SmoothSpan Blog

For Executives, Entrepreneurs, and other Digerati who need to know about SaaS and Web 2.0.

How Do You Market Cheap Socially?

Posted by Bob Warfield on November 23, 2011

Sameer Patel has an interesting post that got me to thinking:  How do you market cheap socially?

What got Sameer to post was the following (in his words):

Social Times reports that the way to get more “Likes” on Facebook is to offer coupons to satiate the what’s-in-it-for-me hunger of an increasingly discriminating social networker.

This might well be that moment in social media marketing history when we look back and say – “what were we thinking??”

Here’s my problem with that–what do you do if what you sell and market is “cheap?”

Michael Porter’s musings on competitive strategy suggests there are 3 winning market strategies:

1.  You can build the best.

2.  You can be the low-cost provider.

3.  You can focus on some under served niche that the other two are ignoring.

There are a lot of companies in this world who adopt #2–what they’re selling is “cheap”.  Come buy from us, because we’ll give you the best price.  The whole notion of brand tends to facilitate cheap, except where the brands go out of their way to attack cheap sellers, the way Rolex or Louis Vuitton would.  Once you become fixated on a brand that satisfies #1 (i.e. you view it as the best), all that’s left is to find the cheapest source of #1.  The businesses that act as middlemen, retailers that sell the brands, often fall back on #2 to market themselves.  Yes, you can buy that Canon DSLR a lot of places, but ours is cheaper.

If you think about it, the Internet is ideally suited to convey the messaging of #2 because #2 is a search game.  Amazon facilitates that search for cheap, eBay facilitates it, Craigslist is there, and certainly any search engine spends a great deal of time processing searches that boil down to trying to find the best price on something.  I do it myself all the time and so do you.

Enter Social networks like Facebook.  We’re told that it is important for us to “engage” with our customers and to “join the conversation” with them.  Yet, what engagement or conversation is needed in the quest for cheap?  Not much really.  In fact, it somewhat detracts from the experience because we’re suspicious that if we stop to listen for too long, we might accidentally absorb the sales pitch and pay too much for some article we’ve vowed to get the best possible price on.

So what’s a poor purveyor of parsimony (sorry, couldn’t resist) to do in order to leverage Facebook and the legion of other Social channels?

Why it seems pretty obvious.  If you’re selling cheap, you’ve got to sell it everywhere.  Why not offer coupons for “Likes” if you are running that sort of company?  You’re actually not marketing your marketing as Sameer says.  Rather, you’re offering one of the many tricks of your trade, in this case a coupon, to convince your would-be followers that you are indeed the bona fide cheapest source of the product they seek.  And even if it isn’t the product they seek, it is still a good deal, and a consumer looking for cheap is probably interested in more cheap they didn’t even know they needed.  I think we still have a 55 gallon drum of crunchy peanut butter around here somewhere from the days before we banned ourselves from Costco unless we were stocking up supplies for a party.  Last on the list of reasons to do it is that as Likes, +1’s, and other Social Signals increasingly impact SEO, it will become harder and harder to sell “cheap” unless you engage in these activities.  After all, one of the ways you got to be so cheap is you quit paying to have charming personalities engage with customers.  They’re over at Nordstrom and have been absent from Walmart for a long time if they were ever there.  You ain’t got nuttin’ but a whole lot of cheap to talk about, so hand out those coupons freely and hope your SEO will still be able to get you noticed.

All this musing on “cheap” does make one wonder whether the Internet helps or hurts any of Porter’s 3 big competitive strategies.  It looks to me like #3 benefits the most because I see it as the Long Tail.  Finally we can target ever smaller niches and aggregate enough of them to yield an interesting business.  Cheap rolls along happy as a clam.  No sales tax online (yet!).  Plenty of new tools to get the word out that you’re cheap.  How can you go wrong with that, other than that lower market friction means lower margins and cheap’s were already razor thin.  That’s probably why the latest iteration of give-away-something-of-apparent-value-to-lock-them-in is doing so well in the form of products like the iOS Walled Gardens and the new Kindle Fire.

Perhaps the one that is most challenged is #1.  In the old days, when you want the best, it seems like it was easier to seek it out and touch it.  There were fewer degrees of “best”, less diversity.  Perhaps I am confusing what to me looks like a candidate for “Best” but is in reality merely a niche product and I didn’t realize I live in that niche.  Either way, it seems like search brings an embarrassment of riches when it comes to best.  Yet, it is the products that truly are “Best” that I think have the biggest opportunity to do those Social Things that we dream about and that Sameer wishes companies would do instead of offering Coupons.  It is the products that are “Best” that have the greatest opportunity to produce wonderful content for Inbound marketing that gets good SEO.  The “Best” crowd actually have something worth talking about, worth engaging with, and worth a conversation.  This is true too for the niche players.

On balance, the arms race between the three models continues.  They each have good strategies to employ, even if they don’t appeal to everyone.  That’s normal.  That’s why we have 3 flavors.

3 Responses to “How Do You Market Cheap Socially?”

  1. Hi Bob,
    Thanks for the riff but this post stands on its own two feet – lots to think about there.

    With respect to the riff, though… I would go one step further for the “cheap goods” and provide the coupon anyway. Insisting on a “Like” in this case is unnecessarily re-injecting marketing where a sale should be happening. Arguably, more blasphemous than injecting more marketing into marketing. : >)

  2. […] visitor to this blog named Bob Warfield left a comment about a post he made in his blog HERE. Bob is also the creator or progenitor of machine shop “Speeds and Feeds” software called […]

Leave a Reply

%d bloggers like this: