FULL TRANSCRIPT BELOW:
Aaron Konzelman: Hey everybody. Welcome to American Small Business Institute. I am Aaron Konzelman here today with Johnny Molson.

Johnny Molson: Hello Aaron.

Aaron Konzelman: Hey. Good to have you back with us.

Johnny Molson: It’s great to be here.

Aaron Konzelman: Awesome. All right. So we’re talking today about the differences between advertising and marketing and what that looks like.

Johnny Molson: Yeah. And this is something that I think the marketing industry has done to itself. There are so many tactics out there. There are so many vehicles out there. Should I be on Snapchat? Should I be on the radio? Should I have a billboard? Should I be in the newspaper? Should I be on Pandora? Should I be on TV?

Johnny Molson: We focus a lot on the tactics, the things. But my question is what if it’s not the advertising. Advertising is just a part of the whole. We say advertising and marketing sometimes like we say Sasquatch and Yeti or yams and sweet potatoes like somehow they’re the same thing.

Aaron Konzelman: It’s not the same.

Johnny Molson: And while they have similar functions, they’re not the same thing.

Aaron Konzelman: Right, right.

Johnny Molson: Marketing is not advertising. Advertising is just part of marketing. There’s so much else that goes in there. So what is marketing? Well if we want to know what marketing is it’s all the stuff. It’s everything that might touch a customer. It might be your pricing strategy, and do you have the inventory in there. Are there extra membership perks? Are there incentives for financing? What’s the texture of your business card or your bathrooms clean? That’s marketing. A lot of businesses will say, “Hey, we need to do some marketing.” Buddy, you’ve been doing marketing ever since you opened your business. Marketing’s already been going on. You were doing marketing the day that you put a sign out front. You’ve been doing marketing when the receptionist answered the phone this morning. If you need to do some advertising, then that’s part of the marketing process. But they’re not necessarily the same thing.

Johnny Molson: Here’s an example of a store, the Grandview Grocery and Liquors Limited. And they don’t have an advertising problem. They’ve got a marketing problem. They need to fix their sign. It’s not … even if we did great ads for them, people are going to show up there and go, ugh. What’s going on here?

Aaron Konzelman: Yeah, sketchy.

Johnny Molson: So it’s the marketing that they have to look at. If we look at the traditional marketing funnel, it looks like this. It starts of course with unawareness. We bring them to awareness. From awareness, that’s where your advertising is, to consideration. Now we’ve kind of convinced the customer. Then from consideration to preference. Now I’ve made the choice and made the purchase. Then comes loyalty. That means I’ve come back, and I’ve purchased again. Then comes advocacy. That’s where word of mouth comes in.

Johnny Molson: But if we’re being honest with ourselves, there’s always something kind of broken. There might be something where things are falling apart there. If it’s an awareness issue, then yeah. We have a conversation about your advertising. But if the issue is happening where preference or customer loyalty happens, well that might be a function of your staff selling skills.

Aaron Konzelman: Oh okay.

Johnny Molson: And that is part of the function of marketing. You need to bring somebody in who understands how to train sales staff. Or maybe they just need to clean up the place and fix your sign and those kinds of things. That’s what we try to look for from a marketing standpoint. Advertising’s not necessarily going to help your salespeople be better salespeople.

Aaron Konzelman: Right, yeah.

Johnny Molson: So if we look at the marketing fundamentals, it’s really just three things. You do the diagnosis, you then build a strategy, and then you start to implement the tactics. What’s the diagnosis? Well, the diagnosis is what at Wizard of Ads we refer to as the uncovery. We dig in to see what is special about this business. What’s unique about what you do? What’s going on in the marketplace? What’s the competition look like? The full top to bottom, what it is. Then we can build the strategy. The strategy is made up of three pretty basic things. Who are we talking to? And I don’t mean demographics. I mean, what’s their makeup, what are their values and their qualities. And who are we not talking to? Who are we choosing to lose?

Aaron Konzelman: yeah.

Johnny Molson: Of course. What is it we want them to do? And that doesn’t necessarily mean go buy stuff. What we want them to do is we might … what we might want to have happened is a function of the marketing is train the sales staff. Or we might want to revisit our logo or something like that. And how are we going to accomplish that? And then as far as the tactics go, it’s the old four P’s of marketing, the product, price, place, and promotion. Is your product and service right? Have you done the due diligence to make sure that’s right? Your pricing strategy. That sends a message.

Aaron Konzelman: Yeah, absolutely.

Johnny Molson: A Lexus is just a fancy Camry. It’s a Camry at a bigger price. So we think more of it. That’s part of that, that’s a pricing strategy. Your distribution chain, of course, has to do with how it gets from the vendor to the customer. And then finally comes the communications. You can see that it’s 1/4 of 1/3 of the whole picture. The advertising is, of course, important, but it’s not the only thing that affects it. In fact, if you look at these four businesses, Disney and Amazon and Nordstrom, and Zappos, these are all legendary companies that have books written about them, about their impeccable customer service and customer experience.

Johnny Molson: Could they exist without advertising? They probably shouldn’t, but they could.

Aaron Konzelman: Right, but they could.

Johnny Molson: Right? Because of their marketing structure is so strong within it, they could probably get away with it. It wouldn’t be wise, but they could probably do it. The Wizard Academy is a great example of an organization that doesn’t advertise but has an amazing marketing structure. People who come here and experience the tower and everything that goes on in it goes “Wow. I got to share this story.” So that’s a great marketing function, but ironically, an organization that was built on great advertising doesn’t do any advertising. But does amazing marketing, and that’s really the difference. The key takeaway, of course, is you build your strategy before you ever start to worry about the tactics. If you start asking those questions of well should I be on the radio, should I be on Snapchat. That question is way down the line, and really you can’t start asking that question until you’ve built your strategy. You can’t go to the tactics until you do that.

Johnny Molson: What if it’s not advertising? Well, it might be something affecting the product or the service. It might be good PR, bad PR. It might be you got a crappy location. Maybe your staff is an exceptional sales staff, and they’re doing a great job, or maybe they’re not good sales staff. Or maybe you just didn’t do a thorough enough diagnosis. Those are the things to look on. And one of the things that we say here so often is that it’s the message that makes the media work. The media doesn’t make the message work. But I’ll enhance that just a little bit and say, “No actually the strategy makes the marketing work. It’s not the marketing that makes the strategy work.” So really if you look first at the strategy, that’s the energy that’s going to make your marketing work.

Johnny Molson: Where you choose to advertise, that’s down the line a little bit. Think about that later. But don’t even start to have that conversation until you’ve had the conversation about your strategy and your overall marketing.

Aaron Konzelman: Love it. Fantastic.

Johnny Molson: It’s been a pleasure being here. Thank you very much.

Aaron Konzelman: Yeah, yeah. Thank you so much. Rock and roll.

Johnny Molson: Hope this is helpful.

Aaron Konzelman: Yep. We’ll see you guys next week.