August 30, 2023

The Power of a Marketing Effort

I've told you this story before, but it bears repeating.

It's 1998, and I'm working at Eddie Bauer. A marketing campaign-centric brand. We had thirty "events" each year (out of 52 weeks). In essence, there was a campaign every-other-week.

We had an Executive who told me that the thirty campaigns demonstrated "the power of a marketing effort". It was one of those moments of pure gibberish. The statement sounded dynamic and meaningful in a meeting. But come on.

Back in 1998 I was highly motivated by disproving gibberish (maybe times don't change). So I forced my marketing team to conduct an experiment. For the next twenty-six weeks, a random sampling of our customer base would not receive a single marketing promotional campaign. We'd keep bulking up the catalogs ... but the marketing campaigns ("It's Summer Sale, take 50% off") were removed. No campaigns. If "the power of a marketing effort" was true, we'd see it in the test results.

Here's what the test results looked like.
  • Control Group (Campaigns):  Sales per Customer = $25.00. Profit/Customer = $5.00.
  • No Campaigns:  Sales per Customer = $25.00. Profit/Customer = $7.50.

In other words ... there was no "power of a marketing effort". 

Marketing campaigns at Eddie Bauer had no meaning to the customer. It was just an endless array of gibberish that the customer ignored.

There wasn't a soul at Eddie Bauer that believed my results. I didn't care. I had to prove to myself how feckless most marketing efforts are.

Recently a client told me that they executed a holdout test and found out that 93% of sales were organic and not driven by the catalog. They discontinued the catalog. The customer didn't even notice. The client was much more profitable as a consequence.

If you take away a marketing activity and sales don't change, you know that there was no power in that marketing effort.

By and large, most marketing campaigns cannibalize each other ... rendering each other meaningless. You're free to disagree with me.

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