‘Exclusivity’ in an age of abundance
Many traditional marketing constructs don’t work anymore
During the Summer Olympics in Tokyo, Visa’s global sponsorship deal made it the exclusive payment technology partner and the only card accepted at the Olympic and Paralympic Games. It’s actually not a new arrangement: Visa has been the worldwide sponsor since the 1988 Seoul Games, and its deal runs through 2032.
We could see how preventing the use of any other credit card except for Visa could possibly make sense if every national Olympic federation were to dole out VISA cards to all of their athletes and team members. But when there are so many different payment methods available, it’s unlikely that a brand is actually gaining much by artificially forcing exclusivity, as Visa did in this case. This is not how brand loyalty works anymore — if it ever did.
Or let's say you're a movie producer who is launching a big blockbuster feature. With your $60+ million-plus marketing budget, you have your work cut out for you: You're trying to convince people that they should leave home, drive to a movie theater, and sit there for a few hours to enjoy your movie. That's a very different sell now than it was just a few years ago. TThat’s because today, the competition for your exclusive theater run isn't only the other movies that are released in the same release window; now you’re competing with an abundance of content that is accessible from the comfort of one's couch or mobile device — which is never very far away from its owner.
In these cases — and more — brands would be better off rethinking their marketing practices, because the strategies that worked last century won’t cut it anymore.
For more than 100 years, the marketing funnel — or customer journey — began with consumer awareness of a product or service. In theory, the funnel narrows as consumers move through different stages from awareness through consideration and intent, all the way to a purchase. Too many brands still think of that funnel as being unidirectional, but that's not the case anymore. Research suggests that the funnel is actually no longer a funnel, but a haphazard set of connected interactions. When customers experience one or more negative interactions with a brand, such as a mispersonalized ad or some type of subpar customer service, they are more likely to exit the funnel or end their brand journey because they have an abundance of other choices.
Times have changed since the heyday of Gillette, for example, which largely cornered the razor market for decades, with only Schick as a distant competitor. Maybe consumers didn’t have a brand relationship with their Gillette razors because for years it wasn’t the kind of purchase that inspired any type of brand affinity; it was a utility, and that was it. Gillette accounted for 70% of the global razor market in 2010, before upstarts like Dollar Shave Club, Harry’s, Supply, Walker & Company’s Bevel, Billie, and Cornerstone entered the fray. They had a new approach to communicating with consumers, and it worked, shaving Gillette’s market share to 54% by 2018.
A growing disconnect
Don’t get us wrong: A global sponsorship for the Olympics is a huge deal. But unfortunately, as we’ve previously written, most sports sponsorships fall short because they are executed for a bygone era. It’s a missed opportunity when a brand’s logo is plastered on the shoes of an athlete competing in the finals of a major tournament being watched by much of the world if there isn’t a seamless way for viewers to buy those shoes.
In other words, it’s great if consumers have heard of your brand, but how easily can they buy your products?
Perhaps paradoxically, pulling this off is now easier for smaller and newer brands because they are more likely to work with Shopify or some type of ordering and delivery mechanism that was actually built for this century. In comparison, a traditional brand may need to jump through hoops to understand its real-time inventory, multiple retail partners, and how to logistically get those shoes to buyers in a way that doesn’t take more than a week. This doesn’t sync with how consumers learn about or buy goods and access content today. Not only is there so much to choose from, but consumers can often get what they want in no time at all.
How should you approach marketing in an era of abundance?
Don’t annoy customers
Ads that point to sold-out items aren’t doing anyone any favors. The supply chain crisis is not just a temporary blip on the radar: It is expected to extend well into 2022. Make sure you aren't inviting customer backlash by promoting goods that you can't deliver.
Customer service is an integral part of the customer journey: If your customers don’t have easy ways to get in touch with you they won’t be customers for long. And they just might tell all their friends about the dismal experience on social media on their way out.
Just because you can doesn’t mean you should
Ad tech and mar tech have made reaching out to customers easy and relatively cheap; for larger organizations, however, this can often mean that customers get multiple emails and promos per week or sometimes per day. While most consumers are happy to tolerate promotional emails in general, "too many emails" is a top reason why up to 7 in 10 consumers hit the unsubscribe button.
Can less be more?
The fashion brand Balenciaga pulled away from all regular run-of-the-mill social branding and the like last year (the company is walking that back now due to a leadership change) but the tactic to only share collections in their story highlights seems to have worked. In 2019, its Instagram engagement rate was triple its competitors. It recently wiped its social media account clean — following in the footsteps of fellow fashion brand Bottega Vanetta. Only time will tell whether Balenciaga’s move heralds a pivot to exclusivity.
The bottom line here is that brands need to rethink their marketing strategies and partnerships that favor exclusivity. They may no longer appear as attractive as they once did. The reason why is simple: They no longer make sense for the consumer.
One Question
It’s the annual budget season when most of the advertising and marketing plans for the coming year will be set. Can your organization build in enough flexibility to be able to pause, reassess, and divert committed spend? For example, if the supply chain crisis continues to affect product availability on shelves and in warehouses, will you have the flexibility to suspend the ad spend? Should you?
Dig deeper
Live commerce promise vs reality
Thanks for reading,
Ana, Maja, and the Sparrow team
p.s — There’s no One next week because of the Thanksgiving holiday in the US!
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Who we are: Sparrow Advisers
We’re a results oriented management consultancy bringing deep operational expertise to solve strategic and tactical objectives of companies in and around the ad tech and mar tech space.
Our unique perspective rooted deeply in AdTech, MarTech, SaaS, media, entertainment, commerce, software, technology, and services allows us to accelerate your business from strategy to day-to-day execution.
Founded in 2015 by Ana and Maja Milicevic, principals & industry veterans who combined their product, strategy, sales, marketing, and company scaling chops and built the type of consultancy they wish existed when they were in operational roles at industry-leading adtech, martech, and software companies. Now a global team, Sparrow Advisers help solve the most pressing commercial challenges and connect all the necessary dots across people, process, and technology to simplify paths to revenue from strategic vision down to execution. We believe that expertise with fast-changing, emerging technologies at the crossroads of media, technology, creativity, innovation, and commerce are a differentiator and that every company should have access to wise Sherpas who’ve solved complex cross-sectional problems before. Contact us here.