Upstream Marketing

Unlock Growth Using the Combined Principles of Insight, Identity, and Innovation

Tim Koelzer, Kristin Kurth

• Publisher: Greenleaf Book Group Press
• Year: 2021
• Print ISBN:
  9781626347519
• eBook ISBN:
  9781626347526
• Topic: Business
• Subtopic: Finance
• Index: Business

In Upstream Marketing, authors Tim Koelzer and Kristin Kurth share best practices, research, case studies, and analysis informed by their more than twenty years of experience helping transform client brands and businesses through their work at EquiBrand Consulting, a top management consultancy. The result is a groundbreaking deep-dive into the fundamentals of upstream marketing—the process of identifying and fulfilling customer needs, which relies on the strategic implementation of three core principles: insight, identity, and innovation.

​An invaluable tool for business leaders looking for mindset, strategy, and processes that will help them improve their organization proactively, instead of reactively. Upstream Marketing includes meticulous analysis of seven profile companies, breaking down the values and principles that make them great—and offering some how-to tips you can apply yourself. The authors also draw on examples from their own work with clients to help illustrate how applying the principles of upstream marketing correctly and at the right time can impact the health, growth, and success of any business.

CHAPTER 1

UPSTREAM MARKETING—AN OVERVIEW

“It is well known that ‘problem avoidance’ is an important part of problem-solving. Instead of solving the problem, you go upstream and alter the system so that the problem does not occur in the first place.”

—Edward De Bono, author, Serious Creativity

“Because the purpose of business is to create a customer, the business enterprise has two—and only two—basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”

—Peter F. Drucker, author, The Practice of Management

“As to methods, there may be a million and then some, but principles are few. The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble.”

—Harrington Emerson, management consultant and efficiency expert

THERE’S AN OLD STORY ABOUT a man searching at night on his hands and knees under a streetlight, looking through the grass. A passerby stops and asks what he’s looking for, and the man replies, “The keys to my car.” Being helpful, the passerby joins in the search. After some time, with no success, the passerby asks whether the man is certain he dropped the keys near the streetlight. “No,” he replies. “I lost the keys somewhere across the street.”

“Why look here then?” asks the surprised and slightly irritated helper.

The man responds, “The light is much better here.”

If one thing is clear from our years of management consulting, it is this: Most organizations search for growth in all the wrong places. They believe an ad campaign, refreshed website, digital marketing funnel, more content, social media, sales promotion, or similar effort is going to drive sustainable growth.

Many CEOs, business leaders, and marketing managers see their playing field as largely fixed and overemphasize downstream marketing, failing to embrace the power of upstream marketing to build strong brands and transform their business. In some cases, they’ve surrendered the foundational principles of marketing to the digital era, including an overreliance on marketing push tactics.

The purpose of Upstream Marketing is to change that perspective and provide the principles, tools, and techniques to redefine the playing field and unlock growth.

This book introduces the concept of upstream marketing, defines it, and establishes a new framework to drive growth, drawing on core principles of insight, identity, and innovation. These principles, when combined with six upstream marketing best practices and four business framing questions, facilitate a strategic approach to fulfilling customer needs and creating new market spaces.

The principles and practices are universal and apply to any organization, regardless of industry, company size, or geography. So, whether you are an executive in an established company, a small business owner, on the board of a nonprofit organization, a student of marketing, or just interested in understanding the concept of upstream marketing, you can benefit from this discussion.

BEST PRACTICES IN CORPORATE GROWTH

“What’s the headline?”

That’s the question the lead partner asked our consulting team during an internal strategy session. It was the summer of 1997, and Tim was working for another consulting firm, before EquiBrand.

Our team was assisting a global apparel manufacturer develop a process to stay at the leading edge of innovation. The client wanted to define a standard approach to growth and innovation, then implement it across the half dozen or so business units within the company.

The project had two broad parts—a design phase and an implementation phase. The design phase kicked off with an internal assessment to get up to speed on our client’s business and establish initial hypotheses. How were leading companies able to consistently grow their business more, and faster, while others in the same industry lagged? What were the major steps, activities, outputs, and requirements to achieve above-market growth?

Our job was to define best practices that distinguish “good” companies from “great” companies, then use that information to design the process. (If this “good to great” approach sounds familiar, that is because it’s a fairly common way to benchmark best management practices.)

We selected six companies across a spectrum of industries based on financial performance and company access: First Union (now part of Wells Fargo), Gillette (now part of P&G), IBM, Nike, Gap, and The Walt Disney Company. In exchange for participation, the companies received a copy of the study findings.

With the list solidified, we divvied up the companies across the team and set out to gain best practice insight. The first profile company our sub-team visited was Nike. At the time, Michael Jordan and the Chicago Bulls were in the middle of their second three-peat world championship performance after their first three-peat win a couple of years earlier.

With Jordan back in the game and at peak performance, Nike’s Air Jordan was generating huge revenues for the company. Nike had a significant athletic footwear business, though not much else. It may be hard to imagine now, but in 1997, there was no Nike Golf, no Nike Soccer, and no Nike Tennis.

Through research before the visit, we learned that one year earlier, in 1996, Nike had signed a then little-known, twenty-one-year-old Tiger Woods to a $40 million, five-year contract, despite Nike’s limited presence in the golf category.

Also in 1996, Nike made clear its commitment to the world’s most popular sport, soccer, by signing the CBF—the Brazilian Football Confederation, making good on CEO Phil Knight’s belief that, “We will only truly understand football when we see the game through the eyes of Brazilians.”¹

Looking at the business through the eyes of the consumer was a recurring theme in assessing Nike. It became even more apparent during our visit to Portland, Oregon.

When our team pulled the rental car into Nike’s headquarters, we thought we had made a wrong turn. We were expecting a collection of corporate office buildings. The Nike grounds, though, looked more like a college campus or sports complex. Soccer fields. Volleyball nets. Running tracks. It was early morning but felt like lunchtime or a Saturday afternoon. Employees were out on the fields, playing, working, and experiencing the category and brand.

Nike’s culture, deeply associated with athletes, sports, and design, was vividly on display that day. Phil Knight’s mantra was evident. His team looks at the business through the consumers’ eyes. In fact, the Nike team became the consumer, gaining more in-depth insight while having fun!

We didn’t get to meet Phil Knight that day, but did spend time with his lieutenants to understand Nike’s approach to marketing and innovation. The interviews helped define how Nike successfully innovates product after product, time after time.

Weeks later, the full consulting team met to compare notes and debrief research findings across best practice companies. We had hoped to uncover a standard innovation process to replicate with our client team. That didn’t happen. The companies were too different, and no single process emerged.

Instead we found a common set of principles across all best practice companies, which was far more impactful. We used case evidence and systematic review to “structure the unstructured” in preparing findings. Our team then presented initial recommendations on innovation best practices and obtained approval from the client to employ them in the pilot phase.

This second project phase was where the study differed from typical “good to great” comparisons. After the design phase, we worked directly with the client to pilot a new approach to innovation real-time with a couple of their divisions before refining and rolling it out across the organization.

In the end, we significantly improved our client’s business condition by using a principles-based approach to growth, adaptable across individual business units. We obtained deep consumer insight and developed and launched numerous new products, with results far exceeding the cost of the study. It was a very favorable return on investment.

GROWTH STRATEGY EVOLUTION

Over twenty years have passed since that initial best practices study. Revisiting our findings today suggests it was a good start. We identified and cataloged many classic tenets of corporate growth—the importance of customer insight, a strong brand, and an innovation mindset. These growth-drivers are foundational to marketing, as important today as they were then.

Still, our initial study had its shortcomings. That work occurred before the emergence of the “digital economy,” which, of course, is now just the economy.

Today, business change occurs much faster than it did when leading companies like Apple, Amazon, and Google were in their early stages. Many of the management principles that drive these companies today, including their approaches to product development, organization design, and culture, weren’t well understood then.

Certain processes and principles, like rigid, top-down strategy development and a multistage-gate approach to innovation, have largely been replaced. Now, practices like agile planning, design thinking, and minimum viable products (MVP) are proving more effective.

Twenty years ago, customer input came at later and more discrete stages in the product development cycle. Today, it occurs much sooner and in an ongoing fashion. Rigid strategy development that occurred periodically has been replaced with continual listening, learning, and adjusting.

Innovation used to emphasize new products and services. Now, it involves creating new business models and customer experiences, often through digital transformation. Technological innovation, new forms of interactive marketing, and digital disruption are common. Design sprints, rapid prototyping, and digital diaries lead to better, faster, and cheaper innovations.

The way companies and consumers interact has also changed. Historically, marketing communication was mostly one way, from companies to consumers. Now, it’s interactive—real-time marketing, including multiple streams of ideas, with continuous strategic strikes.

Brand storytelling and immersive customer experiences have proven more effective than broadcast media in driving sales. Interactive content, personalization, and social and data analytics enable deeper brand-customer relationships.

Increasingly, companies are turning to direct-to-consumer (DTC) marketing as they seek to bypass retailers, wholes...

Table of contents

• Cover
• Title Page
• Copyright
• Dedication
• Contents
• Preface
• Chapter 1: Upstream Marketing—An Overview
• Principle 1: Insight
• Principle 2: Identity
• Principle 3: Innovation
• Now Apply It: Integrate and Execute
• Appendix
• Acknowledgments
• Notes
• Index
• About the Authors