Marketing for the next normal
Covid-19 has underlined that many marketers’ favorite tools are obsolete. It’s time for marketing with real meaning.
What lifts you up in times of crisis? Humor? The laugh of a toddler? A surprise phone call from a friend? The joy of sharing food with family? Brainstorming? While Covid-19 has forced people everywhere to practice social distancing and to work virtually, we find ourselves more dependent than ever on the power of human connection to recharge our spirits and remind us that we are not alone. Research shows that our stress levels decrease when we socialize with others: it creates and strengthens shared purpose.
After the initial shock of Covid-19, when we have absorbed its dramatic impact on how we work and taken stock of its grim human toll around the world, we will begin to look forward with a sense of renewal and optimism. What is ‘normal’ changed almost overnight, so what lessons were learned and what new routines developed that ought to continue for whatever comes next? One of the most fundamental lessons is that businesses have a unique opportunity to leverage their vast global footprints to become a force for good, inspiring people to reimagine how we should relate to one another – and marketing plays a central role. Why? Because, at its core, marketing is rooted in human psychology. When practiced well, marketing provides evidence-based insights into the human condition that can help businesses address societal needs.
The challenge is that marketers have been distracted from their core task of developing deep understanding of people by recent advances in technology, particularly in data-gathering and analysis. We see patterns in data and infer meaning, but metrics alone do not uncover people’s behaviors hidden within.
The limits of measurement
Business schools teach STP – segmentation, targeting, positioning – as a framework for identifying and reaching customers. Yet too often STP has been used by marketers as a rote, mechanical planning exercise: one which produces sterile generalizations of populations. Covid-19 has been a brutal reminder that the human condition is fragile and demands social connection. One cannot converse with a spreadsheet, ask for its advice about vexing challenges, or expect it to rally us when we are at a low point. Our essential humanity, empathy, and sense of decency toward one another, which are so vital to helping us cope with stress and anxiety, do not reveal themselves in market share data, conjoint analysis or any of the other tools used by marketers.
Advances in measurement methodologies have fostered a false sense of confidence. We tend to believe that the science of marketing has given our organizations greater precision and certainty. Yet while data analytics have improved our ability to precisely measure the impact of various marketing investments, those initiatives are dependent on the marketer’s ability to discern meaning about what inspires us and helps us feel understood and valued. In short, advances in measurement precision have not coincided with advances in understanding how to create meaning.
I am not without appreciation for those who seek to measure performance. I have written several business books specifically about metrics, based on research into more than 500 companies and their leaders. But I have also cautioned about measurement obsession without a concurrent and commensurate devotion to understanding the idiosyncratic human factors that create actual results.
Today, marketing’s adherents must recognize that STP is obsolete. We need to redefine the discipline’s approach to understanding customers, so that our organizations and their leaders can sharpen their focus on how they can help people – in times of crisis and non-crisis alike.
What should replace STP? It is time for CAM: cause, advocacy, and meaning.
Cause is defined as the customer’s personal aim, belief or need, for which they are seeking validation and affinity. Unearthing cause provides far richer customer information than is afforded by conventional segmentation. Probing to understand what influences the customer’s context helps reveal the shared interests across populations not evident in conventional marketing approaches.
A recent television ad for Advil, the US ibuprofen brand, features Neal Unger, a 62-year-old skateboarder who performs remarkable tricks that would normally be associated with someone decades younger. Using cause as the filter for identifying customers, a thoughtful marketer could discern the qualities that 62-year-old Neal and any 17-year-old skateboarder share in common, then apply inductive reasoning to define their cause – such as expressing their personal freedom – that conventional segmentation approaches would have missed. This approach can help marketers develop more impactful offerings.
Cause is defined at two levels: cause with a ‘little c,’ and with a ‘big C.’ Cause with a little c is personal and individual: I have a problem (or an aim), and I need a solution (or a path forward). A simple illustration would be: “I need to communicate with my friends and family, but how do I do it virtually when I am used to being with them in person?” One widespread solution to this suddenly-common problem in 2020 was Zoom, the video conference call technology, which saw its usage skyrocket after most countries around the world implemented lockdown and stay-at-home policies to mitigate against Covid-19.
Cause with a big C refers to the collective needs of society and is therefore more community-based, focusing on the point of greatest leverage to address a complex societal shared interest. For example, Covid-19 is an existential threat. It was critical for scientists to decode it quickly so that global organizations could intervene effectively to reduce catastrophic suffering and eventually create sustained value for society.
With vaccination programs not expected before 2021, health organizations needed to establish universal healthcare protocols. Frequent daily hand washing and the use of disinfectants became part of the new normal for people around the world, but this quickly led to shortages of hand sanitizers and disinfectants. The point of greatest leverage was the world’s medical care workers since they would be in direct contact with multiple virus carriers. To address this big C problem, Germany’s Beiersdorf AG, a leader in personal care products, switched its production lines to mass production of medical-grade disinfectants and shipped them out to hospitals and front line medical personnel. That greatly reduced the chances of those personnel contracting the virus, and of them spreading it among other patients in the healthcare system, or the people they encountered in their daily lives outside of work.
The traditional marketing approach of targeting the most commercially viable customers assumes the lowest common need for businesses: financial attractiveness. This narrow focus strips away people’s idiosyncrasies and softens the sharp edges that define each of us. It is a numbers exercise, reducing customers to dollar-based data points devoid of human qualities, and thereby driving organizations’ decision-makers to extract maximum financial gain with minimal investment pain. This may hold appeal among those seeking budgetary efficiency, but such an approach risks undermining the company’s ability to create real value over time, since the customer’s authentic voice is effectively silenced in the pursuit of statistical perfection. Simultaneously, marketers have struggled to provide convincing qualitative customer insights that could inform more useful and descriptive customer narratives.
A marketer’s responsibility today is therefore to create advocates. Advocates are crucial to any business because they represent more than mere commercial gain. They are champions for the greater value your company offers society beyond products and services, and they share this enthusiasm with others. One way of creating advocates is through human-centered design (HCD), the practice of solving problems that considers human perspectives at every step of the process. It encourages businesses to cultivate insights about customer behaviors and can help them anticipate customers’ latent needs. Marketers must translate a customer’s cause into ongoing advocacy: doing so attracts a more passionate, fervent and dedicated customer, akin to how sports teams foster communities of fans.
Patagonia offers a well-known example of customers as advocates. Since its founding, the company has stood for environmental responsibility and minimizing the public’s impact on the natural world when enjoying the outdoors. This sincere dedication has led to exceptional brand loyalty. Customers understand that the company’s purpose is rooted in environmental responsibility, not making money. Yet it is also financially successful. Customers resell their used Patagonia apparel on the company’s website, creating a secondary market for its pre-owned clothing. The company has its own venture capital fund seeking to help entrepreneurial firms that are dedicated to solving pressing environmental needs. That sense of responsibility also ran through the company’s response to Covid-19. On March 13, 2020, Patagonia announced that it was closing all stores, offices and operations. Would employees lose their jobs? No. They would receive their regular pay, with those who could work from home doing so. Three weeks later the company reopened its online business, with a clear acknowledgement that selling clothing “isn’t an essential service,” and appreciation for healthcare, government and those services for working through the crisis.
Patagonia is not alone. It turns out that socially responsible and environmentally active companies are gaining increasing market acceptance. In 2018, Edelman surveyed 40,000 consumers and found that 59% were ‘belief-driven’ buyers, making their decisions based on a company’s social responsibility. In 2020, Edelman published its latest survey, in which 71% of consumers said that if they perceived a brand to be putting profits over people, their trust would be lost.
The commitment to advocacy and socially responsible behaviour does not come at the expense of financial results – far from it. Marketing’s efforts to develop advocates actually increases the potential for financial gain as a by-product: the contribution to a greater social good attracts more customers who, in turn, also become advocates, creating a virtuous cycle of value creation.
All of us want to feel like we matter. Historically, marketing has concentrated on creating positioning messages to attract target markets, but those ‘company-out’ communications lost effectiveness 20 years ago. The advent of digital and social media ushered in a dynamic era, away from ‘company-out/top-down/one-way communications’ and toward ‘customer-in/bottom-up/ongoing interactions.’ Control over brand reputations shifted from company to market, stranding fixed-mindset business leaders on an ever-shrinking island of traditional marketing thinking. Slick corporate communications became perceived as glib and, therefore, untrustworthy.
To create demonstrable impact with society, authenticity and credibility are non-negotiable. Making meaning requires marketers to understand, empathize and interact thoughtfully with customers. That need has only been reinforced by the Covid-19 crisis and it was refreshing to see companies stepping up to make meaning. Adobe made its Creative Cloud application suite available to schools; Ford provided payment relief for customers leasing or financing their vehicles through Ford Credit, and worked with GE to build 50,000 ventilators; and Hilton and Marriott offered ‘Hotels for Hope,’ providing free rooms near medical centers for healthcare professionals.
Covid-19 has laid bare the inadequacies of segmentation, targeting and positioning. The lessons learned from this crisis to date have reminded us about the importance of human connection. Marketers must use cause, advocacy and meaning to build rapport with customers and help lift them up, even in times of extraordinary challenge and crisis.
— John Davis is regional managing director North America at Duke Corporate Education. Illustration by Ben O’Brien.