The Marketing Plaza

In the business world, one would assume that the concept of profit and loss is basic and easy to understand. Not true. The idea of profit is laced with subtleties.

In marketing, you first come across this when you encounter one of the famous 5 P’s — namely Price. You’re taught about price points not in terms of profit, but in terms of consumer appeal — what price will the market bear?

Profit becomes muddied in the real marketing world when you start working with a motivated sales force — motivated to create commissions. This can include selling products at a loss, or selling products that don’t have the highest profit margins, meet current company goals, or match the true growth potential for the company. I have sat through many a sales meeting where reps received public accolades for sales that I knew had not yet helped the company turn a profit. I knew, because the sales revenue had not covered marketing costs or even taken them into consideration and those costs were high.

I’m now reading the book Free by Chris Anderson, a business writer well worth following from his original book The Long Tail to today’s best seller. In it, he writes: “People are making lots of money charging nothing.” How, you ask? Well, that is the paradox of free in today’s world. As he goes on to write while discussing an historical example: “Free didn’t mean profitless. It just meant that the route from product to revenue was indirect, something that would become enshrined in the retail playbook as the concept of “loss leader.”

The real problem with profit and loss is that we’ve relegated it to our accountants, who literally take a literal look at it. It’s one of the main reasons that marketing people have such a difficult “sell” with accountants, and a reason why businesses should be supported but never led by accountants. Profit and loss are not easy concepts, short-term concepts, or as obvious as black and white. Today’s loss is tomorrow’s potential best-seller — that is if the business has vision, goals, an understanding of the product and what it will take to bring it into the public conscious. And bringing a product into the public conscious — well, that’s true marketing!

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Marketing is a verb.  Seth Godin points it out in his book Tribes, but the fact is any dictionary will tell you the same thing.  The point is that, as a verb, marketing is about doing something. 

As with anything in life, action creates reaction.  It's a basic law of physics that also applies to marketing. Not all marketing gets the reaction you want.  Some seems to fall on totally deaf ears, but in reality, may be softening a final sale. It's what makes marketing maddening.  Sometimes you can't prove beyond a shadow of a doubt what works, but you do know what doesn't.  Doing nothing doesn't work.  

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Where do PR and advertising fall in the Marketing Toolkit?  As with everything else these days, they are both evolving, and through Darwinian logic are becoming more assimilated in the Internet Age. Years ago, in the mass market era, marketing was advertising.  Then, PR became more popular and split as its own area of specialization replete with PR agencies separate from ad agencies.  If there was any early distinction it may have been that PR was for celebrities and advertising for products, but the Tylenol scare of 1986 clearly changed all that. Brand managers learned that PR had a big place to play in their marketing plans and not always just for crisis management.

PR continued to grow in stature as brand managers also learned that an item mentioned in a news article had more credibility than a straight ad.  Advertising agencies suddenly needed PR partners on the team. Then, team dynamics changed. Twelve years later, in 2002, advertising guru Al Reis and his daughter Laura Reis went so far as to espouse the death of advertising in their book The Fall of Advertising & The Rise of PR.

Today, I'd venture to say PR is advertising — almost direct mail advertising.   PR now targets specific customers rather than groups of customers. This is best discussed in David Meerman Scott's book The New Rules of Marketing & PR.

Unfortunately, most printing companies never latched on to the potential of PR even in the days when it was a relatively simple science.  They never hired staff or affiliated with freelancers with strong writing skills and never felt they had enough news to share with the world.  In today's world, where everything is about the latest news (newspaper woes aside), well done press releases now position forward-thinking businesses as experts in their field with news about topics rather than events or staff promotions. It's a way to get a message out to a public increasingly through Twitter, LinkedIn, e-mail messages directly to prospects and current customers, and a tiny little bit of pitching to the media (increasingly trade over mainstream). 

I don't know if I'd go so far as to say PR has grown up.  More accurately, it's probably experiencing its second childhood — taking the big boys to the teen playground of modern social media.

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Segmentation ain't what it used to be, but then again what is?  Years ago, you could send out a mass message and let interested customers step forward all on their own. Then, customers started getting more discerning and couldn't be counted on to step up front and center, also known as the death of mass marketing.  To counter, marketing geniuses went into military mode — using a divide and conquer strategy, but calling it demographic segmentation.  They divided customers into all sorts of buckets including women, men, teens, mothers, fathers, lovers — you name it.  We consumers were beat for awhile, but then we started homogenizing and women became motor cycle riders as much as men became cooks.  You just couldn't trust stereotypes any more.  What was a good marketer to do?

Instead of leading the horse (ahem to consumer) to water, marketing folk learned how to gather the flock and find people who wanted to follow a particular brand, message, or affiliation. If this sounds obscure, think blogs, networks and user groups — places where people naturally gather to learn about something they self-decide they want or need.

Enter the recession, and along with the digital age marketing folk — in desperate need for low cost way, effective ways of reaching interested parties — know that segmentation is no longer just a science, but a full blown necessity.  Here's a quote I recently came across from the Jan. 1 2009 issue of CFO magazine:

"In a time of limited resources, management has a desperate need to figure out is priorities.  Now is the time to segment your customers."  Larry Selden, Professor emeritus, Columbia University and co-author of the book Angel Customers, Demon Customers.

Segmentation by any other name is really prioritization — who to choose to talk to, when, and about what.  And, in a time when resources are tight, it's more important than ever to use your resources wisely and not waste time, money or effort on non-viable prospects.

In printing, we are familiar with the concept of waste.  In marketing, reaching beyond your market base is also called waste. If ther were ever a time to get tough on waste of all sorts, it's now. In marketing, you attack waste with sharp shooter targeting.  It is, after all, a war out there.

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What can you learn from a marketing campaign that misses the mark?  Plenty.

We invited two printing company CEOs who succeed at marketing to be part of an NAPL panel at the 2009 Top Management Conference in Tucson.  Both had won awards and we wanted them to share their knowledge and approach to marketing with the other attendees.  One of the panelists had won a total of four marketing awards — two gold and two silver.  I assumed he would discuss the gold awards.  Wrong.  He insisted he only wanted to discuss one of the silver awards and talk about why it didn't win a gold.

He started his discussion with "Let me tell you why this campaign didn't win a gold."  He went on to discuss how it was a great campaign, got the company entry into key decision makers at targeted companies, but didn't succeed largely due to timing (he was targeting retail just as the economy soured particularly for that sector).  But, he noted, the program worked on many levels and they are not abandoning it. Rather, they are fine tuning it in the coming year for other market segments.

Hazzah –  a CEO who realizes that marketing is not always perfect out of the gate and that we can all learn valuable lessons from failures as well as successes. Ironically, the panel followed a key note address by leadership guru David Ulrich in which Ulrich noted that all great leaders have experienced failure in their lives.  The distinguishing factor about a great leader is that he or she learns from the mistakes and goes on to even greater things. The famous example is always Abraham Lincoln, but I have a new hero — David Pitts, from Classic Graphics in North Carolina.  He's the guy on the panel who was determined to discuss lessons learned in missing the Gold.

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The word that is.  Recently I went on a printer's web site that claimed innovative service.  Well said, but was it believable?  Not if you looked at the rest of the web site surrounding the words. 

• The copy had been written for a long shelf life and had not been updated in a few years or months. 
• The pictures were pale (innovation would imply vibrancy to me), and the photos showed presses. Perhaps they were innovative presses, but from the customer's perspective, who can say?
• There were no innovative aps — pages flipping, audio files, video.
• There was no interactivity — not even one form to fill out, or "contact us" button — and those aren't really very interactive.

In short, the web site was nothing more than words on the screen, reflecting the printers penchant for putting words on paper, but little else.

So here's the question:  Who are you marketing to anyway?

If it's a potential customer (as one would hope), the word "innovative" has to reflect what it means in customers' minds and has to have some teeth behind it. Before you claim to be innovative, it would be nice to know exactly how the customer defines it, but you don't have any more time to wait. Start getting info from customers, but meanwhile — tomorrow — start updating your web site.  It's hard to claim "innovative" anything if you don't even have an innovative "skin", or web site.  It's a basic just like having a modern building with running water.  And, it doesn't have to cost you a small fortune.  Just like flat screen TVs, iPhones and all other technically wizardry, web programming and design has also become more affordable. Go get you some — technical wizardry that is.

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A news item from Cal Poly posted on WTT.com today states: "Cal Poly’s Graphic Communication Department is partnering with Goss International to revolutionize the printing industry by making it interactive."  The article goes on to discuss using print to provide codes that can be uploaded to mobile devices to create coupons and assist customers with obtaining special offers.  It's an "important step to ‘reinvent’ the value of print as a medium that expands reach and utility when combined with interactive technology such as handheld devices,” states the release.

That's good news, but begs the question: Hasn't print always been interactive? I would argue print's role hasn't changed, but the definition of "interactive" has.  Years ago, interactive meant a call to action in calling an 800 number and using a coupon code to get a special offer. Today, it means walking around with the coupon code in your mobile phone. Tomorow it may mean having the register scan your mobile phone for the coupon bar code and to do the debit transaction from your checking account.

And, in the end, isn't it all about marketing?  It's not a new concept that integrated marketing programs are the ones that work best. Integrated means using all medium at your disposal including (not excluding) print.  Every medium has its role in a well-thought out campaign.  The goal is to make sure that marketing people like me know where print fits and use it wisely and to their best advantage. Integrated in today's world just means "also interactive!" 

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Today I saw a banner ad on a web site that was borderline profound.  It said " Be Found Before They Start to Search," or something close to that. The message was simple.  The challenge is not about being found. It's about having customers who never look for anyone else but you.

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It’s the end of the year and a great time to look back on all things accomplished, particularly because it has been a difficult year. After all, it’s easier to get things done when times are good.  It’s exceptionally noteworthy if you can point to accomplishments during the lean times. 

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