Are you aware you’re only reaching 20% of your market? (1) Are you aware you’re only reaching 20% of your market?

You’re only reaching 20% of your market

By only reacting to customer demand instead of stimulating and creating it, marketers enter a price-driven, zero-sum arena that inevitably becomes a race to the bottom. The time has come to take a break from the insatiable hunt for empty digital conversions and look at the bigger picture to plan a race back to the top of your sales charts.

Written by:
Nils Koch Jensen, Partner

Digital channels are fundamentally changing the way consumers buy. It is an incredibly exciting time to be a marketer, but also one where a dangerous cocktail of unproven tactics and a lack of perspective are added to the marketing tool box.

Twenty years ago, a campaign typically comprised TV, print and POS material. Fifteen years ago, we started adding digital media to the plan. And recently, within just a few years, there has been a move from “digital as an add-on” to “digital only”. Consequently, marketers who used to have a cross-channel perspective have become one-eyed. The challenge with this is that digital tactics are thereby seen as a direct substitute of analogue channels such as print ads, offline, in-store, events and TVC, when in reality they often complement each other. So, what are the consequences for companies that blindly follow the digital high-priests?

To understand that, most would (hopefully) say, “Let’s start by understanding our customers”. Or, equally as important, our potential customers.

“The fact is, few people actually know what they want until they…well, until they know what they want!”

Today, that is exactly the point at which many brands enter the playing field – when the customer knows what he wants and, unfortunately, also knows what he is willing to pay. (Note: this is not good for your business).

The rise of marketing automation, search engine marketing and inbound marketing has lured many marketers to increasingly focus on reacting to signals from the consumer about when and how they are in the market for a product or service.

Focusing exclusively on digital tactics leads brands astray

Most digital marketing tools are, in essence, mid- to lower funnel tactics. (And yes, the funnel does still exist!) They are tactics that can help brands build a stronger presence in the consideration and decision stages of the funnel, but they do not necessarily build brand awareness and brand salience. Understood by the degree at which a brand is immediately noticed or considered, when a customer is in a buying situation, be it in a physical or online store.

Digital channels are, in many ways, good for transactions but not always good for brand building. Bain & Co. recently released a study documenting why. The study showed that consumers’ recollection of an ad was 3 times stronger in traditional media, and that purchase intent increased by 80% with multiple exposures to different types of media – not digital alone!

And adding to that, with the “brand as a publisher” and “content marketing trend”, which are partly fuelled by the Digi-craze, too many companies are steered by customer whims. Either they gain a lot of empty impressions, that create no brand preference, or they end up creating demand for the category in general, but not their brand in specific. This mean that brands flicker in the wind and adjust to customer whims, but end up visionless and reactive. All this comes at the cost of consistency, differentiation and distinctiveness – core principles of successful brand building.

“Advertising used to be about telling people what they want and creating demand – not just reacting to it.”

We seem to have lost this fundamental principle. But why?

Chasing shiny objects

Digital transformation has risen to the very top of executive management’s agenda. Most brand and marketing organisations experience profound pressure to adopt more data-driven and digital marketing tools. The marketing team doesn’t want to be left behind, so it works hard and rushes in to take advantage of the many new opportunities. However, this often occurs without the organisation actually being ready for it.

Management’s relentless focus on the topic means that these days it is easy to gain the approval and backing for a tactical digital campaign. An initiative that appears to be directly measurable but which, in reality, rarely gives you the connection between empty media KPIs and business and sales critical KPIs. Consequently, it is becoming harder to get a green light for the longer haul of upper funnel awareness and brand building that would stimulate demand in the passive market. The reason for this is that it will never give management the same perceived direct measurability as the reactive digital channels can.

“We see a concerning tendency for most to opt for the easy option, and only cater to their current active market, while completely overlooking what is often close to 80% of their potential market.”


Most markets are mass markets

The marketing professor Byron Sharp has shown how the long tail of light buying customers often constitutes up to 50% of a brands’ sales. We believe this finding also is valid for a much broader context. Even for specialised B2B markets, where – if you add up the relevant people influencing or taking the purchasing decision – you often end up with a quite large target group.

“We believe that brands should refocus their efforts on building reach, frequency and awareness – principles that have been sacrificed on the altar of personalisation, targeting and automation.”

At Kunde & Co, our own experience in developing 50+ integrated campaigns annually for our clients highlights that on- and offline sales, customer service and other hard conversion points are magically boosted, and campaign investment returns multiplied, when we apply a balanced approach of upper funnel, medium and lower funnel tactics. Even though consumers might change their mind in the consideration phases, brands that are part of the initial consideration set convert 3-4 times more often in digital and physical sales channels, as highlighted by McKinsey & Co.

At Kunde & Co, we recently supported a well-known and established brand with an integrated consumer campaign. The campaign showed us the following effects after just two weeks of upper funnel media investment:

  • Branded search suddenly increased by a massive 500%
  • The efficiency of lower funnel digital tools increased significantly with cost per click (CPC) on SEM decreasing to only 30% of the CPC prior to the investment in broad media
  • Social Media content performed 29% better on average
  • Onsite conversion rates improved by 114% in periods with upper funnel media investment, compared to periods with digital investment only

This case is by no means unusual. We see similar patterns between upper funnel tactics such as TVC and conversions in inbound channels and on social media posts. Another case taught us that upper funnel investments not only lead to a 159% increase in inbound sales but also increased sales from outbound activities by 29%. This highlights how your performance in the lower part of the funnel relies greatly on your strength at the top.

So how do we get digital right?

Digital tactics provide great opportunities, but these in turn increase the need for us to understand when and where to apply them. What is most interesting right now is that leading pure-online brands have recognised the need to let the pendulum swing back from the digital-only marketing approach.

Thinkbox research, based on data from Nielsen, found that online businesses invested more than £500 million on TV advertising in the UK in 2015, up 14% on the prior year. The research also showed that Netflix, Google, and Facebook spend more than 60% of their marketing budgets on TV advertising.

“Overall, this means that online businesses are now the second biggest category of advertisers on TV in the UK.”

And, this year, we even saw the debut of Amazon’s first-ever Super Bowl TV advertisement.

To some this might seem odd, but online brands have begun to realise that to win their market, they need to build their brand and stimulate demand – and this can rarely be achieved with a digital-only approach.

“Pure online players need to become a starting destination instead of an end-destination that is accessed through Google, affiliates or comparison websites. – This is where awareness and brand building come into play.”

The online brands are investing heavily in simple awareness measures to become the default online choice of their category. By having a strong position in their potential passive market, they short-circuit the whole zero-sum game of price comparison sites, affiliate marketing and AdWords.

We have identified seven commandments that demonstrate how we believe companies should optimise the role of digital media across the customer journey:

  1. Start with strategy
    What is your segment? What is your value proposition? How do you go to market? It might seem conservative and sophomoric, but it is absolutely worth repeating.
  2. Understand your active and passive market
    What size is your potential market? And how big a share is currently actively searching for a solution in your category? Where is your battlefield in this market? Do you need to drive and stimulate demand in the passive market, or should you merely focus on harvesting the current active part of the market?
  3. Understand how to drive the passive market in to active consideration
    You have to tell people what they need – don’t just react. What are the trigger points for stimulating demand in your segment and market? How do you ensure passive prospects actively consider your category and your brand?
  4. Deliver a convincing story and concept
    Embrace storytelling, aesthetics and emotional appeal. A crucial question is still how do we convey a visually engaging and emotional story throughout all the funnel’s disciplines. It is still about defining a differentiated story, executed in a distinct way and delivered consistently across touch-points.
  5. Understand attribution
    Attribution is often allocated to the last-click without any understanding of indirect effects. Constantly look for patterns and causality across channels and media – not in the individual channel or media alone.
  6. Are you ready to harvest and support your success?
    Changes to your marketing mix have a direct effect on the demands and strains that will be put on your marketing, sales and customer service functions. Is your customer service ready to help support leads through its customer journey? Is your website ready to work as an effective digital destination? Are your point-of-purchase destinations aligned with your communication? These are basic mechanics that are often forgotten.
  7. Refine your strategy with insights from your digital platforms
    Many of the platforms provide terrific metrics that you can take into your ongoing evaluation at a strategic level. Take the insights out of the platforms and apply them in the broader context and across the funnel. Too often the insights are left in the silos. For instance, search behaviour, website traffic analysis and social media listening can provide extremely valuable information. Branded search is an excellent simple way to showcase your immediate impact from upper funnel tools and activities.

Media neutrality and strategic thinking will give you a head start

We believe that the many people who say that the basics tenets of marketing are changing, are fundamentally mistaking tactics for strategy. The discipline of strategic marketing has not changed. Upper funnel branding continues to be a powerful tool that enables you to set the goals, build associations and trust before the more tactical, information-searching stages of the purchasing process begin. Channels will change over time. New channels will appear, current channels will disappear. But they are still just channels, and channels are a means to an end – not an end in themselves!

Right now, it is crucial that we do not think either or, but both. Addressing the passive part of a market is increasingly becoming an opportunity as fewer and fewer brands are willing or have the courage to invest in it. With more and more companies focusing on lower funnel tactics, many markets have been left there for the taking.

The buying process is not channel specific, so why should marketing be? The time has come for us to put the terms “digital marketing”, “digital marketing strategy” and the like, to rest. Those terms mistakenly elevate tactics to strategy and limit the marketers’ playing field immensely. Instead “digital” should be taken as a given (Do we still have “non-digital” marketing?). We need to get back to media neutrality and establish strategic thinking as our starting point. 



You’re only reaching 20% of your market

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