There are 2 types of marketing, and you can choose only one

If we look at marketing from a strategy perspective, there are only two types of marketing, namely brand and direct response marketing. Everyone admires the power of branding. We want to reach the level of brands like Nike, Apple, and Starbucks. Many marketers know what to do to get there. Unfortunately, only a few succeeded. Why?

What is the difference between the two?

There was an argument that there are two types of marketing. And companies have to choose only one. It is not possible to do both. It’s very rare to be successful in doing both.

We all know that brand marketing is a long term investment. The objective is not to sell a product per se. Brand marketing sells a concept, a philosophy, and a belief. Direct response marketing, on the other hand, is to sell a product. This approach promotes product features and pricing. You have to look for a new and different audience almost all the time. Once the direct response marketing reaches a certain point, the cost of acquisition becomes unbearable. The companies that use this approach start to cut cost, reduce marketing efforts, increase their salesforce, and hammer their existing customers. It’s a vicious cycle.

A lot of companies use direct response marketing

Why? There are two reasons; it is because direct response marketing is easy to do, and you can get sales quickly. If a company opts to use direct response marketing, its salesforce is the one that drives the business. The marketing department, if any, would be very small. The marketing role would mostly be lead generation, i.e. getting as many leads as possible. As we all know, quantity hardly comes with quality; it’s a number game.

Working under this environment, we are looking at 5–7% sales conversion if lucky. It means there is about 95% waste in the process. Because there is a lot to waste, the direct response marketing companies are likely to fall into crisis every ten or so years. The marketing cost jumps typically more than double in one cycle. This approach would work well in markets with large population size because the quantity is an essential driver of the business.

It is also much easier to do direct response marketing. The approach is straightforward. You contact or call lots of customers until you find the ones who either believe your pitch or want your product. The role of marketing is mostly to produce sales collateral, update websites, and buy ads to get more leads.

Brand marketing is much harder

I like to put the brand and inbound marketing in the same category. This is because they have similar objectives. The reason that brand or inbound marketing is difficult to do is that this approach is about delivering solutions that have a positive impact on people and your business. It’s about building trust and brand by offering a solution that could make the customer’s life better. Metaphorically, it’s like going out on a date. You have to introduce yourself, go on dates for some time, before you can ask her to marry you. The keywords here are trust, solutions, concepts, and a better world. It’s not about the products.

Short-term and Long-term Dilemma

Assuming you are a marketer working in a direct response company. More often than not, you would be frustrated from time to time. The company doesn’t seem to care much about your role. A CEO doesn’t know how marketing is different from campaign management (true story). You cannot use a lack of brand awareness to explain why your lead quantity doesn’t meet the budget. Everything is all about lead generation and sales. You think you can do better marketing. You know you have to build a brand.

I had been through this scenario before. My advice to you is you should understand your leadership team. If they never show signs that they know what marketing or branding is, don’t waste your time. It is most likely that your leadership team is all about short term results. They want revenue today and tomorrow. Don’t talk to them about investing in brand to leap the benefit in the next few years.

The biggest challenge in my career is how to balance between short-term and long-term to drive sustainable performance. The issue is to be sustainably profitable; you need a group of dedicated, passionate customers who believe in your brand. To achieve this objective, it requires a business to have an ongoing, smart, branding strategy and ‘know your why’ investment. Many companies are always under pressure to deliver a right-now performance. To deliver the right-now performance, businesses have to concentrate most if not all resources to short-term sales and marketing activities.

And, as a marketer, you have to come up with new and lots of promotions all the time to sustain the short-term results. You wouldn’t have time and energy to invest in the longer-term future. Worse, the cost of doing business is getting more and more expensive because you have to target new customers all the time. It’s a death spiral. We would keep on doing it until it eventually ends. If the people at the top don’t understand this dilemma, it’s going to be hard to change.

Final thoughts…

If you are a marketer that is working in a direct response marketing company, you can spend times to learn a tactical side of marketing. Your role is likely to be about ad buying, maintaining websites, and ultimately lead generation. If you are passionate about branding or better marketing (i.e. marketing with meaning), you should plan to find the companies that do brand or inbound marketing. You can spend times upgrading your inbound marketing and brand strategy skills. The reason is simple: your current company will not change. Don’t waste your time to think about changing it.