They had me at “meow.”
They lost me at “sign up.”

I was flipping through Facebook, unmarking most of the “Top Story” posts (seriously, Zuckerberg, get your algorithm right already). And that’s when it caught my eye — an ad featuring a cat lounging in some Jetsons-age contraption:

Since I’m addicted to furry creatures with pointy ears and tuna breath,  I was hooked. Since I also dig on futuristic design, particularly anything with the word “pod” in it, I clicked…

And that click constituted an act of extreme rarity.

The click-through rates on Facebook ads have plummeted to such abysmal lows, Facebook’s own head of measurement and insights is publicly disavowing them. Instead, he’s hyping the value of “awareness” and other metrics used by old-school media and previously ridiculed by new-media zealots. (For more on the new media flip-flop on metrics, see my post, “And The Standards Go Out The Browser Window: Banner Ad-Nauseum”).

So call CNN and issue a tweet: here was a Facebook user tearing himself away from his friends’ posts to actually click on an ad.

And just as quickly, I clicked away, pausing only long enough to capture the landing page so I could share it here:

The ad took me to some site I’d never heard before, Fab.com, and there was the Cat Pod that had been promised. The problem? I couldn’t learn anything more about the Pod, or the website selling it, since the site is “by invitation only.” Really? They ran an ad on Facebook to take me to a members-only site?

Ah, but I could gain access: I just had to provide my email address first.

Podded Cat Meets Old Dog

Now, when it comes to these here Internets, I’m an old dog who knows some old tricks. Way back when most of us “information-superhighway” travelers had accounts on Prodigy, Earthlink and AOL, I learned that if you give some stranger your email address, you’ll likely get back stuff you don’t really want. So these days, I give out my email address begrudgingly, even if it involves brands I know well. And I still get annoyed. I recently gave my email address to Groupon, and they responded by bombarding me with discounts on tanning sessions, teeth whitening and other offers I usually leave in my spam folder. At least I could trust Groupon to go away once I unsubscribed (which they did).

But who the hell is Fab.com? Would they be sharing my email address with Nigerian princes or the hucksters behind the “congratulations you’ve won an iPod” talking banner ads? Isn’t it customary to get to know someone, or enable them to know you, before asking for their email address?

So I bailed. I figured my cats could live without $79 pods. I’ll console them with some extra turkey and giblets instead.

And that is a classic example of “friction” in e-commerce.

No, not the turkey and giblets. Friction is anything that makes shopping more difficult for customers. That could be a long registration form, a dysfunctional search engine, or simply too many clicks to get to the products they want. In the bricks-and-mortar world, customers have to put up with some friction, such as essentials stashed in the back of the store, or mathematically illiterate cart stuffers in the “12 items or less” line. But on the Internet, friction lets prospective customers slip away. (Get it — “friction” and “slip away”?) Who needs hassle when there are hundreds of other sites that will happily take our money just a click away?

Now I understand any brand wanting to create an exclusive shopping experience. Stringing up that velvet rope, real or virtual, can make a business more enticing, since it keeps out the “riff-raff” and makes those admitted feel “special.” But before it can do that, the business must make sure people want it in the first place. You don’t want to put up a velvet rope and have no one but the bouncer waiting beside it. And creating that desire requires marketing: you must let people know you exist and that you pack a whole lot of awesome before you ask them to jump through hoops.

Fab.com did neither of those things. Now, as far as I know, Fab.com could be an amazing company run by kitten-rescuing Buddhist nuns with immaculate manicures and masters degrees in legal ethics. But prior to spotting this Facebook ad, I had never heard of them before, and since I couldn’t peek inside their site, I had no idea what else they offered beyond the $79 Cat Pods. They just wanted my email address up front for something unknown that’s by invitation only.

Now, that measurement-and-insights dude at Facebook can talk all he wants about how his ads are best used to create impressions. Ironically, the Fab.com Facebook ad was successful in generating a click-through. It was the impression that was far less than impressive.

Consider it an illustrated guide to marketing techniques.

Too many entrepreneurs and CEO’s tell me that they “don’t have money for marketing” or they’re “not ready for marketing yet.” What they’re really saying is that they don’t know what “marketing” means…

Many think marketing means advertising and other promotions, which actually constitute just a small part of marketing. In reality, marketing encompasses a broad array of responsibilities and activities:

• product design and development
• naming
• location selection
• distribution
• market segmentation
• customer relationships
• pricing
• sales
• publicity
• competitive analysis
• community relations
• and more

If a company has a name, a product, a price, a business card, even just an office, it’s performed marketing. Those elements might have been performed by non-marketers — for example, the product might have been designed by an engineer, the price set by the CFO, and the office leased by the investors — but they’re still subject to the forces and whims of the marketplace. If marketing doesn’t have sole responsibility for all these activities, then it should (and often does) significantly influence them.

What It Means For Management

Even if a company’s executives decide to hire an outside marketing agency or consultant (like myself), they must understand marketing fundamentals to monitor what their agency and consultant are saying and doing.

There’s another problem: some companies have fully established marketing departments, but they’re separate from publicity, advertising, and sales. That makes no sense, since publicity, advertising and sales are all part of marketing. Such functional silos result in inconsistencies and internal conflicts. No wonder most businesses underperform!

So what is marketing?

No two marketers agree on a definition — and that’s one reason why so many managers are confused about it. Even the American Marketing Association has a terrible definition of marketing:

“Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.”
- American Marketing Association, October 2007

For a profession that supposedly excels at communications, that verbal gumbo is just embarrassing.

The authoritative Philip Kotler offers a more concise definition:

“Marketing deals with identifying and meeting human and social needs.”
- Philip Kotler, Marketing Management

That’s better… but a little broad. A company’s operations or HR departments might claim that their job is to meet “human needs.” And if a company doesn’t like its logo and wants to change it, which “human need” is that meeting? A logo is certainly a human preference, but “need” sounds too strong in that case.

Here’s the definition of marketing that I like and use:

“Marketing is the art and science of managing brands and relationships.”

You could argue that that is also very broad, and I wouldn’t disagree with you. But this definition contains several key elements:

1. Art: Marketing is the one business function where imagination and creativity are not only allowed, they’re encouraged. That’s why it attracts many creative professionals: writers, designers, photographers, musicians, filmmakers. That’s why I got into it.
2. Science: At the same time, a truly professional marketer also relies on research, data collection, and analysis, just as any scientist would. With the rise of digital marketing, we marketers have much more valuable data than ever, which can tell us what is working and what is simply a waste of time and money.
3. Brands: Your brand is your appearance, personality and reputation rolled into one impression. Everyone has a brand — even individuals. (We tend to just use the word “reputation” when talking about people.) And your brand determines your ultimate value in the marketplace, influencing everything from how much you can charge for your services, what caliber of employees you can attract, how readily you can attain news-media coverage, and what investors are willing to pay for a share of your company. Marketing is responsible for creating, monitoring, enhancing, enforcing and extending that brand.
4. Relationships: Marketing supervises all communications between the company and its stakeholders — not just customers, but also employees, competitors, news media, the government and more. These communications must be strategically and sometimes creatively crafted. At the same time, the relationships must be cultivated using various tactics, from rewards programs to targeted pricing. When it comes to customers, marketing also determines which should be served and which should be divested.

Make It Personal

The definition, “Marketing is the art and science of managing brands and relationships,” applies to individuals as well as corporations. We all do marketing in our daily lives, whether we call it that or something else. If you’ve created a resume, applied for a job, or earned a college degree to enhance your credibility, that’s marketing. Even more personally, if you’ve tried to find a boyfriend or girlfriend, husband or wife, that’s marketing (with fewer quantitative analytics).

So marketing in business is merely an extension of something we already do personally. What distinguishes professional marketers is their use of creativity and strategy to do it better.

"Oh, look, it's shiny and new – let's worship it!"

Q: What consumer and market research guided the iPad development? Steve Jobs: “None. It isn’t the consumers’ job to know what they want.” – from the New York Times

Customer centricity argues that companies should restructure their strategies and operations to put customers in the center. What’s wrong with that?

1. Many marketers think “customer centricity” simply means “great service” – a misunderstanding that could be devastating.

EVERY company claims that its customers come first – good luck finding one that doesn’t – but here’s the problem for marketers: Customers don’t agree on what’s “great service” or how much of it they want.

One customer might consider “great service” as simply getting what he wants quickly with no hassles; another customer expects to be waited on hand-and-foot. And while all customers say they want great service, many customer-centric small businesses went bankrupt as those same customers flocked to Walmart’s low prices.

In her post “Customer Service Alone Is Not Enough,” Harvard Business Review editor Karen Dillon wrote “Virgin Atlantic Airways provided me with the best customer service I’ve ever had… My thanks to them? I’ve never once flown Virgin again.” Her reason? “At the time, Virgin didn’t have a great frequent flier program.”

There’s also the issue of “over-quality,” where companies provide more than the customer needs. For example, McDonald’s could serve its food on fine china with silverware, but that would constitute “over-quality” for customers who simply want convenience and low prices. Indeed, some people find that too much service makes them uncomfortable, as I once felt in an over-solicitous Tokyo department store.

2. No two customers are exactly alike – even in the same industry.

When someone says, “Put your customers in the center of your strategy and operations,” you should respond, “Which customers?”

Customer service is expensive, so treat it as a resource to be allocated carefully. If you have hundreds or even millions of customers, serving all these disparate needs can sacrifice economies of scale and incur massive costs. That’s why smart businesses focus on their best customers. The “Pareto Principle” hypothesizes that 80% of results come from 20% of the causes. For Neiman-Marcus, 90% of their sales come from 20% of their customers, so Neiman Marcus does offer great customer service – but mostly to great customers.

In addition, customers regularly change their minds. Their indecisiveness can impede your operations and ability to build a strong brand. During a recession, customers might focus on price; during boom times, they might prefer quality and prestige. And as Steve Jobs would argue, many customers don’t even know what they want until they see it.

3. There’s a difference between the “customers you have” and the “customers you want” – and some are bad for business.

Let’s say you open a gourmet sushi joint, but most of your customers want hot dogs. Should you go “customer centric” and fire your chef and spend a lot of money to convert your restaurant into a fast-food stand? Or should you try to change your customer base?

Then there’s the customer who mistreats your staff and is extremely demanding. You could fire that customer, but if you had structured your entire business to serve them, it’s not so easy. Consider the costs:

• You have to train your employees regarding that customer.
• You have to customize your products to that customer’s needs.
• You have to subsume your own brand to the interests of the customer.

After all that investment, could you fire that customer? Could you then go to the trouble and expense of seeking out a completely different one?

I know an ad agency with a giant multinational client who treats the agency’s employees as servants and disdains creativity. Consequently, the agency regularly loses its top talent, forcing it to pay higher-than-average salaries to retain even mediocre employees. Over time, this has hurt the agency’s ability to attract new clients, which gives the abusive client even more power.

4. And what if that customer fires you?

If you are customer-centric and your customer leaves you, you suddenly have employees and structures in place dedicated to serving a customer who no longer exists. Many famous ad agencies have gone out of business from the loss of just one client.

Along the same lines, what if one of your key customer-service employees leaves? You’ve spent a lot of money training her, and she has acquired years of knowledge about your customers and their preferences. Now she’s taking all this experience and expertise – and perhaps even your customers – to one of your competitors.

5. You must balance the needs of your customers, employees and other stakeholders.

Where you set your balance depends on a number of factors, from the intensity of competition in your industry, to the nature of your investors (short-term or long-term).

If your industry is price-intensive, or if you have heavy profit-target and budget demands, spending a lot on your customers might be frowned upon by short-term shareholders, who want to see profits and growth NOW.

If you’re in a tech-driven industry, great service can attract customers, but the product is still paramount. GM launched the Saturn brand, whose key differentiation was its customer centricity. And Saturn succeeded… at first. Saturn’s product line, however, fell behind the competition, so its sales declined. Today, Saturn no longer exists.

A tech-driven company that becomes customer-focused also risks losing its best engineers, who, by nature, are product-centric. Mercedes, for example, could offer cheap basic cars to attract younger customers, but how would Mercedes’ top engineers feel about their “luxury” company becoming mainstream? What will Mercedes do when BMW comes and hires them away? And how will the previous Mercedes customers feel, since they paid a high price for the “prestige”?

Then there’s the community. You might be satisfying your customers perfectly, but if you offend certain interest groups or incite the media, you could get into hot water. I don’t think any of BP’s customers were complaining about the quality of its oil or its service before the spill. And the people complaining about the MTV series “Skins” are probably not its fans.

Finally, if your competitors (another key stakeholder) are focused on serving the same customers or customer base, you might wind up with nearly identical products, which could lead to a damaging price war. In such industries, it might be more valuable to be competitor-centric.

6. Customer-centricity does have its uses – for some companies in some situations.

It’s what I say about all “best practices”: what works for one company at one time might not work for another company – or even the same company at a different time.

Dell, for example, was once extolled for its customer-centric policy of customizing all computers and cutting out middlemen. This worked for a while – until Dell found itself on the floor, flattened by Apple’s more appealing line and HP’s cheaper computers. Now Dell sells pre-configured computers through a number of major retailers. Customer-centricity has been replaced by business as usual.

Apple, in the meantime, disdains even basic customer research, and Apple customers are given only a few options. But last I checked, Apple  isn’t doing too poorly.

Customer-centricity works best for companies that offer large scale, complex, customized products that take a long time to implement. If you’re developing an IT system, designing a skyscraper, building an aircraft carrier, or crafting an ad campaign, it makes sense to put that client in the center of your universe – but for that one project only. The high margins on such products cover the costs of service, and in the case of aircraft carriers, that customer may be the only one that exists. And yet, it’s still important for these companies to keep their other stakeholders in mind.

7. An argument for brand centricity.

Some marketers push customer-centricity because marketing consulting involves catering to a handful of clients. It works for the marketers, so they think it will work for everyone.

The reality: you have many options to put in the center of your company, so select what’s appropriate, not what’s trendy. Restructuring a company is disruptive and expensive, and most companies can’t afford to say, “Oops, that didn’t work. Let’s go back to what we were doing.”

One way to play it safe is to put your brand in the center of all your efforts. If everything you do is for the sake of keeping your brand well-liked and well-respected, everyone is happy – except your competition.

But that’s a topic for another post – this one has already gone on for too long, and from what I hear, my customers don’t like that.

Related Articles:

• Relationship? Relationship?! Sorry, Corporations, Consumers Just Aren’t That Into You
• A Side Order of Spaghetti: Why Listening to Customers is Nothing New — or Even Necessary
• Marketing Mix-Up: Being Treated Like Lois Lane

"Dude, I don't care if the sheep's free - haggling is half the fun!" (photo by pmorgan via Wikimedia Commons)

What do charity organizations and most Web 2.0 companies have in common? None of them make a profit. (Apparently, someone convinced dotcoms that “free” was a viable business model.) But they all still have prices – just not in the traditional sense of numbers on a tag…

For instance, I once tried to convince a dotcom exec to create a strong brand for his company, complete with a distinctive personality, original look, and a little niche appeal. The exec asked me what value a strong brand offers, and I noted that it could command better prices. The exec’s response: “Our site is free, so that’s irrelevant.”

Not so fast, boss.

True, the company (a YouTube copycat) allowed consumers to view its videos freely, but this company had to pay much more to video producers than YouTube did. At the same time, the company was trying to sell advertising to sponsors. Above all, the company was looking to eventually sell itself to the highest bidder – the ultimate price for any venture.

And that’s just scratching the surface.

Here are a few prices that organizations and even individuals might have to contend with down the road. Perhaps you can think of a few more…

1. Price of Sponsorship. Media companies try to sell ads. Nonprofits try to sell sponsorships of special events or ads in commemorative programs. The stronger the brand, the more the organization can charge for those sponsorships. Some Web 2.0 companies enjoy tens of millions of visitors per month – more than most magazines or TV shows – yet struggle to attract significant ad dollars. Meanwhile, some highly regarded nonprofits (like certain universities) consistently attract high-paying donors (“how much to have that campus building named after me?”).
2. Price of Talent. Every organization competes for the best employees on the market. What you have to pay them is influenced by how much they want to work for you. In professional basketball, the Lakers and the Clippers would have to offer very different salaries to attract the same player. In the world of nonprofits, people will volunteer freely for a cause they love, with the best causes attracting the best volunteers.
3. Price of Investment: How much do you have to give investors for their money? If you’re a top brand, you give up a much smaller percentage of your company for each dollar they invest. (For publicly-traded companies, this is obviously represented by stock price.) If you’re a nonprofit or a candidate for public office, the amount you receive in contributions and what you have to promise in return are both influenced by the strength of your brand.
4. Price of Publicity: For top brands like Apple, scoring news coverage is effortless. Steve Jobs speaks, the media writes. Weaker brands need to spend much more on public relations, and might still never get covered by the major news outlets. This particularly applies to politicians and entertainers: the limelight goes to those the media deems most worthy.
5. Price of Customers: Even if you give your product away for free, it doesn’t mean customers will come. A strong brand generates additional traffic effortlessly. Case in point: most video websites are free, but while YouTube’s traffic has continued to grow, the YouTube wannabes are mostly flat or declining. Your brand also determines the type of customers you get — easy or high-maintenance, profitable or penny pinching.

So even if you think you’ve got the best product in the world or are serving the greatest cause of all, you still have to consider the price of everything. Including yourself. I know, the saying goes, “A cynic knows the price of everything, the value of nothing.” But entrepreneurs, philanthropists, careerists and social climbers should know all the above, and while they might not charge for their services, they should never sell themselves short.

All hail the legendary progenitor of social media! (Photo by Jason "FishSpeaker" Pratt via Wikimedia Commons)

For decades, professional procrastinators relied on communal hydration technologies (i.e. water coolers) to support their best practices. Unfortunately, that particular tool maxed out bladder capacities, and even the dullest middle managers quickly learned that employees chatting while holding little paper cups weren’t exactly doing “work.”

Fortunately, Silicon Valley came to the rescue…

In the early part of this century, our nation’s brightest technologists and venture capitalists invested thousands of hours and millions of dollars to meet the critical global need for mingling. Social media was born, and professional procrastinators could now elevate their indolence to all new levels. In one fell tweet, they could now kill time while engaging in an activity that vaguely looked like work.

This new technology, however, did not come without risks. As some unlucky procrastinators discovered, using social media improperly could accidentally create “value” for their organizations. When improperly applied, social media could develop relationships with customers and even generate revenue. Consequently, some procrastinators were assigned extra hours to maximize returns on social media, which defeated the purpose while making it feel like work.

To prevent further mishaps, the National Association of Professional Procrastinators (NAPP) has issued the following guidelines for Social Notworking… (Note for students and the self-employed: “parents” or “spouse” can be substituted for “boss” below.)

1. Eliminate all professional references from your profile: When you create an account on any social medium, avoid mentioning your company, title, or areas of expertise. Just use your name and an amateur smiling photo of yourself or your dog. This prevents the hassle of receiving actual business contacts.

2. Focus on accumulating fans, friends and followers: The actual number of followers you attract is completely meaningless unless you convert them into customers or collaborators. However, bosses are impressed by numbers, so focus on attracting tens of thousands of followers. On Twitter, that can be achieved by simply following tens of thousands of other people. When anyone asks if your social media efforts are effective, proudly boast your follower count, and strategically ignore any critical thinker who responds, “So what?”

3. Follow all the actual experts in your field: If you follow real journalists, executives and specialists, you will look like a serious student of the field. Of course, you don’t need to actually read what they say. For social notworking, the only posts that matter are those telling you where your favorite lunch truck is parked.

4. Permit yourself only small talk: Engage in the kind of chatter that you would never email to a potential customer, employer or business associate. For example, describe what you had for breakfast, complain about the weather, state the errands you plan to run after work, root for your favorite sports teams, and post inspiring quotations. This prevents serious business conversations from arising. Of particular procrastinatory value are unnecessary niceties and empty flattery. Consider the following exchange:

“Thanks for following me!”
“Well, thanks for linking to that great article!”
“You’re welcome! I’m glad you enjoyed it!”
“Of course, it was great!”
“And thank you for sharing my link!”
“The pleasure was mine!”
“CUL8R!”
“U2! Great tweeting you!”

While such exchanges appear vacuous, you can explain to your boss that they constitute “developing relationships.”

5. Participate in trends: In case you run out of small talk, social mediums conveniently provide suggestions known as “trends.” Most of these trends consist of the kind of celebrity gossip and rumor mill grist that you’d find on the cover of a supermarket tabloid. Most people can’t get away with reading a tabloid as “work,” but reading “trends” counts as “keeping up with the market.” On YouTube, trends take the form of the hot videos of the day. On Facebook, they consist of anything anyone posts, particularly if they involve cute animals or crowds of people spontaneously breaking into choreographed dance routines in public.

6. Share several articles per day: To convey expertise without doing any actual research or analysis, share every article you find that’s even tangentially related to your industry or field. The best faux-expertise articles consist of lists (“Top 10 this” and “5 Ways to do That”). On Twitter, you can easily accomplish this by retweeting the actual experts you’re following. (Retweeting, by the way, also helps build relationships even though it takes less effort than scratching your ear.) In addition, online publications have facilitated professional procrastination by including “share this” or “retweet” buttons below every article. Of course, don’t waste time actually reading these articles — needlessly reading tedious articles is for PhD students.

Extra credit: Services like bit.ly count the clickthroughs to articles you shared, providing one more number to impress your boss.

Given the ever evolving ways to leverage social media for procrastination, we’re only scratching the surface here. Other topics include “Jargon Slinging to Justify Your MBA,” “Repeating Common Sense to Fake Profundity,” and “Foursquare, Video Games and other Wastes of Time that Unfortunately Look Like Wastes of Time” — but we haven’t gotten around to them yet. We plan to… someday… but hey, have you seen this video yet?

This article originally appeared in The Antidote.

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• Relationship? Relationship?! Sorry, Corporations, Consumers Just Aren’t That Into You
• Hypocritical Mass: The Big Lie About Twitter
• Words Of, Uh, Wisdom: How To Score More Twitter Followers
• Notes For A Screenplay: If Real Life Were Like Twitter
• Not Weird Science: Social Media In One Word
• Kevin “Nalts” Nalty: The Stupidest Article About Social Media Ever

What's even harder to believe is that this show is already 17 years old.

The hardest part to believe about “Superman” isn’t that a man can fly with no physical means of propulsion. It’s that Lois Lane, a reporter, can’t tell that Superman and Clark Kent are the same guy because of a pair of glasses. (Perhaps she needed a pair of her own.)

Lois’ lack of, um, vision is captured in an episode of the TV series “Lois & Clark,” wherein the time traveler Tempus gives her the low-down…

Tempus: Um, Lois, did you know that, in the future, you’re revered at the same level as Superman? Why there are books about you, statues, an interactive game. You’re even a breakfast cereal.
Lois: Really?
Tempus: Yes. But, as much as everybody loves you, there is one question that keeps coming up: “How dumb was she?” Here, I’ll show you what I mean. Look…
[puts glasses on]
Tempus: I’m Clark Kent.
[takes glasses off]
Tempus: No, I’m Superman.
[puts glasses on]
Tempus: Mild-mannered reporter.
[takes glasses off]
Tempus: Superhero. Hello! Duh! Clark Kent is Superman. Ha, ha, ha. Well, that was worth the whole trip. To actually meet the most galactically stupid woman who ever lived.

Apparently, some self-proclaimed marketing experts think most people are Lois Lane. They try to make us think they’ve come up with some spectacularly new idea by slapping a disguise onto an old one. But in place of glasses, they use words.

For example, last year Forrester Research recommended renaming brand managers “brand advocates” to reflect their new responsibilities in a digital age, proving without a doubt that Forrester should stick to research. As a friend of mine commented, “Really, Forrester? Rhetoric fixes things?” For the privilege of reading this piece of jargon slinging, Forrester will charge you only $499.

And that’s really the whole point of these rhetorical acrobatics: selling books and articles, not advancing the field of marketing.

From P’s to C’s…

One of the most popular targets of the disguise game is the 4P’s of the marketing mix: product, price, place and promotion. Established 50 years ago, the 4P’s are the fundamental elements of a marketing plan. They are to marketing what running, passing, blocking and kicking are to football offenses.

The fact that the 4P’s are well established makes them a tempting target for fame seekers, who proclaim that the 4P’s are passé or misguided, and then — ta-daa! — unveil their own perfect substitute. Forrester includes its own 4P’s substitute in that $499 article. After all, what better way to attract attention and sell overpriced studies than to announce that you’ve upended the foundation of an entire field?

One of my students recently directed my attention to another substitute, “the 4C’s of marketing”, in that virtual tome of infinite flawed knowledge, Wikipedia. Supposedly focused on customers, the 4C’s consists of customer, cost, convenience and communication. Let’s dissect this presumptuous impostor, one C at a time, shall we?

Customer

To include customers in the marketing mix is to grossly misunderstand what a marketing mix is. The marketing mix consists of everything you can DO or CREATE in a marketing plan. In other words, the tactics. The customer is the TARGET of all that.  Putting customers in the marketing mix is like putting fans in the football playbook. Completely nonsensical.

Customers are also just ONE target of a marketing plan. A marketer needs to additionally consider the competition, its own company stakeholders (executives, investors, employees), and members of the community (the media, regulators, interest groups, potential collaborators). These are the 4C’s I teach — customers, competitors, company, and community — as a “Stakeholders Analysis” to help craft a smart marketing mix. It’s not a substitute.

Third, including customers in the marketing mix condescendingly implies that other marketers have never considered customers when crafting their plans. That’s not a C; that’s a bunch of B with a mighty big S.

Finally, by leaving product out of the equation, the 4C’s also leaves out packaging, ambiance, quality and all the other attributes that make a certain product or service attractive. Shall we tell Apple to ignore product innovation and design and just focus on meeting customer needs? That’s not only bad marketing, that’s bad business.

Next!

Cost

Instead of just the sticker price of the product, “cost” includes all the expenses incurred by the customer to acquire and own the product. That sounds considerate, but there are three problems with that.

First, different customers have different costs. For example, I live within walking distance of three supermarkets, so it costs me nothing in gasoline to buy my groceries. Somebody up in the Hollywood Hills has to drive each and every time. And what if one guy drives his hybrid to the market and the other takes his Hummer? How can you actually determine all those costs for all your customers? That could result in paralysis by analysis, and not lead to any solutions.

Second, certain acquisition costs are already factored into price, such as shipping-and-handling. “Cost” is not a substitute for “price” — it’s just a matter of depth and degree. How far do you want to take it? And if your product is virtually identical to your competitor’s product, and they’re both for sale in the same store (think bottled water), then acquisition and maintenance costs are not an issue — but price may be.

Third, there are many brilliant and complicated pricing strategies, from two-part tariffs to reference pricing to freemiums. To ignore those by focusing on costs is to leave half of your marketing tools at home.

Convenience

In the 4P’s, “place” refers to all the distribution tactics that you can implement. In other words, how do you get the product to the customer? “Convenience” asks you to consider how easy it is for the customer to get the product. That’s nothing new or innovative; that’s just isolating one attribute and declaring it a substitute. I’ve yet to encounter a company that doesn’t consider access issues for their customers. That’s just basic distribution planning — as it has been since the first farmers brought their goods to the central bazaar.

In addition, “convenience” is not the only aspect of distribution that customers care about. The image of the distribution outlet also matters. A luxury product will take a huge hit to its brand if it’s for sale at Walmart. Indeed, some customers won’t even set foot in a Walmart for any reason.

Other places offer unique advantages. Red Bull, for example, initially sold its energy drink in bars because that’s where customers are used to paying high prices for funny tasting beverages; because bars can make a glorified soft drink seem edgy, adult and sophisticated; because bars inspire experimentation and conversation; and because bars let you observe your customers consuming the product on the spot.

Place isn’t just about convenience. Indeed, in the case of Red Bull, the company initially made their product hard to get to increase its mystique and desirability.

Communication

Supposedly, “communication” is superior to promotion because it includes two-way conversations. This ignores the fact that promotion has always included two-way conversations as options, such as in-store demos or door-to-door proselytizing or telemarketing. Last I checked, telemarketing is not exactly a well-loved tactic.

Promotion also already incorporates social media and other wonders of communication, so why rename the category?

Third, using the term “communication” ignores that fact that not all customers want conversations or any kind of relationship with a company — many just want to buy their stuff and to be left alone.

Finally, there are effective promotional tactics that do not involve any two-way communications, such as public relations or SEO/SEM. To focus just on interactive promotions is to, again, leave half your tools at home.

Overall, this 4C’s is simply a variation of the 4P’s with an emphasis on some tactics over others — in other words, marketing planning as usual. Its most serious flaw is to list “customers” as a tactic, when they’re part of the overall consideration set. 4C’s? Meet deep six.

Mmmm, Conflict…

Over the years, I’ve seen other variations of the marketing mix, all guilty of misunderstanding, contrivance or incompleteness. There’s a reason the 4P’s have survived for 50 years: they cover all the bases, they’re logical, and their very simplicity is what makes them work.

Now we marketers love to disagree. After all, differentiation is what we do for a living. Just ask all the marketers you meet to define “marketing” or “brand,” and you won’t find two who agree.

I for one relish a good marketing debate. Some killer insights and creative strategies can evolve from a smart discussion. But when the disagreements center on simply twisting words around, then call me anti-semantic, but I won’t play along. Believing that mere wordplay is revolutionary would just be galactically stupid.

Related Article: “A Side Order of Spaghetti: Why Listening to Customers is Nothing New — or even Necessary.”

Just read an article by Brant Cooper entitled “Is social media worth your marketing dollars?” Most of the advice is fairly standard and could apply just as well to non-social media. But what made me say “hmmm” is Cooper’s definition of market segments:

“Market segments are comprised of like people, who share a common interest, who look to one another as a trusted reference and who have access to each other. If customer in California is just the same as a customer in New York, but they have no means to communicate, they are in separate segments.”

Now that makes uncommon sense — if your marketing goal is to go viral.

Now THAT is a segment. (photo by Steel City Hobbies via Creative Commons)

Up to this point, every definition of “market segment” I’ve ever read emphasizes common characteristics and accessibility, resulting in verticals such as “immigrants,” “college students” and “Steelers fans.” And, yes, you can certainly market to those groups.

What Cooper argues — and I agree — is that a potentially more rewarding segment is one that’s internally connected. In that light, Steelers fans make a great segment because they’re often chatting away on related forums, such as my fave Behind The Steel Curtain. So if you have something relevant to pitch, like a magazine of Steelers news, your message has the potential to spread among them.

Immigrants, on the other hand, are too broad of a segment, despite their numbers and clear needs. While many immigrants obviously communicate with each other, the segment as a whole is not interconnected, particularly in social media. Sending your message to a Korean immigrant in L.A. is not likely to result in it virally reaching a Russian immigrant in New York.

What this means for the marketer in the social media era is one more checkbox: In addition to asking the key segmentation questions — is this segment distinctive, accessible, measurable and profitable? — you now have to ask if it’s interconnected. If it’s not, you’ll probably have to use traditional mass media, like a TV commercial, to hopefully hit as many target customers as possible.

And for all the people calling themselves social media experts — and there are millions more of them every day — spending money on a TV ad would be a sin worse than (gasp) not having a Twitter account.

Related Article: Divide and Conquer: Segment Your Market without Pissing Anyone Off

Faux Sure!

Of course, you already know that Pringles aren’t really potato chips. One bite told you that. You just ate ‘em because they make good midnight munchies. And they come in that cool tube.

But the blogosphere buzzed when parent company Proctor & Gamble publicly proclaimed that Pringles aren’t entirely made from potatoes. In an attempt to save on snack taxes in Britain, the company noted that 58% of each Pringles chip consists of wheat and corn flour, fat, seasonings and something called “emulsifiers.” Unfortunately for P&G, not only did this confession fail to cut their taxes, it also undermined their Pringle brand worldwide.

Notes Advertising Age (subscription required to read):

The theory that all a company’s employees — not just its marketing department — help create the brand came into sharp focus last week, when an obscure tax ruling in the U.K. centered around the contention of Procter & Gamble Co. lawyers and finance people that Pringles aren’t potato crisps (chips, in U.S. parlance) made the brand the butt of jokes around the globe.

The lawyers and finance people were thinking strictly in terms of dollar signs (or, in this case, pounds — which is rather appropriate for junk food, no?), and not thinking of the much more valuable overall brand. And that’s most likely because they don’t have a great understanding of what “brand” means.

They’re not alone. I’ve met so-called “VP’s of Marketing” who didn’t understand what a brand is. In fact, I’ve yet to find two textbooks or two experts who agree on the definition, though the varied concepts are fundamentally the same, and the experts do agree on its importance.

So as another Cool Rules Pronto public service, here is a handy definition of “brand” that anyone should be able to grasp — even a lawyer:

A brand is your image, personality and reputation
rolled into one impression.

All entities have a brand: a company, a school, a non-profit organization, a government department, a sports team, a religion, a rock band, a politician, even you.

Indeed, one of the best ways to understand branding is to make it personal.

You can control parts of your own brand: your style, your attitude, your educational background and credentials. Other factors are more difficult to control: rumors about you, how others might judge you based on where you’re from or what you look like, or even what your close associates are doing.

Look, It Rubs Off!

Yes, you can build or damage your brand by association.

You might seek relationships with certain brands — or purchase certain products — because you admire them, you identify with them, and you want them to reflect on you. Top colleges sell a lot of T-shirts that way.

The converse is also true: Many people (including his old golfing buddy George Bush) stopped associating with Enron CEO Kenneth Lay after he was accused of crimes. Loyalty is only brand deep.

One company might have many faces to its brand.

Wal-Mart might be friendly to its customers, but it’s hard on its suppliers, and has been convicted of occasionally mistreating its workers. The brand you show professionally might be very different from what you show your family and what you show to your friends. Different people might regard a brand differently: some people love Wal-Mart and others think it’s evil; some people admire Sarah Palin while most think she’s an idiot; and your mother will likely treat you differently than your boss will, while your pets will always think you’re the greatest thing in the world.

Managing a company’s brand is the most important responsibility of the marketer — because even your CEO can stray. The CEO of Merrill Lynch was forced to resign after he spent $1.2 million to redecorate his office when financial institutions were begging for federal bailouts. His VP of Marketing should have said something to him long before that happened.

As the Pringles case demonstrates, all employees of a company can affect the brand, from the executive suite to the guys in the warehouse, so it’s important that they all understand it and protect it. Yes, managing a brand is hard work that requires both a global and local perspective, and almost 24/7 vigilance. But if done well, it’s well worth it…

What is the value of a brand?

• A strong brand enables you to charge higher prices than a similar competitive product.
• It enables you to attract the best customers and the best workers, and to retain their loyalty.
• It creates recognition and trust in a competitive and confusing marketplace.
• It makes investors more enthusiastic about you, and makes your stock worth more than a similar company with a weak brand.
• It makes the news media more eager to report on you.
• And it makes some consumers even willing to wear your logo on their clothes, their cars, or even their skin (as tattoos).

The Pringles brand is probably strong enough to withstand this little dent, but a few more shakeups, and these faux crisps could easily crumble.

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