I’ve been using the metaphor of the internal combustion engine in my consulting projects lately, and with great success.
The key idea of this marketing as the internal combustion engine (marketing engine in the subesquent text) is that marketing essentially deals with streams of customers that interact with our business, whereby these flows create profit, business growth, but also exhausts that may or may not be damaging.
Let me give you a short explanation of the proper internal combustion engine, just to see how this can refer back to business and marketing. An engine is a machine built of several main parts, wherein the combustion chamber is the most important part of all. In order for the engine to work one needs to feed it with fuel, gasoline for example. This fuel is pumped into the combustion chamber, i.e. the space inside the engine cylinder. At a certain point the fuel that is properly mixed with air inside the cylinder is ignited, which causes an explosion. The explosion creates a very high pressure that pushes in all directions, however the cylinder does not move except for the one moving wall, the piston. This moving piston is the provider of the force that can be used in many different ways. One typical use of the force is to transfer it to the wheels of a car. The engine does not stop there, because the cylinder still needs to push out the exhausts, plus the heat generated by the explosion. Then the cycle repeats, and so many times over, in the rhythm of rounds per minute real driving force is provided from the engine.
In a simplified view the steps are:
1) gas and air enter the engine
2) explosion happens
3) force, exhaust and heat leave the engine
4) everything repeats many times over
Let me take this view to marketing.
1) customers and products enter the shop
2) the purchase happens
3) profit, cost and satisfaction exit the shop
4) everything repeats many times over
Ok. Let me disect this simplistic view.
A customer entering the shop is a process in the making, not a simple pour into the tank event. The whole process of bringing customers into the shop is as much art as it is science. One of the more successful metaphors of pouring customers in is called the funnel. The funnel was strongly promoted by Google with its Analytics software in the last years and thankfully so. Marketing people, especially of the younger generation now understand better than ever that funnelling means that in order to have one single purchase there have to be hundreds, thousands sometimes even millions of visitors on an ecommerce website for example. And visitor traffic is costly, in most cases.
So when the purchase happens (step 2), there already is a lot of cost involved with it without even calculating for the cost of making the product. One of the key insights of my marketing engine view is that the cost of the funnel is an intrinsic cost of the product. Reread if necessary. Or move to step 3, to see my elaboration.
A purcase is one beat of the marketing engine cycle. The profit, cost and satisfaction can, should and must be calculated at every beat of the engine. Here’s why.
The cost consists of the variable costs of production, i.e. materials used in the unit product, as well as energy, work and, this is the key ‘and’, the cost of ‘funneling’. Profit is the difference between the price and the cost. What remains to be dealt with is satisfaction. Why do I put it here?
It shows that satisfaction is the single most important factor of growth. If a business wants to grow it needs repeat customers. Period. I’ve written about this in my Net promoters score posts. Repeat business is a kind of turbocharging of your marketing engine. The more repeat business there is, the lower the cost of funneling, hence the more profitable we become. Please don’t confuse satisfaction with over-indulgence, wherein customers are over-serviced without adequate return business.
Repeat business from existing customers creates faster and stronger cycles of purchases, which accelerates the business to new profits, strength and growth.
All of the above can be modelled in a robust and highly understandable excel spreadsheet, whereby one has to properly model the specifics of each business, its products, funnels, costs and everything else that a business needs. Each marketing plan made in such a way is different, but the underlying model of the marketing engine, based on the idea of the internal combustion engine, is universal and the same for all businesses.
In case that you would be interested in my approach, I have several real life examples that I can show to you in person, and I hope that in the foreseeable future I will also be able to publish this work that I take a lot of pride in. You can contact me at gregor dot cuzak at gmail dot com.