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The marketing process is often depicted as a funnel.  The funnel guides the consumer from the widest part, his awareness of a product, down to the thinnest part, the actual purchase of a product.  The funnel image is a great tool for describing the marketing process. However, for as long as I’ve been exposed to the funnel, I’ve had an issue with it: The sale of a product is not the end of the marketing process.  In fact, it’s a point at which a whole other process kicks off that culminates in either repeat business or referrals.

I struggled with how best to articulate this concept for a while until I stumbled upon Duct Tape Marketing’s blog post, “The Easiest Way to Describe the Marketing Process.”  In that post, John Jantsch explains the process, not as a funnel, but as an hourglass.  This was a “duh” moment for me, and I immediately decided that I needed to start using this imagery (thanks, John!).

The Two Halves of the Hourglass

The reason the hourglass works so well is because it’s basically two funnels, one stacked inverted upon the other.  The top half is the marketing funnel that we all have come to know and love/hate.  It deals with the customer acquisition part of the marketing process.  In the top half of the hourglass, we’re going out to a wide pool of consumers, and slowly guiding them towards the purchase of the product that we’re selling.  The tools to do this are the well-known marketing tools of advertising, PR, demoing, sampling, etc.

The second half of the hourglass is where this whole concept gets interesting.  The traditional funnel model, essentially says that once you’ve made the sale, your marketing job is over.  If you want to make more sales, go back to the top of the funnel.  The hourglass, however, acknowledges that there are better and more efficient ways to make additional sales.  As the consumer (or the grain of sand) passes through the middle of the hourglass he comes out on the other side in a process that aims to keep that customer coming back as a repeat customer and/or or to have that customer refer another customer to your product.

The second half of the hourglass is so important because the repeat customer, or the customer that will evangelize your product is the holy grail of any business.  Having every single sale come through the top half of the hourglass means lots of new customer acquisition, which is expensive, and time consuming.  Every grain of sand going through the top half of the hourglass is a single sale.  If you want another sale, you need another grain of sand.  When you get repeat business and referrals, it means that the first process yields multiple sales.  Every grain of sand through the top half of the hourglass can yield an exponentially larger number of sales. Some businesses do the second half of this process so well, that they can eventually forego the entire first half.  Isn’t that the dream?  When you no longer have to worry about finding new customers, and your customers instead find you, or just keep returning to you?

Expressing the Halves of the Hourglass

John Jantsch at Duct Tape Marketing expressed the different steps involved in the hourglass process of marketing in his own way, but what follows are the steps as I see them.  In some places, they’re simpler, in others more elaborate.  In the end, we’re expressing the same thing, but using different methods.

Awareness:  The consumer becomes aware of your product or service. At this point, all that’s happened is that he now knows it exists. If you sell purple widgets, this is the point where you need to make people aware the purple widgets exist and are for sale.

Interest:  The customer knows the product exists, and now he’s interested in learning more about it.  This is where you get to educate the consumer as to why he needs a purple widget.

Intent:  The consumer has now done his homework and knows he wants to buy.  At this point, he’s just looking for where to buy it.  The idea here is to make it as painless as possible for the consumer to buy your purple widget.

Purchase/Sale:  The consumer has purchased your purple widget.

Experience:  Now that the consumer has purchased your purple widget, you better be sure the experience he has with it is positive.  This comes down to making sure you can deliver on what was promised.  If you can’t, forget about getting return business.  Bonus points if you can overdeliver on what was promised.

Trust/Identify:  Assuming that the consumer is happy with his purple widget, you now have an opportunity to create a link with him.  You can forge a relationship with this consumer.  Some companies are doing this through loyalty programs, others are experimenting with social media to find new ways to connect with their customers, and the best companies realize that no matter what they do, this is all about delivering top-notch customer service and showing the customer just how much he means to them.

Repeat/Refer:  If you do the above steps correctly, the customer will gladly purchase from you again, and he’ll probably even tell his friends that they should purchase from you as well.  All of a sudden, all of the people he knows are getting their purple widgets from you.

Use Hourglass Marketing

So much emphasis is put on the top funnel in marketing because it’s the hard part.  You have to take non-believers, and get them to buy from you.  The bottom half of the hourglass is easy.  It’s just a matter of delivering on your promises, treating your customers like the valued people they are, and making it easy for them to come back, and to tell their friends how great you are.  Unfortunately, because we’re often so busy focusing on the tough first half, we forget about the second half.  The hourglass as a whole is important, and truly successful businesses know this.

If you want your business to succeed, use the hourglass.

Image courtesy of secubie.

When you enjoy what you do for a living, you have a hard time disconnecting from it.  You tend to see the world around you through the lens of your “work.”  Last weekend, I unwound by visiting Marché Jean-Talon, a large local farmer’s market, with my better half.  Despite being as disconnected from work as I could be, I still managed to see small business and marketing lessons all around.

Here is the story of my day, and the lessons I learned.

1. Customers are willing to pay more for quality and service

After hunting for parking for fifteen minutes, we eventually found a spot and walked two blocks to the market.  The lack of parking was no coincidence.  The place was packed.  I thought local farmers couldn’t make a living anymore because everyone wants to buy their food cheaper at big box supermarkets imported from some banana republic?  Apparently, these consumers didn’t get the memo.  They were out in droves.

Even someone as inept at gardening and farming as me could quickly tell that the produce on display here was of higher quality than the stuff I had bought earlier that week at the supermarket.  Not only that, at the supermarket, I’m lucky if I can find a clerk who isn’t running away from me.  Here, nearly every person working in one of these stalls had a smile and was pleasantly chatting with a customer. Sure the prices are higher, but I for one am willing to pay a little more for a decent tomato and a human interaction. Judging by the crowd, I’m not alone.

2. You must differentiate yourself

We immersed ourselves in the throng of people and started perusing the aisles.  It wasn’t long before I was overwhelmed with options.  If you’ve ever been to a large farmer’s market, you know that pretty much everyone is selling the same thing.  Sure, different farms sell different things, but there is always at least 3 people selling the same fruit, vegetable or other food, and oftentimes far more.  There must have been ten stalls selling tomatoes.

So, in such a situation, how do you convince people to buy from you?  Price won’t work, because people who are shopping for high quality produce, don’t care about price.  Quality is important, but arguably everyone around has quality products.  You need something to differentiate yourself.

One stall had built a fruit sculpture.  Another stall was actually boiling corn on the spot and selling it with butter and salt.  Another stall was staffed by a woman who had bright red hair that was sticking straight up.  These stalls caught my attention, and they were the ones that had the best chance of getting my business.

3. Free samples work

As we continued to wander around and fill up our bags with fresh produce, I noticed a trend.  Just about every stall I had bought from, had first let me sample their produce before I bought it.  There are two lessons to be learned here.  The first is that if you’re hungry on a Saturday afternoon, and don’t feel like spending any money, you can probably eat your fill off of the free samples at a farmer’s market.  The second is that offering a free sample of a quality product works, as my bags of veggies could attest to.

Many businesses are very scared of this practice, because of the cost of producing free stuff, whether in time, or in money.  The fear is that if the product exists for free, why would anyone buy it?  The internet has aggravated this debate with its easy access to free information, making content publishers cry foul.

Despite this, the fact of the matter is that free works. It works especially well when you give away a small piece for free and then charge for the whole thing.  Don’t be fooled, though.  Samples will only work if the product is good enough to make someone want to pay for it.  The sample is just the mechanism of distributing the knowledge that the product is that good.

4. If everyone else is doing it, and you’re not, you lose

As I came to my realization about the free samples, I began to pay more attention to the stalls that were doing the free thing.  The vast majority of the stalls were doing it.  There were only a small handful that were not.  It’s no coincidence that those stalls were the ones that had the smallest crowds around them.

Sometimes the market (no pun intended) forces you in a certain direction.  Even if there was a time when those farmers could have still sold their produce without giving samples, that time ended when most of the other farmers started doing it.  Follow the market, and don’t get left behind.  You might not always like where it’s going, but you still need to stay on top of it, otherwise, your competitors are going to leave you in the dust.

5. Customers value personality

After a couple of grueling (and delicious) hours of shopping, we decided to stop at the crepe stand in the middle of the market.  Crêperie du marché could probably make a lot of money, simply by existing in its current location.  What made it truly special, and something that I don’t mind telling you about, is that they went the extra mile.

I waited in line to order order our crepes, and as I did so, I noticed the gentleman taking the orders wore a striped shirt in the Parisian style.  When I finally began speaking to him, it was plainly obvious from his accent that he clearly was French.  The shirt wasn’t just a gimmick to sell more crepes.  It was who he was.  Unlike the majority of business transactions that I perform on a regular basis, where I’m lucky if the person on the other side even bothers to say hello, and a “How are you?” is an unexpected courtesy, I actually had a conversation with this gentleman.

He told me about the business, how long it had been there, informed me that they would be moving locations for the winter months, but would be staying open for that season for the first time since they opened.  He was genuine, and friendly, and had personality.  Then he handed me a loyalty card, and asked, “Do you come here often?”

“I will now,” I replied.

6. If you’re human, customers forgive ineptitude

We sat down at a bench as we waited for our names to be called out to collect our freshly-made crepes.  The entire process was visible to everyone in the market.  The man who collected the order would write it down on a scrap of paper, and hand it to the guy who would make the crepe or waffle, who would then pass it to the guy who filled it with the right sauce and/or fruit.  The part of me that used to manage operations cringed.  Their workflow process needed some work.

In the fifteen to twenty minutes that we sat there waiting for, and then eating our crepes, the four person staff managed to make at least three or four mistakes on orders.  Despite this, not a single customer got angry.  How is this possible?  Aren’t customers supposed to get enraged whenever a mistake is made?  Not necessarily.  Not if they see your business as people, and not as a machine.  People are fallible.  We make mistakes.  Everyone recognizes this implicitly, and so, when a person – especially a nice person – makes a mistake he is more likely to be forgiven.  When a corporate machine makes a mistake, we get angry, because these corporate machines are supposed to be infallible for the sake of efficiency.  If you’re human, you get a second chance.  If you’re a machine, you get replaced by a better machine.

Business lessons are all around us every day, we just need to keep our eyes open, and we’ll notice what works and what doesn’t.

What lessons have you learned from everyday life?  What other non-traditional sources of learning do you use?

A hundred years ago, there weren’t a ton of options for advertising your business.  You could post fliers or you could advertise in the local newspaper.  I suppose you could also have hired a town crier, but I think they had stopped doing that by the early 20th century.  Today, a business has no shortage of options for advertising.   From traditional print media, to broadcast media like radio and television, to internet marketing and everything in between. An advertiser’s biggest dilemma is picking the right medium.

I’m a firm believer that a proper advertising effort needs to be multi-pronged and needs to take advantage of several media.  That’s not where most businesses go wrong.  The idea that you need to diversify your advertising is accepted.  The issue that most businesses face however, is that they don’t differentiate between media and seem to use every media in the exact same way for the exact same purpose.  That’s just crazy.  A bicycle and an airplane are both transportation methods.  They both get you from point A to point B, but beyond that they have entirely different purposes.  You wouldn’t take a plane to get exercise or commute to work, and you wouldn’t ride a bicycle to your business meeting in Beijing (unless you live in Beijing, in which case, you almost certainly are taking your bicycle to your business meeting).  The point is: all advertising media serves the same basic purpose, but beyond that each medium has its strengths and its weaknesses and should be used as such.

This is true in online, just as in traditional media.  Different media work better for different demographics and for different marketing purposes.  If your target demographic is 18-25 year old males, are you going to advertise in Home & Garden?  Of course not. So, why do I frequently see products geared towards that 18-25 year old male demographic advertised on primetime television?  Have they not looked at the numbers?  18-25 year old males don’t watch primetime TV (unless it’s Monday Night Football).

Similarly, if you have a super-niche product, don’t buy a billboard.  Last time I checked, billboards were expensive and their conversion rate was low. How effective can they be for a product that only appeals to 1 in 200 people to begin with?

If your goal is to maximize your return on investment in the short term, use a medium that is going to do that.  In my experience, the best way to accomplish this is to use a pay-for-performance medium.  The best known is pay-per-click advertising on Google, but don’t neglect Yahoo or MSN (Bing!).  Also, aside from pay-per-click search advertising, there are a ton of pay-for-performance options coming about.  Some publishers are offering pay-for-performance video products now, where you have options of paying by the play, or by some form of other conversion.  This kind of advertising is great for short-term ROI maximization.  What it’s not great for is branding.

Far too often, clients will ask me what it would cost to appear first on Google’s search results page under the sponsored links section.  This practice has been popularized by certain agencies that have built an SEO-like price structure around SEM (pay-per-click) advertising and are selling “guaranteed 1st place” positions.  This dubious agency practice aside, using SEM to give yourself position is a bad idea, and is often a case of ego-marketing.  First off, the structure of SEM is based around garnering the most relevant click-throughs possible for the least amount of money.  For various reasons, using the medium to rank first on Google is like using a billboard to market a new fMRI technology.  First off, it’s ridiculously expensive.  Secondly, because it’s an auction format, if you have two players in the same market making the same mistake (and there always are), they’ll blow the roof off the cost of appearing first, and the only winner in that battle is the publisher of the ad.  Third, even Google has determined that you don’t have to be number 1 to convert well.

If you are looking for branding and exposure for your brand, use a different medium that will get a lot of eyeballs for a fixed price.  These pay-for-placement media have been around longer than pay-for-performance media and are still valuable.  Examples include buying ad space on websites or in print media, buying a spot in a directory, either print or online depending on your business, billboards, tv spots during appropriate time slots, etc.

You also see this issue arising a lot in newer media when advertisers haven’t quite figured out how to use the medium yet.  The topical example is advertisers who use Twitter as simply another broadcast advertising form.  These advertisers haven’t had tremendous success and are blaming the media for the short fall.  However, other advertisers, who are using Twitter for permission marketing are having great success in improving their brand image and connecting with their customers.

Bottom line, figure out what each medium is good for, and use it for its purpose.  Don’t ride a bicycle to Beijing.

What are your favourite targeted forms of media?  What do you use them for?

You’ve built a business.  You’ve put in a lot of hard work, blood, sweat and tears, but now your business is built.  You are proud of your business and rightfully so.  Building a business is one of the hardest things you’ll ever have to do, and you should be proud and want to show off a bit.  But your marketing is not the place to do it.

The purpose of your marketing strategy, whether it be online or offline, is to attract new customers. Everyday, as both a consumer, and a person who works with businesses, I see people forget that, and instead focus on how awesome they are.  Expounding about how great you, or your company is, is not the same thing as demonstrating to a consumer why he should become a customer.  Focusing your marketing on you is what I call ego-marketing, and it’s more common than you think. You might be doing it yourself and not even realizing it.  Here are four ways you can spot ego-marketing.

Ads that are bigger than they need to be

In today’s evolving world of performance marketing, bigger is not always better.  The key is to look at your return on investment.  Often, smaller, better targeted and more well placed advertising will have a greater ROI than bigger, more expensive advertising.  A small ad in a trade magazine is better than a half-page ad in a mass-market glossy.  The third position for a PPC ad is better than the first.  Most of these things make sense when we evaluate them critically, so why do so many people still do them?  Because it feels better to see your ad in first place, and it feels better to see a big billboard with your brand on it.  It’s ego-stroking.

Copy that focuses on features, and not benefits

This is a cardinal sin of copy writing, but you still see it often because people either write their own copy and don’t realize it, or people hire copy writers and tie their hands.  Business owners will focus on the features of their products, as opposed to the benefits to the customer because they’re looking at it from their own perspective.  As a business owner, when you’ve got a product with cool features, you love to talk about them, because, hey, they’re cool!  Think about when you buy a new TV and your friends come over and you want to show it off to them.  What you talk about are the television’s features: this many hertz, that much resolution, this many millions of colours, etc.  You’re doing that because you’re doing it for your benefit, not for them.  Because you’re showing off your TV.  If the sales guy at the store had sold you the TV the way you bragged about it to your friends, you probably wouldn’t have bought it, though.  Bragging to your friends is fine, bragging to your customers doesn’t work so well.

Excessive use of accolades

I was browsing a website the other day, and as I scrolled down the page, all I saw were awards and achievements.  It got to the point that I got to the end of the page, and not only was I bored, but I also wasn’t sure what the company whose site I was on did exactly.  It’s an extreme example, and the use of accolades in marketing can be helpful to show value and quality, but over-doing it becomes tiresome and boring to your potential customer.  Think of your advertising as a conversation at a cocktail party.  No one wants to hang out with the guy who spends the whole evening talking about all of his achievements.  They want to hang out with the guy who is interesting, intriguing and has something to offer without having to talk about it all night long.

Ads that focus on the business, not the customer

I enjoy learning the history of the companies that I give my business to.  It helps me connect with them, and makes for a more engaging experience than simply me just handing them my money.  However, I only do this for the companies that I know I’ll be giving my money to.  Before I make that decision, I’d much rather hear what the customers of the business have to say than what the business has to say.  So, if your marketing strategy puts a long description and history of the business before customer testimonials, you’re ego-marketing.

How to recover from ego-marketing

The good news is that the best way to stop ego-marketing is to recognize that you’re doing it and stop it.  Pretty easy.

The bad news is that it’s an easy trap to fall back into.  Large companies have it easier because employees are not as invested in the company and in the product, so it’s easier to market it without that pride coming through.  Smaller companies are very closely invested in their business and rightfully so.  As I said in the beginning, they are entitled to be proud.

If you’re concerned about falling back into the trap of ego-marketing, keep in mind that you’re already sold on your own products, so you might not be the most objective person to know what it takes to sell them.  If you want that objectivity, ask others.  Ask you current customers what sold them on your product and focus on that.  Ask complete strangers (whether in the form of market research or just an informal chat) what they would need to hear to purchase your services.  Ask a marketing expert; it’s their job to know what works, and they have the distance necessary to produce convincing marketing.

What do you think?  Am I being too harsh?  Can ego-marketing actually be effective?