Product Marketing System » Target Marketing

Why should 50% of your marketing fail?

admin — Fri, 11 Jun 2010 14:22:00 +0000

The need for a high failure rate is in direct contradiction to many of my conversations. It is also against most people’s approach of trying to do everything right the first time. I was reviewing one of Donald Reinertsen older books, Managing the Design Factory. Reinersten is simply a great author that takes what I call Geek information and converts to a level of understanding that I even get. I used material from the aforementioned book re-writing it for the purpose of marketing versus software development.

Why should 50% of your marketing fail?

Using the Information Theory: the more probable the event, the less information that is needed. Why is that true? If you receive information that you expect, it contains little information. For example, if you have a targeted message to one person, that information will have a better chance to succeed. If you send the same message to 2 people, you have introduced more risk and less chance to succeed. So rather than try to drive failures out of the process or become more efficient we must introduce large amounts of information and as a result more risk. In fact, that magic number for efficiency is 50%.

To generate that 50% number lets define the 2 extremes. If we want 100%, the information theory states the lower amount of information needed. That means if we “do it right” the first time we have driven all the information out of the process except for a very select audience. If we look at 0% that means that we provide all the information to a very large audience. An analogy that I use for 0% may be a Super Bowl Ad. I am pretty sure at this point that anyone reading this is not contemplating a super bowl ad next year. My failure rate at this point may be high but it is not at either extreme. At least it is at a starting point.

How do we generate this information efficiently (50%)?

Distinguish between failures to generate useful information, which are new failures and those that generate information that we already have, which are the old failures.
Providing tracking information or checklists especially from past experiences. Good accounting of your failures is really more valuable than the description of the most successful work.
The early you test the better.
Use the smallest batch size possible.

In our discussions with small batch size strategies we can think of the process is producing potential errors at a certain rate. If we can test early, we choose to receive these errors when the costs of reacting to them are low. The striking advantages of the small batch size are that information arrived early and our total population of errors remains small because it arrives in more manageable chucks. Of course, the more batch sizes you have the more you waste design resource each iteration incurs extra costs and of course extra cost or path.

These two areas are always in direct conflict and one of the things that need to be weighed is the costs of the trials tested. When the cost of the trial is high fewer iterations will be performed and vice versa. However, frequent iterations can actually be much more valuable than people suspect.

I think this is a very interesting concept and deserves further study. I use this theory in developing Facebook and Google Ads on a regular basis. Seldom are my ads stagnant. They are constantly evolving and change as success rates change. For an example, if you have a campaign that has three or four ads in it, you can constantly evolve these ads to increase hit rates or conversions…but only try to be 50% successful!

Machine Gun Marketing

admin — Thu, 19 Nov 2009 13:19:00 +0000

I was reading Success Coaching U Blog and Joe wrote an article about Ready, Aim, Fire. Good headline, you already can guess what the headline is about, Target Marketing. I remembered a piece of advice I received from another Duct Tape Marketing Coach on targeting your direct mail, which I call the Machine Gun approach. For obvious reasons, I won’t disclose the source, but the following statistics were shared:

I don’t have a success story, I have a sobering story. Here it is:
Number of pieces mailed: 10,000
Response rate: 1%
Number of inquiries: 96
Number that you manage to reach by phone to qualify: 70
Cost of qualifying by phone, per inquiry: $30
Number who turn out to be qualified leads (20%): 14
Total cost of qualifying ($30 X 70): $2,100
Campaign cost of $10,000 + phone qualifying cost = $12,200

Total cost of $12,200 divided by 14 qualified leads = $871.42. In other words, you must spend $871.42 to get to each lead who needs your product or service, can afford it, has authority to buy, and is ready to buy now. Not so good for a small business….

I will call this method the Machine Gun Marketing. Another method of Machine Gun Marketing is the Marketing Idea of the Week. You have an Ad Rep call on you and they have this special 3 for 2 deal. Plus they have this even that they will be attending and handing out another 1,000 pieces of whatever they are selling. Oh yeah, you will also be exclusive to your area of expertise and we will even create the ad. What a deal! But….you will have to do something by Thursday, this being Tuesday. Sounds like a great idea?

If it is not part of your overall marketing strategy, if it not targeted, and I mean really targeted, and you have extra cash in your marketing budget that you were just clueless on how to spend it and you have no collateral material supporting it and you cannot create the ad yourself(a two-step ad, by the war), and you already know how you are going to measure it and….. I have asked Ad reps, that I do not respond to this type of marketing, many have stopped calling. I wonder why…has their machine gun jammed or just ran out of bullets?

Technorati : Advertising, Direct Mail, Ideal Client, Target Marketing

Do you know the last time I was on a horse?

admin — Thu, 08 Oct 2009 01:05:00 +0000

Ok, I am going to rant a bit over an honest mistake but in this day and age, I wonder what demographics this company is using? Several months ago, I started receiving a very high-end horse magazine. Suburbia me, I can’t even remember the last time I was on a horse. In fairness, 15 years ago I did attend a horse show.

The last 3 to 4 months I have continued to receive this magazine. It became a joke in the neighborhood and became a topic in my speaking on what a little Lean Marketing can do for someone; Reduce waste. Recently, I was notified that my trial period had ended, but I continued to receive the magazine with last issue warnings and so on. They have received no response from me. The magazine has continued to come but now the list I was on has been sold to 2 other “Horse” related publications and it goes on. At this time I am receiving 3 horse publications, and additional supplemental mailings from catalogs and such.

My fist indication is that these publications have needlessly increased their circulation at the expense of their advertisers. Do print publications buy list on a regular basis? Is there that little verification on developing a mail list? Are they this willing to buy an un-targeted list such as this? Are that unknowledgeable about their target audience? I am flabbergasted that as a marketing person that a reputable magazine would so blindly put someone on their circulation list, never verify them and even more importantly maybe sell the unsubcribers to another company.

However, the advertisers may be the ones to blame. Do they have this amount of cash to pay for this type of advertisements? I wonder?

Machine Gun Marketing

5 Step Process to Lean Marketing -It’s really 6

Technorati : Horse, Lean Marketing, Machine Gun Marketing, Print-publications, Target Marketing