December 2008

"The Datapoohbah is frustrated.  Frustrated with MBA’s and "Highly Educated" people that quite simply, “do not have a clue”.  I have long subscribed to the philosophy that it is simply possible to over educate.  That higher education, without real world experience, is a dangerous thing.  Unfortunately today that seems to be more the norm.

One needs only to look at the economic crisis on Wall Street, banking, big business, retail and the automotive industry.  All of these industries are filled with MBA’s and folks who should know what they are doing.  They are supposed to be smart, right?

• I know a person with a Masters in Computer Science who also holds an MBA and that literally couldn’t change a toner cartridge in a printer without help.
  (Yes I know they can be complicated, but damn, the instructions are pretty clear on the bag that the toner comes in).

The item that really got my goat today can be found here in the article written on November 28th entitled "You Can Support Headcount and Share of Voice on a Tight Budget" by one; "Alan See", Marketing Genius and MBA.

In this ~750 word article, the marketing genius would try to convince you that during these tough economic times you can "Do more with less" and by doing so you can still build sales leads and retain head count.

On the surface the article looks pretty good.  No, it’s not real deep, not a lot of marketing material is deep.

But the reality is this article spins and skews what went down during this "engagement" in a way that is almost criminal.

"the company increased qualified leads by 7 percent while cutting the budget by 24 percent. The decrease in spending was not the result of reducing headcount. During the campaign, the sales force set three consecutive monthly sales records, as well as three consecutive quarterly sales records."

Sounds pretty good doesn’t it? 

Who wouldn’t want to hire a guy who could increase your sales leads 7%, set sales records, cut your budget and allow you to retain staff during these tough economical times?  Oh, and while he’s at it, single handedly increase your "share of voice".

So that’s the spun version of what happened at this "engagement", and as you know there’s almost always two sides to every story.

I’ll try to keep this simple so those with MBA’s can keep up.

Suppose you run a lemonade stand.

Your basic costs include: Water, Ice, Lemons and cups. 

Your primary method for advertising includes:

• Word of mouth (Brand X, our lemonade is delicious)
• Print advertising (Direct, local market advertising, perhaps leveraging coupons to reach your market).
• Direct Customer marketing, via email or snail mail.  (Hey Joe, you’ve enjoyed our Lemon aide in the past, you should try our new pink Lemon Aid)

You’re trying to grow your business so you hire engage a marketing genius.

This new guy has lots of great ideas for focusing your marketing. 

• Fewer Tasters, More Buyers (Marketing term: higher quality leads)
  Specifically he wants to reduce the number of ’shoppers or tasters’ so that you use fewer resources sampling your products (cost savings). 
  (Bear in mind that tasters and samplers aren’t a burden, and history has clearly shown that the more people you have tasting your product the more people buy)
• Stop/Slow Direct Marketing (decrease the spend, save the headcount)
  Stop doing what you’re good at.  Stop that local or direct marketing that has worked so well in the past.  Stop inviting new and current customers to taste your new flavors, that might waste your time.
• Use Smoke and Mirrors (Marketing term: proclaim yourself thought leaders)
  Instead of spending your hard earned marketing dollars to generate leads (tasters of your product).  Spend it on a thought leadership piece, to educate the market on organic lemon farming, water filtration.  The things that help to make good lemonade.  Nothing directly related to your specific product, just over-all feel good, brand awareness marketing. 
• Get on the Web 2.0 bandwagon (Marketing term: leverage social networks)
  The value proposition here is still debatable.  This too is feel-good marketing.  Being where your customers expect to see you.  Nothing wrong with this just, but be mindful of the time you spend doing it and the ripples that come from it.

There is nothing wrong with thought leadership marketing.  It’s generally a good thing.  But it’s the type of marketing you do "in addition to" what has made you successful in the past, not "instead of".

The problem comes in when you cut your marketing spending on your bread and butter marketing and focus all your internal resources on the other.

What you don’t read about in Mr. See’s article is the flat spin he put the company in by neglecting the bread and butter marketing that the company lives on.

Three months of consecutive sales records?  That’s a true statement that had absolutely nothing to do with his efforts to ‘reduce the spend and save the head count’.  
It’s completely unrelated. 

Did any of his work pay off?  Yes, in some ways it did.

It is true that the thought leadership piece did drive a few highly qualified prospects our way.  A few prospects closer to buying without wasting a lot of time tasting.  If we calculate the true cost of those leads, the cost would be considered astronomical.

In the process of this engagement we all learned a very valuable lesson.

Do what you’re good at, and do it well. Ignore the obvious and it will eventually catch up to you.