It’s Only Marketing
Rich Meyer of New Media Marketing writes that Marketing is not rocket science. It’s nothing more than a process of identifying consumers’ problems and finding a way to communicate how your product or service solves it.
It’s Only Social Media
How about social media? Rick simplifies that too. He says that if it isn’t a repeatable process to make money, it’s just a hobby – and one of the biggest hobbies seems to be the obsession with social media marketing:
Can you walk into your pantry and honestly tell me that you want to have a social media relationship with any of the brands that are in there?
How does he support this?
According to Datamation.com, “For the most popular businesses on Facebook, those with more than a million “fans,” fewer than 3% of those fans are seeing the companies’ daily updates. In addition there’s no correlation between interactions with a customer and the likelihood that he or she will be “sticky” (go through with an intended purchase, purchase again, and recommend). Yet, most marketers behave as if there is a continuous linear relationship between the number of interactions and share of wallet. That’s why, as the Wall Street Journal recently reported, you see well-established retailers like Neiman-Marcus, Land’s End and Toys R Us sending customers over 300 emails annually.
It’s Only ROI
What Rich is saying is that social media has it’s purposes, but should not be confused with the basics of marketing – enhancing hard ROI metrics through a well integrated marketing strategy.
The findings of a study by the U.K.-based Fournaise Marketing Group drives this home. In its 2012 Global Marketing Effectiveness Program, it interviewed more than 1,200 CEOs and decision-makers in North America, Europe, Asia and Australia. The findings:
- 80% of CEOs don’t really trust and aren’t very impressed by the work done by marketers.
- In comparison, 90 percent of the same CEOs do trust and value the opinion and work of CFOs and CIOs.
What’s the problem?
- 80% of CEOs believe marketers are too disconnected from the short-, medium- and long-term financial realities of companies.
- 78% of them think marketers too often lose sight of what their real job is: to generate more customer demand for their products/services in a business-quantifiable and business-measurable way.
- 69% of B2C CEOs believe B2C marketers now live too much in a creative and social media bubble, and focus too much on such parameters as “likes,” “tweets,” “feeds” or “followers” – parameters they can’t really prove generate more business-quantifiable customer demand for their products/services, which these CEOs judge “interesting but not critical.”
For B2C CEOs, more customer demand means more products off the shelves, more sell-in, more sell-out, more sales volume, more sales revenue. For B2B CEOs and B2C CEOs in such prospect-driven industries as education and insurance, more customer demand means fueling more qualified or sales-ready prospects to the sales pipeline who can then be converted faster into actual revenue by sales forces.
It’s Only Technology
Of course, B2B marketers would respond that they are increasingly focused on the latest marketing technologies such as marketing automation, lead management and CRM to generate customer demand. Still, the CEOs are not impressed. Why?
- 71% of these CEOs believe that these tactics are still failing to deliver the level of incremental customer demand expected of them.
These CEOs feel marketers are too distracted and by the technological elements, and have forgotten that technology is only a support tool that does not create demand – only accurate strategies and campaigns for promoting product benefits, content and customer value propositions that generate results.
It’s Only Performance
But haven’t B2B and prospect-driven marketers focused more on performance indicators, such as prospect conversions and revenue? Yes, but the CEOs say that these marketers have lost sight that these are primarily sales force-related performance indicators, not customer demand-related indicators for which marketers have 100-percent control.
Study: Are the CEOs Right?
A Forrester Research report titled “The Purchase Path of Online Buyers In 2012″ analyzes conversion paths on 77,000 orders to determine what sources returned the most revenue.
Results: The data showed that the top performing sources were direct visits, organic search, paid search and email campaigns, but social media fell far behind the rest:
- Fewer than 1% of transactions are traced to social links.
The top sources of new customer transactions were:
- Direct visits: 20%
- Organic search: 16%
- Paid search: 11%
The top sources of existing customers (an area where many think social would shine) were:
- Direct visits: 20%
- Email: 13%
- Organic search: 6%.
What’s the Problem? Forrester suggests that the low numbers could be due to measurement periods required since a 30-day attribution model was used in this report, and company sizes. Social media has been known to have more dramatic results on SMB sales and this report lacks data from a small to midsize e-commerce site.
Overall customers viewed social media favorably, but use the medium as more of a discovery method than an acquisition method. Based on a survey from 2011:
- 48% of respondents think social media is a great way to discover products & brands.
- 40% of respondents think that social media is a great way to discover sales and promotions.
- But only 17% have bought something based on a friend’s post.
Getting Marketing Right
What are Marketers doing wrong? According to the CEOs surveyed, Marketers Just Don’t Get Key Marketing Metrics.
- CEOs want marketers to zoom in on a few critical key business performance indicators to precisely measure, quantify and report on the level of customer demand they are asked to deliver, instead of drowning everybody with data and analyses that are too remote from the P&L.
How To Become “ROI marketers”: CEOs say that too prove that they can be solid business generators, Marketers must Focus on tracking, reporting and boosting key marketing performance indicators, including:
- Market share
- Prospect volume
- Prospect quality rate
- Marketing effectiveness rate (percentage of marketing spending that directly generated prospects) or Marketing ROI (the correlation between spending and the gross profit generated from it).
- BizPM (business potential generated by marketing).
Jerome Fontaine, CEO & chief tracker at Fournaise says:
It’s not a game of data, but rather a game of the ‘right & relevant’ data for the right purpose and the right decision-making, with no fluff around. Marketers will have to understand that they need to start ‘cutting the rubbish’ if they are to earn the trust of CEOs and if they want to have a bigger impact in the boardroom. They will have to transform themselves into true business-driven ROI marketers or forever remain in what 65% of CEOs told us they call ‘marketing la-la land’.”
Social media has a place. But Marketers must acknowledge that the greatest looking Facebook page with high engagement does not necessarily lead to making money by selling products.
So If Marketing Isn’t Rocket Science, What Is It?
It’s a process of identifying consumers’ problems and finding effective, efficient and quantifiable ways to communicate how your product or service solves it. Marketers need to focus on bottom line results: selling products, and justify that they are getting results.