Friday, March 29, 2019

One Powerful Tip to Improve Every Business Strategy

Photo by patricia serna on Unsplash
I generally hate blog posts and articles that suggest there is a single trick, hack or tip that can change your world. (I swear if I see one more headline promising the one habit that can turn me into Jeff Bezos or Warren Buffet, my head will explode.) But, there is one powerful tip that, I have found, can help you avoid costly mistakes and turn a weak business or marketing strategy into a powerful one: Define your goals and metrics first, then develop the plan to deliver on those.

That's it. That's the entire tip. Not exactly rocket science, huh?

The problem is that, far too often, we do the opposite. We commit to a strategy we like or a technology that intrigues us, and after our plan is set, we then figure out how to measure the outcomes. The problem with this approach is that we develop metrics to fit the strategy rather than developing a strategy to match what we want to accomplish and what our business needs. By figuring how we'll measure what we have already committed to doing, we end up with vanity metrics rather than important business KPIs.

The 2008 to 2015 social media strategies of virtually every brand illustrates this problem. Every company in the world jumped into social media for reasons that ranged from weak ("our competitors are doing it!") to incomplete ("our customers are adopting it!") So, after an organization committed to a Facebook, Twitter, YouTube, and LinkedIn strategy, all that was left was to determine how to measure it. Thus, we ended up with meaningless metrics such as likes, retweets, fans, and comments. And, having committed to measures that have little to no link to our business goals, brands then spent a lot of money to achieve results that didn't matter. How many brands learned the hard way that Twitter sweepstakes, Farmville giveaways, vapid content, and fan contests were useful only for lifting useless metrics while doing nothing to improve brand health or results?

We can see the same thing happening today with voice devices. Brands continue to jump onto the Alexa and Google Home bandwagon because voice devices are rapidly becoming common in US homes ("our customers are adopting it!") And, as a result, brands are rapidly jumping into developing voice applications such as Alexa Skills, the number of which doubled in 2018 ("our competitors are doing it!")

The problem is that too many brands commit to developing voice apps without really understanding how consumers use them or establishing what the brand wants to accomplish and how it will measure success. The outcome is that a lot of voice applications with little evidence they get used. Amazon doesn't release data on monthly active users of skills (hmm, I wonder why?), but what we do know is that 60% of Alexa skills have zero ratings and only 5% have more than ten. We also understand why people use their voice devices, and every one of the top reasons is core functionality provided by the device makers (time, alarms, online search, directions), entertainment (music, fun questions) or media (news and weather).

To continue reading about the three benefits derived when we set our goals and measures at the beginning and not the end, please visit my Gartner blog.