Measuring is different than Succeeding

Many marketing executives believe in measuring effectiveness.  From Google Analytics to Conversion Tracking to "Share of Voice", the importance of measurements is growing rapidly.  In order to succeed though, we marketers have to actually do something with the data.  Make more rational decisions.  Invest more deeply in the  things that work.  Why would any rational person want to invest in something they know doesn't work?  And without measurement, why would any rational person invest in something they don't know if it works or not?

Why Social Marketing Works, and Sometimes Doesn't...

Did you ever wonder how Papa Johns Pizza got to 1.5MM Fans on Facebook?  Do you wonder if they make money on Facebook?  Why does Ford run TV commercials pushing people to their Fanpage?  Are companies making money with Twitter?  The short answer is: Social Marketing pays... usually.

Papa Johns:
  They are incredibly consistent on their Facebook and Twitter Pages.  1 Contest or Sweepstakes a week.  At least 1 coupon per week... and all involving their fans.  As a consumer, it PAYS to follow Papa Johns (discounts/contests/more).  This eMarketer.com study shows that 65% of daily followers want Deals and Sales! Papa Johns is capitalizing with REGULAR deals and sales... and it is working.

Ford:
  Are 440,000 people following Ford on Facebook to get a deal?  Probably not, a cursory glance shows that most engagements on Ford's Facebook page are questions or comments for Ford.  Would Ford's fans enter a contest to win a Car... probably yes.  But Ford doesn't run such contests very often. If they did, they'd have a lot more fans.... but would they sell more cars?  Maybe.  But the direct line of sales success from couponing is not there for Ford like it is for Papa Johns.  So, is Ford making money on social?  Nobody knows... probably not even Ford!

I think companies need to wise up and realize that a small consumer purchase on Facebook (like Pizza) works only because it is measurable by coupons.   Cars, B2B, and other big purchases need to figure out a way to see if Social is worthwhile very fast!

The "Tree of Business"

To so many people, business is confusing.  It's hard to understand, and we fear the unknown.  To the most "daring" among us, we embark on starting and running our own companies (I'm on Startup #2).  When people begin to think about starting this insane ride that is "self-employed"... it may be helpful to think of business as a tree.

First, the most important question:
What kind of business do you want to build?
1. A Tree that grows large and bears regular fruit.  (a for-profit business, but limited in size)
2. A Tree that stays small, and has just enough fruit to feed yourself & family.  (a for-profit business, often called a lifestyle business).
3. A Tree that sprouts many other trees and grows into an orchard or a forest (a huge corporation that someday may IPO - Initial Public Offering).
4. A Tree that gives any excess fruit away to charity (a non-profit)
5. A Tree that you plan to grow quickly, by feeding the tree its own fruit, and then someday sell the tree to someone that is building and orchard or wants to keep the fruit for themself.  (a for-profit business, designed for acquisition).

Knowing what you want out of your business can be extremely helpful in deciding A.) What to do.  and B.) When to feel successful. and C.) How to get your starting soil (investment).

Enjoy your fruit!

Decision Making Angst: Why being "undecided" is painful and what to do about it.

"So, clearly Karmaback has speed, responsiveness, and price going for them," Carol says, "but Wildfire looks to have more clients."  "So, Adam, which Sweepstakes company are we going to go with?  Karmaback or Wildfire?".  Carol looked on, red eyes staring, heart pounding faster than it should, and clearly stressed.

Adam looked back wide-eyed and confused.  "Carol, we've just started looking at options, we have weeks yet before we need to decide." Adam is confused because he asked Carol to find a good Sweepstakes company only yesterday.  Where is all this angst coming from?  What is the rush?  The deadline is months away.

A few days later, Adam has learned more about Wildfireapp and Karmaback and now his eyes are red, palms too sweaty.  "They both have positive aspects," he says, "lets just pick one and be done with it.".

WAIT!!!!!!!!!!!!!!!!!!!!!!!!

This is classic cognitive dissonance causing an irrational behavior.  Is "just pick one" really a good way to make an important business decision?  After you've picked one, the next thing is rationalization and confirmation bias and a whole bunch of other "post-decision" justifications.  Why? The angst is over, now you have to justify that you are a rational person... even though you just weren't.

When faced with tough decisions social experts believe that cognitive dissonance causes humans that hold different conflicting possibilities in their heads get added stress and discomfort while the two are debated.  This leads to a "rush" to find an answer in order to "reduce dissonance" and the discomfort of indecision.

There is only one way I know of to confront and defeat the cognitive dissonance of decisions... creating decision criteria.  No, the cognitive dissonance is not "gone", we humans still feel it... it still presses on us.  However, as business people, we have to at least TRY to make rational decisions.  It's why we are leaders, managers, and in the game in the first place.

So, to defeat the angst of decision making, you can only make as rational a decision as possible with criteria that make sense.

Here are the steps that work for me:
1.) ignore all data collected so far.  Just forget it.  save it for later in the process.
2.) imagine you have no data, and create a "table" or list of information you would LIKE to have about all the choices prior to making a decision.
3.) select which data are "go/no-go"/ must-have items. and circle them.
4.) collect data, get samples, find as many options as you can... and fill out the table.
5.) eliminate all choices that are "no-go".
6.) evaluate the remaining choices FAVORING the ones that you have more data for.... (better to know than to guess).  *THIS STEP IS CRUCIAL.  If you are having trouble collecting data for an option, in my experience, its not a very good option.
7.) pick the best choice based on the data you collected and the criteria... in the event of a tie, pick the one that contacted you/you got data for first.  (Speed matters).

Enjoy.

Decision made.

Dissonance over.

And you made a rational decision in the face of stress.

Nice job Adam and Carol, you rock.

You must have picked Karmaback :)