Rethink Marketing

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Identifying the Real Causes of Marketing Problems

 

Marketing problems are easy to spot – sales are down, customer attrition is up, the market has shifted, the product launch fell flat, or that exciting customer retention program isn’t generating the expected response. But while identifying marketing problems is easy, unraveling what caused them is not.

For example, a problem may be that a new advertising campaign “isn’t working.” Investigation centers on the effectiveness of the advertising – specifically, the message and design. But is that really the problem or an indicator of the problem? Advertising ineffectiveness can be caused by a variety of factors beyond messaging and design – for example, the publication mix, frequency or page placement, media choice, or even the accuracy of the buyer profile.

Identifying the actual cause of the problem obviously is critical to resolving it. Yet it’s common for investigation to stop short and focus on the most probable cause which may not be the real one. When that happens, turnaround activities tend to be misdirected, the root cause remains unexplored, and the implementation of legitimate, effective solutions is delayed.

The results of causal misidentification can be serious. While companies waste money and resources, the real damage can be far greater – decreased product momentum and revenue gains, declining employee morale, diminished executive approval, fading customer perceptions, or the loss of competitive advantage.

But what leads to causal misidentification? While the reasons can be complex, an inadequate discovery and analysis process is often the culprit as the following real-world example reveals.

A "Too-Fast" Solution

A software company had a problem: sales of a network security auditing product were declining rapidly. An opportunity surfaced to promote the product directly to independent auditors through an auditor association, even though the primary target market was known to be internal corporate auditors.

Executive management approved an 85% discount to encourage product “seeding”; one year of updates and maintenance was included. The campaign was handed over to Marketing to implement, but there was hesitation: the initial analysis indicated the project could generate unfavorable reactions from existing corporate customers and potentially damage the product and corporate brand. Additionally, Marketing learned that the internal sales team could not allocate resources to support outbound follow-up calls.

Though these findings were presented quickly to management, the decision was made to continue. A three-part direct mail campaign was launched along with special association magazine wraps, advertising, and inserts.

After two months of aggressive advertising and direct mail efforts, the final results indicated less than a 0.2% response rate from the association’s members, and no product sales. Additionally, the backlash from existing, full-price corporate customers was more severe than anticipated – irritated customer calls were fielded by executive management, and negative word-of-mouth was reported by the sales team, aggravating its efforts for months afterward.

What went wrong? For starters, the company believed it simply did not have the time to investigate the problem thoroughly: markets were changing and windows of opportunity were closing. In place of solid business intelligence, the company relied on weak anecdotal information to support the first intriguing idea that came along.

The company also ignored its previous segmentation and target market data in favor of a niche market that seemed promising. No research was performed, however, to validate this segment by identifying the buyer profile, his/her needs and drivers, and the purchasing power of these individuals.

Overall, the desire for an immediate boost in product revenue overshadowed the long-term marketing strategy and created unrealistic expectations of the campaign, the response of potential buyers, and the speed at which revenue would increase. Additionally, the decision not to explore the potential impact on current clients proved to be detrimental to customer satisfaction and long-term sales.

Digging for Answers

What should have happened? A more thoughtful exploration of internal and external factors should have occurred to review all potential causes of declining product sales and develop a campaign solution with a high success potential. Through the discovery process, these and other questions should have been considered:

  • Customer: Has our customer changed? Are their needs shifting? Is the product still meeting their needs? What is the confidence and satisfaction level after use?
  • Product: Is the product considered to be cutting edge or is it falling behind technologically? Why? Is it easy to install and use? Is it problem free? Does it deliver the benefits claimed?
  • Sales: Is our sales process effective for this product? How much time does the sales team spend on promoting this product? Is their interaction effective? Are demos needed? What are the obstacles encountered? How should we respond?
  • Marketing: Are the product messages in line with customer needs? Is the value proposition on target? Are the product benefits relevant? Is the promotions plan effective?
  • Competitor: Have competitor products leap-frogged us, or have they significantly changed their marketing strategy? Is there a substitute product coming on stream? Are our product features targeted for absorption by other network offerings?

For this company, subsequent findings revealed sales process weaknesses, a slowdown in product improvements, and the introduction of a more robust competitive product to be the underlying causes of sliding sales. Even a smart marketing campaign would have had difficulty overcoming these unresolved core issues.

In the end, three months and significant customer goodwill were lost while implementing this unsuccessful advertising campaign, a result that could have been avoided with more due diligence.

Toward Better Results

Sometimes it can be difficult, awkward, or even painful to dig deeply and identify the real causes of a marketing problem. Yet long-term resolution demands thoughtful review and analysis before expensive or time-consuming solutions are put in place. By engaging in consistent and careful discovery, companies can avoid unsuccessful turnaround activities and achieve better, longer-lasting results.

ReThink Marketing can help your organization uncover the underlying issues to your marketing challenges and drive home effective results. Call us today.

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