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Every entrepreneur has made a blunder or two while trying to win new customers. If you're lucky, you can use the lessons you pick up to succeed the next time around.
Napoleon had Waterloo. Lee had Gettysburg. Custer had the Little Bighorn.
After his blunder, Napoleon was sent into exile. After Gettysburg, Lee never again invaded the North. And after the Little Bighorn--well, there was no "after" for the reckless Custer.
Entrepreneurs are far luckier than generals. For one thing, we seldom put our lives on the line. For another, though most of us have failed miserably at one point or another in our careers, the best of us have learned valuable lessons and become better leaders as a result.
So here I recount the three biggest new-business blunders in my career--and impart the useful, if painful, knowledge I gained as a result.1. Underestimating a new business lead
We were once approached by a company that made specially equipped vans for handicapped people. When they asked if we would be interested in representing them, we said sure, but we treated the opportunity far too lightly. In fact, we didn't even rehearse until about an hour before the presentation was scheduled to begin.
Our team decided not to present in person. Needless to say, our competitors took the new business lead very seriously and sent their full team to meet the prospect.
It gets worse. I showed a photograph of a handicapped-accessible van parked outside a retirement village. I began my explanation, but the prospect interrupted me. "Steve," he asked, "you do know the slide you're showing contains a photograph of our No. 1 competitor's product, correct?"
When my heart began beating again, I opted for humor. "Of course," I chuckled. "We just wanted to make sure you were still paying attention to the presentation."
The prospect wasn't amused. Needless to say, we received a "Dear agency" letter the next day informing us the business went to our competitor.
Lessons learned: Never pitch a piece of business unless you're willing to invest the maximum time and resources necessary to win it. And never wait until the last minute to rehearse or review the contents. We now work backward from a presentation date and rehearse multiple times.2. Trusting a mole
I received a call once from a good friend who also happened to be the in-house general counsel of a global international consulting firm. "Steve," he said, "not only are we firing our PR firm, but I know exactly what they did wrong and I know exactly what the CEO and COO want from the new firm."
We were thrilled to compete and ended up sharing every strategy and tactic with my friend, who massaged them at every step. I don't think I'd ever felt more confident striding into a prospect's conference room than I did walking into the consulting firm's that day. When the presentation ended, the CEO was the first to speak:
"That had to rank as the most glib and superficial presentation I've ever heard," he said.
The COO applied the coup de grâce: "Steve, why did you just assume this is what we wanted?"
We did our best to regroup, but we were dead in the water. Steaming, I ran to the nearest phone and called my friend. When I reported the results, he replied, "Hmm. I guess things must have changed between then and now." That was it. My best guess is that he had overheard snippets of different conversations and leaped to the wrong conclusions, but I never got further explanation.
Lessons learned: Don't trust an inside source at a prospective client's organization. Always depend on what the lead decision maker tells you in her brief.3. Drinking your own Kool-Aid
Like many firms in my field, we've dramatically changed the range of services we provide. So though we began as a traditional public relations firm 19 years ago, we have subsequently morphed into a fully integrated strategic communications firm.
In our early, PR-only days, we had the good fortune to represent a top office-products manufacturer. But as is often the case, the old management team that had hired us was swept out and replaced with a new one. And when a new sheriff arrives in town, the first person he shoots is the existing PR firm.
Fast-forward five years. One of the original clients had returned to the office-products company, in a much more senior position. Now that he was the sheriff, he was anxious to shoot the existing firm and bring in his favorite (that would be us). And so he arranged a capabilities presentation to his fellow managers that we assumed would be little more than a rubber stamp for him to hire us.
But there was one slight twist. "Joe" asked that we update him on the "new" Peppercomm. Rather than review our still-considerable public relations capabilities, we instead launched into a 40-minute review of our amazing new array of sophisticated client service offerings. The managers didn't seem impressed in the least. At last, Joe stopped us and said, "Hey, Steve, we're looking for a PR firm. It seems to me that Peppercomm doesn't even do PR anymore. But thanks for the update. We'll be in touch."
We were dead. I tried my best improvisation routines to win them back, but we had blown a golden opportunity. The PR account went to another firm that, you guessed it, did nothing but PR.
Lessons learned: You don't want to begin a meeting by extolling your firm's virtues. Instead, ask the prospective client to restate the exact scope of the assignment for which it requires assistance. Had we only asked, we would now once again be working with Joe.
The great thing about business (as opposed to war) is that leaders can live to fight another day. And, trust me, I now go into battle a chastened, if better prepared, leader. I may have been humbled by three horrific blunders, but each has made me a better entrepreneur and my business a more formidable competitor.
You don't have to treat all your employees exactly the same. But it's not quite that easy.
It's easy to become enamored with the cachet of Silicon Valley companies and wonder if you can replicate their way of life and fun company cultures. But what if napping rooms and yoga coaches aren't a fit for your business?
I received this email from a HR manager at a company facing just such a dilemma:
Currently there is a disconnect between all managers on how they manage their employees and apply benefits, handle performance evaluations, and bend the rules. Even though we do have a written handbook with outlined policies and procedures, these are regularly bent or broken. I'm concerned that we are not only creating animosity within our organization but also leaving ourselves open for potential legal liability. Our CEO has been awed and inspired by recent articles from some of the top creative companies that employ this type of work style successfully. However the reality of our situation is that over 50 percent of our work force is based in manufacturing. The freer model may work well for companies in Silicon Valley, but it doesn't seem to fit into our blue-collar midwestern culture. Everything I have learned in HR is centered around consistency and documentation. Can you please guide me as to whether or not this still holds true, and if so, why consistency is still important? Or is this train of thought rooted in the past and the movement forward is to a more relaxed view of consistently applying policies, procedures, and guidelines throughout our organization?
She has some really important concerns. In some things, it's absolutely and legally necessary to be 100 percent consistent. For instance, sexual harassment and illegal discrimination should never be tolerated. Pay must always be done correctly. You also need to be fair and treat like situations likewise. But you need to evaluate what "like" situations are.
For instance, the HR manager above is faced with a CEO who wants a cool startup culture, but 50 percent of the company's employees work in manufacturing. Often in this situation, a more structured environment--where people show up on schedule, do their work, and go home--is the norm.
When You Can Bend the Rules...
But what about the other 50 percent of employees? The ones who aren't manufacturing? The rules can be different for these people for a couple of reasons. It's probably going to be OK for your marketing director to work from home on Tuesdays, because she can do 99 percent of her job over the phone and with her computer. Additionally, it's OK for your exempt employees to cut out of work an hour early because they'll be following up after the kids go to bed anyway.
And should two exempt employees be treated identically? Not necessarily. What you need to be looking at is performance. If John is always on top of things, is highly productive, and is available whenever he's needed, you can allow him a lot of leeway. But if Jane is hard to find, doesn't return calls when she's out of the office, tends to fall behind on her projects, and is generally unproductive, you can rein her in. It's all about performance.
This means you do have to treat your employees as individuals. It also means you need to document performance--otherwise Jane might claim that she's not allowed to work from home but John is because he's male and you're a horrible sexist. You need to have it documented that she isn't easily accessible when she's working from home, while John is.
...And When You Can't
With your manufacturing employees, of course, cutting out an hour early means an hour's less pay for that person and--depending on the set up of your place--lowered productivity for the whole team. The point is, the consequences of the actions aren't the same, so they shouldn't be treated the same.
Managing this way is more difficult, no doubt. It's much easier to follow zero tolerance policies and not have to think through employee requests, but it limits your work force unnecessarily.
With a focus on women entrepreneurs, the World Bank's International Finance Corporation plans to open a financing venture for emerging markets.
On Thursday, the World Bank's International Finance Corporation announced plans to launch a $600 million financing program in order to support women entrepreneurs, reports The Wall Street Journal.
The hope is that by having the program tap emerging markets such as Southeast Asia, the Middle East, and North Africa, women will have a better shot at developing their own businesses.
“We cannot afford to exclude half of the world’s population from the rightful role in helping to change the face of the global economy,” World Bank president Jim Yong Kim told the Journal.
However, many women worldwide cannot access loans due to legal or social barriers that undermine their efforts. For example, many women are not allowed to own assets such as a home, which would provide collateral for a loan. According to the IFC, the disparity against women-owned businesses in emerging markets is so great that nearly $320 billion has been held back.
Another goal of the program is to put more women to work. As economists told the Journal, closing the gender gap in the Middle East and North Africa could lift those regions' per capita gross domestic product by 27 percent; in South Asia, by 23 percent.
The IFC has vowed to invest $100 million in the venture, called the Women Entrepreneurs Operating Facility. Goldman Sachs has pledged an additional $32 million. For Goldman, the program represents another facet of its 10,000 Women initiative, which has provided business training to female entrepreneurs since 2008.
Don't keep your employees in the dark when it comes to the company's finances. Educating them on the state of the business makes for a more engaged team.
How much should we tell our employees about the business's finances? For small and midsize business owners, there's often a lot of anxiety about sharing too much information. For employees, there's a strong desire to understand the business and its prospects for the future. If you run a privately held company, balancing this is tough. Here are some general guidelines:
- Don't give information without education. Any financial reports you decide to share, whether they're summaries or complete traditional reports, such as your balance sheet, P/L, and budget, should always be accompanied with a thorough education as to how the employee can read the data. It's possible that your employees don't have the background or training to fully understand these documents, so passing them on without education can be little more than distracting.
- What does it mean to them? When looking at the information that you provide, there needs to be a clear summary telling the employees what it means to them. They will likely have lots of relevant questions:
- Is our company getting better or worse? More stable or vulnerable?
- Is my job at risk?
- What are we investing in to make us more successful in the future?
Employees look for context and relevance to the numbers.
- What can I do? Along with providing context for the numbers themselves, it's also important to provide a road map for what you're doing as a company with the information and what you're asking of employees. The ask during positive periods is simple: Keep doing your great work! The ask during negative periods may be around cost cutting, trimming waste, or helping to sell more. Be specific. Employees who believe in your company and its leaders want to know how they can contribute to its growing success or help in overcoming its current rough moment.
What to tell them
Every owner has a right to his or her own level of comfort in your transparency. I will also tell you that the companies that are attracting the best talent are moving towards greater transparency because smart employees want to know what's going on in their businesses. Here are some items you should consider when presenting and discussing the company's finances with your employees:
The days when employees were willing to extend blind trust on financial matters to the owners of the business have passed. People are concerned about the viability of their company, their own jobs, and whether they've bet on the right horse. People will stick with you through rough times if they know what's going on and see a path to success. You do nobody a favor by holding onto the information, because the speculation will always be there, and without data, it will likely be negative.
Presentations are all about what we do with our bodies. The trick is to make yours have impact.
If I asked you to walk around a room as though you were the most confident person in the world--if I asked you to show me confidence, only with your body and without words--what would it look like? You might stand up straight and walk slowly with long strides and smooth arm gestures. You’d look people in the eye, smile, and hold up your chin. You would breathe deeply, and your shoulders would relax.
If I then asked you to walk around showing me the physical manifestation of fear and nervousness, you would probably close in on yourself. You might hold your arms tightly to your body, duck your head, and move erratically and quickly, as though fearing danger at any moment. Your eyes would dart around, and your breathing would be fast and shallow.
Try it out now: Get up from your seat and walk around the room, first in confidence and then in fear. Note how different you feel and how your body tries to show those emotions.
This nonverbal exercise has an important purpose. We have a misconception that presentations are about the words we say and the slides we show.
Presentations are actually all about what we do with our bodies. People focus on your body, usually without even realizing it. Much more impact comes from your body than from your words. As a matter of fact, putting your body into expansive, powerful poses can actually create confidence.Your Body, Your Mood
Confidence is a doozy of a concern for a huge percentage of people--whether they present formally to crowds or just to small groups at weekly meetings. People often say gaining confidence is their biggest goal.
Get ready. You have the instant ability to do just that. All you have to do is make your body look confident. When William James said, “Act as if you are beautiful, confident, and poised, and you will be," he was more right than he might have realized. The way you hold your body can actually change the level of power and confidence you feel.
We all have attitudes and perspectives within us that come alive from body cues, not from mindsets. In fact, those who study the psychology of self-efficacy (your belief in your ability to perform a certain task or skill) have found that one key to unlocking confidence is to talk your body into it, even before your mind.
For example, if you show the physical signs of happiness (smiling), you will feel happier. Your face, body, and voice send signals to your brain, informing it that you are experiencing a particular emotion because you are engaging in behaviors that signal happiness. You then feel that emotion.
One study even showed that forcing the body to change can affect mood and attitude. In 2006, 10 clinically depressed patients, who had been depressed for two to 10 years and who had not responded to drug therapy, were administered a drug that reduced their frown lines.
In other words, researchers used Botox to force the patients’ faces to assume a happier aspect--free of frown lines and down expressions. Two months later, without additional drugs, nine of the 10 were no longer depressed. And no, silly, I’m not telling you to go get Botox. The point is that by forcing the patients’ bodies to send new signals to their brains, their chemical depression began to improve. This astonishing finding is only the beginning.Strike a Pose
Some of the most fascinating research in this arena comes from Amy J.C. Cuddy, as reported by the Harvard Business School. In her work “Power Posing: Brief Nonverbal Displays Affect Neuroendocrine Levels and Risk Tolerance,” she illuminates the fact that we have much more ability to manipulate our confidence than we realize.
Cuddy and her co-authors conducted experiments to measure several important hormones. The first was testosterone, which is present in both the human and animal worlds and correlates with greater confidence, risk tolerance, power, and dominance when it is present in the body at higher levels. The second was cortisol, a hormone that’s present in the brain and body during times of stress, fear, and lack of confidence and which can also over time create hypertension and memory loss.
In her experiments, Cuddy’s subjects were asked to hold high-power, expansive poses--such as putting their feet on a desk with their hands behind their head--for one to two minutes. Members of another control group were directed to sit with their legs crossed and their arms protecting their bodies, often with their heads down. Saliva samples from before and after the experiment showed astonishing changes.
Controlling for the subjects’ baseline levels of both hormones, Cuddy and her co-authors found that high-power poses decreased cortisol by about 25 percent and increased testosterone by about 19 percent in both men and women. By contrast, the low-power poses increased cortisol about 17 percent and decreased testosterone about 10 percent.
In addition, the people who had taken on the high-power poses said they felt very “in charge” and “powerful.” They felt confident. This research has ramifications not only for presentations but for anyone who might feel powerless or have low self-esteem. By manipulating the way you hold your body, you can affect your level of confidence and sense of control. And by managing your internal confidence, by building yourself up and giving yourself more power, you in turn affect how your audience feels about you.Make a Connection
My geek core gets so worked up about this stuff! By changing our bodies, we control chemicals that can affect our confidence. When we are positive, confident, and willing to make a warm connection with our audience, they will respond. As Cuddy elaborates:
We are influenced, and influence others, through very unconscious and implicit processes. People tend to spend too much energy focusing on the words they’re saying--perfectly crafting the content of the message--when in many cases that matters much less than how it’s being communicated. People often are more influenced by how they feel about you than by what you’re saying. It’s not about the content of the message, but how you’re communicating it.
Excerpted with permission from Be the Best Bad Presenter Ever: Break the Rules, Make Mistakes, and Win Them Over © 2014 Berrett-Koehler Publishers
Two years after legalizing pot for recreational use, the state issued the first license to a grower.
Washington State issued its first legal-marijuana business license on Wednesday, the Associated Press reported, making Kouchlock Productions of Spokane the first licensed and certified grower there.
Issuing a producer/processor license to Sean Green, CEO of Kouchlock--a name that refers to being so high that a person is unable to leave the couch--marks a new phase for the Pacific Coast state. Business owners are lining up to obtain such licenses in hopes of cashing in on the potentially lucrative marijuana business.
"Cannabis prohibition is over," Green said, according to the AP. "I'm coming home with jobs, Spokane."
Under the law passed by Washington voters in the fall of 2012, Green will be allowed to grow 21,000 square feet of marijuana plants. Kouchlock Productions, however, will not be able to sell cannabis for recreational use unless it receives a retail license. The entrepreneur plans to start by growing plants to sell to other growers.
The Washington Liquor Control Board says it has received more than 2,800 applications for producer/processor licenses. The state has yet to begin issuing retail licenses, for which it will hold a lottery later this year.
The first marijuana retail stores are expected to open in June or July; the board plans to allow 334 pot shops statewide.
The sale of marijuana for recreational use also became legal in Colorado this year. Under federal law, however, it remains illegal.
Gadget love is an infidelity you have to learn to live with.
One of the first columns I ever wrote for Inc. was about the intrusion of technology into entrepreneurial marriages. It's still among the complaints I encounter most often when I talk to founders and their spouses. Mostly spouses. Entrepreneurs argue that smartphones and tablets free them up from the office. Spouses counter that the entrepreneurs carry their offices with them, like Bluetooth-enabled hermit crabs.
The most recent version of this lament comes from Kathy Korman Frey whose husband, Josh Frey, is CEO of OnSalePromos.com, a Washington, D.C.-based promotional-products company. Kathy is a self-described "business junkie" with an MBA and her own small business. Nonetheless, she finds it easier than her husband does to put limits on work hours. Her biggest gripe is the omnipresence of Josh's laptop. It's everywhere--at the breakfast bar with the kids, on the couch, in bed. "It's like he's having an affair with the computer," Kathy says. "It has the siren's call.
"When I noticed that Josh's office space had bled into the entire house, I tried to set some rules," Kathy told me. "For example, 'No laptop in the main living areas of the house.' When I'm around someone who's furiously typing away, the mojo of the home is gone. It's very un-Zen."
If there were a 12-step program for relatives of tech addicts, setting rules would probably be step four (after getting the spouse to admit he has a problem, hiding all the chargers at the bottom of the box of holiday decorations in the basement, and threatening to buy a signal jammer). Josh understood why Kathy wanted to establish limits, but he wasn't crazy about it. And Kathy admits she was a half-hearted enforcer. (I did mention that she's also an entrepreneur.) Not surprisingly, over time many of the rules have quietly vanished.
A few have stuck around, though. The couple has successfully prohibited gadgets at the dinner table--both for themselves and their two kids. If a smartphone peeks its head out during date night, they consider it "bad form."
Kathy said the best vacation the couple ever took was at a place in the Virgin Islands with no Internet access. "You have to remove the option," says Kathy. "Otherwise the computer is like Josh's little buddy. He carries it around like it's a Mini-Me."
Kathy has read the studies that explain how the blinking light or ding that accompanies a new email creates a small adrenaline rush. But she thinks the real reason Josh--and, yes, she--have so much trouble disconnecting is fear of missing out on that one crucial communication or piece of information that could mean the difference between success or failure for their businesses. "You don't want to be the bottleneck to your own future," she says.
The point of limiting technology at home is to spend more quality time with your family. If you're freaking out that business-moving events are taking place without your knowledge, that time won't be quality. I like that Kathy and Josh have drawn a few clear lines but are otherwise realistic about how far they can banish technology. The best strategy is to convene a conversation with the entire family about what's desirable versus what's realistic. Try to imagine yourself going smartphone-less for an entire Saturday. Do your palms sweat just thinking about it? If so, don't commit.
Whatever the rules, everyone must be a party to enforcing them; otherwise the arrangement will quickly fall apart. Tough as it is to set limits, the rewards are great in terms of enabling the connectivity that's truly important: the kind you enjoy with loved ones.
Marketers often lose track of what marketing is all about. These phrases signal that they need to get back on track.
Over the years, I've listened to hundreds of marketing pitches and participated in thousands of conversations among marketers. I've then watched how well the subsequent marketing campaigns actually performed.
Based on that experience, I've identified eight phrases that almost always mean that a marketing group is on the wrong track and will probably fail. Here they are, along with comparable phrases that reflect a more likely-to-succeed approach:1. "Marketing drives sales."
Marketers use this phrase to communicate their belief that sales is just the tail end of the marketing effort. They have it backwards. Selling is the entire reason any company exists.
Say instead: "Marketing is trying to help make sales happen."2. "We've been talking to our customers."
Marketers have a tendency to think about marketing as a process of pushing information out, hence talking to customers is a good thing. In fact, effective marketing is the other way around; it draws customers in.
Say instead: "We've been listening to our customers."3. "We have a worldwide focus."
This phrase is just the worst example of the misuse of the word focus. Because it's impossible to focus on more than one thing at the same time, any marketing effort that has too wide a focus will inevitably fall flat.
Say instead: "Today we are focusing on the following specific objective..."4. "Shock and awe"
Any marketing metaphor that uses military imagery is inherently absurd and awkward. Warfare is all about killing the enemy; marketing is all about persuading customers to buy. There's really no common ground.
Say instead: Nothing.5. "Sales doesn't follow up on our hot leads."
Many is the time I've heard marketers complain that they find hot leads that the sales team is incapable of closing. But a hot sales lead is, by definition, one that the current sales team can easily close. If it can't, it's not a hot lead.
Say instead: "Sales team: Please tell us what kinds of leads you can easily close."6. "Everyone must use this standard presentation."
This ominous phrase comes out when marketing groups want to present a consistent brand image to the world. Only one problem: Every customer is different, which is why salespeople (the good ones anyway) always customize their presentations.
Say instead: "Here are some slides that might be useful."7. "We are rebranding."
The concept of rebranding assumes that the brand consists of the exterior elements that express the brand, like the logo, font, tag line, and so forth. Brand actually reflects the customer's experience, so the only way to rebrand is to change that experience.
Say instead: "Let's improve our products and services while making them easier to buy."8. "I am a market strategist."
Strategy, by definition, is long term. Employing somebody specifically to strategize virtually guarantees that your strategy will change frequently, making it impossible to execute tactically.
Say instead: "We've got a strategy; now, let's make it happen."
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In order for acqui-hiring to work well, there must be philosophical and cultural alignment.
A new promotion for Oscar Mayer promises to help you reboot your morning with a phone app that triggers the scent of bacon when your alarm goes off.
You already know morning people rule the world. But did you know that what you smell in the morning can impact your day?
It's true. The smell of coffee or frying bacon can stimulate your appetite and raise arousal levels when you wake up, according to Focus. Which is perhaps part of the reason why Oscar Mayer released an iPhone attachment and accompanying alarm clock app this week that tantalize the senses with the smell of frying bacon. When it's time to get up, the phone dongle unleashes the scent, and the alarm goes off with a sizzle. On the phone's screen, a frying pan appears.
“With nearly two million mentions of #bacon on Instagram, it seems people never get tired of bacon," Tom Bick, senior director of integrated marketing and advertising at Oscar Mayer, said in a statement. "That’s why our team decided to develop a device to give folks what they long for most."
Of course, there are a host of other ways to get charged up in the morning. If bacon isn't your thing, supercold water with lemon might do the trick--either by drinking it or splashing it on your face. Aromatic protein and fruit are also helpful. For an extra kick, try some spicy beef jerky and cucumbers with chili powder, or go tropical and reach for some watermelon with cayenne pepper.
Productivity may not depend on who we recruit but what we expect of them.
Nobody knows how to hire. We spend hours combing through resumes, conducting dozens of interviews, deploying psychometric tests, and checking references. And when the bright new hires fail to deliver, we blame them when, at heart, we know we goofed.
Everyone thinks they can spot talent even though all the evidence suggests it's impossible. And maybe even irrelevant.Productivity Secret
A classic psychology paper, Pygmalion in the Classroom, describes a study in which elementary-school students were given a test to identify the most able. Their teachers were told which pupils showed outstanding promise and, lo and behold, by the end of the experiment those children started performing exceptionally well. The catch? The test was nonexistent, and the children had been chosen entirely at random. What made the difference was that their teachers now believed in them.
Twenty-five years later, an Israeli researcher wonders if the same Pygmalion effect might apply to teams. Working with trainee military platoons, some leaders were told that their men had particularly high potential. No individuals were singled out; the leaders simply believed they were working with exceptionally promising material. Raising leaders' expectations caused improved performance of approximately 20 percent. Just imagine a 20 percent productivity improvement--achieved by no other means than by believing in your people.
The Pygmalion studies--and there are hundreds-- indicate the degree to which leadership may matter more than talent. The high achievers weren't special--but their teachers and leaders believed that they were. And when you start to believe that your people are great --or talented or creative--it's amazing how quickly those qualities can surface.
Some of this may be due to priming: You start to find what you're looking for. So when a member of your team shows creativity or energy or resourcefulness, you spot it, praise it, reinforce it. So you get more. This positive feedback cycle may be a lot more powerful than anyone's ability to pick talent.
With so much information available on click-through rates and Web traffic, it can be tempting to put online marketing campaigns on autopilot. But that's a mistake.
We're a long way from the Mad Men days, when advertisers just stood around bouncing ideas off each other before launching campaigns for the masses. Those might be romanticized times, but advances in computing and the sheer volume of data available today mean marketers can use machines to run far more efficient campaigns than ever before.
And yet there's still something incredibly important that online marketers can learn from Don Draper and his ad team. With so much information coming from so many directions--Web traffic, click-through rates, sales transactions, and conversion paths--it's all too easy to put campaigns on autopilot and forget the powerful role that creative people play in the process. The best online marketing campaigns find that sweet spot where technology and human expertise meet, to produce results that go beyond optimization.
Here are four ways that companies should be shaping their campaigns in a data-driven world:
1. Connect campaigns to business goals. Many marketers have a narrow view of lead generation and ROI that focuses on data-driven outcomes that don't help the business grow. For example, a company might want to earn the top spot in organic search rankings for a keyword without knowing how that outcome drives revenue.
Using vanity metrics to define success can lead to campaigns that feel good but don't contribute to the bottom line. Before launching a digital marketing campaign, step back and evaluate the goals of the business. While it may be tempting to choose targets based on what you can achieve using readily available data, not seeing the big picture can be a very costly mistake.
2. Take campaigns to the next level. One of the biggest problems with automation is that it only evaluates existing data and assumes the best advertising copy is already in place, which means it only looks at how well a campaign is performing instead of how well it could be performing. Without human expertise, your campaigns will improve, but they will never grow. The fact that you have so much data at your disposal can cause you to wrongfully believe you have everything you need to be successful.
For example, take a car-insurance company that ranks on the first page of search results for the phrase "car insurance." Though the marketing team might be thrilled, conversions don't follow. As it turns out, most people search for car insurance using geo-specific keywords, such as "California car insurance." A search engine can't figure that out; it takes a team of experts asking smart questions to come up with a better alternative.
A machine can tell you what consumers are doing, but not why they are doing it. In search marketing, the most egregious example of this is in bid management, in which keyword bids are adjusted based solely on their performance. While auto bid management can make existing ads more efficient, it can't use the results to create an even better ad with a different message that will double revenue.
3. Use data insights across channels. An algorithm can optimize ads within one campaign, but it can't tell you how to apply the lessons you learn to other channels. It takes real people to knock down the walls between marketing silos.
Ideally, pay-per-click advertising and SEO should be joined at the hip, but in many cases the two teams never talk. By casting a wide net in paid search and finding a variety of keywords relevant to your business, you can then use that research to set up a better SEO campaign. And as the keywords climb the rankings in Google's organic search results, paid search efforts can be tailored accordingly.
Those lessons in search marketing can then be applied to additional channels, including other display networks, social media ads, and email marketing. It also leads to a robust content-marketing program with sharable stuff created by people for people--which Google generously rewards via better search rankings.
4. Share the data across the whole organization. The lessons learned in digital marketing channels can also be applied offline across the organization. Instead of trapping the data within automated channels, teams should be sharing insights that can help the business grow in other ways.
After the recent data breach at Target, we saw a spike in searches for small business accounting tools that also included security-related phrases. That's the kind of timely information the sales team would love to have while meeting with prospects. Any time new search terms gain popularity, it's an opportunity for a business to use online insights to inform real-world efforts.
At Wpromote, we call the process of combining data-driven decisions and human marketing expertise "intuitive search intelligence." (The concept has been so successful for our clients that we released an e-book that dives deeper into our approach.)
When it comes to marketing, companies don't need to return to the Madison Avenue glory days, but don't forget them as technology takes marketing to places the Mad Men could have never imagined.
OK, so they aren't exactly taxes. But these expected new costs to business courtesy of Washington could be cause for concern.
Small-business confidence remains significantly below pre-recession levels. Why? It isn't just the cold winter, the uncertainty, and the sluggish growth.
Ask any of my more than 500 small and midsize clients and one common theme will come up: taxes.
Most of the business owners I know pay anywhere from 20 to 30 percent of their net income to the federal government, between Social Security, Medicare, and corporate or individual taxes. And this excludes state, local, sales, and other taxes.
It's a big number for all of us. And we're concerned that it's going to only get worse.
There's good reason to be concerned. The past year saw a slew of taxes hitting both individuals and small businesses.
- Social Security taxes were restored to their original rate after years of "stimulus."
- Medicare taxes went up.
- A new tax on unearned income was imposed.
- Rates on higher earners increased to levels not seen in decades.
- Capital-gains taxes went up.
- The ceiling for itemized deductions was raised.
- The tax advantages of certain employee benefits, such as health savings accounts, were reduced.
As I write this, those higher taxes are being calculated by our accountants who are putting together our corporate and personal returns and bringing us bad news: We owe more than before. This hurts.
But we're not done yet.
Are you a business owner? Your money is at stake. Pay close attention to what's going on in Washington this year. The following are four enormous new costs to businesses potentially on the way, particularly if some of President Obama's proposals become law. In my view, they amount to taxes on business. They are:
1. Research and investment costs. OK, these are not compulsory costs, but they're necessary for growing businesses.
At the end of 2013, two enormous business tax benefits effectively went away. The first was the ability for small companies to take accelerated depreciation (or, in other words, write off an asset faster) for capital purchases up to $500,000. That amount is now down to only $25,000 in 2014.
In addition, the popular credit that businesses could earn by spending money on research and development also expired at the end of last year.
The result is a double-edged killer: Businesses have less incentive to invest in capital equipment or spend money on research and development. And the amounts that they do decide to invest are providing much less tax benefit to them than in the past.
2. The proposed minimum-wage increase. In my view, an increase to the federal minimum wage would be a tax. But as taxes go, it isn't a bad one, actually--the money goes straight to the employee instead of to the government.
The President is campaigning hard to increase the federal minimum wage to $10.10 per hour up from $7.25 per hour. Right now, a full-time employee making minimum wage earns about $16,000 per year, which is sadly low.
A person at this income level likely receives welfare, food stamps, and medical help from the government. The government cannot afford to pay more in these tight budgetary times.
What to do? The President is effectively turning to businesses. He wants to require us to pay our people more. Business owners hate to be told what to do by the government. Most business people I know can not only afford to pay this extra amount but concede that no one working 40 hours a week should be earning such a small income in 21st-century America.
Whatever your opinion, the increase is unlikely to happen.
But this potential "tax" is out there. And it erodes business confidence.
3. The federal deficit. The President's proposed budget, released this week, continues the strategy he set out in his State of the Union address of ignoring our growing federal deficit and national debt. Many feel that our deficits are not a political issue in 2014 because they're going down.
But many economists, even the Congressional Budget Office, forecast deficits creeping back up toward $1 trillion a year in the next few years as the cost of entitlement programs comes due. And even deficits that are "going down" are still half a trillion a year (they were "only" $174 billion in 2007) and are adding to our unsustainable level of national debt at a frightening pace.
How will this be solved? The President (and many members of Congress on both sides of the aisle) is counting, among other things, on tax reform and the closing of loopholes that businesses are legally using to save on taxes--in other words, an enormous tax increase.
4. Health care reform. No, it isn't what you think. The employer mandate, which requires any business with more than 50 full-time equivalent employees to provide health insurance to their full-timers starting in 2015, is not a big deal for most of my accounting clients. They already provide health insurance.
The penalty for not providing this insurance is a tax, in my opinion, but it isn't the tax that my clients are concerned about. The concern is that they will be required by law to provide a minimum level (i.e., "bronze") of health insurance going forward.
As rates inevitably go up (and some are predicting significant increases), the ability of the business owner to share these costs with employees is significantly limited because of the federal law.
More taxes are here. More taxes are coming. That doesn't make me (and many other small-business owners) optimistic at all.
Word of mouth is advertising's Holy Grail. How Warby Parker takes an active role in making it happen
When it comes to advertising, nothing packs more selling power than word-of-mouth endorsements. Sure, a print or TV ad can help you build brand awareness, but personal recommendations from friends, family, and colleagues prompt consumers to spend money.
Thanks to the ubiquity of social media, word of mouth is more powerful today than ever before. Not only does digital technology put the sharing of opinions at the fingertips of virtually everyone, but also 38 percent of adults say they aim to influence others when they express their preferences online.
But most of us assume that word of mouth implies some distance between consumers and the brand that’s being talked about. Word of mouth is for the people, by the people, right? It’s supposed to be organic.
Maybe not, suggests Warby Parker, an online vendor of eyewear. As part of its home try-on program, the company sends five pairs of specs to customers to give them a chance to thoroughly assess their options for new frames. Customers are encouraged (via email) to post photos to their social-media accounts of themselves wearing each potential pair. This leads to word-of-mouth advertising. And though it might still be organic growth, the company is the one planting the seed.
“Every picture that we see, we comment and give feedback on,” Tim Riley (@tmrly), Warby Parker’s director of online experience, tells Path.To. “We’re seen as the expert view, but what also ends up happening is that four or five of the customer’s friends also comment. Not only is that person who posted getting really good feedback, but then four or five more people might get introduced to the brand as well.”
As a maker of something people wear, Warby Parker is well suited to get its customers to post photos of its product. But what about companies that sell less personal items? Neil Blumenthal (@NeilBlumenthal), Warby Parker’s co-CEO, tells Build that the question misses the forest for the trees. Using social media to encourage word-of-mouth advertising isn’t merely about getting customers to use social media to post photos or content about the company; it’s about being authentic.
“You’re never going to get people to do [something] that is unnatural or unhelpful,” Blumenthal says. “Companies need to put themselves in consumers’ shoes and ask what’s really relevant to them, not just ‘Will this help me market?’”
For example, Warby Parker knew its social-media efforts would succeed because the home try-on program was already generating word of mouth offline. “People would get the home try-on sent to their office, and they would immediately ask their co-workers [how they looked],” Blumenthal says. “It exposed us to an entire [group].”
Extending the program to Facebook and Twitter simply made sense.
This article was originally published at The Build Network.