Jun 25, 2012

The Fusion Of Transactional and Awareness Marketing: A Roadmap For Transactional Marketers

Posted by Wendy Weber

I am delighted to have a Guest Blogger this week.  Paul Becker is GM eCommerce/CMO at eInvite & its sister company, Checkerboard.  He has held senior management positions at Ancestry.com, Hasbro, and The United States Mint, among other well respected companies.  Here are his thoughts on the fusion of transactional and awareness marketing:

“It wasn’t that long ago that transactional advertising (direct response) and awareness advertising (think toothpaste and paper towels) had almost no similarities. As businesses began marketing on the Internet, that changed. For example, even consumer package goods companies were trying to generate click-through from banner advertising and build eMail marketing lists.

However, there were still a lot of differences, including advertising media, creative and success metrics.

Similarities and Differences

Media

Awareness advertising media focuses on Reach, Frequency, Rating Points and Cost Per Point. Direct response advertising focuses on effective CPM (the cost to reach a particular audience) and the cost effectiveness of customer / lead acquisition.

Creative

Creative strategies are also different. Direct response creative is more focused on Offer, Incentive, Call-to-Action and Offer Terms, all intended to generate immediate response.  Awareness advertising creative is more focused on top of mind awareness, differentiation, brand perception and future purchase intent.

KPIs

Awareness advertisers like CPG companies measure success based on top of mind awareness, brand perception and purchase intent, however at the end of the day what they measure success on is market share (many direct response advertisers don’t).

Direct response advertisers usually measure success based on cost of acquisition, ROI on advertising and customer lifetime value (CLTV).

Why Transactional Marketers Care

To be profitable, almost every business needs to reduce customer churn, and increase retention, repeat purchases and loyalty. Why? For many businesses it costs money to generate a first time sale, and therefore profit comes from repeat customers.

So, in addition to acquiring new customers transactional marketers need to differentiate their brand(s), increase brand engagement, make sure they target markets and acquire customers where their value proposition is most relevant and their competitive advantage strongest.

Applying Awareness and Branding Best Practices

If you’re reading this on the Crandall Associates blog, I assume you’re a transactional marketer, and may be interested in an integrated marketing approach. Following is a high level summary of where I have been able to successfully apply CPG strategies to transactional marketing, both online and offline.

Transactional marketers do not always have access to syndicated research and sales information as CPG companies do, however I’m sure that you will be able to at least apply some of the following strategies.

Market Analysis

Using syndicated research, the first step for developing long term growth strategies is market analysis, including:

  • Market segmentation; what differentiates market segments, how big are they and where are you most competitive? Ideally market segmentation should be based on purchase motivations and needs.
  • Market trends; where is the market heading, what trends are driving growth and what will you need to change to compete more effectively?
  • Market share; What is your market share, and how concentrated are your markets?

Competitive Analysis

Part of the market analysis includes doing a competitive analysis of existing and potential competitors. Syndicated research, industry information and doing your own analysis of competitors can be used, and usually includes:

  • Product portfolio analysis; how wide and deep are their different product lines, where are they strongest, weakest and where are there gaps?
  • Pricing analysis; At the product category level, how do competitors’ pricing strategies compare to yours?
  • Channel strategies; what marketing and sales channels do they use?
  • Branding / positioning; How are they differentiating / merchandising their products, and how do they position their brand(s)?

SWOT

After completing the market and competitive analysis, you should be able to develop a SWOT analysis relative to your competitors.  You’ll want to fill in the following for your firm;

  • Strengths
  • Weaknesses
  • Opportunities
  • Threats

Branding

After you have conducted a market, competitor and SWOT analysis you will be able to develop a long term brand strategy.

You’ll be better prepared because you will know what market segments you want to target, will know where the market is heading, will know who your competitors are, and what their strengths, weaknesses and brand strategies are, and your SWOT will help you identify your unique selling propositions and competitive advantages, which your branding will be based on. Ask yourself:

  • What markets / market segments are we prioritizing, and what is most important to the markets?
  • What is driving market growth?
  • What are my points of difference and competitive advantages?
  • Based on the competitive and SWOT analysis, where are the highest barriers to entry from competition?

Growth and Competitive Strategies

Now that you’ve identified and prioritized target markets and competitors, and determined what differentiates you and how you’ll brand, you can better implement growth strategies. Ask yourself these questions:

  • Where do I have the best short term and long term growth opportunities; new channels, new markets, new products, selling deeper into existing channels / markets, or do I need to diversify?
  • Since transactional marketing is usually more product specific than branding, you may benefit from a “driver-item strategy.”
    • Look at customer acquisition history and identify what product lines and products have generated the most customer acquisition and most profitable customers.
    • Identify what product lines and products best support your brand strategy.
  • By using driver items across channels you will acquire customers, monetize advertising, and you will differentiate and brand.

Channel Strategies

We all read about multi-channel marketing and sales these days, and have heard that multi-channel customers are the most valuable to a business. Here is how I have found multi-channel marketing and sales to increase results:

  • Cost-efficiency; In many situations, using a mix of offline and online marketing channels will increase both cost-effectiveness and volumes, for example using cost-efficient radio and print advertising can improve the success of online marketing due to increased reach and cost-efficiency.
  • Awareness, education and differentiation; Each channel will be more effective than others for something, so a mix is usually best; for example search engine marketing reaches potential buyers when they’re in the market, and ROI is pretty easy to control, however it does almost nothing to differentiate, merchandise and educate about your points of difference.
  • Maximizing sales; Often the needs and purchase motivations of customers in different channels (such as retail stores and e-Commerce stores) are different, and having different products, pricing, services, packaging, etc will increase sales and customer acquisition.

These are just some of the techniques I’ve had success with integrating into transactional marketing. I hope you find them helpful too.”

Bio

You can find Paul’s bio on LinkedIn at http://www.linkedin.com/in/paulbecker or can reach him at themarketerpaul@yahoo.com.

 

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