Strategy’s role in a downturn
(The following first appeared in the Just Enough Strategy series of technology marketing essays in 2003 that can be downloaded here. It seems eerily appropriate today.)
The panic doesn’t usually creep into their voices until we’re nearly done with the coffee.
“I know strategy is important,” the colleague will say to me as we wrap up. “But I can’t spend a lot of time or effort on marketing strategy. I need to do stuff that will generate sales today.”
I’ll nod sagely. And hope he doesn’t waste too much money on misdirected marketing tactics, confusing any motion with forward motion.
Strategy has gotten a bad rap as the tech economy has soured. In part, this is the fault of some direct marketing consultants, Web designers, PR firms, and ad agencies who charged inflated prices for meaningless “marketing strategies” during the boom times as a way to add margin to their basic services.
But marketing is needed to create demand that sales then fulfills. And a marketing strategy is nothing more than a disciplined approach that focuses demand creation efforts. Indeed, as I’d have liked to have told many colleagues over coffee, in a down economy you need focus more, not less, so every dollar spent is well spent.
So how to make marketing strategy fast and fashionable again? Start by demystifying it. A good way is to begin thinking of spelling the word “strategy” with three Cs:
Who are your firm’s target customers? Most companies think they know, but it’s not enough to say “Fortune 1000 firms” (or, God forbid, “anyone with a computer”). What title do individuals you’re targeting at these companies have? In many cases, the “customer” really is two people — a user and a purchaser (in education, for example, the teacher is the user, but the P.O. may be issued by a curriculum administrator).
Now boil down, briefly in writing, what motivates them: Why do they buy what they buy, why do they avoid certain products, and what larger forces in their industry or company may influence their decisions? Past sales call results and trade Web sites can provide clues.
Who are your firm’s top competitors — really? Not the firms that you think you compete against, but your competition from your customers’ perspective.
You may think they’re one and the same. But let’s say that at home you have a ripped couch. Upholsterers and furniture manufacturers think they’re competing for your business. But from your perspective, so may sewing needle and duct tape firms.
Pick up the phone and do a soft sounding of some of your best customers, asking them who they think your competition is.
The third “C” is the course — the strategic marketing direction. Once you better describe who your target customers and primary competitors are, defining your course is much simpler.
You’ve already developed touchstones that can provide a reality check on whether any marketing or sales tactic fits inside those boundaries.
Tempted, for example, to exhibit at a local tech event just for the exposure? If that tactic doesn’t draw or influence a target audience, commit those resources elsewhere.
Of course, if you have time to do the traditional market analysis, SWOT analysis, competitive analysis, target audience identification, key features/benefits grid, positioning statement, and functional strategies of advertising, collateral, distribution, public relations, packaging, pricing, and promotion — by all means do them.
But you shouldn’t embark on any marketing tactics without, at the very least, a firm understanding of the three Cs and how they define a rudimentary marketing strategy.
Anything else could spell, well, disaster.