Do you believe in a false paradigm?
Where did marketer’s unholy fixation with awareness-based advertising come from?
Well, to understand that, we need to go back in time and consider the paradigms governing our craft. By paradigm, I mean a fundamental belief that informs all our thoughts and actions.
For context, consider what is arguably the biggest false paradigm of all time—where people truly and unshakeably believed the earth was flat. When the first scholars and explorers started to question that cherished belief, they were killed as heretics. Thankfully for us all, the evidence eventually became overwhelmingly obvious and early adopters of the new ‘round earth’ theory went on to discover new lands, new peoples, and new fortunes.
Well, there is a marketing paradigm that is as popular, and as false, as believing the world is flat.
There is a false marketing paradigm – it is called the purchase funnel.
Most of us marketers had the purchase funnel framework drilled into us in college. The whole notion of a purchasing funnel was invented in 1898. It was last modified in 1924, nearly a century ago. Since the early 1960’s it has been a touchstone for most brands—either consciously or subconsciously—guiding their marketing decisions.
Since “Awareness” and “Familiarity” are the first two steps, many businesses prioritize those marketing activities. In fact, because these two tasks seem so important in this framework, comprising over 60% of the funnel’s area, many brands spend over 60% of their marketing budgets, their marketing personnel’s time, and their agency relationships, on activities designed to generate awareness and familiarity.
But it’s time to open your mind to an alternative way. In fact, embrace the new reality.
There are only four moments that really matter to consumers, and as such, there are only four moments that should matter to marketers.
In 2010 researchers from Harvard University wondered if the purchase funnel was still relevant. So they did some research and they discovered nothing about this once beloved model it is still true. In fact, there are only four moments that really matter to consumers, and as such, there are only four moments that should matter to marketers. I’ll briefly explain each one, and as I do, imagine if your company did something as blunt as allocate 25% of your time, personnel and budgets to becoming experts at each of these four phases:
When consumers identify they have a want or a need, they begin to proactively investigate the best possible options. There are two ways for brands to get onto their radar. The first is very expensive and inefficient – it’s called advertising. The second is called marketing. I’ll explain the difference with an example.
I challenge you to drive around your town on a weekend with the radio on, and not hear a commercial for a mattress company. Mattress companies carpet bomb the airwaves hoping and praying that somebody listening will need a new bed. And probably some small percentage of the population does, and appreciates the ads promoting some special offer. But, Select Comfort, maker of the Sleep Number bed, doesn’t participate in this advertising arms race.
Select Comfort focuses on purchase triggers. They buy data that lets them know who is most likely to be in the market for a bed, using triggers like a marriage or divorce, graduation or pregnancy, or people suffering from back pain. They also set up showrooms in malls and offer free sleep diagnostics and use the data captured as sales leads. They have become expert at direct marketing and sending versioned collateral based on need and immediacy. Select Comfort has grown revenues from under $600MM to over $900MM over the past few years using this hyper targeted marketing approach.
A “yell and sell” go-to-market approach no longer makes sense.
Consumers are simply too overwhelmed by all the advertising stimuli we bombard them with, and they have become expert at learning how to shut them off or fast forward past them. A “yell and sell” go-to-market approach no longer makes sense.
Unlike a funnel that tapers, Harvard discovered that consumers actually add brands to their consideration set as they become more informed. That means that brands that weren’t initially top of mind, now have a second chance. As consumers do their homework—usually online or by talking with friends—they add more options. This reality has birthed an entire discipline called “content marketing”.
Content marketing helps brands be persuasive in a really substantive way, yet not enough marketers are really good at it.
Content marketing helps brands be persuasive in a really substantive way, yet not enough marketers are really good at it. Instead of 30-second commercials or clever print ads, content marketing prioritizes things like blogs and white papers, ratings and reviews, infographics and online videos, strategic partnerships and customer service. The same talented art directors, copywriters and designers who currently make your ads should be repurposing their skills to optimize your website, improve your store experience, reimagine your product packaging (and even perhaps your products) and create all your internal training and recruiting materials.
Perhaps the best example of a brand that excels in the Evaluation phase is Zappos. They spend next to nothing on advertising, but have prioritized their marketing efforts on four areas: customer service, attractive shipping policies, website optimization (so they rank high on organic search), and producing tremendous online content. They don’t make the shoes or clothes they sell, and they really have no competitive advantage except their approach to marketing. When you see how effectively they do what they do, especially compared to the buying addicted competitors in their space, it makes sense why Amazon wrote them a check for a billion dollars.
The old funnel completely overlooks the fact that somewhere between 30-50% of purchase decisions are made at the point of sale. That means that consumers couldn’t reach a decision in the first two steps, so they decided to just show up to the store or a website and make a decision there. This is game changing for brand leaders who want to improve conversion. Unfortunately we’ve worked with many clients who defer all control of their front line staff or customer service agents to operations or HR. How many CEO’s or CMO’s give their website analyst sufficient time to explain ways to boost site conversion? Or work hand in hand with visual merchandisers to optimize store experience? My guess is very few.
Too many brand leaders falsely assume marketing’s job is to get people to show up, and somebody else’s job is to close the sale.
Too many brand leaders falsely assume marketing’s job is to get people to show up, and somebody else’s job is to close the sale. Marketing’s job is to own the customer experience. And while Superbowl commercials are undoubtedly fun, it’s the unsexy things like packaging, warranties, return policies, point of sale displays, and staff training that should be marketing’s primary focus.
In 2009, marketers at Hyundai worked with one of our company’s partners, Brand Keys, to understand what they could do to help consumers buy cars at the onset of the recession. All the auto dealers were panicked and were dropping prices and offering attractive financing offers left, right and centre. But Hyundai was already a well-priced vehicle. They didn’t need to offer consumers more margin-eroding discounts. Rather, the research revealed what consumers really wanted was assurance. In an unstable economy, they needed to know they could make their car payments if they got laid off. So, rather than joining the noise of rebates and employee pricing, Hyundai offered an Assurance Program, allowing their customers the opportunity to return their car for a full refund if they lost their job. That provided dealers with the ultimate closing tool at point of purchase. Salesmen were able to use that marketing program to exceed consumer expectations. And that year, while sales were down 37% in the auto category at large, Hyundai’s was up 14%. They did real marketing.
The final moment that matters in this new customer model didn’t even exist in the original purchase funnel. It prioritizes the post-purchase experience, dealing more with advocacy than awareness. If brands can get this part right, consumers will skip the first two steps of the process the next time they are in market and go straight to you to purchase. That’s called the loyalty loop.
If brands can get this part right, consumers will skip the first two steps of the process the next time they are in market and go straight to you to purchase.
In addition to their repeat purchases, this is where brands can create opportunities to amplify positive word of mouth. All that is required is that we spend more effort making the ownership experience more exceptional. And if you consider the alternative, it’s really a no-brainer. Consider these stats:
- 86% of consumers say it’s important to have a positive brand experience AFTER making a purchase
If the ownership experience fails to live up to consumer expectations:
- 65% complain to family and friends
- 41% write an email or letter to the company
- 34% write a negative online review
- 19% complain within their social networks
- Only 1% say they will repurchase from the company
Consumers simply have too many choices now to put up with mediocrity. We’re living in an age of hyper-commoditization, and as marketers we need to step up and help our brands become better. Rather than telling people we’re great, we need to actually become great. Our customers don’t need more ads or sales promotions, they need to feel valued and appreciated, and have the confidence that we’re consistently living up to their ever-changing expectations.
Our customers don’t need more ads or sales promotions, they need to feel valued and appreciated.
Consider Harley Davidson. I assume we can all accept the fact that Harley Davidson is an icon. Pretty much any time you can get consumers to tattoo your brand on their body, you know you’ve got something pretty special. Well, their global CMO revealed that he only spends 15% of his marketing budget on awareness building activities. If you want to achieve the kind of results Harley achieves, why not do the same type of marketing they do? It starts by rethinking the entire marketing paradigm.