Q4, the oh-so-wonderful and soul-crushing period, when companies need to wake up to the looming reality that the year is coming to an end. Management is pushing to speed up the sales, revisit targets and check up on budgets and ponder the question “How the hell did we spend one-third of the marketing budget on Mikey’s drinks at our last summer party”. Marketers pull together one final, half-assed attempt to wake up the sleeping target market with hopes that maybe this campaign is going to boost up sales.
Most marketers at this point would say that this is an exaggeration, but unfortunately, it’s not far from the truth. Most companies have adopted new ways of working in hopes of being more agile and lean in today’s “digital world”, which has led them to cut time on actually planning on what they should do, and what works. And God forbid if someone in the marketing department dares to ask for a month to conduct customer research or a brand survey.
All of this has led to the death of marketing strategy.
Tactification in simple terms kills strategy
Digitalization has brought in a lot of benefits for marketing, but every time a company says they are focusing only on performance marketing or growth hacking, it makes me cringe. Not to say that performance marketing or growth hacking aren’t valuable, but they have led to tactification of marketing, where we are more focused on specific marketing actions, click percentages and individual campaign results rather than overall success. Looking at the campaign results is crucial, but by believing that doing one sales activation campaign after the other is the way to success, you are way off. The numbers just don’t add up in the long run.
Companies are becoming more and more obsessed with tactics and promotions for a few simple reasons. First of all, it looks good on your marketing dashboard. You get quick sales benefits, and who wouldn’t want to go to their boss and present revelational data from successful campaigns. Secondly, marketing strategies are seen as useless documents with fancy meaningless words that some hand-waving consultant has scraped together. Thirdly, companies don’t understand the long-term benefits of brand marketing and strategy.
All of these are fair comments, but that’s mostly because we have lost the art of making a proper actionable marketing strategy.
How are we supposed to do it, then?
Companies need to adopt a market-oriented mindset. People are not just numbers and that’s where many companies go wrong. We need to start marketing planning with a diagnosis.
Proper marketing strategy always starts with research where you look at data, not just numbers on a dashboard. By conducting both quantitative and qualitative research, we start seeing where the market actually currently stands. Talk to your customers, conduct surveys, interview focus groups, and spend time in your customers’ world. Diagnosis is really the foundation on which everything else that follows, is built upon. In the diagnosis stage, you simply look at the market and your customers as they are. Diagnosis is not about planning ahead, it’s just studying and defining the total market and segments within it. If you do this right, you will end up with the same data as your competitors. Diagnosis ends when you have sliced up the total market into understandable segments. It’s important to distinguish the different target groups from each other, as they are of different value to your company. Also, it is important to recognize that these segments may have different needs and desires. By separating the total market into segments, we allow ourselves options when it comes down to tactical actions, as we will later find out.
Once we are finished with the diagnosis, we can start strategizing. We carefully look at the segments and start making choices on which segments to target. As the old saying goes “Strategy is about making choices”. Very rarely do companies have the budget or the marketing capabilities to target all of the segments, so now is the time to be smart. “Which of these segments will we go after?” Which ones are the most profitable for us?
Once we have decided on the targeting, it’s time to revisit the good old positioning. “Where do we stand in the eyes of the customer?” “How do we differentiate ourselves from the competition?” Positioning is, in simple terms, the intended brand image. It tells us what we want to convey to the customer in everything we do.
After positioning we move on to objectives. It’s super easy to come up with pointless objectives, such as “create retention to maximize revenue” or “increase sales by 200 000 €”. These kinds of objectives have no real intention or value. Using SMART objectives gives you specifics you need to understand what you need to achieve and how much time you have to achieve it. It is crucial to specify a specific action in the objectives to make them actionable and understandable. A proper objective would probably look something like this: “Objective 1: Increase aided brand awareness from 53% to 60 % among the total market by the end of 2021”.
Really good strategies utilize funnels and comparative conversion rates to specify objectives. Also, usually, marketing strategies have multiple objectives and they may vary from brand objectives to product-related objectives. We need to be careful here though, spreading the resources too thin will result in not achieving any of the objectives
Objectives end the strategy phase. At this stage we already understand the total market and our segments, we have selected which customers to target, we know what we want to say and we also understand what our objectives are. It’s time to get tactical! We start to ponder how we are going to achieve this. Selecting the right way of delivering the message is as important as the message itself. Luckily, at this stage, thanks to research, we know who our customers are and where we can get a hold of them. It is just a matter of selecting the right channels and the right partners. Word of caution though, not all people live in a digital world only. And no, the “traditional” media isn’t dead. Marketers tend to mirror the customer to themselves, which leads to a mistaken sense of reality. Most successful campaigns are always both digital and analog, both long and short, and we need to try to find a perfect balance. And that’s where most companies need a lot of help.
Finally, we come to the part that is going to create chaos, havoc, and disbelief within the CFOs and CEOs. Cost is too high, ROI for next year is too small, cutting down on brand marketing and increasing short-term sales activation, we have all been there. Most importantly, budgeting needs to be done on an objective level, and promotional marketing needs to cover brand marketing. Both are important for the next twelve months, but only the brand marketing will bring benefit to the company 2 years from now. There really isn’t any secret sauce to budgeting, to be honest. Objectives and tactics come before the budgeting for the simple reason that you can start calculating how much does it cost to reach this amount of people and achieve this objective. At the end of the day, it’s your call, but most importantly, companies should also rely more on advertising agencies to provide feedback on this part. The only advice is that be careful not to overreach with the objectives and expectations. Eventually, overreaching leads to trouble, if you can’t reach the targets and the ROI is not good enough.
If you need guidance on how to split your budget between brand marketing and sales activation within your industry, there is statistic to help you, but obviously every company is different and you need to evaluate your own needs.
So there you have it, in its simplicity. A proper marketing strategy structure hasn’t really changed in the past 50 years. Sure, there are more possibilities when it comes to tactics, but eventually, it’s about just three things: Diagnosis – Strategy – Tactics. Doing things the right way will leave you with room to maneuver and also money to cover Mikey’s never-ending thirst for those cranberry vodkas at the next summer party.
Written by Jukka Ihalainen, Digital Operations Director
*Image: Isaac Smith, unsplash.com