Strategy : The New Marketing

The best of brand + the best of direct + sales, powered by finance = success

This simple equation is the foundation of convergence. We bring together the best ideas and techniques that connect us to the individual, so that we can communicate with the individual on his or her terms. For over 20 years, I studied, tested and developed this methodology. It is the fastest way to create brand resonance and build brand loyalty. We have all the tools we need right at our fingertips to reach the individual and build an empathetic relationship.

Today, it is all about respecting the individual. Convergence retains the powerful imagery and messaging of brand advertising while leveraging the motivational techniques of direct marketing, and focusing all of it on the goals set by sales. It is powered by a financial model, using the contribution margin of what the customer is expected to be worth in a set period of time. It is about making money fast; it happens in real time with statistics to guide the way; and it has the advantage of being a process we can repeat over and over again, as well as proving critical path accountability to the CFO. …

Convergence is a bit like Chemistry 101. We need to mix the right elements to get the expected reaction. …

The Best of Brand
… Over the years, brand builders have developed a science that pulls us into a love affair with the brand. The aura of the brand—what we like or dislike about it—is everything. … Brand builders know exactly what to do or say to create need and desire in their target buyer. Some targets are huge—I mean, didn’t everyone desire the iPhone? And some targets are small, like me needing that really cool fiberglass sea kayak. …

We know that brands are more successful when we have an experience with them that is consistent with the brand persona. Convergence creates experiences and dialogue with the brand in order to strengthen brand loyalty.

One of the most valuable tools we need from branding to do our job well is a brilliantly crafted brand brief. It is also known as the brand book or brand identification platform. If we want all communications to reflect the essence, tone and character of the brand, then it seems reasonable to have a brief that defines all of these intimate details with some emotion. … Anything less gives us room for interpretation, creating our own definition, which results in weakening the brand.

The Best of Direct
The second key ingredient in convergence, direct marketing, is the science of moving people forward in the sales process, either to interaction/leads or to sales. Direct marketers know how to measure and project every possibility. They can push the limits of interaction and build brand using every kind of media available, in ways that traditional advertising can barely fathom. … I like to think of it as building communications via any media to provide prospects and customers with “proof of concept points” for their consideration.

The Best of Sales
Combining the best of brand and direct is starting to make sense, as both have proven skill sets that can enhance the objective of the other. But what the heck does sales, our third ingredient, have to do with it? … Salespeople are on the frontline every day—listening, probing, questioning, and then answering the customers’ hard questions. … With ever-increasing competition and complexity in the market, the need to support them with real-time information is more critical today than ever before.

One of the tools we need to learn from sales is called objection selling. Rather than focusing our strategy and creative on features and benefits, we need to know why an individual wouldn’t move forward—the individual’s potential objections. … Objection selling gives everyone in marketing and advertising the right perspective to develop the empathetic dialogue needed at each phase of the sales process.

Not only can we benefit from their frontline knowledge of the customer, but also we can gain some serious traction from their database. Sales organizations use sales support software to isolate and define customers, lovingly referred to as the pipeline. Convergence uses the same idea, relying on a database to methodically build relationships and communicate with customers. … We are going to use the database to understand exactly where the individual is in the sales process so we can communicate directly to the individual … Internalizing this new information will help us determine the next step for each customer, as well as the communication needed to get the customer there.

The Power of Finance
… Convergence uses finance to determine the appropriate investment spend as well as the expected value of the individual. We use differential accounting, the process of burdening only the direct cost of goods sold and overhead, as a new source of funds to invest in future marketing and advertising. Rather than trying to estimate the lifetime value of the individual, we’ll take a more pragmatic approach and project the expected value over a set period of time. This could be as short as a few months or as long as several years.

Most folks determine their marketing and advertising costs based on a percentage of sales from this year’s static profit and loss. Working that way is about as precise as pulling a number out of a hat. Convergence uses a much more efficient model based upon real-time accounting. By gathering information from an individual after the transaction, we can determine his or her worth. Using the power of statistics, we’ll arrive at weighted averages for sales and costs that we can trust. We’ll understand the contribution margin to profit and use that knowledge to drive marketing and advertising costs. In other words, you’ll work with actual, proven statistics that relate to sales to build a model that works for years to come.

Richard Rosen is president and CEO of the marketing agency Rosen. This is an excerpt from his new book, “Convergence Marketing: Combining Brand and Direct for Unprecedented Profit.” Rosen has brought his innovative marketing approach to clients as diverse as General Electric, Dell, MetLife, Viking River Cruises and TaylorMade Golf. He can be reached at http://www.rgrosen.com.