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Tag: testing

  • Can Small Companies Act Like A Big Business And Win?

    Can Small Companies Act Like A Big Business And Win?

     Size matters, right? In some things, that’s certainly true. In the start-up phase of a business, its more like “Scale Matters,” as the mantra driving pixel-based and other start-ups is “Does it scale, and how well?” This avoids the trap of essentially creating a job for the founder, instead of a business primed for success and growth. If the founder is a limiting factor, because he can only be in so many places at once, that’s a problem with scale. It’s a structural issue, one that needs to be addressed at the earliest stages, so the business can pivot around it and grow.

    Agility is the biggest single advantage small business has over their larger industry-mates, and to give that up with layers of bureaucracy, rigid policies, staunch and robust process guidelines with little room for innovation seems counterintuitive. However, there is one area where acting like a bigger company can pay much bigger dividends – Marketing.

    Most small companies suffer from a couple of similar ills when it comes to marketing themselves:

    • Small companies typically focus on sales rather than marketing anyway, laboring under the misapprehension that if they can just sell enough widgets, software licenses, land enough accounts, find enough clients, the marketing will take care of itself. As a consequence, most underspend, in some cases drastically, on outreach marketing activities. Oddly, these are the exact type of investments and activities that will position them for the growth they so strongly desire. Most founders are so fearful of waste, or of appearing to make a mistake, that they play everything close to the vest, making only incremental advances, taking the safe route and only repeating the actions they “think” worked the previous year. This leads to small, defensive thinking and limits growth like a vice squeezing the business until it’s frozen in place.
    • Spending on the “wrong” things. The old saw still holds that ”half of our advertising works, we’re just not sure which half.” In today’s data-rich, public-sharing society, there’s almost no excuse for not knowing which half of any activity drives revenue, some types of activities are just harder to connect directly to sales growth than others. With that said, businesses who have never advertised or done any real organized, planned outreach activity almost universally find a significant uptick in sales revenue when they decide to start. But that glow is short-lived, as they try different things on an ad hoc basis without a plan, and spend themselves out of all the revenue gains they made at the beginning.

    Now What?

    What to do? Modern marketing is about agile, “spend, fail, learn, repeat” cycles. You’re not going to hit the target on every activity the first time out, and there’s a learning curve for every business, regardless of how many consultants or agencies you engage. You’re going to fail at some point, better to accept it, get used to it, use it in a positive way and get past it. One now-famous CMO of a large consumer products company had a philosophy about how to “do” agile with a variety of marketing ideas – if you throw ten ideas at the wall, and 6 of them stick, you’ve broken even and paid for the bad ones. If you hit 7 or more, you’re up for the year. Take the education from the 4 failures and commit those resources to the other six, and double down. This creates a culture of upwardly-spiraling innovation, one that rewards success while negating the suppression and stigma of failure. Failing fast and cheap works in your favor over making big bets on untested ideas and misplacing resources at a loss.

    Where small business can think like a bigger business is in their attitude toward spending on marketing activity. Small-minded miserliness is self-defeating. Do a quick cost-benefit analysis, allow founders to have the courage of their own convictions, and take a calculated risk on some outreach activity that’s informed by solid, hard-won research.

     

    4-Step Process To Improvement

    • Get to know who your customer really is, spend the time and money on research.
    • Find the company’s “why” early on and use it like a weapon against your competitors.
    • Differentiate the small business from their market-mates, and exploit the difference
    • Designate a real, realistic portion of your sales revenue for marketing activity.

    Once you reach that spending level, you’re done for the year, limiting your losses by putting a stop order on funding ideas that haven’t borne fruit. Now you have a system for testing ideas, limiting downside of investing in ideas that don’t generate revenue, and have a back-stop for using the education to apply toward the ideas that do work and drive revenue upward. This kind of test, fail, learn, repeat cycle is innovation-friendly, and can spawn all sorts of new ideas, new products, new angles, new customer segments, all of which lead to the type of rapid growth start-ups are known for.

    You’ll be surprised at the benefits that the courage to innovate can generate in the long- and short-term, and the gains that can be had by simply thinking and acting bigger than you are as a company. Size does matter, most importantly, in the realm of perception.

  • Lies, Damn Lies, And Statistics

    Lies, Damn Lies, And Statistics

    The world of marketing is fraught with data, we’re drowning in it, awash in a sea of numbers, statistics, charts, graphs, analytic dashboards keeping track of minutia that has little bearing on the bigger picture of framing and positioning the thing we’re marketing in it’s best possible light to the best possible audience. What was once about words, pictures, images, headlines, ideas, insights and engagement has been reduced to a series of tactical, digital zig zags, trying to maximize return on a micro level, and hope it scales up and moves the corporate revenue needle.

    Why?

    Do It Yourself

    One of the reasons that data has become so powerful (it always was, we just didn’t think it was cool to talk about it) is that not only is there a lot of it, but it’s easier to obtain and derive, and the costs are much lower, thanks to the Internet. In the bad old days, if you wanted to measure engagement or response, you had sales numbers (conversion), inbound phone call numbers (inquiry, “likes”), or account rep activity (lead gen inbound). Other than those in-house numbers, if you wanted to know more, you needed to dig much deeper, create a research study, engage a firm and have them do what they do and report back.

    Today, all the activity data, engagement activity, views, likes, dwell time, clicks, shares, conversions, and other forms of engagement signal are logged, categorized, organized and reported to you digitally on a minute-by-minute basis in real time, using inexpensive or free software. And it can all be accessed by anyone with a laptop and an Internet connection, anywhere in the world.

    Prove It . . .

    One other reason all this craziness over data is occurring is more corporate and has to do with economics. The marketing department has long been viewed as an expense, occasionally by the more enlightened as an investment, but only recently as having the potential to be a profit center. Marketers have always had the need to justify their existence pressed upon them, and we spend hours writing reports, dissecting response numbers and finding ways to make it look like the things we’re doing contribute directly to the company’s revenue and well-being. On some level, the more data we can present, the more attractive a case we can make for being provided, and spending, more money to do the things we know we need to do, but have to prove it to everyone else.

    In the real world, using data to gauge performance, learning and improving returns, and making decisions based on data is really the main idea – but we’ve been doing that for years. The real trick is to properly select and vet the data you’re looking at and using to make those decisions. Just because a number represents a count of a certain behavior or response doesn’t make it a viable or useful piece of data – it may not scale, it may not apply across platforms or audiences, it may not be sustainable, it may be badly skewed by events you have no control over. But it is data, and therefore useful, right?

    The other pitfall to all this data is that even if it is accurate, correct, vetted and sustainable, you need to find a way to convert that data to insight, and that insight into an action plan. You have to use the data to further the cause. Most data will tell you something on it’s own, but its not enough to go the distance. You need to step back, see the larger picture, put the data in context with other inputs you have proven already, and see if it flies.

    Lies, Lies, All Lies!

    Now we come to the lies part. Numbers and statistics can be manipulated to indicate almost any point of view, the insight comes in the interpretation. Averages tend to dilute or blunt insight, rather than amplify it. Statisticians have all sorts of tricks and formulas to manipulate data so that it can tell virtually any story you want – it’s all in the spin, how it’s presented. Even something as simple as college rankings, a long standing measure of the potential for success in leveraging education and brand to elevate one’s position in life in the long term, can be easily manipulated by marketers to tell a story that promotes the cause. If a college has slipped in the rankings from number three to number seven, is that slide an anomaly, is it due to something short term or environment that will reverse it self when conditions change? Even though that could be seen to represent a significant slide, it’s a virtual certainty that recruiters will be touting it as a “Top 10” college for years to come following the slide, hoping that nobody looks too closely at where within that top ten it falls.

    Use It Right

    The best use of all this data is to gain a clear understanding of the current position and level of success of your marketing efforts, establish a base line, relate it to growth, profitability, revenue growth, reach, market share or other commonly regarded metric, in order to use that baseline as a starting point for improvement going forward. If that happens, justification of added spending will be easily achieved, as activity can now be tied directly to results that impact everyone. Clicks and likes don’t pay the light bill or match the retirement funds, but if you can use data to show how you’re moving the needle, use it to improve performance by looking at the “right” metric, and make good decisions based on a few key data points, then that’s all the data you really need . . .