It’s Saturday night. A few friends and I sit around my table playing a board game. Listening to music in the background. Suddenly, I hear a familiar voice talking about how water is used in our homes and lives. After quickly hushing my friends, we sit in silence and listen to the rest of the Culligan ad.
Maybe you’ve had a similar experience. It could be watching the news or listening to music. But you’ve seen the splash Culligan has made re-entering the national marketing scene on January 7th. However, national marketing is not new to Culligan.
Prior to the 2006 franchise agreement, Culligan advertised at the national, regional and local level. This approach is considered a three-tier marketing strategy. Which is the dominant marketing strategy used in the United States by franchise and dealer groups.
But it’s important to note that this approach is only effective when funds are correctly allocated across the three layers.
The last time Culligan embarked on a national advertising buy was in 2004. At the time, the national budget was a mere 20 percent of the current national budget.
With such limited funds, TV buying wasn’t an option. Which left magazines and occasional radio spots as the media of choice.
Unfortunately, that media buy was not large enough to make an impact.
With the 2006 franchise agreement, Culligan moved away from the dominant three-tier strategy and began utilizing a two-tier approach consisting of regional and local marketing.
The lone exception was a small national web pay-per-click program that started in 2009.
Maximum control was given to the franchisees with this system. It helped protect Culligan’s current customer base, but also worked to generate new sales leads.
In 2018, by combining the 1 percent gross revenue from Culligan dealers and the corporate match, Culligan is back to utilizing all three levels of marketing. It has now become competitive in advertising spend with other household brand names such as Brita and PUR.
When it was announced that Culligan would be adding national marketing to the strategy, some were critical. But here at KennedyC, we’re big believers in the three-tier marketing model.
Because every tier gets results. But each does so in different means.
One tier alone cannot sustain growth. Because it fails to adequately address the needs of the customer as they move through the marketing funnel. It is the layering of three tiers that makes the marketing effective.
The three-tier marketing approach works by breaking out marketing budgets between awareness building and sales promotion.
For peak efficiency, we believe that one-third of funds should be directed toward brand (national). And two-thirds should be allocated toward sales promotion (regional & local).
Although some regional dollars are still needed to carry the branding campaign, the national buy is easing the regional branding workload. This means funds are able to shift from purely brand building to incorporating more lead generation.
This shift is key since lead generating avenues are critical to layer in with branding efforts.
Branding is just one piece of the marketing puzzle and it alone cannot make potential customers pick up the phone.
The top tier, considered the national tier, is meant for overarching brand building.
The main focus of this tier is to raise brand awareness, educate consumers and execute top of the funnel marketing efforts.
The goal of a national campaign is to establish images, voice and sounds that consumers will come to associate with the Culligan brand.
Being able to share a brand message at the national level lays the foundation for the regional and local levels to drive consumers down the purchasing funnel.
The national campaign is able to reach consumers that do not watch traditional programming, such as local news. At the regional and local level, advertising on cable through ad resellers like Comcast and Spectrum results in a segmented buy that misses the satellite and streaming viewers; thus cutting reach and driving up costs.
Placing the buy at a national level removes this inefficiency and allows the commercial to reach all homes with that cable network. Regardless of whether the provider is cable or satellite.
Additionally, satellite, which most rural customers use as their television provider, is only available for advertising at the national level.
While the efficiency of placement and cost are a positive, one downside of a national buy is the inconsistent viewership for popular shows across the nation. For example, The Tonight Show has more popularity in the Western and Northern United States compared to Law & Order SVU which is heavily watched on the East Coast.
This variation in viewership, as well as the lack of localization, is where the middle tier comes into play.
As we are discovering with the national branding initiative, the middle tier is perfectly situated for turning brand recognition into sales leads with special offers.
It is also the most cost efficient tier.
The regional tier leverages the power of dealer cooperation to purchase broader based media at a lower cost than a national buy. This tier captures consumers that are starting to do more research on the specific products offered by a company.
The messaging at this level entails the “Why Now”.
Running media at the regional level allows for businesses to customize their messaging and offers to better suit regional water characteristics. Tagging TV spots with sales promotions creates a sense of urgency that inspires action from consumers.
Furthermore, the regional tier fills in viewership gaps left by the national tier by purchasing programming that cannot be bought at the national level, such as local news.
An added bonus to layering in local programming at the regional level is cost efficiency. In fact, it is the single most cost-efficient medium that uses sight & sound.
In addition to boosting the national TV buy, other media outlets such as newspaper, website and digital advertising are more cost efficient at the regional level. Once consumers are made aware of the “why now”, local marketing, helps convert them into a sales lead.
Once the brand is recognizable and regional offers are outlined, it is time to push consumers to purchase using local marketing efforts.
Local marketing is unique from regional and national marketing, because it has the ability to specifically target zip codes with information and offers that are most pertinent to those consumers.
This level’s focus is the “Why Me”.
It keeps consumers moving towards the final step, the purchase, by highlighting why they specifically need a product . And why they need to get that product from you.
Having the ability to customize messaging and delivery per city is incredibly important, especially in Culligan’s case where water problems vary greatly between counties and states.
One offer and price point will not fit the needs of all consumers, which is why the local level is needed.
Local marketing also allows for quick reaction to breaking news stories that may directly impact a business. Such as a competitor going out of business or a problem water issue surfacing.
As we continue to support this exciting new branding campaign, it will be critical to remember that regional and local advertising play a huge role in business growth. New creative and exciting channel purchases cannot move the needle for sales growth by themselves.
Keeping regional and local marketing efforts fully funded is key to business success. As outlined above, it is important to remember that all three layers of advertising - national, regional and local - work in tandem.
Strong brand awareness built through the top tier lays the groundwork for strong lead generation at the next two tiers.
*A previous version of this blog has been published in the CDANA Connections, February 2018 Edition