"The more I find out, the less I know."

Friday - June 25, 2004 at 12:07 PM in

Leppik's Laws of Marketing


1. Nobody really understands marketing.
2. Anybody who claims to understand marketing is trying to sell you something.
Marketing is only about two things: making sure that your product or service is better than the alternatives for at least some customers, and communicating that superiority to those customers so they'll buy. Most companies, however, only focus on the communication side of the equation. This is reenforced by the large industry which has grown up around selling advertising and similar services.

But since the best marketing strategy is unique for every company, and combines both product enhancement and communication, there is no formula which works everywhere. That's why nobody really understands marketing: what worked at one company will usually fail somewhere else. And making sure the product or service really is better for some customers is hard work.

A Better Product or Service
A product or service can be superior for any number of reasons: price, quality, capabilities, convenience, familiarity, or geography (just to name a few). The buying decision is a complex, emotional one, which neither the buyer nor the seller completely understand.

At some point, marketers discovered that they could, through advertising, manufacture product superiority out of thin air. Since nationally-distributed products often have few differences between brands, this added a whole new way to create a superior product. People don't prefer Coke or Pepsi because of price, availability, or taste (usually): people prefer one or the other based on the emotional associations the advertising has created around the brand.

Hence was born the idea of Brand Image.

If you happen to have a few hundred million dollars floating around, creating a great brand image is easy. Just look at Pets.com. Unfortunately, as Pets.com amply demonstrated, a good brand image isn't enough if the product or service is inferior in other ways (like costing $20 to ship a $10 bag of pet food). And besides, these days almost no small company has a few hundred million to spend on advertising.

Other than the cost, though, this is a great idea. Spending money is easy. Creating a better product or service is hard. Most of the obvious ways to create a better product or service have already been done, but there's an unlimited number of ways to spend money.

Some Things I've Learned About Marketing
1. Direct mail doesn't work
2. Magazine advertising doesn't work
3. Online advertising doesn't work
4. Webinars don't work
5. We can't afford broadcast advertising

But:
6. Exhibiting at tradeshows works, but takes a lot of effort
7. Sending out an original, informative newsletter works, but takes a lot of effort (both to write the newsletter and to develop the list of prospects)
8. Talking to industry gurus works, but takes a lot of effort
9. Providing prospects with beta tests of innovative new services works, but takes a lot of effort

Your mileage will certainly vary, since effective marketing techniques are wildly different for every company. But the pattern is clear: marketing which merely requires us to spend money (and not think) inevitably doesn't work. The things which work take a lot of effort, and involve opening direct lines of communication between us and the customer.

These lines of communication work both ways. Our best ideas have come from discussions with people outside the company, and have allowed us to refine our service to be more responsive to the customers' needs.

Posted at 12:07 PM | Permalink | | |

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