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Beyond Customer Driven Marketing
What seems like a minor shift in perspective can produce a major increase in marketing effectiveness.
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People are more informed. Informing people is no longer the problem. Getting it believed is. |
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People are more skeptical. They are quick to detect hype. They want less fluff and more substance. |
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While they don't expect much from marketing, they react quickly, strongly and very positively to the truth, especially if it contains negatives about the marketer's products. They greatly value salespeople and other sources of information that tell the truth, the whole truth, and nothing but the truth. They act on the recommendations of such sources, often with surprising rapidity. |
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They want more differentiated products. |
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Decisions are more complex. |
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There is more group decision making. |
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People play a variety of confusing roles in the group decision making process. There are many different types of decision makers and influencers: technical advisors, requesters, testers, prescribers, purchasing agents, end users, approvers, payers, experts, helpers, gadflies, spouses, friends. It is increasingly rare that only one person investigates the product, makes the decision and pays the bill. |
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New products are achieving higher awareness levels faster, but people are more reluctant to try products than ever before. |
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Customer loyalty is diminishing, but customer inertia is increasing. In other words, people will often stick with you not because they like you or your company, but because it is difficult to change. |
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Salespeople cannot get by on personality alone. They have to know their products, and the competitions' products cold. |
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There are an increasing number of highly technical products that simply cannot be sold by salespeople alone. |
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The use of ``non-traditional'' media, such as seminars, teleconferences, independent rating services, expert panels, monographs, computer simulations, will continue to increase. |
Let's look at what such a decision package looks like. Let me offer you at this point two tracks, to be most responsive and respectful to you, the reader. After all, you are my ``customer,'' for at least as long as you are reading this. Hopefully longer.
(1) A technical product: Since many of my clients are pharmaceutical and medical device companies, I feel that I should start with how to sell a new product to physicians. If you have a highly technical product, whether or not you are marketing ``to'' physicians, this is the track to concentrate on. Those of you not selling to physicians who are still reading this have more than a little imagination, so you will have no trouble making the necessary changes to apply it to your own highly technical products outside the health care field.
Keep in mind, however, that the pharmaceutical industry labors under some difficult and unique constraints. It is almost impossible to change the product directly. The decision maker is a prescriber, not the purchaser, but both are customers. The products directly effect the life and well-being of the customer. Marketers are severely constrained by the FDA in what they can, and cannot, say, even to the point of not being able to tell the truth about certain characteristics of almost every drug. Product success is often dependent on whether the patient uses the product properly (takes the medication, on schedule, for the full course of therapy). So, ``If you can make it there, you can make it anywhere.''
On the other hand, there are several things that make marketing easier. The decision-makers do not have to pay for the product. The decision-makers have a tremendous personal and professional interest in using new products. The decision-makers are smart. They want information. They spend a great deal of time seeking new information. A positive decision is highly leveraged, i.e., can influence many purchases.
(2) Consumer products: Let's take a high-ticket product, and a service.
(1) A NEW DRUG
You are coming out with a new drug in a major therapeutic category: an antibiotic, cardiovascular, anticancer or psychoactive drug.
It goes without saying (almost) that you should do your homework:
Since the way the Package Insert reads is of crucial importance, you have to know the lay of the land even before doing the studies.
What are physicians using now? What are their satisfactions and dissatisfactions? What are their felt needs? What are their hidden needs -- their obvious and hidden attitudes? Most importantly, but most often neglected: How will they be making their decisions? What are the criteria and their relative importance, what will they take for evidence, what will they be looking at, from whom, etc.?
You must not only look at FDA requirements, but also at the physicians' decision-making requirements and preferences. Some clinical and laboratory studies must be designed from the point of view of the decision maker -- against the drugs he is presently using, using measures he can understand, with patients similar to his.
The requirements of the FDA for scientifically establishing safety and efficacy are often different from the requirements of the practicing physician when he or she is looking at your new drug to see if it's ``better'' than the one already being used.
The necessary studies for decision making can usually be run at the same time as the studies required for approval.
This is not the place to go into an exhaustive analysis of the naÊve and unimaginative condition of clinical trials. But I want to stress a point, not only to the pharmaceutical industry. You are eventually going to be making claims that have to be backed up: You better make sure that they are not only the right claims but that the substantiation is driven by the decision maker's information preferences, rather than your convenience.
Before marketing the drug, test the materials with real physicians to see (1) what communicates and (2) what is persuasive.
Develop materials that recognize the different perspectives of the different decision makers. For instance, different physicians may be looking for:
Greater efficacy.
Lower side effects.
Greater patient compliance.
Greater cost effectiveness.
Greater specialist usage.
The one with the most scientific data.
The one with least legal risk.
The one that works in the hands of experts.
The one that works for the typical physician.
The one that will most impress the patient.
The same brochure may be able to address several of the above, but you will need different approaches for the sophisticated vs. the unsophisticated, the specialist vs. the generalist, the innovator vs. the traditionalist, the scientist vs. the pragmatist, the people-oriented vs. the technologically oriented, the inner city vs. the suburban, the large city vs. the rural, etc.
You are going to need several different communication channels. (See my paper ``How to Convince People To Adopt Your Product'' for a detailed analysis of the messages and media.) Some physicians love salespeople, some will not see them. Some read journals, some do not. Some go to meetings, others never go. Also, some learn best from audiotape, videotape, audio or video teleconferences with experts or peers.
Whatever the emphasis or the channels of communication, you need to come at it from the perspective of: How can I help these people make the best decision? How can I help them get what they want? How can I help them do better?
They will be trying to figure out exactly where the drug should and shouldn't be used. Where it might be best. How it compares with the alternatives. How to try it with the least risk. What to look for. How to evaluate their trials, how to apply it further.
Create an integrated system.
If you want to help them come to the best decision fast, you have to help them, not just hit them with a lot of facts, however well substantiated. You have to organize the material for them. You must chart the course of events and materials so that they get what they need, when they need it, in the form they need it, from the sources they need it. If your product is really better, the truth is on your side. So, the facts are on your side. Therefore, the evidence is on your side. If you organize and sequence the presentation of evidence right, people will sail through the decision. If your product is not superior, you need to augment it in one of the many ways so widely written about.
The first thing you have to do is make a compelling claim. It's been called the Unique Selling Proposition, the Big Idea, The Raison D'Etre, the Positioning Statement. It has to be sharply focused, and you only get to have one. Everything else is a variation of this one idea. However, it can't be so broad that it is meaningless. Very few products have a compelling case for use. I like to call it The Idea Behind the Product, or the Essence Of The Product, or the Product Identity. Take your pick.
Most products lack definition. The opposite of something that has definition is something that is a blur, or is in a fog. That's how most products are experienced to most people. [See the Club Med example later.]
This product positioning is what ad agencies try to create. Unfortunately, they are often the victims of their superb creativity. They often live in a world of their own creation and fall in love with their own ideas. Too often, they look, but don't see, they listen, but they don't hear and they identify but don't empathize.
Once you have the compelling claim, you have to develop an educational program around that claim. Let me quickly add that I mean an educational program in the best sense: exciting, fun to engage in, one where the pride of accomplishment can be experienced, one that is inspiring (yes, inspiring). One that does not look like traditional education or marketing. There aren't many analogies in either education or marketing. The best blend of the two is Sesame Street. In pharmaceuticals, a rare few of the seminars (most are deadly, if you'll excuse the pun), a rare few of the formulary (P & T) committee folders, and a rare few of the monographs, roundtables, tapes, etc., and, of course, most of my telephone conferences.
You have to develop a case for why someone should switch to your product. A case requires evidence and evidence requires substantiation.
Different physicians look to different places for substantiation. Some want experts to distill the information and give a considered opinion. Others want to see the scientific studies firsthand. Still others don't care what the studies at the large universities show, they only want to know whether the drug is working out in their peers' hands. You must cover all these bases, and more, to have materials that will be believed.
When you make your case, include an objective product comparison chart. This is often the single most powerful piece of material you can provide, since it goes to the heart of decision making. Make sure that you include your disadvantages and your competitors' advantages. Make sure the measures on the chart are in vivo, clinically relevant criteria. Also, make up another chart showing your features, their benefits and the implications (the so what?, the what-to-do).
It is astounding how many products do not make their case in a simple, coherent manner, with backup. Instead, they present the decision maker with a mishmash of unsubstantiated claims and bald assertions.
Then, you must make trial easy. Realize that trial usually takes place on refractory patients. Show physicians who to try it on, what to look for, how to handle side effects, what to tell the patient, how to interpret the results. Give guidelines. In short, write a guide to trying your drug.
Conduct field trials: keep track of actual results under practice conditions, and feed them back to the physicians. That is what the physicians are really concerned about.
Spread the word. There are dozens of specific ways to encourage word of mouth, yet very few are used. More about this in a future paper.
The Long and the Short of it.
There are two opposing forces destroying most product communication. (1) It has to be simple, terse. (2) It has to be long: complete, detailed, with alternate approaches, answering the lingering questions.
That's why, in the pharmaceutical industry, the detailing aids are often 10+ pages long, but are so simplistic that the physicians' eyes glaze over. What is needed is a set of organized materials: complete and well organized, but any given element is direct and simple -- just what the doctor ordered.
Do you think that customer driven marketing is naÊve and idealistic, especially in the pharmaceutical industry? Then you don't know about Merck. This is the pharmaceutical company that most approachs what I am advocating. Can you imagine a company that actually conducts seminars that devote much of their time to teaching physicians when not to use a drug, which of their competitors' drugs should be tried first, and how to detect and control adverse reactions? Where a salesperson who does not present the negatives about a drug as aggressively as the positives is reprimanded? That's Merck.
Conventional wisdom in the pharmaceutical industry says that sure, a company that has the leading drug in almost every category, a company that has the money of Merck can afford to be honest. I say that conventional wisdom has it backward: Merck is a consistent winner because they are committed to a customer orientation, not because a customer orientation is something they can afford as a luxury. Incidentally, they treat their suppliers as consultants, keeping them informed, working with them, acknowledging superior work, and paying their bills on time. It is also no accident that Merck is consistently voted the best company in the U.S. to work for as an employee.
In fairness, I have seen dozens of examples from other companies where a product manager developed an organized, integrated set of customer driven materials and events that pushed the product over the top. However, almost every marketing program I have seen has had major gaps that severely limit the rapid acceptance of the product. More often than not, these are easy to identify and fix.
Let's look at a consumer product that has lessons for all industries.
A HIGH TICKET CONSUMER PRODUCT: THE NORDIC TRACK
The NordicTrack exercise machine simulates cross country skiing. It has one of the best marketing programs I have ever seen. If you haven't seen their materials, I strongly suggest that you give them a call (their ads are in almost every magazine). They illustrate customer driven marketing almost perfectly.
They start by recognizing that different people might want an exercise machine for different reasons, but everyone wants efficient exercise. That is the Big Idea behind their product: Efficient exercise; more calories burned and more muscles exercised per unit time than any other activity. They seem to have identified the person who wants the machine for weight loss, general fitness and rehabilitation from an injury. Within the general fitness category, they seem to have identified several types of people: those who want more energy, a high efficiency workout, those who don't want to waste a lot of time, cross country skiers who can't get out skiing as much as they want, those who want cross training for other sports, older people who want to stay fit. Cutting across these categories are the unsuccessful dieters, the successful dieters who worry about gaining weight again, injured joggers (and people suffering from other injuries), people who lead busy lives, and people who have other exercise machines gathering dust. How do you sell to such a diverse group of people?
First, get them to make an inquiry. Different NordicTrack ads start off with a strong claim designed to catch the attention and arouse the curiosity of different types: ``Get off the diet roller coaster,'' ``More energy, less time.'' Not exactly award-winning headlines, but ones that make a compelling claim.
You then call an 800 number and reach a wonderful, friendly person who offers to send information and answer any questions. She asked me if I wanted a free video cassette, and what format recorder I have. She was much more ``real'' than almost anyone I would have met in a store. I received the information promptly. What information! Again, nothing that will win any awards -- just the most compellingly persuasive material I have ever seen. First, you get to meet the inventor of the NordicTrack and his daughter. You get to read the story of the invention of the machine and how his daughter won the intercollegiate cross-country ski championship twice by training on his machine.
The separate brochure is really several brochures split into several ``tracks'': information for the exerciser, the dieter and the health conscious. But more importantly, there is information for people with different information preferences. The scientifically-minded are informed by descriptions of university studies comparing calories burned with other exercisers including other ski machines. There is a page of testimonials from both experts and ordinary folks, broken down according to weight loss, rehabilitation, feeling good, etc. Every objection is addressed, including its size and portability: there is even a story about a chef who travels around the world giving cooking demonstrations, who claims that it is the only thing that allows him to maintain his weight! I doubt that anyone really reads more than a quarter of the brochure, but it is so well organized that they can skip to exactly what they want to know, making it almost custom-designed.
When you call them to ask questions, the person talks from experience and enthusiasm -- all their people, apparently, are NordicTrackers (they must be the healthiest company in the country). I wasn't sure whether to get the middle model or the high-end model. She patiently referred me to some pictures in the brochure, all the while maintaining that the cheapest model would do exactly what I want. She pointed out some adjustments that were possible with the high end model that I might appreciate later, but won't need immediately. Of course, I wanted the adjustments. She said that unless I was one of those people who liked precise measurements (she stressed that she wasn't), the middle and the high-end model were identical in adjustments and performance, except for two guages. When I told her I am a gadget lover, she said that she wouldn't pay an extra $100 for the two guages, but that if I would get motivation and pleasure from them, we were only talking about a few dollars a year over the life of the machine, but that I had to be the judge of something like that and that I would be happy with any decision I made. Of course, I could use it for 30 days and return it for another model (or a refund) in the unlikely chance that I wasn't satisfied. If I hadn't ordered then, she probably could have sold me a BMW!
Always, I had the feeling that she was trying to help me do the right thing, that she wanted me to experience the benefits of the machine that she believed in with near religious fervor. However, if I didn't want to buy, or wanted to think about it longer, she respected that decision.
When I said that I would like to order it, she said that their usual 10 day shipping policy could not be honored because of the unusual demands of the season (it was near Christmas). She gave me a realistic delivery (not shipping) date, and asked if I could live with that. I said yes and she repeated that it was worth waiting for. I did not receive the usual series of post cards that mail order firms send out announcing that their product is back ordered due to the popularity of the item. Instead, I received the electronic stopwatch and distance guage very quickly, with another confirmation of the approximate date I would receive the machine.
Not only did it come on time, it was intelligently packed and came with clear directions, with a small wrench to tighten a few bolts, in case a wrench was not handy. There was an 800 number attached in case I had trouble, with a promise that there were specially trained people at that number who could help me with the very simple assembly, who could even give me instruction on the correct motion, in case I had trouble ``getting the knack'' of cross country skiing. It came with a training program. These people definitely cared about whether I took it out of the box and used it properly.
I had two minor problems in the year I have been using it: one with an adjustment knob and one with the electronic stopwatch/speedometer. Both were handled courteously and expeditiously, no questions asked. I was even sent a rebate offer if I referred a friend who bought.
I can only think of a few things that would have improved the process. I was not sent a survey, or called, to find out if I were satisfied and if I could suggest any improvements. Also, if I were them, I would expand my line of accessories to include video tapes of beautiful cross country ski scenes for viewing while ``tracking'' (I often watch the travel channel when ``tracking,'' but it feels funny to cross country ski through Maui).
Incidentally, they are probably not doing much qualitative marketing research, since there are several obvious other themes that they could be emphasizing, which I think could increase their sales dramatically. They should certainly be doing focus groups of people who have just bought their machines, those who have had it a year, and those who have gotten the materials but who did not buy.
(2) ANOTHER CONSUMER EXAMPLE: THE CLUB MED
Unfortunately, this one is a negative example. They have a wonderful product. They even have a Big Idea, which they can state clearly: ``The Antidote for Civilization.'' Then their marketing falls apart. They sell it as if it's another resort, though they say that it is unlike any other resort, and they even say why. In fact, if you look at their beautiful brochures, you will think that they are selling typical luxury resorts. On the contrary, there is a central idea behind their resorts: that they deliberately and systematically remove unneeded (on a vacation) trappings and expectations of civilization that cause stress, and substitute a series of services and social mores that would not work in civilization, but are perfect for a vacation. Some of these things are alluded to in their brochures, but the basic message is lost. Their Winter/Spring 1989-90 brochure talks about ``What the Club Med Is.'' They talk about beautiful sites, villages, their unique staff concept (GO's), and the variety of activities offered. But unless you already know what they are talking about, the brochure might as well be about a Marriott resort. To people who understand what the Club Med is all about, their description is perfectly clear. However, their new prospects miss it all, because it is not explained clearly in fundamentals. They are preaching to the already converted.
My proof is that every time I go, I find myself talking with people who are furious, whose expectations were violated, who have no idea about the idea behind the Club Med. When I tell them the story behind the invention of the Club, and when I explain the reasons behind what the Club is trying to do there is a dramatic change of attitude. They not only see that the rules are not arbitrary, but that the strange practices have an important purpose. They usually see that dozens of things they were regarding as negatives, such as small rooms without phones and TVs, are actually well-thought-out benefits.
Further proof is that many of the Clubs are the best family resorts I have ever found, but they still have a reputation as being only for the ``swinging singles.''
What should a company like this do? They need to segment their markets much more clearly into singles, couples (older and younger) and family markets, probably with different resorts for each. They need to tell their story and, above all, they need to articulate their raison d'Etre, if they haven't forgotten it. They need to recognize that even within the three main segments, there are many different reasons to go on a vacation, and they have to address themselves to each, even at the risk of driving away many people who are not really suited for a Club Med vacation. By being clear and customer driven, they could again operate at near capacity. They need to have several different types of brochures. They need to have a price comparison with other resorts, showing how much money people would have to pay for separate food, sports, instruction, flights and child care. They need a travel agents' program that gets their idea across to agents who think they know all about the Clubs (after all, they've been there) but don't. They should talk about the Club Med experience, and make it almost into a movement toward the important things in life instead of on the superficial trappings.
Their past advertising was brilliant advertising for the general idea of a vacation, the need for relaxation and the need to get away from civilization -- it did not sell the Club. Their new campaign, which just broke, shows the diversity of people they serve and the variety of their activities. They explicitly state the theme of their advertising in a recent brochure to members. ``Our message: Club Med is the vacation of infinite possibilities for couples, families, singles, and sports enthusiasts of all ages.'' They have fallen into the versatility trap: He who tries to be all things to all people is nothing to anybody. They still fail to distinguish themselves from conventional luxury resorts.
I'll bet they have little trouble generating inquiries, but that they have a low closing rate and return rate. I'm sure that people have a high degree of curiosity about the Club Med, that travel agents don't satisfy and that the brochure does not satisfy. I can't tell you how many people tell me that they were there a few years ago, loved it, but just don't know why they never went back. The reason is that they don't have any idea why the Club Med was uniquely suited for them -- that their satisfaction was not a fluke. That it wasn't just ``well run,'' but that its unique characteristics were responsible for a great vacation, so they can count on being satisfied in the future.
Satisfaction comes from having your needs and expectations met or exceeded, from having your criteria met. If the criteria are fuzzy, you never really know what to make of your experience. The difference between a satisfied customer and a convert who keeps coming back is that the convert knows why he is satisfied, understands why the product is unique, and believes that the uniqueness will continue.
If you don't make clear why your product is superior, customers can't tell others clearly why they should use the product. All they can say is that they had a good time, that they were satisfied. So, most of the power in word of mouth opportunities are lost.
The moral is: Set up the expectations right, exceed the expectations in a way the customer understands, turn happy customers into converts, then turn the converts into evangelists.
Come to think of it, the Club Med needs an objective outsider, who loves their concept, to profile their customers and prospects, look at their promotional mix, figure out what is missing or has to be changed, sequence the materials and events, and sharpen their communication. As I think about it, I realize that I'm the perfect person for the assignment.
THE NEED FOR A NEW KIND OF MARKETING CONSULTANT
There is a need for consultants who bridge the gap between market research and the agencies who execute the marketing materials (ad agencies, promotion agencies, PR agencies, marketing communication companies). That is the responsibility of the product manager, but most product managers cannot and should not do it themselves. They should hire specialists who can be objective, who can afford to be non-political, who have been through 100+ product launches, who are experts in the psychology of product adoption and who are qualitative marketing research experts.
Think of it this way: When you build a house, you need someone between the surveyors and civil engineers who give you the lay of the land (analogous to the market researchers) and the contractors (analogous to the agencies who execute the plan). This person is called the architect. A good architect integrates the surveys, engineering, desires and other psychology of the client, availability of materials and cost constraints. He then comes up with a master plan that has structural and aesthetic integrity. He then gets it approved, makes mid-course corrections and then either manages the general contractor or lets the customer do it.
The advertising and marketing communications agencies are general contractors who at best have several conflicts of interest. Most people putting up a house would not dream of doing it without an architect standing between them and the contractors. You should not put together a marketing program without retaining an unbiased expert to coordinate its integrity, integration, strategic effectiveness and structural soundness. I call this process Persuasion Design. More about it in a future article.
I hope that this article has inspired you to steer beyond traditional image and slogan marketing, even beyond customer driven marketing, to navigate toward organized, customer empathic, quality marketing. Let me know what happens.
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