From panic to profit – Part 1 – A marketer’s story.

Tim Berners-Lee, a British scientist at CERN, invented the World Wide Web (WWW) in 1989. That single invention, created the world we now call online, and in case you didn’t notice, it fundamentally changed the way we live, the way we work and especially the way we interact with one another.

In this series of three posts I am trying to show how that world of online has changed the way consumers interact with businesses, as well as how and why businesses need to adapt, in order to be part of the conversation.

In part 1, I tell my story as a marketer, how the online world has impacted me, my clients and the companies I have interviewed. Part 2 I show why this has happened, how technological changes have influenced us and how customer behaviour has changed. Part 3 covers the inbound marketing methodology, what it is and how to implement it.

In the end I hope to show why companies panic, but how they can move back to profit.

 

A marketer’s story about a client’s journey.

The timeline below is based on my experiences of working in marketing, both online and offline. I’ve included feedback from my clients, as well as interviews with a selection of companies I have had contact with in the last 3 years. It shows the journey they have all gone through, as the full impact of online was felt by their businesses and impacted their marketing efforts. It shows how and when they panicked, how they reacted, and how they managed to get their marketing efforts back on track. Let me try and explain what I mean, by going through the numbers.

Outbound Marketing. Old school marketing.

1Traditionally, companies made a product or offered a service. They then found a place to advertise said product or service, usually in places their target market was going to see it. If there was an interest, then they had an opportunity to sell it. That cycle would then start all over again. Word of mouth was a bonus on top of their existing marketing activities, but never guaranteed.

The ad man and the salesman, in the olden days were kings. They were sharp, on their toes, they knew their products and especially their customers. Convincing a customer to buy was an art form and they were great artists. Think back to the door-to-door salesman. They knew their craft. Media agencies, in their prime, were also considered kings. They knew the media, they knew the target groups. They knew where to advertise, for how long and their expertise was worth their weight in gold, or commission.

This “old school” way is what is called outbound marketing. It’s based on pushing the product or service towards the customer. It is costly. All the media has to be bought, and the salespeople never came cheap.

 

Notice. Something is different.

2Companies started noticing a change in the results from their marketing activities. It wasn’t working as it used to all these years. This “something” that companies noticed was a direct result of Tim Berners-Lee’s internet. It is what we simply call “online”. Companies that have traditionally used print media, paid advertising, newspapers and television, wasn’t ready when their customers moved online to look for and find information. Companies noticed when “online” became a part of their business life. They noticed it at first as only a blip in their bottom line when their return on investment from their marketing activities were lower than it was supposed to be.

In 2012 I started working with a new client. They can to this day still remember the date, 19 March 2012, when they noticed that their usual marketing activities didn’t give them the results it used to. What they should have noticed was that on that day, their target group moved online.

The saying is often true, that if you do what you have always done, you get what you always got. In the case of my client as with so many others, they got nothing, or much less than they were used to. They noticed the change, and were at a loss as to what to do about it.

 

Reflex. Copy paste.

3The general response from companies as a result of online, was to create a website. Start a Facebook page. Have a Twitter account. Employ a young person who knew all of this online stuff. Basically what they were doing was that they were getting a website, because everyone else had one. Get on Facebook, because everyone else was. Although it is good to be where your customers are it’s not good if you have no strategy for doing it, or a good reason why. This knee-jerk reaction to move online, did not end their worries, as they were still losing sales on a daily basis. Their return on investment from their marketing efforts still showed no sign of moving back up or to give them what they got before.

One of my other clients recently came back to me with a response that they did not like what their company looks like online. Their online presence did not reflect who they truly were. When searching for themselves, their brand, their products, they didn’t like the results that showed up. Neither the images they saw, nor the text or written words that showed up. Yet they are wholeheartedly responsible for uploading all the content.

These scenarios are very common in today’s marketplace. It happens, when there is no strategy for marketing online. Just doing it because you have to, or because everyone else has done it, is never a good idea. It has to form part of your overall business strategy and not an added extra.

 

Panic. OMG! WTF!

4An analyst friends of mine always asks his clients this simple question; “What’s the weather like?” It’s a very pertinent question to ask. How is it going? Everything running smoothly? Although companies see blips as part of running a business, not many were prepared for this blip to become so big. That is what caused them to panic in the first place. That panic, however was not only about money. It was also about the feeling of helplessness. The feeling, that they did not know what to do about the problem.

69% of consumers do research online before they initiate contact with a company or make a purchase.

Online usually has two effects on companies that increases the panic. Both of them, however, can be addressed. The first effect is that when consumers move online, to do research and search for products, they do not find the information they are looking for, because companies still focus their marketing efforts offline. So in essence the company does not exist. The second effect is, now that consumers are online, searching for products and finding information, they also find the competitors’ product information. They compare prices. Read reviews. Companies are then faced with a very knowledgable customer walking through the door and salespeople are completely unprepared, and outgunned.

One way how companies react to the panic is to spend more money on the same problem, hoping it would go away, or show some sort of result. You can clearly see this if you look at the data for advertising spend to see how disproportionate it is between online and offline. Consumers have moved online, yet companies still spend too much money on offline media. Throwing money at the problem seem to be linked directly to the feeling of helplessness. One positive that can be taken from the data is that online advertising spend has been growing year on year.

 

Inbound Marketing. Teaching an old dog new tricks.

569% of all customers do research online, before they initiate contact with a company or purchase a product. This means that your customers have researched your product online, they have compared it to your competitors’ on features, benefits, as well as price. They have also read all reviews about your company, your products and may even have asked their friends for comments or recommendations.

Companies, however, need to change the way they think, especially about how they approach their marketing strategy. With so many of their customers having moved online, companies now need to move from an outbound (push) marketing methodology, to more of an inbound (getting found online) marketing methodology. What does your online presence look like right now? Can your customers find you? Can they find your products?

The Shop.org summit for 2014, highlighted one single concern. How can companies keep up with their customers?

When companies have implemented this inbound marketing methodology properly, the panic will start to ease, and life, or their bottom line, will start to return to normal. Implementing it properly, is key though. Too many companies still tend to measure Facebook likes, and such superficial evidence to show that their online strategy is working. A return on investment is evidence that your online activities are working. That does not mean you need a webshop or even sell online. It means you need to be visible online when consumers search for you, or you won’t be part of the conversation.

When you have done it right, and have a strategy in place, you will be confident that you will be found online, and you will not be scared about what the consumer finds online. Everything will be in place and you will trust in your inbound marketing strategy. When that consumer, that was looking for you, has become a lead and is ready to make a purchase, your salespeople will be ready, and prepared to make the sale or stand by with even more information.

 

Risk #1. You’re not ready.

6As with all things new, there are challenges and risks. Changing a company’s marketing methodology from outbound to inbound means the company itself, also needs to change.

The first risk that has been identified, is that companies are not ready to change to inbound marketing, even though the market and your bottom line shows it needs to be done. The main reason is that employees do not want to accommodate or incorporate this new way of working or way of thinking. There’s new ways to create and manage content. There’s new ways to market and sell the products. And there’s new ways to create leads.

The Shop.org summit for 2014, highlighted one single concern. How can companies keep up with their customers?

 

Online vs. Offline. Digital vs. print.

7In a recent article in Harvard Business Review called Digital-Physical Mashups, they discussed the challenges companies have faced, and is facing, when the world of online becomes a reality in their business. There’s been two main reactions, and both have proved wrong. The first reaction was to just ignore online and pretend it didn’t exist. The second reaction was to close down the offline business and move everything online. Companies have to find the right balance between online and offline, so that the two compliments each other and form the perfect “mashup”. Although we spend a lot of time in the online world, for now, we still live in an offline world.

The value the offline or outbound marketing part of your business has generated, needs to be used, or utilised by the online part of your business. The value created by offline investments cannot just be thrown out overnight.

 

Risk #2. You’re not prepared.

8The second main risk companies face when moving to an inbound marketing methodology, is that they will not be ready, to cope with the amount of contacts and leads it generates. Most companies walk slowly but surely into this, which is good, but most often they are ill-prepared to cope with the volume. Or their sales teams are not prepared to close the deal in this new way. The sales part was all done by the content online, and all the customer wants to do now is buy, if they do not have more questions first. Sales people often feel alienated to this new way of selling, as do marketing people at this new way of marketing. Companies are also not used to the way inbound marketing generates leads.

This risk should not be taken lightly nor should it come as a surprise. All that has happening, is that companies have found their customers, and are marketing to them again. The marketing is only done in a new place and in a new way.

 

Outbound benefits. Outbound marketing always benefits from inbound marketing.

9Inbound Marketing should never be seen or done in isolation. Offline and online should be integrated. The only difference is that more consumers tend to start online, so more attention should be paid to online or inbound marketing.

The blip I referred to earlier, was because there was no inbound marketing incorporated in the marketing efforts. If inbound marketing and outbound marketing integrates, there is often a positive blip that can be noticed in the return on investment from outbound marketing activities. Outbound marketing tend to benefit when inbound marketing is added to a company’s marketing strategy.

 

Profit. Moving back to business as usual.

10When you’re working in this new way and have successfully adapted to this new world of online, you should see a positive curve from your marketing activities. You should comfortably be able to move from panic to profit. This is all possible because you’ve understood where your customers now are. Your products or services are again appearing in front of them. You are found.

 

Why did this happen to me?

In part 2 I will aim to show exactly how and why the world has changed, why consumers have moved online, and what you can do to move forward and make online part of your marketing strategy.