Manage Risk. Maximize Results.
As every savvy financial investor knows, managing risk is imperative for success. In advertising and marketing, risk management plays an equally important role. It helps those involved in the strategic and creative sides of the discipline work more closely together, quickly dismiss ideas that are doomed to fail, and develop powerful, effective communications that strike hard at their targets.
One way to manage risk in advertising and marketing is to subscribe to a tried-and-true "methodology." This type of process allows you to learn from the successes (and mistakes) of those who have gone before you. What follows is one such successful methodology, one whose tenets have helped me tremendously. I hope you find them helpful in your work, too.
1. Establishing goals.
When a race has no finish line, it's called a chase.
Running without knowing where you're going can be exhausting. It's an endless effort devoted to reaching a destination that has not been clearly defined. It is a prescription for failure.
Whether in life or in business, setting goals is important to your success. In the case of marketing and advertising, it's more than just important - it is critical. Although goal setting sounds simple, the task often becomes clouded and without focus. In fact, goals are sometimes dismissed altogether.
Clearly, this is a mistake. It starts with Senior Management.
Where are we going and how do we get there are the two essential questions that must be asked, answered, and agreed upon by the executive team at your company. It is necessary for senior management to clearly articulate and outline goals for everyone to follow. Why is senior management so important? Because without their buy-in and support, a negative domino effect may take place, resulting in weak organizational support, unrealistic budgets, fragmented results - and ultimately, failure.
Start by asking yourself and management exactly what do we want and need to accomplish? You'll probably find that each member of the executive team will have different goals. However, to create an effective program, it is necessary to narrow the focus and underscore the key goals and objectives to be achieved.
Naturally, goals and objectives vary. For example, they range from increasing sales volume and revenue to heightened awareness and branding. Write the goals down and engrave them in stone. If your goal or destination changes, it will affect your strategy or road map.
As long as you know where you're going, you can find a way to get there.
2. Research and analysis.
Why guess when you can ask?
Advertising decisions are too often made in a vacuum. If you consider that information is power, then why not acquire the information that can help take the risk out of your marketing decisions? In other words, perform secondary and primary research.
Gathering secondary information.
Seek out objective studies that provide both quantifiable and qualitative information about your market. Often, trade magazines hire outside research firms to perform independent studies. Talk with editors and publishers - after all, they specialize in news and information directly related to your industry. They know who's who and what's new. Also, trade organizations can be warehouses of information. And don't forget the Internet. Article upon article about your industry are likely to be found on the Web.
In this information gathering process, take a good look at your competition. Who are the leaders and how are they positioning themselves to your target? What's their share of the market and even their advertising spending levels? After all, you're fighting for your prospect's attention and need to know who's speaking the loudest in your marketplace. In essence, there's a battle going on for your customer's share-of-wallet. Information on your competition can only strengthen your ability to make sound decisions.
If you or an associate don't have the time to gather information, look to companies that specialize in this type of desk research.
Let's face it. The most important information that can help create successful advertising will come from the people who actually buy your products and services. Start with your customers. By speaking with as few as 15 to 35 people, you'll gain invaluable information that will help you chart your course. Ask them for their perception of your products and services. Find out what benefits and features are most important to them.
Understand your customers on an emotional level. What are their frustrations, fears, needs and desires? What are their media preferences? Also, consider hiring an outside firm to interview your customers, one-on-one for truly unbiased answers. Often, customers are like friends: they don't want to hurt your feelings, but they'll gladly talk behind your back.
It's the prospects that count.
Understanding your current customers is important, but understanding what will motivate your prospects to become customers is golden. After all, isn't the goal of advertising to persuade and motivate? Again, 15 to 35 one-on-one interviews can be sufficient in gathering this important information. It's surprising to note how often what is important to the prospects is overlooked by the advertiser.
It's all in the questions.
When interviewing clients and prospects, the purpose is to better understand the benefits of greatest importance to them. When developing your questionnaire, keep in mind the interview can range from a half hour to an hour. What follows are a few examples of questions that can be asked. Because most of the questions are open-ended, it's best to limit the total number to 12 - 15.
- What is your decision making process when buying similar products or services?
- What is your perception of ABC company?
- When you think of "X" product or service, which companies come to mind?
- What are the key benefits and features you are looking to obtain?
- What challenges are you currently facing?
At the end of the interview process, it helps to ask respondents to rank benefits from most important to least important, on a scale of 1 to 10. You'll find the ranking technique to be particularly valuable in determining consistencies between respondents.
Ultimately, to achieve the kinds of positive results that are required, you must uncover those benefits that have the power to motivate and persuade your target. Generally speaking, you should look for the three most important benefits.
3. The power of brand identity.
What is "brand identity"? Think of it as describing a friend to an acquaintance - a friend they haven't met. You have the opportunity to set the stage for your acquaintance's expectations. You may describe your friend as a tall person who's warm and outgoing, a good listener and an excellent tennis player. When they meet, your acquaintance's expectations are set. Let's hope your friend lives up to your description.
A brand is made up of three components:
- The foundation of the brand is its core competency - the organization's special talent.
- The variety of benefits and features offered to its consumer.
- The company's personality.
When combined, these three elements make up the brand identity of an organization. In this model, while the benefits and features may change to suit a particular target market, the core competency and the personality remain constant.
For example, think of Intel® - the well-known computer microprocessor company.
- Core competency: performance enhancement.
- Benefits and features: a host of solutions that enable e-businesses, extensive industry support, and a broad range of system configurations, etc.
- Personality: Innovative, reliable, and powerful.
As you move through the advertising process, it's important to articulate your brand identity. It will act as a guide in helping shape your communications efforts. After all, each and every one of your efforts should strengthen your company's brand identity.
4. What's your position?
Now that brand identity has been articulated, it's time to be proactive and develop positioning. Simply put, "positioning" is the process that determines how a customer or prospect thinks of a company, its products and its services. It's important to be proactive and tell the target market exactly how you want them to think of a particular company, product or service.
To articulate a position, you should ask yourself seven basic questions:
- What business are we in?
- What market(s) do we serve?
- What are our customers' special needs?
- Who is our competition?
- What makes us different from our competitors?
- What benefits do clients derive from our services?
- How can we get everyone in our company to tell the same story?
Once these simple questions are answered, a positioning line can be written. Some examples of positioning in the consumer's mind are:
- McDonalds®: The family-oriented restaurant where I can be assured of a quick, consistently good meal.
- Nordstrom®: The high quality fashion retailer I can trust to receive impeccable customer service.
- Federal Express®: The convenient, global shipper that will get my package to its destination on time, every time.
5. Let's talk strategy.
Now that secondary information and client and prospect interviews have been analyzed, it is time to think strategically. If the goal is the end-point or destination, then the strategy serves as the logistics or road map to get there. Naturally, every tactic - whether print advertising, direct mail, e-marketing, etc. - must be examined against the strategy to gauge its validity. In other words, if the tactic doesn't fit the strategy, it doesn't belong in the plan.
An example of an interesting strategy is that of Intel®. For the most part, we don't go to the store and buy a microprocessor for our computer. Yet, Intel is a household brand. They've told us over and over that unless your computer has "Intel Inside" it is not as fast and powerful as it could be.
You can credit this to the Intel Inside® Program, which was launched in 1991. The program represented the first time a PC component manufacturer successfully communicated directly to computer buyers. Today, the Intel Inside Program is one of the world's largest co-operative marketing programs, supported by some 1,000 PC makers licensed to use the Intel Inside logos.
6. So, what's the plan?
When it comes to creating awareness for a company's product or service, it's hard to beat advertising. The concept is simple - send a message to as many people as possible, as often as possible. However, without a well-constructed, well thought-out media plan you may be wasting a considerable portion of your budget.
Saturate, sustain, and stand out.
As with all winning campaigns, thoroughly understanding the target market's information-gathering habits is crucial. Choosing the right media requires thoughtful strategizing, tireless planning, and savvy negotiation skills. When all is said and done, advertising is about reaching as many consumers as possible as many times as possible with the least amount of waste.
7. A word about creativity.
Creativity doesn't just happen; it's a process. As Leo Burnett once said, "The secret of all effective originality in advertising is not the creation of new and tricky words and pictures, but one of putting familiar words and pictures into new relationships."
For example, consider a print advertising campaign for the Michelin® Tire Company. In these ads, the company could have chosen to talk about all the features and advanced materials in their product. Instead, they portrayed a baby upside down in a Michelin tire, coupled with the phrase "Better Grip."
By tying that headline to a picture of innocence, we find ourselves reacting emotionally when we understand the importance of safety through Michelin tires. That's positioning. It only works when you identify the key benefits that will motivate your target market. You must focus on a competitive advantage or benefit crucial to them. Capture the prospect's attention. Attain a clearly defined position in their mind. And finally, give them facts that motivate them to take the action you desire.
Keep in mind that testing creative is a double-edged sword and needs to be handled carefully. Considering that your work should always try to connect with a particular consumer, test creative by conducting one-on-one interviews that emphasize the advertising's clarity and the respondent's ability to identify emotionally with the ad. Focus groups, as a rule, are ineffective vehicles for testing creative, primarily due to the loud minority that can dominate such proceedings, and dramatically influence and inhibit creative direction.
If it works, repeat. If it doesn't, change.
Ultimately, advertising is about persuading more people to buy more products and services more often. As a result, your process should incorporate measuring and evaluating your advertising and marketing efforts. By doing so, you can compile data that will help you construct an advertising "model" - a model that consistently delivers or exceeds expectations, and is repeatable and predictable. Also, recognizing that strategies and tactics that have worked in the past may not work today is all the more reason to evaluate and measure effectiveness. If your efforts aren't working, evaluate the situation and change accordingly.
Advertising doesn't have to be like a box of chocolates, where you never know what you're going to get. Instead, it can be successful and repeatable when you following a process designed to understand your target and how to better connect with them. Such a process reduces risk and maximizes the return on your marketing investment.
Yes, it's common sense - but often not common practice.