This is the second part in the series looking at the First Principles of Marketing. In the first article I explore what marketing is on a fundamental level and why marketplaces exist.
Marketplaces are great. They bring together sellers and buyers. But what if there is no marketplace for the niche you’re targeting? Or there is a marketplace—physical or digital—but you want to reach people who don’t go there?
It’s hard to connect to individual people out of the blue. Without more information, you would pick some at random and annoy them with your sales pitch.
Fortunately there’s a better way: People hang out in groups. And groups form around something people have in common. Enjoy kite-surfing? You’ll join a club and meet other kite-surfers at competitions. Use a programming language? You’ll most likely discuss stuff in an online forum or even go to a meetup in your city.
Another group you spend a lot of time with are your friends. Maybe you went to the same school or grew up in the same neighborhood. Probably you and your friends have a few activities that all of you enjoy and that you do together.
All those groups either get together in meetings with everybody present, or they only exist in the digital space, or they form around content that their members consume—like newspapers, radio, TV, books, movies, shows.
Or they form spontaneously.
Imagine you’re a tourist visiting a temple in the mountains. It took you a two-hour bus ride to get to the temple. Welcome! You’re now part of a temporary group and all of you have a few things in common: You’re interested in the temple, you might run out of water or food and in the evening you’ll want to get back to your hotel in the city.
And so in close proximity to that temple there will always be souvenir shops and food stalls: Vendors targeting the group “temple-tourists” by simply being at the location.
But it doesn’t end there. Far away from the temple, you might find providers who specialize in all-inclusive temple tours, taking you from the city center to the temple and back. Providing food and water along the way, dropping you off at one of the souvenir shops.
That souvenir shop wasn’t picked at random. They have probably figured out a second marketing channel—additionally to “being there”— and have a deal with the tour provider to give them a cut of the revenue they bring in. In fact they found another place their target group hangs out: In organized tours.
The tour providers themselves had to solve the same problem: In their search for places where their target audience hangs out, they’ve made a deal with a few hotels to suggest their tour to all new guests.
This narrow example expanded quickly. It shows that even small markets can have complex marketing channels. I’m sure in the background even more deals are made.
Every group has its gatekeepers. They protect the group from outsiders. In the example the tour organizer and the hotel owner are the obvious gatekeepers. You have to go through them If you want to talk to the tour participants or the hotel guests. But what guards the group of individual tourists visiting the temple? It’s a metaphorical gatekeeper: the geographical location. If you want to sell them something, you have to be there.
There are always free and paid paths into a group. The more your goals align with the group’s priorities and the gatekeeper’s mission, the less it costs to connect to the group.
If you produce excellent content, a search engine will show your website to their users because they are there to find relevant content. But if all you want to do is show them your sales page, you have to pay the search engine to display ads.
Going to a meetup, being a helpful member of the group and mentioning your video series on the subject while talking to other members is free. Telling everybody at the meetup they should buy your online course, probably means you’ll have to sponsor the event.
The free and paid routes into groups are distinct marketing channels. In the case of the search engine it is content marketing vs search engine marketing. Both with very different cost and return structures.
The easy but expensive way to get into a newspaper is to run an ad. Or you align your goal of being exposed to readers with their goal of learning something interesting. A journalist might write an article about the unusual thing you did—and you’ve done successful public relations.
Every company and every product have a different set of gatekeepers that allow them to pass for free. A giant company makes it into the news just because they are so big. But your small side-project might be mentioned in a blog because the blogger emailed you and you wrote back.
The other way round doesn’t work. The blogger would never write something positive about the giant corporation because he thinks they’re evil. And your side-project won’t be mentioned on the news because it’s irrelevant to most people. But that’s OK. Your audience doesn’t even watch the news and the giant company’s target group doesn’t read tech blogs.
The more relevant your offering is to the group, the greater your success will be. Always.
Even if you take a paid route, it’s best to first think about unpaid paths. This way your first goal is being relevant to the group. And in the best case, the gatekeepers will let you talk to the group for free. At worst you’ll have to pay. But your ad, your sponsorship, your recommendation program will be precious to the people in the group—not another ad they click away.
In the next article I apply the same First Principles thinking to niches and explore why it’s best to pick multiple paths into the same group.
Don’t forget to subscribe to the blog newsletter below and if you like the article, share it with your group on your favorite network.
