The New York Times had an interesting article yesterday on counter-insurgency in Iraq. When I read the following I thought, “Ah hah, that’s a terrific analogy for marketing!” (and it’s just an analogy, folks… I don’t want any comments on the implications of bombing customers!).
Vietnam stands as an encyclopedia of what shouldn't be done. Foremost in the do-not-repeat category are the indiscriminate use of firepower, the resort to conventional tactics to fight an unconventional threat and the failure to implement an effective ''hearts and minds'' campaign. The preferred strategy has been referred to as "total war..."
So let's take each of these in turn.
Indiscriminate use of firepower:
First, all firepower is indiscriminate in the absence of a good cause. I’ve advised more than one client to refrain from advertising until their products and services were of a caliber that customers would actually want to buy. Ditto for commodity products with no real differentiation, or less-than-stellar customer service. It’s better to temporarily reallocate the marketing budget towards creating something of real value… otherwise you’re just creating awareness of mediocrity. It’s a losing battle.
So assuming the company has a good cause and strong value proposition, what’s the most effective firepower strategy to accomplish its objective? It depends on the situation. Here are two frequent problems in estimating firepower:
Problem 1: Underestimating firepower. In the past few years, everyone’s been trying to do more with less. But at a certain point, low spending becomes nothing more than spitting in the wind. I know of several companies that tested advertising or direct mail with a tiny budget and a sub-par agency, got exactly what they paid for (ie. no results) and then pronounced the verdict that “marketing doesn’t work.” Sort of like sending soldiers into battle with capguns and saying afterwards, “see, I knew we’d lose.”
Problem 2: Overestimating firepower. I once worked with a national agency that recommended the same overkill media strategy in every market from Dallas to Wichita. They just didn’t know how to creatively maximize a smaller budget.
Conversely, a few years prior I worked for a scrappy small agency where one of our clients (a regional restaurant chain account) wanted to run mass advertising everywhere. But a cost/revenue/utilization analysis revealed where mass advertising made sense and where it didn’t. We used guerrilla tactics in markets where combined store revenues couldn’t justify the media cost, which allowed us to give sufficient weight to areas that needed it. (And if it’s relevant to you, here’s the tactical how-to: Add total revenue per market, then index the revenue against radio or TV cost-per-point in that market. Let’s say you have 10 locations in Chicago but the revenue/cost index is 300+… it won’t make sense to advertise unless you open more stores there. Next, look at store utilization per market and compare with the cost/revenue index. If the stores in Market A are running at 85% capacity, and the stores in Market B are running at 65% capacity, Market B gets priority for the ad dollars even if their cost/revenue index is higher. They need the extra media firepower.)
Resorting to conventional tactics to fight an unconventional threat.
Many companies keep turning to the old ‘tried-and-true’ methods to generate more sales: tweaking sales comp plans, running price promotions, changing their ad campaign, etc. But the rules of the game have changed; customers are now in control. And those customers have evolved to be more individualistic, better educated, and increasingly distrustful of corporations. They pit the conventional companies against each other in price wars for their business, then turn around and pay more with an unconventional company offering real value. The way to win is by reliably solving customer needs, authentically and transparently. Yes, this is tougher than changing the comp plan, but this is what’s necessary in today’s economy.
Failing to implement an effective “hearts and minds” campaign.
For a company to be a superpower, every employee – from foot soldier to commander – must be intellectually and emotionally engaged in the brand-building effort. As John Moore said in a recent post, “What hope is there of a brand engaging customers if it can't engage its own workers?” Harvard Business Review wrote that for "every 5% increase in employee satisfaction, there is a resultant 2% increase in customer satisfaction, returning up to 1.8% in net profit." Start with the hearts and minds of your employees, and the hearts and minds of customers will soon follow.