Author: admin

It has been more than two years since I last wrote a marketing strategy post – Nigeria-telecoms-companies-and-marketing. The post generated a lot of review and was even a subject of a senior level strategy revamp in a major telecoms company in Nigeria. In this post, I will be making a case for a paradigm shift in the way we approach business/marketing strategy formulation.

First, a bit of background. The concept of marketing myopia was first postulated by Theodore Levitt of Harvard in his landmark 1960 HBR article titled Marketing Myopia. In the article, Levitt asked the now famous question, “What business are you really in?”  According to Levitt, failure to answer this question correctly always lead to business failure. And he gave the example of the American railroad:

“The railroads did not stop growing because the need for passenger and freight transportation declined. That grew. The railroads are in trouble today not because that need was filled by others (cars, trucks, airplanes, and even telephones) but because it was not filled by the railroads themselves. They let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business. The reason they defined their industry incorrectly was that they were railroad oriented instead of transportation oriented; they were product oriented instead of customer oriented” 

That is the main thrust of Levitt’s argument: businesses will do better in the end if they concentrate on meeting customers’ needs rather than on selling products.

All industries are dynamic. The truth is, every industry was once a growth industry and the ones that are currently riding a wave of growth enthusiasm are likely already in the shadow of growth decline or will soon be. 

Let us look at the practical implication of these paradigm shift in selected Nigeria industries:

Telecommunication: 

On the surface, MTN, Etisalat, Airtel, Globacom are all in the telephone business. But in reality, nothing could be more erroneous than this. If these companies are to properly answer the question “what business are we in?”, they will agree that they are in the business of enabling communication between people. The success of any of these companies depend on realizing this. Five years ago, SMS used to cost 15 Naira. Today, the average cost of SMS is 4 Naira. But the real issue is not even in the declining revenue accruing to telecoms companies from SMS, the real issue is that in the next couple of years, SMS revenue will be zero! The reason for this is not farfetched, why should I pay for SMS when I can send the same message (and actually a lot more with multimedia) via Whatapp, Snapchat, Facebook chat etc.

Even the traditional cash cow for these companies, voice, is not insulated. Skype call is free. In fact, I now make more calls on Skype than on traditional phone. While it is true that I am not currently a representation of an average Nigerian, it will not be naive to project that as smart phones and data becomes cheaper, more people will embrace internet calling; with the implication that average spend by subscriber will keep falling. 

NIPOST

A classic example of a company that fail to properly define its business is Nigeria Postal Service, NIPOST. NIPOST apparently thinks it’s in the letter distribution business. Wrong. (Of course, the problems of NIPOST are a legion: package disappearance, undertrained and unmotivated employees, analog operation etc). The single most significant factor responsible for NIPOST’s withering is its failure to correctly define its business.  

Were NIPOST management more strategic, they would have understood that they are in the logistics business? This simple paradigm shift would have changed the story of NIPOST. Okay, what do I mean?

While it is true that the advent of email and texting have eroded the volume of physical letter, the overlooked fact is that the same internet has dramatically increased the number of package deliveries, ala Jumia, Konga, Rytedeals and co. The extensive postal infrastructure NIPOST has all over Nigeria gives it a huge competitive advantage in package delivery. Thus putting cost and geographic spread into consideration, it would have made a lot more business sense for these e-commerce companies to work with NIPOST (every other things being equal of course).

 SUCCESS ROADMAP FOR YOUR BUSINESS

The lesson from the above examples is that, for companies to enjoy long-term success, they should stop defining themselves by what they produced and instead reorient themselves toward customer needs. 

The entire company must be viewed as a customer-creating and customer-satisfying organism. Management must stop seeing itself as producing products but as providing customer-creating value satisfactions. This is the central idea that must be pushed into every nook and cranny of the organization. Failure to do this will mean the company will be merely a series of pigeonholed parts, with no consolidating sense of purpose or direction.

Properly defining your business will result in constant watchfulness for opportunities to apply your existing assets to satisfying needs and ultimately profit generation for the company. The companies that succeed long-term are the companies that expressed a new willingness to change their product to fit customers’ requests—practicing the “tell us what color you want” school of marketing.

So, for an Etisalat for example, no amount of creative marketing can increase the declining Average Revenue Per User (on voice calls) in the long term. At best, brilliant marketing can only increase its market share of a declining market. 

The future is not ahead of us. It has already happened. Unfortunately, it is unequally distributed among companies, industries and nations–Philip Kotler

The world is changing. To remain relevant and thriving in a time like this, you need to be abreast of the changes shaping the world around you and adapt to it.  Else, you become obsolete. 

If you are a business owner, CEO, or CMO, you need to ask yourself this important question: Does my marketing team have the requite skills to be relevant in the contemporary time. To be successful today, your marketing team needs all the traditional marketing skills and, a whole lot more. Sam Davies puts it best when he said: “To make sure the people in your marketing team can stay ahead in the modern world of marketing, they need to develop new skills, be more innovative than ever, and take complete advantage of the fact that we are living through a revolution and there are no rules”.

Below are the four must-have skills in any effective modern marketing team

1. A Solid Understanding Of Marketing Fundamentals

The first thing your team must have is a thorough understanding of marketing fundamentals. This is so important that without it, all your marketing initiatives are doomed to failure. This is common sense right? unfortunately, it seems common sense is not common. Just last week, I was in a meeting with a prospective clients where their in-house marketing manager displayed an utter lack of understanding of marketing fundamentals. Asked to provide a summary of their marketing strategy, he kept rambling about their “rebranded logo” ” advertising on radio and newspaper!

Your marketing team must be grounded in such marketing fundamentals as the four Ps of marketing and, STP. Yes, all marketing is built on STP-Segmentation, Targeting and Positioning

2.  An Understanding Of Human Psychology

 One essential component you need in your marketing team today is someone (or people) with a deep understanding of how and why other people think and act the way they do. It will be practically impossible to create compelling marketing communication if you don’t know why it would be compelling to your audience in the first place

Before you start jumping into all the tactical nitty-gritty of marketing, it’s really vital to understand how people operate.

3. Storytelling Skills

Susan Gunelius of Forbes puts it best when she said “Brand storytelling isn’t a new concept, but with the explosive growth of social media and content marketing, the opportunities to tell stories as part of direct and indirect brand marketing initiatives have become a strategic priority”

Today’s effective marketing team must include a competent storyteller (Brand Creative Content Executive if you like). This individual will focus on increasing consumer emotional involvement in the brand through social media and content marketing stories as well as on weaving the brand storyline into offline brand experiences and marketing initiatives.

4. Marketing Analytics Ninja

Marketing analytics comprises the processes and technologies that enable marketers to evaluate the success of their marketing initiatives by measuring performance using important business metrics, such as ROI, marketing attribution, and overall marketing effectiveness. In other words, it tells you the effectiveness of all your marketing initiatives.

As your market becomes increasingly competitive,  there is no question that the collection, analysis, and extraction of insights from data is becoming probably the biggest differentiator for commercial success.

“Data can be the catalyst which, when leveraged correctly, allows a business to outperform the competition. The key is not just collection, but leverage. Size doesn’t matter insight matters”.

I am sure you now know why you need a data analytics ninja in your team.

Lastly…

So, the first thing for you to do is to audit your current marketing team to see if they have the requisite skills. If no, well, do the needful and if yes, congratulations. In which case, you need to make sure you have some great ways of working in place to make the most of them.

Have you been feeling overwhelmed by the sheer quantity of information you have to read every day (online). Well, you are not alone. As far back as April 2008, Betsy Schiffman wrote in Wired magazine:
“now that the first burst of enthusiasm for social networking has died, people are now realizing that web 2.0 is actually a huge time sink. Facebook, twitter, flickr and plaxo may have helped foster community and communication, but they ‘ve also added immensely to the flow of often—interruptive messages that their users receive, leading to information overload and possibly a nasty internet addiction”

And even if before now you have not seriously considered scaling back on the amount of time you spend on the net, you should for the following reasons:
There are too many information on the net and you just can’t have the time to read them all.
The brain has limited capacity. Try to read for twelve hours nonstop. At a certain point, the law of diminishing returns sets in and your rate of assimilation starts going down. After a while, you just realize your assimilation is zero.
More informed is not necessarily synonymous with better informed.

On a personal level, I realised a couple of years ago that I was spending too much time feeding on everything on the internet & like a thirsty man in the desert who suddenly found an oasis, I was gorging myself to stupor. I read all kinds of blogs, participated in social media (general and niche), subscribed to newsletters too numerous to count and, just before I know it, I was devoting more than five hours a day to devouring information.

But after a while, I came to the realization that I had to adopt a proactive approach to my internet activities if I was to remain productive and maintain my sanity. The following are some of the tips that helped me.

Determine what is important
This is about knowing the difference between need to know and like to know
Need to know: These are the information that are vital to our functioning effectively in our professional, social and economic lives. As an internet marketing practitioner, for instance, I need to be abreast of any change in ranking factors on search engines; new business application on social networks like Facebook and LinkedIn; and …..Likewise, a medical doctor obviously need to be up to date on advancements in his area of expertise.
Like to know: two of my favorite websites used to be Forbes magazine and Guinness records websites. The information I get from these sites are nice to know but add little or nothing to my professional and personal development—they are a kind of like to know. Like to know information and activities include things like checking status updates on Facebook; checking the hottest video on YouTube; reading the latest celebrity gossip…..
The point is that you should identify those sources that provide you with need to know information and the ones that provide you like to know. You determine the selection criteria but, be absolutely honest with yourself.
My suggestion is that you should eliminate or at least significantly reduce (to less than ten percent) the time you spent on like to know activities. This leaves us with the need to know.

Because all your need to know activities are not created equal and also because of time constraint, you should scale them base on your perception of their relative value. For example, after a personal audit, I decided to read only 6 blogs a day out of the about fifty I used to read before. My daily blog list now looks like this:
1. SEOmoz for internet marketing
2. Branding Strategy Insider for offline marketing
3. Copyblogger for internet copywriting
4. BNET for general business information
5. Jeremiah Owyang for social media marketing
6. Seth Godin for motivation
7. I also devote 3 hours every Saturday to numerous other blogs

Allot time to different activities
You should allocate specific time to your online activities. If you stay in a city with heavy traffic like Lagos (like me) for example, you‘ll probably spend hours in traffic every day. You can make good use of this time by using the time spent commuting to work for your need to know. The time spent commuting back can be spent on less demanding activities like social media.
This makes sense. Most people assimilate better in the morning. Thus, by visiting blogs and other quality information sources in the morning, you get optimum result from your reading.

Things you should avoid
Configure Twitter not to interrupt you at work
Don’t check email too often. Only check emails at predetermined schedules
Stay off instant messaging or at least disable sound alert in your instant messaging during office hour

First, a bit of background. The concept of marketing myopia was first postulated by Theodore Levitt of Harvard in his landmark 1960 HBR article titled Marketing Myopia. In the article, Levitt asked the now-famous question, “What business are you really in?” According to Levitt, failure to answer this question correctly always leads to business failure. And he gave the example of the American railroad:

“The railroads did not stop growing because the need for passenger and freight transportation declined. That grew. The railroads are in trouble today not because that need was filled by others (cars, trucks, aeroplanes, and even telephones) but because it was not filled by the railroads themselves. They let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business. The reason they defined their industry incorrectly was that they were railroad oriented instead of transportation oriented; they were product-oriented instead of customer-oriented”

That is the main thrust of Levitt’s argument: businesses will do better in the end if they concentrate on meeting customers’ needs rather than on selling products.

All industries are dynamic. The truth is, every industry was once a growth industry and the ones that are currently riding a wave of growth enthusiasm are likely already in the shadow of growth decline or will soon be.

Let us look at the practical implication of this paradigm shift in selected Nigeria industries:

Telecommunication

On the surface, MTN, Etisalat, Airtel, Globacom are all in the telephone business. But in reality, nothing could be more erroneous than this. If these companies are to properly answer the question “what business are we in?”, they will agree that they are in the business of enabling communication between people.

The success of any of these companies depends on realizing this. Five years ago, SMS used to cost 15 Naira. Today, the average cost of SMS is 4 Naira. But the real issue is not even in the declining revenue accruing to telecoms companies from SMS, the real issue is that in the next couple of years, SMS revenue will be zero! The reason for this is not farfetched, why should I pay for SMS when I can send the same message (and actually a lot more with multimedia) via Whatsapp, Snapchat, Facebook chat etc.

Even the traditional cash cow for these companies, voice, is not insulated. Skype and Whatsapp calls are free. In fact, I now make more calls on Skype and Whatsapp than on the traditional phone. While it is true that I am not currently a representation of an average Nigerian, it will not be naive to project that as smartphones and data become cheaper, more people will embrace internet calls; with the implication that average spend by the subscriber will keep falling.

NIPOST

A classic example of a company that fails to properly define its business is Nigeria Postal Service, NIPOST. NIPOST apparently thinks it’s in the letter distribution business. Wrong. (Of course, the problems of NIPOST are a legion: package disappearance, undertrained and unmotivated employees, analogue operation etc). The single most significant factor responsible for NIPOST’s withering is its failure to correctly define its business.

Were NIPOST management more strategic, they would have understood that they are in the logistics business. This simple paradigm shift would have changed the story of NIPOST.

Okay, what do I mean?

While it is true that the advent of email and texting have eroded the volume of the physical letter, the overlooked fact is that the same internet has dramatically increased the number of package deliveries, ala Jumia, Konga, Rytedeals, and co. The extensive postal infrastructure NIPOST has all over Nigeria gives it a huge competitive advantage in package delivery. Thus putting cost and geographic spread into consideration, it would have made a lot more business sense for these e-commerce companies to work with NIPOST (every other thing being equal of course).

***This post was first published a couple of years ago. With the content still very relevant and poignant today in Nigeria, we decided to bring it up again.[/vc_column_text][/vc_column][/vc_row]