July 09, 2024

Min-Maxing

It's a concept from video games and baseball ... "What do you do best? Let's do more of it!"

It's a concept that came up twice in projects in the past six months (and yes, I'm about to dummy-up the situations to protect the innocent).

First, an e-commerce brand was exceptionally good at acquiring new customers via product listing ads. They were so good they kept growing and growing and growing ... until they hit their optimal level. From there, every additional dollar spent was sub-optimal, harming profitability. When I explained the concept to the Chief Marketing Officer, she said "what do I do next?"

Second, an old-school catalog brand was exceptionally good at (checks notes) cataloging. One problem. The paper/printing/postage ecosystem was increasing costs that the brand could not longer generate 10% pre-tax profit while maintaining net sales at a constant level. They could get to 10% pre-tax profit by reducing circulation by 30%, but that solution was unpalatable to the Owner. The Chief Marketing Officer looked at me on a video conference and said "what do I do next?"

In fact, the phrase "what do I do next" comes up repeatedly ... not just in the two projects mentioned above, but in 75% of my projects. In the first example, the e-commerce brand was good at one thing (product listing ads). In the second example, the old-school catalog brand was good at one thing (mailing catalogs).

Now, imagine being a major league pitcher. You are good at curve balls. You change spin rates, you change speeds, you change pitching angles. All of those tactics make your curve balls more effective. And yet, you can't throw curve balls on every pitch, or you will get lit up. So you should be good at something else as well to set up your curve ball ... not as good as throwing your curve ball, but you need multiple skills to maximize the one thing you are good at.

Imagine if the e-commerce brand or the old-school catalog brand were good at something else? They wouldn't ask me the question "what do I do next?"

If you are sitting in your office (home or work office) right now wondering "what do I do next?", you know that you have min-maxed one specific skill for your brand and don't have a backup tactic to help move you into the future. You've "min-maxed" yourself into a specific way of marketing, and once you've moved past an optimal situation, you are in trouble. This is why you'll hear e-commerce brands lament Google or Facebook or Apple (for shutting off the data pipeline to Facebook) ... they're good at one thing and when that one thing is sub-optimized, they don't have something to fall back on.

Be great at something.

Be good at a couple of additional things.

It's sort of like having a diversified 401k portfolio, right?

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.

Cost Differences

Do you remember Bernie Mac in Oceans Eleven ... negotiating van prices? Muttering nonsense about Aloe Vera while squeezing the sales dude...