The Need and the Value
Before you can build a marketing strategy, you must first have a strong grasp of the market landscape. What is the underlying need among consumers that you’d like to service? Understanding this context is like turning on a light in a dark room — everything becomes instantly visible.
Strategies that focus on harvesting an existing demand are always easier to execute than ones where you need to ‘show’ the audience what they need. When you are operating in an entirely new market and you are creating a category (ie a need, service, product). This requires far more creativity, and frankly, far more hard cash to execute.
Another way to approach the market is to look at the underlying problems you can solve for the consumer. Consumers might not have an outright need for a product or service, but they may experience a certain problem, difficulty or challenge. In other words, the need is not explicit, but there is a need branching out from an existing problem; a need which you can satisfy.
For example: While few consumers actually needed the Apple iPod or iPhone, they were certainly experiencing the problem of the clunky, battery-devouring Walkman or the inconvenience of a flip mobile phone. People didn’t know how they had a need until they were shown the true convenience of Apple’s new products.
Products or services that tap into either a problem or a need tend to be very hard to market and they also tend to be unsuccessful. This is unless the concept is absolutely ground breaking and it delivers substantial value for the consumer. Such cases are very rare and should not form the basis for your strategy. While there was no explicit consumer need or even problem giving rise to Facebook, it is undeniably a raging success. However, it is a decidedly rare event.
Here’s a very simple litmus test for the commercial viability of a product or service: Panel test how much consumers would be willing to pay for your service or product. Don’t ask whether they would buy the product, but rather look for a hard number.
The Essence of Your Offer: A Solution
What are you actually selling?
Many startups that focus excessively on creating products drift away from the actual underlying need or problem that they are meant to address. It’s often useful to think of the essence of the product. In other words, what is the outcome of its use or consumption?
At the most fundamental level, to survive as a business, you need to provide your customers with value. This value is simply the difference between all the benefits derived from your offering minus their price.
VALUE = BENEFITS/PRICE
Take Starbucks, for instance. They are not merely selling hot beverages with certain flavours, they’re providing comfort, convenience and ultimately a positive, relaxing experience in a familiar and recognizable environment. Customers leave refreshed, with a sense of having just relaxed in their living room. That is ultimately the value delivered and the essence of the service.
How can you gauge your customers’ value? Just ask. Ask them outright why they are buying your products and services. Interestingly enough, their responses may be enough to change your entire value proposition.
Remember the Apple Mac Mini? While initially marketed as an affordable Apple entry point computer for PC users, the Mini was actually frequently used as a home media center. Apple subsequently tailored the product accordingly, adding an HDMI port so that it could easily connect to HDTVs and accommodate for its real-world use case.
There has been a lot of hype around the concept of data-driven marketing over the past few years. While it is certainly true that modern marketers need to be numbers-oriented, it’s tough to work with data effectively — especially early on.
Data-driven marketing is:
A marketing strategy built on analysis of big data, collected through consumer interactions and engagements, to form predictions about future behaviors.
Being data-driven helps you make short-term decisions, and it allows for technology to take over when it comes to media buying and fine tuning campaigns. However, performance data can not tell you outright and with certainty what the ideal marketing message is, what the optimal price point is, or what the next market to conquer is.
For early stage businesses and startups, note that you obviously won’t have much data to analyse. In other words, you’ll have to learn by doing.
The key to being data-driven is to understand how and why your performance varies, and act upon these findings.
For instance, you might find that Mobile and Desktop users behave vastly differently. You might find that different age groups make for completely different types of customers.
The key is to identify such trends and leverage them in the appropriate way to optimize your value delivery, revenues and your customer acquisition and retention.
The Matrix Approach
Although there are many reasons why companies use data-driven marketing, more often than not, its intended goal is to enhance and personalize the customer experience.
For instance, you can ‘slice’ up your performance data by many dimensions, such as age, gender, acquisition channel, device and even inferred psychographics and interests. This helps companies convey the right message, to the right audience, at the right time.
Data-driven marketing allows brands to create a customized campaign that converts leads through a deeper understanding of the customer profile. It makes it much easier to separate and group target audiences a business is trying to reach.
For example: You may find that female 25-34 year-olds from Santa Barbara, CA may prove extremely receptive to your offering. You may even find thousands of observations confirming this, as well as high degree of statistical analysis to support your hypothesis. However, you still need to ask two questions:
- How big is this segment, in absolute terms and relative to the greater target market?
- Can I effectively pinpoint and cater to this potential audience and if so, at what cost?
In other words, you are looking for significant variability, but also significant scale to the potential new audiences.
Example Top-Level Marketing Strategies
Here are a few examples of top level marketing strategies that encompass the environment, customer acquisition, and value delivery.
Example of an overarching marketing strategy for a real estate business: To leverage social media to pinpoint prospective house sellers and deliver competitively priced, fixed-fee real estate services to undercut established agencies using a nimble, digital-first service.
Example of a top tiered marketing strategy for a CRM platform: To create a new niche segment for personal coaching businesses needing CRM services; driving value using specifically tailored functionality and introducing a new price point between the flagship services and the bare-bones solutions. In addition, to drive new customer acquisition using a referral program and maintain retention using monthly tutorials and webinars.
Example of a top line marketing strategy for an online university: To drive customer acquisition using specific behavioural and audience targeting; identifying 24-30-year-old college leavers and showcase degree completion programs using underutilized video formats.
Note that in each case, the strategies are succinctly defined.
- … because the strategy will be reviewed and tailored on a frequent basis.
- …. because the strategy needs to be clear and concise.
- …. because a marketing strategy is meant to clarify a complex landscape with a view of how to move forward.
Top marketing strategies outline target audience, message, actions and behavior.