When The Incremental Cost Of Stupidity Is $0


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I’m at the ripe young age where I have seen a lot of different scenarios for marketing, demand gen, lead gen, and prospecting.

In the “old days,” many of our techniques were oriented around F2F, direct marketing, and telephone calls. We looked at the cost of every program we conducted, managing to a certain budget or cost per qualified lead.

In F2F, we had the time of the sales person, the travel expense and so forth. With marketing programs, direct marketing was king. We’d look at the cost of developing the program, the cost of printing the collateral, and the cost of mailing the pieces. Even with phone calls, there was an actual cost that we attributed to the call. For example, $0.25 per call. Of course we had corporate contracts, to reduce those, but we paid attention to the costs of local calls versus long distance, how many minutes and so forth.

The bottom line is any demand gen programs had very real costs that could be $100s of thousands or even millions.

So when we looked at these programs, we spent a lot of time analyzing the programs, tuning them for success, and trying to meet a budget of manage costs. We knew we could only conduct a certain number of programs because we had a budget that we could spend across all of those programs.

As a result, we carefully analyzed, tested, and evaluated the programs so that we maximized the results we got for every dollar we spent. Often, there were intriguing programs we could launch that we chose not to, simply because we couldn’t afford them, or the expected return was to low or the risk of program failure was too high.

In short, we carefully evaluated every marketing, demand gen, lead gen program we implemented. If a program wasn’t producing what we expected, we would study, analyze, refine the program to more effectively produce the results we expected. If we couldn’t figure out how to improve a program and get the desired results, we stopped that initiative and shifted our spending into programs that would produce better results for each dollar we invested.

Fast forward to today. Technology and the web has made the incremental cost of conducting marketing, prospecting and other demand gen programs approach zero.

The cost of sending 100 emails, 1000 emails, 1,000,000 emails is virtually the same. The cost of dialing 100 numbers hoping to get pickups or 1000 numbers or 10000 numbers is virtually the same.

This phenomenon, the ability to focus on volume with virtually no cost impact has produced some interesting behaviors. Since the incremental cost of emails is virtually zero, the way we get the number of responses we need can easily be solved by just sending more emails, making more dials. The cost of doing more is virtually zero, so we solve all problems in demand gen simply by increasing volume and velocity.

As a result, we do a lot of stupid things, because the cost of stupidity (from a cost of selling/marketing perspective is virtually zero. Even the most stupidly designed programs will produce some result. All we do is the math, if we need 10X the results, we up the volumes by 10X, maybe even 100X just for good measure.

As the response rates for a certain program decline, rather than understanding the decline, we simply double the volume or velocity. And if that doesn’t work, we 10X it. And the incremental cost of doing this is virtually zero.

In the “old days,” when things cost real money, we tried to understand what worked and what didn’t, refining things to produce the best results for every dollar invested.

Today, since the incremental cost of an email, a text, a message, an LI message, a dial is virtually zero. We don’t take time to understand, and improve our programs, we simply do more of the same stupid things we have done in the past, just playing the numbers and math.

How would we change our email strategies if each email we sent cost the same as first class postage? How would we change our dialing strategies if each connect cost us $0.10 – $0.25?

Stupidity always wins when the incremental costs of doing more of something is close to zero.

But there’s a flaw in my argument, to this point. I’ve focused only on the expenses of our demand gen, lead gen, marketing programs. I’ve only looked at those costs. Which, unfortunately, is the way we evaluate programs too offen.

But what are the real costs of stupidity?

We are training customers and prospects to trash emails because they are junk. We are training them to put tools in place to junk virtually everything they receive.

We art training our customers/prospects not to answer the phone. Personally, I never answer a call from a number or individual I know. Not answering the dozens of other calls I receive a day has no adverse impact on my business. In fact it frees up my time to focus on what’s important.

The more dumb emails I get, the more pointless calls I get, the more promotional LI invitations I get, the more I filter and shut those things down. An the response from sellers is not to figure out what they might change to get me to respond, but just to inundate me with more of the same crap.

The real cost of stupidity has nothing to do with what a program costs, but the costs of alienating customers and prospects who are exhausted and won’t respond.

Sadly, though, too few understand the cost of stupidity. Rather than figuring out what is working, what is not, and what we need to change to improve results; we just do more of the same stupid things, because the cost of doing more is vitally zero.

Is this what you really want to do? Is this the prospect/customer experience you want to create?

Republished with author's permission from original post.

Dave Brock
Dave has spent his career developing high performance organizations. He worked in sales, marketing, and executive management capacities with IBM, Tektronix and Keithley Instruments. His consulting clients include companies in the semiconductor, aerospace, electronics, consumer products, computer, telecommunications, retailing, internet, software, professional and financial services industries.


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