Strategy

Doug Hall is on to Something: End the Marketing Madness

As mentioned in a prior post, our recent affiliation with Salesby5 has sparked some intensive discussions around how to help companies in this economic meltdown be smarter with their marketing — thereby increasing sales results.  In prior posts, we’ve already covered some of the basics such as engaging in a marketing forensics assessment of both qualitative and quantitative indicators of a brand’s performance.  However, an emerging concern we’re seeing from both agencies and their clients is “….I (client) need to reduce my marketing budget by X%, but I don’t know where to start and what to cut…”

One of the marketing innovators that Salesby5 embraces is Doug Hall, founder of Eureka! Ranch.  As I was going through my collection of marketing resources this past week I decided to revisit one of Doug’s books “Meaningful Marketing” as this topic of budget management in a declining economy has been weighing heavy on my mind.  While we like to avoid being a book reviewer, there are a handful that we like and this is one of them (no, we’re not an Amazon affiliate nor are we compensated).  Here are some scary statistics to grab your attention:

* Failure rates of grocery products have increased from 46% in 1961 to 80% in 2002

* An estimated 90% of venture capital funded initiatives fail

* Advertising testing has found that 66% of television commercials are 100% ineffective at growing sales

So why do companies perpetuate the same approach over & over and expect different results?  Because the process is familiar. One of the key points Doug makes early in the book is ”….. hard data enhances reliability – statistical data, impartially analyzed, allows us to separate illusions from reality.”  We couldn’t agree more.

Doug also identifies three kinds of marketing: (which are you engaged in?)

(1) Meaningful Marketing – honesty, respecting your customer’s intelligence, engaging in intelligent dialogue, developing products that make a difference in your customers’ lives, and differentiated in such a way as to ensure profitability. FOCUS: Value.

(2) Mindless Marketing – uses sales & marketing tricks (to create impulse purchases) as opposed to actual virtues and merits of your offering to make the sale.  While easier to execute, it’s hypnotic effect is short lived;  as mindlessly as they became a customer they can leave you.  FOCUS: Price.

(3) Meaningless Marketing –  lacks the substance of Meaningful Marketing or the clever trickery of Mindless Marketing.   It neither creates/nurtures long-term success, nor provides short-term sales spark — its a death sentence of mediocrity.

We argue that perhaps part of the marketing forensics assessment that every brand should undertake is to assess its marketing philosophy:  Meaningful, Mindless, or Meaningless.  Why?  Because no amount of budget cuts (or price cuts) will impact sales if you’re focused on the wrong things.  If honest with themselves, many companies have fallen into Mindless Marketing — the never ending search for new marketing techniques that will provide a shortcut to success.  Why?  Because it’s driven by a lack of faith in a brand’s fundamental value, quality, and virtue.

One barometer of a company’s true brand value proposition can been seen in the scope and magnitude of its price discounting, and 2009 is a great year to watch this happen.  Price promotion is the most addictive form of creating short-term sales while destroying long-term brand value.  As mentioned in a prior post, Ferrari is the only auto manufacturer in the world with a two year waiting list for new cars and posting record profits — yet, its the most expensive brand in a category that is facing global softening of demand.   

Aside from picking up a copy of Doug’s book — you might ask yourself: Is 2009 the year to stick our heads in the sand and retain a tight grip on the failed marketing strategies of the past — or should we reinvent the company’s brand value proposition to improve profits now and as we emerge from the recession?  Take a look at his 100 data-proven truths (they’re only 1 page each) and begin to reflect upon application to your business — who knows, maybe with some effective implementation you won’t need to cut that 2010 marketing budget after all.

We’re here to help.

Tags: Brand Value Proposition, Meaningful Marketing