ArticleInsane Principles That Lead To Better Outcomes
I’ve attended far too many meetings focused on what [client/brand] should do in order to [hit whatever goal they’ve set] – so this week, instead of talking about uber-tactical things, I wanted to take a step back and share some of the crazier principles I’ve come to believe after doing this for far too long.
This is certainly one of the more philosophical articles I’ve written, but I’ve tried to temper the theory with actionable, real-world examples of how each principle might be able to help your client or your brand achieve better outcomes – sales, leads, profitability, whatever – going forward.
Principle #1: If it isn’t broken, break it.
Almost inevitably when I speak with a C-Suite executive, an entrepreneur or a client, I find that they’ve made assumptions about certain campaigns, channels, tactics, creatives, messages, whatever: “We know that Google/Meta works….” or “Email has been our most profitable channel….” or “Organic search isn’t our problem….” or “Messages about Y resonate best with audience X….”
If you examine the performance of any marketing asset – campaigns, landing pages, ads, emails, flows, whatever – you’ll observe 6 tiers:
Tier 1: the BEST performers – not all brands have them, but all want them
Tier 2: good, but not great. The proverbial B+ students.
Tier 3: middle-of-the-road, gets the job done but not remarkable, good or great
Tier 4: below-average, but not massively so
Tier 5: money incineration central
Tier 6: guesses, experiments, pet projects + other things we refused to evaluate
This evaluation is deeply intertwined with the scope of any project: since the executive believes that certain things ARE working, it seems illogical to them to dedicate more time, money and/or resources (in-house, external, whatever) to them – and instead, to focus those efforts on the stuff in the lower tiers.
This eminently logical, and so the agency/freelancer/consultant/staff member accepts these claims as a foundational truth, and sets about addressing the perceived weaknesses – probably with varying degrees of success.
But what’s never questioned is whether what’s “working” needs to be broken. The mere suggestion of this provokes reactions on-par with if you suggested something truly insane, like giving away your product for free or refusing a free vacation to Seychelles.
No one stops to ask: “What if we’re wrong, or worse, if we’re only half-right?”
The thing that gets lost in this evaluation is that every one of these tiers is relative. Brand A’s Tier-1 could be Brand B’s Tier-3 – but unless Brand A is willing to say, “What if what we think is working is – in reality – NOT working as well as it could or should? Or, what if we’ve solved for a local maxima instead of a global maxima?”
Most marketers or executives or founders don’t want to grapple with that question. They don’t want to know if the thing they’ve celebrated as a success is not actually working as well as they thought.
That reluctance kills growth.
I think brands and marketers would do better to turn the entire “tier” system above on its head:
- Spend the majority of your resources focused on a few core channels/tactics/platforms/whatever – your T-1 or T-2.
- Spend the next tranche of resources on the guesses, experiments & hunches.
- Spend whatever is left on the stuff in the middle
- Cut everything else.
Try to break the things that you believe are working – because in breaking them, you might just find that what you thought was exceptional was only the tip of the proverbial iceberg. Put another way, that channel/platform/tactic was producing results in spite of what you were doing, not because of it. I see this all the time in email flows: a brand says their welcome flow is their highest performer, and so it must be good – but when you dig in, you realize the setup is barely competent, the flow is missing tons of vital information, and the sales/leads coming from it are the people who were always going to buy anyway, but just needed a reminder. It isn’t nurturing the curious into customers; it’s reminding the customers to press “buy”.
The same is true in Google ads (plenty of brands have Google Ads setups that are driving sales via brand or a core set of hyper-specific KWs – and because of that no-one thinks the channel is broken), Meta (some creative performs and all of a sudden we just start making variants of that), etc.
The opportunity is often in the place you’d look last – and for most brands, that’s the thing they think is performing best. This is your invitation to look/sound stupid and question the wisdom of not breaking what you believe is working.
Principle #2: Averages Hide Insights + Diminish The Extremes.
If I presented a brand (or a marketer) selling a high-end product with an ability to advertise in a place where 68,000 people, with an average net worth of $3.75M each, would be locked in for 3-4 hours, most would probably jump at the chance to secure that placement.
What if I told you that was a Seahawks game with Jeff Bezos in attendance?
It’s true: the net worth of every person at Lumen Field increases by $3,000,000 (yes, that’s true: Bezos’ net worth is ~$210B and Lumen Field has a capacity of about 68,000 – you do the math) – and the average net worth of a Seahawks attendee is about $750k.
This is an extreme case of a single outlier radically skewing a dataset – but the same holds true (at a much smaller scale) for marketing tactics, product performance, etc.
Averages hide insights.
For many of our clients, their average order value can never be created with any combination of products sold in their store – yet somehow, their advertising efforts all reference that AOV in some form or fashion.
That’s insanity. Brands/agencies are designing acquisition strategies around a point that does not exist. Consider how this could skew your data with the following hypothetical store:
Imagine a store with 5 products:
- A starter (trial) pack of A, B & C selling for $125.00
- Product A (base size) sells for $75.00
- Product B (base size) sells for $85.00
- Product C (base size) sells for $90.00
- Product D (premium, not included in trial) sells for $155.00
The AOV of the site is ~$110.
No single product, or combination of products, adds up to $110. There’s no way for a customer to come to the site and actually purchase exactly $110.00 worth of product. But, you say – the average is fine – over a large enough sample, the total AOV will be $110 and we can plan around that.
NO.
The distribution matters. Let’s assume this brand has the following cost structure, and this structure is uniform across all products (it isn’t, but it’s close enough):
25% = COGS
10% = Fulfillment (warehousing, pick/pack fees, credit card processing fees, etc.)
10% = Incidental cost of fulfillment (customer service, returns allowance, etc.)
25% = Contribution Margin
30% = Allowance for marketing acquisition
Aside: If you’re in lead generation, you can do this same math. You’ll obviously change what you’re adding up to things like labor costs, materials costs, etc., but you get the idea.
The (very savvy / better than most) marketing agency takes the $110 AOV and multiplies it by the 30% marketing allowance to come to a CAC target of $33.00. They happily plug that into Google and Meta, and they achieve it. Everyone celebrates this wonderful success.
One problem: the marketing agency screwed up.
Let’s take the most common orders (in order of popularity) (30% in parenthesis)
- Trial Pack (alone) = $125.00 ($37.50)
- Single Product A = $75.00 ($22.50)
- Bundle #1 – Products A & C = $165.00 ($49.50)
- Bundle #2 – Product A, B & D = $315.00 ($105.00)
- Single Product C = $90.00 ($27.00)
- Single Product B = $85.00 ($25.50)
- Single Product D = $155.00 ($46.50)
It turns out that the marketing agency OVERBID (and, correspondingly, cost the client money) on all of the Product A, B & C individual orders and UNDERBID (and, correspondingly, likely missed out additional orders) for the Trial Pack, Product Bundles and Single Product D. In short, focusing on the average led to suboptimal allocations and decisions across the board. The fact that this happened to mathematically work out is a fortunate accident, not a masterstroke of marketing work. .
The same happens on the other end of the spectrum – I had a client share a report that the Revenue Per Click on Ad X was nearly $10.00 – 5x higher than any other ad. Said client was convinced that this ad was the key to his brand’s growth.
One problem: when we dug into the transactions associated with this ad, there was a single, massive order that radically skewed the data. Take that anomaly out, and the ad was below average in every other respect. It was wholly unremarkable, except that it happened to be the thing a whale clicked on just before purchasing. When we inquired about the ad, the customer remarked that it was just a reminder and couldn’t recall it at all. It made no difference to him.
And when that single data point was excluded, a radically different picture of the brand’s creative performance emerged. Had the brand gone forward with their plan to embrace this ad, they would have over invested in something that’s entirely unremarkable and (likely) lit a ton of money on fire.
Finally – there is the reality that most innovation happens at the extremes, not at the middle. If you want to know the best features of your platform, you ask the power user, not the occasional user. Why? Because the power user is one who has (probably) investigated many use-cases and has probably spent way too much time optimizing their workflow. The median user is probably a mid-level person who doesn’t know what they don’t know and is wildly unserious about optimizing their workflow or maximizing the value created by your tool.
If that sounds insane, consider that John Montagu – the 4th Earl of Sandwich (and purported inventor of the sandwich) was a compulsive gambler who (according to historical sources, Wikipedia and the 1772 travel book A Tour to London: Or, New Observations on England and its Inhabitants by Pierre-Jean Grosley) demanded that his servants bring him meat placed between two slices of bread so he would not have to leave the card table. The sandwich, then (according to historians, I wasn’t there) was created not in response to the demands of the common person (or even the common gambler), but rather to address the glutinous habits of a truly degenerate gambler.
For a more modern example, consider DeWalt – the entire brand (+ product catalog) has been designed to withstand the (wildly creative and truly absurd) ways in which construction workers break, damage and destroy tools from other brands. If you asked the average Lowes or Home Depot shopper what their durability requirements were for a power tool, they’d probably tell you something like, “If I drop it down some stairs or from a ladder, I want it to still work.” DeWalt, on the other hand, isn’t designing their tools for the average handy-homeowner-installing-shelves use cases; they’re creating products that can withstand the drunk construction worker chucking them from the roof (please don’t do this). And in doing that, they’ve created a set of products that are widely considered to be the standard in the construction industry. If DeWalt only solved for the average, they would have created a perfectly fine but wholly unremarkable product; because they ignored the average and focused on the extremes, they created a billion-dollar brand.
None of this is to say that averages are always bad (they’re not!) – but I’d venture to guess that mis-use of averages is at the heart of more issues than proper use of averages has ever solved.
Principle #3: Get the direction right; sort the details later
One thing I’ve noticed after nearly fifteen (yeesh) years in finance & marketing: we (collectively) have an unholy obsession with the process that goes into making decisions, far more than we are obsessed with the results of the decisions themselves.
Some time ago, a client we were brought in to work with a rapidly-growing, venture-backed business. Around the same time, this brand also retained a well-known conversion rate optimization (CRO) specialist to work specifically on their landing pages. The focus behind both moves (hiring us and the CRO expert) was their leadership (read: investors’) desire to shift the brand’s unit economics into more favorable territory (this is the kindest possible way I can write “to stop lighting money on fire in a futile attempt to keep warm”).
As is the case with many of these engagements, the CRO consultant set about implementing a rigid, pseudo-scientific framework for how certain elements and/or sets of elements on landing pages could be changed, how long each change/set of changes would need to remain in place before a new set of change could be made, and an entire host of other stipulations designed to avoid confounding factors & multicollinearity, and (in theory) ensure we could reach statistical significance on each test run. This was all done under the guise of bringing rigor and scientific process to marketing – and the executive team (again, read: investors) lapped it up like ice cream on a hot summer day.
Of course, there were two flaws with this CRO consultant’s flawless plan: (1) it took too damn long and (2) it solved for incrementality when we needed exponential growth.
One of the more successful salespeople I’ve ever known told me: the only two losses in sales are the longs: a long no and a long yes. If you want to win, keep it short: a short no beats a long yes every day of the week.
In a business burning $500k/month, you don’t have time to wait around for the p-value on your messaging test to finally get below 0.05, and the difference between 0.10 and 0.05 is meaningless to anyone except an academic. We’re in marketing. I’m not interested in my clever marketing experiment being published on JSTOR or SSRN; I’m interested in maximizing my expected return on invested capital. An incredible, statistically-significant finding that comes at the cost of the client’s business isn’t worth it.
The second – and related – flaw: this process was designed (like most CRO efforts) to be incremental: propose a hypothesis, design an experiment to evaluate the hypothesis, evaluate results, accept or reject the hypothesis. Rinse, repeat. This sounds incredibly appealing to executives, investors and business owners because we all (collectively) have been indoctrinated into a cult of hyper-rationality since we were in middle school (probably before). The notion that we should be methodical and rational and logical has been ingrained in us far too early (and far too harshly), and in cases like this, it causes us to do dumb things.
There’s a reason that Silicon Valley – with its “move fast and break things” motto – has created more disruptive, world-changing technology in a few decades than any other place on the planet: they care more about the result than the logical purism of the process.
In the case of this brand, they needed to find product-market fit. They needed big changes in short order. They needed to 10x their marketing effectiveness in less than a year, not improve it 10% a few times over. I argued this brand should be taking massive swings – change everything. Test 5 different offers. Throw a dozen (or more) different angles into the market. When I first proposed this, I was laughed at; I was told I wasn’t being serious and that someone with my background should know better. After all, if they did this, how would they know which change was working?
About three months and many thousands of dollars later (with very limited results to show for it), that same group decided that while I may be (slightly) crazy, I probably wasn’t wrong.
While this brand may be an outlier, this scenario is far too common. More and more, we (as an industry) are focused on the logical coherence and rational purism of the process, to the detriment of the viability of the solution. Don’t get me wrong: there’s a time to proactively seek out small, incremental, 10% improvements – but it isn’t when you’re burning an Aston Martin V12 Vanquish every month. There’s a reason I advocate for the 10x & 10% model for testing – and it’s to avoid the trap that this brand (and so many others) have fallen prey to.
Don’t be stupid, but be a little crazy.
Principle #4: If everyone’s doing it, do something else.
There’s a somewhat famous chart that looks something like this:
Put another way: if you do the same things that everyone else does, you’ll get the same things that everyone else gets. Incrementality is found by going against the grain, by doing the things no-one else is willing to do.
Perhaps nowhere is this more apparent than on Meta (IG & FB): look closely enough, and you’ll see the same hooks, the same ad types, the same content, the same memes recycled this way and that. If you go one level deeper, you’ll often uncover the same ad account structures, the same naming conventions, the same bidding strategies, the same integrations.
This has (quite predictably) led to a sentiment that these ads are trite and unremarkable – which has corresponded with an overall decline in platform-wide efficiency metrics (ROAS, CPA). Where brands could once get a 10x ROAS on Meta, they’re now delighted to get a 3x. The same phenomenon can be observed in stocks (the early investors in Google or Meta or Amazon reaped 10,000x returns, while the investor in 2010 captured a fraction of that, and the person who finally bought in 2021 captured a miniscule fraction of the 2010 person’s return), in fashion/goods (having a Stanley 2 years ago was a statement; today it is a staple), even in cars (owning a Roadster or early Model S is still a status symbol).
As adoption increases, surplus value decreases.
To break free of homogeneity, ask yourself: where is the empty space? What is the thing that others aren’t doing or I don’t hear/see about?
If your competitors are spending a boatload of money on digital ads, go old school (radio, TV, direct mail); if you see everyone using a traditional ad format, try a quick hook. If every competitor is using sales/discounts this holiday season, raise the price or bundle more things together. Whenever you see everyone else do something – positive or negative – experiment with the opposite.
Dare to be different. Be bold and creative. Throw caution to the wind and do something radically different. On a normal day, a relatively average person (beware of those) will see somewhere between 4,000 and 10,000 ads (that sounds like a lot, until you realize that there are ~8 ads on a single SERP, and one ad every 3-5 posts on social media, and anywhere from 5-10 ads on a single, long-form news article). 99%+ of those ads will probably never even be seen, let alone remembered (our brains are the original ad blockers).
What will be remembered? The ads that were either hyper-relevant and pertinent and/or the ones that were truly disruptive. If you’re curious about how I’d suggest going about creating those, I’d encourage you to read Best Practices Are (Usually) Bullshit.
The corollary to this (related to Principle #3) is: someone (or everyone) has probably already thought of the rational/logical solution. Candidly, that’s always been the downfall of logic: it’s predictable. If you can figure it out, so can I (and vice versa).
Principle #5: A little waste goes a long way.
I was listening to a recent episode of the 9 Operators podcast (you should check it out) as the co-hosts were discussing ways to improve profitability and margins. Inevitably, the idea that “wasteful” marketing should be cut was offered up and accepted as a good life choice.
Before we go any further, let me be clear: I’m not in favor of lighting money on fire for the fun of it. I’m as opposed to wasteful spending as anyone.
But: I think a little waste is a good thing. Hear me out.
If I wanted to cut all the waste from an ad account, I would probably look at every audience/ad/keyword/placement/whatever from the past X days that has not recorded a conversion, then eliminate it. If I wanted to go a step further, I’d set Max CPC limits (Google) and/or Bid Caps (Meta) in my accounts to avoid blowup CPCs on anything that has previously converted, squeeze the efficiency targets to restrict spend further, and double down on the things that have performed well in the past.
And that would work, at least, for a time. Efficiency would rise.
Back when I played ice hockey, our forwards coach (let’s call him R) used to berate our forwards for shooting at the middle of the net. He would lose his mind if someone nonchalantly deposited a puck into the center portion of the net. To me, this was unusual – most coaches (at least, until I got to juniors) were obsessed with players not missing shots. “Get it on the net” was the mantra. Every coach I had (up until this point) would absolutely lose their minds when someone would miss high and the puck would ricochet out of the zone. Not Coach R. He wanted everyone on our team picking corners, damn the consequences. Bar down was the expectation. If you went for the middle of the net on a rush, the only good news was that you didn’t have to worry about cardio for the rest of the week.
For a while, I just assumed Coach R was certifiable. One night after practice, I asked him what his deal was – why did he loathe our hitting the middle of the net so much. I’ve never forgotten his response: you don’t score goals by shooting pucks through goalies.
The marketing plan that I outlined above is the equivalent of shooting at the middle of the net. There is very little waste and very little downside risk. Is there a time and a place for it? Yes. But if you want outsized returns, you need to take risks. You need to shoot for the corners. And, when someone looks at it, some of those risks are going to look an awful lot like waste.
If there’s no monetary waste in a marketing program or an ad account, then there’s no exploration happening – you’re not trying new things or deviating from yesterday’s script – and that’s the most insidious kind of waste: you’re wasting time. You’re missing out on emerging trends and emerging searches and emerging platforms and emerging formats. It’s OK to light some money on fire if the light those dollars produce helps you find a better way forward.
Does that mean be reckless? No. But a little waste goes a long way.
Principle #6: Fight Battles You Can Win
I’ve attended no less than a dozen meetings in the past ~month where the primary focus of the conversation was how to respond to the competition – what they’re doing, what features/functionalities they’ve introduced (or are planning to roll out), how they’re changing their marketing, where they’re advertising, what offers/discounts/promos they’re running.
It doesn’t matter who you are (or who your competition is); if these are the conversations you’re having, they’ve already won. I’m certainly not suggesting to ignore your competition, but I am suggesting that no company should allow their competition to dictate their strategy. There’s a fine line, but it’s one far too many brands are (at the very least) leaning over.
Every remarkable brand – whether it’s Liquid Death or Ridge Wallets or Louis Vuitton or (whatever) – has carved out a singular, differentiated position in an otherwise crowded marketplace. They’ve re-framed the debate in the minds of their target audience from an area where they’re competing to one where they’re the only player.
While this is a traditional tactic of luxury brands (I wrote about that in Issue #56, Lessons From Luxury):
More brands would do well to think singularly. Any time you reduce a brand to a set of features or functionalities, you enter the commoditization arena. No brand leaves that arena unscathed, and, if you walk into the arena often enough, even the greatest combatant won’t walk out.
It is not out of reach for any brand – it just requires a willingness to think differently. To obsess over the details that others ignore. To mine the diamonds that your most loyal, devoted, utterly fanatical customers have found in their experience with your company. In short – it’s work.
An absolutely wonderful example of a brand doing exactly this comes from – of all places – Emily in Paris. In the first episode of Season 4 / Part 2, Emily is attempting to fly home to Chicago on Air France (nice product/service placement there). As she’s checking in, the attendant shares that she’s been upgraded to business class (thanks to her boss, Sylvie) and invites her to wait for her flight in the Air France Lounge at Charles De Gaulle airport. In the ensuing scene, Emily is shown Facetiming with Sylvie first as she walks up a gorgeously photoshopped grand staircase into the lounge, then as she is offered Champagne and croissants, and finally as she relaxes on a luxurious chair overlooking the tarmac. In the midst of the conversation, Emily comes up with a campaign slogan, “Luxury begins on the ground…” – which Sylvie tells her to write down, then get on with her Holiday.
What stands out about this is the re-framing of the experience. Yes, Air France has a very nice business class product, but so does Turkish, KLM, Lufthansa and many others. Air France flies to many of the same destinations as those airlines. And Air France is priced competitively with each of those other airlines to many of those destinations. In short: Air France is a perfectly solid airline, but they knew that competing on features, aircraft, destinations and price was a losing game, so they re-framed the entire conversation to one they believe they can win: the over-the-top luxuriousness of their lounges.
In the context of a flight, the lounge is a trivial detail – but it’s one that Air France (to their credit) does execute quite well. And – thanks to Emily’s (read: Air France’s agency’s) clever tagline, anyone watching Emily in Paris (let’s also be real: the Venn diagram of the audience for Emily in Paris and the audience of people considering European vacations is a lot closer to a circle than most want to admit) and thinking about what airline to fly internationally will now (a) want that same glamor shot of the Air France lounge – good for some ongoing social media exposure and (b) introduce the quality of the lounge as a decision-making point in future flight decisions.
Will many travelers decide to fly Air France because of their lounge? Probably not. But will show watchers on the fence about a KLM flight via AMS or an Air France flight with a stopover at CDG lean a little toward Air France? Probably. And a little movement at the margins is often where marketing earns its keep.
A radically different example of this exact same idea comes from Hims / Hers Health – as with Air France, they’re (essentially) offering the same suite of available-at-any-doctor products, with the same active ingredients, that have been on the market forever (I think Rogaine hit the market in ~1988), at the same price points (in some cases, higher price points) than any person would get by going to their doctor and getting a prescription.
The great insight that has catapulted Hims/Hers Health into a $3.85B company was that while there is a massive need for their products, no-one wanted to talk about them. They didn’t want community or camaraderie; they wanted discretion. Hims/Hers entire business model is oriented around this counter-intuitive insight – from a non-descript form to a confidential, 100% virtual appointment, to alarmingly plain boxes containing your products. Sure, their advertising is everywhere – but their products are (seemingly) no-where. At a time when every other company/organization in the health space is adopting a “loud-and-proud” approach, Hims/Hers went against the grain.
As of this writing, Hims/Hers most frequently advertised value proposition isn’t their products (or their efficacy); it isn’t the results (though they are there); it’s their discretion. They have taken a factor completely unrelated to the standard conversation (privacy) and made it the only conversation.
Principle #7: No one thinks about your brand as much as you.
Before I started writing this newsletter, I spent hours talking to Aaron Orendorffabout what I should write, and how I could create valuable, novel content each week. I remember being absolutely terrified of writing the same thing twice – and worse, someone remembering I had done it.
Aaron’s response was: “That’s the only problem I’d pay to have.”
One of the great downsides of the internet being forever is that everyone is terrified of being remembered, when being remembered should be the thing we strive to achieve.
We had a social content meeting to review next month’s content, and upon seeing a post for (who the hell knows), a member of our team piped up, “We can’t use that image – we used something similar last April.”
Excuse me, what?
One: I don’t know the precise amount of time one needs to spend browsing a social profile to be able to recall (with striking accuracy) the content of a post made nearly eighteen months ago, but I’m quite certain it’s well over any “too much” threshold. Two: any member of our audience who has spent that amount of time on our social profile is either a loyal customer/client or a crazed stalker, and in either case is unlikely to be offended.
When I read old ads (another fun pastime of mine), I’m continually astonished by the level of message consistency and discipline exhibited by the “mad men” marketers – for years on end, brands hammered home the same points in the same way, using the same language and visuals and motifs. It didn’t matter how many prior ads used the same message, they continued to drive it home time and time and time again.
To go back to the 4,000+ ads a day stat, I – someone who lives and breathes advertising – can’t name more than 50 ads I saw today. Out of (at least) 4,000. That means I’ve forgotten 98.75% of the things brands tried to tell me – oops? Ironically, the only ads I remember are the ones I know I’ve seen long before today.
Let me put this another way: repeat yourself early & often. Hammer your messages home. Endeavor to be remembered. The best problem you could ever have in Q4 (or any time) is for your audience to see your ad and think, “You know, I’ve seen this 100 times before.”
Cheers,
-Sam
