Wednesday, 22 July 2009

Leave Auntie AIDA alone - understanding consumer buying behaviour

The esteemed consultants at McKinsey have been burning the midnight oil to come up with the startling revelation that consumer purchases are, wait for it, needs and wants driven.

Yes, it’s true. In its recent paper on the
Consumer Decision Journey, McKinsey challenges the linear progression of consumers from awareness to purchase and now says that consumers start with a trigger event that spurs them into action: they decide they need or want something and then set about finding it.

Well, knock me down with a feather.

The disturbing thing, beyond the fact that people are actually paid to come up with this stuff, is that Mckinsey is confusing the psychology of buying with a marketer’s approach to intervening in the process.

The linear progression that McKinsey challenges is based on AIDA – Awareness, Interest, Desire & Action.

To my knowledge, nobody has ever maintained that this is how people buy. We have understood since Maslow was a boy that human actions are based on fulfilling needs. When we have a need, we set about fulfilling it at a speed dictated by the urgency of the requirement and the degree of risk in the decision.

A B2C or B2B marketer’s challenge is to intervene in the process and create a purchase of their product at the highest possible price. This could involve stimulating an impulse buy or making sure that the brand is on the consideration list for a more measured acquisition.

‘A’ stands for ‘attention’ or ‘awareness’ and makes AIDA a good guiding principle when developing the approach to anything from a new brochure to a long-running multi-media campaign.

In the context of a shop, AIDA can mean grabbing attention with a compelling display and then turning the initial curiosity into desire with a great product and packaging. This, in turn, should lead to the action of a purchase.

A brochure or a website, be it B2B or B2C, should follow the same principle. The creator must find the compelling Home page or cover message that encourages the reader to delve deeper and deeper until action is taken.

Awareness comes into play for the more complex decisions when the purchaser may decide to explore the market. A marketer needs to create awareness to ensure the product or service is in the consideration set in the first place. This awareness could be created by brand advertising or a face-to-face relationship, either way it is a necessary pre-curser to interest in the marketer’s product, the decision that it’s the right solution and the action of purchasing it.

AIDA remains valid and has its place for those that understand it. To claim insight from the revelation that purchases are needs and desires driven is like proclaiming the Earth orbits the Sun.


Saturday, 11 July 2009

When the tail wags the dog – the great sales versus marketing debate

How can you tell if a salesperson is lying?

His lips are moving.

Don’t you just love the arguments between salespeople and marketing? Ali v Foreman was nothing compared with the constant bickering between these two old adversaries. Like brothers, they defend the family honour in public and snipe at each other in private.

I came across an excellent LinkedIn discussion last week started by a sales guru who was giving marketing both barrels: sack the Chief Marketing Officer; make every marketer spend at least a year in sales and measure marketing performance solely on the basis of reductions in the cost of sales where among his more strident remedies.

Never one to resist an argument, I couldn’t help but wade in with a view.

So, let’s try and resolve this once and for all. Should the marketing department be a support function to sales or is sales a function of marketing?

In my career I have seen examples of both. Now I’m running my own business, I see it from yet another perspective.

Among my favourite definitions of marketing is the one provided by Professor Paul Fifield who says that the sole purpose of marketing is to sell the maximum amount of units at the highest possible price.

So there you have it, even a Professor of Marketing admits that, in the final analysis, marketing has to deliver sales and profit. Perhaps the salespeople are right? Marketers should immediately bow down to Sales and accept their true position in life.

But what would happen if they did?

I have worked in organisations where salespeople rule. The top roles were filled by the top salespeople and every conversation was about turnover and pipeline. In this environment, the role of marketing was invariably limited to tactical direct mail campaigns, brochures and corporate gifts: all geared to supporting this week’s idea and today’s income target. To create a discussion, let alone gain sponsorship for more strategic initiatives was all but impossible.

This is not to say that the salespeople who were promoted into the senior management positions didn’t have the ability to be strategic. Of course they did, but because the culture was so heavily geared towards short term measurable results, tactics tended to dominate the decision making process. Business performance was highly cyclical as a result with great highs and near catastrophic lows.

Another great definition of marketing is ‘making friends with people who might need you one day’.

The definition needs some work. ‘Might need you’ feels untargeted and ‘one day’ too uncertain, but I love the whole concept of marketing and business being about ‘making friends’ and forging relationships. The idea that a customer would consider a business a friend is a brand Nirvana, providing as it would a platform for long-term sustainable growth and resistance to the worst highs and lows of economic conditions.

Inevitably the idea of building a brand and making friends is too soft and intangible for many people.

Let’s be in no doubt, and I see this first hand in my own business, Sales is one of the most important components of the marketing strategy. If the leads aren’t being found and converted, there is no long term to plan and position for, so the marketing department needs to get its finger out and do its bit to feed the machine.

But Sales is exactly that: one part of the marketing strategy and it puts the cart firmly in front of the horse to have Marketing reporting to Sales. All of the elements of product, price, place, promotion, people, process, physical evidence and positioning need to combine before a business can make friends with customers and sell the maximum number of units at the highest possible price.

A Head of Sales who has the ability to do all of this - manage sales performance as well as think about strategy, targeting and positioning - isn’t a Head of Sales at all, but a Head of Marketing... and thoroughly deserving of the title.