Inbound Marketing
In our article on thought leadership, we discussed the role of content in influencing ideas and actions, and also touched on key differentiators of thought leadership. One of the most important distinguishing features of thought leadership – especially as we practice it at Fondation-LAB – is generosity.
That is, thought leadership is motivated by altruism, and the desire to raise awareness around issues and inspire people to find solutions. For example, thought leadership efforts might focus on how to enable more women to participate in formal economic activity, or how to encourage involvement in social entrepreneurship.
In this sense, it is distinct from activities geared more towards selling products and services. However, the use of content to influence how people think and act has obvious applications in marketing and sales.
Thought leadership is essentially the marketing of ideas, rather than of products. However, the growth of the importance of influencers has shown that the boundary between these two activities is at best porous.
Producing compelling content that has the power to change how people think can also affect their purchase decisions. Influencers know this, and so do the brands that sign commercial agreements with them.
Thought leadership is not about selling. Rather, it is geared towards a thorough examination of all aspects of a situation with a view towards trying to find a solution. Instead of a single focus on the benefits of a specific product or service, thought leadership requires a more holistic approach that considers both the pros and cons of a proposed solution – conventional marketing in contrast merely promotes the benefits of a particular product.
The rise in the power of thought leaders and influencers has given rise to a new facet of marketing known as content marketing – that is, using targeted content to sell.
Conventional marketing
The conversion funnel model has been used for many years to describe how potential customers are ‘converted’ first into leads or prospects, and then into paying customers (and ultimately, ideally into fans or advocates).
The funnel model is particularly useful in understanding marketing as it represents a large pool of potential customers (the widest part of the funnel, or the entrance), narrowing down to a much smaller number of paying customers.
The narrowing of the funnel speaks to the pressure that is placed on consumers to purchase (much of it generated by marketing and advertising) and there is a sense of inevitability that they are being moved along a treadmill. This sense of impersonal ‘progress’ towards a goal they may not have originally had can cause resentment amongst consumers. This is especially the case during the ongoing cost of living crisis.
The funnel approach can be described as a series of steps, taken by either the brand or the (potential) customer:
- Discovery – the consumer becomes aware of the brand, its products, services and USPs.
- Interest – a more active engagement in the brand’s service offering and customer value proposition.
- Appraisal – actively comparing the brand with their competitors.
- Confirmation – consumer make a purchase or subscription decision.
- Conversion – consumer makes repeated purchases and recommends the brand to others.
This journey – and the shape of the funnel – speaks to conventional marketing being a form of one-way communication rather than a conversation, and this can tend to devalue and depersonalize the consumer.
Inbound marketing
The risk of a disconnect between brands and consumers has led to a re-appraisal of conventional marketing on both sides of the equation. Consumers are becoming more resistant to marketing, while brands are increasingly realizing that a better approach is needed.
At the same time, companies have more data on their customers than ever before, thanks to information collected during digital interactions and transactions. This offers a greater degree of insight into consumers’ motivations and desires.
This awareness makes it easier for companies to align themselves with the needs of their target audience, and create genuine connections through providing information or content that the audience will find useful. Context is at least as important as content, and enabling customers to engage with brands when and where they want to. This can lead to the audience feeling more empowered, as though the balance of power between brand and consumers has shifted slightly.
Three steps to connection
Whereas conventional marketing (the funnel model) uses a series of steps to go from awareness to conversion, Inbound marketing distils this down to just three steps:
- Attract – building awareness by gaining attention.
- Engage – focusing on enabling individual consumers.
- Delight – making the customer feel valued.
Inbound marketing is a form of relationship marketing – it uses an exchange of knowledge to deepen the connection between the brand and the consumer. This connection – and the content that enables it – lies at the heart of inbound marketing.
The inbound marketing journey
Attract
This involves using targeted content to gain attention and establish the brand’s position as a leader in the field. In this sense, it is similar to thought leadership, although it differs in that it ultimately has a commercial motivation. In this phase or step of inbound marketing, the goal is to drive awareness.
Engage
This is the active nurturing of relationships with customers. Crucially, it involves two-way communications. The relationship can be deepened by customizing the offering – this recognizes that each customer is a unique individual with their own specific wants and needs.
Delight
Empowering and rewarding customers ensures their loyalty, and can convert them into advocates for the brand. This then creates peer-to-peer (P2P) and word of mouth (WOM) marketing opportunities.
Offering loyalty club memberships or similar schemes rewards repeat customers and also facilitates increased data collection. This allows brands to subsequently deliver targeted content and personalized offers, thereby further deepening the relationship with each customer.
Replacing the funnel
Rather than the conversion funnel discussed above, inbound marketing uses a flywheel model. In engineering, a flywheel stores rotational energy generated by an engine to maintain balanced performance and amplify the output. In a business context, a flywheel model involves making incremental changes that lead to exponential growth over time.
For a flywheel to work effectively, it requires constant energy (just like a brand/consumer relationship). In this way, it can overcome friction and accelerate progress towards business goals. By applying force (or energy) to each of the three phases of inbound marketing (attract, engage, delight), you can drive and accelerate growth.
In the attract phase, you earn attention by making valuable, useful content available. Applying energy to the engage phase involves making the buyer journey as seamless as possible, while the delight phase is all about rewarding the customer in ways designed to deepen their loyalty to the brand.
Inbound marketing – although a more modern development – is still bound by the logic that dictates that it is far easier and much more cost-effective to retain an existing customer than gain a new one. Indeed, the essence of inbound marketing or relationship marketing is based on an acceptance of this fact and a recognition that the deeper the relationship created with a customer, the more valuable it will prove to be over time.
Advantages of the flywheel approach
A key difference between conventional marketing and inbound marketing is the positioning of the customer within the model. In the conversion model, the customer is at the bottom of the funnel, which speaks to their importance (or lack thereof). With the flywheel model, the customer is at the center – they are the most important part of the equation.
Inbound marketing places the emphasis on customer service, and keeping the customer happy. By adding energy to the flywheel, you can gain and maintain momentum. In a business context, this means driving referrals and repeat sales (which, as we have seen, are the most valuable form of transactions as they cost the company less).
Benefits of inbound marketing
Inbound marketing – or using valuable content to keep the flywheel spinning – lets you both attract new customers and retain existing ones. Inbound marketing creates opportunities for increased interactions, including P2P and WOM. Inbound marketing begins with owned content but can lead to the creation of earned content – that is, content created by customers and reviewers which has the advantage of being seen as impartial. This can add to the trust surrounding a brand’s
There are clear parallels between inbound marketing and thought leadership – both activities depend on trusted content as the foundation of lasting relationships between brands and their customers.
In the attract phase, original value-added content is aligned with the audience’s interests. In the engage phase, brands or thought leaders build a community through collaborating with their audience. In the delight phase, brands (or thought leaders) can inspire and motivate positive change.
Conclusions
The growth of thought leadership will by definition inspire change in many areas – including marketing. Applying the same principles that power successful thought leadership (originality, value-added content, collaboration and generosity) are also the essential pillars of inbound marketing.
By conversing with people rather than talking at them, both thought leaders and inbound marketers can achieve unprecedented reach, influence and growth.