“Pay it Forward” Marketing

Good marketing uses time-tested practices to acquire new customers while minimizing spend.  While the web has augmented this purchase process greatly, the fundamentals of exposing new prospects to your brand and driving referrals from your installed base remain. But change is afoot. Companies have been leveraging online communities for years to drive awareness.  But with the advent of the programmable web and connected devices, they are discovering they can improve their market position by giving back to them as well.  Releasing their platform as open-source on GitHub or making their community data API accessible are now considered strategies. They have also built powerful referral engines around their business.  Moving a customer through the stage of consideration to preference almost always involves enabling a trial experience — at a minimum a product display in retail.  Consumers seldom put out big dollars for something blindly.  But smart connected companies are not only using their existing customers to find new ones, they are also using them to provide this pre-sales demo experience.  They have shifted their marketing investment upstream into the products themselves. Not every product can easily participate, but with forethought certainly every company can leverage the new dynamics to better establish their brand in a world increasingly dependent on direct consumer feedback.  Every company should be trying to “Pay it Forward” – it’s very good marketing.   Before diving deeper, a quick setting of the stage will help clarify.

Creating awareness yesterday – “Push & Pull” marketing

Awareness generation utilizes three basic groups of tactics – traditional MARCOM, traditional product channels, and digital marketing approaches leveraging the web.  First the classic push of advertising to get folks to the store, and then the pull of the store promotions to achieve purchase. The majority of marketing awareness spend continues to be directed at the traditional venues of TV, Radio, and in-store activity ( but this is shifting quickly – large companies are now directing 10% of all spend to mobile.)  These tried-and-true channels are likely to remain popular for high-volume consumer goods with broad customer appeal.  Established brands maintain their position through advertising – think Coke, McDonald’s, or Ford.   But for demand generation at the product level these tactics are no longer cost effective.  Traditional marketing has really become “Big Buck Marketing“, devoted solely to brand maintenance (and selling pharmaceuticals or political causes) rather than awareness.

Traditional MARCOM Traditional Channels Digital Marketing
TV, Radio, Print PR Direct Mail Email marketing Telemarketing Retail – Circular ads Retail – In-store POP displays Direct Retail Distributer Dealer Inside sales Outside sales In-home sales OEM Customer support Service support Online display ads SEM SEO and Content marketing Email flighted campaigns Social networks Affiliate networks Influencer-Paid placements Online retailers

For physical products, a lot of product-level awareness continues to take place in traditional channels.  Big box retailers, specialty shops, and direct sales remain the best means to expose new prospects to a product and allow them to experience it (if only to touch…).  But even here the trends are negative.  New products are having a very difficult time getting space in the consolidating retail market.   Relying on a channel partner to create demand for a new B2C product usually proves disappointing.  But for many B2B or complex consumer products the “One-on-one” marketing approach of direct sales remains preferred. Unlike traditional approaches, Digital Marketing leverages the power of our connected self.  We seek the deep rich information it provides.  We want its many options and product customizations.  We like to talk about our desires and purchases.  And our most “trusted advisors” have always been our friends.  Not surprisingly, much of the purchase process has moved online. But the game has not changed much to date. We just learn more faster;  companies use our online profiles to drive better marketing spend efficiencies through tighter targeting of prospects and leverage of online communities.  “Growth Hacking” has excelled at finding untapped means to accelerate product discovery by their selected targets.  But when we step back, the basic steps of our purchase process remain untouched.

Creating awareness tomorrow – “Pay it Forward” marketing

By putting these tactics on the following 2×2 grid we see a huge transition underway in the marketing mix.  Digital marketing has shown the most efficient tactics use “users to reach users”.  They use the power of connected communities to get products in front of prospects.  As always, winning marketing strategies engage the user.   They educate him, entertain him, tell him a story.  They hold his hand and demonstrate the product.  The wonderful dynamic of a direct sale centers on user engagement. But a new and much more powerful quadrant is developing for connected products and services.  Not only do they leverage communities of users and offer powerful ways to engage their customers through their devices.  The best ones also create a powerful pre-purchase demo experience and also give back through releasing real value back into the community.  In doing so they create that most valuable of currency – the brand advocate.

Awareness Generation Matrix

The new marketing strategy must execute across these four dimensions for max acceleration and long-term competitive advantage.  They must:

  1. Leverage a user community appropriate to their offering to drive awareness.
  2. Insure high user engagement with their prospects during the sales process.
  3. Contribute back to the community creating a powerful tribe of advocates committed to their success.
  4. Enable their installed base to “demo” the product to another community member as a natural act of use.

Doing this will create “Pay it Forward” marketing.  Some examples to illustrate.

Strategy Approach Company examples
Leverage user community Build around large existing platform Leverage APIs of social platforms WPEngine – WP only hosting WordPress plugins: eg. Yoast SEO Facebook OpenGraph
User engagement during sales process Live demo sites Free trail or Fremium service tier WooThemes – Live demo of themes Buffer – Free up to four social profiles
Giving back to the community Open Source software Big data set APIs Focused Cause eg. Price transparency data Opensource graph database – Neo4j.org 23andMe Genetics for your app Twitter Bootstrap Health pricing Data.gov
Enabling virality in installed base Data contributes to experience Data of interest to friend Data of value to community FitBit fitness tracking Waze traffic monitoring Dropbox community strategy SlideShare embedded presentations

Note that this is not instant marketing – it’s a long-term strategy.  Unlike Growth Hacking which focuses on massive acceleration from zero sales early in a product’s life, Pay-it-Forward marketing requires sustained investment and commitment.  But those who achieve success here will also have secured extremely defensible market positions for the long haul.

Want more on the future of marketing?  Follow me @gilbertdw.

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