Yes, you can still get there from here.
This is the good news: Every marketer has been there at some point—that moment when you realize the marketing strategy, to which everyone agreed, has not yet delivered satisfactory results, and everyone is looking to you for the fix. This is the bad news: You feel like you’re on your own, and you’re probably right. Thankfully, there are some tried and true strategies that have helped marketers find their paths out of this challenging business situation that don’t include “polish up the résumé.” Here are three strategies, inspired by the pages of history, which, depending on your time frame for success, may give you some welcome inspiration for change.
(Short-term) The Ted Williams strategy: only swing at good pitches
In his famous book, The Science of Hitting, baseball great Ted Williams advises would-be players to find and understand their “happy zone.” This means that smart, disciplined batters narrow the range of what qualifies as a good pitch—they take fewer swings, but each, theoretically, has a higher chance of success. Translated for marketers, it means several things. From a positioning perspective, it means taking time to review and clarify your positioning. If you take an honest look at the sum of your marketing efforts and find you are trying to be all things to all people, stop. You’re wasting your budget and confusing your market. And speaking of markets, the Ted Williams strategy applies to customer profiling, too: You should narrow your target market to only those customer segments that show a high willingness to purchase and represent a healthy margin for the business. Among the universe of people you sell to, these segments represent your happy zone. There’s little reason to expend precious time, effort, and money on attracting alternative target segments until you have maximized your returns with your core group. From a product line perspective, it means focusing budget dollars primarily on those products or services that represent the greatest return on marketing (ROM). Ultimately, this may mean lower unit sales overall and even lower top line revenues. But it should also mean increased bottom line profits. Until your promotional efforts have saturated the market for this product or service to the point of diminishing return on investment, it makes little sense to divert budgets elsewhere. Apple applies this strategy in its refusal to manufacture affordable (cheap) iPhones. Inexpensive phones are out of Apple’s happy zone, which has proven to be a sage approach, as reflected in its world-leading market cap and 91 percent share of the mobile handset industry’s profit in 2015 (1).
(Medium-term) The Cortés strategy: making success the only viable option
In 1519, when Hernán Cortés (de Monroy y Pizarro Altamirano) landed in Veracruz to begin his great conquest, he ordered his men to burn the ships. As the story goes, some of his men thought it was a joke—until they found themselves tipping back a tankard of rum on the beach that evening as the last embers of the bonfire of their way back home smoldered in the twilight. The point of this campfire wasn’t to kick off their campaigns in the new world with a party. It was to ensure everyone had no choice left but to focus on the same goal. Unlike the Ted Williams strategy, which relies strictly on greater focus, the Cortés strategy is about first focusing on the company. This means cutting out products or services that don’t meet contribution margin expectations or do not serve a greater strategic competitive value. The idea is that those underperforming products or services, along with the infrastructure or resources required to support them, are keeping the company from focusing on what will create profitable success.
More than a decade ago, we were privileged to help a company execute this strategy successfully. MacGregor Golf was struggling financially and considering receivership when it asked if we could help resurrect this once-vaunted brand. It was a challenge we couldn’t pass up.
By extending the brand from equipment for elite players down to cheap three- and eight-club sets at big-box sporting goods stores, MacGregor had lost relevance among its profitable high-end target segments, resulting in dramatic declines in sales and market share. We advised exiting these mass market lines and outlets and immediately refocusing on delivering only high-end, high-margin products—in effect shrinking the company from nearly $40 million to just over $20 million in annual sales. Combined with a high-profile repositioning of the brand within the trade, we established multi-year communication and tactical strategies for each channel and target. As a result of this restricted product and channel strategy and a re-energized marketing program, MacGregor was able to expand distribution among key green grass and pro retailers in North America, Europe, and Asia—increasing revenues from $20 million to over $120 million in just four years.
(Long-term) The Clayton Christensen strategy: become the unexpected disruptor
In his seminal work, The Innovator’s Dilemma, Harvard professor Clayton Christensen lays out a compelling landscape where large, successful incumbents become victims of their own success in the face of disruptive technologies. By historic standards, these companies are doing everything right to serve the needs of their customers. But disruptive technology creates an alternative behavior option that can dramatically change or negate the market need those organizations are successfully serving today. So what is the Clayton Christensen strategy in regard to marketing? Well, as, Xerox PARC Chief Scientist Alan Kay, pioneer of object-oriented programming and the windowing graphical user interface we use on our PCs every day, put it, “The best way to predict the future is to invent it.” This strategy requires taking the perspective that the long-term success of the company depends on seeing your business as a potential disruptor sees it and creating a challenger business model that has the potential to destroy your existing market share before that hypothetical disruptor gains a foothold. In practice, instead of focusing all your products, services, and marketing on maximizing returns from your current market, you should assign part of your budget to investigate and create the next market challenger yourself.
Of course, doing so is certainly not as simple as the length of that last sentence would imply. It requires a commitment to understanding the inner workings of the relationship between your customers and the job your product is being hired to do for them. It means constant, iterative innovation and a venture capitalist’s appetite for encountering more dead ends than home runs. And, most important, unlike R&D that is focused on solving a problem five to ten years out, disruptive technologies provide an alternative that can be used today, even at the cost of an existing high-margin business. IBM successfully built its PC business at the cost of its mainframe business. Netflix killed its own DVD-by-mail business with streaming services. At the start of the first dot-com era, American Airlines created a subsidiary of its Sabre travel agent reservation business and sent it to a separate location with a charge to disrupt the travel agent business. The result was Travelocity.
The best opportunities are those we create for ourselves
If history has taught us anything as marketers, it should be that business as usual delivers results as usual. The increasing acceleration of change and technological disruption and complacency hastens risk. The smartest approach is to view our challenges not solely from the historical perspective but from the potentially unflattering perspective of our competitors, our customers, and our potential disruptors.