Businesses hire marketing agencies to achieve commercial objectives. They do this in the belief they are hiring expertise that can deliver results they would be incapable of achieving alone.
When, as is often the case, businesses question the expertise of marketing professionals, they do so only as a prelude to hiring another agency and making the same mistake again. The result is a deepening cynicism about the ability of marketing to deliver results and another nail in the coffin of ‘expertise’.
This cycle of hope and disappointment keeps recurring because businesses and marketing agencies collude in misunderstanding as to what it takes to build an effective marketing strategy. A few predictions from economists will help explain how this confusion arises:
- In 1967, economists claimed the Soviet Union would have one of the fastest growing economies by the year 2000. In 2000, it did not exist.
- A study in the journal Economics and Portfolio Strategy showed that only 13 out of 425 managed funds performed better than the market average
- In a 2005 book, Expert Political Judgement, Philip Tetlock tested 82,361 economic and political predictions from 284 experts and found that they were as accurate as a “dart throwing chimpanzee”
These errors happen because human judgement is biased. From over-optimism to the way we use data to confirm beliefs we already hold, our decision-making is driven by our tendency to make fast, intuitive judgements. While this serves us well most of the time, this way of thinking is not sufficiently rigorous to run an economy or create an effective marketing strategy. It’s not that marketing strategists or economists don’t evaluate evidence. Most of them do. It’s that they don’t evaluate themselves evaluating the evidence, which means they are blind to their own blindness and the flaws in their strategic thinking go unnoticed
How, then, can you build an effective marketing strategy that is more likely to achieve consistent commercial returns?
- Check for biases in your thinking. This is an iterative process and needs to be repeated at every stage of the origination, development and implementation of your marketing strategy.
- Build a sales enablement strategy, which means you are tracking the leads your tactical marketing generates all the way through the sales funnel. Few agencies do this and it results in the underperformance of the entire marketing effort. For instance, the Aberdeen Group, a leading business research organisation, found that companies with robust sales enablement strategies experienced a 13.7% increase in average contract value.
- Use data to build well-defined buyer personas. This means identifying who your buyers are and how they make decisions. As with identifying biases, this is an iterative process and as your marketing uncovers new information about your buyer personas, you can refine and deepen their profile.
- Trust data above intuition and experience. This is easy to say and hard to do because there will be times when the evidence is pointing in a counter-intuitive direction and that’s when you must have the courage to follow the data. As with all marketing decisions, once you make them, you must use feedback to review and refine those decisions in the light of new evidence.
- Accept that marketing strategists are making decisions about what might happen in the future (the number of leads you will generate, where those leads will come from etc.), which means you can’t be certain about the outcomes your marketing generates. What you can do is build your strategy using the principles outlined in this blog, to give you the best guarantee you can get that your predictions and judgements will be right.
And the stakes are high.
An economist mismanaging a bank can destroy a country. A marketing agency mismanaging your marketing strategy can destroy your business. Our eBook, 'How to Create a Successful Marketing Strategy', outlines these steps, and once you have read it, you'll never think the same way about marketing again.