3 Marketing Fails That Demonstrate The Importance of Fundamentals

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The temptation to find a simple solution to the ever-more-complex initiative of marketing growth is strong. Explore an effective website for just about any technology software you can apply to marketing, and soon enough, you’ll be convinced that this is the solution for your growth challenges.

Consider the explosion of interest in AI (artificial intelligence) with the recent release of Chat GPT. (Click this Google Trends search, and you’ll see the buzz quantified.)

ChatGPT is an impressive example of the power of AI (try a few queries and see what it generates). But AI’s influence can be misapplied or under-applied, and the precision of its algorithms can be debated ad nauseam. The same is true for most marketing technology (Martech) solutions I’ve encountered.

Now, this article is not taking aim at the Martech industry in general or ChatGPT specifically. Martech has helped the industry take massive strides forward, even with the headwinds of the macroeconomy and privacy regulations curtailing data access. But technology, for all of its power, has huge adoption challenges. It is simply not a magic bullet for growth.

While I’m at it, neither is any single initiative, no matter how often you hear buzzphrases like “customer-centric marketing” and “content is king.”

Yes, it’s incumbent on good marketers to look for solutions to their challenges, whether they’re measurement, creative or audience-based. And yes, the industry changes so rapidly that it’s a big part of a marketer’s job to stay up to date with trends and releases that can improve performance, efficiency, or both.

That said, none of this is a substitute for marketing fundamentals.

Whether your fundamentals version traces back to David Ogilvy or the 5 Ps (people, product, price, placement, and promotion, an evolution of McCarthy’s 4 Ps), they must serve as your bedrock.

Let’s look at three examples of fundamental marketing fails:

1. Uber’s Jump Bikes and Scooters

Another fundamental that’s been drilled into me in my marketing career is that things have to start with a market need for a product. How many products are created to fit a fad or a founder’s vision without an at-scale, long-term need to match?

The echo chamber of Silicon Valley provided a great example of this in Uber’s “Jump” line of bikes and scooters — a market created out of the shaky idea that people “needed” these vehicles all over the streets of San Francisco to get where they needed to go. In a famously compact, walkable city, and without a mobility component that would have accommodated differently-abled people from whom walking wasn’t an option, the scooter project fell on its face and choked scrap yards in the process.

Related: 5 Crypto Marketing Fails and How to Avoid Them

2. Made.com

This one’s a failure of placement — where the customer finds a product.

With notable exceptions (Wayfair, Overstock), the furniture industry presents many challenges. Beyond the expensive logistics of shipping large items, buying furniture online requires the user to take a big leap of faith and trust that customer reviews (many of which are proving fake) will provide reasonable assurance that, yes, the product will look and feel good in your home even if you’ve never seen it or touched it in person.

Beyond that, furniture etailers importing overseas goods often incur huge warehousing costs. Made.com was building a healthy business by turning that model on its head and purchasing goods only after taking orders for them, thereby reducing warehousing risks, until they overreacted to the online purchasing shift wrought by COVID.

Just as the first vaccines were hitting the public in the spring of 2021, Made.com doubled down on its warehouse space, jacking up operating costs without considering that furniture customers who could return to shopping in person would be more likely to do so than customers in other, less sensory-dependent verticals. This failure to predict customer behavior was also a failure of people, and largely because of it, Made.com collapsed last November.

Related: Ask These 5 Questions Before You Blame Your Company’s Failures on the Marketing

3. A shoe company

Since this company was a former client of my agency, I’m not going to name-shame them. But we had some tussles over promotions, another of the 5 Ps.

This company had a CPA (cost per acquisition) target of $60 for new customers, but they were only willing to pay $20 per customer referral of new customers. Instead of optimizing referrals and lowering overall CPA, they pumped money into paid marketing campaigns with their $60 CPA target. My agency runs paid campaigns on all channels, but I could see the failure in this logic.

Related: More Is Not Better: How to Effectively Target Retail Promotions

While this is only an example, it’s part of a more significant marketing issue. In my experience, people tend to think about promotions as sales or discounts, but they can and should expand their options to include BOGOs, giveaways and rebates. Back in a college marketing class, I learned that rebates are a phantom cost — 80% of them go unclaimed, and as soon as they expire, all those “costs” go back to your bottom line.

Whether it’s customer referrals, BOGOs, or giveaways of slow-moving clearance products, use promotions to lower your overall acquisition costs — but only if you have a solid plan to maximize customer lifetime value after the first purchase. Otherwise, you risk acquiring customers at a loss with no hope of profit.

There’s a common thread here: neither Martech, content, mobile, nor any other shiny object would have prevented these. And there’s a lesson as well: marketing and growth leaders charged with keeping their eyes on the big picture must ensure their fundamentals are in order before leaping to take advantage of the next big thing.


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