One of the keys to maximising the return on the investment of marketing, or alternatively reduce the cost of marketing is a reduction in the reliance on advertising or more broadly promotion. This presentation looks at the strategies used by businesses that have excelled without advertising. This presentation looks at rational, commercial and scientifically sound strategies for boosting revenue - while reducing the cost of advertising and marketing more generally. It directly addresses maximising the lifetime value of each and every customer.
3. •psychology, education and business
•consumer behaviour management
•company director and strategic advisor
•private and public sectors over 25 years
7. 1. marketing and advertising are not the same
thing
2. profit maximisation requires much more than
just enquiries encouraged by advertising
3. few things drive profits more than focusing
on customer life time value
11. marketing is all about identifying a precise target
group and the behaviour you want that group in
order to achieve commercial and/or social
objectives
12. marketing is about encouraging your target
market to behaviour in a required manner for:
-first time
-last time
-more often
-less often
13. managing human behaviour involves a lot
more than communication – with the two
central pillars being the customer and the
product
14.
15. Even communication involves much more
that advertising with some of the most
effective avenues now including electronic
direct mail and influencer marketing
16.
17. and - advertising is less effective than ever
• ever-increasing level of noise with the average person viewing 8000
advertising messages per day.
• ever- increasing fragmentation of the media options and channels
• ever-increasing resistance to the hyperbole, platitudes, and half-
truths in advertising and the decline of advertiser credibility.
• Ever decreasing trust in brands and advertising – with 50% trusting
businesses, 18% trusting executives and 38% trusting brand adverts
• a growing recognition within business that the accountability of
advertising and the credibility of advertising agencies is low
18. even digital advertising is limited
• the growing use of ‘ad-blockers’. some 25% of american internet users
are now using ‘ad-blockers’ to block digital advertising.
• the growing use of advertising-free subscription services as offered by
the likes of youtube and netflix
• the growing preference among marketers and popularity among
consumers for content that informs, educates, and engages.
• the concentration of media ownership or control, with 50% of all
digital advertising controlled by facebook and google
19. internationally, while advertising budgets were
expected to increase by 4.5% in 2019, they have
actually increased by just by 3.6% - and this is
despite a booming us economy
more than 50% of advertising internationally is
now online.
20. in 2017/2018, proctor and gamble reduced its
advertising budget by $750 million and sacked 50
advertising agencies. in the first quarter after the
cut, sales increased by 3%.
25. • repeat customers spend up to 300% more that first time
customers
• repeat customers are a tenth of the cost to acquire than first
time customers
• repeat customers refer 50% more than first time customers
• referral customers spend 25% more than un-referred customers
• referred customers cost almost nothing to acquire
• referred customers are 5 times easier to convert due to higher
trust
26. Conversion
• understand conversion rate variables
• develop a proven strategy and system
• be first and make it easy
• fully leverage the customer journey
• engage the prospect
• educate your prospect
• demonstrate you value proposition
• build and leverage relationships
27. Average sale
• make average sales as important as conversion
• target segments with the capacity to spend
• create a comfortable environment
• understand the complexities of price
• employ people who can build a relationship
• have an optimal product with extras
• employ strategies to sell up and on
• offer an excellent customer experience
28. Margin
• identify a target market you can own
• understand what your target market is buying
• build a brand that ads value
• differentiate so comparisons are hard
• use price strategically
• select the product category with care
• ensure the customer experience ads value
• minimise advertising costs
29. Repeat and Referral
• create a sense of significance
• deliver everything that you promised
• be remarkable
• reinforce emotions
• develop relationships
• make it easy
• have a referral programme
• listen hard and respond honestly
32. 3. few things drive profits more
than life time value
33.
34. amazon has a brand value a very close to that of apple
amazon has a market capitalisation very close to that of
apple
amazon has a turnover about half that of apple
amazon has a staggering customer lifetime value,
driven by largely by repeat business
37. view marketing in its broadest sense
view communication in its broadest sense
view community as the future of marketing
38. marketing
• the customer – ideally a market you can own
• the product – ideally tangibly superior
• the customer experience – a part of the product
• the price – used as a marketing tool
• the distribution – making buying as easy as possible
• the brand – adding value to everything else
39. apple, with a great product has an advertising a
budget of .05%
telstra with a very average product, has an
advertising budget of 7.14%
40. communication
• content marketing
• native advertising
• search engine optimisation
• traditional direct marketing
• electronic direct marketing
• influencer marketing
• websites and chatbots
• personal communication
41. costco – one of the worlds largest retail brands
has no advertising budget, instead relying almost
entirely on direct marketing
42. community is the future
• builds loyalty and evangelism
• facilitates feedback and meaningful conversation
• significantly reduces the cost of communication
• establish a leader, followers and outsiders
• create a shared vision, values and interests
• ensure frequent and engaging conversation
• consider targeted external communication
43. brand community
61% of all us corporations have or are developing
one
general communities
a us$12 billion industry in 2019
47. other marketing tools
• great products sell themselves
• differentiated products are harder to compare on price
• effective branding ads value (without advertising)
• the right price will drive demand
• an excellent customer experience will drive sales
• ease of purchase can also drive sales
• accountable communication drives costs down
48. post enquiry
maximising conversion rates makes each enquiry more
meaningful
maximising average sale makes each enquiry more lucrative
maximising margins means each enquiry contributes more
profit
maximising repeat and referral maximises life time value
49. advertising is a valuable tool in marketing, but it is
expensive and often wasteful
50. action
• change your definition of marketing – to focus on behaviour
• identify a market you can own and understand it very well
• develop a product (in the broadest sense of the word) that exceeds
customer requirements
• build a brand (through people) that differentiates and adds value
• address communication after other marketing tools
• address post enquiry strategies before addressing enquiry
• beware of advertising wankers