Most of the marketing qualifications I’ve studied for and theories I’ve come across are based on established companies, with budgets and people in place to deliver plans. They don’t talk too much about how to evolve your marketing from start-up to growth, from nothing. When a start-up, spin out or small organisation starts out or wants growth, it has to invest a lot of time trying firstly to get known and then to differentiate itself from the competition out there. We operate in a noisy, cluttered world, clamouring for attention as well as for intention to buy. Having a USP is one strategy but it has its limitations. Branding is another, but neither is the easy route to success for start-ups.
The USP Theory
With a new to world product or service proposition then the conventional marketing wisdom stresses the importance of having a Unique Selling Proposition (USP). The USP theory goes way back to 1961 when Rosser Reaves introduced the concept in his book, “Reality in Advertising”. Reaves talked about three conditions that must be met for advertising a USP:
- Must be a proposition which means you “Get these benefits when you buy this product”
- The proposition must be unique – something your competitors don’t, can’t or won’t offer
- The proposition must be what your prospects want – or certainly enough to buy it
Introducing AIDA
So when a product is truly “new to the world”, the marketing challenge is to first get it known about, then get people to try it and buy it. One theory that covers this strategy is AIDA (see recent blog on Art & Science of Marketing I). AIDA (which stands for Attention, Interest, Desire, Action) effectively models the sequence in which tactics move your target audience through the stages of the buying. In other words, as a start up you have no Awareness and so your initial marketing strategy should tackle this and then eventually move prospective customers through to Action (ideally purchase)! The question is how you might achieve that? One route is by persuading customers that what you have is something that will make life better, easier, more fun or give them more status or desirability and, as the model suggests, if this coincides with what they are looking for, this will lead to a sale. In other words, the benefits of your product or service should be couched in terms of whatever it is that your customer perceives to be of value to them.
Competing For Time, Attention and Wallet
The trouble is, most businesses are not monopolies, and rarely operate in a vacuum. Even if no-one (for now) has the same great idea as you do, you are still competing for a share of your customer’s time, attention and wallet. Whatever problem or gap you identify has an existing solution of sorts. And, even if yours is the best one in town it will only be for as long as it takes for the rest to catch up.
When an idea is truly ground-breaking, it takes a lot of time, effort and usually money, to establish it in the mainstream market. There is an inevitable time lag to make your first sale and even longer to get into profit. This is especially significant as an upstart start-up in competition for sales and seeking to displace the incumbent providers and suppliers. In this situation not only is there a ton of work to be done to get noticed and recognised but there is also a lot of resistance and inertia to overcome because, well simply put, people have no reason to change supplier unless it is worth their while to do so.
Patience for the Long Game
In many ways, it doesn’t matter how great you think your product is, there are many reasons why people still won’t buy. Even when they are aware of you (and this takes a long time to happen) and acknowledge that you have a product with something of value to offer, (again lots of work to be done to reinforce benefits and features here), you may still find that the time is not right to buy. Perhaps their existing tool still does the job sufficiently well, for now. If the replacement cost seems high to them, and they need time to save for it, your marketing effort has to ensure that you are there are the right time, in the right place with the right offer to be successful.
Changing habits takes time, and the other issue of overcoming lack of confidence or appreciation for the novel does too for everyone but the early adopters in any market. Here marketing needs to reinforce and reassure, providing proof and evidence to set out a vision for how the change will enhance the buyer’s life.
The Buying Chain
Just to complicate things further, we are seldom dealing only with one decision maker. For example you’ve probably heard that men are the most frequent buyers of women’s perfume. Most I imagine are buying it as a gift :0) Many products are bought by one person but intended for the use of another. Further, the purchase may be influenced by the views of yet another person. Take the example of a toy: User is the child, purchaser Granny, final decision on appropriateness, the parent! So your marketing has to have appeal to all links in the buying chain.
Oh and in a business to business marketplace, the complexity of the buyer decision-making chain is on another level. Organisations may have several people that need persuasion and incentives to change product and supplier. The people who hold the budget, the people who use the product, the ones who procure it and the people who will install and maintain it and so on…. Nobody said it would be easy!
And Nothing Lasts Forever
So the first stage in your marketing strategy is to understand who your buyers are, who you are competing against, who and what it is that you are trying to displace and on what criteria your customers buy. Once you have a clear view on this (usually requiring some serious research on your part) you are ready to move on.
So Why Choose You?
Next you have to create real reasons for buyers to choose you. Usually this means people need a reason to change suppliers. Again you need first to make them aware of you and your product, how you/they compare with alternatives and thereby convincing arguments for prospective buyers that it is in their interest to buy from you. This is often where the USP comes into play. 99% of the time you will be competing with something or someone else – either a direct or indirect competitor. Understanding your prospective customers and competitors, and designing a competitive strategy requires the ability for customers to differentiate between alternatives.
But is a Unique Selling Point enough? The fact is, very few products or services are unique for long. Nothing lasts forever. Positioning your business for growth and a bigger, or different marketplace, requires stepping up to some further challenges.
Protecting Your Unique Position
Most products and solutions are modifications or upgrades at best, and many are “me too’s”, the idea having been copied by another company who may or may not do it better. The sad fact is that being unique is not always a guarantee of success. It is often the second market entrant that makes the most money since in an ideal world, the first has already broken the ground, worked to raise awareness, made a first attempt at convincing early adopters to try and has identified where the early interest comes from. Followers don’t have the same costs and barriers to overcome and some may even understand customers better or have a greater share of the existing market to leverage. So “uniqueness” has to be supported by other sound marketing principles and strategies. And often this is where the strength of branding is leveraged.
Compelling Brands
If you have been successful in penetrating and maintaining the awareness of customers, the chances are that by now you will also be firmly on the radar of existing competitors or incumbents. If they perceive you as a viable threat, they are highly unlikely to willingly give up market share without a fight. Their response might take many forms ranging from launching a communications campaign or strong rebuttal of your claims to be unique, to a full blooded rival or copy cat version of your product or service. The more successful you are, the more likely they are to invest in replicating what they see as the winning features of your product or service for themselves. Or if the opportunity is seen to be great, it may quickly suck in new competitors to take the innovation and competition further yet, into other new products, suppliers or solutions. So how do you remain ‘differentiated’ in this hostile environment? Well if a product is not “unique” in terms of its features perhaps it can be through branding.
Brand(abilities)
Brands are more than logos. They may have started out as burnt on emblems on the underside of cows, but the concept extends far wider than cattle and ranches now! Brands are a mark of distinction (still) and an emblem of quality. The best ones confer a promise and an expectation of quality in line with what the customer pays for. Premium brands charge and make a lot of money by building a proposition that is seen as enhancing and adding value to the consumer. They can command high prices because they create exclusivity, desirability, durability, reliability and so on. (More on this in other blogs). The reputation of a brand is built on the entire experience customers have of it and their perceptions are influenced by all the ways in which they interact with it. This means not only the product, but distributors, suppliers, service agents, sales, after sales and marketing promotions, employees and the whole shebang!
Creating Your Unique Brand
I read somewhere that the wonder of music is that there are only twelve notes. So no matter who you are, these same dozen notes are all you have to work with. The fact is though that they can produce many unique variations through how they are combined and composed. The same is true with people and their companies. Human beings and founders are made from the same elemental building blocks and substances but in what we value personally, and what we stand for, how we work and what that says about us, we are all unique. The values and attitudes we hold, also determine what we expect from others and these in turn effect how we relate to them and vice versa. People affiliate with brand values – or they don’t according to how they fit with their own values and sense of self. That is why when you start a business, how you work and who you recruit is important. The culture you create is in line with your particular values and how the people in the business behave, from the leaders down reveals a lot about what is important to that organisation.
Many huge global companies were founded by one or two individuals whose values still shape the brand. A huge list of the biggest brands and charitable causes were for example, founded by Quakers. Interestingly, Quakers were barred from working in many professions, including the law and the military. As a result they made their way in trade and commerce and other spheres spawning such household names as Kraft, Cadbury, Fry’s, Reckitts etc. Their sound working principles were founded around a sense of community which helped many of them survive through a lot of change as this entailed attending to the welfare of their workforce.
Healthy organisations are built on authentic values and the resulting culture, or “way things are done in the business” is very apparent for all to see. It attracts the kind of employees that can operate happily in that culture because they feel comfortable in it and engaged in what it does, understand their role and how they are asked to go about it. Partners, employees, customers and investors sense when a culture is a genuine one and know that over time, the real facets of a culture come through. When the going gets tough, the authentic values(as opposed to the merely espoused or aspirational ones), guide our decisions and actions. While you can try to replicate the systems, processes, products and service touches that you think give competitors an edge over you, if it doesn’t reflect your authentic values and style, the facade will crack if not sooner, then later.
You ARE The “U”
So as a founder of a new business what does this mean for you? The first thing is to be absolutely clear about what your own ethos is, the things you value and stand for and build your culture and your brand around those. Ensure that people whom you recruit share similar values and that the work they are expected to do has meaning and relevance both for them and your organisation and that they can do that in such a way as it is in complete accord with your and their values. Make how you work apparent for all to see and ensure that customers experience your brand as you intend it. A product feature is hard to copy but an authentic brand, based on strong values is much harder to emulate. The only thing that remains unique over time is YOU!