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Applying the 80/20 Rule to Marketing: A First Look

December 31, 2014 Leave a comment

One of the many great lessons I’ve taken from Tim Ferriss is the active application of the 80/20 rule to projects and endeavors.

The 80/20 rule, known more formally as the Pareto Principle, states that 80% of your effects are usually generated by 20% of your inputs. For example, in B2B sales it’s often the case that 80% of the revenue comes from 20% of the customers. If you’re running a PPC campaign right now, it’s highly likely that 80% of your traffic comes from 20% of your bidded keywords. The ratios are not always exact, but the point of the principle is that in any given situation, the vast majority of our effort may not be achieving substantial returns.

This is why analytics have become so important to marketing over the last ten years, and why CMO’s have become obsessed with ROI tracking. The moment that companies could finally calculate the direct effect of advertising, most senior executives had a heart attack at the inefficiencies they saw (there’s a reason they call is “spray-and-pray”). The last decade of marketing has been about reallocating resources to where they demonstrate measurable results.

Pareto 101: Baby and the Bathwater

It’s easy to assume that just because you find an 80/20 dynamic somewhere, it’s always a problem that must be fixed. It’s not. The 80/20 dynamic will always tend to exist, even in optimized systems. It’s part of what happens when a system finds equilibrium. Sometimes expending effort on the lower 80% is absolutely necessary to maintain the top 20%.

Here’s an example: if you sell technology, you may decide that you only want to offer technical support to your top 20% of customers (let’s say “enterprise” customers). They are, after all, the ones who are supplying the majority of the revenue. You can do that, but your brand will be damaged by the refusal of support to the other 80%. So that may not be the world’s best idea.

Now, it’s tempting to apply the 80/20 rule only from a monetary perspective.  But because many marketing departments in the SMB world are staffed by only a handful of people, it may be more interesting to apply it from a time perspective instead. What tactics – hacks – can you apply to marketing that will have the highest gains compared to the amount of time it takes to implement and sustain them?

Where do we face this challenge at its most stark? Digital content marketing.

Content marketing – including blogging, social media, case studies, whitepapers, etc. – is a hugely important part of the digital marketing world. If you produce enough informative, interesting, trust-inspiring content, people will come to your website looking for more of your sage wisdom. They will trust you and your products, because of your authoritative works. They will share your content with their friends and colleagues, who will in turn link to your site and establish those all-important backlinks that are necessary for organic rankings…and then you’ll rule the world…

…in theory…

Content marketing is also incredibly labor intensive, even when content is actively repackaged and repurposed. Marketing Directors tend to fall in love with it because the only expense is salary – a sunk cost. But without an audience actively sharing your content, linking to it, or using it in a specific evaluation of whether or not to buy, it consumes more value in time than the results it generates.

Try This At Home

You want a fun activity? Select an SEO agency at random (these are the agencies who are supposedly the best at using tactics like content generation to foster backlinks and organic search results). Take a look at how much content they’re generating on their own behalf (it’s typically a lot). Then, go to the Moz website and enter their main URL into the search tool. Look at their Domain Authority score (this is how much authority the domain has achieved based on backlinks, social shares, age of domain, etc. – this is the necessary prerequisite to high search rankings). Anything under 50 is pathetic. An agency that knows anything about SEO should have an authority in the 80s or 90s. How did yours score?

Most companies, including the SEO agencies who should know better, produce a ton of original content that no one reads, no one shares, and has no effect on trust, authority or ranking. This is a ripe area for the 80/20 rule to be applied.

Looking to Apply the 80/20 Rule To Marketing

Andy Crestodina, the Strategic Director of Orbit Media, is one of the most successful appliers of Content Marketing for the purpose of search optimization. His book, Content Chemistry, discusses the concept of “atomizing” content. That is, creating one large unit of content that can be broken down and repurposed through many different media. For example, an eBook that also serves as a blog series, the basis for an infographic, the outline for multiple webinars, etc.

This is an example of applying the 80/20 rule to content marketing: creating content that can be atomized and repurposed with minimal extra labor. But this is just one example. Imagine how we could apply this principle to other channels like database marketing, telemarketing, and even traditional channels.

Time to open up the floor. Where in your experience can marketers pick up the most true gains with the least amount of implementation time and effort?

These could be ideas at the tactical level, like headline-writing, simple web forms, or building your influencer network. But I’m really looking for the subtle, couterintuitive ideas that on one’s talking about. Did you ever try a marketing experiment that made no logical sense and have it pay dividends, the way some people increase the fat content of their diet in order to lose weight?

What’s your best marketing time-hack?

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