Marketing in a data/digital world
Does the game change?
A 1,000 word article is too small to explain the significant challenges one faces in a digital world. That’s why my colleague (Brian Almeida) and I wrote a book called Marketing in a data/digital world (available on Amazon). This was a book aimed at millennials in charge of start-ups and some of the older generation, already in marketing, who would face the challenge of the era of volatility, uncertainty, complexity and ambiguity (VUCA) and digital. era – all at the same time!
However, I write some thoughts based on the issues raised by Mr. Jaishanker, the consultant, which I use as a guideline for this article. Although Mr. Jaishanker and I had a connection through IMC-India, for many years, it was only a few months ago that we met physically and had a very pleasant interaction. This note is an extension of that lunch conversation.
What is my reaction to Peter Drucker’s quote: “The purpose of marketing is to make selling redundant.”
I have to admit that I am an old world trader. I believe we can continue to tweak, expand and refine – but the basics don’t change. Sales is part of marketing. The focus on the sales function may diminish with the evolution of the digital world and the use of technology. But sales will remain strong and we will never be able to completely cancel sales, which will remain in the marketing mix.
Marketing has undergone a revolution since the days of the 4 Ps
Maybe it was a slower “evolution” to begin with. More recently, it has come close to a “revolution”. We all know that we have been through the period of the 4 Ps of Marketing (McCarthy).
Marketers could improve the suitability of their product/service to meet customer needs by adjusting 4 parameters – product, price, physical distribution and promotion. Later two more P’s were added – People , which play a role in defining the matrix and creating effective messages; and Policy, that impact business relationships within countries and even locally.
In the 1990s, the focus shifted from product and service to the customer – and Robert Lauterborn of the University of North Carolina, USA, proposed the 4Cs matrix – Consumer wants/needs; Cost to be met; convenience of purchase; Communication.
The customer has become the primary driver of product-related decisions, while the advent of online marketing has reinforced the validity of the 4Cs – communication and shopping convenience metrics have been most affected.
Now, digital ads are both more relevant and cost-effective than mass media advertising. And we know what happened to shopping convenience with Amazon, Flipkart, BigBasket and others leading the way.
In the 2000s, the Marketing Manual describes the 4Rs of marketing that relate to the age of the Internet – Relevance; Answer; Love relationship; To return to.
Professor V Kumar in the United States is the torch bearer of what we now call “engagement marketing” (EM). He says this technique will define a business for the next five years. Commitment is the total value delivered by your customer over the next three years. This theory evolved from the notions of transactional and relational marketing. EM also uses customer lifetime value, which is the net present value of the customer’s future cash flows.
In the casual dining category, fully engaged customers make 56% more visits per month than those who are disengaged. In the electronics industry, engaged customers make 44% more visits per year and spend $84 more than those who are disengaged.
A while ago, I saw a clothing manufacturer analyze data from those who had purchased shirts during a special sale. Then they sent out a general promotion for the new blue blazers they had developed. The answer was 9%! A month later, they emailed only those who had purchased blue shirts. The answer was 35%. This is a simple example of how data is now used!
The shoe shiner at the VT station has taken data collection to its simplest level. He sees the passing crowds. He taps on his box to make a sound only when he sees a passenger wearing leather shoes. He ignores the others (the vast majority who wear sandals, sneakers, and canvas shoes). He is compiling data and making a selection of the target audience confidently while sitting in front of his shoebox.
A frequently asked question is how the marketing function has helped address the business challenges facing businesses in the pandemic era.
I can only tell you that a large part of my consulting business has collapsed. Certainly, companies needed guidance on what to do in such a crisis, but they also wanted to save every penny in this environment. So, pay to consult? Not at all!
My son ran an event management company in Bangalore. With the pandemic, there were no conferences, seminars, weddings or exhibitions. Business has come to an abrupt halt!
But when you walk around the city, you find that many restaurants have launched door-to-door delivery services. The shoe shiner at Chembur station now offers door-to-door service. My wife buys all of her grocery needs from BigBasket (BB) – and BB has also gone beyond selling groceries to selling bathroom brushes and other non-consumables. Of course, there are those who couldn’t change the 6Ps – and either shut down or have the financial capacity to wait out the outbreak.
You will also see the number of online training courses advertised. These are higher education institutions and universities with foreign collaboration, which broadcast large advertisements in the media. But you will have to look very closely at the address and find it somewhere in Gurgaon or Telangana. The high visibility of Byjus and Bennett – these are examples of products of this epidemic.
Are companies improving their customer relationship as they go digital?
The answer is yes and no!
Very often, companies think that technology will solve all their problems. This will not be the case. When I phone my resort company I am connected to a voice and then I have to press 2 , then 3 , then 4. And then the agent is busy. Please hold on. But there is music, to keep you busy. After going through the process three times, I give up!
Also, every time I call, I have to explain the problem to a different person…for the third time?? This happens with my bank, with my insurance company and many other situations. Working in a “PhyDigital” world can also be very painful.
I’m sure we’ll overcome these issues as we go along, but as Unilever Chairman Sanjay Mehta says, we’re now moving from a VUCA world to a BANI world – Brittle, Anxious, Non-Linear, Incomprehensible!
The number of start-ups in India is among the highest in the world. Will they all succeed?
Not really. They say about 40% of start-ups fail and close in the second year. There are those who become unicorns – and quite quickly. A recent example is SportswearIPO. JThey are the ones who have truly identified a market need/desire – and developed an appropriate product – and ALSO built a management team that combines all the talents necessary for a successful business. (as Narayan Murthy did when starting Infosys) and not just on one aspect – superior technology (which is what most startups fail to do)!
These are random reflections on aspects of marketing that will always be based on the foundation of the 4 Rs and will therefore be able to manage the challenges of VUCA and now BANI in our complex environment.
My friend Hermawan Kartaja, the marketing guru in Indonesia, in his latest book – Marketing 5.0 – says
Data-driven marketing will have to make smart use of a mix of predictive marketing; contextual marketing; Augmented Marketing
This could well be the subject of another article!