Listen! Hear that? Its the sound of the penny dropping in thousands of boardrooms around the globe. Actually, I didn’t hear it either, but its like a black hole, you might not see it, but there’s increasing evidence of it having happened.
I mentioned a few weeks ago that I have had a few interesting discussions lately with organisations that were looking to leverage their brand community and all of a sudden it seems I am falling over organisations that are doing the same. I was in Stavanger early this week, talking to investors, business managers and marketing services businesses and the theme emerged there and yesterday in Prague I met a marketer from a leading mobile operator who had this issue clearly in view too.
At last businesses are realising that its not viable to rely on acquisition to generate your growth – its far too expensive and the return is modest, mainly because most markets are fully subscribed and everyone is buttoning down and tying-in their customers. The only untethered targets are in emerging economies where you’ll be climbing over your competitors to reach the same customers. You have to do this of course for the sake of your long-term health, but its more important than ever to do it efficiently and if you visit this post frequently you’ll know that I think we still have some way to go in developing efficient marketing. However, that’s another subject.
There aren’t a lot of folks around right now who are looking for stuff to spend their cash on, most are struggling with the commitments they already have and those that aren’t are quickly becoming as rare as hen’s teeth. Other than the poor inundated souls in these new territories there just aren’t going to be any new customers to chase so your growth has to come from your existing customers. This is nothing new. Way back in 2005 the State of Marketing Survey that was conducted by IDG for Prophet revealed that 62% of business growth was already comming from existing customers and that organisations were looking to the same segment for 72% of their growth in 2006 (it doesn’t seem that Prophet have followed up on that report so I can’t say that they were right although its a believable figure).
So, there’s still no doubt that the emphasis has to be on growth from existing customers (in fact it might be moreso) but factors like the arrival of recession mean that even this cash cow is about to become tougher to milk. So where is the easy growth going to come from? The answer to that question takes us straight back to The Brand As A Medium, one of my long time causes, but, of course, to to be in this game you first have to have a strong brand community. Don’t say I didn’t warn you, I’ve been promoting the need for brand development for years. If you weren’t listening and didn’t get your brand in shape you are in trouble because you don’t build the kind of brand strength you will need to make this work, overnight. In the past I’ve managed to deliver measurable results from brand-building programmes over a twelve month time-span, but, everything is tougher now and if your brand isn’t sorted already, you need to be thinking in terms of a three-year development phase before your community offers third parties any real value. Sorry, but these are the facts!
Before you jump from your executive balcony though … If you start now, and I mean this minute, today, and run a brand development programme in parrallel with an operational efficiency drive you might just emerge from the recession fit for battle. Note please, I’m not saying you’ll achieve growth to match that of the businesses that did their prep. You might get something short term, but for you payback will come when trading conditions improve. Never before has Full Effect Marketing and programmes like Brand Discovery been more relevant.
October 2, 2008