Radically Proactive Marketing – The New Name of the Game


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Radically Proactive Marketing – The New Name of the Game

  1. 1. Radically Proactive Marketing – The New Name of the Game February |2011
  2. 2. Radically Proactive Marketing – The New Name of the GameThe old rules of the game - Advertising, shelf space, retail presence.The new rules of the game - Predictive models, one-to-one offers, outboundcampaigns.65% of product launches fail. That’s means that the millions of hours and millionsof dollars in resources invested into developing two out of every three products isa complete waste. Visit an electronics store, a bank, or a telecom dealer, and oddsare that two-thirds of the products and services you see there won’t be aroundthe next time you visit. Rather sad, but rather avoidable as well.Poor planning and lack of truly understanding what the marketplace desires aresome of the root causes of such failures. But an overall inability to move suchproducts and services falls on marketing and sales. The passive culture thatpermeates within these two groups – particularly in marketing – is inexcusable.For too long, marketing teams have been allowed to pass the buck, by blamingsales teams, by blaming executive management, by blaming anyone butthemselves for the failure of a given product or service to sell.In actuality, no one but marketing is to blame. A passive attitude whereby salesare somehow mythically driven by just increasing advertising or retail presencedoesn’t cut it anymore. It’s time that marketing teams make a radical shift to theworld of proactive marketing.Proactive marketing, in all aspects, is the opposite of what’s done today by mostcompanies in B2C sectors. Anything and everything around selling more tocustomers, making them more loyal, or even acquiring them is done on a one-to-one level, never on a mass-scale – be it in the form of individual offers,customized products and services, or outbound contacts , it’s about winningcustomers over one-by-one. It’s done below-the-line, it’s personalized, and it’srelevant – again, all characteristics that are radically different than business asusual.Proactive marketing is not, however, an end-all solution. It does not mean an endto traditional marketing; rather, it’s a complementary effort. It’s the extra pushthat gives companies the edge against their competitors, it’s the little bit morethat makes or breaks a product or service, a relationship, a company.Companies ready to take the leap and begin their own proactive marketing effortsneed to follow a set of steps to build the base for conducting such activities, stepsthat can be summarized as follows:1. Get to Know Each Customer: The first step is to truly understand thedifferences among the customer base, with each customer having his or her ownset of behaviors and needs, not to mention potential value. The goal here is to
  3. 3. take the mass base of customers and at least segment them into several dozenactionable groups.Some of the key factors that help define and differentiate these groups arearound demographics (age, nationality, gender), product usage (recency,frequency), spend (existing, potential), and needs (in terms of products andservices). Companies in certain sectors traditionally have such data on hand (i.e.telecoms and banks), others need to build mechanisms for getting it (i.e. retailersthrough loyalty programs).2. Build the Offers: Proactive marketing in its essence is sales, by making arelevant offer to the right person at the right time. Based on the defined targetgroups, products and services that are relevant to them must be identified, andoffers developed around driving uptake. It is critical that the offers be relevant,otherwise, it’s no different than business as usual – trying to sell ice to an Eskimoas the saying goes.Not only should the offer be relevant, but there should be an additionalenticement for the customer to pull the trigger. A couple examples of smart andrelevant offers with enticing additional benefits should make this clear:Financial ServicesScenario: Mary Smith is one of our credit card subscribers, but does not have hersalary deposited into our bank. Rather, she pays her credit card statementthrough another bank.Objective: To get her to open a checking account and have her salary depositedwith us each month rather than have her keep her savings elsewhere.Behavior: An analysis of Mary’s credit card usage behavior shows that she makesnumerous airline ticket purchases every quarter, and spends a great bit overseas.Mary also spends the rewards points she earns from using the card, which sheearns on a “one point to one dollar” ratio.Customized Offer, via Phone: Mrs. Smith, if you set up a checking account withour bank and make automatic salary payments into it each month, instead of onepoint for every dollar, you will instead earn two points for every dollar you spendon your credit card for all airline ticket purchases and overseas spend – a benefityou will enjoy as long as automatic salary payments are made each month.Electronics RetailerScenario: Bill Reynolds bought an HP laptop three years ago from us, a transactionrecorded via the fact he used his loyalty card when he made the purchase.Objective: To get him to buy his next laptop with us, as analysis of similarcustomers has shown that it’s now time for him to replace his old one.
  4. 4. Behavior: Bill is an iPhone junkie. He bought two iPhone 3Gs from us the week itcame out, and one iPhone 4 from us the week it came out as well.Customized Offer, via SMS: Exclusive for you, buy an HP laptop from any of ourstores this week, get $50 off your next iPhone purchase (iPhone 4 or next year’siPhone 5).TelecomScenario: John Doe used to top up on average $50 a month each of the prior 18months – the last 6 months he has been averaging $20.Objective: To get John back up to $40 or $50 spend per month.Behavior: The decline in spend has come from a complete cut-off of internationalcalls – John used to call the UK and would generate us $20 - $30 in revenues eachmonth from this behavior. His current revenues are comprised of data and localminutes usage.Customized Offer, via SMS: A special offer just for you – top up $50 within thenext week, enjoy half price calls to the UK for one month afterwards.It cannot be stressed enough that for every offer that is designed, a solid businesscase must be built, in order to ensure the effort makes sense financially. In theabove scenarios, it is assumed as such. Ultimately, any effort that generatesrevenue that normally would not have been realized (regardless of dip in grossmargin) is an effort worth undertaking (assuming all else is equal, such that theactions are not offered to the masses and are targeted, are not made to thewrong customers, etc.).3. Pick the Channel: There are many channels that can be used for reaching outto customers. Each has a different effectiveness rate based on the offer to bemade, and obviously each has a different cost associated with it. In certain cases,making calls will make sense, in others, sending an SMS. Other alternatives suchas email, mailer, and auto-dialer also can be used.We recommend companies play around with this aspect of proactive marketing,mixing and matching offers to various channels, to determine the best blend ofchannel usage. Small-scale pilots with different customer segments, offers, andchannels will get the job done here.4. Gain Momentum: As daunting as it may seem to get the whole effort up andrunning, it has to start somewhere, and we recommend it start small. Pick acouple of hundred customers to be contacted with one or two offers to beginbuilding momentum, to gain some visibility across the business. Successes shouldbe shared, failures learned from, modifications made as needed. The truly hardpart around shifting to a proactive marketing mode is getting the first three steps
  5. 5. listed above completed, yet it’s often this step where things fail. Building upsuccess by success should help ensure a full-scale rollout is ensured.In this day and age when competition is fiercer than ever, margins are down, andcustomer expectations are sky-high, companies need to find an edge, that extraadvantage against their competitors. We are confident they can find it inproactive marketing, a practice that will proliferate across companies and sectorsover the coming years.
  6. 6. About Forte Consultancy GroupForte Consultancy Group delivers fact-based solutions, balancing short and long termimpact as well as benefits for stakeholders. Forte Consultancy Group provides a varietyof service offerings for numerous sectors, approached in three general phases –intelligence, design and implementation. For more information, please contact info@forteconsultancy.com Forte Consultancy Group | Istanbul Office www.forteconsultancy.com