Dashboard: The (Marketing) Road Not Taken

[Music] welcome to another 21 hats dashboard brought to you by our sponsor the great game of business I'm Lauren Feldman I'm here with Sean busy to talk about the things we think business owners should be thinking about this week Sean is CEO and founder of Kinesis which is based in Portland Oregon and works with small businesses on marketing culture and strategy welcome back to dashboard Sean he morning Lauren Sean last week you published a really interesting piece on LinkedIn arguing that uh business owners put a lot of time in energy into marketing that turns out to be kind of misguided can you give us an explanation of what you were getting it yeah I mean I was just I was talking you know kind of specifically you know sort of throwing things at the wall um and hoping they were would stick and also just sort of years and years of observation of of folks doing things like paying for digital you know it's kind of an umbrella term which often means paperclick or lots of blog posts trying to optimize for SEO or um you know hiring a junior person to really take over a social media account and just kind of fire hose people with content and you know my my point was that um this is a lot like trench warfare that essentially a lot of businesses are engaging in the same type of activity as their competition and you know it's just it's becoming a matter of more and more money producing worse and worse results and really trying to encourage people to look for other paths forward you talked a lot about friction you know the idea that people are spending more getting Less in return give us an example of the kind of friction you were talking about I mean there's a lot of examples here right so back in 2005 um we were we were on the top of the world in terms of search engine optimization you could type the term Marketing in Portland OR brand Portland OR web design in Portland and Kinesis would be on page one at the very top and that lasted for a good number of years we were we were really good at that and then over time you know that kind of writing became on the wall in terms of you know other businesses figured out this was important and they figured out how to do it so you had that competitive Force but then what I think the more important thing is that Google started pushing links to the top of the page that weren't people that were really good at and doing organic work like we were they were putting people at the top of the page that were paying them money and at first it was really innocuous right it might have been a link or two and then it was three links and they were highlighted in blue so you could see the difference then over time became just the norm and I think we've all seen this where the quality of search has gotten kind of worse and worse and worse because it's really become a place where you pay to play and so if I were still engaged in that today I would be spending an enor amount of money just to maintain some relevance in that space way more than I did in the past and getting probably worse and worse results um in part because now Google's become a toll booth um so you have the combination of everybody's doing it and the tech platforms that own the data and the customers you know they're they have a profit motive right and so they're driving everything towards um towards more more cost higher cost and I've seen this a lot too with especially folks who you know are advertising on Facebook and you know kind of in that space there's a lot of complaints of like God it's gotten so expensive and and I'm spending more and getting less do you think this is equally true uh for companies that are selling uh to Consumers versus companies that are selling to other businesses yeah that's a great question and you know I I should I should uh caveat this with you know my my area of expertise is really in B2B and and that's a space where it tends to be more oriented towards strategy lower numbers higher value and when you're these are these are generalizations but if you're in the B Toc space you're generally talking higher numbers lower value you know small little changes are meaningful to you and so I see that a lot of consumer Brands they really kind of have to play in this sort of digital trench warfare uh at least to some degree uh it's just you know I see a lot of companies that a maybe don't even need to at all um or B because they don't because they're often working with companies that that are sort of biased in this direction they're not asking what else is possible they're just sort of saying well I went to a seminar and and my colleagues are doing digital marketing and so I hired a digital agency maybe that's not the right path and what I see with B2B is there's a lot of a lot of room for more creativity and and to be more interesting and I think get better results so what else is possible what are those other paths you're referring to I mean I can give you a couple examples you know I'll use one in the kind of consumer space so I'll use a big company even though this is a small business podcast he's a big company because you know it's something we all know so I I like Costco great example of a business that you know instead of focusing on I talked in the on the piece about the four Ps of of marketing which is product price placement and promotion most people see marketing as promotion right they're pushing really hard on ads ads ads or SEO you know pay attention to me pay attention to me if you look at a company like Costco they're actually thinking a lot about the product uh also about the price so so for them the product isn't the stuff in the stores the the product is the experience you have through membership so they've fundamentally changed what the product was in comparison to their competition and they've just gotten a huge benefit from doing that and everybody else is kind of copying and following them but doing a poor job of it so they think a lot about membership they they they really care about the customer because it's a membership business not a pro not a a retail box store business and then they do things like make it easy to return things they treat their employees well and that be creates kind of this virtuous cycle where people ref you know they say to their friends God I love Costco why would I go anywhere else it's a really good example of like they could have gone to trench warfare and done like the Bed Bath and Beyond strategy right like 20% off of everything all the time you know Bam Bam Bam just constantly advertising but instead they said let's change the product you know and let's change how it's priced too you know so you get people to pay for memberships as opposed to coming in the door for free but then the things that they get when they come in the door are way different than everywhere else you know and often much more affordable so I I just think that's a really good example of like using strategy to change the product to change the price to not get caught in the like trench warfare of trying to out advertise or you know out digital uh the competition um so that's that's like one of my favorite examples in the consumer space do you have that example of uh a a smaller business choosing one of those deaths yeah I'll use example there's a there's a small metal fabrication shop outside of Portland in McMinville called solid form so they weld things right you know they'll weld structural steel in a building they'll weld ornamental things put staircases together you know and and if if solid form had engaged the owner's name is Deon if Deon had engaged in sort of traditional marketing as everybody is sort of being told to do it digital for example you know he would have been told well you need keywords for things like welding and metal fabrication blah blah blah and you need to buy those or you need to do a bunch of blogs about wet metal fabrication well now he's fighting all the other firms that say the same thing right and in order to rise to the top you have to spend more and more money or energy or time right so what he did that was really different is he was really passionate about the careers and the trades and he started going into the high school and evangelizing this and talking about it he started to go to networking events and acted as a speaker there he started um building like Affinity groups of people who were interested in the in the trades and like recruiting kids out of high school to this career in the trades and what's really interesting about that is that he's not talking about metal fabrication he's talking about something that he's really passionate about which is the opportunity for career advancement within the trades and pretty soon he was Finding other people who are interested in that too which just so happened to be contractors and Wineries and people who can actually buy his services and so now they're aligning on something that they both care about and he's not hammering them over the head with well buy my steel you know or buy my you know buy my fabrication Services uh which which ends up if you do that path ends up being on often on price instead he's building relationships and he's you know creating centers of influence which are really powerful ways to get multiple customers in a strategic way you know not this like Brute Force you know trench warfare and you know he's I don't know he's gone from 15 to 40 employees in the course of I don't know six or seven years he's doing really well financially because now he has these deep relationships and people who hire him over and over again it's it's not unlike the Costco model in that he kind of changed what the product was and he deemphasized the thing that he does to make money which is steel fabrication and he overemphasized a thing that was adjacent to that and really important but that none of his competitors are really at the time especially were really talking about and he became a leader in that area and he became known as the guy to talk to about Workforce Development so it's it's a really good example of a B2B strategy that was rooted in something he cared about and he believed in and that was different from the rest of the market and didn't end up you know he's not buying customers he's actually building relationships and I think that's a good example of of a B2B approach or another small business approach and that I would encourage people to think about when they want to get customers is what are my other choices besides just buying or renting them through digital platforms that's a great example uh I I want to ask you about another uh marketing story that I highlighted in the morning report last week and that involves Walmart uh Walmart has decided it wants to sell its own premium line of food at its supermarkets the line is called better goods and it sounds to me like they're they're kind of trying to be all things to all people which is something that we generally try to discourage especially for smaller businesses I'm just curious do you think this can work for a behemoth like Walmart they are the uh the country's biggest grosser already or is is this a mistake for them too in your opinion so I'm I'm just G to say I'm no expert on grocery or retail understood so but I but I can speak to this through the lens of brand and positioning and messaging and a as a customer I have seen Walmart for years anchor its brand and positioning as we are here for the everyday person right we are the brand you come to where you can find things that are affordable and kind of the meat and potatoes of your of your needs and you know you make some trade-offs with that right like I don't go to Walmart and say gosh I bet they treat their employeers really well like Costco does right like I'm making a trade-off here of you know I'm gonna get something for low price so they've got years of that brand Heritage and I just really question the ability to unwind that by simply offering a new product now if you think back to Target a while back like say in the like maybe 90s or early 2000s when people would jokingly say tar do do you remember that Lauren like like they they really went at how do we become a place where people can get things that are designed thoughtfully and they were successful at that right they hired Michael Graves they hired all these other you know pretty pretty fancy product designers but I think what was different about that is like they were creating a new market that didn't exist before and Target also I I mean they had some brand Equity of who they were and what they were about but it wasn't that strong like Walmart's is and and so I just I just really question it from that perspective of like brand transformation and change you know it would be like you know I read The Inquirer and then one day they say hey we're going to do New York Times level journalism you know it's like okay come on you know like who's going to believe that so I really questioned it in that perspective and the other thing that I've observed which is really interesting and maybe this is why they're doing it is I'm watching Brands like Whole Foods really become commoditized like if you go into Whole Foods now instead of seen all these you know bespoke and boutique you know small business Brands and really kind of expensive and good things there's all kinds of like w not Walmart like Whole Foods 365 like their house brand stuff and and it seems like they're way more they're playing like a price game like this is cheap this is Affordable so it's it's really interesting you've got Whole Foods going the other direction right it's trying to shed itself of that whole paycheck which of course is happened since they were bought by Amazon they were bought by Amazon yeah yeah I it's been more gradual there so I think they're I think they might be quote unquote successful and they're going to apply you know Amazon like Logistics to it and so they'll they'll they'll really squeeze out all the like cost centers I just I it's I don't know it just seems rather strange for Walmart to make this play what what do you think about it you know what's your uh yeah well I I was intrigued by the comparison you made with uh Target the the big difference that struck me is with Target I think they were trying to to kind of adopt the glow of other brands that they brought in you mentioned Michael Graves um people who were established I mean not necessarily household names but you know those who knew knew yeah uh whereas Walmart is doing something they're playing with a little bit more fire it seems to me in that they're introducing Their Own Line uh better Goods that is intended to be upscale and going against the tide of what you described you know years and years of being the place to go to get a good value that that seems like a bigger risk to me do you think you know this just hit me do you think they're just doing a me too play for Trader Joe's I I think that's very likely I I think they're if they're not thinking directly about them they're thinking about Whole Foods uh they're probably thinking about Costco a little bit too um they're so established they've got so they they need to find new customers try to find new customers right yeah they've done all they can with their existing yeah well okay so here's here's another question I mean you kind of introduced the the term you know sort of high-end but I wonder if that's a Mis presentation of what's going on here because when I think of Trader Joe's I do not think of highend I actually think of like curated unique things that are pretty affordable um and the quality is decent but not like not like bespoke you know like so it feels to me more like this could be and they talked in I read the article they talked a little bit about like trying all these different things and experimenting and that felt so Trader Joe's I mean Trader Joe's is a machine I mean pretty diabolical too if you really dig into it in terms of how they will steal small business ideas and then brand them their own even naming them very similarly I mean that's the I don't know if you've done seen any reporting on that but that is wicked stuff that they do to entrepreneurs and so I could see Walmart looking at that going hm that's pretty evil and effective we could do that too so I mean you know I hate to say it but I I I I think that's honestly I I'd give more Credence to that's the motivation they're looking at Trader Joe's and going holy crap that brand is is growing like crazy there's no competition for them if you think about like a you know if you were to draw like an XY chart of of grocery experiences Trader Joe's is in its own world it it there's nothing comparable to it I think they're going after them I don't think they're coming after Whole Foods I I I really and that play actually makes a lot more sense to me I think you could move a Trader Joe's Shopper to Walmart way easier than you could a I don't even want to use Whole Foods as an example anymore I I feel like Whole Foods is this weird place now but like a zupan we have these in Portland zans OR these like really fancy you know bespoke expensive as heck stores I think they're going after Trader Joe's I think that's really the the the piece that's not being talked about I I I think you make a good point in that story it was a very good story in the Wall Street Journal by the way um they they talked about sending people around the world looking for flavors and textures and formats they saying it sounds like a lot of fun but these people were eating eight meals a day uh trying to discover you know something special and I think this probably fits into that Trader Joe's uh mode that you're suggesting but they want to bring they're looking for all this and then they want to make it themselves and sell it under their own flag uh see okay first next next time have your friends of the Wall Street Journal call me first because I could have given that Insight but second if you think about those those folks that the the journal is interviewing they have been coached hard on what to say and that narrative that they just shared right there that is straight out of Trader Joe's we explore the world we look everywhere for rare finds and unique things and then we make them our own that's Trader Joe's but not too unique they found some things like jar with Cube zucchini was a step too far for their customers yeah that's now that'll be the funny part it's like how how how tjs can they go and still have the their existing that's the other thing too are they trying to sell to their existing customers or are they actually trying to pull market share I trying to pull market share I think they know they they're trying to pull market share absolutely and and I mean you know hats off to them you know I I this is another piece back to the whole digital marketing you know when you when you go at that idea of trench warfare you are like fighting for customers your existing customers are fighting for that is often a function of the thing you are selling is similar to lots of other people and one path to escape that is to create something new right is to make a new offering or to rep package your existing offering in a different way that can potentially get new customers this is very much out of Blue Ocean strategy so you know in the large corporate space it's really hard to find true Innovation outside of a few companies so what you tend to see is the meing where they look at another market and go you know what we can we can take market share from those guys we know what size of the mark they've done the analysis they've secret shot they've hired xtjs employees and you know got all kinds of information I promise you that's happened and and so the large corporate players they're these sharks swimming around the ocean they don't they generally don't create something new that hasn't been done before they tend to emulate and copy but then what they look for are things that have not been copied a lot and so this is a good example of that now for a small business the opportunity is usually not to like copy some body else that's not as copied as much but it's actually to create something totally new and that's I think that's the the most undervalued potential in the small business space within the kind of marketing realm going back to Devon at solid form what did he create that was new it was a community of people who cared about Workforce right he became an evangelist for that he put a conference together on that right it's like he made something new that was worth paying attention to you know Sean I think that's such a great point because when people think about making something new if you talk about that they assume you're talking about a product that's not the case here it wasn't a new product it wasn't a new offering it wasn't a new service it was adjacent as you put it I think yeah I like to say you know and actually this is just a thing we put on our website as like a value proposition I'm like you know what we do we help people Market in a new way and and you know Devon is marketing in a new way he's he's putting things out there in a new way but back to CCO right uh treating your employees well that's not a product but but it's a new way of approaching work for it shouldn't be I mean but in the large corporate space it's kind of a novel thing right so this this new way I would say way of working or a way of doing something to to open your mind to it isn't just a product although it can right membership was a new product for for Costco but they also had other new things that weren't products to your point like um customer experience returnability um employee experience um free samples you know so so like lots of really interesting things and all cheap hot dogs right you know so so you put all that together and that's a brand and if I think of that is really the the opportunity for small businesses to think about Sean I had a couple other things that I wanted to discuss with you but um once we get going I just can't stop asking questions and I think we' used up our time thank you for uh for taking the time this morning I appreciate it thanks Lauren they were great questions thank thanks for the opportunity Sean busy is CEO of Kinesis which is based in Portland Oregon and works with small businesses on marketing culture and strategy this episode was brought to you by the great game of business which helps businesses use an open book management system to help build health companies you can learn more at Great game.com have a great week everybody