What’s one of the main reasons why marketing campaigns fail?
It’s not the competition.
It’s not how much you invest in the campaign.
Nor the copy.
Nor the ads.
The reason is not knowing your market’s sophistication level – because it means you’re not tailoring your message to your audience. (Check out Episode 11 of the Underground Marketer Podcast to learn how to choose the right audience to sell your product or service to).
If you’re putting out basic ads and campaigns, you can’t expect to stand out – especially in a crowded market.
Once you figure out your market’s sophistication level, you’ll understand the claims and promises that work for your audience.
What is Market Sophistication?
Eugene Schwartz coined the term “market sophistication” in his best-selling book Breakthrough Advertising. Published in 1966, it remains a classic in marketing and copywriting and one of my favorite books out there. If you only have time for one marketing book this year, this is the one.
Let’s define sophistication as having a great deal of knowledge or experience about a subject. Market sophistication is the level of awareness (or sophistication) that the market has regarding the products or services you and your competitors offer.
Now, to put it into perspective. If your product is an innovation, you don’t need to engage in a major marketing campaign. When Steve Jobs announced the iPhone, he only had to say that it’s a phone that plays music and has access to the internet. People were mindblown!
Nowadays, as the smartphone market has leveled up and became more sophisticated, advertising has reached the next level as well. People now care about all the details, from color and design to memory, battery life, camera, and all the new features. Everyone compares products all the time and the market needs to be knowledgeable enough to choose the best option.
Schwartz noticed multiple levels of market sophistication, so he classified this whole process into 5 stages.
The 5 Stages of Market Sophistication
Stage 1 – The Pioneer
In this stage, you are the pioneer. You find yourself in a Blue Ocean. You are the first one, so you get to set the bar – which can be a blessing and a curse.
Finding yourself in this position has become more common nowadays, due to rapid technological developments.
In this stage, all you have to do is place your product on the market. Schwartz suggests that you should be “direct” and “simple”.
So, for example, let’s say you were the first one in the weight loss pill market. You’d simply advertise your product as: “This pill will help you lose weight.” Nothing less, nothing more. It gives all the necessary information to attract the right audience.
Anything new is intriguing: it attracts attention, but it also leads to skepticism. There’s really nothing much that you can do – people will either want your product or not.
If the product proves successful and you manage to establish a new market, this creates competition, leading to the next stage.
Stage 2 – The Follower
While you still need to be direct and remarkable, simplicity won’t cut it anymore. In stage 2, you need to differentiate your product from the competitors. Schwartz encourages marketers to expand the original claim to make you stand out.
You need to rise above the competition and prove why your product is better.
Now that the market knows what a weight pill is, you need to give them concrete results.
The way you’d advertise it now would be: “This pill will help you lose 10 kg in 2 weeks!”. You’ve emphasized and strengthened the original claim, but also made bold promises.
However, don’t try to outdo your competitors so much that you sound ridiculous. Don’t make false or unsustained claims because you can’t fool others, at least not for long.
For instance, if your competitors already used the message “take this pill and lose x kg in y days”, don’t try to compete with this statement by saying something clearly false, like “take this pill and lose 5 kg in one day”. No one will believe you.
Instead, you need to turn your attention towards the third stage and creating a unique mechanism for your product.
Stage 3 – The Veteran
There are many competitors on the market at this level of sophistication, but their exaggerated claims have led the customers to become untrustworthy and skeptical. But their needs are not met, and their problems are not solved.
According to Schwartz,
“If your market is at the stage where they’ve heard all the claims, in all their extremes, then mere repetition or exaggeration won’t work any longer. What this market needs now is a new device to make all these claims become fresh and believable in making them again. In other words, a new mechanism.“
Now, it’s time to figure out what makes your product different in order to add a unique mechanism to it (I covered what a unique mechanism in Episode 10 of the Underground Marketer Podcast). To put it briefly, a unique mechanism is your product’s secret that makes it different from the competition. More specifically, it’s WHAT makes your product deliver much better results than the competition.
For example, in the case of the weight loss pill, you could now say: “This weight loss pill contains a coffee bean extract that is scientifically proven to boost your metabolism and help you lose 10 kg in 2 weeks.” It’s that one ingredient or the difference in the manufacturing process that will set you apart, and get customers to trust that your product will work when others don’t.
Follow my 5-step process to creating a unique mechanism that works!
Stage 4 – The Warrior
At this point, everyone else will also have a unique mechanism. You are all trying to compete for the number 1 spot. This is the Red Ocean, and the hungry sharks are ready to hunt each other down. It’s time to crush your competition!
Now, you not only need to promise more benefits, but you need another mechanism. This is the point where you either make it and become iconic or you fail and fall into oblivion.
Let’s take Apple, for example. When the competition increased, they needed to differentiate. It was a war between Mac vs. PC. So Apple made this claim: “Last year, there were more than 114,000 viruses for PCs not for Macs.” It was a direct way to say that they were better than PCs when it came to security.
At this point, the only way to distinguish yourself from the competition is to advance to the last stage.
Stage 5 – The Iconic
This is the story-telling phase. In his book, Schwartz says that it’s essential to understand that “the emphasis shifts from the promise and the mechanism which accomplishes it, to identification with the prospect [themselves].”
At this point, there is enough demand, the wants are there. Your audience needs to identify with you, your brand, and your vision.
For example, I’m sure you’ve been asked this before: are you Mac or PC? iPhone or Android? Apple or Samsung?
Macs as being for cool people, artists, and designers. PCs are for geeks and gamers. Microsoft office is for businesses.
Apple, especially, has created this cult-like following by promoting an image of a person that people aspire to be: successful, trendy, tech-savvy, etc. When Steve Jobs introduced the first iPhone, it was iconic – a product that made history.
Here’s another example using the weight loss pills again: “Our very successful coffee bean extract pills are back on the shelf, but not for long. Hurry up before it’s too late!.” This creates urgency and a sense of exclusivity. People will wonder what made these pills sell out in the first place, and they’ll hurry to try them out.
Now that you know what market sophistication is and how it works, it’s time to do your homework. Go out there and analyze the market and the competition. Figure out what works for others and what doesn’t. Try to understand your market’s level of sophistication through research and analysis.
Then, implement what you’ve learned. A big mistake that I see often is when companies advertise below the market’s level of sophistication – you’ll just end up smothered by the competition. It’s okay to advertise above the current stage (if the market is stage 2 and you advertise using a unique mechanism which is for stage 3), but NEVER below it.
It’s also time to stop sending the same marketing message to all your targets. Learn and adjust accordingly. Put more work into crafting the perfect offer.