Last Updated May 5, 2011 5:41 PM EDT
- BLUNDER #1: Treating Customer Support as a Expense. As I pointed out in the recent post "Can You Keep Your Customers Loyal", lousy customer service is BY FAR the most common reason that customers defect to another vendor. In a sane company, customer retention is the highest priority, because acquiring new customers is expensive and hard to do, while selling to existing customer is cheap and easy. Any company that spends a single dollar on marketing when their customer service sucks is simply flushing money down the toilet. Unfortunately, the notion that cutting costs in customer support makes good business sense has grabbed hold of the tiny brains of an entire generation of mediocre managers. Too bad, because the companies that buck this trend generally kick the collective butts of their clueless competitors.
- BLUNDER #2: Addressing Product Problems With Marketing. I can't tell you how many times I've seen a company with a problematic product try to "fix" it by running advertisements or by "repositioning" the product. In most cases, the real problem is usually either lousy quality or lousy service, both of which are toxic to brand equity. There is no amount of marketing that can overcome such problems. If your ads pretend the problems don't exist, you're making things worse, because the customers know that the problem is there and will simply become vociferous about it. The only way to fix a product problem is to fix the product and then wait a long, long time until your reputation recovers. Spending money on marketing in order to change a negative perception that's grounded in reality is always a huge waste of money.
- BLUNDER #3: Considering Anecdotes to be Valid Research. In the past, this blunder mostly took the form of marketing group treating focus groups as a valid research methodology. Here's the truth: if you ask 10 people what they think of a product, you've got the opinions of 10 people. Period. It has NO statistical validity whatsoever and any attempt to draw conclusions from such "data" is pointless. Today, marketing groups make the exact same mistake with social networking. They're treating the comments that people leave online as if they were representative of public opinion. That's crazy, because online commenters are often anonymous, frequently sock-puppets, and represent nobody except themselves. While it's true that it's a PR problem if your company is being slammed online (especially next to where they can purchase online) but gathering comments not a replacement for doing real research.
- BLUNDER #4: Spending Money on Unmeasurable Activities. Many marketing groups are goaled on their ability to create deliverables: brochures, videos, ads, events, tools, etc. These are assumed to be of value in creating "brand awareness" and theoretically make it easier to sell the company's products. Unfortunately, those assumptions are often dead wrong because nobody bothers to measure the actual impact. In many cases, marketing groups actively avoid such measurement because they're afraid that everyone will find out that these activities are, in truth, fairly useless. For example, when companies finally started measuring the actual monetary value of advertising in newspapers, they were shocked to learn that, despite marketing's insistence that such advertising was a good investment, such ads often had virtually no impact on sales. Rule of thumb: if you can't measure something, it's usually crap.
- BLUNDER #5: Failing to Compensate on Lead Conversions. The only reason to have a marketing group is to make it easier to generate sales. Therefore, marketing groups should, and must, be goaled and compensated on whether or not the sales leads they generate actually convert into customers. When this is suggested, the standard response from most marketing groups is to blame their sales group for not being able to close the "great" leads that marketing passes them. But that's idiotic and puerile because, as Donald Rumsfeld once put it: "you go to war with the army you've got." A sales lead is a good lead if (and only if) your CURRENT SALES TEAM AS IT EXISTS TODAY CAN CONVERT IT. Anything else is garbage and a waste of effort. Marketing groups that resist being compensated on lead conversions are just defending an ability to remain ineffective.