***This guest post is written by Jim Ewel, President and Founder of AgileMarketing.net***
In today’s fast-moving, consumer-driven world, marketers are expected to support their decisions with data. The Don Draper model, where marketers make decisions from their alcohol soaked gut no longer plays well. Yet when we talk to many marketing leaders, they will admit that they don’t have the data they need to make the toughest decisions.
Yes, they have data to improve their Facebook advertising campaigns. Yes, they can choose landing page A over landing page B based on A/B testing. But that’s not enough.
They want to make the decision to enter a new market (or not) based on data. They want to make that tough pricing decision based on data. They want to justify that multi-million dollar bet on a new product based on data. And they want to make these decisions quickly—faster than the competition and fast enough to satisfy demanding consumers. Making these kinds of tough decisions requires that marketers examine integrated, omnichannel data to support decisions about the marketing mix across channels.
Supporting the toughest marketing decisions is a tall order and the complexities and subtleties of most businesses means that no cookie-cutter approach will satisfy everyone. However, there are some guidelines that marketers can follow to improve their ability to make these tough decisions and make them quickly.
Build a Solid Foundation
Begin by building what data mavens call a “system of record”—in other words a database that brings together data across all channels, where the sources of the data are well understood and accurate, the data is clean and consistent, and everything is up-to-date. You’ll need help from IT or an outside technology provider/partner to help make this happen, but don’t outsource this completely. The key is to get external help without giving up control. Make sure that you, the marketer, understand the sources of data, what each field or item of data means and the relationship between fields—particularly those fields that have the same or similar names but may have very different data sources. There are tools that can help you manage this so it doesn’t need to be manual or something you do on your own. Understanding your data and the process that brings it all together allows you to trust the accuracy of the system of record.
Next, implement and learn to use tools designed for marketing decision-makers. It’s useful to have dashboards and standardized reports, but if they’re not designed to answer marketing questions, they’re probably not that useful for marketing decision-making. And, inevitably there comes a time when you’ll need to analyze the data in ways that aren’t on the dashboard or available in the standard reports, and you don’t want to wait until IT can generate a new report. Decision-makers that understand how to explore the data and generate their own analysis will be able to make better, faster decisions.
Decision-Making as a Core Competency
Decision-making using data needs to be developed as a core competency of the marketing department. Speed of decision-making leads to speed of action, and both of these benefit from preparation and practice. To cite a small but well-known example, one of the reasons why the Oreo team was able to create a memorable tweet during a 34-minute power outage in the NFL Super Bowl a few years back was that they had all the decision-makers in the same room on the day of the Super Bowl.
Identify expectations for the kinds of data needed to support particular marketing decisions (pricing, entering new markets, increasing investment in an existing market, etc.), and develop a process for making these decisions. With clear KPIs and a consistent measurement framework in place, you can push decision-making down and look for ways to speed up the pace of decision-making without reducing (or negatively impacting) the quality of the decisions.
Little Bets
Although the point of this article is to help marketers make the toughest decisions, that doesn’t mean that these need to be the riskiest decisions. Risk can be reduced when making tough decisions by making a series of little bets, identifying failures quickly at a small scale, accumulating small wins, and learning as you go.
As Peter Sims points out in his book, Little Bets: How Breakthrough Ideas Emerge from Small Discoveries, many of the best companies and the best entrepreneurs do this on a regular basis. For example, many of Amazon’s most successful initiatives (Amazon Marketplace, Amazon Web Services, Prime) started out as little bets. Here are two quotes from Jeff Bezos regarding the importance of making little bets to innovation:
“Innovation is part and parcel with going down blind alleys (exploring ideas that may or may not be commercially successful). You can’t have one without the other.”
“Companies that don’t continue to experiment, companies that don’t embrace failure, eventually get in a desperate position where the only thing they can do is a Hail Mary bet at the very end of their corporate existence. Whereas companies that are making bets all along, even big bets, but not bet-the-company bets, prevail. I don’t believe in bet-the-company bets.”
Portfolio Allocation
Marketers can also take a lesson from financial planners as they think about the placement of particular decisions in their overall marketing spend. Don’t bet everything on the riskiest decisions. Instead, think of your decisions and allocating your marketing spend as a portfolio—the majority of your marketing spend should be in well-known and well-understood areas (equivalent to so-called Blue Chip stocks or perhaps bonds in a financial portfolio), with experimentation and riskier bets receiving minority investments until they prove themselves.
Coca-Cola marketing has famously called this the 70-20-10 rule. Invest 70 percent of your budget and 50 percent of your time in proven, well-understood marketing efforts. Invest 20 percent of your budget and 25 percent of your time on experiments around what is already working, looking to fine-tune those things that are already working. And invest 10 percent of your budget and 25 percent of your time on ideas that are completely untested and unproven. These last, smaller bets are the ones that provide the innovation that leads to future growth.
Successfully making tough marketing decisions will always require a certain amount of uncertainty and judgment. You can improve your chance of success by building a solid foundation of well-understood data, developing decision-making as a core competency within your organization, making a series of little bets to learn and reduce risk, and by allocating your marketing spend in a portfolio balanced for risk.