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|Federal Highway Administration > Publications > Public Roads > Vol. 62· No. 3 > The Seven Habits of Highly Effective Marketers|
The Seven Habits of Highly Effective Marketers
by Stephen W. McDaniel
With the publication of Marketing Highway Technology and Programs in late 1990, the Federal Highway Administration (FHWA) acknowledged that the marketing concept - understanding the needs of the market and providing products or services that satisfy those needs - has a role to play in accomplishing the mission of the agency. In the administrator's statement at the beginning of this publication, then Federal Highway Administrator Thomas D. Larson wrote, "Marketing very aptly describes what we need to do."1
Many federal officials who equated "marketing" with selling believed that marketing was applicable only in the private sector. But slowly, a broader perspective of marketing and its value to the organization is emerging, and most officials now would agree with FHWA marketing specialist Martha Soneira, who recently said, "Basic principles and techniques of marketing, typically associated with corporate America, also meet the needs of the public sector."2
In the "early days" of marketing in FHWA, the marketing effort was almost exclusively focused on facilitating technology transfer, but recently, FHWA marketing specialists have been promoting the use of marketing as a "business tool that can be applied across every discipline found within an organization."3 This perspective is reflected in the principles of FHWA's Quality Journey to create and sustain continuous quality improvements and in the FHWA National Strategic Plan.
The strategic plan recognizes that "generally, [FHWA's] accomplishments result from cooperative efforts rather than through compliance," and the plan is full of language such as "identify new initiatives to meet emerging needs," "gathering input from our customers and partners," "committed to excellence in service to [FHWA's] customers and partners," and "[building] on ongoing initiatives in quality, customer feedback, and program evaluation."4 All of this is part of the marketing process.
From 1991 to 1997, I conducted 30 marketing workshops across the United States for FHWA. In these workshops, I was privileged to interact with dedicated highway professionals who were interested in improving the agency's and their own abilities to develop innovative highway products and programs and then to move them through the "system." I observed many impressive marketing efforts in various areas of FHWA.
Likewise, during my 25-year business and academic career (most of it spent as a marketing professor at Texas A&M University), I have been impressed by the marketing efforts of many companies in the business world. I have become increasingly interested in why some companies have more success than others. What separates the most successful marketers - such as Procter & Gamble, Johnson & Johnson, Dell Computer, and Wal-Mart - from the less successful ones? What do highly effective marketers do to achieve their successes?
Based on research and consulting projects I have done through the years and from my own observations of companies' marketing practices, I put together a list of seven key success factors for marketing. These seven factors are what I see the good marketers doing. Borrowing semantically from Stephen R. Covey,5 I have entitled these success factors "The Seven Habits of Highly Effective Marketers."
In this article, I present these habits, as well as some business and highway examples of each. My hope is that administrators, program managers, and others throughout the highway community will find these observations helpful in planning and implementing marketing efforts to support highway programs.
Habit #1: They are Customer-Oriented
So, marketing begins with finding out what customers want or need, developing that product, informing customers about it, then making it available to them. The business world is full of examples of products that have been successful, not because of "slick selling," but because someone found out what people needed and then provided it to them.
A recent example is Colgate Total toothpaste. Introduced in December 1997 by the Colgate-Palmolive Co., Total toothpaste, which contains a wide-spectrum antibiotic, is the first oral pharmaceutical ever approved by the Food and Drug Administration. A team of 200 scientists at Colgate spent 10 years and $35 million developing Total toothpaste.7 Their charge was to develop a good-tasting dentifrice that fought bacteria and did not get immediately washed away. With aging baby boomers increasingly concerned with gingivitis, the product targets consumers aware of this bleeding-gum problem. The idea of developing a product to meet a specific customer need has resulted in the largest marketing campaign in the company's history and a sure blockbuster product.
Examples of customer-oriented marketing efforts are also found in the highway field. For more than 15 years, FHWA's Local Technical Assistance Program (LTAP), formerly the Rural Technical Assistance Program (RTAP), has been a model of being customer-oriented. LTAP centers have established an impressive track record of helping local governments develop a sound transportation system through training, technical assistance, and technology transfer. A relatively new program component that is dedicated to meeting the distinctive needs of Native American tribal governments shows how a customer-oriented program should work.
The Native American Local Technical Assistance Program (NALTAP), also known as the Tribal Technical Assistance Program (TTAP), has several customer-oriented objectives.8 The six TTAP centers avoid holding their classes, workshops, and other training programs at the centers or even hub locations. Instead, virtually all TTAP-sponsored programs are held where they are most needed and can be most effective - at the customer's location. Through questionnaires, customer evaluations, and other forms of feedback, the centers regularly solicit opinions from people representing local tribal colleges and governing bodies. The TTAP centers focus on identifying customers' needs and planning programs to respond to those needs.
Habit #2: They Know What's Happening
One company that has consistently done a very good job of getting the right kind of information from the right sources is Dell Computer. Founded in the mid-1980s by 20-year-old college student Michael Dell, the company has become the darling of Wall Street. During the 1990s, Dell's stock price has increased at a rate five times that of Microsoft - a $1,000 investment in Dell in 1990 would now be worth $300,000.
In 1992, Michael Dell became the youngest CEO ever to make the "Fortune 500" list, and with a net worth today of more than $7 billion, he is one of the richest individuals in the world. According to Fortune magazine, "Michael Dell's distinctive edge is his understanding of ... [the] landscape in the computer business." Dell Computer's vice chairman adds, "He has an incredible sense of the market."
The following provides some idea of how this highly effective marketer has obtained this good feel for the computer business: "Dell ... spends one day each week checking out the innovations at one of the site's tech facilities. He also spends a ton of time with customers, including a recent visit to Chicago where he participated in a sales presentation to senior executives. For Dell, customer contact isn't just a question of boosting the business; it's staying up on and in tune with an ever-changing market."9
Just as highly effective business marketers require good information from various sources to make good business decisions, highly effective highway decision-makers likewise require good information. The primary sources of this critical market information are the driving public, cities, states, industry, academia, and research, as well as other FHWA divisions and government agencies. One particularly commendable effort by FHWA in this regard is the International Technology Scanning Program.
Several teams recently completed information-gathering trips to nine countries to observe innovative highway programs and practices that have the potential for transferability to U.S. highway systems. Finland and Sweden were the source for weather-related traveler information. Information on congestion management was obtained from The Netherlands. Traffic management and transit program information was picked up in the United Kingdom. Bridge structure information was obtained from Japan, Germany, and Switzerland. And information-gathering trips to New Zealand and Australia looked at road safety audits as a means to improve highway safety.10
With so much information available, better access to and management of highway information that is most relevant to a specific highway issue are always needed. DataPave, a new software program, is an example of one such product. For 10 years, highway agencies have been collecting data from thousands of long-term pavement performance (LTPP) experiments. The program has a set of tools for searching, viewing, and manipulating the data, permitting a PC-user to access the entire LTPP database. As a result, virtually any information a decision-maker might like to have about an LTPP site can be quickly obtained. And this site information can be selected by key demographic characteristics - experiment type, climate, traffic, geographic location, and others.11
Habit #3: They Focus
Market segmentation involves conceptually breaking down the entire population of potential customers into groups. These groups, or segments, are then viewed as possessing some sort of homogeneous characteristic related to their buying behavior. This characteristic, or segmentation category, might be related to demographics - such as age, gender, location, or buying power - or to some psychographic factor - such as lifestyle, attitudes, or behavior.
Target marketing involves selecting the specific segment(s) within a segmentation category on which the marketing efforts will be focused. Market segmentation and target marketing recognize that an organization cannot be all things to all people. Instead, the highly effective marketer must focus. And if there is more than one segment on which the organization desires to focus, then a different marketing effort may be required for each segment.
Several years ago, I served as a consultant to a small company that marketed devices that attached to windows, giving them extra strength and providing protection from high winds. In formulating the best marketing strategy for this product, initial marketing research indicated that two demographic categories were probably the best on which to segment. The first was geographic location - eventually targeting people who lived in hurricane-prone areas along the Gulf of Mexico and the Atlantic Ocean. The second was type of property (residential or commercial) - eventually targeting facilities supervisors in high-rise commercial businesses. The resulting target market of "businesses located in high-rise buildings in the 10 cities along the Gulf and Atlantic coasts that were most frequently hit by hurricanes" eliminated most of the U.S. population. But this process provided a well-defined target market on which to efficiently and effectively focus the entire marketing effort.
In 1988, the South Carolina Department of Transportation (DOT) realized it had to do something about the alarmingly high level of highway fatalities in the state - the third highest in the nation at the time.12 A public relations and advertising firm, Fisher Communications, was hired to develop a statewide advertising campaign designed to call attention to the problem and to bring about safer driving behavior. The result was a five-year campaign entitled, "Highways or Dieways? The Choice Is Yours."
The hard-hitting television campaign was developed with a specific target audience in mind - the person with an attitude that says, "I'm a safe driver; nothing could happen to me." Depicting real-life situations, the campaign was designed to convince the person with a high level of self-perceived invincibility that they were not as safe a driver as they thought they were. For example, one spot showed a woman driving a minivan down the highway while looking in the rearview mirror and putting on lipstick. In slow-motion and horrifying detail, the spot then dramatically depicts the fatal result.
The South Carolina campaign was highly effective. Over a five-year period, the state experienced a 38-percent decline in its death rate. The number of highway deaths per 100 million miles (160 million kilometers) of vehicle travel dropped from 3.7 to 2.3.
According to Fisher Communications president Kevin Fisher, the key to the success of the campaign was the effective targeting of that driver who feels invincible behind the wheel. Many people wrote or called the South Carolina DOT to say things like, "I feel like I just saw myself in that television ad. I've done that, but never again!" Clearly, the targeting strategy hit its mark.
Habit # 4: They Are Different
There are many bases for a sustainable competitive advantage. The two most common are high quality and low cost. Such consumer brands as Mercedes-Benz, Rolex, and Maytag have achieved sustainable competitive advantages based on quality, while Southwest Airlines, Wal-Mart, and Timex have successfully differentiated themselves on the basis of low cost.
Southwest Airlines has done an excellent job through the years in differentiating itself in a highly competitive industry. Begun in 1971 as a strictly regional airline serving only three Texas cities - Dallas, Houston, and San Antonio - Southwest Airlines has been successful in every new market it has entered. It now operates from 53 airports from Los Angeles to Baltimore.
Southwest Airlines has developed a highly effective system for keeping costs down and keeping key services up. Although other airlines have tried to duplicate the Southwest model, none have yet been successful. The following are some of the components of Southwest's model:
The results have been impressive. Southwest Airlines has the lowest seat-per-mile cost in the airline industry, while routinely recording the highest customer satisfaction scores in the industry. As a result, Southwest Airlines is the only major airline to record more than 25 consecutive years of profitability. Southwest is a truly effective marketer that has successfully differentiated itself in the marketplace.
In the highway field, the road weather information system (RWIS), a unique product that was developed through the Strategic Highway Research Program (SHRP), has a competitive advantage based on both quality and low cost. It is a better system than the alternatives, and it also saves money. This snow- and ice-control technology monitors pavement and weather conditions to provide the real-time information necessary for effective coordination of anti-icing and snowplowing efforts.
The benefits of this technology are significant and readily discernable. The amount of time spent by crews and equipment clearing snow and ice is dramatically reduced, and the amount of salt, sand, and other materials needed can be significantly reduced. One estimate shows that RWIS technology, used in conjunction with anti-icing procedures, can result in annual savings of $416 per kilometer in areas with 100 hours of storms per winter to $4,385 per kilometer in areas with 900 hours of storms.
Reported case studies have verified the advantages of RWIS. The North Dakota DOT saved between $10,000 and $15,000 in four storms by cutting back on the use of sand on one bridge. Another estimate shows that using the RWIS system along a 153-kilometer stretch of the West Virginia Parkway saved almost $9,000 per storm.13
New highway technology and programs are much more likely to be adopted when it can be shown that this new approach is significantly different from the alternative approach.
Habit #5: They Communicate
One of the most effective advertising campaigns in recent years is built around the three words "Like a Rock."
In 1991, the Chevrolet truck division of General Motors had a major image problem. Although engineering tests showed that the Chevy truck was one of the most dependable and well-built on the market, consumers did not perceive it that way. Marketing research studies consistently showed that Chevy trucks were perceived as "wimpy" and as the least dependable, least durable trucks on the market.
Without substantially changing anything about the product, the company instead radically changed its communication approach or advertising strategy. The Campbell-Ewald advertising agency came up with the perfect solution for the product's image problem - Bob Seger, his 1984 original composition "Like a Rock," and captivating visual graphics demonstrating the ruggedness of the Chevy truck.
Now in its seventh year, the "Like a Rock" campaign has catapulted Chevy trucks to the top of the industry and has placed Chevy trucks in the same category of perceived quality as Mercedes-Benz, Lexus, Cadillac, and BMW.
Speaking of pick-up trucks and long-running ad campaigns, the Texas DOT has had great success for more than a decade with a litter prevention campaign built around just four words - "Don't mess with Texas."
Based on extensive marketing research efforts by GSD&M, an Austin-based advertising agency, the "heavy litterer" was identified: a pickup-driving male, 18 to 34 years old, who likes sports and country music, has an anti-authority disposition, and is not motivated by appeals to civic duty. Supplemented with more than $114 million in free public service broadcast time, TxDOT effectively targeted this market segment with a television and radio campaign featuring well-known sports figures (then Houston Oiler quarterback Warren Moon, boxer and Houston native George Foreman), country singers (Willie Nelson, Jerry Jeff Walker, and LeAnn Rimes), and others who tended to be highly respected by these young macho men.
This no-nonsense campaign has received several awards, including the "International Broadcasting Award" presented by the Hollywood Radio & Television Society for the world's best television ad and an FHWA award given annually to the state agency showing the best anti-litter effort.
Most importantly, during the first five years of the campaign, visible roadside litter in Texas decreased 72 percent and the number of cans along Texas roads dropped 81 percent.
Although extensive (and expensive) media advertising is usually not possible for promoting highway programs and products, effective communication can, nevertheless, take place through any media. In September 1997, we did a survey of 24 individuals attending the Lexington, Ky., meeting of the Extended SuperpaveT Technology Delivery Team. We listed several communication methods and asked the respondents two main questions: In your opinion, to what extent has the Federal Highway Administration used each of these so far in promoting Superpave? In your opinion, how effective is each of these methods for promoting Superpave?
Figure 2 displays the results of this survey. Two key findings are apparent. First, the communication methods perceived to be most frequently used by FHWA in promoting this program are not necessarily the ones perceived to be most effective. Second, the FHWA communication methods perceived to be most effective, at least for this program, tended to be those of a personal, rather than a nonpersonal, nature. Although one would probably want to use a combination of several communication methods to promote a highway program, the results from this survey show that a highly effective Superpave program marketer would want to make sure that such methods as training courses and presentations to groups are included in the communication program. It may be that the communication methods judged to be most effective for this program would be similar for other FHWA programs.
Habit #6: They Grow
For most business marketers, growth typically occurs from getting more people to buy the product. This might come from convincing them to try it for the first time or getting them to switch from a competitor's product. In some slow-growth industries where the market may be rather saturated, much of a company's marketing effort might be directed towards convincing other companies' customers to switch. Pepsi spends much of its advertising budget trying to convince people to switch from Coke. Burger King tries to change people's automatic response to stop at McDonald's for a hamburger. And who hasn't been barraged by telemarketing and direct-mail pleas from credit card-offering banks and telephone companies telling us we'd be much happier with them?
Sometimes growth occurs from finding new uses for a product and successfully communicating these additional uses to customers. For example, over a period of several years, the Florida Orange Juice Growers Association has convinced people that its product really is "not just for breakfast anymore." Now it has begun a campaign telling people that because orange juice can help to fight cancer, people should drink more of it at one time.
Current print and television advertising shows people drinking a small glass of orange juice, and the ad has the tag line "Fight Cancer." Then an oversized glass dramatically appears with another tag line: "Fight Cancer Harder!"
Other examples include the classic Arm-and-Hammer baking soda ads showing consumers putting it in the refrigerator, down the drain, and in the cat litter box to combat smells and the WD-40 ads showing people loosening bolts, stopping squeaking hinges, and even lubricating shower-door tracks. This type of creative marketing can be very effective for "growing" sales.
In the current political environment where government downsizing is probably viewed more favorably than government expansion, growth of highway programs might at first appear to be undesirable. But one should realize that business downsizing is also currently in vogue, and yet, revenue, sales volume, and market share increases are still desired. We are not talking about organizational growth; we are talking about the growth of the influence of the organization in the marketplace.
Highly effective marketers are those who use their resources more efficiently so that, assuming a socially beneficial product, the marketplace is better off from the greater use or adoption of the product.
Within FHWA, the Superpave Program has experienced impressive growth in recent years. Since 1993, the FHWA Superpave Technology Delivery Team has formulated and implemented strategies for getting the Superpave system adopted by the highway community. According to survey data compiled by the Superpave team of lead states, 93 Superpave projects were awarded in 1996. The following year, 350 projects, an increase of 276 percent, were awarded. In 1998, 1,339 Superpave projects were awarded - a 283-percent increase over 1997 and a 1,340-percent increase over 1996.14
In a headline reminiscent of the famous Florida orange juice slogan, a recent FHWA publication proclaimed, "The Superpave System: Not Just for Roads Anymore."15 The article described the growing popularity of the Superpave system. Not limited to state highway agencies and local governments, Superpave mixes are being used on parking lots of businesses and churches.
Growth in the adoption of the Superpave system is clearly an emphasis of the Superpave lead states team. In 1996, Superpave mixes made up just 2 percent of the hot-mix asphalt used by the states. This increased to 16 percent in 1998. By the year 2000, the team goal is for Superpave mixes to account for 88 percent of national tonnage awarded.
Even the very best consumer product marketers would be envious of this superb level of growth.
Having good customer relationships is beneficial to both the organization and the customer. For the organization's benefit, satisfied customers will tell their friends, providing the most effective kind of promotion possible - positive word-of-mouth advertising. A good relationship with a customer also increases the likelihood of getting future business from that customer. Customers are more likely to do business with someone they know and trust.
And having good customer relations can also lower costs for servicing a customer because finding and developing a new customer can be much more expensive than cultivating a present customer. One study showed that companies can improve profits from 25 percent to 85 percent by reducing customer defections by just 5 percent.16
A good relationship is also beneficial to the customer. Customers view repetitive dealings with a familiar organization as less risky. For example, when we built our second house, we went with the same builder who had built our first house. The main reasons were that we knew what we were getting and we had positive prior dealings with that builder.
At the most fundamental level, people want to be dealt with on a one-on-one basis. Relationship marketing addresses the basic human need to feel important. We appreciated doing business with a builder who knew our names and remembered our kids. And because the organization has dealt with the customer before, the customer might receive more effective service delivery from the organization. Relationship marketing allows the organization to become more knowledgeable about the customer's requirements and needs. Because the builder knew our preferences, he could better meet our expectations and satisfy our needs.
Figure 3 shows the five levels of relationship marketing.17 At the most "basic" level, a marketer sells the product or service but does not contact the customer again. At the "reactive" level, the marketer sells the product or service and encourages the customer to call if they have any questions or complaints. At the "accountable" level, the marketer phones the customer a short time after the sale is completed to see whether the product/service is meeting the customer's expectations. The marketer also solicits suggestions from the customer so that the organization can continuously improve its offering.
The last two levels of relationship marketing emphasize true customer relations. At the next-to-the-last level of relationship marketing, the marketer is "proactive" and contacts the customer from time to time with helpful information. Finally, the ultimate in relationship marketing is when the marketer and customer essentially have a "partnership." The marketer works continuously with the customer to discover ways that lead to more customer satisfaction. This partnership arrangement begins at the product/service idea stage and continues for as long as the product/service is still in use. Although not every situation lends itself to a partnership type of arrangement, many high-ticket and long-term projects do.
Through SHRP, FHWA has generally attempted to build customer relationships and develop a "partnership" level of relationship marketing. From the very beginning, customer (state) input was obtained, along with input from industry, academia, researchers, and other highway interests. FHWA worked closely with the state and local highway agencies to test under real-world road conditions the 100-plus products identified by SHRP. Considerable effort was made to provide the training, demonstration, and other resources necessary to use the products.
In the March-April 1998 issue of Public Roads, Michael Halladay, chief of the Technology Management Division within FHWA's Office of Technology Applications and manager of the SHRP Implementation Program, provides an assessment of SHRP. He stresses the important role of "creative partnerships" in successful SHRP efforts. Under the subheading, "Partnership Is the Key," he refers to the second phase or "post-research phase" of the SHRP program. "The second phase built on the successful partnerships created during the research phase. The partnerships functioned through distinct technical working groups (TWGs) and expert task groups (ETGs) composed of highway agency, industry, academic, and FHWA representatives, whose specialized guidance and careful planning ensured that any products developed met specific, identified needs."18
Now as the products coming out of SHRP are being adopted, FHWA's role shifts to making sure that the products are performing properly, are being used properly, and that any problems for the user are being addressed. As customer relations are emphasized and partnerships are cultivated, everybody wins.
Within FHWA, all employees must realize their critical role in helping the agency succeed in each of the seven areas emphasized in this article. Pavement engineers must make decisions from a customer-oriented perspective. Bridge engineers should know what is happening in their field, in the highway community, and in their local area. Management should make sure that every program has a focused approach so that specific target results can be achieved. Continual efforts should be made to find the best way of measuring pavement stress or fixing potholes so that the method is significantly different from the status quo or other available options. Every engineer should be continually growing in his/her professional development and should be contributing to the continued improvement in the effectiveness of the agency. Highway researchers should use the most effective tools available to communicate their research findings to others. Technical support personnel should be willing to give that extra service necessary to build customer relationships. In short, everyone in the agency must be doing marketing.
As the seven habits of highly effective marketers are implemented throughout FHWA, not only will better and safer highways result, but better relationships with the various partners of highway agencies will be developed.
Stephen W. McDaniel is a professor of marketing at Texas A & M University in College Station, Texas. Dr. McDaniel is co-author of two books, Consumer Behavior: Classical and Contemporary Dimensions (Little, Brown, and Co., 1982) and Cases in Marketing Strategy (Merrill Publishing Co., 1984), and 60 journal articles in the field of marketing. From 1991-1997, he conducted 30 highway technology marketing workshops for FHWA. He has a bachelor's degree and a master's degree in business administration from Texas A & M University and a doctorate in business administration with a major in marketing from the University of Arkansas.
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