Upstream Marketing Challenges and Opportunities
Upstream marketing challenges
- Upstream marketing lacks definition and can be difficult to do. Upstream marketing is neither a strategy nor process, but rather a set of principles and underlying concepts that should be consistently applied to obtain maximum effectiveness. Many companies don’t know how to get started or tend to treat various upstream components as separate or distinct, as opposed to an integrated system in driving growth.
- Upstream marketing takes time. Before its benefits are realized, upstream marketing can take months and years of strategizing and planning. When faced with a soft business climate or limited resources, many companies will turn to downstream tactics – a new ad campaign, social media, sales discounting – to spur short-term growth, and never get around to focusing on upstream activities.
- Upstream marketing success is hard to measure, at least in the short term. Advertising impressions, click-through rates, lead tracking and other downstream metrics provide some sense that downstream marketing is working. This is often not the case with upstream marketing.
- Upstream marketing can lack tangibility and may not seem overly exciting. An ad campaign, a new website or slick company brochure is inherently more appealing, given the emotion typically involved, than a marketing strategy or business plan.
- Many organizations are not set up well for upstream marketing success. Small-to-medium sized businesses may lack training, education or resources required for upstream marketing. Conversely, many large organizations have strategic planning departments staffed with MBAs. These groups, though, are often disconnected from strategic marketing, research and development and other functions required to develop and launch new products.
Upstream marketing opportunities
Despite the challenges, there are counter-arguments for why upstream marketing makes sense and why now. The main reason, discussed earlier, is the substantial business that results. New markets, new products, new channels and other growth areas open up entirely new revenue streams. Other reasons include:
- Upstream marketing offers the opportunity to be “roughly right” vs. “precisely wrong.” Precision is often required in downstream marketing (in product performance, advertising copy, etc.). Most companies can’t afford to miss in executing downstream marketing because the cost of failure is too high. Occurring earlier in the business development cycle, upstream marketing allows for iterative refinements as you go. You don’t have to win every time, but you need to be in the game. Upstream marketing gets you in the game.
- New tools and techniques that support upstream marketing emerge every day. Upstream marketing today is much more efficient vs. prior years. Market research, prototyping, mock-up websites, 3-D printing can be huge time- and cost-savers. New business support centers – specifically designed to help with new business development – are cropping up. We’ll explore these and other tools in creating new business concepts
- Consumers are comfortable with the concept of beta products and product updates. Consumers have become conditioned to accept products that may not be 100%, as a result of technology companies and constant updates. Ship and iterate is an acceptable way to gain early, loyal customers. After version 1, it’s 1.1, then 1.2, and eventually version 2.0 Consumers get this and are comfortable with the concept.
- With upstream marketing, the Pareto principle, or 80:20 rule, often applies. This concept, named after economist Vilfredo Pareto says that for many events, roughly 80% of the effects come from 20% of the causes. For example, 80% of sales come from 20% of your customers. Another example: 80% of sales come from 20% of your salespeople. The implication for upstream marketing: 80% of value is achieved with the first 20% of the effort. More specifically, the use of upstream marketing tools, frameworks, and a general comfort with ambiguity can reap 80% of its benefits with just 20% effort.
Finally, this book is designed to provide an integrated framework and the tools and techniques to get started and succeed, as described next.