Brand share vs. market growth in e-commerce

Advertising, Online Marketing

There are two types of advertising that a brand can do:

Brand share or market growth.

If you are the market leader you will often want to do market growth advertising.

Ie. your aim is to grow the size of your market.

If you are not the market leader you will want to do brand share advertising.

Ie. growing your share of the market that already exists.

To carry out a market growth strategy when you are not the market leader can be a fruitless exercise.

To prove why, let’s for the sake of argument say that Coca-Cola has 75% share of the cola market whilst Pepsi controls the remaining 25%.

Market growth vs brand share

This is why it would be a silly idea for Pepsi to focus on a market growth strategy:

Market growth advertising

The grey area represents how the market has grown (the circle is now bigger) after a market growth advertising strategy.

Although Pepsi has gained some new customers and grown as a result (light-grey), Coca-Cola has grown by three times the amount (dark-grey).

The correct approach for Pepsi to take is to practice brand share marketing:

Brand share marketing strategy

Using a brand share strategy, Pepsi is able to take customers away from Coca-Cola – not only do they gain ground but their competition loses some share.

To be a non-market leader and to grow the market is to hand new customers to your market leading rivals and can be the precursor to downfall.

That is why kitchen towel advertisers don’t convince you that you need kitchen towel, they instead tell you why their brand of kitchen towel is much more absorbant than any other brands available.

Using this thinking in e-commerce

This style of thinking doesn’t (or shouldn’t) just apply to advertising, it should be used in other forms of marketing.

An e-commerce website should not be solely focussed on convincing its visitors that they need to buy its product.

It should instead be telling its visitors why they should buy the product from them instead of their rivals. Their rival will often be the likes of Amazon and Ebay – both have market leading credentials.

If a small e-commerce website does a fantastic job of providing exciting information about a product but does not do a good job of giving reasons to buy from them instead of their rivals it is too easy for the customer to default to the market leader to fulfil the purchase.

Reasons can include:

  • Price
  • Security
  • Speed of service
  • Quality of service
  • Familiarity

The trick of the small e-commerce site is to convince the website visitor that what they offer is better than their (often bigger) rivals.

The small e-commerce website must identify a game that their market leading rival is not playing and then win that game.

If you are too good at getting people interested in buying the product (market growth) but are not very good at selling yourself as the place to buy (brand share) you will be handing customers to your rivals.

Sadly, much of the battle is lost on price when it comes to e-commerce, but customers can be swayed.

A good brand share strategy should focus on shouting about simple promises that can be kept.

Customers should understand that you guarantee next day delivery.

They should understand that you are officially endorsed by the product maker to supply their best products.

Amazon makes it hard for customers to speak to a real person: you can guarantee that it is very easy to speak to a real person.

The brand share strategy that you offer depends on who you are.

The important thing is that you put most of your energy into telling people reasons to buy from you instead of your rivals.

Take from the e-commerce market that already exists, don’t get hung up on growing it.

In Out

Advertising, Online Marketing, SEO

Last week (29/05/2012), SEOmoz rebranded to Moz.

The change was announced using one of the things that made the brand so successful in the first place: a blog post.

The headline news of the post is that Moz is pinning its hopes on ‘inbound marketing’ as opposed to ‘interruption marketing’.

Accompanying the piece is this ‘infographic':

Interruption and Inbound Marketing

Here are a few points of interest:

  • Moz has a vested interest in the successful uptake of ‘inbound marketing’ because its new analytics package will allow you to measure it.
  • ‘Inbound’ is “powered by creativity, talent, & effort” – Are advertising and other ‘interruption’ techniques not?
  • TV, radio and print ads are “responsible for <10% of clicks on the web” – hardly a KPI for offline advertising success.
  • The whole thing is suspiciously thin on the ground in terms of success metrics – which types of marketing brings results?
  • Interruption (the word) is inherently negative.

Considering these points, the graphic above begins to resemble a piece of (not very creative) propaganda.

I am all for the progression of the online marketing industry but not at the expense of other types of marketing.

To automatically dismiss advertising and other forms of ‘interruption’ marketing is to miss a trick.

Then there is the issue of ‘inbound’.

Here is some gumpf from a Moz video about what they do:

“It’s connecting and being responsive on social media and knowing how those interactions pay off…

…and it’s knowing when and where customers are talking about your brand so you can engage them in meaningful conversations.

Moz analytics makes it possible to measure and improve all of your inbound marketing efforts on one platform.”

Phew, I bet all brands have been waiting for a way to engage their customers in meaningful conversations.

Who cares about selling them stuff and providing customer care when you can have a meaningful chat with them?

I’ve lost count of the times I have said “why isn’t there a platform that makes it possible to measure and improve my inbound marketing efforts?”

Despite including ‘transparency’ as one of its ‘core values’, I’d argue that Moz’s use of indulgent language is exactly the opposite of transparent.

Moz certainly offers one of the best resources for online marketers but its leaning towards unproven trends is worrying.

Can you imagine selling ‘inbound marketing’ to your clients? For now, I will continue to work in online marketing.

Everton and Liverpool

Advertising

Everton and Liverpool are two football teams based in Liverpool.

As you can imagine, the rivalry is fierce.

Blue vs. red.

One side of the city vs. the other side.

But there is one place where one of the clubs has used creativity to become the clear victor.

Everton decided to open a new club store in one of the city’s premiere shopping centres.

The club had to choose a name for the store.

They already had The Everton Store at their stadium.

So they decided to change the name of their original stadium store to Everton One.

Making the new store Everton Two.

Nothing particularly clever in that.

Until you consider what the shopping centre is called.

Liverpool One.

So the address on every piece of advertising is:

Everton Two, Liverpool One.

 

NB: For this an similar stories I recommend you have a read of www.predatorythinking.com.

Should I start an e-commerce website?

Uncategorized

No, you shouldn’t start an e-commerce website.

Still want to huh?

To help you decide whether you have what it takes I have put together this list of 10 questions you should ask yourself, to help point you in the right direction.

10 questions e-commerce webmasters should ask themselves:

  1. Are you cheaper than Amazon et al?
  2. Do you have at least 2 full time members of staff to run the website?
  3. Do you use the internet to buy things?
  4. Do you have any knowledge / experience of running a website?
  5. Do you think a site that doesn’t rank number one in Google can still be a success?
  6. Do you stock products that people can’t buy anywhere else?
  7. If yes to previous question – do people actually want to buy the products you exclusively stock?
  8. Are you cheaper than Amazon et al?
  9. Do you know what a USP is?
  10. Are you cheaper than Amazon et al?

If you answered no to any of these questions don’t start an e-commerce website.

Best of luck in the future.

Companies in orbit

Advertising, Online Marketing

Bob Hoffman, AKA the Ad Contrarian wrote a storming piece this week about how stupid people in business can’t do too much harm.

That’s because the companies that they work for have already achieved orbit.

That could be the reason why rash, social media driven decisions, no matter how misguided tend not to destroy companies completely.

Take PepsiCo for example.

In 2010 they launched the Pepsi Refresh Project that saw them divert most of their Pepsi advertising budget towards social media, most notably at the expense of their Super Bowl ad spot.

The project was an unrivalled failure and was clearly the product of a stupid person.

Despite losing some ground (-5% market share), things aren’t too bad for PepsiCo, they are still selling pop.

Despite making a decision that would have killed a lesser brand, consumers are on the whole oblivious to any change.

That’s because PepsiCo is in orbit.

As Hoffman explains:

“With enough energy, a satellite will escape the gravitational pull of earth and will achieve orbit. Once it achieves orbit, it operates on its own. It will circle under its own power for years. And the only way to knock it down is to get in its way.”

Businesses are the same.

PepsiCo and the brand Pepsi has so much history, so much advertising success and the weight of so many customers that they have achieved orbit.

PepsiCo has broken free from the gravitational pull of the world and has been orbiting for a long time.

It would take something catastrophic to take it down.

The governments of the world banning brown fizzy drinks would probably do some damage.

A stupid marketing executive isn’t that powerful though.

They can redirect the entire marketing budget to social media for a year and not worry too much about destroying the company.

So next time you see a big company do something rash, don’t just assume that it is a good idea because a big company ‘wouldn’t just do something stupid without having good research’.

Chances are it is a bad idea, just not bad enough to knock them out of orbit.

SEO industry is influenced by complicators

Online Marketing, SEO

Search Engine Land is arguably the most regularly updated source of news for online marketing professionals.

Currently at the top of the bill is news of a new Google Penguin update.

The update is called Penguin 2.0, or Penguin 4.

2.0 or 4?

Which one is it?

Whilst I sit here with my morning coffee, trying to decipher the name of the update is hard, so what chance does anyone have of working out what the update actually means?

This is endemic of the current state of online marketing, where obfuscation is used as a tool to confuse clients to the point of compliance.

Look at this article from Search Engine Land about Penguin 2.0 / 4.

A full three quarters of the way down the page and words are still being used on working out what the update is called.

I (like many I suspect) scan these types of articles in the brief moments of down time I have throughout a day.

I like to think of myself as relatively able at understanding new ideas.

Yet I have no idea what this article is about.

“but if this next one is the “true” Penguin 2, are we going to make a mistake calling it Penguin 4? I’ll argue not as big a mistake as if we called it Penguin 2.”

What?!

After all of this name calling there is a video at the end of the article by Google’s alpha geek, Matt Cutts who explains what the ‘future holds’ for the search engine.

His headline message is this:

“Make a great site that users love…we try to make sure that if that is your goal we (Google) are aligned with that goal.”

That sounds pretty simple to me.

Don’t build a crappy website.

Don’t build a website people won’t care about.

Put hard work in and you will succeed.

That last one sounds familiar.

Oh, that’s right, that’s because it applies to absolutely everything else in the world.

Don’t overcomplicate things. Just work hard, moron.

Nothing is new

Advertising, Online Marketing

Everything creative you think of has been done before.

Stop fighting it, you won’t win.

Someone better than you did it first.

And then someone else did it again.

You are just repeating the cycle.

No matter how hard you try, nothing you do will be new.

Although this sounds like a desperate situation, it really isn’t.

Dave Trott champions predatory thinking.

Predatory thinking is about changing your perspective on a problem and only solving the part that you need to in order to reach your goal.

In practice, this means beating your competition instead of achieving perfection.

Trott tells the story of two men walking through the jungle being stalked by a tiger.

One of the men laces up a running shoe whilst the other scoffs: “you will never outrun a tiger”.

To which the other man replies; “I don’t need to, I just need to outrun you”.

The goal is to not get eaten.

Beat your competition and you achieve your goal.

And so back to creating something new.

To create something genuinely new is perfection.

It is hard and in most cases impossible – like outrunning a tiger in the jungle.

But why even bother?

True creativity is taking something that exists and showing it to a new audience.

To the new audience the thing will be new.

You know it isn’t, but they don’t.

One of the best examples of this is in music.

Pendulum is an Australian dance / rock music act.

They used to make run of the mill dance music.

To a seasoned dance fan’s ear the music was the same old thing they had heard before.

The true creativity of a band like Pendulum was to go chasing the affections of rock music fans.

They appeared in Kerrang magazine and played at rock festivals.

To rock fans, Pendulum’s music was absolutely new.

Yet the music isn’t new, the fans are.

But the fans don’t know that.

The band gets hailed as trailblazers by one camp and copy cats by another.

But at the end of the day they achieve their aim: sell lots of CDs.

Nothing is new, but your audience doesn’t know that.

Lock-in and processes

ISO:9001, Project Management

The best processes should be adaptive to changing requirements and encourage the learn and improve cycle.

For that reason, implementing a process documentation system that requires a time or financial cost to update encourages lock-in and ultimately makes the process less able to change.

Lock-in is something that becomes common amongst medium to large businesses.

Perhaps the most common form of lock-in I come across is to do with the web browsers that my clients use.

If my client works for a large company, chances are that they have an IT department.

IT departments who have a remit to maintain hundreds / thousands of machines can become prone to lock-in.

This is the reason why IE6 has survived for so long. Not because people like using it but because the admin nightmare it would cause an IT team to update outweighs the perceived value of doing so: lock-in.

Of course lock-in is a negative thing. It is restrictive and forces decisions to go the way of the lock-in.

This is why processes must exist outside of the realms of lock-in.

If a process becomes locked-in then it cannot be improved and the process will begin to exist for existence’s sake.

This is why, in a recent conversation I had with someone who is implementing a quality management system I was shocked when they explained their plan to have their entire company process produced on a wall chart.

The wall chart would require a level of pre-planning, design and a relationship with a company to produce it.

The idea of the wall chart was great.

It would allow the company to monitor clients as they move through the company process.

The actual chart however would be the opposite of agile.

Imagine this scenario;

You review your process and find a small area that needs a minor change to improve things.

You remember that although you can change the process, it won’t be reflected on the wall chart.

The wall chart is too expensive to bother with changing for such a small tweak.

With the wall-chart as the go-to for members of the team there is a risk that they may continue working from the existing process and not the new and improved process.

You decide that it is safer to keep the process as it is so that everyone is working from the same plan.

Lock-in.

Ideas and Delivery

Online Marketing, Processes, Project Management

I was recently talking to someone who asked me, “what do you mean when you say that ‘ideas are more important than delivery?'”.

It was in reference to a line on the about page of this website and was a good question.

Finding myself in a tricky spot where the only exit was the exact shape and size of a well considered answer I had to engage my brain.

After a brief delve into my memory I answered:

It was based on my time spent studying and subsequently working at the University of Winchester with Chris Horrie who is always full of good ideas.

Not only is Horrie always full of good ideas but he has an uncanny ability to side-step the awkward politics and difficulties that crop up with delivery.

The result of this was that ideas were cherished and encouraged and delivery was believed to be a thing that would follow, one way or another. A solid idea craves delivery.

Although my answer goes some way to describing why I used the ‘ideas are more important’ line on my about page, I don’t feel that it fully captures the essence of what I was getting at. It also risks writing off ‘delivery’ as not-so-important, but this is not the case.

So, a more concise answer would be this:

Good, solid delivery of a project will never be able to save a bad idea from failure.

A good idea can survive shoddy delivery.

That is why ideas are more important than delivery.

Delivery can happen, there is always a way.

Good ideas cannot be faked. You must work hard to own a good idea.

A good example would be a client who I worked with some time ago.

The client had an idea, it was to create a website that would provide a place for amateur creatives to publish their work, sell it, share it on other websites and the like.

Not a bad idea but it was missing a couple of key things.

1. The client had no solid proof that there was an audience for this product.

2. The client had no pre-planned method of gathering a significant audience, instead opting for a ‘build it and they will come’ attitude.

Fast forward a few months to the delivery of the project, a fine delivery at that.

The website was delivered in the form of a technical masterpiece. Chock full of features, bells, whistles and empty database rows ready and waiting for creative work.

Despite the great delivery and subsequent addition of new features, up-take on the site has been slow to say the least.

The delivery followed the brief perfectly but the idea within the brief needed more time to brew.

I am confident that the site in question will come good, all it needs is some good promotion, but that requires going back to the ideas stage.

You can’t fake hard work at ideas stage. Delivery will always happen.

Vine

Online Marketing, Technology

Here is a solid lump of bullshit for you.

On econsultancy.com there is an article that reviews the top 5 best and worst examples of brands using Vine.

Here is the review of the first of the ‘best examples':

Urban Outfitters

This Vine is great as it shows two cute dogs, and the only two absolute truths in marketing are that sex sells and people love to share content about animals.

Secondly it just has just two different clips in it, so it’s not painful on the eyes.

Wow, that sure was useful.

Let’s deconstruct this.

“This Vine is great as it shows two cute dogs”.

OK.

“the only two absolute truths in marketing are that sex sells and people love to share content about animals.”

Nope, that isn’t true.

“Secondly it just has just two different clips in it, so it’s not painful on the eyes.”

It is painful on my eyes, but not because of the clips, more because it is wasting my eyes’ time.

If this is in the top 5 of the best Vine has to offer then I think it is safe to say that, so far, Vine is a waste of time.