Key Learnings from Malcolm McDonald's Address to the CIM Small Business Conference 22nd May 2015

How to develop a strategy to grow sales and profits  

Digital MarketingHere we look at one of the key speakers from the CIM conference, Professor Malcom McDonald and his talk on how to develop a strategy to grow sales and profits.  As always Malcolm is pragmatic, easy on the ear, and fond of debunking a few marketing myths here and there, including questioning the focus on digital marketing. 

Professor McDonald started his talk with this quote:

For many companies, the greatest threat is not being out of touch with digital developments, but losing sight of the fundamental needs of their consumers and the underlying long-term drivers of their business. (Forward 50. Nicola Kemp, Marketing, Nov. 2013, p.52)” 

Key to this talk was the importance of digital being part of the whole marketing strategy, not the be all and end all of itself.  We couldn’t agree more.  Traditional methods of marketing are still highly relevant.  But it does make integration of the off-line and on-line journey slightly more complex.  As we noted in our Ocado case study, the on-line journey often starts off-line with a TV, radio or press advertisement, for example.  Equally a journey that starts on-line with a Google search may end up in a shop as consumers adopt web-rooming strategies of searching online for information and then concluding the purchase on the high street.  

McDonald goes on to reiterate the importance of real people and real promises with this quote from Helen Edwards:

“Yes, the fourth wave of digital marketing has arrived, but consumers are drowning in an ocean of branded pap and the interactive lifeline they really want to be thrown is the one whereby companies answer calls promptly, answer calls in person, keep their promises, make better products and contribute to a better world.”  (Helen Edwards, LBS in Marketing, November 2014 pp 36-37 ). 

I grew up as a Product Manager at BT and remember desperately wanting to be the Advertising Manager.  Marketing communications seemed so much more glamourous than managing the product.  Only as I grew in that role did I realise again and again that along with the Customer, the Product really is King.  Without a great product and happy customers  (the true long-term drivers of the business) , all your efforts to build search engine rankings and a great content and social media strategy really can’t deliver profit.

The purpose of strategic marketing, McDonald, re-iterates, is to develop sustainable competitive advantage.  Here the words, “sustainable” is key.  Sustainable advantages can’t be achieved by technology or pricing alone.  Technology can be rapidly emulated or superceded.  Battling on price creates price wars which may damage an entire industry, and can be incredibly difficult to sustain profitably.  What consumers will buy into however is brand value. 

We only have to look at Apple, the first $200bn dollar brand, to see brand value in action.   Although Samsung is the most commonly owned mobile, the Apple iPhone is the only mobile brand making any significant profit on handsets (Mintel 2015).   According to Mintel (2015) the key brand value that Apple ranks highest for is Differentiation (the product part of the mix) and Apple are just behind  Samsung for Trust. Remember Edwards' quote above about better products and companies that keep their promises. 

So where does digital marketing fit into all of this.  Is it strategy – all important – or is it tactical?  To Thrive you need an effective strategy, based on a sustainable advantage and you need effective tactics.   

Commsbox Commentary: So what is the difference between digital marketing strategy and tactics?

The role of digital marketing is to support the overall marketing strategy. Strategic digital marketing is where the digital elements of the marketing mix add to your sustainable competitive advantage in any or all of the 4Ps.  This is particularly the case where the website IS the product. 

Websites as Products

Increasingly websites are becoming the product or an integral part of it.  For example, the traditional middle class careers such as law and human resources, and even marketing consultancy, are moving towards online products replacing whole departments in companies.  MyHRDept.co.uk is an example, where small businesses can replace an HR Department with an online and telephone support package.  Online products typically offer speed of access and cost savings as key differentiators. Based on a Freemium model, the SmartInsights website offers much free information, and then by subscribing businesses can obtain templates and other more detailed resources for developing marketing strategies.

Supercar Dating ScreengrabAt a B2C level we might consider Spotify which is busy replacing physical music, and so differentiates itself on being able to extend the sheer number of tracks you can listen to, as well as differentiating on price.

Online dating has all but replaced traditional dating agencies and is one of the fasting growing online industries.  

In developing the website for Supercardating.com, the dating website for those who enjoy the supercar lifestyle, graphic design and layout was just one consideration for us here at Commsbox.   Where the product IS the website, far more is involved, including integrating the digital presence with the entire customer experience and the business processes that support it.

In all these cases the website is strategically  linked to the businesses processes, delivery of product, payment and promotion.

Websites as Channels to Market

The website may not be the product itself, but it may be the exclusive channel to market as in Amazon or AO. The purpose of these sites is to sell directly to the consumer.  The strategic importance of an online only channel for physical products is savings to the company in terms of decreased need for real estate, stock and staff.  This can then be passed onto the consumer in the form of lower prices.

Websites as Key to Stakeholder Engagement

Bletchley Park screen grabFor some the digital presence is not so much a way to sell products or services, but an enabler for ongoing communication with a wide range of stakeholders.  For example in the third sector, charities have many difference audiences.  There is a difference in the way an organisation might communicate with visitors compared to staff, volunteers and services users.  In developing the website for Bletchley Park, we helped to integrate the digital presence with many other processes including the selling of tickets and merchandise, distribution of news and booking of events.  The website is a central and busy hub for diverse communications between Bletchley Park and its many stakeholder groups.   Using Commsbox they are able to segment communications to different stakeholder groups via targeted newsletters and emails.

Websites as a Way to Sizzle

 

Red-echo screen grab

 

As digital communications are highly visual it is tempting to think of them purely in terms of branding, and yet this is just one piece of the digital marketing strategy, albeit vital. In developing this website for Red Echo, sizzle is definitely at the heart of the digital marketing strategy.  As graphic designers the digital presence is a place to showcase their visual appeal, as well as adapatability to different device ownership.

 

 

Digital tactics are individual activities which deliver the strategy

These individual activities include your email campaigns, social media posts and pay per click ads, for example.  Much is written elsewhere about these individual tactics.. And it’s important to understand how each of these works for maximum effectiveness.  However, as Professor MacDonald reminds us we need to consider the long term drivers of a successful business whether that be through product design, competitive prices, or being the best at understanding a niche segment.  But these tactics should be servants to the overall strategy, rather than individual activities driven by tactical objectives. 

Summing Up Professor McDonald’s Talk 

Professor Malcolm McDonald left us with these 6 steps for developing an effective leadership strategy:

"1. Identify a profitable, underserved market (niche).

"2. Target only one segment at a time.

"3. Create an irresistable offer. Offer quantitative proof that you are the best.

"4. Become the obvious expert in your niche.

"5. Create a hit list of the customers you want to win. Concentrate your firepower.

"6. Get high quality referrals."

(Excerpt from McDonald, M. (2015) How to develop a strategy to grow sales and profits, CIM Small Business Conference 22d May 2015)

Here at Commsbox we help SMEs to deliver on these 6 steps through their websites and digital communications.

If you’d like to find out how your website and marketing automation can deliver on these 6 key steps please get in touch.

CONTACT US

 

Acknowledgements

We are indebted to Professor Malcolm McDonald for the insights delivered in his inspirational talk at the CIM Small Business Marketing Conference, 22nd May 2015, and his permission for the audience to share materials from his talk. 

McDonald, M. (2015) How to develop a strategy to grow sales and profits, CIM Small Business Conference 22d May 2015

Mintel (2015) Mobile Phones – UK – April 2015


Caroline WrightCaroline is Marketing Director for
CommsBox, marketing automation software.  Her industry experience spans high technology companies, charities, membership organisations and the creative industries. Caroline also works as Senior Lecturer in Digital Marketing at the University of Hertfordshire and has been instrumental in setting up their new BA Marketing with Digital Communications.  She also works with postgraduates on MSc Marketing and with professionals taking Chartered Institute of Marketing/CAM Digital Marketing Diploma.You can connect with her on LinkedIn.

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