In recent years, there’s been a tremendous shift in marketing strategies, as businesses recognize that customer relationships are influenced by relationships with other stakeholders.
In the past, almost all advertising and marketing focused solely on customer relationships to a specific product or brand.
That approach fails to account for the perspective of stakeholders and the inherent value in a diverse network that is much more complex than the traditional customer-centric model.
What is Stakeholder Marketing?
Stakeholder marketing focuses on community engagement to recognize and understand its values, needs, and interests.
With that sort of thinking and the right information at hand, it becomes possible to tune marketing strategies that maintain and produce beneficial relationships.
The easiest, most straightforward definition of stakeholder marketing is recognizing that a brand isn’t having a conversation with a static or homogenous audience.
Instead, all marketing is a conversation with all the stakeholders.
How do Stakeholders Affect Marketing?
Connecting with customers is essential, as the world is more connected than ever before.
A few keystrokes can ignite controversy, and conflict or tension can easily upset even the most well-laid marketing plans.
Stakeholders can organize themselves faster, more efficiently, and with a louder voice, and that means that savvy marketers must understand the complex nature of their brand relationships.
Let’s use a simple example to explain how stakeholders affect marketing.
The National Football League’s Washington Redskins had an established brand going back to 1937, though some called for changing the name, viewing it as a pejorative.
Despite a recent lack of success on the field, most of the club’s customers, their fans, were loyal and resistant to calls to change the name.
Then, a groundswell of activist energy in 2020 saw the team’s stakeholders with an amplified voice for their rallying cry to change the name.
The resulting pressure cooker rapidly saw investors, government officials, advertisers, and news outlets pressure the team and its shareholders to change the name.
After years of resistance, the team realized that their stakeholders affected their shareholder value.
The voices calling for corporate social responsibility had become so powerful that they could no longer retain the original name.
They rebranded the team to satisfy multiple stakeholders, preserve shareholder value, and retain existing consumers with a new marketing strategy.
This is the power of stakeholders, communities, and their ability to affect marketing in organizations and firms, both large and small.
Who are the Stakeholders In a Marketing Plan?
Marketing outcomes can have a profound effect on an organization.
Failing to address the concerns of key stakeholders is a recipe for disaster, so marketing discipline is essential.
Stakeholders vs. Shareholders: The Difference
Shareholders have made a financial investment in a business.
They may even be a business partner or partial owner of the company.
Stakeholders can be individuals or groups who have a vested interest in a business, its projects, and the results.
But, unlike shareholders, stakeholders do not have a financial interest in the business.
Technically, in terms of stakeholder marketing, shareholders are also a type of shareholder, so keep that distinction in mind when you consider types of stakeholders.
What are the Types of Stakeholders?
There are at least ten different types of stakeholders that fall into the larger categories of internal/external, primary/secondary, and direct/indirect stakeholders.
They all have an interest in a business, though their role and perceptions vary based on how they interact with it.
There are different types of stakeholders in a marketing campaign.
At the top of the list are primary stakeholders, like customers and team leaders.
They have a high level of interest in the outcome of a project because it directly affects them, and they actively contribute.
Then there are secondary stakeholders engaged in project completion but with a lower level of commitment.
Then, there are direct and indirect stakeholders.
The former has involvement with daily activities within a project, and the latter is more concerned with the outcome than the process of reaching it.
Internal Stakeholders vs External Stakeholders
Internal stakeholders work within a business’s framework and usually have a direct relationship with it or its products.
Employees and owners are examples of internal stakeholders.
External stakeholders still maintain an interest in a business or organization but aren’t affiliated with its operations.
A material vendor who sells supplies to a business is a good example.
What are Stakeholder Examples?
Here are some examples of different types of stakeholders.
- Customers: perhaps the most essential stakeholder ultimately, are the buyers of products, and the quality of their purchase directly impacts them. They are external, secondary, indirect stakeholders.
- Media: Interaction with the media is a major advertising avenue for most businesses publicizing their works or products. The media is an external, secondary, indirect stakeholder.
- Employees: have a stake in their company because it writes their paychecks, but they also interact with customers, so they have a powerful amount of influence. Employees are internal, primary, direct stakeholders.
- Government: Various government agencies are stakeholders in a business or organization by default, as they collect taxes from it and its employees. Government is an external, secondary, indirect stakeholder.
- Community: Communities consider ‘good’ businesses as an asset, and a good relationship between a community and a business functioning within it can be mutually beneficial. Communities are external, secondary, indirect stakeholders.
- Trade Unions: Trade unions have an outsized influence on their members and on the businesses they work for through collective bargaining. They have tremendous influence and assets and operate across multiple spheres, like politics, safety, social media, and pay. Labor or trade unions are external, secondary, indirect stakeholders.
- Owners: Owners supply capital and equity to a business and determine how it runs. As such, owners are internal, primary, direct stakeholders in their business.
- Suppliers: Suppliers sell goods to a business and depend on the revenue from those sales. A supplier has a role as an external, secondary, indirect stakeholder.
- Investors: Investors may be owners of a company or outside shareholders. They may also bring connections, ideas, motivation, and promotional skills to a brand. They have an external, primary, direct role as stakeholders.
- Creditors: Those who lend money have a secured interest in an organization’s revenue and worth. In the event of a foreclosure, they’d receive compensation even before your shareholders. Creditors are external, secondary, indirect stakeholders.
Why are Marketing Stakeholders Important?
Marketing stakeholders are all important because each one of them has a role in the ultimate success or failure of a business.
Stakeholder opinions matter, as their influence, affects your ability to advance marketing strategy.
They also have a clear perspective on products and sometimes a vested interest to go along with them.
This is especially true if a business wants to gain positive reviews.
Plus, they’re not easily replaceable.
If we return to our American football example, consider that the primary motivation to not change the brand image was to appease a relatively stable and satisfied fan base.
But, when the majority of other stakeholders clamored for a logo change, and the entire business and its marketing strategies approached a point of untenability, they pivoted instantly.
Key Components of Stakeholder Theory
The essential parts of stakeholder theory include a few methods.
First, you must identify your stakeholders.
That includes researching which customers are the most influential, how third parties interact with suppliers and customers, community impacts, squeaky wheels within the organization, and which outside influencers can impede progress or drive success.
Then, it’s time to place all of these identified stakeholders in appropriate buckets.
That allows you to craft a single stream of messaging that is portable and identical across different aspects of your brand and your marketing strategy.
The whole process yields a plan to prioritize, execute, and release a marketing strategy for stakeholder engagement.
The Evolution of Stakeholder Marketing Over Time
The age of completely customer-driven marketing is over.
For instance, in the early days of television marketing activity, a single message was deliverable to a large audience.
The receivers of the message didn’t have the same opportunities to interact with each other or with wider audiences.
Throughout the late 20th century, the product messaging that marketed products to customers was simplistic and almost purely customer-centric.
For instance, radio and TV jingles ruled the day for large companies like McDonald’s.
Even though they were advertising to audiences around the world, the same logo, jingle, and hamburgers were the message, and the revenue was enough to keep the bean counters happy.
Now, just a couple of decades later, advertising has seen a paradigm shift in reaction to the mobilization of stakeholders worldwide.
The digital landscape has grown over time and is only going to get stronger as time progresses.
Consider how recent actions in Europe have seen mega-corporations, like McDonald’s, shut down their operations in Russia, costing them $50 million per week.
Doing so doesn’t penalize international mal-actors directly.
Instead, those actions are largely taken in reaction to the clamoring of a stakeholder group that doesn’t have a direct interest in selling cheeseburgers.
Instead, you’re using a strategic plan to prioritize stakeholder relationships over customer relationships.
Those same forces drive companies like Disney to make statements in reaction to political hot button issues, as marketing department managers realize there is risk in action as well as wrong actions.
Stakeholder Mapping
Stakeholder mapping is the next level of the bucketing we talked about earlier.
This is stakeholder analysis on steroids that allows you to develop insights that guide proactive engagement strategies.
By charting stakeholders, you can identify and categorize them.
What is a Stakeholder Map?
A stakeholder map is a representation of how you’ve identified stakeholders.
With careful assessments, categorization by similar interest groups with shared needs, and the identification of effective engagement strategies, your business maps out all the stakeholders in play.
How Does the Stakeholder Map Work?
A stakeholder map works by graphically representing your stakeholders according to your analysis.
This becomes your stakeholder model, where with a quick look, your sales team and content marketing experts can stay on brand and on message, regardless of which important stakeholder they may be dealing with.
Using a Stakeholder Map to Find Marketing Stakeholders
A stakeholder map can be a relatively simple Venn diagram or a more complicated chart, but it really just depends on the needs of your organization.
The bottom line is that the data points you plot help you identify marketing stakeholders and tune your strategy to their needs and expectations.
For any business, understanding stakeholder position and influence is essential.
But, you might also want to gauge their level of interest, legitimacy, power, urgency, authority, and involvement.
Implementing Stakeholder-Oriented Marketing Strategies
Once you’ve plotted key stakeholders on your map and understand the conceptual framework, it’s time to put it to work.
The power of marketing science can drive your business to success, but it’s up to you to identify the marketing strategies that will work for your business.
Types of Stakeholder Marketing Strategies
Common types of stakeholder marketing strategies include:
1. Social Investment
Create value for your community by aligning your strategic business objectives with their needs and expectations.
2. Land Management and Access
Mapping all of your land-based business assets allows you to identify neighbors, localities, and municipalities.
Then, through a targeted digital marketing strategy, you can ensure these stakeholders are on the same page and that you’ve aligned with their local needs, avoiding delays, work stoppages, and harm.
3. Compliance Management
Managing compliance might not seem like a marketing strategy at first glance.
But, a transparent approach to compliance and regulatory burdens is marketing gold when your competition struggles under the microscope.
4. Local Content Strategies
Engagement with the local community through the act of hiring isn’t enough in the 21st century.
But an effective content strategy that includes clear communications, accurate record-keeping, jobs fairs, and a suite of targeted community engagement activities can activate organic stakeholders.
Stakeholder Management: How to Get Buy-In from Stakeholders
When stakeholders buy into your business, everyone wins.
So, tailoring your corporate strategic goals to the things they care about is a sure-fire way to get buy-in from your stakeholders.
The more relevant, positive, and competent your business appears, the more satisfied they will feel being on board.
Here are some thoughts to consider when looking for buy-in:
- Moral and ethical values: is your project worthy of acceptance?
- Stewardship of the environment: will you have a net positive impact?
- Rights and beliefs: does your business infringe on anyone’s safety, religion, or health?
Measuring Stakeholder Marketing Effectiveness
Even the best marketing strategy requires routine measurements of its effectiveness.
However, the information you compile has to look beyond profits and loss.
Of course, it’s essential to earn income.
But, engaging with and satisfying stakeholders is just as important.
Consider your effectiveness in marketing through some different prisms.
- Brand loyalty: Are you retaining customers? Are they making repeat purchases? What about customer satisfaction? Consider email follow-ups for each sale to gauge your customer relationship.
- General attitude: Consider implementing a survey to evaluate the general impression your non-customers have about your firm.
- Engagement: Are you getting likes, retweets, and shares?
Once you figure out what is important to track, you can track those metrics with a marketing scorecard and adjust based on the results, making adjustments as time goes on.
Wrapping Up
Some say that a shift away from traditional marketing is long overdue.
But, it might be fairer to say that the interconnectedness of the modern world has brought an opportunity for a different type of marketing strategy that identifies, engages with, and satisfies the needs of more stakeholders than ever before.
The power is yours, and while implementing a more diverse stakeholder marketing strategy may cause some short-term headaches for you and your marketing team, you can rest assured that your business won’t be stuck in the past when it comes to engagement, communications, and community.
That’s a long-term recipe for success and competitive advantage.