No-one in business wants to spend any more than is absolutely necessary on marketing. At the same time, everyone in business wants to maximise sales and, ultimately, profitability. Sometimes, these objectives appear to conflict with the aim of reducing marketing and advertising expenditure. They may even be seen as a sure way of reducing sales.This is the fourth in a series of 5 thoughts examining this perceived conflict and outlining action that can be taken to reduce marketing and advertising expenditure without impacting sales.Behavioural economist, Dan Ariely undertook a study in which two groups of supermarket patrons were presented with a new display. As group one entered the store, they walked past the display with no-one looking at it. When group two entered the store they saw 6 people standing and looking at the display. Significantly more members of the second group stopped and looked at the display and many more of group two made an investment.
The fact is, people behave like sheep. This observation can be demonstrated by stopping in a mall, looking up into the air, and observing how many people follow your lead.
Consumers are sheep. The fact is, however, so are business people (who are also consumers). It is rare to see a business owner or marketing manager implement a strategy that is distinctly different to that of a competitor. That is why most motor vehicle campaigns look the same. That is why most real estate campaigns look the same. That is why most home building adverts look the same.
And yet, it is those with the courage to be different, like Steve Jobs and Elon Musk, who ultimately deliver the greatest success. They do this by focusing on their customers rather than their competitors. They have the courage to zig (on the basis of good data) when their competitors zag.
Amazon CEO, Jeff Bezos, recently noted – “If we can keep our competitors focused on us while we stay focused on the customer, ultimately, we’ll turn out alright.”
This policy is well demonstrated in the decision of Amazon to open 3000 ‘Amazon Go’ stores around the world over the next 12 months at a time when Amazon competitors are putting more and more of their focus into competing with Amazon online.
At a time when the market is zagging, Bezos and Amazon have the courage to zag – enabling his brand to address a very specific need in a very distinctive way. Such a strategy can be very effective, not just in generating sales, but also in reducing advertising cost. This strategy will help to deliver Amazon a strategic competitive advantage – an advantage that is 100% customer focused.
Put the customer at the forefront of the marketing strategy. Develop products with the customer and not the competitor in mind.
Have the courage to make decisions on the basis of the data and have the courage to zig while others zag – or better still zigging – no matter what the competitor is doing. Focus on your customer and not your competitor and you will be well placed to minimise marketing, in particular advertising costs.
Have the courage to zig when others zag.
SOURCES OF THIS WEEK’S STATISTICS
CNBC, ReachForce, Single Grain, Business Know How, DDE, The British Psychological Society, UDC Sauder, Small Business Trends, Quora, Business Town, Thrive-Hive, My Customer, TallyFy, The Daily Egg, Forbes and E-Star