How Sponsorship Increases Brand Awareness and Generates Good Will

 

Do you have a local sports club that you support? Sponsors help them operate through providing funding or support in other ways. Some of the events you attend probably also receive sponsorship.

The biggest sports teams in the world have sponsorship splashed across the uniforms. The NBA has even succumbed to the lure of extra money after decades of refusing to have sponsor branding on the uniforms.

This blog explores what sponsorship is, how it works and its benefits to businesses.

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What is Sponsorship?

Sponsorship involves a business relationship between two parties, where one party (sponsor) provides support in the form of funding, resources, or services to the other party (beneficiary), who in return provide access to the sponsor for rights and associations to be used for commercial advantage.

“(Sponsorship is) the provision of assistance either financial or in-kind to an activity by a commercial organisation, for the purpose of achieving commercial objectives.” (Meenaghan, 1983)

The sponsored party could be an event, organisation, or an individual; the involvement of this second party, distinguishing sponsorship from advertising.

Initial examples of sponsorship can be found over 100 years ago, but they are rare and on a small scale. Its use has exploded since the 1970s. 

According to Meenaghan (2001), in the UK, spending on sponsorship increased from £4 million to $1075 million between 1970 and 1997. In the US, spending increased from $850 million in 1985 to $8.7 billion in 2000.

“Sponsorship involves two main activities: (1) an exchange between a sponsor and a sponsee, whereby the latter receives a fee and the former obtains the right to associate itself with the activity sponsored and (2) the marketing of the association by the sponsor.” (Cornwell & Maignan, 1998)

A common form of sponsorship is of sports clubs. 

Your favourite sports teams are likely to have the logo of their key sponsor/s on their uniforms. This exposure on television, social media or other media holds value to the sponsor. 

The sponsor could also be provided access to players for their own events or PR and corporate hospitality at their events or games.

How does sponsorship work?

Through the affiliation with an entity people care about, sponsorship helps to enhance the public perception of the sponsors’ brand. This affiliation creates a ‘halo effect’ of goodwill, where positive associations with the beneficiary of the sponsorship are reflected onto the sponsor.

Because sponsorship provides a positive benefit to society through empowering the existence of entities consumers care about, sponsorship is typically more positively perceived than advertising’s sole focus on commercial goals.

Advertising’s only interest is the profitability of the firm, thereby having no obvious benefit to the greater society. Advertising can also be coercive, resulting in alerting consumers’ defence mechanisms. Sponsorship’s commercial intent is more subtle and indirect, lowering consumer defence mechanisms. 

Read more about persuasion knowledge for a better understanding of this process.

The table below shows a comparison between sponsorship and advertising characteristics.

Comparison between advertising and sponsorship (Meenaghan, 2001)

“Sponsorship works differently in relation to the consumer than do other forms of advertising and promotions in that it engages the consumer differently by bestowing benefit on an activity (e.g., sports or the arts) with which the consumer has an intense emotional relationship.” (Meenaghan, 2001)

 

Leveraging the partnership

To maximise the commercial result of their sponsorship, sponsors should focus their branding and marketing communications efforts on leveraging the association.

For example, along with displaying their branding on flags or banners at a sponsored event, social media posts promoting the event and the businesses’ role as sponsor.

Consumers can hold positive associations and deep loyalty towards sponsors of the sport, events, causes or other entities that they care deeply about. Sponsors proactively promoting their relationship enables these brands to leverage this emotional connection these consumers hold. The values of the sponsored activity or entity are then associated with the sponsor’s brand.

“Sponsorship appears to be another area of marketing, along with source effects, store atmospherics, brand extension, and brand alliances, where the consumer’s ability to see an association between marketing assets enhances the effectiveness of these assets.” (Cornwell, 1995)

 

Sponsorship fit

Sponsors invest in sponsorship to establish their credibility with their target market. For this practice to be effective, there needs to be an organic link in terms of similar goals, values, and vision, between the sponsor and the beneficiary of the sponsorship. One that makes sense to the public.

The sponsor’s target market should match the target market of the beneficiary they are sponsoring. Therefore, the right consumers have subjected the affiliation and the response is likely to be better if there is perceived to be a good fit between the two parties.

Also, passionate followers, fans or consumers of the sponsored entity judge the fit of the relationship and respond more (or less) positively than the typical consumer if the sponsor fits the same values. 

If there is a fit, the sponsorship is perceived to be more sincere. This is seen as more authentic.

“Events, activities, and venues have been fully recognized for their ability to target a particular demographic or psychographic segment.” (Cornwell, & Maignan, 1998)

 

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What are the benefits of sponsorship?

Sponsorship works in a way that it provides mutual benefits for the sponsor and the beneficiary. The beneficiary of the sponsorship receives funding or resources to operate. 

Sponsorship has replaced other forms of funding such as government support in some countries to the extent that some sponsored activities rely on corporate funding to exist.

For a business, some of the key motivations for investing in sponsorship are improving goodwill, enhancing public relations, increasing brand awareness, improving brand image. 

Improving profitability is obviously the end goal for any businesses’ strategic planning — these motivations contribute to enhancing the probability of this.

“The sponsor’s investment benefits the activity generates a goodwill effect among activity fans, which in turn influences their attitude and behaviour toward the sponsor’s brand.” (Meenaghan, 2001)

 

Goodwill

One of the key factors distinguishing sponsorship from advertising is the presence of goodwill. Goodwill from the sponsor in supporting the beneficiary and gratitude from consumers to the sponsor, grateful to them for helping out a favourite event, sport or organisation.

According to Meenaghan (2001), goodwill effects are mediated by the intensity of an individual’s involvement or connection with the sponsored entity. 

Highly involved fans/consumers connection with a sports team for example can be deeply felt, and their awareness of the sponsor’s brand is likely to be higher than a casual fan/consumer.

Therefore, the goodwill affects for the sponsor are likely to be greater and they are more likely to develop a favourable opinion of the sponsor. This can trigger a strong preference for a sponsor’s products or service, increasing their purchase intention.

Goodwill also exists at different levels depending on the type of entity being supported by the sponsor. For example, the sponsorship of social causes typically generating more goodwill toward the sponsor than sponsorship of the arts or a building.

Enhancing public relations

Through sponsoring entities such as sports clubs that consumers care for, this fosters a socially responsible reputation. Improving community relations is a common sponsorship objective for corporations, especially banks, as they often do not have the best reputation. 

As well as sponsoring well-known sports clubs, the organisation also sponsor local events or not for profit groups that benefit the local community where they are based. Other ways to benefit the community might be providing computers to a local school.

Sponsorship can be a relationship marketing tool. 

Relationship marketing is the marketing activities that attract, develop, maintain, and enhance customer satisfaction and fostering customer retention. This was discussed in week 14.

Sponsorship can be a vehicle for developing relationships with the target market through signalling to them that our business shares similar interests and supports the same causes.

In B2B, It also helps create bonds with businesses partners who share a common sponsorship or strengthen their relationship with current and potential clients, through the use perks of sponsorship such as a corporate box at events.

Increasing brand awareness

Awareness of the sponsor’s brand is increased through the publicity of the entity they are supporting. It could be through advertising, TV coverage or other media such as social media or news articles, or people attending and seeing branding of sponsors.

Local businesses can increase awareness of what they are doing in the local community through an article in a local newspaper, whereas large corporations or consumer brands can put their brand in front of thousands or even millions of people through sponsoring a high-profile sports team with an audience on a global scale. 

The All Blacks, Los Angeles Lakers or Manchester United, for example.

Sponsorship can provide a broader reach than advertising which will only reach a finite audience, depending on the platform.

“Activity followers, being most knowledgeable of the image values embodied in the activity, transfer these specific image values to the sponsor.” (Meenaghan, 2001)

 

Improving brand image

Cultivating positive and favourable brand associations (traits consumers attribute to a brand) and enhancing credibility is a benefit of sponsorship. Because of the goodwill factor, sponsors are viewed more favourably. This positively influences their brand equity.

Brand equity is the influence brand knowledge has on the consumer response to marketing. Brand equity strengthened when the consumer is familiar with the brand and holds strong and favourable associations with it. 

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Types of sponsorship

Sponsorship is typically associated with a sports team or event, but there are multiple forms of sponsorship. It can include concerts or the performing arts, and sports stars such as LeBron James are commonly sponsored by clothing companies such as Nike because of their global appeal.

Other sponsored entities include not for profit groups, charity or business events, associations, social media influencers and celebrities, buildings (often banks sponsor skyscrapers), and local government-funded venues such as stadiums.

One event could have multiple sponsors. Those sponsors might all contribute an equal amount for equal benefits, or there might be different tiers of sponsors. These have different levels of investment and sponsors receive individual benefits based on the value of their investment.

For an example of a business event — I run a networking event called Linkedin Local Hamilton, funded through sponsorship. It’s probably not what you expect — I wanted it to have an atmosphere more like a cocktail party.

Sponsors pay for the food and beverages of the people attending the event — usually around 150 people. Venues are offered for free, which is an in-kind sponsorship (discussed shortly). 

Tickets to attend the event are free or donation-based, which means there is little income. The events rely on sponsorship to exist. The benefit to sponsors is the exposure of their brand as a sponsor in social media promotion and with the people attending the event. 

It has worked well — I have run 13 events and counting.

Financial sponsor

There are two main types of sponsorship. Financial and in-kind sponsors.

A financial sponsor is also known as a cash sponsor and it is the most popular form of sponsorship. It is pretty simple — they give money to an entity in return for a promotion or other benefits outlined in their sponsorship agreement.

Some different types or levels of financial sponsorship are:

• Series sponsor — the highest status of sponsorship. the name and the logo of the sponsor are incorporated into the title of the series and other promotion, the rights to use teams, team members, players, coaches, and the series body in conducting joint promotions, right of presence at all official events.
• Title sponsor — similar to series sponsor, but for a one-off event. Many of the same benefits of a series sponsor mentioned above, another being branding placed around the stadium.
• General sponsor — also a large contributor (usually exist in the absence of a title sponsor), they receive the right to promote their association as a sponsor and often receive media coverage.
• Team sponsor — fund individual teams. They receive mention in media coverage of a team and often has on the uniforms and at their stadium. Special access to the team often provided.
• Official sponsor — is a sponsor that makes a certain part of raised funds (within 20–25%). Typically, the given status may be granted by category — for example, ‘official insurance partner’.
• Participating sponsor — is often one of the numerous sponsors and the benefits are not as extensive as the other sponsors. The size of their fee usually does not exceed 10% of total raised funds.

In-kind Sponsors

• Venue Partners — allows events to be hosted at their venue for a discounted or free rate. This allows the venue to gain exposure to a certain demographic.
• Prize Sponsors — donate items to be used as prizes at events such as spot prizes for doing activities or items to be included in a charity auction.
• Food Sponsors — at events, food sponsors offer free food to attendees. Catering can be a big expense for the organiser.
• Digital Sponsors — might provide a custom app for an event or live stream it to social media or a webpage.
• Media Sponsorship — marketing is provided on multiple communication platforms and PR, which can be valuable for not for profit/small businesses who do not have the budget or expertise themselves.
• Technical sponsor — provides goods or services, to a sports team for example in terms of medical skills or equipment or perhaps supplements.

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Summary

In sum, sponsorship is a marketing tactic involving a business relationship between two parties — one being the sponsor who provides support in the form of funding, resources, or services to the other party (beneficiary); who in return provide access to the sponsor for rights and associations to be used for commercial advantage.

This article has discussed how sponsorship works and its benefits, different types of sponsorship, and what needs happen in order for sponsorship to be an effective marketing tool.

Thank you for reading. 

I hope you enjoyed the content and learnt something new that you can apply to your business.

This article was originally posted on the BYB Marketing Blog: https://brandyourselfbetter.com/blog/post/208450/how-does-sponsorship-work

How to Optimise Your Pay-Per-Click Advertising

The first place that many people go to search for information about a product, service or brand is an online search. Probably Google. 

From the convenience of our computers or mobile phones, we have access to all the information we will need. If a business wants customers to find them online, they must optimise their presence on these search engines so customers find them before their competitors. 

There are two ways to do this, SEO and Pay per click ads. 

This blog explores how Pay-per-click advertising works and gives recommendations on how a business can optimise their strategy.

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What is Pay-Per-Click (PPC) Advertising?

Pay-per-click advertising is a form of digital marketing, originally developed as a method of creating revenue for search engines. Along with organic (non-paid) search results, paid ads make up a second list of results.

Ads appear alongside the organic (non-paid) results on a search engine results page (SERP), companies paying to their links displayed in this sponsored section.

You can think of it like buying visits to your site instead of earning those visits organically through search engine optimisation (SEO). As the name suggests, businesses running the PPC ads are only charged when a user clicks on their ad.

There numerous PPC ads, the most common being search engine advertising, as explained above. Google ads are by far the most popular, Bing coming in a distant second. Google ads are the main subject of this article.

Other types of PPC advertising include display advertising (banner ads) and remarketing where people see an ad because they previously interacted with your company. With display ads, the owner of a webpage allows businesses to advertise on their website.

Also referred to as contextual advertising, keywords in the content of the webpage trigger what ads visitors are shown.

Businesses running ads are in an ongoing competition for popular keywords — ads are subjected to an ‘Ad Auction’. Based on competition, advertisers bid on certain keywords for ad placement and the search engine uses algorithmic calculations to determine which ads are displayed and in what order.

As well as the cost-per-click bid (the highest amount an advertiser is willing to spend), the other factor that determines the ad rank is the Quality Score assigned by Google. This will be discussed further later.

“As PPC suggests, advertisers also have to pay for every click they receive via that sponsored link.” (Kritzinger & Weideman, 2013)

 

The Benefits of PPC

Because businesses are only charged when a potential customer clicks on their ad, it is a pretty effective form of advertising. Imagine how many people would drive past a billboard and see it, but never act. Results can be more objectively measured.

Businesses also benefit by reaching potential customers at a price that fits the budget they set for the campaign.

There are far fewer PPC advertisements on a search result page than the organic results, so businesses better chance of being seen by internet searchers. It is also extremely hard to rank in the first few results organically — usually, it is a large investment in SEO over a period, that most businesses do not have the expertise to do themselves.

It is much easier to set up a Google ad and rank — if you have the budget for it. Users of PPC ads choose the geographic areas they want their ads to be shown in, so it is a powerful way to focus your advertising to locations you are trying to target.

There are three beneficiaries with PPC ads. First, the website or search engine displaying the ads get paid for the advertising space, the advertiser who attracts customers and the customer who is provided with relevant results for their search query. Keywords ensure the ad should be just as relevant as the organic results.

“Google makes 99% of its profit through the PPC model of Internet advertising.” (Kapoor, Dwivedi, & Piercy, 2016)

 

Creating a PPC Campaign

First, create logically organized Ad Groups. An ad group has one or more ads sharing similar target audiences — it organises ads by theme. Next, research, select and organise closely related keywords into these Ad Groups. Then, ads are created for these ad groups. Each Ad Group should consist of a minimum of two ad variations.

A campaign has one or more ad groups. Ad groups should be as specific as possible, to ensure they are relevant to customers

Campaigns need a start and finish date. Before getting started, work out your daily budget, based on the campaign length. Sometimes it can spill over budget slightly, so allow for around a 10% contingency — tell Google your budget is 10% less than it is, just in case.

Each keyword has an average cost per click depending on the competition, so based on your overall budget, calculate how much you to spend on your chosen keyword bids.

Analysing Your PPC Results

Spend money to test, learn from their results, and then refine your ads to optimise your campaign results. One of the advantages of digital marketing is the amount of data it creates, empowering businesses with information to improve their advertising. Continuously analysing your performance allowing you to make small adjustments at a time to optimize your campaigns.

Test your campaigns and ad groups. This is when you start spending money. Test variations of your keywords, ad copy and landing pages. Dedicate time and money into educating yourself what works best for your business. Start with more than one version of your ad — you do not know how it could be improved if you only run one ad. If it does not work, you blow your whole budget.

Learn by analysing the results of your ads. This provides valuable consumer feedback in terms of their behaviour when exposed to your ads. Objective data to improve your ads and gain a better understanding of the best keywords to use and how much to pay for each click.

When we understand our ROI for different keywords, we can find expensive and under-performing keywords which can be removed and those we want to bid higher on to achieve a higher Ad Rank and improve your Quality Score. You can also identify negative keywords that you do not want to trigger your ads.

By checking ‘see search terms’, you can see which terms triggered your ads. It also helps to discover new keywords to add to your existing campaigns.

An impression is when keywords trigger an ad to be shown in the results. Impression share is the percentage of times your ads were shown out of the total number in the market you were targeting.

Other key metrics to monitor are page views per visit, time on site and conversion rate.

Creating a UTM (Urchin Tracking Module) snippet tag for ads to help identify the link in Google Analytics. This allows you to identify what ad campaign was most successful. how visitors came to land on the landing page.

Optimise your ads by refining them to modify what is not working. Make changes to your keyword lists, ads and landing pages to find the formula and user experience that works best for your business.

“…allows advertisers to place bids on specific keywords or phrases and have their advertisements show up alongside the organic search engine results.” (Boughton, 2005)

 

Optimising Your Ads

To make sure we get the best return on investment from our PPC ads, we must optimise them to get the best result. This section discusses four ways to optimise your ads: Keyword relevance, Google’s quality score and creating more targeted ad copy and landing pages. There are tools available to analyse your ads, such as Wordstream’s free AdWords Performance Grader.

Keyword relevance

PPC campaigns are built around keywords. The Keywords within a search query trigger what results are shown. Therefore, businesses need to figure out what terms their target customers will be searching for.

Create tight keyword groups with a mixture of low-cost, highly relevant keywords and frequently searched terms relevant to your business.

Long-tail keywords should be included; these are more targeted search phrases that contain the more generic keywords (head) with modifiers that make it relevant to a more specific audience. For example, instead of just ‘marketing’, ‘digital marketing strategy in Hamilton’.

Once you learn more about what is working and what is not, you can add Negative Keywords. These are non-converting search terms that you can exclude from your campaigns, to become more targeted by improving campaign relevancy and reducing the wasted budget by focusing on your best-performing keywords.

Google Keyword Planner is a great tool to help with keyword research. It highlights the search volume and cost per click for keywords and suggests relevant terms. Wordstream also provides a free keyword tool to help you find the most relevant keywords to use for your business.

Quality score

The quality and relevance of your keywords, landing pages, and PPC campaigns. better Quality Scores mean more ad clicks at lower costs.

Assigned independently by Google, Quality Score includes:

• The historical clickthrough rate (CTR) measure of how convincing your ad is to your target audience. of the keyword and the matched ad
• The CTR of all the ads and keywords in your account
• Landing page quality
• Keyword relevance to the ads in its ad group
• Keyword relevance to the matched ad and search query
• Account performance in the geographical region where it is shown

Ad Copy

Your ad copy should be relevant to the landing page where you send them. If it is not, this will affect your quality score. To test your ads, run two or three variations per ad campaign to test different titles and descriptions.

To optimise your ads, your headline should not exceed 60 characters, and your description should not exceed 80 characters.

However, Google does prefer longer headlines as this is where information is most likely to be noticed. The most important keywords should also be communicated in your ad copy.

Landing page

The landing page is where a person goes after clicking on an ad. Do not make the mistake of sending every ad directly to your homepage.

Send people directly to a custom landing page matching the ad content, that is optimised to minimise bounce rates and increase conversion rates. 

The image above is an example of a landing page to sign up to receive a free eBook. This could be the focus of a PPC ad, to add relevant people to your database.

Content should be specifically tailored to the ad and have clear calls-to-action (CTAs) aligned with the search queries that would have triggered the ad.

Sending people to a general page means it might not be relevant to what they initially searched, and they probably will not be able to find the information they require easily. They are likely to hit the back button or close the window/tab. Users are unlikely to navigate through further pages to find what they need.

How to Create a Brand Identity to Influence How Customers Perceive Our Brand

A common mistake from beginner marketers is confusing their businesses brand image with their brand identity. I get it. They sound similar and are connected concepts.

But they are not… Our brand identity is what we think our brand is and the brand image is what customers think our brand is. However, our brand identity does influence how our brand image is perceived.

This article explores what a brand identity, its importance and strategies a business can use to create their own brand identity.

5 Marketing Management Theories That Every Serious Marketer Should Know

The better we understand the theory, the better our decision-making becomes, without even having to think about it.

Marketing is the psychology behind selling more products or services. 

By understanding more about consumption and the thought processes behind it for customers, the better we can please them. The more we understand about how businesses work, the more we can improve the processes. The more chances of success!

This article explores five theories and models that all business owners and marketers should understand.

The 80/20 rule, The Expectancy Disconfirmation Theory, The Product Life Cycle, Porter's Five Forces, and The Ansoff Matrix.

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The 80/20 rule

The 80/20 rule suggests that 80% of sales come from 20% of customers.

This theory dates to 1896, conceived by Italian economist Vilfredo Pareto, to explain wealth distribution when he noticed that 80% of Italy’s land was owned by approximately 20% of the country’s total population. It is thought that his initial observation was that 20% of the pea pods in his garden produced 80% of the peas!

“The Pareto Principle, which is sometimes called the 80/20 rule, states that a small proportion (e.g., 20 percent) of products in a market often generate a large proportion (e.g., 80 percent) of sales.” (Brynjolfsson, Hu & Simester, 2011).

 

The Pareto Principle

In the 1940s, Joseph M. Juran developed Pareto’s principle for use in strategic business management, naming it after Pareto — the Pareto Principle.

The underlying belief that the relationship between inputs and outputs is imbalanced and unequal, and for many phenomena, 80% of the output, consequences or effects are produced by 20% of the input or causes.

Representation of the Lorenz curve and the Concept of the 80–20 Rule (Dunford, 2014)

The rule transcends disciplines. It has since been applied for numerous purposes across the business, including in sales, marketing, economics, management and even computer sciences. 20% of athletes win 80% of the time, 20% of patients consume 80% of healthcare resources, and 20% of society holds 80% of the world’s wealth.

When applied to business, the underlying assumption is that 80% of the outcomes or results come from 20% of the effort. Other variations of this rule in a business context are:

• 80% of profits or revenue come from 20% of customers
• 80% of product sales from 20% of products
• 80% of sales from 20% of advertising
• 80% of customer complaints from 20% of customers
• 80% of sales from 20% of the sales team

However, this ‘rule’ is an observation, rather than a law or science. The two numbers don’t have to add to 100% — it is only used as a rule of thumb. It could be 80–20, 90–10, or even 90–20.

What we learn from this principle is to focus your efforts by working harder on the things that matter. That 20% of activities that provide 80% of results. The small stuff does not need to be sweated if it does change the overall result.

“It helps to realize that often the majority of results comes from a minority of inputs.” (Dunford, Su, and Tamang, 2014)

Individuals and businesses should focus most of their time and energy on accomplishing the tasks with the largest return on investment. They can do this through recognising how and where results are achieved. Similarly, the focus with sales should be on developing strong relationships with the best and most profitable clients.

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The Expectancy Disconfirmation Theory

Expectation confirmation theory is a popular model used in services marketing for measuring customer satisfaction, introduced by Richard L. Oliver in 1977.

“An individual’s expectations are (1) confirmed when a product performs as expected, (2) negatively disconfirmed when the product performs more poorly than expected, and (3) positively disconfirmed when the product performs better than expected.” (Churchill & Surprenant, 1982)

The performance of a product or service is compared or measured against the customer’s expectations. Those expectations (or desire) of performance (or experience) are subjective to everyone, based on their prior knowledge of that product.

Performance becomes the mediator for satisfaction. The evaluated performance or experience influenced by previous experiences with that brand and consumers without prior expectations base their satisfaction judgements solely on the performance of the product.

The resultant difference between expectations and performance the basis for the disconfirmation of expectation (or desire) and can be positive or negative. Negative disconfirmation meaning the customer is left dissatisfied.

The theory has been applied across multiple fields to gain a better understanding of customer’s expectations and requirements, such as marketing and consumer behaviour, tourism, psychology, information technology, and the airline industry.

The expectancy disconfirmation theory involves four primary variables: expectations, perceived performance, disconfirmation of beliefs, and satisfaction.

The original expectancy disconfirmation model (Oliver, 1980)

Expectations

Consumers associate certain attributes or characteristics with a brand which is anticipated by that person. These expectations form the basis of comparison judgement — directly influence both perceptions of performance and disconfirmation of beliefs, and indirectly influence their post-purchase evaluations and feelings.

Expectations of a brand, product or service can be based on aspects such as feedback from friends and family, online reviews, marketing material, salespeople, and previous consumption experiences.

“First, customers have an initial expectation according to their previous experience with using a specific product or service. Second, new customers that don’t have a first-hand experience about performance of product or services.” (Elkhani, & Bakri, 2012)

 

Perceived Performance

After consumption, the consumer forms perceptions of the performance of a product, service or experience. These perceptions are influenced by their pre-purchase expectations, then influencing the disconfirmation judgement.

Aspects that performance is based on will be subjective depending on the product, service or experience — for example, for a mobile phone, one performance factor is how long the battery lasts.

Perceived performance can also indirectly influence customer satisfaction.

Disconfirmation

The judgments or evaluations that a person makes regarding a product, service or experience is called the disconfirmation of beliefs. These are made in comparison to the consumer’s original expectations.

If it outperforms expectations, the disconfirmation is positive. If it underperforms, the disconfirmation is negative. Thus, increasing or decreasing post-purchase satisfaction.

Disconfirmation mediates the relationship between performance and satisfaction.

Satisfaction

Post-purchase satisfaction is the extent of how pleased, contented or unhappy a person is after consumption.

The consumer’s disconfirmation of the perceived performance directly influences their satisfaction, satisfaction also indirectly influenced by both expectations and perceived performance through the mediating effects of disconfirmation.

How satisfied or dissatisfied a consumer has influenced their post-purchase behaviour. This includes their attitude towards the brand, their loyalty and whether they repeat purchase, and their word of mouth intent. If people are happy, they are more likely to purchase again and tell friends about their positive experience.

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The Product Life Cycle

The lifecycle of a product is the length of time it is on the market. Beginning when it is introduced into the market and lasting until it is taken off the shelves.

When a product is introduced to the market if successful, demand increases. Then, as new products enter the market and become successful, they push more dated ones from the market, replacing them.

This concept is commonly used in marketing management, helping inform the decision-making of business, such as pricing, when to increase spending on advertising, expand to new markets, redesign packaging and cost-cutting.

This life cycle has four or five stages, depending on the source. The original model used four — market development, growth, maturity, and decline.

Other versions have added a fifth, introduction, which is the second phase.

Where a product is in its life cycle impacts how it is marketed. New products have more informational marketing, whilst mature products have marketing which differentiates it from the alternatives.

Large manufacturers often have products each in various stages of the product life cycle at any given time.

Each stage has unique costs, opportunities and risks and individual products have different lengths of time when they remain at any of the life cycle stages.

The Product Lifecycle (Levitt, 1965)

Stage 1 — Market Development & Introduction

When a new product is brought to market, typically there will be some research and development behind it, to make sure it is fit for market and proven demand for it.

Before launched into the market, costs accumulate with no sales. It could take years and a large investment of capital to develop and test some products.

Next comes the introduction to the market, where the goal is to build awareness of the product.

Marketing costs here are high. To reach out to potential customers, substantial investment in advertising is made. Marketing focuses on making consumers aware of the product and its benefits.

Pricing can sometimes be higher to recover costs associated with product development.

“Unit sales are low in introduction, because few consumers are aware of the new good (or service). With consumer recognition and acceptance, unit sales begin to increase… the start of the growth stage. …As more competitors enter the industry and the market becomes smaller… Unit sales reach a plateau, and the product is in the maturity stage.” (Rink, & Swan 1979)

 

Stage 2 — Growth

If a product launch is successful and customers accept the product, it enters the market growth phase as demand increases. The size of the total market inflates, sometimes called the ‘Take-off Stage’, as the company aims to increase market share. Production, distribution and availability are expanded.

If innovation on a product is high and there’s little competition, pricing can remain high. Marketing is aimed at a broad audience as demand and profits are both increasing.

Stage 3 — Maturity

As demand and sales levels off, a product enters the market maturity stage. Sales are the highest at this phase and the costs of production decline as manufacturing becomes more efficient. Marketing costs are also reduced.

As more options become available to customers, as competition increases.

Firms may look at updated product features to stay ahead of competitors and maintain market share. Prices also tend to decline to stay competitive.

Stage 4 — Decline

When products start to lose their appeal with consumers and sales reduce, they enter the market decline phase. Market share is lost, often because of increased competition as new products enter the market, with other firms trying to emulate their success. These can be more suited towards customer needs with the advancement in technology for example or lower prices.

Firms can choose to discontinue the product and remove it from the market, find new product uses to position it differently in the market, or perhaps by exporting the product into new markets.

In any case, the firm by now should be into the research and development phase for their next product.

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Porter’s Five Forces

To help better understand and assess the competitiveness of an industry, Porter’s Five Forces model is commonly used.

“According to Porter (1980), the collective strength of the forces determines the ultimate profit potential in the industry.” (Dobbs, 2014)

Michael E. Porter from the Harvard Business School created the model in 1979. He believed that by understanding the level of competitive intensity of an industry, it will identify the attractiveness of entering that market.

Porter’s 5 Forces (1979)

Attractive markets have few competitors or there might be a gap in the market that a business can target with strategic positioning.

Emphasising the importance of identifying imperfect markets offering more opportunities that are profitable, the model provides useful information to direct a businesses’ strategic approach and marketing.

If they are an existing firm and want to a better understanding of the current market, they can analyse their current position and plan their future direction by aligning it with their strengths and addressing their weaknesses. If a new business or entering a new industry, they can highlight how they are most likely to succeed.

“…Account for long-term variances in the economic returns of one industry versus another… distilling the complex micro-economic literature into five explanatory or causal variables to explain superior and inferior performance.” (Grundy, 2006)

Applying ‘systems thinking’, the model simplifies several complicated microeconomic theories into just five components that impact a market’s long-term profitability:

• The bargaining power of the buyers
• The threat of new entrants
• Competitive rivalry
• Threat of substitution
• Supplier power

Competitive rivalry is the central box of the model, a function of the other four forces. The importance of negotiating power and bargaining arrangements is identified — this focus on external factors more prominent than in other market analysis theories such as a SWOT analysis.

Buyer Power

In certain marketplaces, buyers have more power and can apply pressure on companies to lower prices. If competition is high and the customer has many choices, they have a higher power. Buyers can also join to have a stronger influence on changing the behaviour of a firm. For example, for ethical reasons consumers might boycott a brand.

The Threat of New Entrants

What is the likelihood of new entries in the market? If an industry is perceived as attractive, increased competition is highly likely.

If too many new entrants enter that market, its potential profitability will decline. If a marketplace has few but immensely powerful players in it, they will try and make it as difficult as possible for new companies to enter that market. Other barriers to entering that market also need to be considered to do exit barriers. Entry barriers include government policies, patents and technology.

Competitive Rivalry

The current competition within the marketplace is obviously an important consideration. Understanding competitive rivalry uncovers how many competitors there are and how much they spend on marketing, what competitive advantages they have (if any), the level of continuous innovation and any differences in quality between players.

Threat of Substitution

Customers might be able to choose to substitute a product or service with another. Not to a competitor’s product from the same market — but instead, switching product categories altogether. For example, a person might stop purchasing fast food and instead purchase pre-made frozen healthy meals. The more substitute items there are, the more likely customers are to be drawn to an alternative product.

Supplier Power

Firms must research and consider different alternatives for supply in the market. Raw materials for example can vary a great deal in terms of price, quality and whether. Have the right supplier is critical. How much power does that supplier have? How many competitors do they have? Will their price be consistent or are they likely to increase it? The fewer suppliers there are, the more power they have. The cost of switching suppliers and the ease of distribution is also a consideration.

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The Ansoff Matrix

A popular framework for decision-making about growth and expansion strategies is the Ansoff Matrix. Developed by H. Igor Ansoff, it was first published in the Harvard Business Review in 1957.

His perspective was that firm must continuously grow and change to create a competitive advantage.

“Growth is essential to run a business for profit and, to study the growth, Ansoff Matrix is a planning technique used for deliberate judgment about firm growth through product and market extension networks.” (Hussain, Khattak, Rizwan, & Latif, 2013)

By analysing their market through the four components of the matrix: market penetration, market development, product development and diversification; firms identify strategic alternatives to accomplish their growth objectives.

The Ansoff Matrix (1957)

Also referred to as the Product/Market Expansion Grid, the Ansoff Matrix also helps businesses to better understand the risks of different growth strategies.

Of the four strategies, market penetration hosts less risk and diversification the most risk.

Market Penetration

Increasing the sales of existing products to an existing market is a market penetration strategy. Firms aim to increase their market share, which can be achieved in the following ways:

• Prices are decreased to attract new customers
• Promotion and distribution increased
• A competitor in the same marketplace is acquired

Often brands new to a marketplace engage a market penetration strategy through offering lower introductory prices.

Product Development

The focus of the next strategy is on developing and introducing new products to existing markets. This involves extensive research and development by a firm to expand on its product range. The strategy is usually used if a firm has a strong understanding of their current market, giving them the ability to meet the needs of the existing market by providing innovative solutions.

Characteristics of product development include:

• Investing in R&D to develop new products to cater to the existing market
• Acquiring a competitor’s product and merging resources to create a new product that better meets the need of the existing market
• Forming strategic partnerships with other firms to gain access to each partner’s distribution channels or brand

An example of this BMW and other premium automobile manufacturers adding an electric sports car model to their fleet of vehicles, to compete in the electric sports car market with Tesla and increasing consumer demand for electric vehicles.

Market Development

Entering a new market with existing products is called a market development strategy. This could be by expanding into new geographic areas, either domestically or internationally, or focusing on new customer segments (groups of buyers with similar needs).

If a company holds a competitive advantage with a certain technology, for example, it can be easily transferred into another marketplace where similar consumer behaviour characteristics with their own market, should mean it is a profitable strategy.

For example, often companies in New Zealand will expand into neighbouring Australia if they are highly successful. Australia and New Zealand share similar consumer behaviour across many segments, meaning the product or service can remain virtually unchanged.

Diversification

Using the introduction of new products as a strategy to enter a new market is called diversification. This is the riskiest strategy in the Ansoff Matrix, as both market and product development are required. But it also offers the most potential for profitability, by accessing consumer spending in a market they previously had no access to.

There are two types of diversification: related diversification and unrelated diversification.

Related diversification means there is an overlap between a business and the new product or market. For example, a company that produces plastic lunchboxes might start producing plastic bumpers for automobiles.

Unrelated diversification is where there is no overlap between the core business and the new product or market. For example, if that same company producing plastic lunchboxes was to start manufacturing steel framing for construction.

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Summary

That is the conclusion of the five theories & models that all marketers and business owners should understand.

That was a fair bit of information, I hope you can digest it all and learnt something that will benefit you and/or your business.

Marketers and business owners, in general, should always be looking for opportunities to increase their understanding of how customers think and how business works.

I hope you enjoyed the article and learnt something new. 

This content was originally posted on the BYB Marketing Blog:  https://brandyourselfbetter.com/blog/post/164457/5-theories-or-models-that-every-serious-marketer-should-know

How to Optimize Google My Business to Improve Your Local Search Ranking

With over 90% of the search engine market, it is important for businesses that they are easily found through Google searches.

Google has made it easier for businesses to rank on their search engine by introducing Google My Business. Optimising your Google My Business profile will improve your rankings through Google search and maps

This article explores how businesses can optimise their Google My Business profiles to outrank their competitors and be the first business customers find on Google maps or search.

“Google owns 92.18% of the search engine market share.” (Mohsin, 2020).

 

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What is Google My Business?

65 per cent of all Google searches contain a local reference, which means it is especially important businesses can optimise their local search engine optimisation (SEO).

Google My Business a free tool that helps business owners to better manage their online presence by providing information about their business that is shown in Google search results. This includes information such as their location, contact information, photos, customer reviews and products/services they provide.

For a business to create a Google My Business account, they first need a Google account.

Providing as much information as possible to help their Google ranking for relevant search queries. The more Google knows, the easier it is for them to show it to the right people. A businesses’ online identity is therefore significantly improved as part of a location-based marketing strategy. Once a Google My Business listing is created, this generates a Google Maps location which synchronises with Google Search to enhance searchability.

“Google offers several discrete approaches for local SEO strategy such as listing a business through Google My Business.” (Keegan & Taylor, 2019)

Google My Business complements a businesses’ website by giving them an extra marketing presence through a Google listing, which can drive more traffic to the website or convert people into customers without them even needing to visit the website. It provides a snapshot of your business.

The benefits of Google My Business

Google My Business profiles enable potential customers to find, learn about, and engage with businesses. Users can list all their business attributes to highlight what they do and their unique and desirable benefits, including information useful to consumers such as whether there is Wi-Fi or disability access.

The key benefit of creating a Google My Business profile is to capture more customers who search for a service like they offer on Google search or maps. 

Similarly, to social media or a website, it is another marketing and lead generation tool.

“Google Maps empowers business owners to create and maintain listings that appear in Google Maps and Search. First, a business owner uses the Google My Business website to register a new listing.” (Huang, Grundman, Thomas, Kumar, Bursztein, Levchenko, & Snoeren, 2017)

A businesses’ local search ranking is enhanced through posting regular content and having relevant and useful information to the My Business account. Google’s algorithm considers activity and quality of information as well as proximity and relevance to the search query. A higher ranking in search results means higher visibility and more likelihood of customers finding them.

More customers are also converted, as all the pieces of information useful to potential customers is provided. Theoretically! But only if their Google My Business profile is optimised. This can lead to customers calling, direct messaging, visiting the website, asking questions, requesting a quote or booking an appointment/reservation — all through the My Business profile!

“The strategy represents the ultimate in genuine pay for performance marketing and, as a result, represents one of the most promising long-term marketing strategies for e-commerce.” (Duffy, 2005).

 

Google My Business Strategy

The first step is having a Google My Business profile. But the challenging work is not all done! The profile must be optimised and there must be a strategy, just like with any other marketing tool.

There is actually one step before the first step (I know, makes no sense) — do a Google search to make sure a listing does not already exist. If one does, from a previous owner or third-party data source, Google Maps allows the new operator to claim ownership.

Next, verify the My Business listing. Find out how to do that here. This is critical for the listing’s visibility and performance — Google will not display the business or its edits until ownership is verified.

Completed profile

Having as much useful information about your business as possible through having a completed profile will help boost the ranking of your business page in local search results and increase the chance of potential customers engaging and acting.

The sections of a Google My Business profile to complete are:

Name, location and phone number

The business name should be identical to what is used on store signage and other marketing. Make sense, right? The location obviously needs to match your physical location and any other listings of the business online.

Since many businesses operate as service-area businesses and do not have a physical brick-and-mortar location, the location of the business can be switched off if it is a home office for example that does not take appointments. Adding a service area means the business will still show up in relevant local searches.

With such a high number of people making search queries on Google Maps via mobile phones, it is important to list the business phone number so customers can contact the business to make bookings or ask questions. Make sure there is someone who answers that phone number promptly and returns calls if they are missed.

Website

Make sure the website (if there is one, which there should be) is included. One of the key benefits of a My Business profile is the ability to send more traffic to the website to convert more customers. It is not often people are going to decide to purchase from a My Business profile unless they are looking for something on the go such as a café or gas station nearby.

Hours

Add the hours that the business is physically open or taking appointments and update them if they change. Such as with Covid-19, if the business is forced to close, a My Business profile should reflect this. The profile can also be customised for holidays and other special events. If customers know you are open, it will encourage them to visit your physical store.

Category and Attributes

Choosing the right category for your business to help the most appropriate customers find you is key. Over 80% of My Business views are through discovery searches for a product/service category rather than searching for a business name.

After choosing a primary category for your business, you can choose secondary categories. Make sure they are relevant, so the right people are finding your business who need a product or service you offer.

When you choose your categories, Google will give you a list of attributes you can check off to further describe your business.

Many attribute options are available, you can view them here. Note that currently, this option has been deactivated due to Covid-19 and there are only a small number of available options.

Add products and services

By adding all your products and services to your profile, this will tell potential customers exactly what you do and what your specialities are. It also adds relevant keyword terms to your profile to improve your ranking on Google searches. Include the product or service name, description, and price if applicable. Link these products/services to be purchased at the website’s store if you have one.

From the business description

The description of your business is included in the ‘From the business’ section. Try and use all the available 750 characters, with key information in the first 250 characters. 

Use content you have already created for your social media accounts or from the About Us page on your website (assuming you have one).

You can use this to talk about how you provide value to customers, what makes you unique and how you are different from competitors. This is called positioning.

Just like traditional website SEO, using keywords in the business description will increase the chances of customers finding your profile.

Posting regularly with updates and photos

A My Business profile can be used to post about a variety of things such as business announcements, offers, and events. Posting content on your My Business page is like blogging on your website for SEO or posting on social media. 

The aim is to provide as much quality and detailed information about your business as possible, to try and connect with searchers.

Posting regularly will increase your Google ranking, and increase the number of actions taken by consumers who find your profile. Some posts will be viewable on Google search or Maps if relevant keywords are triggered, making it valuable marketing direct to customers.

Posts expire every seven days, so it is important to be consistent to keep your presence fresh on Google. Posts can be made on-the-go via the app from a phone or tablet, or via a computer.

Include links and other calls to action, such as getting visitors to visit your website, follow you on social media or sign up to mailing lists for example.

Because of the little situation going on around the world currently forcing many businesses to close their doors, there is now a specific option to add COVID-19 updates.

“Adding links to Google Business profile, as well as relevant photos and images encourage Internet users to take targeted actions on the retailer’s website. Targeted actions of Internet users, including the number of routes and the quantity of calls are directly depend on the number of photos uploaded by retailers.” (Murphy, 2019).

 

Photos

Adding photos regularly will help a My Business page to perform better by positively impacts your ranking.

According to Google, businesses with photos on their My Business profile receive 42% more requests for driving directions via Google Maps and 35% more clicks through to their websites than those without any. One of your images may be used by Google to display in local search results if it matches a keyword term searched for.

Each week, I’ll add a post with a link to my latest blog and an image such as this one below.

Try to add a new photo once a week. Use photos to summarise the business and what it can do for its customers. Create an identity.

Encourage customers to leave photos as that will improve your ranking. If you are a restaurant or café, you could offer a free voucher for ‘photo of the week/month’ for example to incentivise people to leave a great photo on your profile. The photos I have added to My Business profiles via Google maps has now surpassed over 1 million views which prove — people are looking!

If you are a restaurant, add photos of food items on your menu, or satisfied customers. 

If you are a consultant, add some photos of you in your work element. Other examples of photos you could share are interior and exterior views (e.g. parking), or team photos.

Ensure your photos are of high quality. If your photos are of low quality, that does not leave a great impression with customers. Follow Google’s best practice for images: JPG or PNG formats, sized between 10KB and 5MB, minimum resolution of 720px height and width. 

Make sure photos are in focus, well-lit, without editing and excessive use of filters. Professional and keep it as real as possible!

Upload your logo for your profile thumbnail and one that highlights your brand as the cover photo. Edit to fit a 16:9 aspect ratio.

You can also add video, so include a video of you introducing yourself and how you help people or maybe a video snapshot of you or the team on the job.

“Internet users’ reviews/comments in Google affect the retailer’s website position in the local search results.” (Natorina, 2020).

 

Customer Reviews

Positive reviews have a positive effect on potential customers who are researching your business. They also increase your businesses’ visibility in search results, so try and encourage customers to make reviews.

Reviews influence consumer decision-making, so reviews are a key ranking factor in the My Business algorithm. On Google searches, often the first results are those with multiple reviews and a high rating, and search results may also a display a review for a My Business Profile if it uses certain keywords people are searching for.

Encourage customers to leave feedback by creating a link they can click to write a review. Around 60% of people will leave a review if requested, so ask! It could be in a follow-up email. Start with your loyal customers.

Reviews help other customers decide about a purchase, so people often do not mind leaving one (like I leave photos of every restaurant I eat at on Google Maps — which has now surpassed).

Make sure you monitor and respond to reviews. This feedback will encourage additional customers to leave one as it illustrates that your business values its customers and their feedback.

Questions and answers (Q&A)

Set up alerts to monitor your Q&A, as anybody can ask, and anyone can answer. Monitoring this ensures you maintain accurate information.

Questions and answers that contain keywords can help improve you are My Business profile’s ranking for that keyword. Creating your own Q&A is therefore an important optimisation tool. Make a list of the businesses most frequently asked questions and then ask, answer, and upvote answers on your personal profile.

Messaging

Over 80 percent of people use their phone or tablet for local search, so being able to conveniently message from their device to your My Business profile is a fantastic opportunity.

Businesses can only reply to customers through Google My Business app. Messaging must be enabled via settings on your Google My Business dashboard and once enabled, a button appears on your profile for direct messaging from customers. To make sure you do not miss an opportunity, set up alerts for messages.

Businesses can set up customised automated responses to messages. This will improve your responsiveness which will help keep message response time under 24 hours and make sure you are not penalised from slow response times.

Other functionality

Google My Business is continuously being updated with more tools for businesses.

Marketing Kits are now available with a recent update, which you can use to share on other forms of social media to bring traffic to your page. One of these is to encourage reviews. On the topic of reviews, make sure you have some! Try to encourage satisfied customers to write you a glowing review. This will increase your credibility with anyone who finds you.

Google reserve is another useful function, allowing people to make reservations or book a meeting time with you via integration of a calendar application. This syncs with your calendar with notifications. This is a very convenient feature to show people what time slots are available to book without having to go backwards and forwards.

You can now add a short name to your Google My Business account, which makes your business easier to find through a map search, and URL’s are not as messy if you share the link.

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Thanks for reading this article, I hope you enjoyed the content and learnt something you can apply to your businesses’ Google My Business to improve your search results.

This content was originally posted on the BYB Marketing Blog - https://brandyourselfbetter.com/blog/post/153562/how-to-use-google-my-business-to-attract-more-customers-through-search