Tom Affinito, VP Corporate Development @ Kenshoo
Transformative marketing is what every brand aspires to achieve with their advertising investments. But out-of-the-box thinking can sometimes miss the mark. How does a marketing organization find ways to go big without risking too much? In today’s post, Kenshoo’s Tom Affinito explains how marketing experiments can lead the way.
Marketing is a business investment like any other—where the goal is to spend money to make money, while also strengthening competitive positioning and consumer loyalty. And with a multitude of ways to put together a marketing portfolio, making the right decisions is the key to making the best investments over time.
In the first two parts of this series, I explained how marketing experiments can help practitioners better understand the data required to calibrate and validate data-driven decision making.
But the hardest part of any decision process is realizing that something needs to be (re)evaluated. Strong internal support for testing and readily available business, industry, and marketing data sets can help inform these choices, but how should you prioritize among options to test? Which hypothesis is most important to evaluate? Are any choices potentially game-changers for the business or are the current options limited to ideas tied to marginal improvements?
Well, a team-supported focus on experiments can help here as well and make it more likely that you’ll find the transformative marketing ideas your brand needs.
The rapid evolution of consumer preferences creates risk for marketers, with “analysis paralysis” driving execution of tried-and-true tactics over unproven, long-shot strategies. Staying with safe choices often delivers incremental performance, at the cost of pushing the business from “leader” to “follower” in the eyes of consumers. But those companies that know how to balance performance improvements with bold innovative ideas can steadily move forward with transformative marketing leaps, edging out the competition, and widening category leadership.
In baseball terms, it’s the manager’s dilemma of going for safer singles or for riskier swings that can knock the ball out of the park. Single hits get players steadily on base, but it doesn’t guarantee they will get home to put meaningful points on the board before the field is cleared at the end of the inning. Conservative strategies work over time, but with agile competitors that know the fundamentals, a slow and steady approach can lead to slowly slipping market share as the rules of the game change from under your feet.
As a business leader, how do you make sure that you’re pushing your players to take the big swings at the right time?
Learn how to win at Amazon Advertising by thinking like Amazon
To reduce risk aversion, some marketing organizations foster a “fail fast” mentality and urge their teams to try things even if they fail because failures can still be insightful. Failures are celebrated as learning moments. And supporting teams that try and fail gives the green light for others to find and try more transformative ideas.
However, too many failures of unproven ideas can also be devastating. Too many strikeouts, and not enough home runs, will also lose the game. So, to mitigate risk, the most successful companies have a rigorous process to vet out-of-the-box ideas with low-risk, non-disruptive marketing experiments before they commit to big course corrections. This way, they can better understand the pros and cons of these tactics to help guide how they look to achieve transformative marketing.
So, marketing experiments can not only help you figure out which things to try but also provides a safe haven for out-of-the-box thinking—where transformative marketing ideas come from—to flourish.
Clorox’s Agile Martech Development is a case study from Gartner/CEB which profiles the test-and-learn culture of The Clorox Company and how it switches between Learning Phases and Transformative Phases to experiment on hypotheses and then applies the lessons learned to take big leaps in capabilities.
These learning projects help Clorox “validate feasibility and impact, separating realistic from unrealistic capabilities”. By testing, learning, then applying those insights, their capabilities continue to grow.
From the case study:
“In actuality, development is often punctuated by large leaps forward in capability as organizations understand requirements, potential impact, and technical possibilities and constraints more deeply (the actual path in the graph).
“For example, Clorox invested in several small-scale projects to learn about data integration’s technical realities and value potential (resulting in minimal capability development) before implementing a DMP (resulting in large-scale capability development).”
The Clorox model provides a working framework of a company that can successfully foster transformative thinking while still putting controls in place to reduce the downside when risky bets don’t pay off.
Clorox has scaled its ability to test-and-learn through experimentation by 8X over their previous capacity. And that volume is leading to enough insights to keep their marketing focused on growth and innovation beyond the day-to-day operational improvements. As Doug Milliken, the VP of Global Brand Development for Clorox says about the learning model: “We’re doing more tests and they’re no longer hunches but rather strategic hypotheses. We have enough well-placed ‘shots on goal’ for one win per quarter.’
Marketing experiments are at the core of this framework. If you are looking for transformative ideas from your team, a test-and-learn culture can serve as the foundation of your transformative marketing organization.
Three key areas where a culture supportive of experimentation has the most benefits for marketing are:
Research from Econsultancy on optimization experiments shows that “more than nine in ten (91%) company respondents expect to increase the number of experiments they run over the coming 12 months.”
How many experiments are companies running? Well, just in marketing optimization experiments, 83% of brands and 92% of agencies are running these programs with some high flyers running 100+ experiments each year! It’s not hard to imagine that a brand running five or ten times the number of experiments versus a rival would have a competitive edge.
Of course, moving to a test-and-learn culture may take some organizational change, but your team will have to adapt to drive transformational marketing.
“We have to become comfortable with learning by doing, and that sometimes means ripping out and replacing what we built once we know exactly what we need,” says Shawn Goodin, Director of Marketing Technology at Clorox.
But—as the adage goes—to get results you’ve never had before, you have to do things you’ve never done before.
Clorox took a few years to develop their approach for finding and testing strategic hypotheses. There is no silver bullet. If you want to fly, you have to grow wings, buy wings, or change the force of gravity. If you are a marketing leader tasked with goals that seem unattainable to you right now, growing your capacity to execute experiments today will scale your opportunity for transformative marketing growth tomorrow.
Can you afford to wait?
Request a Demo of Kenshoo