Welcome to Curious About Marketing
My newsletter investigating marketing strategies and measuring their effectiveness
I would be delighted and grateful if you would join me as I seek to understand the marketing strategies employed by the companies I encounter. I want to hear what you think about my analysis, so post comments or reply to me directly. I am also interested in your suggestions about future posts.
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Here are a few things I plan to explore in this newsletter, one company each week:
1) Cost of Growth. I am working on a systematic way to measure how companies make growth happen and have developed some big picture metrics to employ. My hypothesis is that the best marketing strategies will generate growth more efficiently. Right now, my metrics are:
a. Revenue / SGA: This tells us how many revenue dollars a company gets for every dollar spent on Sales, General, and Administrative.
b. Growth / SGA: This tells us how many more revenue dollars a company got this year for every dollar spent on Sales, General, and Administrative.
c. Gross Profit / SGA: This tells us how many gross profit dollars a company got this year for every dollar spent on Sales, General and Administrative.
I have picked SGA as the denominator because every company seems to break up sales and overhead into their own custom buckets and ultimately, the performance of the entire management team is evaluated this way. Clearly, this is not a perfect way to think about marketing strategy, because many factors outside of marketing come into play. It is the best I have come up with to compare one company to another.
There are many gaps in this methodology, the biggest is likely R&D. In the future we will have to come up with a way to measure how R&D should be evaluated. In some industries, it will have a very large impact – in pharma for example.
There are also external factors like the growth rate of the industry, or general economic conditions. These are important for sure, but we will be looking at companies compared to their industry peers – so the effect of these factors should be similar for all industry participants.
2) Modernization, Trends, and Expectations: Many things that are easy now used to be hard. In its day, sending a document by fax was a giant step forward. Now when we encounter a doctor’s office still using faxes, we are dumbfounded.
Naturally, we measure the performance of any delivery against the expectations set by Amazon. However, we also expect the DMV to renew our driver’s license as easily as our bank sends a new credit card. We expect every book to also be an audiobook. We expect the mapping app on our phones to tell us how to get there and exactly when we will get there. Spend 10 minutes with ChatGPT and the acceleration of these expectations is evident.
In the next pandemic, we will expect a vaccine in weeks. Dealing with these trends will consume an ever-growing portion of the marketing executive’s brain cycles.
3) Instrumentation: A Formula 1 race lasts less than 2 hours. In that time, each car’s 300+ sensors generate 3 terabytes of data. The data is transferred to the pit in real time enabling team leaders to make decisions and improve their chances of winning. In between races, teams dig in deeper and analyze the performance of the car and the driver from every angle, to improve the team’s chances of winning the next weekend. The new CMO dashboard can have just as many inputs and the right analysis at the right time can make a big difference. It can also be a distracting or misleading. Let’s put our heads together and invent the dream CMO dashboard for the companies we discus.
In my posts I will dig into these three areas and others, pose questions, and propose methods of analysis. I am really looking forward to building a community of people that are Curious About Marketing. I look forward to hearing from you.
Later this week I will dig into Dutch Bros Coffee. The delightful people at Dutch Bros really seem to be having fun. Is fun enough to win the day? If so, what would you put on their dashboard?