Marketing BS: The Book: The Introduction
I started this newsletter in April 2019 as a way to build an audience for my book, which I hoped would be published within the next nine months. It is now more than two years later and while the newsletter has taken on a life of its own, the book still hasn’t seen publication (Funny aside: I have lost track of the number of salespeople who have claimed to have read the book…). After many revisions I sent the book to my publisher book four weeks ago and it is now in the final proof reading stage. Below is the final version of the introduction.
If you have not volunteered already, and you would like to be a pre-reader of the book, just reply to this email and let me know. Pre-readers will get a copy of the book about four months before publication. In exchange I just ask you to write a review of the book on publication day.
Without further adieu, Marketing BS: The Introduction.
Introduction
“Any sufficiently advanced logic is indistinguishable from stupidity”
~Alex Tabarrok, professor George Mason University
I have nothing against marketing. I’ve spent my career in marketing. I love marketing. Marketing gets a bad rap. Many claim that marketing makes things more expensive (“Why don’t they put those advertising dollars into a lower price?”) or that marketing is manipulative (“Facebook ads are destroying our democracy!”) or that marketing is sneaky (“What’s the difference between snails and escargot? Marketing!”). Marketers are right up there with user car salesmen and lobbyists as the least trusted professions.
Many people would agree with the claim that “Marketing is BS”.
But that is not my claim.
I do not believe “Marketing is BS”.
Marketing, at its core, is just helping people who would get value from purchasing and using your product, get a chance to purchase and use your product. “Build a better mousetrap and they will beat a path to your door” is the greatest lie ever told to an entrepreneur. Clearly the quality of the product matters (a lot!), but without good marketing many potential users would never find out about it.
So my claim is not that marketing is bad. My claim is there is a lot of bad marketing. There is a lot of Marketing BS.
This book is about why there is so much marketing BS. I am a believer in efficient markets. Capitalism, for all its faults, is really good at eliminating inefficiencies. Marketing BS should have been left as a footnote to history. Firms full of “Marketing BS” should have been outcompeted by ones that were not full of crap, and yet BS today seems to be as prevalent as it has ever been. This book is an attempt to explain why marketing BS is still with us, and how we can start making small steps to send it packing.
Answer the phone
David was a large man with a big job. He was Chief Marketing Officer of a Fortune 500 company that sold very expensive, luxury products directly to consumers. Like about half the examples in this book, his exact product will have to remain confidential, but you can think of it as something along the lines of expensive cars. He brought his team to see me in Seattle to ask for advice. The conference room where we were met had an unobstructed view of Lake Union where float planes were taking off and landing while we discussed his business. Each time a plane landed we had to pause our conversation, creating a sense of anticipation, or maybe just frustration. After exchanging pleasantries he asked me what technology he should be using to integrate his marketing website analytics software with the CRM (customer relationship management) tools his salespeople were using. He wanted his salespeople to know when a potential customer was visiting specific pages on his website so they could be proactive with “personalized selling.” He wanted to communicate the right message to the right customers at the right time.
I stopped him: "When a customer makes an inquiry and marketing sends that lead to sales, how long does it take for your salespeople to call the prospect back?"
He had no idea.
That was his problem. Going after “big ideas” while forgetting about the basics is THE problem I see over and over again in organizations big and small. Yes, integrating marketing and sales technologies is helpful to a business. But you know what’s more helpful? Calling your customers back when they want to talk to you. There’s a natural tendency in business to go after shiny objects (like integrating technology platforms) but forget about the simple, fundamental ways to make a sale.
The opposite of a “simple idea” is a complex one - and there are a lot of issues with complex ideas.
They are often wrong
Even when they are right, it is often difficult to know what to do with the complex idea. It’s easy to understand, “call back your customers quickly”. It’s less clear what you do with, “this customer has visited a page about purple hats” - do you call them and ask them about their hat preference? Do you email them? Do you wait for a second visit to the hat page?
Even if you think you know what to do, solutions are often hard to implement. You might need to integrate your marketing analytics tools with your Salesforce CRM, then build alert functionality to inform your salespeople when to act, then develop tracking tools to ensure your salespeople are acting the way you want them to, then ensure that getting your salespeople to take action on the hats isn’t causing them to drop the ball somewhere else (and many solutions get much more complicated than that)
Even once they are implemented, we often don’t know WHY they are working. Many complex solutions rely on “black boxes” that spit out solutions without practitioners understanding how the box got to the conclusion (which makes it impossible to question or challenge). Is the integration working because salespeople are responding to the hats, or is it because there is just more executive time focused on watching the salespeople, or is it something else entirely? Often there is no way to know.
Once complex initiatives are implemented, it is hard to know if they are actually having any impact. Oftentimes we spend as much time trying to track the impact of initiatives as we do building the initiatives themselves. If your business fluctuates month-to-month by 10%, a complex solution that is getting you either a +4% or -4% change to a sub-component of the company is likely to be buried in the noise of other things going on. When things are complex and interact with many parts of the business it is often difficult to disentangle their actual effects, and we are left with “storytelling” or just believing that the complex solution MUST be effective because we have put so much effort into it.
What to do about it
It is worth pausing at this point to handle a potential objection. This argument against complexity does not mean the world is simple and “not complex”. The world is VERY complex. More complex than even the most bearish complexistas believe. Unintended consequences caused by well meaning solutions are the rule in life, not the exception. It is because of this global complexity that complex solutions fail so frequently. Any investor will tell you, “It’s not the idea, it’s the execution”. They say this because execution is hard. And complex solutions make execution even harder. Any time you add another step in your process or require the actions of another human being, you increase the chances that something you did not anticipate could go wrong.
This does not mean that simple solutions will always work. Of course not. Raising minimum wage looks simple but it leads to all sorts of knock-on effects (reduced employment, changes in who is hired, increased automation, shifts in which new businesses are started, reduction of non-monetary benefits, increased harassment of employees, etc). In a complex world, the impact of even some simple solutions may be counter-intuitive. But there are SOME simple solutions that work. There are some simple solutions that have been proven to work again and again. But because these ideas are simple and because they have worked for years across diverse organizations, talking about them does not raise the speaker’s status the same way sharing complex solutions does. And complex solutions have the added advantage (for the speaker) that when the idea is wrong it is hard to know it is wrong. The speaker can make a high status career out of sharing complex ineffective solutions before anyone is the wiser. If the complex ideas are tried and they fail, it becomes YOUR fault as the executor, not the brilliant speaker who shared the ideas. When ideas are complex it is always possible you just did not do it right. The speaker maintains their status as the giver of truth, whether the ideas are ever effectively implemented or not.
Some problems in the world are truly hard — hitting a hole-in-one at Augusta is hard no matter how you try to spin it. But most “hard” things are either “math hard” or “bodybuilding hard”. “Math hard” refers to things that are difficult to figure out, but easy to learn once someone else has figured it out. It took a genius to create the Pythagorean triangle theorem, but now it is standard knowledge for anyone entering high school. The formula for successful bodybuilding is also no secret. If you lift heavy weights daily and eat high amounts of protein (and low amounts of everything else) you will build a very hard body. The reason it is hard is it takes a lot of effort over an extended period of time. While truly hard marketing and business problems exist, most are just “math hard” or “bodybuilding hard” — and that ratio is highly weighted to the latter. It is hard to keep our eye on the ball when there is so much out there to distract us.
David, the CMO discussed at the top of the chapter, had no idea how long his customers were waiting for their calls to be returned. In my experience, if the executive doesn’t know if something important is happening, it likely is not happening the way he or she hopes. In between the prop plane landings, I convinced David cancel his advanced integration plans and instead focus on some basics his organization was missing:
Standard sales process: Create a standard, organization-wide process for sales to follow when they get a new lead
Tracking: Build tracking tools to ensure the process was being followed and reported in a standardized way
Analysis: Take the standardized tracking data and have an analyst look for insights. For example determine how fast the first customer call-back needs to be to maximize conversion
Prioritization: Look at the current data available on customers to determine what characteristics predict customer buying and use that to prioritize sales follow-up (i.e., use the data they have before they go collecting new data)
Processes. Tracking. Analysis. Prioritization. These seem like simple things that you don’t need an advisor or a book to tell you you should be doing. But organizations are missing these simple things all the time. And if an organization is not tracking how fast they are calling customers back, I guarantee you those calls are not happening soon enough. If your customer call-backs aren’t tracked and monitored, that’s your first problem to solve—not the more complicated one of integrating sales and marketing software.
Make sure the machine is plugged in
When I graduated from Wharton Business School, I went to work for McKinsey & Company, the world’s most prestigious (or at least most expensive) management consulting firm. My role allowed me to travel around the world and help fix businesses. Because we were so expensive, only large companies could generally afford us. They’d bring us in when they needed help fixing something fundamental to their business and couldn’t address it on their own.
Initially, I was excited to apply what I’d learned in business school. My professors had taught me that companies often approached marketing in the wrong way, and I thought I’d come in and do it “right” as a high-paid consultant. One of my mentors at Wharton thought businesses were often ignorant of accurate methods of predicting their customer’s future behavior, but what I discovered working with McKinsey is that he overestimated these firms rather than underestimating them. In my experience at McKinsey I found marketers weren’t doing things wrong when it came to customer lifetime value tracking—they just weren’t doing them at all.
So much of the work I did at McKinsey didn’t involve coming up with brilliant ideas to help companies improve the way I thought it would; instead, I helped them execute on exceedingly simple things they were missing. For example, I once spent a year helping a global telecom company reduce their customer “churn rate” (i.e., I helped their customers keep being customers for a little longer). Our plan was to figure out which customers were more likely to churn, and then send them targeted discounts via text message to try to re-engaging them before they were lost completely. Parts of that project were legitimately hard, such as developing the highly sophisticated model to discern who was likely to churn and why. The last step of the plan was to send messages to those people and see if they’d come back in a way we could measure. We broke likely churners in two groups: a control group, for whom we did nothing. And a test group, whom we sent SMS discounts and waited to study the long-term impact.
As you can imagine, it took us a long time to build these models across multiple countries and get them to work correctly. We finally landed on an approach that was working, but for one problem: one of the five pilot countries was not seeing any impact from the program. There was no reduction in churn at all. We couldn’t figure out why. What was so special about this country that the program that was working everywhere else was failing there? Was it their differing demographics? Was it their unique culture? Perhaps something the local competition was doing? We had no idea. Finally, I sent my analyst to travel to the country in-person and work with the local team to troubleshoot what was happening. He went through the whole system. He cut the data by demographics to see if that could explain it. He did competitive analysis. He checked the algorithm to ensure they were using it correctly. He checked the messaging and verified translations. Nothing seemed out of place. All the elements seemed in line with the processes in other parts of the world. It SHOULD have been working.
Then, he got to their SMSC (the machine that sends the text messages) and realized it wasn’t working. The machine that was meant to send the messages had died and no one had noticed. Operators were running the advanced algorithms to build customer lists, feeding those lists into the machine with optimized personalized messages and then… nothing. The only thing wrong with the targeted messages we were building was that they were not being sent to the customers.
This telecom company paid an extremely expensive team of consultants to come up with advanced models and build fancy algorithms to apply targeted discounts, but the basic problem was they didn’t turn on the machine. There’s a running joke at IT help desks that when someone calls, the first question should be, “Is your computer plugged in?” My McKinsey experience was the Fortune 500 version of that joke.
Keep it simple
I took my experience with the broken machine with me through my career. At Expedia we were being beaten by Booking.com because Booking was focused on building their site around their customers' needs (booking hotel rooms) while Expedia’s site was built around the internal company structure. Every division wanted their corner of the homepage to drive their part of the business. I created Expedia’s first landing pages team and had them shift focus back to what the customer was looking for.
When I left Expedia, I went to a private equity-backed company called A Place for Mom—the Expedia for senior housing. APFM was the biggest company of its kind, but it was struggling. I built a team and we spent 18-months fixing basics like calling customers back when they inquired, building a collections department, creating a search engine optimization (SEO) team, hiring a celebrity spokesperson to solve our PR problems, and more. By fixing these basics, we were able to grow by 30 to 40 percent a year for multiple years in a row and had one of the more successful exits in the PE-firm’s history.
After five years at A Place for Mom, I’ve gone on to help a variety of private equity and venture capital-backed portfolio companies. Despite the variety of profiles—marketplaces, education providers, software as a service (SaaS), eCommerce, B2B, B2C, and more—I found many had the same types of marketing problems. The same issues came up over and over again, whether the specific product was software for helping people manage health clinics, a technology school for millennials or a Yelp-like service for lawyers. No matter what the product was or how the business was set up, they all made the mistake of chasing fancy and missing out on basic improvements.
What’s Next?
This book is broken into three sections. The first section is a short, single chapter appetizer. Like much of the book, it begins with a tale far from traditional marketing. The chapter tells the story of Charles Darwin’s experience with personalized medicine and explores the parallels between the historical evolution of medicine and science with what we see happening in the the field of marketing. It defines “the third way marketing” and explains why I believe third-way marketing is the future for successful CMOs.
Part two of the book is the main course and makes up the majority of the book. Part two attempts to explain why there is so much Marketing BS. Each chapter explores a particular bias that results in marketing organizations doing counter-productive things:
The Incentive Problem: It takes a strong CMO to resist the organizational incentives that push towards non-ideal behavior.
The Shiny Object Problem: New things grab our attention, and distract us from the old, simple things that work.
The Trust Customers Problem: We use market research to avoid using our judgment, and what potential customers tell us often bares no relation to what they will actually do.
The Trust Science Problem: Data seems like it could be the answer, but it is often used incorrectly, and becomes another tool to avoid responsibility.
The Overconfidence Problem: Too often we think we will be the exception and we waste time on low probability events
The Best Practice Problem: We try and copy what the best companies out there are doing, but forget that elements of success do not work in isolation. Using Lance Armstrong’s wheels will not on their own win you the Tour de France.
The Hire IBM Problem: We do what everyone else is doing rather than trying to be different - which leads to competition for limited resources among the “uncreative”.
The Fast Feedback Problem: We crave metrics, but the result is we focus on the short term things we can measure and ignore the long term investments that have higher returns
While each chapter is structured around a bias, the chapters are largely narrative in nature rather than didactic. I tell stories of situations from the real world - both inside and outside the marketing function - where the bias in question comes into play, and what we can learn from it. The hope is that readers do learn from each chapter, both what not to do, but also what the alternative is. I believe stories help that internalization far more than tables of numbers or well argued theories alone.
The third and final section is the dessert. It asks the question, “If so much of marketing is BS, what should we be doing instead?”. These three chapters are not the final answer to the question, but they will hopeful start the discussion. That discussion will be much more thoughtful for readers who have digested the main course, so skip dinner and jump to dessert at your own risk!
Chapter 10 explores why a CMO must think about marketing in a much broader way than just advertising and product branding. It explores the role a marketer should be playing in everything from product management to company monetization.
Chapter 11 argues that success is often about being “good enough” in many things rather than trying to be excellent in any one particular thing.
Chapter 12 explores the structure I use when working with portfolio companies - search for new opportunities, scale good opportunities, and refine and improve the opportunities you have brought to scale.
Now let’s get started. And remember: Keep it simple.
Edward,