For a recent school project, my 14-year-old niece was online googling and researching all things about the late 1960s through the mid-70s. Hey, Uncle Larry, she said, you lived as a young man through that time and were a hippie, werent you? I said I remember advocating peace and love, but no so much being a hippie. What I also recall from that time is two recessions and the pain of skyrocketing oil prices. The Federal Reserve raised interest rates significantly and slowed money supply growth, also slowing the economy and causing unemployment to rise. It wasnt until the early-to-mid-1980s that the U.S. economy began to recover.
Motor oil manufacturers had always sold product to their distributors, who in turn sold it to jobbers and installers who put that motor oil in their customers vehicles. As a result of the 1973-1975 recession, many vehicle owners found it too expensive to take their cars to garages and service stations to have their oil changed. They wanted to change oil themselves to save money. Thus, the do-it-yourself channel emerged.
New Channel, New Thinking
Through that time of tight money, people started to re-examine how and what they purchased. They spent less money on frivolous things and looked for ways to economize and buy cheaper. Soon, new markets opened up to cater to this trend. By the mid-1970s, more people were shopping at giant discount retailers like Kmart and Walmart.
As these retailers grew their respective businesses, they sought out manufacturers to sell to them products that never were sold directly to retailers before. One of those products was motor oil. Manufacturers reluctantly agreed to sell to them, but only in cases at first and not individual quart containers, to appease their distributor base.
The first brand I recall seeing sold by retailers was at Kmart: Shell motor oil packaged in 24-quart cases of composite-metal cans. Unfortunately, oil manufacturers really did not know the new DIY end user that well. A 24-quart case weighs around 50 pounds! As a young man it was very hard for me to pick up, let alone someone with less physical strength.
Valvolines management team at that time was the first to truly understand the new DIY motor oil channel. They did informal research by talking to retailers and DIYers to better understand their needs. By the late 1970s, they had created the 12-quart case with a cardboard base, logo and future purchase incentives on paper laid on top of the cans, all wrapped in clear plastic. The marketing position was to sell enough oil for two oil changes and two cans for topping off between changes.
The brand grew from a minor player to a major independent brand. This is an example of a relatively smaller company growing its business in a new channel by being more innovative than any competitor at the time.
That was the 70s, and now were nearing the 2020s. While major retailers were the channel of choice then, the channel of choice 50 years later is digital. Companies like Amazon have led the way in making it easy to make purchases from the comfort of ones home. As a result, consumers do not have to get into their car or truck and head down to large retailers to make their purchase; they just make the purchase from home. Hence, large retailers that flourished in the 1970s, like Kmart, J.C. Penney, Sears and others, are now heading to the trash heap of yesterday. Walmart seems an exception, managing to re-invent its services to work in the 21st century.
All About the Brand
Successful marketing within the digital channel starts with knowing your own brands equity and that of competitive brands. A brands equity can be by design or by default. Successful brands truly craft and work images all the time. When you see a symbol and you know all about that brand from that symbol, the brand has reached equity heaven, like the ones at the top left.
If a brand does not pay attention to its brand equity, it will still have equity; but that equity will come by default.
When marketing within social media, the presumption is that a brand knows its target audience demographics. It is important to also know their psychographics, habits, practices, lifestyles and especially social media use; to know the customers personas inside and out; and for brand management to have that knowledge refreshed on a regular basis.
This requires behavioral marketing research to be conducted and updated regularly. I am always amazed when calling on a client or potential client when he or she says, I dont have to conduct such research, because I know all about my customers.
Something I always ask business-to-business clients is, Do you want to know the best way to win new customers? The best way is to know their customers customer better than their customer does. How do you do that? You conduct behavioral research among their customer base.
After gathering and analyzing that information and presenting the results, the probability of impressing an existing customer or gaining a new customer increases significantly. Youll know you have their full attention when the client principal says, Huh, I didnt know that.
As a result of solid behavioral research and segmentation analysis, a brand can identify its target audiences habits and practices and where their time is spent on social media. The next most important principle is to be where the target audience is: connecting on the right social media and other digital channel platforms.
Then, build a connection by bringing them to your website to provide more in-depth information and objective analysis of their needs. If they start depending on you for solid buying decisions, youve developed that relationship.
Eyes on the Target
Use digital channels that work best with your target audience, be that websites, search engine optimization, apps, online events, mobile marketing, email or whatever works best. The ideal approach is to aim at where your brand strategy, your business strategy and your digital strategy come together.
According to a study conducted by the digital marketing agency ODM Group, 74 percent of consumers rely on social networks to guide purchase decisions. Fifty-three percent of Twitter consumers recommend products; of those, 48 percent intend to buy that product. The most effective platforms to mobilize consumers are Facebook (86 percent of users rely on it for guidance); Twitter (65 percent); blogs and reviews (55 percent); and videos at 50 percent.
These facts act as a good reminder to not only understand your target audiences, but to implement better communication and customer support strategies while constantly monitoring for brand mentions across social media platforms. Then, work with social media influencers to help promote your brand. Some strategies:
Try to find claims over competitors to exploit. Many years ago, I conducted a survey among ASE Certified technicians and mechanics. It included a simple question: What brand of motor oil do you use in your personal vehicle? The answer came back Valvoline. For years after that discovery, the brand rode that claim to inform consumers that Valvoline was used by the best mechanics in their own personal vehicles-a claim no competitor could make.
Look for loyal customers to advocate usage for your brand online. Thats 21st century word-of-mouth advertising. Social media offers the opportunity to find incentives for brand-loyal advocates to post product pictures and share supporting testimonials with their friends and followers. As examples of incentives, a company may run offers and contests for influencers to write about its product or service, then share their brand stories with their social media friends. When potential purchasers of your product or service read good things about your brand, it is a good thing.
Think hard about your messaging. Good agencies always can put great messaging onto places where your target audience gathers on social media. Messaging should first of all be bite size; long messaging does not get read, so keep it simple. And messaging needs to demonstrate how your product or service can improve the audiences life. Whats in it for them?
Content reviews matter. According to a 2018 survey of those who read reviews, conducted by Bright Local, 80 percent of 18- to 34-year-olds not only read reviews but write them. If a brand receives negative reviews and its brand guardians jump to resolve complaints, those bad reviews can turn into good ones.
When you know where your customer is at and the platforms used most often, investing in social media advertising provides an efficient way to laser-focus advertising. In the past, advertising was rarely precise enough to reach target audiences without some spillover. Amazon has built a huge business on a philosophy of laser-targeting advertising to each of its customer bases.
Who Gets It Right?
Today, another lubricants company is doing the same thing in the emerging digital marketing channel as Valvoline did in the 1970s. RelaDyne was founded in November 2010 through the merger of four oil distributors in the Central United States (Oil Distributing in Ohio; Mid-town Petroleum in Illinois; Louisianas Pumpelly Oil Co.; and The Hurt Co., Texas). RelaDyne is a B2B aftermarket company that targets automotive installers, on- and off-road commercial fleets, and the industrial lubricant and equipment reliability marketplace.
RelaDyne has grown inorganically by buying and integrating some 50 acquisitions into the company, including five this year so far. The company has grown organically as well, via an integrated and sophisticated digital sales and marketing strategy designed to engage, convert and retain customers.
According to Dan Oehler, vice president of sales and marketing, RelaDynes organic growth success is the direct result of an integrated sales and marketing process. We work deliberately to attract prospects to RelaDynes domains, move them through a customer journey and then, via our best-in-class sales force, convert them to a valued new client.
Over the past two years, RelaDyne has shifted most of our marketing spend to digital. Now, we digitally generate almost 75 new accounts per month and 16,000 people to our websites, reported Ashley Rickman, the companys director of marketing. The power of our digital strategies is being fully leveraged. With the stated aim of having a national presence in lubricants, fuels and reliability, it projects 2019 sales to exceed $2 billion. This is a smaller company that is well on its way to becoming a large one.
Valvoline and RelaDyne successfully demonstrate that a company does not have to be large to be successful. The beauty of digital channel marketing is that smaller, more innovative players have a greater chance of success with this 21st century selling channel, because the size of ones company does not matter when selling via digital channels. What matters is how a company best meets and serves end-user needs. The companies that do that right will soon be large companies. Those that dont could fade away and head to the trash heap of yesterday.
Larry Solomon is president and owner of Strategic Resources Inc., a consulting firm that specializes in the automotive aftermarket and consumer goods products. His experience includes 23 years at Valvoline. Contact him at larry@sri-ky.com or 859-619-7196.