Marketing is like a baseball bat. A baseball bat is primarily used for enjoyment and recreation. It is an aid to your general health. It gets you outdoors and gives you a good, upper-body workout. It also helps your mental health by relieving stress and laying down happy and long-lasting memories.
But it can also be used as a terrifying, brutal, and intimidating weapon. It all depends on who is swinging the bat.
Marketing also has its dark side. When used positively and ethically it improves lives. It creates value and makes customers, shareholders, and employees happy. It creates jobs and helps the economy to grow. It raises money for good causes. It increases awareness of important issues. It encourages desirable activities. It can reduce anti-social behaviour.
But it can also persuade people to smoke. It can increase sugar intake among children and exacerbate the obesity crisis. It can damage mental health. It can harm the environment. It can create an opioid public health disaster. It can increase alcohol consumption. It can encourage irresponsible behaviour. It can agitate voters to make questionable political choices.
Intrinsically, of course, marketing is neither good nor evil. But it can be used in support of both. Morality is not an inherent characteristic of marketing. It’s who is doing the marketing that counts. Like the baseball example earlier, it all depends on who is swinging the bat.
This article isn’t simply to point out that marketing is not universally a force for good. That much is self-evident. Rather, it is to look at two of the ways that marketing has been used successfully in promoting products and beliefs that are questionable. And then to identify the specific elements that worked so well, in order that we can prise them from the fingers of the scoundrels and put them to good use. And you can use them in your own marketing efforts.
The Positives of the Dark Side of Marketing
So, this is a positive take on two dubious deeds. Panning for gold nuggets in shit creek, if you like. A search for the silver lining hidden inside the dark clouds. A robin hood exercise where we will steal from the bad to give to the good. Ok, I am labouring the point, let’s take a walk on the dark side.
Ashley Madison – Discovering a New Online Dating Market
These days the pursuit of romantic liaisons is technology-enabled. No need to overthink things, no need for patience or agonizing over your next move, just swipe away to your heart’s content.
The total market for online dating could be described as people looking to meet other people for a ‘date’. Which is a pretty broad definition of a pretty large market. To help develop more compelling value propositions the market can be subdivided into smaller needs-based segments.
One way to divide the market is between those looking for ‘the one’ and those looking for ‘the many’. Those who want to be introduced to a prince and those who are happily kissing a few frogs in the hope a prince might appear (apologies for the inherent gender bias but that’s fairy tales for you.)
eHarmony, for example, focuses on those customers who want their potential partners selected for them by a predictive algorithm. Tinder allows users to select anybody they take a superficial shine to (of course they have to have a similar superficial interest in you for the magic to happen).
Beyond this pretty obvious ‘choose for me/let me choose’ segmenting there are other subdivisions, such as same-sex relationships, over fifties, vegetarians, single parents, religious affiliations, hobbies and interests, personal wealth, and so on.
One of the most successful niche segments of online dating was for people already in a relationship. Ashley Madison has over 45 million members ‘looking to have an affair’. It was created in 2001 when data suggested 30% of people on conventional dating sites weren’t actually single. This was clearly a segment worth pursuing.
Ignoring the ethical dimension and the sad indictment on society in general. With revenues around $100 million and margins of between 35 and 40%, this is a pretty good example of successful segmenting and targeting.
How to Use it
In their best selling 2004 book, Blue Ocean Strategy, W Chan Kim and Renée Mauborgne introduced (or re-introduced if you want to be picky) the business world to the concept of uncontested market space.
At a high level, Blue Ocean strategy was a method to create differentiation by reconstructing market boundaries to focus on new and unchallenged markets. This can happen in one of two ways.
Either speculate, hypothesize, test and develop a new offer. This is the ‘build it and they will come’ approach. Or, more commonly, discover markets that have evolved organically but whose needs are not being addressed by current suppliers. This is the underserved market approach.
Look at the entire population using the products and services you and your competition provide. Identify any subset that may be buying the product or service the same as everybody else but whose needs and outcomes are significantly different.
Treat these as a new market and develop a complete offer around their specific and differentiated needs. Obviously, these new markets will have to be big enough to matter and offer you a significant opportunity to develop a sustainable competitive advantage. But even if they don’t, you may find low-cost ways to enhance your current offer.
Customer insight is never a bad thing.
The New Opioid Crisis
Before we get to the next example, about marketing segmentation in the pharmaceutical industry, a little background. The United States of America is currently in the grip of an opioid crisis. Since 1999, over 450,000 deaths have been caused by opioid overdose. The scale of this public health disaster is one of the biggest mistakes in modern medicine.
The pain-relieving and euphoria-inducing qualities of opioids have been known for thousands of years. They were widely used as painkillers during the American civil war leading to widespread addiction among soldiers. The Harrison Narcotics Act of 1914 regulated opioids and sought to reduce their medical and recreational use.
The general belief that opioids were too dangerous and addictive for general use continued until the 1990s when academics and researchers challenged the status quo. They claimed that the benefits of chronic pain relief outweighed the perceived risk of addiction, which they estimated, erroneously as it turned out, at less than 1%.
Oxycontin® – Marketing Segmentation and Targeting
This scientific green light encouraged pharmaceutical companies to invest in opioid-based pain relief medications. With millions of Americans suffering from chronic pain, there was a vast potential market. As a consequence of this renewed focus, opioid prescriptions for pain relief grew to astronomical proportions. One of the big winners was Purdue Pharma.
Purdue Pharma saw sales of its Oxycontin® brand grow from $48 million in 1996 to over $1 billion in 2000. Oxycontin® wasn’t the only opioid pain reliever on the market and it was no more effective than its competitor’s products. So, what was the secret of its success?
There are many factors that drove the success of Purdue Pharma but the most important was how they targeted doctors. They segmented doctors based on their history of prescribing strong pain killers. This should have identified doctors with a high number of chronic pain patients. It could also have just identified the less discriminating doctors with a partiality for prescribing strong painkillers.
They invited 5,000 of these identified doctors and other health care professionals to pain management conferences and symposia where the benefits of Oxycontin® were promoted. They offered a lucrative bonus system to their salesforce and doubled the number of reps calling on these doctors. They offered patients starter coupons for a free 7 to 30-day supply. Approximately 34,000 of these coupons were redeemed.
In short, Purdue identified a segment of doctors most likely to prescribe opioids and aligned every aspect of their marketing activity around creating a compelling and attractive offer to them. In marketing terms, it was a huge success. In public health terms, it was a tragedy.
How to Use it
A segmentation strategy is not suitable for every business. Sometimes you are better making a general offer to the broader market. But in cases like Purdue, the approach made perfect sense.
In any large potential customer population, some will be more attractive to you than others. Marketing segmentation is the process of identifying the most attractive potential customers and aligning resources to focus almost exclusively on them. It can give you better results than stretching yourself too thin or making a less focused, more general offer, to the entire market.
Market segmentation can allow for more targeted messaging and more relevance for the target customers. And it is not just for new product launches. In 2016 Eurotunnel used marketing segmentation to promote their Le Shuttle service that takes cars, by rail, between the UK and France.
They focused on the most valuable potential customers with relevant and compelling messaging. The campaign resulted in a 20.8% increase in cars using the service and generated a return of $11.00 for every $1.00 spent.
Sometimes it’s better to talk to fewer people.
The Dark Side Doesn’t End Here
This article could have gone on to look at cigarette marketing, the sugar lobby, and many others. Maybe we will get to those another day. The point is that even when marketing is used as a tool for promoting dubious or downright harmful ideas, there are lessons to be learned. (In fact, you can hear and watch the season premier of our podcast on the dark side of marketing here.)
So, study the bad guys, see what works for them, and use it for your own, presumably, good campaigns. Just make sure when you sup with the devil you use a long spoon.
Don’t turn to the dark side.