At Growth Arc Advisors, we believe that traditional marketing methods, including segmentation, targeting and positioning and the venerated 4P’s of market planning are necessary tools. However, they are insufficient to capture growth in heavily competed segments.
To those traditional tools we believe that adding behaviorally-oriented approaches to traditional tools is an imperative for growth. We know today for instance that if you want to change a habit, a powerful way to do that is to design behaviors leading up to that habit (for example, starting small, say by simply dressing for your workouts, can improve your workout completion rate.)
Similarly, approaches that focus on examining customers behavior during the buying journey and targeting behavior change in select behaviors can boost purchase. In fact, consistent boosts in growth of 50-100% are common for companies who implement them. This holds true across industry and market sector.
Traditional STP is about favorably representing your product and assumes a rational buyer is considering it. In other words, these frameworks assume that if a buyer understands the benefits and value of an option that he will rationally weigh it against his other options and choose the one that is best for him. Thus, much effort is spent in understanding how the buyer sees value, and developing a pitch that favorably places ones product in that buying context. Furthermore, the up-front marketing work is in creating awareness of the offer within the buyer’s mind.
While it is important to understand the buyers conception of value, and how to place one’s product in it, this concept of the buyer is flawed. New science on behavioral and cognitive influences in decision making reveals that buyers are far from rational and that their decisions can be affected by factors other than the merits of the case.
In fact, the research also show that customer spend less and less time with reps, and do so later and later in the sales cycle. Continuing with a product value sell will relegate suppliers to late entry points in the conversation.
Two key behavioral insights that are the foundation for improved methods
Our approach has been reduced to a 5 step process that has been reliably implemented many times across multiple industry categories, including B2B (chemicals, industrial manufacturing, software) and B2C (pharma, financial services, and consumer products)
Targeting high-yield customer behaviors has been shown to consistently boost growth rates by 50-100% above market rates for companies who implemented.
The method requires a fundamental mindset shift both in focus and execution. First, moving away from a product-only “pitch” mindset and 2nd a disproportionate focused investment on a few key behavioral changes. Both of these mindset shifts have to be considered deliberately by leadership teams to garner the appropriate commitment.
Sales and marketing activities must shift as well in this approach, and this can sometimes be effected by training existing sales force in their new activities or by using alternate resources (biz dev, marketing, tech service) to engage in new activities.
I recently discussed behavioral targeting methods with one of our collaborators, Bob Lurie. Bob is the author of The Organic Growth Playbook, and he has helped numerous organizations embed these approaches through large-scale marketing transformations.