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Marketing essentials for 2019

While there are plenty of guides that praise and predict the rise of new tools, tricks and technology, we believe that many of the opportunities and threats looming on the horizon for marketers are primarily strategic in their essence. The following observations are subjective, unscientific and experience-based, but capture some common themes that we have experienced in our work with companies across Europe in the last year.

1. Get your company’s value architecture right

Most corporate agendas are dominated by profitable growth, digitalization, innovation and opportunities. But in new markets the importance of designing a clear and impactful value architecture across your business and brands has never been greater. Venturing into new markets, segments and business models requires a strong brand to drive your position and win your market. As companies stretch their brand to do this, and govern it closely in order to deliver consistent experiences across touchpoints, it also means that less room is left for creating distinct differentiation on specific value drivers within a certain industry and/or product category. 

So, what do you do when on one hand you have an overall global brand story that covers multiple categories and industries, and on the other hand a need to deliver a distinct value driver and product positioning only relevant to one specific industry? Many will look at developing a new product brand, but this is a quick fix that will actually dilute your global brand power over time. 

Instead, successful marketers will work with their company’s value architecture across their full business and brand system. Start by defining what drives distinct value for your customers and how your product can deliver on that. It’s critical to be able to communicate this value clearly, engagingly and emotionally – both internally and externally. Feature lists and bullet points on product sheets won’t cut it - you have to convey a story that allows you to connect with your customers and engage them in the unique value driver you deliver in their specific industry.

The big challenge is to solve how you can deliver this story while maintaining a link to the corporate brand platform. How does the segment-specific value and story play into your corporate brand and help build its position? Getting this value architecture right and just as importantly governing it to fuel and support, not limit, a global organisations growth aspirations will be one of the central challenges that the growth-driven and successful marketers of 2019 must get right.

2. Tackle the big business questions

We are experiencing that increasing executive-level focus on topics like digitalization, customer experience and customer-centricity is providing an opening for marketers to rise up the corporate ladder. It’s also why in our experience, the number one success criteria for marketers has very little to do with marketing-tactics. The ones that succeed tend to understand and use their marketing toolbox to tackle the big business questions. These topics can vary, but are usually something like:

  • Formulating the market and portfolio footprint: Where should we compete and with which products?
  • Owning the launch of strategic solutions: Owning the process from positioning & value proposition, pricing, distribution strategy, sales anchoring, marketing communications campaigns and KPI tracking
  • Business development & innovation: Finding and unlocking value pockets or unmet needs in the markets by surveying the market and developing and conceptualizing the products to address these pockets
  • Company positioning: Taking the lead on repositioning the company by overhauling everything from the identity to value positioning and culture
  • Organizing the brand and solution stack: Many companies own a lot of (mostly acquired) brands, and have a very inconsistent and inside-out way to present, bundle and position their product portfolio. Marketers should dive directly into that and reorganize the product and brand portfolio according to customer needs and value creation
  • Co-lead corporate strategy: While corporate strategy is usually anchored in the C-suite and driven by a strategy team, the marketing department should be instrumental in how it is formed. Many growth-related topics such as digitalization, customer-centricity and innovation are closely linked to the capabilities of the marketing department

2019 should be the year when marketers play an increasing role within some of the above topics. Once you have those covered, then there will be time to talk content marketing, Blockchain, virtual reality, programmatic buying, viral videos, SEO and TVCs.  

3. Make Sales and Marketing fall in love

Sales and Marketing have traditionally had difficulty cooperating. Funnily enough, it’s not rare to hear one party complain that the other doesn’t understand what it takes to achieve a common goal - to create growth and win market share.

In a situation where Sales are experiencing a ‘race to the bottom’, with customers focusing on price and delivery time etc., and Marketing are struggling to create differentiation and impact in the market with products that are often largely identical to competitors - both parties need to rethink. There’s a need for transition, with increasing focus on the value that the company collectively creates for its customers and its customers' customers.

Sales and marketing have so far attempted to tackle the challenge individually. Sales by identifying and formulating "value propositions" that salespeople can be trained to use when they have to convince the customer to choose them. Marketing, on the other hand, are working to find new ways to create brand differentiation and express the value that the company and its products create for customers, for example, with the highly celebrated “brand purpose”. But it’s all the same unless Sales and Marketing have a common definition and perception of how the company and its products create value for customers.

The customers' decision-making process starts long before they see a salesperson. If there is no clear and consistent connection between the value perception which the customer buys into the beginning of the decision-making process, and the value proposition that the customer meets at the moment of purchase, then the risk of losing sales and customers is imminent.

We believe that more companies soon will realize this, helped along by the hype around "the customer journey". This encourages "sales funnel" thinking, where marketing (and the brand's value positioning) is at the top of the sales funnel, and the solution / product value proposition is at the bottom. 

That there must be consistency from top to bottom in the funnel, of the story and the perception of the company and its products, seems obvious. Therefore, we believe that 2019 will be the year in which Sales and Marketing will start to work more closely together. Cooperation will replace sub-optimization, and companies will start to focus on and develop concepts and solutions - instead of only selling products.

4. Balancing branding and activation

A major challenge for companies continues to be finding the right balance between brand building and activation. As digital behemoths like Google and Amazon continue to drive down prices and increase transparency, branding is becoming one of the last escape pods from the path towards commoditization. However, the pressure to deliver quick, tangible results has meant that more and more companies are seduced by short-term results. Alarmingly, we also see that this same pressure has been increasing over the last couple of years.

It can be challenging to navigate the choppy waters of today’s multiple distribution vehicles and make the right choices. Tactical activation often has immediate and direct results. They consist of offerings like promotions, competitions or seasonal communications, and utilize lower-funnel PPC media channels with a high focus on last-click attribution. While they might produce short-term sales spikes, unfortunately they rarely move the needle in terms of long term-growth and price sensitivity.  

Branding on the other hand, creates deeper preference, simplifies the customer’s decision making process and invokes a price premium. The challenge here is that it can be harder to measure, and even more difficult to attribute. This happens because brands are built on aggregate (company-wide and not specific to certain activities), but initiatives are often measured on specifics (time-limited, isolated activities). As a consequence, there is often a gap between business goals, tactical activation and performance measurement. 

But it’s not about choosing one or the other. Multiple studies show that a branding/tactical split of approximately 60:40 is most optimal. Furthermore, it’s important to remember that one size doesn’t fit all. For instance, we’ve experience where branding is harder and tactical activation easier (Often in B2B where purchasing is – wrongly - considered non-emotional). Here the branding proportion needs to be increased. For other clients, where branding is easier and tactical activation more difficult, we worked with them to increase their tactical activation initiatives to generate higher profit margins. This may seem obvious, but we’ve experienced that many do the exact opposite.

We believe that new winds will be blowing in 2019. There has been an awakening and 2019 will prove to be the year the pendulum swings back towards brand building. More companies will move closer to the optimum split, resume media neutrality, adjust their evaluation framework and ultimately move towards a long-term sales uplift.

 

Merry Christmas and happy new year from all of us at Kunde & Co

W3c

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Marketing Essentials for 2019

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