Tag Archives: Strategic management

July 18, 2016 · 11:02 am

How Facts Can Be Fiction

I was discussing some numbers with someone the other day. It was clear from the conversation that she was taking every bit of data as gospel. I tried to explain a few important things to keep in mind when working with data and as I thought about it perhaps my thinking could be helpful to some of you out there in screed-land.

We all want as much certainty in our business lives as we can get. Part of that is wanting all of our numbers to be facts. They’re not. You may be familiar with the term “sampling error.” Basically, it means that the data is off because the sample from which the data is drawn is not representative of whatever it is you’re trying to measure. While you might think that, for example, your analytics measure everyone, they don’t. Most of the data we read uses some sampling. Sometimes it’s a timing issue – financial data, in particular, can be skewed based on where we might be in a business calendar or where those who pay us are in theirs.

The point is that there are error rates involved with many of these “facts” because these facts are really just estimates.  TV ratings, for example, are probably the most widely known estimates and multi-billion dollar businesses involving networks, agencies, and marketers revolve around numbers everyone knows are not particularly accurate. There are error rates.

Here is the advice I give people. Figure out what questions you’re trying to answer and then find as many different sources of data as you can. If possible, see if you can get multiple people to interpret those data sets. In theory, they should all come up with the same answers. It’s critically important that you NOT tell them what position you’re trying to support (can you find me some information that says we should do XYZ). That is a recipe for disaster because it encourages people only to look at data or interpretations of data that supports what you or they already think is true. That is turning “facts”, which are already often on shaky ground, into a larger fiction, and that’s not what we’re after, is it?

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July 15, 2016 · 12:25 pm

Do You Respect The Traditions? Then Change Them!

By Alice.jessica.north

This Foodie Friday I want us to reflect on a quote I read. It comes from Chef Massimo Bottura who runs a restaurant currently ranked as the world’s best. He did and interview with the folks at Business Insider and one thing he said particularly resonated with me:

Most of the time I ask myself, “Is the tradition really respecting the ingredients?” If it’s not, then I have to change the recipe. In the beginning, it was difficult to do, but after we showed people we could evolve the traditions by taking a different approach, everyone accepted it with open arms.

I think that statement has broader application beyond the kitchen. We have many traditions in our business lives. Some of them are relatively innocuous such as our daily routine and some of them are quite important such as what is the nature of our business. It’s in these latter traditions that we find ourselves often not “respecting the ingredients” by ignoring the changes occurring around us.

Let me give you an example. When I was with the NHL over a decade ago we began discussing the streaming of local games. At the time we had some technical concerns ranging from bandwidth both on our end and consumers’ along with others. Those technical issues are long gone, and the NHL has been successfully streaming lives games to consumers since 2006, but only to consumers out of the local market where the game is airing. It has taken a decade for the local television deals to evolve to permit in-market streaming. That “ingredient” – the local television contract – was no longer “in season” and was being overly respected. The recipe had to change and it finally has, as this article shows. Bravo!

That’s one example. You can probably cite several in your business area where the recipes need change so that the traditions evolve and become relevant to the modern world. We can change things up while preserving the integrity of the tradition and the best things about why it became a tradition in the first place. Circumstances change. We need to as well.

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July 12, 2016 · 10:02 am

Selling To The Sold

I read a piece this morning about how political campaigns are doing a bad job of using the data available to them. The main thrust of the article is this:

It doesn’t make the most sense to continue advertising to a voter after they’ve already made a decision about which candidate they’ll choose on Election Day. While inefficient government spending seems as inevitable as death and taxes, it is still shocking how much budget is wasted marketing to voters who have already demonstrated an affinity one way or another.

You might be sitting there smugly saying to yourself that it’s typical of how politics is out of touch with the real world. After all, many campaigns are marketing organizations that come together for a relatively brief period of time with a basic short-term goal: convince 50.1% of voters to buy your product by a date certain. Our businesses, on the other hand, are in it for the long term and need to garner on-going and repeat business so we’re forced to be better at marketing. But are we?

I’d suggest that we’re really not. Many of us spend a good chunk of our money trying to convince another brand’s partisans to switch to our brand while spending inefficiently against the “undecideds” that are more open to choosing us. That thinking is why a lot of money targets the young. In theory, they are less locked-in to any brand. But why stop there?

We need to spend less time selling what’s already been sold and focus on growing our consumer base. Yes, reinforcing and thanking your current user base is important but it should take far fewer resources than finding and convincing those who are both open to a brand message and ready to buy. You probably aren’t going to turn off your “base” and you’re never going to convince the other brand’s base no matter what you do. You with me?

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