Jun 24

When Closing More Leads Can Actually Hurt You More

Marketing. It’s often considered a spin doctor-ish, slimy profession intended to deceive people into buying something they don’t need.

Marketing as it should be done is actually a very noble profession that can improve people’s lives. However, not only is pursuing “anyone and everyone” at the expense of their happiness unethical, it is stupid and costly to your business.

Bazaarvoice is a company that allows companies to increase and measure reviews about their products. Here are some stats they’ve gathered about word-of-mouth:

*The average consumer mentions specific brands over 90 times per week in conversations with friends, family, and co-workers. (Keller Fay, WOMMA, 2010)
*90% of consumers online trust recommendations from people they know; 70% trust opinions of unknown users. (Econsultancy, July 2009)
*Users put great trust in their social networks. One-half of Beresford respondents said they considered information shared on their networks when making a decision—and the proportion was higher among users ages 18 to 24, at 65%. (eMarketer, October 2009)
*Consumers trust friends above experts when it comes to product recommendations (65% trust friends, 27% trust experts, 8% trust celebrities). (Yankelovich)

Why are these statistics relevant? These along with reputable game theory studies show that people trust other people they know more than they’ll trust you. If you are doing the slimeball marketing tactic by focusing on sheer numbers and quotas, you aren’t focused on who is actually buying your product and if these people would actually enjoy using it.

LET’S DO THE MATH:

Let’s say that your manager wants you to meet a quota, and so you sell 10,000 widgets like you were asked. Because widgets are rather obscure, you sort of fudged the benefits of the product and now only 25 percent of the people who use them are happy with the product. That’s 7500 people who now hate your widget and probably you for selling it to them. According to a study cited by the social network DoctorBase, if these are social media users, a negative review from them will reach 130 people. That’s:

7500
* 130
975,000 people who now think you deceived them

Now let’s say you do this more responsibly. You ignore your manager’s quota and you say, “I won’t get 10,000 sold now, but I will have 3000 sold in six months, and 75,000 sold in a year, and I will do it in a way where we can spend much less in marketing and much more improving our product for the future”. How do you do this?

1.) Understand what your widget is, how customers use it, and how it compares to other products like it in the industry.
2.) Instead of figuring out how you can preach your product far and wide to everyone, figure out how you can get it to 3000 who would be insanely happy with it. This is a lot easier to achieve than finding 10,000 happy customers but requires a bit more homework.
3.) Make those 3000 people insanely happy with your widget. This may or may not cost money in product development, but that’s often what it takes to make people insanely happy.

Let’s be very conservative here. If you make people insanely happy with your product, asking them to tell their friends about you is actually quite easy. They feel like they are doing their friends a favor. So let’s say those 3000 people only reach out to an average of 25 people and convince them that your widget will totally change their lives.

3000
* 25
75,000 people bought your widget and love it.

That’s 7.5 times what your General Manager asked you to sell.

By marketing to those 10,000 instead, you now have to do damage control for your brand’s reputation. You have to spend more money sustaining growth because people aren’t talking about how awesome you are. You have to spend money on customer acquisition and retention. That means less money for product development. This hardly seems sustainable.

By being a marketing sniper versus a cannon, you can trust your community of users to do the marketing for you. Plus you can sleep at night, which is always a plus. 😉