Reach is not impact

This Sunday dozens of brands will pay for multi-million dollar Super Bow ads because those spots will get them in front of what is likely to be the most watched TV show in US history. The odds that more than a handful of these massive budget campaigns will accomplish their objectives sits somewhere between slim and none. Great reach, little impact.

Today, tomorrow and the next day, many thousands of brands will send out many thousands of email and direct mail campaigns to many millions of customers–and most will be ecstatic to get a 1% response rate. Huge reach, very little impact.

Each and every day many of us fret about how many friends we have on Facebook, our Twitter follower count or the number of “likes” we get for something we post. Our often fragile egos may get a temporary hit from multiple retweets or for a bunch of “likes” for our super cute outfit, some random photo of our lunch or the preciousness of our kid and/or dog. But to conflate the number of superficial affirmations we might get with making a meaningful difference is a mistake. We crave more and more reach, but substantive impact is almost always lacking.

As Bernadette so rightly reminds us: “it doesn’t matter who encounters your message, your product, or your service if they don’t care about it.”.

It’s one thing to relentlessly pursue more. It’s another to relentlessly pursue better, more remarkable, truly relevant, deeply connected.

Maybe the people in the tribes we lead want us to turn it up to 11, to increase the frequency, to go for more, more, more. Maybe average or boring is just fine by them.

Or maybe it’s about easing back on the throttle, turning down the volume and choosing instead to uncover and celebrate the people that really matter to us. And then, very intentionally, crafting a message and an experience that deeply resonates with them.

There isn’t only one right way to do this. Your results may vary.

But when we confuse reach with impact, we’re bound to end up in a bad place.

When we ask the question: “who cares?” and the answer is probably only a handful of the people we’re talking to, marketing to, sharing with, then the quest for reach has likely gone to far.

 

Are you done cutting those cookies?

In today’s retail world there are a few truths I hold to be self-evident:

  • Folks don’t need or want much more stuff, so we had better not count on overall spending growing much, if at all.
  • With just about anything available anytime, anywhere, anyway, competing on scarcity of information and access is no longer a viable strategy for most brands.
  • Engaging in a price war is not likely to end well–unless you are Amazon.
  • Consumers are overwhelmed by information and the distracted customer has become the norm. The new battleground is for share of attention.
  • Mass marketing is becoming less effective by the day.
  • No customer wants to be average.

And yet so much of the product we see, the stores we visit, the websites we surf and the marketing we encounter, looks awfully familiar.

Our Boards encourage us to adopt best practices, and by the time we do, the industry leaders are on to something entirely different.

We pick the tried and true, because it seems safe, when it is precisely the opposite.

We choose average because it’s easy to manage and seems to scale. Until it doesn’t and we are left to wonder what the hell happened.

For most of us, the only way to win going forward is to eschew boring and average. We must know our customers better than the competition and use that information to treat different customers differently. We must commit to being intensely relevant and utterly remarkable. We must amplify our signal amidst the noise.

Let somebody else can make the cookies.

 

 

 

 

 

A few inconvenient truths about e-commerce

It’s easy to feel like e-commerce is eating the world. It’s not.

While there can be no question of e-commerce’s continued growing importance and its often disruptive nature–particularly in categories like books and music–I’m both amused and amazed at the lack of perspective many in the industry often seem to have. So here are what I believe to be a few important, albeit at times inconvenient, truths.

Physical retail will continue to dominate. Estimates vary, but brick & mortar retail still accounts for over 90% of all sales. While e-commerce will continue to grow, physical stores will be different but not dead.

Pure-play retail is dying. Scott lays this out better than I can, but once you back Amazon out of the equation, it’s becoming ever more obvious that aside from (perhaps) a few niche exceptions, e-commerce only business models are unsustainable owing primarily to uneconomic customer acquisition costs and overly expensive logistics.

A great deal of e-commerce growth is channel shift among traditional brands. Overall growth of e-commerce will be greater than 10% for the foreseeable future, but much of this comes from major retail brands (e.g. Macy’s, Nordstrom, Walmart) transferring business from their physical stores to their improving digital channels.

Much of e-commerce remains unprofitable and economically unsustainable. Let’s remember that Amazon has never consistently demonstrated an ability to make money outside of its web service business. Let’s remember that virtually none of the massively funded pure-plays has ever turned a profit. Let’s remember that traditional brands are spending mightily to improve their omni-channel capabilities while being lucky to achieve flat overall sales. Let’s remember that many retailers experience such high returns and supply chain costs that a large percentage of e-commerce transactions are profit proof. Let’s remember that just about every omni-channel retailer has had to cut prices and offer free-shipping to try to keep pace with upstart competitors who are subsidized by often irrational investment.

Of course even while accepting these truths, many brands find themselves in a real bind. As long as investors are willing to irrationally fund certain companies, consumers are the big beneficiaries and traditionally funded brands are either forced to respond to remain competitive or get pummeled in the markets by not playing the game, however self-destructive.

The good news is that reality is slowly creeping into the market. Some bubbles have burst–witness the recent deflation of the once ridiculously hyped flash-sales market. Perhaps even today’s hammering of Amazon’s stock suggests investors’ patience is beginning to wane. But it’s difficult to predict and count on the vicissitudes of either the public or venture capital markets. But there are a few things to do right now.

First, don’t blindly pursue all things omni-channel. With consumer demands and expectations changing no brand can possibly remain idle. But a disciplined approach to investing is essential. Conducting a friction audit is a great way to uncover and to prioritize the areas of leverage and greatest near-term ROI.

Second, understand marginal unit economics. Averages aren’t very helpful, yet many companies rely on them for decision-making all the time.  At any kind of basic scale, e-commerce is mostly a variable cost business. Brick and mortar is mostly a fixed cost one. If you don’t understand the differences–and the interplay–you’re going to do something dumb. Don’t be that guy or gal.

Lastly, go deep on the customer insight and customer profitability analysis. It’s one thing to have a few unprofitable transactions within a mix of purchases for a customer that has overall great lifetime value. It’s another to have your customer portfolio laden with high cost-to-serve, low margin, low average transaction value customers who return stuff all the time. Do the math. Don’t chase your tail. Rinse and repeat.

 

Informed by connection

It’s so easy for those born into affluence to tell the man struggling with poverty to resist a “handout”, to just bear down, work harder and to himself up by his bootstraps. No matter that the advice giver has never been exposed to the reality of that person’s circumstances at anything close to an intimate level.

It’s so easy for the politician to put forth a “kick in the ass whomever I don’t like or fear” doctrine–and sign-up for a “more boots on the ground” plan–when they’ve never worn those boots or never had had to look family members of those killed or maimed by those strategies in the eye.

It’s so easy for the sober person to tell the addict to just say “no” and to simply employ greater willpower to get themselves on a path to recovery. It all sounds so obvious to anyone who has not experienced the powerlessness, disconnection and shame that fuels addiction.

It’s so easy for the CEO to assuage shareholders by promulgating off-shoring plans, store closings or mass layoffs, when the people losing their jobs are merely numbers in a press release or anonymous names on some list of those affected by their actions.

And at a far more mundane level, it’s so easy for the marketer to create seemingly brilliant new marketing strategies without taking the time to understand consumers’ wants, needs and motivations at a deeper and more personalized level.

If you are anything like me you may find it easy to stay stuck in a need to be right, without trying to connect with the person on the other side of our self-righteous. And that’s a huge miss.

Data and logic are great. Detachment and hypotheses generated at a safe distant can be useful to achieving objectivity. But more times than not the best decisions, the innovative plans, the work that ultimately matters must be informed by connection. Connection with our partner, our families, our teams, our customers, by anyone affected by our opinions and our actions.

And not surface level connections. Risky connections. Emotional connections. Vulnerable connections. Connections that risk our being wrong, looking stupid, failing miserably.

Informed by connection means being willing to go beyond what we’ve always done, what we’ve always believed and what is expedient or popular. Informed by connection may shake us to our core or merely compel us to say ” you know, you were right, I was mistaken.”

Informed by connection demands humility.

And we could all use a bit more of that right now. At least I know I could.

 

 

 

The power of now. The power of no.

“Life is a series of moments, all called ‘now’.”      

– Unknown

“When you say ‘yes’ to others, make sure you are not saying ‘no’ to yourself.”

– Paulo Coelho

If you are anything like me, it’s often pretty easy to slip into a little time traveling–to lament what might have been or too worry about what the future holds. Unfortunately I lack both a time machine and the gift of prophecy, so this is not only a big waste of time, it can very easily mess with any sense of serenity I desire.

If you are anything like me, you might find yourself frequently saying “yes” to things you really shouldn’t–perhaps out of a desire to look like a good person, to avoid hurting the other person’s feelings or merely because you struggle to trade off the essential against the expected or habitual. And then the resentment and self-shaming follows as we realize how our wants and needs once again take a back seat to the squeaky wheel or the self-inflicted obligation.

We can dream about having super-powers, but eventually reality rears its ugly head. And we can work hard to accept all the things we are powerless over (spoiler alert: it’s just about everything). But when it comes down to it, two “powers” can make a huge difference.

The power of now: the commitment to live fully in the present moment and to let go of the past we cannot change and the future we can neither predict, nor control.

The power of no:  the willingness to stop saying “yes” to obligations, mindless distractions, bad relationships and everything else that gets in the way of our living a life of purpose, connection and fulfillment.

 

 

 

 

Quitting is underrated 

We don’t have to spend much time among our friends or on social media to run across the never give up, quitting is for losers, in-it-to-win-it ethos. There’s a whole socially acceptable narrative built around the notion that only weak people quit and that failure is never an option.

It’s ridiculous. It’s wrong. And it’s harmful.

Perseverance, grit, determination and hard work are certainly important to achieving our goals. But frequently our best work–the work that matters, disrupts, challenges the status quo–comes precisely because failure IS an option. It happens when we know “this might not work” and we choose to do it anyway.

Yet the best friend of an intentional choice to go out on a limb and take a risk is knowing when it’s time to quit. The point is not to avoid failure at all costs, the point is to fail better. Failing better means failing faster and failing smarter. It means knowing when to stop pushing too big of a rock up too big of a hill. It’s radical acceptance of reality. It means being vulnerable to the idea that despite our best efforts, despite what our original analysis told us, despite knowing that we might hurt someone else’s feelings, despite the real possibility of looking stupid, we simply need to stop.

I loved it when, in her now classic talk on shame, Brene Brown referred to TED as the “failure conference.” She called out the reality that all these great leaders and speakers we look up to had dared greatly and failed–many of them on more than one occasion. It was, in fact, a room chock-a-block with quitters. But not quitters who beat themselves up about it and became victims. They were all quitters who had indeed failed better. They eventually figured out when it was time to stop, learned from their mistakes and moved on.

It turns out that knowing when –and having the courage–to quit is exactly what frees us up to go and try the next big thing.

I wonder what we are all doing right now that’s worth quitting?

I wonder if we can muster up the courage to stop and simply say “no more.”

I wonder what amazing possibilities that will unleash.

 

 

You picked a really bad time to be stupid

Last year I wrote a post entitled You picked a really bad time to be boring, the fundamental premise of which was that in a slow growth, highly competitive, ever noisier world, for our marketing to get noticed–much less acted upon–we had better go beyond average. We need to be truly remarkable.

Now I will admit remarkable is easier said than done. But can’t we agree that there is no reason to be stupid, ignorant, unaware or down right lazy with our marketing? Simply no excuse anymore for one-size-fits-all?

The fact is when a brand treats customers as part of an undifferentiated mass, they quickly lose interest. When we fail to demonstrate basic relevance we have little or no chance to command what is increasingly marketing’s limiting factor: customer attention.

Last week I got a voicemail from a sales person at a local car dealership. His pitch went like this: “Hi this is Dave from (car brand I have no interest in) in (town some 30 miles from me) and I was going through the White Pages (huh?) and came across your name and I thought you might be interested in the great deals we have this weekend on (names type of vehicle I also have no interest in). So give me a call when you get a chance.”

It would, of course, be easy to dismiss this as the misguided tactic of some mom & pop, largely clueless business owner who has found some poor sap to work on commission in the hopes of a hit or two. But this form of batch, blast and hope marketing remains common among many larger, more “sophisticated” brands.

As an example, I recently got an email from a luxury retailer that I may or may not have worked for in the past. The hook was this: “As one of our best customers, save an extra xx%…” Really? I have bought absolutely nothing from you in over 5 years and I’m one of your best customers? This brand–which is the same one that has sent me emails encouraging me to redeem my non-existent rewards points–possesses the data to know what my shopping behavior is and therefore could take a totally different, and presumably more effective, targeting strategy.

When brands make little or no effort to know us, show us they know us and show us they value us, our interest wanes. And it’s rarely long before a brand’s share of our attention starts to drop. In my experience, attention, once lost, is very hard to win back.