I recently had the chance to catch Mike Maddock while speaking at the 2013 Compete Through Service Symposium in Phoenix [see takeaways recap]. Mike presented a fantastic keynote about his most recent book, FREE the Idea Monkey. One of the points Mike made at the conference was that marketing and advertising are a tax. He asserted that media dollars are the price and the financial penalty you pay for having a bad idea or a subpar product or service. He reiterated this in an article on Forbes.com called the “True Cost of a Bad Idea“:
“More accurately, marketing and advertising costs have become the tax you pay for not being able to create a better idea than your competitors.”
Maddock asserts that the ability to consistently launch meaningful new products and services eliminates this and allow companies to boost their margins significantly.
Today, Seth Godin made a similar point about eliminating the blah and moving towards innovation. Check out his post entitled, Delight the Weird. Seth challenges us as always to stand out in a sea of sameness.
Moving Toward Innovation Requires Investment
Maddock suggests to brands, “Start by looking at your marketing and advertising budgets. Take some (and probably a lot) from those columns and move it over to the column labeled innovation. Refining your ability to create noteworthy new products and services will increase sales even while your costs of marketing plummet.”
What’s a brand to do? Joseph Jaffe @jaffejuice posits that the answer lies at the intersection of Madison Ave and Moutainview. Jaffe is one of the keynotes at the upcoming High Five Conference in Raleigh on February 26-27, 2014. Here’s a similar talk Jaffe did at Hubspot Bold Talks this past fall:
Jaffe feels that innovation can be leveraged by building a bridge between big brands and start-ups (Madison Ave & Mountainview). Entrepreneurship is the “E” in his latest book with co-author Maarten Albarda, z.e.r.o – zero paid media as the new marketing model. Joe cites P&G’s purchase of the start-up “Sit & Squat” by Charmin as a model example and asks the question, “What would have happened if Kodak had bought Instagram in its infancy?”
In case you are an acronym junkie like me, here are the other letters in z.e.r.o:
Z – Zealots
E – Entrepreneurship
R – Retention
O – Owned Assets
Jaffe and Albarda contend that in a perfect utopian world, brands wouldn’t need a budget for advertising. I couldn’t agree more. I echoed similar thoughts last May in a slideshare entitled, Traditional Marketing is Dead… Long Live the Customer:
My take is more closely attuned to the R of retention in z.e.r.o. Jaffe’s last book, Flip the Funnel similarly makes the case that Retention is the New Acquisition. It’s about recognizing and rewarding the influence, contribution and participation of existing customers as they help evangelize and refer new business.
Peter Shankman of Shankman | Honig perhaps puts it best,
“Take care of the customers you have and they’ll bring you the customers you want.”
Customer Experience vs. Advertising
My friend and fellow Global CX Panel member Eli Goldstein pointed me towards an interesting infographic the other day. He shared a post from Flavio Martins of Digicert entitled, “Customer Experience is More Important Than Advertising“
Flavio points out, “Recently businesses surpassed $200 Billion dollars a year in advertising spending. Yet fewer and fewer customers are trusting advertising as the source of information for products and services. Only 4% of customers trust advertising the most for service information, so can your good customer experience to help seal the deal with customers?”
He also shared an infographic from Zendesk that makes the case for a focus on CX:
Do you agree?
Should brands look to fund CX and innovation by redistributing a percentage of funds from the advertising budget? Can creativity win the day?
Today’s Lagniappe (a little something extra thrown in for good measure) – I mentioned that Jaffe is one of the speakers next month at the ^5 Conference in Raleigh. He’s kicking off the conference, yet he’s just one of five keynotes on the schedule. Joe will be joined by Jeni Herberger, Rohit Bhargava, Lane Becker and Spike Jones. The High Five Conference (the first of its kind) will explore the intersection between marketing and creative. The conference feature three 1/2 day workshops by Alan Hoffler of MillsWyck Communications, Jeni Herberger and ASPE ROI. I’ll be one of the 12 breakouts with the likes of Adele Sweetwater and Dennis Massengill of SAS, Jim Tobin of Ignite Social Media, John Lane of Centerline Digital, Chris Moody of Compendium, Chris Grams of New Kind, Sheridan Orr of Channel Advisor, Chris Butler of Newfangled, Matt Woolman of VCU, Heather Heskett of Heskett.com and Dan Carlton of the PARAGRAPH PROJECT. Here’s the detailed schedule with descriptions of each session: