Tucked way down deep in the southern hemisphere, an intriguing business scenario has been taking place.
On the island of Tasmania, Sullivan’s Cove have been distilling whisky since the 1990s as a niche operator. For many years, they were a small fish in a tiny pond.
Then, in 2014, Sullivan’s Cove went from obscurity to burst onto the world stage, upsetting the historical single malt whisky establishment by winning the prestigious World’s Best Single Malt recognition at the World Whiskies Awards.
Clearly this was no fluke, as they followed up this achievement with back-to-back World’s Best Single Cask Single Malt awards in 2018 and again in 2019. Something very right was happening down there in Tasmania, and all of a sudden this tiny distillery was the focus of whisky fans the world over.
While tiny in comparison to major distilleries around the world, clearly the folks at Sullivan’s Cove have a very high quality product to offer their market. Accordingly, they’ve found a premium price-point to reflect that quality and respond to the spike in demand that these awards have afforded them.
I caught up with Fred Sullivan, strategist at Sullivan’s Cove to talk about their brands and the way that this business has responded to the fame that they’ve achieved in the whisky world. Given the long distilling time, it was no simple matter to just “produce more” as demand grew. It takes about a decade just to distill a batch. So what to do? Furthermore, it’s clear that the Sullivan’s Cove approach is to keep things real, continue to make a great product, and organically grow and evolve within the space they feel is uniquely theirs.
Apologies for the terrible internet connection and audio issues on the video. Try to look past those, and you’ll hear themes that are really interesting for any business owner, including:
Making the most of a “Golden Moment”: a sudden increase in both Originality and Credibility that came with globally recognized awards
Premium pricing in response to demand spikes
Perception of quality in the marketplace
The importance of a narrative in building their brand
An authentic connection with customers at the heart of tactical marketing executions
Honesty and simplicity in communicating brand qualities
I loved chatting with Fred. As a whisky fan who was lucky enough to try their award-winner back in 2016, I can tell you that it is totally worth spoiling yourself for a special occasion. If you’re tempted, here’s where to find it:
In Europe, Fred recommends asking your favorite whisky bar if you fancy giving it a try.
In the US, Californians can head to K&L, and on the east coast, you can visit Astor wines. Both have a delivery service.
Or, just book a flight to beautiful Tasmania and visit the cellar door!
Although I insist on telling myself that I’m a young person, I’m definitely not. I know this, because my body looks disgraceful, my back aches for no reason, and because I insist that 90s music and films are clearly superior to any of the contemporary nonsense being pumped out today. Point Break and Back to the Future are timeless classics that put Avengers to shame.
I made the mistake of watching the 2015 reboot of Point Break on a flight recently, and it offered all the pleasure of a North Korean labor camp. For starters, it enthusiastically refers to itself as a “reboot”, which we all know is a completely terrible term. A reboot is something we ask our parents to do when they call for help with their crashed computer, not anything to do with cinematic masterpieces. On that note, watching this movie proved to be less enjoyable than offering parental tech support.
After watching this horrible remake, I was prompted to rewatch that great original film just to reboot my troubled mind.
You can imagine my dismay to find Keanu’s acting back in that original was not nearly as amazing as I recalled. The dialogue was forced and corny, and the limitless coolness that I so fondly recalled had aged like milk left out in a heatwave. On the positive side, it does feature Gary Busey looking accidentally funny, and a cameo with Anthony Kiedis from the Chilli Peppers. It also has some fairly excellent surfing (in a 90s-way) from Matt Archbold in the opening scenes.
Still, this shock led me to also investigate another childhood favorite, Back To The Future. Although this seems to have retained it’s charm, there’s no doubt that the special effects now look decidedly YouTube-esque and there’s a general lack of polish compared to anything currently on Netflix.
You may recall Michael J. Fox’s character, Marty McFly, bristles at ever being called “chicken”. I had totally forgotten this little plot device, and in case you have too, it can be summarized as “Marty gets into confrontations not befitting someone of his modest height simply because a bully suggests that he lacks courage”. I guess bullied kids back in the 80s and 90s must have loved seeing an everyman hero standing up to a thug.
For some reason, this reminded me of some behavioral science I had been reading which describes the way our subconscious interprets and responds to threats. In short, when it’s our subconscious that detects threat (as opposed to our conscious minds), we are exposed to increased bias compared to when our assessment of a threat is more conscious. For people who suffer chronic anxiety, some researchers speculate that there may be a “pre-attentive warning system” that gives the sufferer too many false signals of threats, leaving them feeling more anxious than their circumstances would reasonably dictate. It’s as though their threat autopilot is always anticipating a crash and trying to course-correct, even though this is just a pessimistically biased misinterpretation of real threat levels.
Although we all have this threat autopilot, this biased subconscious warning system doesn’t cause most of us to suffer chronic, debilitating anxiety. In fact, we have become so efficient at avoiding threats and retreating from fear that we barely even notice it anymore (unlike Marty McFly). Nevertheless, that threat autopilot is still there in all of us, and it skews more toward inaccurate bias than to an accurate assessment of circumstances. Our autopilots have a vast array of mental shortcuts that we employ daily to simply bypass dangers and discomforts before they even break through to our conscious world.
If you’re trying to build a business, you should know that it has implications for when your customer considers buying from you.
First of all, you should have one primary objective if you wish to move a fearful, reluctant potential customer into action: shift them from subconscious to more conscious thinking. It’s in the more conscious state that the customer will be less exposed to fear-aversion biases, and more aware of the real risks and rewards of spending their money with you (Daniel Khaneman’s masterful Thinking Fast and Slow is mandatory reading for anyone who wants to know more about this idea. What I’ve clumsily called autopilot here, he refers to as System 1 instinctive thinking).
In my view, there are three useful triggers to remember when moving someone from their subconscious autopilot (System 1) to more conscious thinking.
SURPRISE – in the CORE Marketing Method we emphasize surprising in two main arenas (Surprise with Value, giving people shockingly more than they anticipate, and Surprise with Service, giving people shockingly more care and attention through the buying process and throughout the post-purchase relationship). Surprise is a powerful tool in marketing because despite anyone’s preference to ignore you, surprise forces the customer to mentally re-write the narrative they have about you to include these new surprising ideas. In creating a new narrative about you, the customer deeply embeds your business into their memory and is forced into conscious thinking in the process.
EMOTION – although emotions sit within the autopilot (System 1) mode of thinking, by clearly associating your business with pronounced emotional drivers that are important to your Ideal Customer, it can remind your customer of their unmet need. Consider someone asking you “would you like a cold beer?” when you have been feeling thirsty on a hot day. The thirst may not have even been front of mind, but upon prompting with the “cold beer”, your thirst becomes more obvious and motivating. In the same way, if your business has uncovered an important emotion that resonates with customers, and you put it directly in the customer’s field of vision, the increased sense of need causes the customer to shift from their subconscious to a more deliberate (conscious) search for a solution.
CONTEXT – some times and places are simply not conducive to interrupting your customer’s autopilot thinking. When she is rushed, or in certain types of groups, or in deeply repetitive routine tasks, she will be less inclined to break out of autopilot thinking. Conversely, in a situation where the customer naturally has more available time, is among less familiar groups, or is not in the middle of routine tasks, she may be more ready to think in more conscious and deliberative ways.
It also helps to know a little about the way fear and bias manifest in your customer, and what your specific responses should be. I’ve listed three biases below that add to your customer’s fear of buying from you (and I’ve provided some solutions for you to consider).
FEAR BIAS #1: Inertia
We all have a strong inclination toward the status quo.
We feel much more at ease with no change, because with change comes the possibility of danger or loss. Even our physical bodies revert to an equilibrium of homeostasis as a healthy default. We prefer balance, sameness, and predictability. For this reason, we need to have drivers that are pronounced enough for our conscious mind to get past the subconscious desire to simply not change at all. In other words, you need to have something very motivating to get you over the hump of inertia.
Solution: elevate the need and make it easy to act.
Stanford’s BJ Fogg has rightly become famous for his excellent Behavior Model. This describes something that is reasonable intuitive once you see it laid out. In summary, the harder (or more effortful) something is to do, the more motivation is required to move that customer into action.
In the CORE Marketing Method, I emphasize marketing tactics that move your Ideal Customer toward specific and identified behavioral actions. So, according to Fogg, it makes sense for these actions to be easy to make (therefore requiring lower levels of motivation to see a customer complete the action). Similarly, we look at tactics that increase motivation through focusing on relieving emotional pain points. As you can see in the image above, prompts (tactics) above the curve will succeed in moving your customer to change a behavior (such as choosing your product over a competitor).
When battling fear-based inertia in your customer, initially give her a small easy action to take that is matched by an emotional driver that is powerful enough to make her push through her fear of change. Once she has made that easy action (and experienced some sort of emotional reward), she will be more confident to make subsequent steps toward being your customer.
FEAR BIAS #2: Uncertainty
Our default position is to protect our resources. In the case of your customer, normally the main resource being protected is money (but also time and effort, and potentially their ego and status). If your business provides any uncertainty about its capacity to truly answer a need for your customer, they’ll be afraid to share their resources with you. They’ll be scared to bring out their wallet.
Solution: show your true self (flaws and all)
The real answer to uncertainty is to thoroughly prove your credibility in order to reinforce trust. This concept is so critical and multifaceted that it makes up 1/4 of the central concepts in the CORE Marketing Method (the “C” stands for Credibility). For this illustration though, I’m going to call out one counterintuitive hack that an entrepreneur can employ to boost trust.
Small and medium size business owners rarely want to let customers know about their modest size and typical SME shortcomings. More often, the entrepreneur tries to create facade of “big business” that never really rings true. Because most customers can tell that the small business is not really a giant global enterprise, the entrepreneur’s efforts to come off that way feels false. Immediately, this is the opposite of trust-building.
More importantly, there’s a remarkable psychological quirk that can work in the small business person’s favor. It’s call the Pratfall Effect, and it suggests that your business will be more appealing if it seems to be capable of delivering on its main promise, but is also clearly susceptible to small inconsequential mistakes. One experiment that proved this theory included an actor who knocked over a cup of coffee during an interview. Experiment subjects liked him better, compared to the same set up where no coffee was spilled. The coffee-spiller was obviously human, and more therefore relatable, which translates to being more likable. Likability and trustworthiness are closely linked in our minds.
In your business, make it known that you stand confidently for reliably solving one critical pain point for one Ideal Customer. You do that thing really well because it’s your true specialty and you know the Ideal Customer intimately. At the same time, it’s fine to let your customer know that you’re a real person, perhaps a small operator, that your Golden Retriever sits at the reception desk, and that you really don’t think you can do those other things the competing big multinational firm offers. By admitting your limits and some minor flaws, you will get a boost in credibility and your customer will lose their sense of uncertainty. This idea is even employed by huge global brands from time to time, such as the famous campaign by Avis Car Rental which proclaimed “Avis is only No.2”.
An interesting side note: research shows that online product reviews of 5 stars are less likely to induce a purchase compared to reviews in the 4’s. The reasoning: people are more inclined to believe the authenticity of something very good, as opposed to perfect.
So, if you want to get past the fear of uncertainty, consider dropping your facade and showing your human (imperfect) side and become more relatable. They’ll trust you for doing so and their uncertainty will fade away.
FEAR BIAS #3: Low Self Efficacy
Self efficacy, in case you’re not really familiar with the term, just describes your own confidence to perform a task adequately. There are four factors that are recognized as impacting your self efficacy:
Mastery: your demonstrated success or failure over time
Modeling: watching others succeed or fail at the same task
Social Persuasion: another person encouraging or discouraging you
Physiological: an awareness of your body showing signs of stress or panic (such as sweating palms or hyperventilation)
Unfortunately for our own self efficacy, we tend to recall painful events more than pleasurable ones, and this also relates to our life as consumers. We can all easily recall being ripped-off or disappointed with a purchase at some point in our life, but we rarely hold on to feelings of pride for the plethora of times that we’ve purchased something successfully. The pain of that historical rip-off sits rigidly in our memory, it tugs on the subconscious, and so your autopilot refuses to fly anywhere near that sort of territory again. Your consumer self efficacy has been forever shaken, and it leaves you with fear – which creates hesitancy – when it comes to buying something like that in future.
This really gets to that first known influence of self efficacy: mastery. We have more mental availability for our failures as customers (even though they are rare) and so we subconsciously doubt our own ability to buy with confidence.
Also of note: regarding social persuasion, research suggests that negative discouragement from others has more power to impact your self efficacy down compared to the positive impact of having an encourager pushing you along. That said, a positive encourager still works wonders, especially if it’s someone we find physically attractive.
For the reasons cited above, you should assume that your customer will be exposed to a biased low self efficacy when it comes to buying from you for the first time. This will manifest in hesitation and caution: failing to complete the checkout from their online shopping cart (industry averages around 68% for abandoned carts), inexplicably failing to send in the signed Scope of Work contract, or refusing the retailer’s offer of assistance with “just browsing, thanks” even when the customer really does need help.
Solution: address the four self efficacy factors
To help with mastery, consider smaller, low-risk buying actions first that prove instantly that the customer can buy from you confidently. As soon as possible, give them a quick emotional win (in a previous post I’ve also described how to emphasize post-hoc rationalization at the first purchase experience … this action will also help them build self efficacy in relation to buying from you). An example might be those taste-tests that the ice cream shop provides. How many times have you ever sampled a few flavors (a small low-risk commitment) and then just decided against buying at all? Hopefully never, because skipping ice cream is something only psychopaths would do. But also because once you’ve made that little low-risk action, you are already committed to buying the whole overpriced waffle cone.
To help with modeling, consider whether your business can create group exposure and buying events (such as grand opening events, auctions or group demonstrations) which takes advantage of the elevated emotions that people feel in groups and the tendency for social facilitation (the effect of individuals being more effective when operating alongside other people completing simple tasks). Another way to help with this is to remind the customer of all the other people who’ve successfully bought from you. When McDonald’s reminds us that billions and billions have been served before us, they are really just asking us to feel confident that our purchase will also be successful based on social proof, and so we leave our low self efficacy behind.
To help with social persuasion, ensure that you and your team are vocal in support of the customer when they are in the middle of the buying process. This is demonstrated by the fashion retail assistant who compliments that article of clothing you are trying on. Or, as happened with me when I bought my first piece of real estate, the realtor went to lengths to know how much of a bargain I was getting and that was clearly a savvy buyer. Even though I knew she was being a sales person and trying to get me to close the deal, my subconscious liked getting the support of her social persuasion.
If a customer engages with your business in the company of others (such as a friend), bring that friend into the conversation to create a positive encourager, and to avoid them becoming a negative detractor. You may also want to think about ways that you can create offers for new customers to bring a friend who may also become a customer and enjoy some sort of reward.
To help with physiological, ensure that your customer’s physical environment is comfortable and non-threatening. However you can, try to help them avoid the elevated heart rate and those other physical reminders that they are stressed or fearful (which in turn erodes self efficacy).
In short, the low self efficacy your customer feels is real, even if it isn’t rational. Put measures in place to help build their self efficacy and watch their fear and hesitation subside.
So, now that you know why your customers are terrified of buying, you can begin to respond in ways to help reduce those fears. There’s also some good news for you: although these subconscious fears are quickly acquired, they are also quickly forgotten. You just need to help the customer put them out of their mind.
Exodus tells us that Moses set out of Egypt with gusto. In dramatic fashion, he flipped Pharaoh the metaphoric bird and took off with his enslaved Hebrew friends, pursuing freedom in a Promised Land of milk and honey.
This reminds me of many stories that I heard during a research project I undertook a few years ago. I was chiefly looking at risk-perception among small and medium size business owners, start up founders and entrepreneurs. But what I stumbled upon was an intriguingly common set of attitudes and backstories.
These 1000+ business people in North America, Europe, Australia and New Zealand recounted their initial journey into entrepreneurship. Overwhelmingly, they described a transition into business ownership as the pursuit of freedom and flexibility and a sense of self-governance.
In most cases, they left an employed role, throwing off the predictable comfort of a monthly paycheck in favor of something more liberating and exciting. Even after being in business for years, their tone of voice and the sparkle in their eye as they recalled their start in business convinced me that this event was a thrilling watershed moment. It was a mix of passion and hopefulness, with a dash of apprehension and nervousness. Even where the catalyst was circumstantial (e.g. losing a job, or inheriting a family business) more than 90% seemed to recount Six Big Desires when starting out:
To Be My Own Boss
To Create More Wealth
To Have More Freedom & Flexibility
To Enjoy More Time With Family or In Leisure
To Work in A Field of Enjoyment or Natural Talent
To Create Something To Be Proud Of
These common drivers seem intuitive to me. I’ve been there myself in several businesses, and can identify. Perhaps you can, too.
It’s not that being an employee is bad per se (it’s my belief that employee and industry experience can be exceedingly helpful for entrepreneurs, and there’s evidence to back this up). That said, it strikes me that the entrepreneurial itch seems to be woven into some of our DNA, and when that scratch is prevented because of the requirements of a 9 to 5, that job can feel like a set of comfortable shackles.
My study also pointed Four Common Worries. These are the day-to-day concerns that were most pronounced in stealing the joy of business owners:
Money Worries – not just cashflow, but also chasing invoices, juggling debts, feast and famine cycles, and lack of retirement savings for the owner.
Time Worries – a sense of perpetual rushing and multitasking, working too many hours without a break, and a focus on time-consuming but low-productivity tasks.
Generalized Stress & Anxiety – feeling uncertain, incomplete, or precarious. Some report fear that “the buck stops with me”, imposter syndrome, and a fear of unknown compliance requirements or legal issues.
No Clear Path Forward – for those who identify as being innately entrepreneurial and ambitious, most describe a sense of not having a means to progress from their current state of survival to a desired future state of success.
Also interestingly, I found correlation between entrepreneurs who over-indexed for self-reported occupational happiness, and three common features of their businesses:
Stability – this was the only concept with a noticeable connection to finances, though it went further than just dollars and cents. This was where the business owner had a sense of predictability in the business, and felt confident that they could see what was likely around the corner.
Social – successful entrepreneurs may trend toward extraversion, but even when correcting for this, happier business owners reported that they liked to spend time with their staff, business partners, suppliers and regular customers.
Social Good – when the business owner had a deliberate and purposeful aim to provide something of benefit to someone other than themselves, they were consistently happier. This includes grand gestures of philanthropy, as well as simple efforts to improve the lives of people impacted by the business such as employees or suppliers.
It’s interesting to me that even when the inevitable tough times in business came up, these happier business owners reported that one or more of these three factors helped to sustain them.
All of this leads me to one simple premise: business owners have common desires and concerns, and there are predictable ways for them to achieve success while increasing day-to-day happiness.
I’ve used this as a foundation for a business accelerator that I run, The CORE Marketing Method. This program teaches marketing excellence based on empirically proven methodologies that works in small business and start ups, and is brought to life in a proprietary business operations model to dramatically and predictably grow a business while containing risk.
So, what does this have to do with Moses?
It’s my belief that when an entrepreneur sets out in transition to become The Business Owner, they typically burst onto the scene with a heady mix of euphoric emotions that make them more susceptible to biases and cognitive blindspots. At the risk of sounding like an off-brand Dr. Phil, these entrepreneurs go in excitedly with both guns blazing, but totally unaware of their poor emotional and mental postures that provide a platform for making faulty critical decisions.
In most cases, this causes the business to fail early. Of those minority that remain afloat, these blindspots prevent them from growing and holds them in a cycle of “just-surviving”, critically exposed to just one bad market event that could cripple them. And, they typically leave the owner prone to those Four Common Worries I described above, causing them to be less happy at work.
All of this could be helped if they learned something from Moses and his posse. Like the business owner, the Israelites also had a bold idea when they shook off their shackles and set out. And like most entrepreneurs, they held an idealized belief about some wonderful (but mysterious and poorly defined) final destination. According to the Kid’s Picture Bible that my two little boys ignore in favor of The Adventures of Captain Underpants, Moses led the Israelites around the desert for 40 years, not quite sure where they were going and therefore, not quite sure how to get there.
I’ve been in the area described in Exodus. It’s a fascinating and beautiful place in many ways, but I wouldn’t want to be there without a functioning GPS and an air-con that can safely blast me back into sub-arctic temps. I’d also want a destination in mind, and way-points of interest along the journey.
Entrepreneurship shouldn’t be a blind leap toward an unarticulated, mysterious final destination. After all, you may be leaping in the completely wrong direction, spending years wandering toward short-term business pursuits when a much more deliberate journey could deliver you to a meaningful destination far more efficiently. To stretch the Moses analogy, some people estimate that his 40 years of meandering covered a distance that could have been walked by a large crowd in about three weeks. In business you don’t want to waste time and resources treading the same ground for years. You want to get somewhere as efficiently as possible.
Right at the birth of a business, the entrepreneur should be ready to start hypothesizing about a goal. In the CORE Marketing Method, I encourage entrepreneurs to recognize that their business is a vehicle that can carry them in a direction of their choosing. I repeat ad nauseam: the business is in service to the owner, not the other way around. For this reason, before we ever start looking at ways to drastically grow a business, the owner is asked to spend some time considering where they want to be in five years personally. At the very least, the plan for the business should be complimentary to those personal ambitions about life.
Then, the entrepreneur thinks about three 5-year goals for the business that align to financial objectives, time and lifestyle objectives, and legacy objectives. These are designed to capture those driving Six Big Desires that gets an owner pumped to do their own thing, mitigate the Four Common Worries, and harness those three common corollaries with increased day-to-day happiness. Working backwards from the audacious 5-year goals, the business owner plots a course with way points along the journey (which I title Growth Milestones in the program).
Moses should have grabbed some parchment and written down as follows:
Big Goal: Get to Jerusalem where there’s milk and honey galore.
Way Points: (i) Get to the Red Sea and leave the Egyptian army treading water (ii) compete with the Philistines who have dominant market share in our target geography, (iii) grow the milk and honey FMCG channel.
Tactical Executions: (i) highly targeted sling campaign directed at the Cranky Giant persona. (ii) Facebook ads.
Result: relax, enjoy knowing the Middle East will be a peaceful utopia without any troubles thereafter.
Three weeks journey time. All of those Sunday School lessons would have been so much shorter.
So what should I do, AJ?
Start by acknowledging that your foundational entrepreneurial excitement, normally related to some of those Six Big Desires, is a legitimate reason to do what you do. Also recognize that as a normal human, these emotional drivers may expose you to involuntary irrational thinking that you’d be wise to account for. The best remedy is a clear plan based on insights over assumptions. That means committing to being Constantly Curious (desperate to learn), adopting a culture of ongoing insight gathering in your business.
At the crux of this plan is a destination that you ambitiously aim for. There’s a glut of evidence for how goal-setting delivers business success, and unfortunately a similar trend for entrepreneurs and SME owners lacking a clearly articulated goal.
I don’t advocate for heavy business plans that are uninspiring, dead documents that live in a drawer.
Instead, I strongly encourage the business owner to have a robust strategy that has a goal in mind, imperatives that are measurable and that cause us to arrive at the goal, and tactical executions that deliver the imperatives.
It’s often the audacity of the goal that provides the deepest well of excitement and passion in the business, which can spark amazing creativity in marketing efforts and inspire innovation for product refinement or breakthroughs in business development. The more agile nature of start ups and smaller businesses means that you can opportunistically take advantage of things as they come into view, but they should be guided by the goal and not derail the overall direction of the plan.
A quick note: I don’t love the emergence of a business philosophy that I think is a misreading of Eric Ries‘ brilliant Lean Start Up model. Ries brought into the mainstream the idea of launching rapidly with a minimal viable product (MVP), followed by insight gathering to fuel iterative product improvements. The misreading is where entrepreneurs think this replaces the need for directional purpose (i.e. a goal). Probably because it provides an excuse to find short-cuts around things that are hard, some also see this as permission to neglect a business plan altogether. That’s not good.
Yes, be responsive to learning and gather data deliberately. Yes, be ready to iterate to better meet your customer’s needs. If need be, discover a business model as you begin to operate. But overall, consider these Lean ideas as fine-tuning the path toward your goals. They aren’t in place of goals. You still want to have those in place and acting as a beacon for all of your efforts.
So, with that I’ll leave you with the most important part of this article, my relevant Dad-joke:
Yesterday I caught some targeted ad’s in my social feed. I feel sorry for the advertising agency that put it together, and for the marketing team that now have to own the blowback. Entrepreneurs and small business owners can learn some lessons.
The campaign is for Hewlett Packard, which is in the home printer business among other things.
It’s clear that the brand marketers at HP wanted to tap into a perceived mood in their customer base: nostalgia for the good old days (presumably when photos were printed rather than uploaded), and dissatisfaction with the current world of social streaming formats and the overabundance of tech in our lives.
The tactic they chose was to post factoids along these lines to social media, with a questioning caption, obviously hoping to tap into a zeitgeist and encourage sharing using the hashtag #getreal.
On the surface this seems intuitive and reasonable. At some point, we’ve all opined about how much time we spend on our phones and how we are all becoming socially detached zombified automatons.
Unfortunately for HP, this “almost successful” campaign is like being “almost pregnant”. It just misses, and in doing so, misses entirely. Check out these comments on my social feed.
This campaign, which wanted to leverage a digital photo sharing platform to critique digital photo sharing, is missing badly because they’ve made three mistakes.
They Appear Inauthentic
They Appear Petulant
They Appear to Not Know Their Customer
I say “they appear” because it’s possible HP are deeply sincere about the wellbeing of the customer. They may be totally empathetic rather than stubborn and judgmental. They may also have excellent data on their customer and a clear persona in mind. The execution feels opposite to that, though, and perception is reality when it comes to marketing tactics.
They Appear Inauthentic
Everyone knows that HP sell printers, and that their customers are using Instagram instead of printing at home. The #GetReal hashtag should apply to them: get real, we know you don’t care about our online lives and just want to sell more printers.
In marketing, trumpeting false virtues will come across as sickly-sweet, and the customer’s finely tuned bullshit-detector will start ringing the moment something inauthentic is dished up. This has the effect of spoiling any part of the message that may have been genuine, as we consumers recoil at anything that seems intended to trick us.
The answer here is transparency, openness, credibility. It serves you well in your business, because customers generally know what’s going on anyway. By being frank you get ahead of cynicism and the pain point can become a common ground issue.
HP could have instantly garnered trust by being more overt about what they offer: a solution to the subtle pain-point of tech-heavy life in the form of a good quality photo printer that’s easy to use and provides a tangible memory to cherish. They could have found a way to communicate “Isn’t it nice to sometimes slow down, and really hold these memories in your hand?”.
They Appear Petulant
While it’s true that the avoidance of pain is a stronger motivator than achieving pleasure, you still need to tread lightly when illuminating a pain point and offering your product as the solution. If there’s ambiguity, it can seem as though the negative being discussed isn’t a recognition of a shared problem but of the business being out of touch and irrelevant.
Because we know that HP want to sell printers, and it seems like they are bemoaning our online photo sharing habits that are hindering that ambition, their negativity feels as though they are being sore losers and blaming us for their troubles.
It doesn’t feel like HP is empathizing with a shared or mutually recognized problem, and are ready to offer a solution. Instead, it feels as though they have a problem and are blaming us, their customer.
I’m certain this isn’t what the HP creative team intended to communicate. They wanted us to gather around a common pain-point and feel motivated to change our behavior toward something more in line with what their product can provide. The problem is, their choice of message and platform came off as exclusively self-serving. The captions read accusingly and without any respect for the needs of the customer. That kills any chance of empathy or reciprocation.
To avoid coming off as petulant, and to ensure an attitude of reciprocation in the customer, HP should have proven empathy by making it clear that we are all in this together. Decent market research would have explored what language was the right choice to tackle the issue, and what words to avoid. Use of humor may have helped, or even a more hopeful tone that said “Look, we get it. We are all using technology so much these days that life feels rushed. Isn’t it nice to have some precious things that are tangible, more meaningful, which lasts for years?”
In your marketing, make sure that you communicate a needs pay-off that relates specifically to your Ideal Customer’s real emotional drivers. These insights can be uncovered during ethnography and surveys, and the words and images can be determined during concept and message testing.
HP could have rolled this tactic out to a small, discreet sample in an isolated geography and spent a day looking at the comments (rather than launch a nationwide campaign that misfired on a large scale). In the CORE Marketing Method we call these Tactical Tests, and these small trial runs are useful for limiting exposure to negative unintended results with a new execution.
They Appear To Not Know Their Customer
By using digital platforms to criticize digital platforms, HP played a risky game of subtly attributing blame to the customer who was willingly scrolling social media at the time of the ad being served.
Potentially, there was a very niched target segment who intend to get off the platforms or use it less in future. This group may have been HP’s target, but social is more blunt than we like to imagine when it comes to targeted ad placements. Instead of catching a mood of a targeted segment, this campaign reached a broad population and seems to judge the average social media consumer and attribute blame to them personally.
If they wanted to reach a group who are dissatisfied with technology and its impact on social life, they should have seriously thought about an alternative medium (or even, different digital placements that feel less within the scope of the critique).
Even though the campaign seems to draw from research statistics as shown in their report, there’s no immediate sense that the research subjects were representative of a specific customer. The campaign variously points to the impact of technology on parents, families, couples, friends, and job interviewees. It makes a blanket complaint about a ubiquitous issue that we all hear and probably repeat ourselves – that technology has come into our lives with some social costs – but it doesn’t really speak to one customer with specific language and an empathetic solution. The customer is also less likely to identify because the caption feels aggressive and accusatory, leading them to reject the message altogether. HP get closer with the parent/child dynamic and concern around kid’s screen time, but even still, these come off as condescending rather than empathetic and understanding.
In the CORE Marketing Method, entrepreneurs learn that their marketing efforts need to first achieve credibility (the C in CORE) and then originality (the O in CORE) in the mind of the customer. Then, based on research (the R in CORE) they can choose tactical executions (the E in CORE) to influence the customer’s behavior. For this case study, the research aspect should have uncovered language that would have evoked a credible, emotional response in a very specific Ideal Customer, and only deployed this in channels where that customer exists in a receptive mental mode.
For example, I could imagine HP discovering that parents were concerned about the amount of time that their kids were online. They could have spent some time checking where those worried parents spend time consuming media (this probably includes social media). They should have then conducted messaging research that probed for words and images that highlighted the pain point, in language that wasn’t blaming of the parent but deeply empathetic, and then offered a needs pay-off that seemed natural, generous-spirited and original. It could have said “We know you’re juggling a lot with being a parent, and you know these are all precious moments. There’s a place for social media, but don’t some of these moments deserve to have their own time, unplugged?”
I feel like I’ve seen this scenario played out before …
The death of Kodak is staple fodder in any business school. Every MBA student learns that this enormously famous, historically successful company failed to respond to the advent of digital photography, and as a result, went under. The take home message is that business leaders need to know when to be stubborn and stick to their guns, and when to pivot in the face of undeniable changes in the real world.
As head of market intelligence at Kodak, Vincent Barraba conducted market research in 1981 into the new digital innovations of competitors like Sony. His research clearly suggested that Kodak had about ten years in which to respond and that they should do so. Unlike George Eastman, who founded the company and made historical pivots from dry-plate photography to film, and again from black and white to color film, the contemporary bosses at Kodak refused to move from their dominant place in the film, chemical and photo-paper market and ignored the trend toward to digital. It’s an interesting story when told from Barraba’s perspective.
It’s even more intriguing to read this 1999 news article. It’s a snap shot of where Kodak attempted a too-late, half-arsed pivot to include aspects of digital by adding “a technological veneer to it” … while in reality remaining fixated on what they wanted to sell: film, paper, and chemicals. Even by 1999, they refused to accept that the customer knew what they really wanted and that their job was to supply it. The plans offered in this old news article have aged like a glass of milk left out in a heatwave.
Contrast this with Ilford Film. This British company decided that they would pursue a niche, and desire to own a segment (black and white art photography enthusiasts). They discovered an Ideal Customer who loved what they offered and who wanted to use the product. They didn’t stubbornly ignore digital, or even suggest that digital was a poor cousin of film to begrudgingly accommodate. Instead, they recognized that their Ideal Customer uses digital in all sorts of ways which can legitimately compliment their use of Ilford B&W film. It was a subtle, but meaningfully different approach compared to Kodak. And it has proven to be successful.
So, what’s at the heart of this difference?
It’s a recognition that the market always tells the truth.
If the customer wanted digital cameras and to save their photos electronically, Kodak either had to play that game, or chase a smaller segment who wanted paper processing for some other legitimate reason. As entrepreneurs we should remember that there’s very little chance of us changing the customer’s mind about what itch they need scratched, but plenty of room to persuade a target customer within the reality of their existing unmet needs.
Know what the customer wants. Give it to them. Ensure credibility and originality, based on research, and with tactical executions that make sense to the intended audience.
HP should simply recognize that for most of us social is here to stay, even with its problems. They should recognize that the market has declared this truth, and they should cater to this market by describing how their product coexists in some beneficial, complimentary way. Finally, they should be careful to find a tactical execution that includes the customer, not alienates them.
Okay. So this is a blog article, being shared on social media, that intends to critique content marketing. I get the irony.
Still, this is worth saying. Most content marketing is fruitless, and even worse, it may cost you customers and result in lost business.
Let’s begin by quickly remembering a term you’ve probably heard of: opportunity cost. In short, this microeconomic concept describes the value of whatever you don’t do with a resource, because you’ve just spent it elsewhere. For example, if you spend $20,000 on a new car, that is 20,000 turns on a $1 claw machine that you’ll never get to enjoy. The opportunity cost in this example is weeks of fun and 100 cubic meters of polyester teddy bears that you’ll never delight in owning.
This concept obviously relates to money, but can also refer to time, energy, extra dark pretzel splits, or any other resource that has utility. You get to choose how to use a resource, and the opportunity cost is the value of that same resource that you can’t simultaneously use in some other way. You can’t simultaneously share that pretzel with a friend and also eat it yourself (I’ve looked into it).
With that in mind, consider what you’re doing with content marketing. In general, creating content takes time. Even curating and sharing other people’s content takes time. It may be that you spend money to purchase software or equipment to help create the content. You need to allocate mental energy and focus. Content marketing doesn’t just have a cost, it has several costs. And that means you won’t be investing those resources elsewhere.
In isolation, this may not a problem. You may decide that spending those resources is worthwhile because you derive some joy from it. In which case, have at it, create away. Become a YouTube star and perhaps become an accidental millionaire like my sons’ hero, Blippi.
I’m not here to tear into hobbyists creating content for fun, but I am here to ask some questions about your business-related content extravaganzas. If you’re creating content as a marketing pursuit, read on. If not, you can stop here and go steal some of Blippi’s bandwidth.
Marketing Isn’t Tactics
At least, marketing isn’t just tactics.
I define marketing as Strategic problem solving in service to the business. This includes tactical executions, but these are only the visible tip of the iceberg. Strategic problem solving normally includes planning, prioritization of resources, insight gathering, monitoring and measurement, promotion, and executing tactics.
The best businesses have a clear plan for growth. In the CORE Marketing Method, entrepreneurs learn that their plans need to be laid out into a series of objectives, working backwards from 5 Year Goals. Because the entrepreneur has determined annual milestones along the way, they can set highly prioritized objectives for each year. At heart, I’m still a 13 year old kid who loves rockets, and so the CORE Marketing Method looks like this:
Having seen a bunch of different models for this type of planning, I recommend Franklin Covey’s 4DX model for a corporate enterprise setting. In smaller enterprises and start-ups, I’ve amended some of Covey’s ideas to have more agility and application to leverage excellent marketing and entrepreneurship. One concept I’ve retained, though, is his concept of WIGs (Wildly Important Goals). These are the must-win battles that are prioritized above all else, and which I feel are best expressed by “We will …” statements, such as “We will become the most popular cafe on town among young professionals”.
This sense of planning and prioritization works perfectly in every SME. This model helps the business owner to zoom out to the macro, ensuring that the business is directionally correct over several years. It then helps them zoom in to the micro, making sure day-to-day operations are also correct, laddering up to those objectives laid out in the entrepreneur’s grand plans. Trust me. It always works.
So what does this have to do with content marketing? Well, let’s see …
The best business owners don’t frantically grasp for tactics, but rather, they decide what Strategic Imperatives need to be achieved for a WIG (Wildly Important Goal) to occur. These are best expressed by “Ensure that …” statements. For example, if the WIG is “We will become the most popular cafe in town among young professionals”, a Strategic Imperative for the year may be “Ensure that at least 25% of all young professional coffee drinkers are aware that our cafe has opened in High Street.”
Once that Strategic Imperative has been articulated, you can then decide ahead of time which tactical executions will help to deliver that goal. You can decide what resource you want to budget in ensuring that 25% of those young professionals learn about the cafe. You may choose to place an advertisement in the local paper, or generate a referral program, or create content on Instagram to build awareness. In execution planning, you’ll become acutely aware of opportunity costs, because spending money on that advertisement may mean you can’t budget as much for the referral program. You can also see in this example that content marketing is a tactic, chosen deliberately because it leads to a Strategic Imperative.
When content marketing is judicially undertaken as a deliberate tactical execution in pursuit of a Strategic Objective, it can make perfect sense. Like all executions, it should have a clear ambition that points to the imperative (help raise awareness among young professionals that our cafe has opened on Main Street). It should have a success metric to decide whether or not it has really worked (500 local young professionals engage with the Instagram campaign), a timeframe (the Instagram campaign will run from Jan to Mar), and a budget (we will spend $1000 and three hours per week to run the campaign). In the CORE Marketing Method, the entrepreneur also runs periodic Temperature Checks (quick way-point observations of the tactic against expected outcomes), and may also run Tactical Tests (small scale trial runs) for more costly executions.
The wonderful thing about this model is that the entrepreneur will immediately know which tactics are worthwhile, and may decide to increase the invested resources as a result. They determine that the opportunity cost is worth it, because they are seeing a real result.
Wait, didn’t your click-bait headline tell me that content marketing is bad?
Well, it can be. And I’ve become convinced that in most cases it is bad, and it’s especially pernicious for some specific reasons.
In most businesses, the systematic approach to marketing I described above is simply not in place. There are no well laid out goals, no substantive plans, and no logically prioritized imperatives. This means most tactical executions are little more than best guesses with fingers crossed, hoping for another customer. These are risky and unpredictable investments, what I describe to my CORE students as bad bets, that eventually lead to business failure or stagnation. It’s for this reason that I can confidently predict that content marketing efforts in SMEs are generally poor investments, because they are so often hasty bad bets.
It gets worse.
You Value The Financial Cost Incorrectly
Firstly, the financial barrier to entry for content marketing channels is very low, compared to other traditional advertising mediums. For $20, you can promote a post on ZuckerFace. This means that these tiny, nibble-size investments are within everyone’s immediate reach, with negligible economic pain felt in each transaction.
The problem is that we tend to use fuzzy logic to determine gists. In this case, the entrepreneur creates a gist – a simplified inner-narrative – that the low cost is effectively free. Never mind that they spend $20, three times a day, for a month. If the cost gist is (semi-consciously) $0 each time they boost a post, then “zero x three times per day x 30 days is still zero! Or close enough, right?” In reality, if they try this for six months, they will have invested $18,000. It’s not a free exercise, it’s a bad bet.
You Value The Time Cost Incorrectly
Most content marketers badly underestimate the time they invest in creating content.
A report from 2016 estimated that 39% of all marketers were spending at least 11 hours per week on social media. I suspect the number to be higher.
I ran a basic survey of 26 content marketers, and asked them to estimate how many minutes they anticipated spending in content creation each day for the upcoming week. When they kept an accurate record over the course of a week, literally 100% of these 26 marketers spent a far greater amount of time actually invested than they had forecast. In fact, it was not unusual for them to spend nearly twice as much time as anticipated. What’s more, before being shown how much time they actually had spent in the test week, I asked them to guess how much they think they spent. In most cases, they badly underestimated the real total even after they knew that they were recording the times.
I speculate that it’s something to do with the medium where these content tactics typically exist. I feel fortunate to have gotten to know a brilliant entrepreneur and author, Nir Eyal. In his excellent book Hooked – How To Build Habit-Forming Products Nir explains that many of the platforms where content is consumed feature highly addictive qualities, leveraging aspects of our psychology that make it very hard to look away. Although Nir wrote the book intending to democratize this for everyone, it does illuminate the reality that we just. keep. scrolling.
Here’s a shocking test to run on yourself. On your iPhone, go to Settings, then Battery, and scroll down to see all the apps being used and their impact on battery life. Hitting the “Show Activity” toggle will shame you with a display of exactly how many hours you’ve spent on those social media apps in the last 24 hours.
Those online environments have the potential to be utter time-sucks, and you, Dear Content Marketer, are immersed in them as both creator and consumer. You’re probably more exposed than most of us. You are likely spending a bucket load of your precious time, with no clear idea of how it’s returning to you. It’s a bad bet.
You Value The Focus Cost Incorrectly
Spending time and money is one thing. But how far can you stretch your attention?
All the evidence points to multitasking being a fool’s errand. Try as we might, we end up squandering productivity as we at switch between tasks.
For now, ignore professional marketers, social media managers, copy writers, and “influencers” (whatever that really means). Instead, just think about regular entrepreneurs and small business owners for a moment. In the vast majority of cases, the owner / founder either produces all of this content marketing themselves, or they provide direction to an employee who does. Even worse, they may just hand over a bunch of money, and completely abdicate strategic responsibility to someone who claims to be an online marketing guru, hoping for the best. Bad bets.
If the business owner is spending time trying to create and post content, attract engagement, and use it to build a business, they are almost always doing this in-between the normal daily operational requirements of their business. They are unlikely to have a methodical plan to create and manage content, with time judicially blocked out in the calendar. More likely, they spent four minutes posting something while they wait for the elevator, another fifteen minutes sharing on social after getting off the phone, and another seven minutes writing some inane marketing blog while on the toilet (ahem). Make no mistake, they paid a productivity cost every time they switched between real work and content marketing. They burned through time because their focus was poorly invested.
Much like the low-dollar threshold to promote online, we feel as though the impact on our focus is negligible. You may be surprised. Your focus is the place where amazing efficiencies can be found, where innovation and entrepreneurial creativity can germinate brilliant ideas, and where you can woo your customer further along the Love Story continuum. Diluting it around ad hoc content marketing efforts is a bad bet.
You Get The Wrong Rewards
Generating real wins as an entrepreneur is not easy. Growing a business can be dreary, thankless work that feels like it may take forever to pay off.
How delightful, then, when we look at our business tweet and find that it has been retweeted a bunch of times!? These micro-feedbacks offer us a little hit of dopamine and serotonin, that feel-good juice that sloshes around our brain. It takes but a moment to glance down and check that follower-count or to watch a few more likes appear on your last post. Each time, we feel a little glow of momentary joy (much better than knuckling down to manage those taxes, recruit a new sales rep, or draw up a real marketing plan). Research is confirming this reward response to be true, and quite addicting.
Over time, these variable rewards form powerful habits that can be hard to shake. What started as an innocent attempt to start a business Facebook page can quickly turn into an obsession, and before long you’ll be sitting in Starbucks with a sticker-laden Macbook, Airpods in, hashtagging your way into full-blown frenzy of Gary V inspirational quote-sharing.
Just because it feels good in the moment, doesn’t mean you should do it (I haven’t sounded this much like a Youth Group Leader since I was a Youth Group Leader). What really feels good is achieving actual business objectives. Conversely, sacrificing those substantive wins for the next fleeting short-term buzz is a bad bet.
You Measure The Wrong Things
Business life is not only hard, but is often lonely. Depending on where in the world you live, entrepreneurs can be viewed anywhere from brave, to flakey, greedy or untrustworthy. Your friends and family may not get it.
We humans are tribal creatures who need the affirmation of others. As an employee, this is formalized around manager reporting structures, promotions, and a weekly pay packet. For entrepreneurs, we often experience ups and downs with little empathy or encouragement from other people. We typically traverse this journey on our own, with occasional input from others in business.
I believe this may be one of the reasons why business owners and entrepreneurs are especially susceptible to chasing vanity metrics.
That term alone can make us recoil, because we may not consider ourselves especially vain by nature. It may be more understandable if we think of these metrics as proxies for human encouragement. These vanity metrics are generally easier to achieve, and more readily available, than the encouragement of others that may only ever eventuate at the culmination of a big project or some other landmark event.
For that reason, the entrepreneur’s psychology may draw them toward the sorts of metrics that make them feel morsels of pride and validation. By coincidence, content marketing is typically judged on many measurements that closely mirror vanity metrics.
These can all be proxies for how we feel others are interpreting us as people, not how they engage with our business. Do they like us? Do they want to engage with us? Do they want to give us their attention? Am I really succeeding?
Those human desires are normal. But unless these metrics are purposefully pointing toward a Strategic Objective on the way to a Wildly Important Goal, it’s not even worth measuring. Chasing these metrics is a bad bet.
So AJ, are you telling me to create content, or not?
I’m telling you to firstly have a plan to reach a specific goal.
Think strategically about what steps are needed to get there. If the costs for content marketing delivers a return in moving you forward toward a goal, and that ROI is better than whatever you forego in opportunity cost, it may be a wise bet. And, if you can set frameworks in place to guard against some of the risks and blindspots, it can be a very accessible tactical choice.
Otherwise, it’s an exercise based in flawed psychology, that won’t really move you towards where you want to be. Critically, it’ll use resources that could be otherwise invested to attract a customer. For that reason I hereby give you permission to not do it.
Now, please like and share this article. I need the dopamine.
The amazing achievement by Eliud Kipchoge – running the marathon in under two hours – is all over the news. And for good reason, the Kenyan three-time Olympic medalist had broken through a barrier many had thought impossible to achieve.
In reality, the dream result was a dream visualized, planned well, supported by innovation and executed flawlessly. There’s obvious parallels here for entrepreneurial business owners, but for now I want to focus mostly on one thing: the surprising effect of reaching an audacious goal.
This latest sporting feat has reminded the world of another historical achievement: the four-minute mile.
When Roger Bannister broke four minutes, he surprised many who speculated that this feat was beyond human potential. More recently, scientific journals have offered that the fastest time humanly possible for the marathon is a couple of seconds under 1:58.
For athletes like Kipchoge and Bannister though, these types of speculations would never get in the way of their ambitions. Once their mind was set on their objective, they pursued it with relentless intent. And like Kipchoge, Bannister had a remarkable journey to prove the doubters wrong.
Following a disappointing result at the 1952 Olympic Games, Bannister initially considered giving up competitive running. After some soul-searching, he was instead able to resolve himself to achieve his audacious goal: being the first person to break four minutes.
Any successful business owner who has faced a setback can relate to this process: self-doubt, followed by a determined resolve. But that determination alone would not be enough for Bannister, and nor is it enough for the entrepreneur.
In the face of that initial setback, and following his resolve to push on, Bannister chose to look for inspiration. He focused on other athletes who had staged similar comebacks. For Bannister this was Sydney Wooderson, a fellow British athlete who held a record time for the mile, was later beaten, but then used that defeat as motivation to come back and set his new record time. Bannister recognized inspirational examples and used them as fuel for his own comeback.
As an entrepreneur, it’s perfectly useful to find inspiration in successful people who’ve overcome similar hurdles to what you may be facing. Note, though, that there’s a difference between being inspired, and finding evidence to replicate. Don’t confuse their inspiring efforts with a prospective method to replicate success. Absolutely, be inspired by their spirit and focus on the broad principles they demonstrate, but don’t expect them to give you a reliable “how to win” methodology. For more on this, read my last article that clears up the difference between inspiring motivation and factual evidence that can be repeated.
To break the 4-minute mile, Bannister knew he needed to select a running-mate. Kipchoge did exactly the same this week, with a team of 41 pace-setters including Olympic gold medallists. “Remember, the 41 pacemakers are among the best athletes ever, in the whole world.” Kipchoge told reporters yesterday. For Bannister’s record, he asked two other world-class runners to set the pace.
In business, you can do the same thing. Find peers with a similar mindset who are also talented, ambitious, and committed to excellent process in their work. These peers can keep you accountable, demonstrate good entrepreneurial form, and help you to set the cadence in your business. I host a small business accelerator, the CORE Marketing Method, and one of the critical benefits of these programs is the chance for entrepreneurs to engage with similarly minded business people who are practicing entrepreneurial excellence in small business.
Bannister and Kipchoge weren’t bound by conventional rules, but were ready to reset the rules to accommodate their goals. For Kipchoge, the record he just achieved won’t be formally recognized by the International Association of Athletics Federations as it wasn’t an open event. Likewise, Bannister’s record time was not achieved under normal race conditions. These two athletes didn’t worry about the convention or typical environment, recognizing that the achievement of their goals should be their single focus.
As an entrepreneur, you must be prepared to take an untrod path to your destination. Short of breaking the law or your ethical principles, be ready to bend or break the conventional rules. Change the environment if you need to, by choosing to play in a novel corner of the market or by finding a completely different way to engage with customers (as all the outstanding Direct to Consumer success stories have done). Bold agility is a weapon in the start up and small business armory. No conventional limitation can derail your dream if you refuse to follow convention, and create your own space in which to succeed.
Bannister and Kipchoge recognized that they could find advantage in innovation. For this week’s achievement, Kipchoge wore a new pair of Nike NEXT% running shoes with carbon-fiber plates, and he ran behind an electric car projecting a laser line for him to follow to stay within the record time. Bannister achieved his record on a newly surfaced track in Oxford and relied on newly developed ultralight spikes. In your business, look to create an unfair advantage in reaching your goals. Where can technology provide you an edge? How can you invest in innovating yourself, your systems, or your tools to move you closer? If the goal is worth it, the investment and creativity to innovate is worth it. At the very least, every entrepreneur should commit to a spirit of continual learning and improvement to innovate personally (I recommend looking into Kaizen). If it’s good enough for Bill Gates to keep learning, so can you. When Gates takes two weeks out every year to read and develop his knowledge, this investment theoretically costs him about $110 million in normal earnings. You can afford to invest in your own learning, too.
So, what does all of this have to do with the surprising effect of reaching an audacious goal? It comes down to remarkable phenomena that was demonstrated with Bannister, and I predict will be repeated with this week’s performance by Kipchoge. It’ll also be an important principle in your business.
Achieving the audacious goal redefines what’s possible.
After countless generations of athletes trying to break the 4-minute mile, within two months Lannister turned up to compete at the Commonwealth Games in Vancouver. At the Games, Lannister ran under 4 minutes again, along with his Australian competitor John Landy. More athletes soon matched the time. Within just ten years, high school athlete Jim Ryun would achieve the “impossible” 4-minute mile (and multiple 16 year olds have since run under 4-minutes). Since Bannister redefined what was possible, we’ve seen more than 1,400 runners beat Bannister’s record for the 4-minute mile. We’ve even seen 2 miles run in under 8 minutes.
My prediction is that we’ll see more marathon distances under 2 hours coming very soon. Kipchoge has just proven to runners what they can achieve, and their visualizations just became living and breathing, modeled in front of their eyes. He’s proven what can be done.
In your business, achieving that first audacious goal is important because it opens the door to other huge goals to follow. If you’ve done it once, you’ll know you can do it again. This is the surprising effect of achieving what people thought couldn’t be done: it makes goal achievements happen more often from that point on. Your success will breed more success.
In the CORE Marketing Method, founders and business owners set three Wildly Important Goals (WIGs) that direct their focus for the coming year. What I’ve noticed is that the achievement of that first WIG can feel like an enormous challenge for the business owner. Interestingly, the second one is often achieved soon after, and momentum typically delivers the third, as if by magic. From that point, the entrepreneur becomes confident and internally motivated to achieve annual goals. Even though each subsequent year’s goals might be bigger by magnitudes of order, scaling the business up through multiplication, the CORE Business Owner has proven to themselves that these sorts of goals can be reached, and so they confidently focus and plough ahead. Just like with Bannister, and I predict with Kipchoge, the achievement of an audacious goal paves a way for many more similar breakthroughs in quick succession.
So, think about your own entrepreneurial challenge. Firstly, have you got that goal clearly defined, written down in a way that is measurable and time-bound? It should be a stretch, but you should be able to at least picture yourself getting there. Then, follow the sequence:
Resolve Yourself – make initial setbacks your motivation.
Look For Inspiration – find someone who’s already modeled the success you desire. Allow their success to spur you on.
Select Your Running-Mates – who can run beside you (and you beside them) to encourage and hold you accountable?
Reset the Rules – change the environment, the definitions, and any details if they get in the way. Be ready to do things differently.
Find Advantage in Innovation – give yourself an edge by investing in your systems, your tools, and especially in your own skills and knowledge.
After this week’s brilliant result, Kenyan President Uhuru Kenyatta congratulated Kipchoge on Twitter. “You’ve done it, you’ve made history and made Kenya proud while at it. Your win today, will inspire tens of future generations to dream big and to aspire for greatness.”
You can inspire yourself to future greatness by achieving your next audacious goal. Your dream business is a worthy pursuit, so dream big and make your own history. Make yourself and others proud by achieving that big dream. Make record-breaking achievements your new normal.
My headline is exactly the sort of thing that Dale Carnegie warned me not to say if I want to make friends. But, I already have plenty of friends, and occasionally I like to throw a cat among the pigeons.
So, before you start to comment your vehement disagreements while tagging your preferred business influencer, hear me out. You can always unfollow me later.
I’m referring to that guy (and they are overwhelmingly male) who emphatically shares his Secret Success Recipes™ online, in books, on podcasts, and especially on those snackable* videos littering your social feed. This guy confidently proclaims, with raised voice and a cockiness-level that would make Muhammad Ali blush, that he knows exactly how you can grow your business and get stupidly rich, just like him.
“Just do what I did.” he shouts at you, pointing at the webcam or looking down at you from the stage. He’ll even take a minute to insult you for being lazy or scared, just because he tells it like it is. Hordes of adoring fans lap up everything he has to say (and sell), madly retweeting and liking and sharing until their thumbs ache.
Sure, he occasionally embraces moments of humility, explaining that he’s made plenty of stupid mistakes along the way and that he’s really a down-to-earth guy, just like you. The fancy car / private jet / waterfront mansion which feature in his promo videos are great, but underneath all that he’s just a blue-collar kid that hustled his way to the Big Time.
Here’s the thing: that biopic may be absolutely correct. He may be down-to-earth and self-made. He may have hustled his way to millions and still love the grind. He may even genuinely care about you and all his followers and believe his own rhetoric. But none of this matters, because his advice is lousy.
It’s lousy because his passion and zeal glosses over the lack of evidence for his assertions and distracts you from the heaping spoonful of bias that he’s asking you to swallow. This wouldn’t be an issue if he was a sportscaster or gossip columnist, but instead he’s asking you to gamble with your business, your livelihood, your future.
At the heart of the problem is a phenomena known as survivorship bias. This error occurs when we look at an outcome, and presume that certain elements preceding the outcome are the cause.
The most often cited example for this relates to a statistician who exposed the error during World War II. Abraham Wald disagreed with the navy, who looked at damaged aircraft returning from missions and who recommended that better armor needed to be added where the shrapnel had left damage.
Wald disagreed, rightly pointing out that those planes that never made it back had probably taken hits around the cockpit, engines, and fuselage. The returned planes that the navy were looking at were the survivors. The armor needed to be added to the areas where the non-survivors had been hit.
I prefer another example, though. It’s to do with cats, especially those falling from buildings. Clearly, I’m not a cat person.
You may have heard the idea that cats falling from six story buildings end up with fewer injuries compared to cats falling from lower buildings. Researchers who seemingly have plenty of spare time actually published this in scientific journals. I’d always heard this was because the height of taller buildings allows the falling cat more time to align itself, feet-first, reach terminal velocity, and prepare to land in a safer position.
That published study noticed that as the cats fell from increasingly higher buildings, their injuries tended to increase, until the buildings got up to six or seven stories. At that height, the reported injuries seemed to plateau off and even reduce.
Amazing. Proof that higher buildings are better for falling cats.
There is, though, another possibility. The study recorded injuries of those cats that had been brought into the veterinary hospital after falling from a building. The issue is that people don’t tend to bring dead cats into the vet hospital, such as those cats that fell from buildings seven, eight or thirty stories high. This was the reason why those researchers were seeing a higher number of injured kitties who had fallen from shorter buildings, and the reason why that original study conclusion was an example of survivorship bias.
So, how does this relate to that confident guru you love? He’s a multi-millionaire entrepreneur success story, and he hustled his way to greatness. We could assume then, that his hustling led him to success, right?
Not necessarily. He may have just been lucky and landed a few big clients or been in the right place at the right time. He may have done 13 things right and 26 things wrong, but those 13 right things paid off more at the time than the 26 things cost him (those same mistakes might cost someone else differently, or even be enough to sink their business). It’s also possible that he did everything right at the right time, but those actions may not be repeatable because of changed environmental factors.
The bottom line is that his anecdotal success can be inspirational and motivational, but it should not be considered strong evidence. His retrospective anecdotes shouldn’t be confused with prospective evidence. Prospective evidence is the sort of information that helps you confidently predict the future outcome of actions you take today.
In the CORE Marketing Method, I touch on the importance of TheHierarchy of Evidence. I use a pyramid model to explain the concept.
This model asserts that your Experience-based Assumptions are numerous and come immediately to mind, but they aren’t highly reliable chiefly because of survivorship bias and other logical errors. Consensus among a lot of people – the Wisdom of Crowds – is a little more reliable as it can wash out some bias (careful though, as groups produce some of their own biases).
Better again is the Wisdom of Experts, which is the consensus of people with demonstrated expertise (such as published academics, or respected business commentators who can point to real data, not just opinion). I recommend entrepreneurs do their best to access this layer of evidence as it is easily accessed and generally reliable. You may wonder how to discern who is an expert, and who is just a self-appointed guru? A good rule of thumb is that those genuine experts refer to actual data rather than war-stories, they have the respect of other similar experts, they never try to put on a hard-sell, their successes have been tested and repeated in different settings, and they often have a proven track-record in either the corporate world or formal educational institutions. Their wisdom is easily accessed through books, lectures, TedTalks, podcasts and blogs. Follow these women and men on LinkedIn and you’ll soon get a sense of what themes can be banked on and inform your business choices. In the CORE Marketing Method, entrepreneurs spend 30 min at the start of their week “filling up the reservoir” in general self-education, and these sources are the perfect place to find these bite-size portions of wisdom building.
Even more reliable again is to run a specific Bespoke Test in your own business based on good methodology, while an aggregated series of these tests on a single question is even better (Meta-Analysis). At the top, are Randomized Controlled Trials. These formal, academic research projects are increasingly becoming part of corporate big business, and when they’re published they can provide highly reliable data for the small business entrepreneur if the studied concept relates closely to your business question. Their real power lay in their ability to provide prospective information that robustly predicts future outcomes.
In reality, no small business owner will afford the time and money for their own RCT, but you can always read published RCT conclusions and find correlations for your business. That said, these highly reliable findings are a bit of a tough slog to wade through and are often filled with academic jargon. A more accessible way to the really useful advice is to find the clever people who author these RCTs, and then read their popular books, or check out their interviews on podcasts and videos. You’ll soon learn what their studies have proven.
All of this is the least sexy thing that aspiring entrepreneurs want to hear, but it’s simply too important to ignore. Most businesses will fail due to making poor choices (bad bets) based on poor information (their own biased assumptions, or the advice of gurus).
In full transparency, relying on hard data doesn’t match my own personality, either. My eyes light up at bold aspirational ideas and I prefer to plough my way through obstacles with optimistic gumption and crossed-fingers. But I’ve learned from the most unexpected place that relying on good evidence makes sense and is one of the keys to reducing risk.
That unusual place is the healthcare industry, where I spent about 15 years marketing medical brands to doctors and healthcare systems around the world. In this work, I came to realize that while doctors are often wonderful people and are almost always smarter than the average person, they seemed especially exposed to bias. This has been well documented in the healthcare profession and is one of the reasons that medical students don’t get to sling a stethoscope around their shoulder until they learn the maxim “evidence-based medicine”.
In a nutshell, the medical professional is trained to base their decisions not on gut-feel, not even on years of clinical experience and personal expertise, but primarily on whatever the evidence says. This means treatment choices should be made on the highest level of extensively tested, peer-reviewed, published science. Often, this is written into treatment guidelines that your doctor follows when they attend to your ‘flu (it’s probably just a cold). The rule of following evidence-based medicine has undoubtedly saved countless lives and helped against all manner of bias, survivorship being just one of them.
Witnessing this reliance on solid evidence in the world of healthcare, along with my nerdy interest in our biases, led me to understand the importance of relying on real data when making important decisions. Relying on insights mitigates against biases and will prevent choices being made on faulty assumptions.
Because it has been shared a bunch of times and liked by ten thousand followers, that Instagram video of your entrepreneurship influencer probably falls into “Wisdom of Crowds” on the Hierarchy of Evidence (which is to say, fairly low down on the scale). If enough people like it, try it out, and it seems to ring true, it may be worthwhile. However, if something higher in the pyramid contradicts it, it’s probably not worthwhile.
In reality, your favorite guru may be a nice guy, and he probably offers some general concepts that are harmless enough. In fact, it may be that the motivation that he evokes in you is useful in its own right. Just don’t mistake these general concepts and motivations as Rules, Laws, or Evidence of anything much at all.
For those decisions that shape the direction of your business and your life as an entrepreneur, you want to bank on something real. Actual evidence.
*snackable video is possibly my least favorite phrase. I only include it in this article to prove to millennials that I know what digital media is. Sort of.
Several years ago I ran a research project that surveyed more than a thousand small business entrepreneurs.
I was interested to see why these folk were so willing to engage in risk. If anyone bothered to look at the stats, they’d never form a start-up or open the doors to their new small business. Government agencies tell us that failure is the most likely outcome within the first 10 years of operation, whether you’re in the US, the UK, or Australia. Anecdotal evidence suggests the failure rate is even higher and especially in certain business sectors.
Even more troubling than the rate of businesses that close up shop, many of those businesses that do survive end up in a state of month-to-month existence, stagnating rather than growing.
I realize all of this sounds a bit depressing. And yet, despite these hard realities, entrepreneurs keep opening their stores, launching their apps, and building their SaaS platforms. I wanted to know why they seemed so impervious to the well-known risks?
I discovered some of those answers. What I didn’t expect to find is that despite all of the risk, failure, and turmoil, entrepreneurs are happier than their friends in steady employment.
At first I thought this might be just something to do with the smaller size of SMEs and start-ups. A report conducted by PWC showed that while just 27% of employees at large companies are happy at work, 43% of small business employees report being happy. Those smaller workplaces seem to have a big impact on worker contentment.
It also turns out that business ownership is a critical factor. A study from the Wharton School of Business looked at 11,000 MBA graduates, and found those running their own businesses ranked themselves happier than all other professions, regardless of how much money they made.
So, it turns out that working in a smaller business makes you happy (whether you’re the owner or an employee). On top of this, being the boss who owns that small business makes you happier than the other employees.
What I additionally discovered was that among all the entrepreneurs I surveyed, three common traits emerged among those who reported more day-to-day happiness than other business owners.
I should point out that while these findings weren’t statistically powered to show causation, the correlations were strong. That said, I listened intently and saw the faces of these business owners. This gave me a real qualitative sense that there’s something to learn from these principles. Interestingly, only one of the three ideas relates closely with money.
Entrepreneur Happiness is Stability and Predictability
This is the first of the three traits that may link to wealth and cashflow, but it certainly goes beyond just dollars and cents. These happy business owners reported having a sense of rhythm in their business and fewer drastic feast-and-famine cycles. Interestingly, they didn’t seem to relate their happiness to moments of euphoria, such as landing a huge client or successfully pitching for funding. Although my study didn’t look into it, the pursuit of these large momentary rewards may fuel some of the addiction to entrepreneurship that many of us can identify with. Even so, these big adrenaline rush moments don’t seem to deliver day-to-day happiness.
In general, these happy businesspeople had often been operating more than five years and had a thorough knowledge of their industry. They had some sense of the patterns of ebb and flow in their business and could see around corners to predict what was coming next. One subject told me “I’ve been working in this industry for over twenty years, and I’ve owned this business for nearly ten. I’ve seen almost everything that there is to expect and I rarely get surprises these days.”
It seems that happiness may have something to do with finding ways to avoid the uncertainty and anxiety common to many in small business.
Entrepreneur Happiness is Having Good People Around
The next theme was a social one. Happier business owners seemed to genuinely like spending time with business partners, employees, and suppliers. Many also spontaneously described liking their customers on a personal level.
This makes sense. We are social animals and being able to celebrate wins together, or support each other through tough times, has a positive effect.
This group also identified having a spouse or partner (or whole family) who were enthusiastically supportive. The family member didn’t have to be involved in the business directly (although many were), but they did seemingly need to understand the atypical life of the entrepreneur and provide encouragement from the sideline. Unfortunately, the converse is also true: those who felt their partner or family didn’t recognize their effort or the dynamics of business ownership reported much more day-to-day stress.
Entrepreneur Happiness is Thinking of Others First
If the first two themes seem intuitive, this final one caught me by surprise.
Whether it be grand acts of altruism, such as fundraising for a cause, or small acts of generosity such as going beyond to support employees, focusing on a good outcome for others with no obvious return to the business seemed to correlate with entrepreneurial happiness.
I collectively refer to these types of inspired actions as Social Good in my upcoming book. Fundamentally, these are efforts that the entrepreneur makes that benefit someone other than themselves and align with a value that they deem to be personally important.
For example, some business owners prioritize environmental impact even where this might increase costs. One business owner I spoke to ensures that her vegan restaurant not only serves vege dishes, but financially contributes to animal welfare causes. Another entrepreneur in the educational space contributes scholarships to kids in lower socioeconomic areas. Several business owners support people living in poverty through direct donation or asking their customers to make a contribution. In my own case, I constantly nag my clients and CORE Marketing Method students to join my Kiva team to provide micro-finance loans to entrepreneurs in developing countries (you really should join).
These acts of generosity did not need to be thematically linked to the type of business, either. Some business owners decided that their revenue would support a local school, church or community group. Others simply found satisfaction knowing that their employees were always taken care of and loved working for them. Many also derived genuine happiness from seeing their customers lives improved, seemingly without a focus on how this might impact their own bottom line. It’s a concept that has been laid out well in the book co-authored by Bob Burg and John David Mann, The Go-Giver (you may want to follow Bob Burg at his site or on his socials at Instagram and LinkedIn).
When I conducted my study, it struck me that many of these entrepreneurs felt that their acts of Social Good had permanence and resonance, even when other challenges in business were temporary. One tech start-up founder chose to pay over the normal hourly rate to his offshore developers and provide other types of support. He described it this way: “Even if we have a bad month in revenue, I can always sleep at night knowing we do something good for these guys working for us. If this thing never ends up succeeding, their lives will definitely be better for having worked for us.”
In the CORE Marketing Method I incorporate this concept as one of the three 5 Year Goals that guide an entrepreneur toward growth.
Along with Money Goals, and Time & Lifestyle Goals, I encourage students to identify Legacy Goals. These are the things that you’ll proudly tell Grandma when she asks how your business is going. She doesn’t care about your fancy car or the VC pitch, she wants to know that her grandchild is a successfully decent person. Sure, the Legacy Goals may include accolades, awards, achievements and recognition, but it should also seriously consider an impact for causes that are important to you and improve the world for others.
This isn’t in an effort to be a saint, but because it seems to deliver happiness. And like all of us, you want to be happy.
For entrepreneurial business owners, the most pressing immediate objective is to secure the next sale.
As you already know, winning the next sale is easier said than done, with a mix of art and science that ultimately produces that coveted next transaction. Digging one layer deeper, the business owner may recognize a perennial question: should they try to find a new customer to give them that sale, or should they focus their energy trying to gain another sale from an existing customer? The conventional wisdom has traditionally argued that it’s cheaper and easier to get another sale from the existing customer, but it’s fair to say that there’s debate about whether focus on customer retention vs customer acquisition is the better bet.
Over the last twenty years, the theory that I recall being shared as gospel was the notion that “it costs five times more to secure a new customer compared to having your existing customer buy again”. This conventional wisdom has been shared so much that it now does the rounds as being quantifiable fact, even though a moment’s reflection should tell us that this model is highly dependent on the type of business in question.
One thing is true, though: customers who have bought from you in the past, will have a different (and more favorable) attitude towards your business when they come back to buy from you in future. You can thank our wonderfully irrational brains for this, and the bias of post hoc rationalization.
In a nutshell, this bias describes our tendency to find internal confirmations for our decisions after we’ve made them. So, if we excitedly drop $250 on a pair of sneakers when a $50 pair would objectively function just as well, we don’t enjoy feeling like a sucker who has made a foolish choice and so our brains quickly come to our rescue.
We consider all the reasons why the extra money was justified. It was the quality. It was the perfect fit. It was the scarcity of Yeezy’s that signaled our status to our friends. Whatever the positives about spending so much, we focus on those elements to internally support our choice and to avoid uncomfortable feelings.
This tendency has important implications for the entrepreneurial business owner. In the CORE Marketing Method, we emphasize the need to move the customer along a continuum I refer to as The Love Story.
This starts at the lowest-value end with a customer buying once, spontaneously and in auto-pilot, and with little thought. It’s what Daniel Khaneman would describe as fast thinking and what I refer to as a One Night Stand. As the customer returns to buy again, they continue to grow in confidence and trust with the business and their behaviors change accordingly, eventually becoming Married Soulmates with deep loyalty and mutual engagement.
Consider that most customers reflect on their purchase decision at two critical points: directly following the purchase, and when an external social trigger causes them to retrospectively focus on their choice (such as a when friend comments on their fancy new sneakers). These are the two moments that post hoc rationalization is most active. And as a business owner, this is where you want to act.
Directly Following Purchase
When your customer has just bought from you, they’ll feel the buzz of excitement of a purchase and will be focused on the reasons why their buying decision was a great idea (their post hoc rationalizations). Take this moment to ask the customer a single survey question:
“What makes you most happy about your purchase today?”
As well as providing you a useful insight around their motivations, it will have the effect of encouraging further positive feelings, as described by Dr. Robert Cialdini in his masterful work Pre-Suasion.
We know that a customer who has moved along The Love Story will more readily buy from you again, and spend more. This should be reason enough to ask your survey question to help them focus on their reasons for being happy, and to move them along that path.
In other words, you’ll see more repeat business.
When you spent all that money on those sneakers, the smart retail owner should have asked you a question: “what makes you most happy about buying these awesome shoes?”. It will have focused your attention on positive reasons and increased the chances of you coming back to buy again.
During Social Triggers
When your customer meets someone in their tribe (that is, someone in their social circle who thinks and behaves in similar ways), you want them to offer a positive impression of your product to help build your credibility (this is the “C” in CORE).
For this reason, you need to offer (1) a mechanism for easy referrals and (2) a reward for doing so (the best referral mechanisms are ones that demand a small immediate commitment, and the best rewards are variable rewards that are exciting and intuitive).
Peer-to-peer recommendation is incredibly powerful in creating customer perceptions because the person hearing the review has little resistance to the message, unlike the skepticism that is often felt towards advertising and promotions. Likewise, the person who made the purchase wants to receive confirmation from their friend that their purchase was a good choice. They are still seeking pillars for their post hoc rationalization.
Imagine you’ve just turned up to meet your friend for lunch, and they notice your fancy new $250 sneakers. They’ll say something about them – because that’s what friends do – and this is a social trigger. At this moment you’ll again focus on the great reasons you had for making the purchase (recalling all of those post hoc rationalizations). You may also point out these justifications to your friend in an attempt to persuade them that it was worth the price tag. In the perfect scenario, your friend agrees, and you feel even better. You clearly made the right choice after all!
The sneaker store that sold to you were smart. They have a customer app that allows you to plug in a friend’s email right on the spot. If your friend opts in, and they choose their favorite color sneaker then and there (a small pre-commitment), they’ll get a nice discount emailed or texted to their phone. As the referring friend, you get a reward also. At first, it’s a 20% discount on your next purchase. But if you refer a second friend, you’ll also get a free pair of socks. And for a third friend, you’ll get tickets to an NBA game. These variable rewards get you hooked on the process and give you a nice hit of happiness.
At this point, you’ve edged further along The Love Story towards being Married Soulmates, more convinced than ever that this sneaker store is just right for you. Even better, you’ve just brought someone else into the picture who may become a customer too. This newly referred customer will likely have similar buying habits to you, and they’ll adopt some of those same perceptions as you (jumping into The Love Story some way along the continuum).
Think about the ways you can create a simple mechanism to help your customer offer referrals to their tribe. The devices in our hands provide easy access, so they should be the first place to consider. Then, spend some time inventing exciting, variable rewards that will get your customer hooked on being your best salesperson.
By now, you can probably imagine those moments when you’ve also engaged a bit of post hoc rationalization after buying something. Don’t feel bad, we’ve all done it. But as a business owner, you need to ensure that you bring your customer along The Love Story, bias and all.
This time, though, our meeting was closer to home. In fact, it was *exactly* at home for Nir, as he invited us into the NYC apartment that he shares with his wife, Julie, and their 11 year old daughter (the Eyals have called Manhattan home since Nir finished up teaching at Stanford Graduate School of Business). Nir’s wife and daughter play an important part in his newest book Indistractable: How To Control Your Attention and Choose Your Life. It was this latest work that we were there to discuss.
In many ways, Nir’s family are at the heart of why he spent the last five years researching the evidence for how to avoid distraction and choose where to pay time and attention. In our chat, Nir explains how an encounter with his daughter led him on a journey to better understand the psychology and mechanics of distraction, and the proven ways to achieve the opposite in life. And here’s a surprise: the opposite of distraction is not really focus … watch the recording of our conversation to see who and what an Indistractable person really is (and how you can be Indistractable, too).
UPDATE! Nir was good enough to personally sign a couple copies of his book for me, and I’m happy to pass these on to you. Subscribe to my newsletter, and I’ll choose two lucky folks to get a copy!