Think back to when you were kid—a time when the world was your oyster. Everything seemed possible (of course you could be an actress/animator/dolphin trainer when you grew up). You were fearless and full of energy.
Then, the inevitable happened—you became an adult. The world made you more cynical; monetary and parental responsibilities put a few gray hairs on your head; and you couldn’t run or bend the way you used to.
Let’s face it: Getting old sucks.
Maturing in the business sector isn’t always favorable either. Startups seem to embody these enviable youthful traits. They’re nimble; they’re always on the cusp of what’s cool; and they’re not afraid to disrupt the space. Public-listed companies, however, seem to lose these budding characteristics as they age. As Joseph Jaffe points out, the pressures to produce short-term results and please investors can cause brands to lose the spark that made their company a winning organization in the first place.
“There’s that wonderful saying ‘Let’s see how big we can get before we suck,’” says the CEO and cofounder of Evol8tion—a company that connects brands to startups. “And as I often say, especially when I’m talking to small businesses from a B2B standpoint,…corporations were built to suck at the end of the day.”
The key to not sucking, Jaffe says, is finding a balance between being a risk taker and being risk adverse so that businesses can scale. So how can marketers strike this equilibrium? Here are Jaffe’s three tips on how to suck less.
1. Invest in experimentation.
Many people are familiar with Google’s 70/20/10 rule for innovation, and marketers can apply this framework to their budgets, as well.
Coca-Cola refers to this structure as “Now, New, Next.” And in a February 2013 blog post, Josh Leibowitz, then a partner at consultant firm McKinsey & Company, explained the budget breakdown as follows:
- 70% of funds goes to “now” or established marketing activities
- 20% goes to “new” or emerging trends
- 10% goes to “next” or untested ideas
So the next time you’re divvying up your dollars, remember to allocate a few to innovation and experimentation.
“Whether it’s 30/60/10 or 70/20/10, it’s really built on this idea that 10% of every single budget—or one out of every $10—should be spent or invested in rapid prototyping, experimentation, tests, pilots, or risk taking—but really on innovation, on things that have no precedent,” Jaffe says.
2. Remember, trying something new doesn’t mean automatically discarding the old.
Even though testing new ideas is important, that doesn’t mean that marketers should forgo all of their tried-and-true best practices. There are several best practices that are no longer relevant or effective, Jaffe says, and there are also new practices that are simply noise. To identify the best of the best, Jaffe recommends following this structure: Keep the best of the old; discard the worst of the old; embrace the best of the new; reject the worst of the new.
“It’s not just binary of old and new—old is bad, new is good,” he says. “Heavens forbid. A lot of the old is bad, [but] a lot of the old is fantastic; and a lot of the new is quite frankly crap. It’s very important to find that balance.”
3. Focus on retention and your “super consumers.”
The idea that 80% of your revenue comes from 20% of your customer base is a time-honored teaching. Yet, marketers still dedicate the majority of their dollars to acquisition. In fact, the “Marketing Budgets 2014” report by Econsultancy and Responsys shows that 34% of companies planned to increase their focus on acquisition last year, compared to 18% who intended to do the same for retention.
“There is no more important balance or equilibrium to find than the balance between acquisition and retention,” Jaffe says. “And if there is any optimization that has to take place that isn’t taking place, in particular [with] B2B, it’s to start to cross that chasm between how we neglect, under utilize, and under invest against not just our most important segment—which is our existing customer—but even the super consumer, which I would define as the tenured, promoter influencer.”
The “super consumers,” according to Jaffe, are customers who have been with a brand for the long haul, adore the brand, and have some sway when it comes to the brand’s audience. Marketers should use these “super consumers” to build an “inside-out model,” Jaffe says—one that uses existing customers to gain new ones, such as through testimonials, content creation, and referrals.
Jaffe describes this idea of using existing customers to acquire new ones as “flipping the funnel” and calls this method the Marketing BowTie framework.