In this episode Jeff shares how Step Change Marketing used predatory marketing to gain market share from their key competitors and how you as a small or medium business owner can do the same.
Delivering big‑brand thinking to small businesses
Originally, Step Change Marketing grew out of the need and the want to deliver big‑brand thinking to small businesses, so it was actually positioned around the Robin Hoods of marketing. That was about six years ago, but it's grown, as consultancies tend to, and we are now advising one‑person start-ups with an idea, through to small businesses, through to global businesses like Sony. We do some business and marketing planning for companies across that range.
Really I think what we were looking to do more than anything was return some of the good will and some of the credentials and credibility around marketing, because it had taken a bit of a beating. I think if you look at the professions that are most respected, nursing comes number one, and then second from the bottom is marketing, followed only by lawyers.
We really wanted to put some credibility back into it and we did that in a couple of ways, one of which was just making sure that when our clients work with us, they can pay what they feel our service has been worth. In doing that, we make sure the clients leave happy.
Pick your own price – the “no invoice” policy
Our clients only pay what they feel that the service was worth, so they pick their own price. We call it a “no invoice” policy, and we run it across all of our strategic advice, which is more or less delivered in workshop and traditional consultancy services.
The way that it works is that we'll engage with the client, do the prep work, the scoping, and we'll work with them through their problem. Then we basically pick a point within the project where they can judge whether or not they think we'll get to the end.
We try and pick a point like at the close of a workshop or something, when the client's seen 90 percent of our thinking but we haven't really had to put in all the hard work of doing the write‑up. I guess it's our way of managing risk for both parties and making sure that there's only an upside.
It's a genuine offer. For whatever reason, if we close the workshop and the client doesn't think the work's great, well, they don't get to take the work with them, but they also don't need to pay their invoice.
Reverse the risk, make it simple
The impulse factors of day-to-day selling are effective, but when you ask someone for thousands of dollars and then there's an uncertain outcome, nothing works like just making sure the risk is on our side.
At the end of the day, we're the professionals. We do this. We would write business plans, brand plans and marketing plans, over 200 of them a year across those three core services. If we don't believe we can get it right, then why should our clients? It's good to put your money where your mouth is.
Steering clear of the marketing bull
Too many marketing consultants or marketing companies out there are using bull. Whenever we sit down with a client for the first time, we are sitting down in the context of the industry's reputation and in the context of their previous experiences. If we don't position against those, we're crazy.
I think that's a message we have for your clients as well. You don't need to be in marketing and you don't need to necessarily have an industry that has had a few arrows slung at it over the years to realise that in an age of media fragmentation and increased uncertainty, and tougher and tougher competition, just being straight with people and letting them know exactly what they can expect from your business is, more often than not, a really great move for anyone.
The response to our message has gone well. All things to everyone is no things to no one, which is basically a way of saying that in any type of marketing, you really want to be able to target very closely into a small enough number of people that you can be incredibly relevant, but enough of them to sustain and grow your business.
We probably ruffle enough feathers and upset quite a large amount of the industry. Certainly we're not everyone's favourites, but we have struck a chord with enough people to grow our business to triple figures, percentage-wise, each year. I think that's really the aim.
An example of a strategy that brought about some controversial ads
We used to work on U by Kotex, which is a feminine hygiene product. We worked on a strategy that brought out some very controversial ads about "The ultimate care down there" which pictured a beaver looking at feminine hygiene products.
Now, of course, to mums and dads out there, that was not going to sell any feminine hygiene products, but actually all they needed was to find the extra 3 or 4 percent of the younger demographic that weren't buying their product, and that would have doubled their business, and that's exactly what happened. You can rub a few people the wrong way, as long as you rub enough the right way to make the money that you need to.
It was the most complained about ad of 2009 and they wanted to take it off air. Of course we had contingency planning around that, and there were alternative cuts to keep it on air and all that sort of stuff.
I think the notion and the message there for small business owners is to be really, really clear. If you look at what your growth targets are for the next year and then you look at the average customer value that you need to hit that, you can actually work out quite easily what the total number of customers you need is.
Then you just want to find that group of customers and be very relevant to them, either demographically or psychographically, with your messaging or with the way that you talk to them or in the way that you connect with them. As long as you can hit those numbers, you've made your growth targets. It really is about deciding who not to talk to, and not actually caring what they think about.
The philosophy behind Step Change is to step sideways more than forwards. At the end of five years, we've four partners that have all been in marketing for many years. There's a whole lot of IP sitting around, but probably sitting at the core of most of it is a piece of thinking called predatory marketing.
What is predatory marketing?
Predatory marketing defines that you strike at the weakness that arises out of your competitors' greatest strength. What happens when you do that is that you're no longer looking for parity or messages or differentiators that don't have a lot of value in them, but also it makes response the most difficult.
Whenever we look at a problem, that's a key piece of thinking that will push that problem through. When you're doing that sort of thing, you're almost always getting an outcome that's very different to what's happening in market and what's being done by the competitors.
Predatory marketing in action
Ads don’t have to be controversial. An example of predatory marketing in action was a campaign we worked on with Australian Pork. Some people might be familiar with the "Get Some Pork on Your Fork" campaign.
The tagline "Get Some Pork on Your Fork" was resurrected from a previous creative agency. It's a nice creative platform. The predatory part of those ads and what's been driving the results was against other protein alternatives within Australia. Australian pork is getting great growth and has been over the last 18 months.
The actual predatory message in there was that, with a piece of pork the same size as a piece of steak, you actually get half the fat of red meat and as much iron, which is a bit of a myth‑busting statement.
The creative that's seeking that out is that someone sits down for a steak, and instead of having the whole steak, it gets cut in half. Basically what that's saying to a red‑blooded man out there is that you can have half the beef or you can have all the pork that you'd like, and get the nutrition without the fat.
That's quite a predatory message. It actually says, "You are better off eating pork than you are eating beef, for a whole lot of reasons," and that's really what’s at the heart of predatory marketing.
It's finding that weakness that comes out of the strength, which is that red‑blooded men in Australia believe that steak is the way to go, but actually if you look at satisfying their needs, not necessarily the greatest choice to put on the plate. I think that's probably the best tactical example of how this happens.
So we’re not saying any meat is bad and we're not saying, "Eat pork because it's better." We're just highlighting some of the facts and letting people make their own decisions. Just showing them that they can have what they want, which is a plateful of meat, without necessarily having to compromise? It's just that "wow" moment, where people haven’t really realised until the stats were put in front of them in a bite-sized way.
Identifying your competitors’ greatest weakness
You might be reading this and as a small business owner you’re probably thinking, "Okay, well, this predatory marketing, I can see it works for a big organisation like Australian Pork Limited. What can I do in my small business to identify somewhere where my competitors have got a weakness that I can then use this predatory marketing against?"
Well luckily, it does work for businesses of all sizes, and we would argue that the smaller you are, the more resourceful you need to be with your marketing. There's an adage that comes out of the New Zealand ad industry, which is, "We have no money, we shall have to think."
When it comes to small businesses, of which we are one, we are huge proponents of it. I can give you a couple of examples, and perhaps the easiest way to do this would be to roll out a little bit of a case study that we actually did for ourselves, so that you will know that when it comes to spending our own money, these are the sorts of decisions that we make for us, and you will also be able to see the results.
But…I am going to save that for the next post of this series where I will share the 5 step process to a predatory marketing campaign. Check back in again soon to find out more about how you can use predatory marketing to gain market share from your key competitors.
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