Sounds like a barbershop quartet and a fad from the 1950′s, doesn’t it? As I promised on Tuesday and finally got around to today, here’s the concept of using a whiffletree to manage your multichannel marketing.
You might think that with more marketing investment moving to digital, with an attendant increase in our ability to read results in real time, that we could automate the allocation of marketing spend across channels. In other words, have machines do digitally much faster what we humans can’t do.
I disagree. We must instead use the technology, but operate in an analog fashion.
Building Antifragility Into Marketing Systems
Systems that seek to avoid all mistakes and always get the marketing investment correct will be brittle. It might work for a while, but the constant measuring lowers the signal/noise ratio to the point where the system isn’t reacting to performance, but to variation instead. How would you like a flash crash to bring your marketing campaign down and keep it down? That idea doesn’t appeal to me, nor to any client I can think of.
Anti-fragile (thank you Nassim Taleb for the term) systems respond positively to stressors, embrace uncertainly and have limited downside. They also have potential for huge upside. They are generally analog in nature, not (as) complex and are operated at the local level by people with “skin in the game.” Much like our whiffletree.
Pulling The Stagecoach
Imagine a team of horses pulling a stagecoach. The stagecoach is your marketing message or your products that you want to sell to your customers. The destination is your corporate vision. Think of the trail as your marketing strategy. There are many ways you can arrive at your destination, but you’ve chosen this particular path. Your team of horses is your marketing team, made up of your channel managers.
Each marketing manager has his or her own style, expertise, personality, and own set of experiences. All good marketing managers share one attribute–they believe all the corporate resources should go to their channel and will do anything to generate the best results to justify that belief. And get all the money allocated to their channel.
I love that attitude! I also know that I can’t pull a full stagecoach to Carson City with just one horse. That’s where the analog whiffletree comes in.
That whiffletree allows each of those horses to run forward to the best of their ability, pulling in the same direction, while allowing the stage driver to balance their different sizes, speeds and temperaments. Every horse does their part and the whiffletree allows constantly variable–analog–input and adjustment. Nothing gets out of hand and you get to Carson City without veering off the trail.
The Need For Speed
Let’s jump ahead to the jet age, because the whiffletree needed for the modern multichannel campaign is a little more complicated than that of the stagecoach.
Back to our OODA loop.
OODA stands for Observe, Orient, Decide, Act. The OODA concept was invented by USAF Colonel John Boyd, who originally invented this to describe a way of thinking about aerial dogfighting. The concept has since been applied frequently in business settings, such as strategy and operations. I like it for marketing purposes because it was developed for fast-moving tactical decisions, without rear echelon interference. Further, the basic premise is that agility and speed will override power.
Your marketing whiffletree must serve the OODA loop:
Observe—Collect data about the situation. What did we input in terms of marketing investment and channels? What were our expectations of performance? What does the competitive landscape look like? What are current media prices? What numbers do we see? A combat pilot takes an assessment of what the instruments say and what visual observation and instincts tell him or her.
Orient—Analysis and synthesis. Are we going in the right direction? What is blocking our path to success? How has this observed performance differed from our past performance or what competitors are seeing? Much like a fighter pilot in aerial combat after a series of complex maneuvers, we need to make sure that we’re headed in the right direction. To a fighter pilot, being disoriented can have tragic results. Ditto the marketer.
Decision—Determine the course of action. In this phase, we have to take all the information that we’ve observed, combine it with our orientation and develop some hypotheses that explain why we are where we are. In a marketing example, we may have hypotheses that the channel mix is wrong. Or we may believe our price is too high relative to our competition. The most important thing about this phase is that we feed actions forward. Those actions might be new tests, adjusting marketing investment, or adding a marketing channel.
Act—Finally, we must act on our decisions. The loop doesn’t actually become a loop until we take action. By doing so, we change the environment and can again begin the observation process. We can see if the actions we took change the environment and our orientation.
The marketing whiffletree needs to include, at a minimum, the following six things:
- Channel level results
These results tell the channel manager at a very detailed level how their area of responsibility is performing. Channel results should almost never be shown to senior management. Relaying information about the readings on the control panel to the rear echelon during combat is never done by a fighter pilot.
- Campaign dashboard
This should be produced regularly–but not too frequently–and shared with all channel managers to provide the 10,000 foot view of performance. All channel managers must have access to this level of information because it gives them an understanding of how their channel performance is contributing to the whole.
- Banding models
This is a rack-and-stack order of the actual and projected ROI, CPA or other metric on a source-by-source basis. It’s an old direct response technique that allows quick decisions when it comes time to move, add, or subtract spend at a granular level. It allows a quick reorientation of the marketing investment when necessary.
- Contingency spend
When the fighter pilot is engaged with the enemy, he or she needs to know how much fuel is left and how much ammunition remains. In marketing, we need to know how many marketing dollars are available to take advantage of new opportunities, and how many dollars are uncommitted that can be repurposed to take advantage of new opportunities. It’s very important that the marketing whiffletree has close ties to your financial department so that information is accurate and timely–and supported by the CFO when marketing asks for another $5 million ASAP!
- Media mix model
This is the most difficult part to create. You should have the ability to read the interaction between all marketing channels. You can’t just turn off a channel because it’s underperforming if it interacts with another channel. A media mix model can help you understand where you must set floors or ceilings on spend for a given channel for the whole operation to work. Remember the “one horse” stagecoach model–it doesn’t work unless there’s more than one stallion pulling.
- Brand metrics
You can’t force people to buy a product they aren’t aware of or don’t understand. Where are your customers on the arc of “Awareness—Understanding—Preference—Recommend?” Brand metrics are important because they help decide how much to allocate to branding and how much to demand generation. Getting the balance right is crucial to ensuring optimum performance.
Unfortunately, you can’t get everything above out-of-the-box from any PaaS or SaaS provider or agency. You’re going to have to build it yourself, and you should anyway. Only your in-house team is going to understand everything you’re doing in a multichannel world, working with multiple agencies. They’ll need that whiffletree to keep things on the right road.
What do you think? Have I been spending too much time watching Westerns and Top Gun?