Next-Gen leaders bring new marketing strategies to family business

The world is full of very successful second- and third-generation family businesses. But look carefully and you will find a big area of tension — an arm wrestle between older and younger family members. That area is marketing.

The heirs — the digital natives — are pushing to make the most of the new world; a world of social media, data, emails, digital, content and programmatic media. The baby boomers and beyond — the digital immigrants — have grown their businesses with traditional marketing; television, print, PR, catalogues and direct mail. And it’s worked. Which is why they are reticent to jump into a digital space that’s less familiar, where in their minds, return on investment is less certain.

One thing on which both groups agree is that every dollar counts. Every dollar spent on marketing has always been spent after rigorous interrogation and much negotiation. But the marketing spend can be measured through any channel, old or new. It’s just that most don’t choose to do so. It can be as simple as asking, “How did you hear about us?” or “What got you interested in this particular product?” It’s an age-old way to understand what channels are working best. And in the digital world, everything is trackable — from whether a customer clicked from a website ad to your site, reacted to an ad or post on social media, or clicked through from an email sent to them.

Convincing the digital immigrants of the ability to measure marketing efforts is only step one. The bigger question is what’s the right mix of marketing spend between traditional and digital. One interesting clue to answering that question is that the global advertising holding companies say they are earning close to 50 per cent of their revenues from digital marketing. That’s a huge shift from even five years ago.

Another statistic that helps is that 10 years ago the average number of media channels used in a campaign that won an effectiveness award was three — today it is seven.

One of the confronting things about digital marketing is that it’s vast. There’s your own website and your own social media channels. The website needs to be search optimised, and designed for a great customer experience. It may or may not need e-commerce capabilities. Within social media there’s Facebook, Twitter, Instagram, LinkedIn, Pinterest and more. Then there’s content to be created for your website and social media, which could be video or still images or type. Then there are very targeted ads that can be bought within people’s social media feeds, and the websites they’re searching. And they can be optimised and automated. But you have to create those ads. And then you have to consider that people are seeing them on a laptop, tablet or a mobile phone. Then there are emails to be written, designed and sent. And then there are data and databases underpinning all of that. No wonder many digital immigrants feel the technology freight train is best avoided. And for those who know they have to get on board, it’s hard to know the best station from which to start the journey.

The big lesson from big brands that have successfully transitioned is simple — test and learn. Five years ago it was not uncommon to hear a global brand announce it was redirecting 25 per cent of its marketing budget into digital; that they were boldly stepping into the digital abyss. The reality was they weren’t 100 per cent confident about what would and what would not work. But unless they tried, and tried faster than their competitors, they would never know and would be in danger of being left behind. For family businesses it’s a lesson worth following. Testing is so much easier and cheaper in the digital landscape. It’s more flexible. More targeted. You can quickly change tack. And you can see the results.

Take Facebook ads as a simple example. Imagine a 40-year-old family-owned retail business with 20 stores, a fledgling e-commerce website, and one new store about to be opened in a metropolitan area. To advertise the new store opening, Facebook allows you to target an exact age range. If the retailer was a girls’ youth fashion chain, you could target 14-to-24-year-old females. A hardware chain might target 35 to 48-year-old men.

You can choose to target only those living within a 5km radius of the store. You can pick up on words that people mention and target them — clothes, outfit, back deck. You can quickly create your own ad within Facebook using existing images or video footage. You can pay per impression, or per click on the ad through to your website. For $5000 you could get a fairly comprehensive and well-targeted campaign over four weeks. One you can constantly monitor, change the messages within, and fine tune the images and videos.

The same goes for social media, other forms of digital advertising, upgrading your website or app, and kicking off your email campaigns. Test, and if it works, amplify it. If it doesn’t, stop and try another approach.

For the digital natives, their elders are right about one thing — traditional marketing still works. It’s combining and finding the right balance between both that will see smiling faces around the family boardroom table.

(This article is written by Andrew Baxter, CEO of Publicis Australia and YPO Sydney Chapter member. This article first appeared in The Australian)

(YPO is the global platform for chief executives to engage, learn and grow. YPO members harness the knowledge, influence and trust of the world’s most influential and innovative business leaders to inspire business, personal, family and community impact. Leadership. Learning. Lifelong. For more information, visit YPO.org)