoned marketers (and people with crazy ideas) bring to the table.
Domains of Marketing : The Five P’s of the Mix
This is the full extent to which we’re going to get textbook-y in this week’s feature, I promise. You can break down marketing activities that support demand generation into five categories (this is often referred to as the marketing mix in those dusty old textbooks).
Product
Or service. The things that you sell, really. The particular features of a product will almost always make it more (or less) marketable in certain circumstances—so it’s well worth considering the impact that a product’s features will have on its marketability.
For example :
You produce and sell hand-knitted gloves in different colours (black, blue, hot pink). The black version will be less marketable to people who find the colour boring. It will be more marketable to people who value versatility in their fashion choices (black clashes with fewer other colours). There are varying trade-offs in marketability for blue, and hot pink as well.
Price
The target regular price at which you want to sell your products for in a given channel. There’s an entire specialist discipline in marketing concerned with pricing, and large companies will often employ analysts and strategists to find the optimal balance between price and profit and a variety of complex scenarios.
Sometimes, pricing strategy is based in legitimate behavioural research and sound reasoning. Sometimes, it’s based in junk science and memes.
At the end of the day, one of the most useful things that you can understand about it for your business is the concept of price elasticity. This is a ratio which describes the relationship between price point and unit sales volume. If you drop the price by X%, then your unit sales will increase by Y%.
Understanding the price elasticity of your products is quite useful—it can be used to plan purchasing and production, promotional offers, and cash flow or financial modelling (among other things).
If you only do one thing for your business on the subject of pricing strategy, make it the measurement of price elasticity. It’s that useful.
Placement
Where are you sellin’ your stuff and how does it get to customers? That’s the long and short of it. Where your products are placed for sale has a significant impact on their marketability, just like the features of the product do.
Do you sell in retail stores? (“brick-and-mortar”)
Your own website?
A marketplace, like Amazon?
Something else?
And, how do your products get to customers after purchase?
Do customers carry them out of a store after paying?
Are they delivered? How long does delivery take?
Do customers pick them up? (“BOPIS” / buy-online-pickup-in-store). How far do customers have to travel to pickup orders?
These combinations also affect the marketability of a given product. And, how you market them to customers.
Promotion
Promotion encompasses the how of marketing your products or services to customers (“creating demand”). Any action which you take to communicate to customers in this context is promotion. Sometimes this is combined with pricing adjustments and discounts to create an offer, sometimes not.
Thinking back to advertising being one tool in your belt—all advertising activities sit in the promotion bucket of the marketing mix. Part of the larger system, but not its entirety.
People
This particular bucket in the marketing mix is a later addition to the classic “Four Ps of Marketing” model introduced in the 1960s. While newer, people is no less important to the overall success of your marketing capabilities.
As you might guess, this bucket is concerned with the people involved in producing, selling, and using your products and services.
Including your customers.
… So What?
All of these parts of the marketing mix need to work together in harmony to maximize your organization’s odds of continued success. Understanding that all of the pieces of your business are a part of an interoperable system was a light bulb moment for me, and perhaps it will be for you.
Let’s carry on.
Building the Fire
With this understanding about what marketing is, and the mix of activities that constitute it, we can think of marketing as something which is continuous. Successful builders and the organizations that the benefit don’t just do marketing once in awhile. It’s an ongoing practice, involving work and enjoyment—like building, lighting, and sitting in front of a campfire on a chilly night.
But fires eventually burn out, right?
Yep. Fires burn out—unless you tend them. That’s why the Olympic flame has burned continuously since 1936. Sustainable marketing isn’t any different.
The Self-Reinforcing System
Naturally, most growing companies view marketing as a series of separate activities with separate structures and goals (some mature organizations do too!). This is why silos form as builders build, and why marketing as a whole often gets less productive over time.
Ever feel like you’ve been putting more money into marketing over time, but you’re not getting as much back out of it as you once did?
This is often why.
Though marketing activities are separate, they’re all a part of the same system.
And that system needs to be self-reinforcing to operate at peak effectiveness. The different buckets within the marketing mix need to, well, mix together to create something greater than the sum of the parts.
So, always look for ways in which different marketing activities can complement other marketing activities.
Here’s an example :
An in-store demonstrator (People) gives a customer (also People) a sample of a new snack food at the local farmer’s market.
Then, they ask a couple of straightforward questions about what the customer thought about the sample and note down the feedback (research, which falls into the Product part of the mix).
And finally, they give the customer a takeaway card with a discount code and link to the brand’s website, where more can be purchased (Promotion, and Price).
In this example, different parts of the marketing mix interacted within a single activity to reinforce each other and drive additional productivity from marketing activities.
Build these kinds of reinforcers into your own marketing activities, and the dividends will compound powerfully over time.
Permissions-Based Marketing
Consumers as a whole are pretty smart… and have been trained to be very particular and protective of their time and attention, given all of the demands for them. A side effect of the multiplying demands on time and attention has been the regulatory focus on consent and permissions for marketing in many jurisdictions. GDPR, CASL, CAN-SPAM, and the DPA 2018 alongside UK GDPR are among the most prevalent regulatory frameworks—but most advanced economies have equivalents that serve the same purpose :
Protect consumer choice, uphold consent, and set out punishments for bad actors.
If the stick doesn’t sit well with you on this issue, consider the carrot (many builders are rule breakers, and that’s OK)—
Being considerate of the time and attention of your customers builds trust. When trust is high between a brand and its customers, loyalty is higher. When loyalty is high, repeat purchasing is more common.
It’s always easier (and less expensive) to market to your existing customers than it is to acquire new ones.
Respect your customers, and they’ll reward you.
So, ask permission before subscribing a customer to a marketing list, explain the purpose of it and what they can expect from those communications, and be consistent about keeping what you do aligned with that permission.
Some practical examples :
A customer provides their email address for the purpose of getting updates on a specific product launch —> avoid sending them emails about unrelated products or general company updates.
A customer provides their phone number to coordinate the delivery of a purchase —> avoid calling them to inform them of generic sales or promotions (especially if it’s a sale on the same thing that they purchased, at a higher price point)
This doesn’t mean that you should be rigid about how you market to your existing customers. It just means that you should respect their wishes insofar as you know them. It’s completely fair game to take a crack at expanding their permission in normal communications.
For instance, when confirming that you’ve subscribed a customer to a mailing list also pitch them on expanding permissions to another use. They’re subscribed to a product launch list? Ask them if they’d like to receive news or offers about related products, and if they indicate yes, expand the permission context to include that intent.
Sustainable Growth
Don’t try to do everything, especially all at once. Don’t even try to do many things at the beginning. Settle on marketing activities which are within your capabilities and capacity to manage at the start. Master those things, and then build other capabilities that support your overall mix, one or a few at a time, and then focus on mastering those too.
One of the biggest mistakes that builders make is trying to do too much all at once (I’m guilty of it too). After all, it’s easy, right? All of the systems and software tools that are marketed to us highlight how easy they are to set up and use—and for the most part, they are.
But inside that sales process, there’s little thought or conversation given to how sustainable it will be for you or your team to use them alongside all of the other tools and systems that you already have.
Don’t get stuck in that trap.
Think about how much capacity you have for new activities before you sign up. Get a no-obligation trial period if you can—you’ll get a much better sense of how well something fits this way than if you were just watching a demo on a call.
Metrics for Success
Measure What Matters. Good advice, and the title of a book that’s very useful on some scaling journeys (and not as useful on others). When we’re thinking about measuring the effectiveness of marketing activities, there are a couple of metrics which every business should use—regardless of their size and maturity.
Marketing Efficiency Ratio (MER) : the revenue dollars generated by your marketing activities. To calculate this ratio, divide your total revenue by your total marketing expenditure (including dedicated staff salaries). The higher the ratio, the more effective your marketing activities are at generating revenue.
Revenue Attribution : tracking revenue back to the specific activities (or activity buckets) that generated them. Revenue attribution is a flexible metric, and you can define it broadly or granularly. My advice on this one is to start simple—track revenue by channel buckets (for example, email / paid advertising / partner marketing / affiliate marketing). If you’re using analytics software which allows you to specify an attribution model, start with Linear Attribution. This model allocates equal credit to all touch-points in a given conversion funnel… so a customer who clicked on an email, later clicked on a link in a press release, and then clicked on a paid ad before finally purchasing would generate equal credit for the sale to those activity buckets, respectively.
Aside from these two metrics, there are dozens of commonly-used ones in marketing (if not hundreds), all with their own fun little acronyms and backstories. Ignore the noise, and focus in on what helps you evaluate and improve your marketing performance. If you can’t determine why a particular metric should be measured, then don’t measure it.
Drowning in data and starving for meaning isn’t much better than not measuring at all.
Here’s an example spreadsheet with some visualizations and a dashboard that illustrates the usage of MER and Revenue Attribution in practice. Copy it to your own Google Account, or download as an Excel.
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