Losing faith in a popular and pervasive belief system doesn't happen quickly. Our minds hang on tenaciously to any straw of evidence that supports what we already believe. It can take years to break free. This is the condensed version of how I became a heretic.
I love marketing. It is so much more fun and sexy than other areas of business. Marketing is about brainstorming groups laughing and having fun. Compare that to accounting, which is about sitting and looking at pages of numbers. Marketing is full of new ideas that are cool and unique. Compare that to operations, which is about building the same set of products, or performing the same set of services over and over. Marketing is considered creative and energetic, while so many other areas of business are considered stale and boring.
When I started my first business, marketing was my focus. We were playing in a new and growing industry, and I justified the financial investment in marketing terms. I said that we would become the "Kleenex" or "Xerox" of our industry. I said that our product was a purple cow – nothing else like it existed. I spent countless hours on marketing materials while other areas of the business didn't quite receive the attention they should have. But in my mind, marketing was job #1, and I was particularly determined to build up the buzz via word-of-mouth.
The first crack in the foundation of my marketing apotheosis came when my partner and I decided to advertise in a local business publication. It was expensive to advertise, but we both read it, so we assumed that other people like us read it as well. We committed a major chunk of our budget to a series of ads that ended up landing us… a single phone call. It was time to regroup. I had learned my first lesson – everyone's behavior isn't like mine. To this day it's the hardest thing to do – to keep that in mind when I pursue new ideas. What I like, what my friends like, what my family likes, may end up being irrelevant.
Fast forward to the Kolache Factory. I loved that place. Kolache's were warm yeast rolls with stuff baked inside of them. I would go in and grab a sausage and egg kolache as often as I could, and I struck up a relationship with the owner. I was a word-of-mouth hero for that company. I told everyone I knew to go try kolaches. I passed out coupons at work, both to employees and customers. I bought them by the dozen and brought them to the office. I was the guy all the marketing gurus tell you to target. I loved kolaches and I told everyone about it. Then one day, I went to get some kolaches and the store was closed. Not only that but there was note saying the owner would sell the franchise rights he had to several other territories.
Kolaches didn't make it.
I don't know why. Maybe it was a dumb idea. Maybe it was a poor location. Maybe they just needed a little more time. Regardless, you never hear that story. You never hear about the company with all the great word of mouth marketing that goes bust.
Fast forward again to 2004. Motorola released the RAZR – a purple cow if there ever was one. The RAZR became the fastest selling phone in history.
But competitors responded. Quickly.
Now Motorola's earnings are suffering. The Wall Street Journal ran a front page article a few weeks ago that blamed Motorola's decision to lower profit margins in order to gain market share with the phone. The purple cow was good, but short-lived.
I would be reluctant to cast off the value of marketing with just a few examples like those above, but the real faith killer for me has been my experience with this blog. I get emails on a weekly basis from people starting new ventures. Some want advice, some want me to link to their website, some just want to let me know in case I'm ever in the market for their product or service. I strike up conversations with some of these people, and I always ask how they plan to get the word out. Ninety percent of the time I get the same answer –we don't have a marketing budget – we are going to use viral marketing by getting blogs to talk about our stuff. Most of the time, the blogs never pick up the message.
I'm not surprised. It doesn't mean you don't have something cool – it just means that your marketing plan wasn't as easy as you thought.
This is my problem with viral marketing. There is no disconfirming evidence. What does that mean? Let's take an example that exaggerates it to make it obvious. Say you looked at lottery winners and asked "what do you have to do to become a lottery winner?" So you take all the winners and you analyze them and you find that the two things in common are that they all bought lottery tickets and that they were all over 30. Now you write a book saying "all you have to do to win the lottery is buy a ticket and be over 30!" It's absurd, right? It's absurd because you ignore all the people that met both those criteria that didn't win. But that is exactly how lots of business research is done.
My post about "Good To Great" is a good example of this. It is one of the most popular business books of all time, but Jim Collins didn't look for disconfirming evidence (or if he didn't it wasn't in his research notes). He looked at a group of companies that were successful, and found what they had in common. He never went back and asked "were there any companies that did these good-to-great things that didn't make the jump from good to great?" We've done the same thing with grassroots and viral marketing. We look at the winners, not the losers. We see how Red Bull does things and we try to emulate that – even as we ignore the hundreds of other companies that used the same tactics and failed. That's why I lost my faith in it. That's why I've learned to take posts like this with a grain of salt. Maybe all the gurus are right and I'm an idiot, but remember that a barber will always tell you that you need a haircut.
So what do I think now?
I think marketing is math. I think it's about understanding your target buyer, how many there are, and how to reach them. It's about knowing how much money it takes to get your message out. It's about realizing that viral marketing is hit-and-miss, that grassroots marketing may take a really long time, and that not every product can be a purple cow.
The point here isn't to abandon these ideas. The point is to realize they are just tools in the toolkit, and like any tool, they have limitations. You will play much better golf if you understand when to use which club instead of banging out the whole course with a 7-iron, and you will make much more money if you turn a little skepticism towards marketing fashions. You know your customers. Gurus don't. Never forget that.