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Why really effective marketing comes from the inside out

Have you got a great product or service that you know people would love, but you don’t have the funds to tell everyone all about it? It’s not an uncommon problem; advertising is undoubtedly an effective way to create awareness, but it is also expensive.

That’s not to say it’s not cost effective. It’s a fair bet that seeing an ad will lead you to try something new at least once in a while. And much advertising exists to make us feel good about the brands we already patronise, with the aim that we’ll be encouraged to buy them again. For big brands in highly competitive markets – think Nike, British Airways, Volkswagen – simply keeping in the spotlight is reason enough. Consumers are a fickle bunch, so it’s vital to remind them you’re there over and over.

But if your marketing budget is five figures long, max, then spending it all on advertising probably makes little sense (there are exceptions of course, but this is a good rule of thumb). Far better then, to make the budget work harder by encouraging “endogenous” marketing.

The term comes from Didier Soernette, a clever prof at UCLA. In late 2004 he published an analysis of what he believes makes books sell, having used physics and mathematics to scrutinize 138 best sellers on Amazon from 1997 to April 2004. I have little hope of understanding the figure work, but his conclusions make a lot of sense.

He found two ways for books to achieve sales success. The first he calls "the exogenous shock", the external impact when a book receives a good review from a respected source for instance. The other is "endogenous shock," when the internal effect of word-of-mouth helps a book's sales to accelerate over time. One of his examples is the Divine Secrets of the Ya Ya Sisterhood, which took two years to reach the bestseller list.

There is a strong parallel here with tactics used in marketing. The “exo” shock of advertising delivers a fast hit of awareness, leading to a surge in sales that tends to diminish once the campaign has run its course. The “endo shock” comes from the internal effect of things that bring customers to the door without them receiving any overt recommendation to do so. In the case of the Ya Ya Sisterhood, word-of-mouth increased over time and allowed the book to rise up the bestseller charts. Soernette found that books that experience this “endogenous shock” are usually more successful, because their sales are sustained for longer.

The same is usually true in marketing; “endo shock” word-of-mouth is a great way to build awareness and sales over an extended period. There may not be the sales burst that comes from “exo” advertising, but if people are saying positive things about your product or service then it’s likely their conviction and willingness to buy will be altogether greater.

So what can you do to generate an “endo shock”?

The answer is lots of stuff – talk to the media, meet with potential customers, surprise people by appearing in unexpected locations. These tactics, and many more besides, are grouped by the catch-all term, public relations. Oh yes, PR. We’ve all heard of it, but how many know what it actually is? They may have been Absolutely Fabulous, but Eddie and Pats never really gave us a clue!

PR can take many forms, but the common feature is getting people to experience a brand independently and for themselves. Let’s take a new model of car as an example (I often do, as I like cars). You might read a review of it in the newspaper one Sunday, then you might see it displayed in a shopping centre the following week. And then it’s on the news, being used to ferry the Olympic Committee through tunnels under London as they review its Games bid. I’m talking about the new Land Rover Discovery, or LR3 as it’s called in the US.

None of these techniques are advertising. The viewpoint of the journalist writing in the newspaper (that, importantly, you bought and chose to read) you recognise as being independent, you walk past the car at the shops and get to take a look for yourself, on your own terms. The appearance on the news report was nothing to do with the car, but there it was and the reporter even mentioned Land Rover by name. Working together, all these things give you reasons to think about the product in a way that outlasts an ad. If you’ve been identified as a target customer by name, you may even find yourself invited to an event hosted or sponsored by Land Rover, with the Discovery/LR3 subtly present.

PR is the slow burn to advertising’s firework display. Fireworks have a lot of impact, but are too expensive for many to afford. Stoking up the embers of PR however, is less costly and longer lasting. Fanning the flames (perhaps I should drop this analogy now) takes patience and commitment, but if you have that great product or service that you want the world to know about, using PR to get that “endo shock” going could well be the most cost-effective way to spend your budget.

Truly British, and on its own terms

Britishness is a rather nebulous concept. Not surprising really, given that Great Britain is, in truth, the moniker for the island land mass that contains an assemblage of nations – England, Scotland, Wales and Northern Ireland – rather than being a country in its own right. For most people on these isles, it’s more a matter of personal choice to refer to oneself as British. Only on passports and at international events, such as the Olympic Games, does it become an official tag.

Yet the meaning of Britishness, and whether it is something that is in decline, causes much hand-wringing in some quarters of society. It’s a common media debate: “What does Britishness mean to you?” The fashionable answer these days is to be as all-inclusive as possible. Fish and chips, talking about the weather, red double-decker buses and profligate tea drinking are as valid as ever. But so too are regional accents, tikka masala, gangsta’ rap and performances of Iranian dance.

The internationally famous department store, Harrords, has tapped into this vibe of diversity with a month and a bit of special events and promotions. The ‘Truly British’ campaign places the emphasis on the ‘ish’ to extend the meaning to anything and everything that the company considers is a part of what Britishness means today. Check out the Truly British microsite here.

It’s a clever promotion, well supported by demonstrations, exhibitions, displays, celebrity personal appearances and, of course, lots of special offers. Harrods has long been an intrinsic part of British culture and the initiative both feeds on and bolsters this reputation. The more cynical among us may insinuate that it’s more posturing by Harrods Egyptian owner, Mohammed Al-Fayed, to convince a sceptical public that he is worthy of British citizenship – something that has been repeatedly denied to him by the authorities.

Perhaps, but the campaign is utterly apt for a company that signifies a top tier of Britishness that is identifiable both at home and internationally. How British ‘Truly British’ really is will of course be debated, but Harrods has been shrewd in associating itself with a more contemporary cause for the term. Instead of defining itself as part of Britain’s past, indeed its heritage, it has exuberantly placed itself in the centre of a festival of manifold, modern Britishness that is of its own making and therefore neatly encompasses everything from the company’s broad range of good and services.

Appreciating the understated

Beverage and confectionary behemoth, Cadbury Schweppes, has announced plans to sell its Europe Beverages business in a move to reduce Group debt and focus on brands and markets with greater growth potential. This division of the company is best known for the Schweppes – originally the first mass produced carbonated mineral water and today the label on a host of drinks and mixers. Internationally famous, Schweppes potential removal from UK ownership could signal the end to the distinctive British identity that the brand has subtly yet enduringly espoused.

Schweppes has used an understated hint of Britishness in its marketing (understatement being a typically British characteristic in itself) to great effect, especially in the US market. Note the British accent in its television advertising, along with wry, tongue-in-cheek British humour. The use of the slogan ‘Schweppervescence’, first used in Britain in the 1940s, is still used for the US market. Small, yet important touches of continuity support this, such as the Schweppers fountain placed in the centre of the Great Exhibition in Hyde Park, London in 1851, which has become one of the brand's hallmarks and now appears on packaging. All of this, in the view of my US colleagues, communicates the notion that Schweppes is “that little bit better”.

The clever thing is that Schweppes uses this notion to successfully justify a higher price point – around 10% more than Canada Dry, its main competitor (Canada Dry is in fact another brand in the stable of Cadbury Schweppes, but only in Canada, Mexico, Syria, Hungary). Together they occupy most of the US market for tonic water and other mixers, yet the allusion to Britishness by Schweppes has enabled a premium price for extremely similar products (both pitched as relatively upper end brands). Indeed, at upscale metropolitan bars the brand is more likely to be found than its Canadian rival.

If Schweppes ultimately finds itself in the custody of a non-British corporation, might it lose this ingenious identity that has served it so well? Linking a brand to national character is nothing new and many corporations maintain this successfully with brands that to them are entirely foreign – think (German) DaimlerChrysler and (American) Chrysler or (British) InterContinental Hotels Group and (American) Holiday Inn. Yet the deliberate faintness of Britishness so intrinsic in this example could well be something that others cannot quite grasp. Of course they could be smart enough to realise this and ask for some help, but it is regrettable how often such errors of judgement are made.