I have spent my career running marketing organizations, both large and small. Regardless of the size of the business, marketing serves a critical role. But what type of organization does it better?
Marketing organizations at large corporations certainly have the budgets, resources, and talent to win in the marketplace. But small, focused startups with their scrappy sensibility, their test and learn approach, coupled with growth hacking capabilities, tend to seize and capitalize on opportunities quickly.
I recently explored these marketing topics thru Kauffman’s Founders School on entrepreneurial marketing. There are no bright lines, but in my view, each type of organization has a center of gravity that forms the basis of five core strengths.
1. Understanding the customer
“Effective marketers know the difference between a customer data point and a customer insight,” Robert Candelino.
Only the organizations that understand a customer’s wants, needs, and desires can win in a million-channel world. Why do some brands resonate and others do not? One success story is Dove’s “Real Beauty” campaign. The first video, “Dove Evolution,” has been viewed more than 25 million times.
Unilever realized that only two percent of girls 8–17 used the word “beauty” to describe themselves. But 70% felt pressure to be beautiful. Both were good data points that led them to the insight that, according to Candelino, became the core of their idea: the difference between how young girls saw themselves and the pressure to be beautiful stopped 60% of young girls from doing things (such as attending school, going to the doctor or giving their opinion) because they did not feel beautiful.
This insight became a motivating driver to broaden the narrow definition of beauty. The Dove team began featuring everyday women (size 4 to 12) from everyday vocations (students to coffee shop baristas).
At the end of the day, data points are interesting, but insights are inspiring and provide the basis for forming a differentiated advantage. Why? Because your brand is speaking to your target in a completely different, but utterly relevant way.
Verdict: The big brands win here—learn from them. Cull the data, but look for the insights that get at the heart of what your target really wants.
2. Forming a strong brand promise
“To win in an ever-changing world, you must identify the constants. This strong point of view forms the basis of building your brand,” Mark Baynes.
The average person is exposed to more than 3,000 marketing messages per day. The new currency is attention. This is what Lenovo’s marketing VP Ajit Sivadasan refers to as “attention Darwinism.” So how do you stand out in the crowd?
Big brands, especially CPG companies, understand that the starting point is to develop a strong brand promise rooted in solving a customer problem and establishing an emotional connection. A brand is the sum of your customers’ (and users’) perception of every interaction, your reputation, and customer service.
Brand managers are trained to develop a deep understanding of what their brand stands for and document it using a positioning statement so that everyone understands what your product or service stands for.
Verdict: Big brands pick up another win here. Before startups enthusiastically jump into lean, test-and-learn agile development-based marketing, they need to stop, pause and codify what the brand stands for both rationally and emotionally.
3. Market testing and execution
“Throw the spaghetti against the wall. Test, measure, adjust your aim, and throw it again. Measure. Adjust. Throw. Learn. Repeat.”
This is my advice for any aspiring marketer. The best product in the world means nothing if nobody knows about it. The great news here is that there are literally hundreds of marketing tactics at your disposal. The bad news: there are literally hundreds of marketing tactics at your disposal.
Agile startups understand that consumers make split decisions to click or abandon a site. While big brands are developing six-month marketing calendars, scrappy startups are changing their messages every day—every hour, in fact—to get the message right. Most effective startups are fielding 15–20 tests to yield .025% improvements. Over time, these improvements add up to more effective user acquisition and retention.
Verdict: Startups get the win this time. Big brands must become more agile. In response, companies like Merck and Kimberly Clark have started to revamp their campaign development process. The goal is to shorten lead time and respond quickly to changes in the market.
4. Efficiently scale for growth
“Usually, you are lucky if you grow so fast that you run a risk of alienating users. You’re talking about the danger of overeating, while most startups die of starvation,” Paul Graham.
Startups understand they will not be in business if they don’t grow—and grow fast. Josh Sookman recounts Zynga as a great example of this. The online gaming company ran thousands of A/B tests to find a business model where the cost of acquiring a customer was less than the overall lifetime value. Once Zynga figured this out, it scaled quickly. The company spent so much on acquiring customers that it’s rumored that Zynga accounted for nearly 30% of Facebook’s revenue in 2009.
Big brands struggle with this concept. To win, they must learn how to scale quickly. Even if they do figure out the lifetime value of a customer and the right model to acquire profitable customers, they’re handcuffed by the budget approval process.
Verdict: Startups win because they can move quicker. Ben Legg, former COO of Google Europe and current CEO of Adknowledge, says it best: “To win in the marketplace, brands need to figure out the LTV of their customer and when they find a successful playbook, uncap the budgets to acquire as many customers as quickly as possible.”
5. High touch in a high tech world
“Make use of digital interactions, but don’t lose the face,” Vala Afshar.
So much of marketing is focused on acquiring customers, but the holy grail of customer marketing is retaining your most profitable customers.
The high-tech world of social media is the perfect place to practice “high touch marketing.”
Big brand Chipotle has adopted a one-to-one engagement model for its social media platforms. A 2011 study from Nation’s Restaurant News reported that Chipotle responds to 83% of Facebook posts and 90% of its Twitter activity are responding with @-mentions. Startup Mighty Handle has adopted a similar strategy but through eCommerce. Founder Ben Rendo writes a personal thank you note to every single customer who buys his product on Amazon. This approach enables a level of customer intimacy that was unheard of five years ago. These interactions deepen the emotional connection between consumer and brand, creating a positive experience that encourages word of mouth and reinforces loyalty.
Verdict: This one is a draw. Learn from companies, both large and small. Talking to as many of your customers as possible, learning from them, and surprising and delighting them is what will create the most valuable type of marketing there is: Tell a friend.
This article has been reprinted with permission from Anita Newton’s LinkedIn page.