The following guest post was written by by Carmel Yoeli (CEO) & Saar Brodsky (VP Creative), co-founders of technology marketing agency Atreo.
If B2B high-tech in Israel could be summed up as a persona, it would be akin to a “weird genius”: It’s brilliant, but a bit of a social reject. Israeli technology is unquestionably among the world’s most advanced, but when it comes to marketing savvy, we lag far behind. So what are we doing wrong? In our view, the problem stems from inadequate strategy, and the fact that Israeli B2B tech companies have simply forgotten one of the essential “Four Ps”: Product, Price and Place are important aspects that we all take seriously, but when it comes to Promotion – well, that’s a different story, and one that we believe Israeli high tech marketers should address as a matter of priority.
It’s not that we fail to promote our products – we do promote them. We just don’t promote them strategically. We create the requisite website, we craft the obligatory approved messaging, we travel to the necessary three exhibitions a year, and of course we hire the mandatory PR agency. But even so, we don’t really know where we’re taking our brand, which market segments we’re targeting and which purchasing behaviors we’re aspiring for our brands to overtake and own.
Maybe every few years, if we’re rich, we’ll even redo our branding at a luxurious design boutique in London, tweak our brand values, renew our logo, and feel confident we’ve ”done the job”. But these actions are very far from executing a real promotion strategy.
Why is it an Israeli problem?
Israeli high-tech’s greatest strength is also its greatest weakness: We are very, very techy. At Israeli high-tech companies, our technological orientation outweighs our marketing aspirations. It’s a phenomenon that happens so often, it’s become a funny trope: a bunch of brilliant Israeli engineers develop a mind-blowing technology, and only after they’ve created it, do they start thinking about possible uses for it.
It’s no surprise that Israel has the strongest technologies – but the weakest brands. We are failing to develop high-equity brands that compete and win against strong, established American brands, or beat our Chinese competitors with their price-based value propositions.
Many great engineers and managers in Israeli high-tech believe that all advertising boils down to beautiful imagery and overblown language, and that it’s a waste of money and energy – because, as they believe, all the “real” B2B sales occur in meetings. And despite dozens of studies that demonstrate the critical importance of a promotion strategy, Israeli companies still don’t develop brands effectively. Sadly, many of them end up paying a heavy price for that approach, sometimes without even realizing why.
Promotion: It’s an art, not a hobby.
“Don’t talk about the technology, talk about the benefit”, or “don’t talk about the benefit, talk about the why”. These are textbook adages that amateur marketers love to recite. But it’s not a real promotion strategy – it’s something they read in a book or saw at a TED Talk. It won’t differentiate their brand from every other brand out there, and it certainly won’t persuade the consumer to choose that brand, or to pay a premium for it. In reality, there’s no ironclad rule for what to focus on. Sometimes it’s the “what,” sometimes it’s the “how,” sometimes it’s the “who,” and sometimes it’s none of the above. This is also precisely the challenge that promotion professionals must crack.
As we know, engineers may be excellent at engineering, but they’re not necessarily excellent marketers. For successful marketing, a promotions professional is necessary. This statement may sound too broad, but consider that 150 years ago, the American retail industry was in exactly the same place that Israeli high-tech B2B is now.
Drawing inspiration from a legendary denim brand
In the late 19th century, a weaving line manager at the Levi’s factory who happened to be able to draw beautifully, started drawing Levi’s ads for the local newspaper. Somewhere along the line, its audience became more sophisticated, and Levi’s realized that there was more to marketing than producing pretty pictures. The company appointed an internal marketing manager to oversee the marketing strategy and its execution. And, to ensure that this task was done properly, Levi’s hired an advertising firm that could devote the time, resources, and professionalism to carry out the promotion. After all, Levi’s is a denim manufacturing company, not a professional promotions company.
This strategy worked great for them, and has continued to shape the Levi’s brand and promotional activity for 150 years. It’s this process which Levi’s Jeans started a century-and-a-half ago, and that American B2B adopted over 30 years ago, that we need to see happening in Israeli high-tech B2B marketing.
The Fourth P: What is promotion strategy?
Product, Price, and Place Strategies can be pretty straightforward to formulate or they can be derived from McKinsey and similar consultants. These strategies dictate what product to develop, which market to target, and what price you should charge. But Promotion Strategy is responsible for making all these things happen. It persuades your customers to actually buy your product for the price you’re asking. Promotion Strategy usually comes from an advertising firm – and by the way, ad agencies just call it “strategy,” because that’s the only strategy they provide.
Promotion strategy defines who you want to be in the mind of the consumer, and how you can achieve it.
Promotion strategy is responsible for creating disruption – that is, changing your consumers’ way of thinking, and altering the beliefs that drive their purchasing behaviors. In short, promotion is what you do so everyone stops buying the same old product they always buy, and starts buying your product instead.
Promotion strategy is the battle for consumers’ mental space:
Does your product generates top-of-mind awareness?
What values does your product strongly project?
Where is it weak, and how must it be fortified against the competition?
Is it associated with a certain situation or season, a state of mind, a sentiment?
Promotion strategy takes an analytical approach to what you want your customers to think, feel and assume.
An example from Israeli retail: The Battle of the Yogurt Brands
For years, Israeli yogurt was dominated by a single competitor: Strauss’s Danone. This brand controlled over 60% of the market while Tnuva’s Emmy brand couldn’t rise above 20% of market share. In 2001, Emmy and Danone had wrestled over messaging about yogurt’s health benefits. And although both brands invested millions in advertising, it generated indifference from consumers, and stagnation of the market.
Tnuva decided to stop and think. Their Surveys showed that consumers already associated any yogurt with health benefits, regardless of brand, so they decided to shift their strategy and seize an entirely different value proposition: Fun. Overnight, Tnuva discontinued Emmy and launched “Yoplait” with crazy red advertisements featuring endearing, full-figured Afro-American ladies dancing. The ads oozed “fun” and had nothing to do with health, and the strategy worked. After 8 months, Yoplait controlled over 50% of the market, shrinking Danone to only 30%. Since then, Yoplait has held its position as the leading player – 14 years and still kicking. That is the power of promotion strategy.
Tnuva Yoplait print ads
What’s the difference between branding strategy and promotion strategy?
Many people get confused between Branding Strategy and Promotion Strategy:
Branding Strategy refers to the brand’s values, the personality it projects, how it looks and talks. Let’s assume we’ve decided the brand is “accessible, intelligent, but assertive.” Sounds nice? Sure. But why did we decide to communicate those values and not the opposite? Branding is impossible without first knowing what the brand stands for and what it’s trying to achieve.
Promotion Strategy asks how we want to be perceived by consumers, and this must be decided first – before we decide how we look or what we say. Or in other words, why struggle over whether your brand’s mascot or leading character should have a red or green tie, if your clients would rather place their trust in a mechanic wearing overalls and carrying a toolbox?
A clear promotion strategy will save your brand.
Let’s look at another Israeli example: Excellence Investment House, also known as “Excellence Nessuah.” In the relatively unsexy investment market, Excellence was the only investment firm that chose to avoid the “friendly, trusted” mantra. Instead, Excellence’s promotion strategy was to differentiate itself through the value proposition of “superior financial performance”. Consequently, its branding strategy was to adopt a condescending brand voice, so in a series of ad spots, a spokesman snarkily proclaimed that other characters’ investments were “good, but not great” (“ze tov aval lo metzuyan”). With this superior, even disdainful catchphrase, Excellence found its disruption, and its customer base jumped more than 30% in the months following its shift in attitude.
Excellence Nessuah TV commercial (Hebrew)
Today, Israeli high-tech is still a long way away from this type of strategic promotional thinking. Many high-tech marketing managers’ sole considerations when judging marketing materials boil down to “Do I love it or not? Is it beautiful or not?” The problem here is that the manager’s personal taste would never be a factor in future customers’ shopping decisions.
The only criterion that should influence and drive the strategy for your brand’s marketing material is whether it delivers the brand’s objectives in the most effective possible way, because:
Only an explicit promotional strategy will save you from “Marketing Mania Disorder.”
Only a clear promotional strategy will save you from changing your marketing message every two months, every time a new product is executed, or every time the brand feels like saying something new (since the first message didn’t say anything important anyway).
Only an unambiguous promotional strategy will save you from broadcasting a combination of shallow and transparent messages about your brand, such as: “the scalable, future-proof, cutting-edge, innovative, best-of-breed, flexible, plug-and-play platform solution.”
Only a robust promotion strategy will prevent you from spending hundreds of thousands of dollars on trade shows to impress potential customers, when no potential customer ever made even one single important business decision on the basis of a hot dog or an iPad raffle.
A good promotion strategy always ensures that just one message is front-and-center for your brand, and that it’s the right message to tilt the customer’s mindset in your direction.
Even in B2B, Excel spreadsheets don’t sign the checks.
For years, it was believed that B2B purchase decisions were made solely on the basis of cold, intellectual “business considerations”. In Israel, this argument still echoes in the industry, but if it was still valid, then how would you explain 2014’s global B2B marketing spend of $108 billion? It’s true that B2B applies more sophisticated technologies to its decision-making and that several people are involved in executing purchasing decisions. Nevertheless – people are still people.
Let’s play a little mental game:
Ask yourself: which upcoming 2016 luxury car model do you think should cost more, the Audi or the Skoda? You know it’s the Audi, don’t you? But the interesting question here is – how? We didn’t overview the expected technical specifications, and nobody on earth has driven either model yet, but we all assume that the Audi should be more expensive. It doesn’t matter that this is a decision about a complex technological product with many specifications that lay under the hood, or that other people, such as family members, could be significant influencers in the purchase decision. The ‘brand trick’ still works. The sense of Audi’s higher value entered our minds a few seconds before we even thought about technical specifications or other stakeholders.
It’s not magic; our brains are simply programmed to categorize things and to provide and rank their value in a fragment of a second. It’s the decision-making process that has worked for mankind for hundreds of thousands of years, and it’s not going to change now just because we have access to Excel spreadsheets.
Brand equity is stronger than any single product feature or any single rational decision. Brand equity is the reason people are willing to pay a premium for a product.
Indeed, research shows that even in the case of technology, we make decisions during the brand touch-point stage, and then rationalize it retroactively to justify the original choice.
People are people. The same person who wakes up in the morning and washes his hair with shampoo that is 60% more expensive just to enjoy “the promise of Pantene”, and instead of buying the generic brand, drinks Nespresso coffee at an inflated price, and then rushes through traffic to the office in his Audi, is the very same person who’s making the purchasing decision on your product. Or has he already decided before his assessment even begins?
The ground is already moving.
The change has already begun, and Israeli high tech marketing is maturing rapidly. True, we still have many veteran marketing executives who would prefer to leave everything as it is and not rock the boat. But we also have a new generation of braver and hungrier marketing decision-makers, who live for marketing and follow the real-time marketing maneuvers of innovative, leading high-tech companies. We’re guessing that if you have read this far, you are the second type, the type who wants to do real marketing and leave your mark on the brand and company. If you are such a marketer, then find “The Missing P” and you will be well on your way to achieving just that.