Warren Buffet is one of the most successful investors in history.
Yet he still lives in the same house he bought in 1958 for $31,500. Starts his day with McDonald's bacon, egg, and cheese biscuit. Loves drinking his Coca-Cola… doesn't have any swanky office on Wall Street. And many say he doesn't have a computer on his desk.
So he has his own rules of living.
And his own rules of investing.
This is why when his company Berkshire Hathaway sold approximately 505 million shares of Apple… representing a 55.8% reduction from its previous holdings… everyone in the investment world is speculating why he did it.
Well, since I’m not an investment expert and this newsletter is not about investing, this news instigated me to talk about another principle of Buffett that makes one of the world’s smartest at picking successful giants that outlast the craziest competition.
I’m talking about Moat. In edition #16 of Vik’s MIX (Marketing. Insights. Exchange) I'm going to break it down for you, Buffett-style, with some real-world examples that'll make you go "Aha!"
Then we will move to two marketing concepts. One that’s blurring the line between sales and marketing and the second is marketing hyper-local.
So here’s what we are gonna talk in edition #16
Building a moat
Smarketing
Being Glocal
Let’s go.
Building a moat
According to Buffett, an economic moat is a company's ability to maintain competitive advantages over its competitors.
It's what keeps the castle (your business) safe from invaders (your competitors). Let’s talk about the 4 factors that help you build the moat.
Cost Leadership
This is all about being the low-cost producer in your industry. If you can make your product or deliver your service cheaper than anyone else, you've got a big advantage. You can offer lower prices and still make a good profit.
But remember, most companies can’t do it right and get killed in the long run. Consider fighting on price only when you can build a most around any other factor.
AWS has nailed cost leadership in the cloud computing space. They've built massive data centers and use economies of scale to offer cloud services at prices that are hard for competitors to match. This has helped them dominate the market and keep customers coming back.
Intangible Assets
These are things you can't touch but are super valuable. Think patents, brand recognition, or exclusive licenses. They're like invisible shields that protect your business from copycats.
ASML, a Dutch company, has a near-monopoly on extreme ultraviolet (EUV) lithography machines used in advanced semiconductor manufacturing. Their patents and technological expertise form a strong intangible asset moat, making it incredibly difficult for new entrants to compete in this space.
High Switching Costs
What it means: This is about making it a real pain for customers to switch to a competitor. If changing providers is too expensive or too much hassle, customers are likely to stick with you.
SAP's enterprise resource planning (ERP) software is deeply integrated into many large businesses' operations. Switching to a different ERP system would be incredibly costly and disruptive, creating a strong incentive for customers to stay with SAP.
Network Effects
What it means: This happens when your product or service becomes more valuable as more people use it. It's like a snowball effect that makes it harder and harder for competitors to catch up.
Shopify's e-commerce platform benefits from network effects. As more merchants join, they attract more app developers and service providers to the ecosystem. This, in turn, makes the platform more attractive to new merchants, creating a virtuous cycle.
Efficient Scale
In some markets, there's only room for a few players to operate efficiently. If you can become one of those players, you've got a natural moat.
In the online travel booking space, Booking.com has achieved efficient scale. Their large user base and extensive hotel partnerships make it difficult for new entrants to compete effectively, especially in certain geographical regions.
Distinct Corporate Culture
A unique and effective company culture can be a powerful moat. It can help you attract top talent, spark innovation, and create a work environment that's hard to replicate.
Netflix has built a distinct corporate culture based on freedom and responsibility. Their famous "culture deck" outlines principles that have helped them attract and retain top talent, fostering innovation and adaptability in the fast-changing entertainment industry.
See, building an economic moat isn't a one-and-done deal. It's an ongoing process that requires constant attention and adaptation.
Here's what you can do:
Identify your unique strengths: What sets you apart from competitors?
Reinforce your advantages: Continuously invest in areas where you excel.
Combine multiple moat strategies: The strongest moats often use several of these factors together.
Stay alert to market changes: Be ready to adapt your strategy as the business landscape evolves.
Focus on customer value: Ultimately, a strong moat comes from providing value that's hard for others to match.
Remember, whether you're a startup or an established player, there's always room to deepen your moat. Keep innovating, keep building, and watch your business become a fortress in your industry.
What do you think? How does your company's moat stack up? Are you feeling secure, or do you need to start digging deeper? Whatever stage you're at, now's the time to strengthen your position.
Smarketing
Brian Halligan, HubSpot's co-founder and CEO, is often credited with popularizing the concept. It's been around for about a decade now, but boy, has it gained traction!
So, why is Smarketing more crucial now than ever before? Well, the B2B landscape has changed dramatically in recent years.
Today customers expect a seamless experience from the first touch point to the final sale.
The rise of digital marketing, social media, and advanced analytics has blurred the lines between marketing and sales.
Nowadays, a potential customer might interact with your brand dozens of times before ever talking to a salesperson. This shift has made it essential for marketing and sales to work in harmony.
Plus, with the recent global shake-ups (hello, pandemic!), businesses have had to adapt quickly. Those with aligned sales and marketing teams were better positioned to pivot their strategies and maintain customer relationships during uncertain times.
Now, let's continue our deep dive into the world of Smarketing…
Take Zoom, for instance. They've mastered the art of Smarketing. Their marketing team creates content that educates potential customers about video conferencing.
Meanwhile, the sales team uses this content to guide prospects through the buying process. The result? Explosive growth, even before the pandemic hit.
Or consider DocuSign. They've aligned their marketing and sales teams around a shared goal: making document signing easy and secure.
Their marketing team creates targeted campaigns based on customer pain points identified by sales. And sales? They use these insights to have more meaningful conversations with prospects. It's a win-win situation.
As we look to the future, Smarketing is only going to become more critical.
With the rise of AI and machine learning, the potential for even deeper integration between sales and marketing is enormous.
Imagine AI-powered tools that can predict which leads are most likely to convert, or chatbots that can seamlessly hand off conversations to sales reps at just the right moment.
To implement this approach:
Collaboration: Encourage regular meetings between marketing and sales teams to discuss goals, strategies, and outcomes.
Align Metrics: Establish shared metrics to measure success, ensuring both teams are accountable for lead quality and conversion rates.
Utilize Technology: Leverage tools that facilitate communication and data sharing between teams, such as CRM systems and marketing automation platforms.
So, whether you're a startup just finding your feet or an established company looking to shake things up, consider giving Smarketing a go.
Start small, maybe with a weekly meeting between your sales and marketing teams. Share insights, align your goals, and watch the magic happen.
In the end, Smarketing isn't just about boosting your bottom line (though that's a nice perk!). It's about creating a better experience for your customers and a more fulfilling work environment for your team.
So, what's your next move? How will you bring your sales and marketing teams closer together?
Glocal Marketing
Glocal is a mashup of "global" and "local," and it's all about thinking globally while acting locally.
In today's interconnected world, brands often need to appeal to a wide audience. But here's the catch - people still crave that personal, local touch.
That's where glocal marketing comes in. It's about finding that sweet spot between broad appeal and local relevance.
Now, there's a new twist on this idea that's really shaking things up. It involves using local data to create super personalized marketing campaigns.
This approach is taking the "local" part of glocal to a whole new level.
It's called personalized marketing through local data, and it's shaking things up in the advertising world.
Let's break it down. This approach uses first-party data - that's information a company collects directly from its customers - to create super localized campaigns. These campaigns speak directly to specific communities, making people feel seen and understood.
Take Monzo, for example. This online bank did something pretty cool. They looked at their customer data and found some quirky trends about local dining habits.
Then they plastered billboards with messages like "Well done Milton Keynes: you went to Nandos more than anywhere else in the UK."
It's funny, it's relatable, and it shows that Monzo gets its customers. People loved it, and Monzo saw a big boost in brand awareness.
Netflix got in on the action too. They created a fake streaming platform called Streamberry where users could upload their own photos.
The twist? Some of these photos might end up on actual billboards. It's like Netflix was saying, "Hey, you're the star here!" People ate it up because who doesn't want to see themselves on a billboard?
But it's not just about being clever. This kind of marketing has some serious benefits. When brands speak your language (literally and figuratively), you're more likely to pay attention and engage. It's like they're part of your community, not some faceless corporation.
This personal touch can also build brand loyalty. If a company shows they understand your local culture and what matters to you, you're more likely to stick with them.
It's like having a friend who always remembers your favourite coffee order.
Plus, using first-party data means companies can make smarter decisions about their marketing. They're not just guessing what people want - they know.
Other brands are catching on too. Spotify's "Wrapped" campaign, which shows users their personal listening habits, has become a cultural phenomenon. And local businesses are getting in on the action, using social media to highlight community events and local flavour.
Here's the thing: this approach isn't just for big companies. Small businesses can use local data too. Maybe it's highlighting the most popular menu item in your neighbourhood or creating a social media campaign featuring local landmarks.
The key is to make it genuine. People can spot fake authenticity from a mile away. So if you're thinking of trying this out, start by really getting to know your community. What matters to them? What makes them laugh? What are their quirks and traditions?
In my view, this trend is just getting started. As privacy concerns grow, first-party data will become even more valuable.
And in a world where we're bombarded with generic ads, these personalized, local campaigns stand out.
So next time you're planning a marketing campaign, think local.
Use the data you have to create something that speaks directly to your community. It might just be the secret sauce you've been looking for.
Well, that’s it for the edition #15
If you enjoyed this edition of Viks M.I.X (Marketing Insight Exchange)? Shower some love so that I keep sharing these new, exciting insights to keep up your marketing game. Hit the like button, share it and drop your comments on what’s your #1 takeaways from this edition.
Appreciate you spending your time here!
If we haven’t met, my name is Vikramsinh Ghatge.
I help B2B companies use the most effective marketing strategies to grow and expand without spending an arm and a leg.
I’ve spent over a decade setting up marketing systems—from content creation to building lead pipelines and driving demand generation. Now, I’m excited to integrate AI to enhance our collaboration, aiming to share richer insights and foster creative synergy.
Need help with your marketing or branding? Reach out to me for advice, partnerships, interviews or podcasts.
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