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✋ The No. 1 Marketing Mistake + How You Can Avoid It
46 Plays4 months ago
This recording is based on one of the top 5 most read newsletters of the last year on The No. 1 Marketing Mistake and how you can avoid it.
You are listening to the Summer Edition of the FutureStrategies Podcast - A show about where marketing, strategies and sustainability intersect. I am currently taking a break from interviews. So you will get 5 short episodes over the summer, where I will lead you through the most read postings of my newsletter. Interviews will be back in autumn 2024.
If you are curious for more deep dives from my newsletter, you can sign up with this link.
About Florian Schleicher: I'm a marketing strategist - over the last 15 years I've led and helped shape marketing at McDonald's, Greenpeace and Too Good To Go. Now I help forward-thinking companies take their marketing to the next level.
With FutureS, my Marketing Studio, I help brands achieve their goals and sustainable growth. All without the usual hustle.
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Transcript
Introduction to the Future Strategies Podcast
00:00:00
Speaker
Hello, my name is Florian Schleicher and this is the Future Strategies Podcast, a show about where marketing, strategies and sustainability intersect. You're listening to the Summer Edition, where you will get five short episodes where I will lead you through the most read postings of my newsletter. So over the next couple of weeks, you will get a best off with me. And if you want to read them all, you can sign up anytime with the link in the show notes. I will be back with more exciting interviews from inspiring leaders in autumn this year. So now you can just relax, enjoy and we'll jump right into it.
Exploring Why Startups Fail
00:00:40
Speaker
Starting marketing has never been that easy. And never before has it been so easy to bring a project to life. But despite this, many companies fail every year. It made me very sad to hear from some founders in my network that 2023 was their last year in business. 9 out of 10 startups fail. And that's what I want to talk with you about today. Why do so many startups and projects fail? What does it take for sustainable success? And how can startups and projects be made a success? Ready?
00:01:14
Speaker
First, why do so many startups and projects fail? What does failure even mean? In my view, failure means that not enough turnover and profit can be generated to ensure the continuation of the company or project. We know that two-thirds of all startups never manage to achieve a return on investment. The success rate of first-time founders is just 18%. And 20% of all startups don't survive their second year. So although it's possible to start a business from home these days and you don't need a big investment, many don't make it.
Importance of Market Needs and Strategy
00:01:52
Speaker
The main reason, apart from the financial end, 35% of all startups and projects don't fulfill market need.
00:02:03
Speaker
A good idea is created and the product or service appears logical and clear from an internal perspective. But the market, the target group, doesn't exist. It doesn't have this need and therefore has no reason to make use of a new solution and change their behavior. This happens when no strategic process has been followed. Too much time has been invested into programming the product itself, but too little time has been invested into analyzing the target group. So there was no good marketing strategy. Good marketing with a great strategy means understanding what the market wants and then creating products and services that satisfy those needs.
00:02:49
Speaker
Second, what does it take for sustainable success? The success of any new idea, whether a startup or a project at the end campaign always depends on having a clear strategy. And this consists of a diagnosis, guidelines and actions. The first step, the diagnosis, is where we analyze the initial situation we are facing. A key aspect of this is to understand who our target group is. The most common way I see this done is by determining what the demographic characteristics of a group are, so their age group, where they live, their income, <unk> etc. However, this approach leaves out a key success factor for a good marketing strategy.
Understanding Customer Needs: The Milkshake Case Study
00:03:36
Speaker
because as Clayton Christensen and Michael Raynor wrote in The Inverator Solution, Predictable marketing requires an understanding of the circumstances in which customers buy and use things. Specifically, customers, people and companies have jobs that arise regularly and need to get done. When customers become aware of the job that they need to get done in their lives, they look around for a product or service that they can hire to get the job done.
00:04:07
Speaker
So above all, we need to understand the situation of our potential target group to know who they are. Many people with completely different demographic backgrounds may have the same problem for which they are looking for a solution, as Emily Hayward pointed out in Obsessed. She writes, the key problem for that audience is what is missing from their lives. Of everything we know about them, what is the most salient problem that this business can solve? If we understand what the problem is, we can tailor our solution to it and really understand our target groups. If we don't do this, then we are working for so-called phantom targets. Target groups that do not exist in reality and therefore don't help us to achieve economic success and survive. So the first step in any successful marketing strategy is to find out who and why they need us.
00:05:05
Speaker
and then base all further decisions and guidelines and actions upon this. Nikhil Trama wrote, if you're not adding value or creating solutions, it's going to be tough. So having a better way to address an existing problem or being the first to tackle a new one is critical. Simply said, don't sell, solve problems. Instead of trying to sell your product or service, try to solve your customers' real problems. This may include helping individuals and organizations to achieve their goals and helping them overcome challenges.
00:05:43
Speaker
To do this, we need to know and understand the perspective of our potential customers. Not to think from a product perspective, but act from a customer perspective. And finally, third, how can startups and projects be made a success? Every project, every company, every product, and every startup needs a clear strategy. The good news is, as my friend Rob recently wrote, it doesn't matter if you write a strategy as long as there is one. And this starts with a razor sharp diagnosis of the problem we are facing as a company and the problem that our target audience has. This requires us to take an external perspective. And there are a few good techniques, methods, and approaches for this, which I will show you here using a great example.
00:06:36
Speaker
I previously worked for McDonald's and many years ago, the McDonald's marketing team was given a new goal to increase the sales of milkshakes, not a challenge for a talented marketing team with an unlimited budget, right? So they started a focus group by demographics of data from millions of customers and conducted interviews with them to make the milkshakes better, assuming that customers could truly tell how to create a better product. The result? No clear answers. No change in sales. Then McDonald's brought on an outside consultant, Clayton Christensen, who took a different approach.
00:07:15
Speaker
To find out what customers were looking for when they ordered a milkshake, he and his team spent entire days in a restaurant, carefully recording who bought milkshakes. They noted the time of each milkshake purchase and what other products were bought, whether the customers were alone or in a group, whether he or she consumed the milkshake on the premises or drove away with it, and so on. The most surprising finding from this work was that almost half of all milkshakes were bought in the early morning. More often than not, the milkshake was the only item purchased and it was rarely consumed in the restaurant. So the researchers re-interviewed customers who bought a milkshake in the morning to find out what they intended to do with the purchase and ask them what other products they bought instead of a milkshake on other days when they had the same task to do.
00:08:09
Speaker
and most had ordered the milkshake to a achieve a similar goal. They had a long boring commute ahead of them and needed something to make it more interesting. They weren't hungry yet, but they knew they would be hungry at 10 am m if they didn't eat something now. They were also faced with other constraints. They were in a hurry, often wore their work clothes, and had at most one hand free. Finally a clear problem. People are looking for a simple snack that can be consumed in a car with one hand and they will keep them full for a long time. No bagel, no banana, no sausage roll, no donut can do that, but a milkshake can. And this also makes the solution to increasing sales obvious as Kristensen described in his book.
00:08:59
Speaker
To tackle the boring commute job, for example, the chain's managers could swirl in tiny chunks of real fruit. This would nail the boring commute job even better because the drivers would at random suck crisp, flavorful chunks into their mouth, adding a dimension of unpredictability and anticipation to a monotonous morning routine. The chain could make the shake even thicker, so it would last longer. and they could set up a self-serving machinery restaurant that customers could operate with a prepaid card to get in and out fast. A good diagnosis looks at the situation, the motivation and the outcome, the result that the purchase of our product and service should achieve. Demographic data doesn't give us this result. We have to observe our customers directly.
Challenges in Strategic Marketing
00:09:52
Speaker
Like National Geographic, go in search of them
00:09:57
Speaker
To do this, we need to first find out where they are and talk to them again and again and again and test new hypotheses directly. Because if they don't know what they need, they simply act emotionally driven. Yes, this type of strategic marketing approach is time-consuming and therefore cost-intensive. It's therefore no easy task, especially in difficult economic times when the next quarterly result is waiting in the wings and the short-term success is sought. Economic pressure and corporate mandates to show the value of every dollar spent have made marketing so much more focused on short-term results.
00:10:40
Speaker
The creative efforts that align with long-term brand equity and overall brand values often feel like they've taken a backseat. Consumer attention has become a scarce commodity, but the tactics designed to get long-term traction and create loyalty, things like brand equity, brand consistency, customer experience, or even net promoter scores don't feel like a priority. let's add But every good marketing strategy starts with a clear understanding of the target group and inside the aha that is based on a problem. And that's the only way that startups, new projects and companies can be successful in the long term. Fortunately, in addition to time consuming research, there are a few other simpler techniques that also work with a little experience and knowledge.
00:11:34
Speaker
You can work with an outside expert, a person who understands how people think, who can do the research for you or guide you through the process to
Conclusion and Call to Action
00:11:44
Speaker
get there. Because in the end, you should use your time well in order to create a business that thrives and that survives.
00:11:55
Speaker
That's it for today. Thank you so much for listening. If you have enjoyed this episode, please give me a rating and forward it to a friend. This means the world to me because I pour my heart into the production of these episodes. If you're looking for an easy way to learn the basics of strategic and sustainable marketing, check out the Simple and Sustainable Marketing Academy. This is my online group learning format for founders and future marketing experts. Or you can sign up to my newsletter where I write about marketing strategies and sustainability with a lot of examples and methods that you can use yourself. And finally, if you want me to help you with the project, please just reach out to me through LinkedIn or my website with the link in the show notes. Thank you so much for listening and I look forward to sharing more with you in the next episode.