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Content Strategy Formation and Competitive Advantage

How does an organization form a content strategy?  How does it know what it should be doing differently with its content?  Content strategy can be more than just a program to improve the performance of content.  It can be a part of business strategy and help to inform how a firm should compete.

As content becomes an increasingly important element in business, it moves beyond being a support activity like human resources or accounting. It becomes a core activity, and joins the ranks of cost, technology, service, logistics and design as a potential source of differentiation and competitive advantage.  By competitive advantage, I am not referring to simply outperforming a competitor at a given time, perhaps following a content refresh in response to an assessment of competitor content.  I am referring to a more systematic approach to finding profitable opportunities relating to content that competitors aren’t pursuing.

Many content strategists associate strategy with planning and process.  A number of popular definitions of content strategy mention planning as the engine driving content strategy.  You need a plan: you can’t just wing it.  Yet in business theory, the notion that strategy is synonymous with planning has become dated. The business strategy guru Henry Mintzberg wrote an influential book in the 1990s on the decline of strategic planning.  He considered the centrality of objectives and programs in strategic planning as a frozen perspective, placing an unrealistic emphasis on control. Elaborate planning has fallen out of favor as businesses confront an increasingly unpredictable environment.

Michael Porter, another business strategy guru, criticized the view of strategy as “benchmarking and adopting best practices.” He argued that strategy should be based on delivering something others can’t.

Planning and process are used to execute a strategy, but they don’t define a strategy.

Popular Perspectives on Strategy Today

Many content strategists present content strategy in terms of a circular diagram.  It starts with discovery and planning, proceeds to creating content, and then moves to assessment before starting a new cycle of discovery and planning.  Many more steps may be involved in this cycle, with more specific descriptions, but the basic pattern draws on classic Plan-Do-Check-Act process for process improvement developed in the 1950s by W. Edwards Deming.  The image is so generic that it’s become a standard PowerPoint template that countless people fill in for business review meetings, a sort of mental comfort food.  No one will disagree with a circular diagram: it doesn’t say where you are going, so there’s nothing controversial about it.

Content strategists also emphasize an organization’s mission and values.  Strategy is more than mission and values.  One needs these things, and it’s important that all content conforms to them.  But values by themselves won’t suggest how to proceed into an unknown future.

Most discussions of content strategy don’t talk about how strategy is formed.  They reference the need to establish goals and to have content strategy reflect those goals, but don’t discuss how decisions are made, and what criteria are used to establish goals.

Three popular ideas color discussions about strategy. Because they are so familiar, people rarely question their limitations.

The first idea is optimization.  Optimization assumes analytics will tell you where you should be heading.  If you apply best practices, you can incrementally improve performance.  It assumes what you are currently doing is basically sound; it just needs tweaking. Sometimes this concept is referred to as performance-based strategy.  But as mentioned earlier, following best practices isn’t a genuine strategy.  By definition, best practices are the same tactics that countless others are using.  With its focus on incremental improvement, optimization can result in a blinkered perspective, where brands myopically follow the same basic course of action even as the operating environment shifts dramatically.  Optimization doesn’t tell us what we should be doing differently with our content, except in the most limited manner.

The second idea is growth hacking.  Here, the approach is trial and error. Firms try something that’s been done by someone else, and sees if it works for them.  If not, they try something different.  Many start ups embrace this approach.  They have a core idea, but have no idea how to make money from it, so they keep trying different things, pivoting along the way.  At its worst, growth hacking provides customers with an exhausting stream of alpha release products based on the hunches of alpha males.  User needs are stress-tested rather than solicited as design inputs.  When big organizations try this approach at scale, it can result in wild gyrations, and can hurt the brand’s standing and customer retention, as high profile initiatives are suddenly and publicly abandoned when they don’t produce their expected magic.

The third idea is goal-setting.  The necessity of having a vision and goals seems self-evident.  Airport kiosks are full of books promising a better tomorrow by setting goals.  TED talks exhort us to ask big questions, and be driven by big ideas.  Why are we here?  What do we want to become?  A goal fetish, however, can generate vague, wishful thinking, along the lines of “we want to be awesome so we can help our customers be awesome.”  Unless the goal is viable, building a strategy off it is pointless.

Goal Viability: the Critical Success Factor

Finding the right goals is key: goals that are both achievable and have competitive impact.  If your goals are tired, or ill- defined, pursuing them won’t result in a big difference.  Tired goals are those that reflexively follow past practices, target obviously achievable outcomes, or simply imitate what others are doing.  Ill-defined goals are those that vague and aspirational without sufficient consideration of constraints and tangible outcomes.  Promising goals, in contrast, blend both realism and imagination.

Conventional thinking about strategy is anchored in the notion that goals shape the strategy, which is the foundation for the plan (Goals > Strategy > Plan).  Strategy based on goals communicates the idea that “failure is not an option,” since the goal is not questioned once selected. Consequently, the goals are often either safe or fuzzy, since no one wants to fail.  There is plenty of need in our personal lives for both safe and fuzzy goals: to exercise three times a week, or to try to be a better parent.  But large organizations face different needs: to find goals that can transform their practices when there’s no obvious script to follow.  They need to change, but don’t know exactly what are the right changes to make.

Rather than have goals determine strategy, it may be more insightful to reverse the process.  We need to create a strategy that can identify viable goals we can plan around.   In this revised formulation, the strategy drives the discovery of goals (Strategy > Goals > Plan).  We then stop thinking about strategy as a declaration, and start thinking of it as a discovery process.  Strategy becomes a way of finding viable goals to pursue.

Viewing strategy as a way to choose goals means the emphasis is on making appropriate decisions.   Strategy is ultimately about making the right choices.  We need a framework for making decisions.

Two themes dominate recent strategic business thinking: the rapid and unexpected changes that can occur outside of organizations from technology, competitors, and consumers, and the vast volumes of data being generated that are difficult to interpret.  These themes impact all areas of business, the field of content included.  In 2011, the World Economic Forum (the Davos conference for global CEOs) sponsored a review of the Future of Content to try to make sense of some of these changes.  The review examined the need for organizations to adopt “transformative business models” to address changes in the content landscape.

Content strategy can draw on recent thinking in business strategy, particularly ideas relating to options thinking and hypothesis testing.  These tools can help organizations answer what they should be doing differently with their content.   Strategy should generate interesting and worthwhile options to pursue.  Options need to be tested for their viability.  Viable options can be put into the plan, after which they are executed and optimized.  In this formulation, the front-end of strategy formation involves the discovery of viable goals, and the back-end involves the testing, selection and implementation of these goals into plans.

“One of the toughest strategy challenges is still the creation of options—creating them is the black box of strategy. It’s easy to write ‘diverge’ on the strategy-process map, but it’s darned difficult to create truly innovative strategy options.”  Dan Simpson (Clorox) in the McKinsey Quarterly

Goal-finding: Generating Options

Three approaches can generate innovative content strategy goals that can be evaluated for their viability.  These are:

  1. Dilemma exploration
  2. Hidden value opportunities
  3. Refinement of beliefs concerning differentiation

Each of these approaches can identify and develop specific goals that seem viable — levers that provide leverage.  Dilemma exploration looks at where to put emphasis. Hidden value exploration looks at opportunities to offer things differently.  Belief refinement is about tightening up beliefs about the capabilities of the brand, and behavior of audiences, so that goals are more specific and potentially achievable.  All three approaches help brands to develop fresh ideas that might become candidate goals.  Candidate goals can then be expressed as hypotheses that can be tested to see if they hold.

Strategy can be a discovery process focused on developing and selecting viable goals
Strategy can be a discovery process focused on developing and selecting viable goals

Dilemma Exploration

Dilemmas are about choices, where two or more options seem desirable.  Strategy is similarly about choices: what to emphasize, to the exclusion of something else.

Organizations face resource trade-offs.  The choices they make when allocating resources can impact their overall effectiveness with content.  While it is easy to allocate content spending in direct proportion to revenues from lines of business or customer segments, doing so might overlook the possibility that a different mix might yield a higher overall impact from content.

Some trade-offs are global ones relating to approach, such as whether to emphasize:

  • Breadth of content, or more limited but highly produced content
  • Targeted content addressing specific niches, or content with wide appeal
  • Succinct, compact content, or expansive content using rich media

Brands need to know where to spend their money.  Let’s imagine that 25% of a budget were devoted to discretionary spending on content: some forms of content receive special emphasis, with the intention that such content would be unique and distinguished from the general content offered by competitors.  What should that emphasis be?  Is it better to do a few splashy things that will get the attention of a particular group, or to try to broaden the reach by creating content more targeted to various specific interests?  For example video is more expensive to produce than written content.  It might yield higher engagement from people not ready to buy, compared with those doing serious comparison shopping, who are reading detailed specs.  Does the attraction of video outweigh the thoroughness of detailed product information?

The interesting thing about such dilemmas is that there are answers, but they are not obvious.  The answers are situationally dependent.  No one can know in advance what the best choice will be, because of the many variables.  There is no best practice that everyone in the industry is following, so there is an opportunity to make a choice that is different from one’s competitors, and potentially benefit from this choice.   As soon as conventional wisdom takes hold about what’s the best approach, the competitive advantage disappears — unless conventional wisdom is wrong and one tacks differently.  Dilemmas therefore are a rich area to explore: decisions with two or more tempting choices that sound promising, but only one of which will yield the biggest overall payoff in terms of value for spending.

Trade-offs also exist concerning whom to target, and which lines of business to emphasize.  This is especially urgent for areas of emerging interest that look promising, but where no reliable information is available.  For example, firms may need to decide whether it is better to emphasize:

  • Segment A (single millennials who travel) or segment B (home-oriented millennial families)
  • Product C (cashless payments) or product D (social lending)
  • Platform E (Apple watch) or platform F (large wall public displays)
  • Marketing theme G (the future) or marketing theme H (nostalgia)

Many marketing campaigns are pitched around a tidy story about how various choices will synergistically work together to yield a perfect outcome — without addressing missed opportunities.  Campaigns may fail or succeed without any clear understanding as to why, and with no learning that can be leveraged later.

All well-considered alternatives offer some value, so it is important to understand the potential value of each. The benefit of dilemma exploration is to determine which alternative provides the most leverage.  Brands may be tempted to try to do everything to some degree, but that would provide no emphasis, and would simply dissipate efforts.  Unfortunately, trying all options at once won’t work.  Dilemma exploration is unlike the superficial comparisons of options done in much A/B testing.  A/B tests generally compare only minor differences, rather than more fundamental differences in emphasis.  Exploring options associated with a dilemma can entail a small special project.  Test an option by making a guess as how big an impact it might offer, and comparing the actual result.  This provides a baseline to know if the option performs better or worse then expected.  Rotate options to try different possibilities and develop a comparison between them.

Discovery of Hidden Value

Hidden value exists when the brand and audience both derive value from a change.  Such value can be discovered when one questions the assumptions embedded in the existing brand-audience value exchange.

Start by asking a probing question: What does the customer want from us that we aren’t providing?  The answer to this question, if grounded in user research and customer feedback, can uncover unmet needs.

Next, respond to each customer “ask” with a question from the brand: What does the brand want from the customer?  To be insightful, the question should be answered candidly, revealing both ideal outcomes and feared ones.

An example will illustrate how hidden value discovery can be applied to content.  Suppose your customer insights indicate that customers are frustrated by your complex terms and conditions.  You benchmarked your terms and conditions, and found them no more onerous than your competitors.  Nonetheless, customers want more clarity in the terms and conditions.  While not at a disadvantage, the brand isn’t using terms and conditions as a competitive advantage either.

When the question is turned on the brand — what it wants from the customer — two themes emerge.  The brand is concerned about possible legal actions from customers, or bad PR if they seem to over promise.  The wordy and weasely terms and conditions are a way to discourage too much attention to what is promised.  The brand’s ask of consumers is: Don’t sue the brand, and don’t create negative PR.

Once the needs of both sides are explicit, one can see common ground that adds value to both parties.  Simpler, clearer terms and conditions would benefit customers, who will then trust the brand more.  Such trust could also benefit the brand, by encouraging more sales.  The brand could feel confident simplifying terms and conditions if it improved its risk management, perhaps by assigning warranty fulfillment to a third party or improving communication regarding scheduled maintenance.  The simplified terms would then be a competitive advantage.

“Framing questions is the other tough challenge, and it’s one of the most important yet under appreciated parts of strategy development. Questions are the lens by which problems are defined and addressed. Generating great answers to bad questions is all too common and not all that helpful in strategy.” Dan Simpson (Clorox) in the McKinsey Quarterly

Beliefs about Differentiation

Everyone wants to be different and special: brands and consumers alike.  Differentiation is a major motivation in strategy. Companies want a competitive advantage compared with their peers, and content needs to stand out in some special way for it to get noticed by audiences.  Differentiation attempts to address two issues simultaneously: things that a company can do that will benefit them but that their competitors are not doing, and things that audiences want but are not getting from the industry segment.

How can the brand be more relevant to customers than other brands?  Unlike the optimization approach, differentiation  does not simply ask how to become better than one has done in the past: it asks how to be better than anyone else.

Three core questions are at the heart of differentiation:

  • Why this?  What’s really unique about the product or service, and in what ways is existing product discourse commodified?
  • Why us?  How do people compare vendors and brands, and where are these factors being addressed inadequately?
  • Why now?  How might content influence the readiness of the customer to take action?

The product and vendor questions are familiar to those involved with market positioning.  Because of their familiarity, it takes a special effort to break free of routine points of comparison: features, benefits, and likability.  Last weekend I walked by a shop in Rome I assumed was a jewelry store.  Something was intriguing about it, so I stepped inside, and realized it was a pastry shop.  The shop had redefined pasty as jewelry: precious and regal, simultaneously reframing my conception of the product, and what a pastry vendor can be.

Brands less often think about how to position their communication with customers to bridge the gap between the customer’s readiness to act, with the brand’s readiness to meet pre-purchase and post-purchase customer needs.  Most brands behave by assuming customers will decide when they decide; the brand keeps badgering them in the meantime to stay top of mind, without probing into how customers decide.  But content has tremendous potential to close the gap between customer readiness and action. It can simplify choices, help customers evolve their preferences over time through dynamic customization, and address buyer concerns about risks and future needs for change.

Refining Beliefs and Testing Hypotheses

Being different can involve having a different set of beliefs from the rest of the field.  We embrace various beliefs about what differences make a difference.  Perhaps beliefs about what makes a company successful: Companies that do certain actions achieve outcomes as a result.  Or beliefs about how customers and audiences behave: Audiences that receive content with certain characteristics will behave in a certain way.

Beliefs about both industry behavior and audience behavior can be expressed as hypotheses that are testable.  With a hypothesis, it becomes possible to refine ideas and determine what precisely might be successful.  Consider the area of content marketing.  Content marketing is common: many brands are doing it.  At the same time, there is widespread debate about how effective content marketing actually is.  Anecdotal evidence suggests that some firms in some sectors can benefit using content marketing with some customer segments.  But there is no consensus that simply doing content marketing is valuable — it may be a waste of money, or even counterproductive if it prompts segments to opt out.

Beliefs many times reflect a hidden goal or wish the believer desires.  Consider some beliefs brands may hold:

  • Customers who share content from a brand are likely to become repeat buyers
  • Our brand can create content for customers that will encourage them to identify with us
  • Our brand can gain new customers by producing non-sales oriented content
  • People who do not typically use our brand may be willing to read helpful content from us if it was available
  • People want to be entertained, and will think highly of us if we provide them with content they enjoy
  • Storytelling is the most effective way to reach customers
  • People expect brands to provide advice about daily life issues, and want such information from our brand

These beliefs vary in their generality and plausibility.  Some may be true in some circumstances, but deserve to be teased apart to appreciate different dimensions involved.  Sweeping generalizations are rarely true in all cases. Some beliefs involve a leap in logic, and should be unpacked to identify intermediate causal dimensions.  Some beliefs may raise a “so what?” response: they sound good, but it is not explicitly clear what the broader benefit is.  Umbrella beliefs about firms and customers can be compared with available cross-industry evidence to see what general patterns and special circumstances may apply, if solid data exists at all.  People can falsely assume their beliefs about one industry or segment are valid for different sector or segment.  People may miss the possibilities of borrowing ideas from a seemingly unrelated area.  Once beliefs are expressed as a statement specific to a brand, or to an audience segment, they can actually be tested.

This kind of rigorous examination of beliefs helps find the kernels of truth in various beliefs that can be usefully developed into hypotheses that can be tested.  Once several plausible beliefs about industry behavior and audience behavior are identified and woven together, the brand has a unique proposition that it can explore.  Examples might be:

  • If our brand creates stories about fun romantic holidays that prospects like (hypothesis 1: brand can successfully create fun romantic holiday stories), they will book more travel services with us (hypothesis 2: bookings influenced by stories).
  • Millennials need, but can’t find, information about their long term disability risks (hypothesis 1: unserved need for content on millennial long term disability risks exists).  If we provide them with relevant information (hypothesis 2: target millennials, and see if they find information relevant), we will make gains with the millennial demographic selling insurance related to this.  (hypothesis 3: some sales activity results).

In the second example, we still see signs that wishful thinking might be at work, but we don’t know for sure.  If people can’t find content that doesn’t exist, that doesn’t mean it is needed or wanted.  What’s seen as relevant information may depend on the segment.  Insurers might consider information relevant to a segment, but the target fails to be interested by it.  Perhaps the insight gained from the hypothesis testing is that targeting millennials is not productive, but targeting their parents about the financial risks of a long term disability to their twenty-something year old children is effective.  In this fictitious example, the pursuit of a hypothesis leads to a genuinely novel goal to execute.

Goals Worth Pursuing

I’ve presented a range of approaches on how to identify fresh ideas that could have strategic value.  There is no need to pursue all these approaches at once, but each might be useful at different times when reviewing high level content goals.  By having tools that invite questions, the development of goals can happen continually, rather than being tied to an event trigger such as a content audit or redesign.

The process for testing and evaluating hypotheses is similar to processes used when monitoring analytics and optimizing content.  Unlike with optimization, a specific answer is sought.  One is looking for confirmation of an effect, rather than just trying to improve what’s happening.  In this sense it resembles the experimentation of growth hacking, although it is focused on innovative ideas screened based on their suitability to the challenge, rather than on copying and trying out marketing tactics widely used by others to see if they fit the problem.  Since the option was chosen because it looked promising, it should show some confirmation that it’s a viable goal, even if it has room to improve.  Testing a hypothesis triggers a decision: whether to keep the candidate goal and try to develop it further, or drop it and try a different candidate.

One benefit of having strategy centered on the discovery of viable goals is that it produces many candidate goals.  The brand can avoid the temptation to make a big bet on one audacious goal.  There are many possible goals worth pursuing, and that encourages creativity and experimentation.

Getting Strategic with Content: the Ultimate Goal for Content Maturity

Many organizations are still trying to close the gap between their current operations, and known best practices.  They are playing catch up, and haven’t yet reached the level of maturity with their content to focus on doing things differently, with the intention of out competing their peers.  They are understandably focused on improving their operations so they can execute plans and goals effectively.

But as content strategy takes root in organizations, and as processes and planning improve, the work of content strategy will be less reactive to fixing quality and operational problems, and more proactive, searching for ways to offer greater value to the brand and its customers.  Firms will stop thinking of content as a commodity to cost-manage, and think of it as a product with defined value.  The evolution of content strategy from process improvement to innovation would thus resemble the evolution of product manufactures from their past focus on total quality process improvement as the central competitive concern, toward considering design and innovation as contributing sources of competitive advantage.

All firms, no matter how mature their content operations, face the challenge of uncertainty.  They face resource dilemmas, and make decisions based on faulty assumptions.  In this respect, all firms need a way to work with imperfect information.  They can’t just follow the example of others.  They need their strategy to empower them to choose goals that meet their specific needs.

— Michael Andrews

The content strategy and marketing relationship

How content strategy relates to content marketing has generated much discussion, as various practitioners learn more about what each other does.  There is growing acknowledgement that content marketing needs strategy, but how this happens is still not widely agreed.  Some people speak of a hybridization called “content marketing strategy” while others refer to content marketing as simply the tactical implementation of content strategy — a related but distinctly later stage of activity.  Implicit in these formulations is a game of one-upmanship, placing one aspect or another as the less important detail.

I have created a simple diagram to show how each side needs to relate to the other.  I hope to bring greater specificity to the discussion than has been generally offered so far, without weighing down it with  long explanations.

How content strategy and content marketing should relate to each other
How content strategy and content marketing should relate to each other

I decided to align content activities according to whether they are primarily focused on brand content in general, or on the relationship with a specific audience segment.  Obviously, audience and content are two sides of the same coin, so there are some things I’ve classified one way that others might classify differently.  One common responsibility is content experience: making sure content offers audiences engagement.  Practitioners are welcome to re-classify specific tasks as they like: I am merely trying to highlight broad tendencies.   I wanted to avoid classification biases based on fuzzy notions of “strategic” verses “tactical” activities, or narrow notions of sales-supporting verses overhead activities.

A second caution is not to treat this classification as a way to organize internally, or to equate activity names to specific job titles.  Ideally, everyone involved in content should work together as an integrated team.  No one person will be expert on all these activities, and some activities may not be familiar to you individually.  The list of activities itself is only indicative, and not exhaustive.

Organizations practice widely different ways of dividing up teams involved with content, based on many factors including budgets, oversight responsibilities and so forth.  My modest hope is that revealing the mutual dependence of various parties on each other for the success of the whole will promote better coordination.

— Michael Andrews

Profitable insights from content marketing

In a previous post, I explained why a brand should not expect their content marketing programs to drive sales growth, because such expectations can interfere with a brand’s ability to build long-term relationships with audience segments.  In this post, I examine how building relationships with audiences using a content marketing program can lead to greater customer insights, support the development of the brand, and enhance profitability.

Marketing is fundamentally about identifying the needs of a segment, and understanding the profit potential the segment represents.  Content marketing enables long-term relationships with audiences.  Content marketing plays an important strategic role precisely because it has a long-term focus, rather than the short-term focus of promotional content.  As Philip Kotler notes: “marketing is not a short-term selling effort but a long-term investment effort.” Brands need engaging content to support that long-term effort.

Relationships enable understanding of marketing segments

Understanding customers for marketing purposes requires a higher resolution picture than offered by personas.  Personas may be a starting point for thinking about segmentation, and may have value helping content writers develop their content, but they don’t provide the deep insights available from data.  Personas should reflect data, but can’t themselves represent that level of detail.

Content marketing can be a fantastic tool for understanding customers.  The more you talk about the interests of your customers, the more they will open up and the more you will learn.  While customer research using content marketing is not a substitute for ethnographic research or other qualitative techniques, it can deliver tremendous insights that can deliver profitability.

Businesses exist to be profitable, and a key part of that is knowing who is profitable.  Audience directed content can help answer at.  When content is focused on the natural interests and motivations of people, they will share their views and preferences in ways more faithfully than in surveys or focus groups.

Part of the purpose of content marketing is to learn what segments are most profitable for which products you offer.  Targeting content helps to distill target market segments according to actual motivations.

Brands can learn many things about potential customers through content:

  • the interests of different people, according to how attracted they are to content of different themes and genres
  • what their attitudes to different topics are, and how their attitudes may shift according to different dimensions of a discussion
  • their values: what they spend time on, what they most talk about and share with others
  • demographic information: household characteristics or profession, either self revealed or inferred through content usage, which can be cross-referenced with offline research sources
  • financial orientation: concerns about finances and willingness to spend on certain kinds of products and services, which can be cross-referenced with offline market data about income, assets, spending and credit

Content can foster audience activity by presenting audiences something they care about, and offering them something to talk about.  This activity produces data on:

  • content consumption behavior
  • search terms used to discover content
  • social interactions relating to content

Through the use of standard digital analytics techniques involving cookies and IP address identification, marketers can learn more about who is engaging with the content, and where else they spend time online.

The process is iterative.  As marketers learn more about distinctions that matter within a segment, they can refine their segmentation to adjust the focus of content, potentially creating new areas of content focus that are even more closely aligned with the interests of a group.  They may also conclude some segments aren’t likely to be profitable, and avoid actively marketing to them.

Even though this content is not aimed at selling, the insights that can be developed from it are useful for developing sales oriented content to present when people from a segment have a need to purchase something.  First, the insights provide guidance on how to message to a segment by using criteria that matter most to them.  Second, the insights help to personalize the offer.  The marketers understand how a segment evaluates a product, and how their values, interests and general circumstances come into play.  They get better insights into what are the chief dis-satisfiers for a segment, can tailor what they recommend based on expected satisfaction of a particular model for a given segment, and offer incentives as necessary to prevent “buyers remorse”, be they discounts codes or coupons, upgrades or membership award perks, or after sales service.

The exact mix of the personalized offer has a big impact on the profitability the brand realizes, so being able to optimize the mix through data developed from audience interaction with content is highly valuable.  Content can clarify how personal values translate into revenue value.  To cite a basic example, some customers will be more time sensitive than others, so they will value time more highly.   The widely variable pricing and service levels the airline industry offers different passengers is based on projected customer profitability.  Some of the this profit yield maximization is starting to be adopted by other industries (without the baggage of having high fixed costs for an essentially undifferentiated product.)

Aligning brand values with values embraced by market segments

Since the purpose of content marketing is to develop a long term relationship rather than a short term sale, it provides an excellent vehicle for brand building.  Calculating the ROI on brand activities is more involved than calculating the profit margin on sales, but it is well established that strong branding reduces sales costs, since you have to do less “selling” when people already trust your brand.

Emotionally engaging content is a powerful way to develop a sense of shared connection with audiences.  You have enhanced your brand with the target segment to the extent your content captures a sense of shared identity with the audience engaging with it.  Customer segments will share common concerns and interests (the segmentation), and the brand needs to learn what these are and how they relate to the brand’s values.  Brands can promote and contribute to the interests of the segment, by offering them exclusive content resources not available elsewhere.  Content can be tailored to match segment’s interests, and highlight common values between the segment and the brand.

The role of content marketing is to translate high-level brand values into content that embodies more specific brand attributes that will resonate with various audience segments.  The content will have a niche focus, but by using a coordinated content marketing strategy, individual segments can be aggregated into larger groupings to align with products and divisions in an organization.

Applications

To see how brands can use content marketing to enhance profitability without resorting to using content as a sales tool, we will examine an example from a unit of HSBC.  While many consumers rate their bank as being unhelpful, HSBC Expat, a unit that manages funds for people who live in foreign countries, has managed to develop content that shifts common brand perceptions.  They have created a community open to all (one doesn’t need to be a customer) that focuses on issues of vital concern to expats. Some of these issues are financial, but most of them relate to other life concerns such as housing or schooling. HSBC contributes some of the suggestions, while community members supply their own tips.

A screenshot of HSBC's content marketing aimed at British expats
A screenshot of HSBC’s content marketing aimed at British expats

The content works well on many levels.  While I don’t have any visibility into the internal metrics of the site, one can see that it has been successful attracting participation.  The content is valuable to expats who access it, and it also provides HSBC with insights into the concerns of expats, and what they most value.  Many comments concern issues like language, or making friends.  Other issues are more specific to financial topics such as taxes.  HSBC can understand more about the various audiences who interact with the content.  Some people will already be expats, while others will be thinking about becoming expats, and some may be ready to give up the expat life and move home.  By providing an emotionally safe space to discuss these topics, free of sales content, HSBC can understand how to serve needs of prospective customers in different situations, and be seen as a brand supportive of their needs.

This example uses a community model, but other media such as videos and games can be used to foster greater engagement.  The focus of the content can be anything that matters emotionally to an audience segment that has relevance to the brand.  In many cases brands develop content around a theme that isn’t directly tied to the brand’s products, but represents aspects of the brands values that resonate with audience segments, which could be values such as performing at one’s best, or innovation and creativity.

Content marketing’s unique role

When brands embrace the possibilities of content marketing as a living laboratory that supports their evolution, they can gain precise insights from small, well-defined segments.  In contrast, when brands expect content marketing to deliver sales growth, they have to chase large numbers of people, and can’t offer content truly targeted to the interests of any group.

There remains a role for persuasive sales content to support the customer’s buying journey, and task focused content to support after sales support.  People who are motivated to do something expect to be persuaded that your choice is the right one.  When they decide what they want to do, they want to get on with it, and need content to facilitate that.  But recommendations only work when people are ready to make a decision, and are interested in listening to the opinions of the brand.   Persistent persuasion, even when subtle, is exhausting, and people’s attention will wonder elsewhere.

To become engaging and sustainable, content marketing needs to provide emotional safety for audiences.  Content marketing also needs to provide brands with actionable insights that can enhance their profitability in order to become a sustainable strategy.  Neither of these things is easy to do.  Engaging content requires enormous creativity and sensitivity to audience needs.  Insights also require creativity to identify, and imagination to see how they can create big opportunities for brands.  Despite the effort required, the payoff can be great precisely because so few brands do either of these things well.

—Michael Andrews