Have you ever invested heavily in a marketing campaign or initiative that just didn’t pay off? Or even worse; invest heavily and you’re really not sure if it paid off or not? We often hear horror stories from our clients about marketing campaigns that took way too long to plan and cost more than it returned — resulting in our own new definition of FOMO (The Fear of Marketing Outlay). But everyone knows you need to spend money to make money, right? The question is always “how much?”
I love to introduce our clients to the concept of small bet marketing campaigns. Let me put this into perspective with an analogy. When I go to a casino, I typically play blackjack (the odds are better than most games), and I set a budget that I won’t go over when I play (just in case lady luck is not on my side). Think about that for a minute — I pick a game that has better odds and I set a budget of an amount of money I’m willing to lose completely. As long as I have chips in front of me, I can keep playing until things turn around. The risk versus reward calculation feels right to me. This is a game of small bets, literally. If you’ve ever played blackjack, you know what happens when someone gets “hot”. It’s not uncommon to double or even triple your original bet.
Small Bets are Defined by Your Personal Risk Tolerance
When someone encourages you to take a risk, it’s easy to instantly imagine bungee jumping or diving with great white sharks. But in reality, taking a risk can be as simple as trying a new food, taking up a new hobby, or visiting a new place. We all have a different tolerance for risk and a different definition of what is acceptable and what is not.
Sure, taking a risk can sometimes mean something traditionally scary or anxiety-inducing (public speaking, anyone?), but it doesn’t have to be. Reframing how you view and define risks is actually the first step to taking more risks in your day-to-day life. And taking more risks? It’s really good for you.
Why is it Important to Take Risks in Life?
As the Huffington Post reported, risk-taking not only exposes you to dozens of positive outcomes you never would have experienced before, but it also boosts your confidence and helps you let go of the fear of failing. If you’ve ever started a new career, asked someone out on a date, or tried out for a sports team, then you probably know all too well that fear of failure is almost always the thing that holds us back from doing something.
So if there’s a way to get used to risk-taking and to prime yourself for being able and willing to take on bigger risks, then it only benefits you to start getting used to the process ASAP, little by little — starting with risks that have acceptable losses if you fail.
For Entrepreneurs, Taking Risks and Business Growth Go Hand-in-Hand
Entrepreneurs take big and small risks every day. They don’t do it for the fun of it, they do it because the buck stops with them and decisions have to be made so that the team can move forward. Successful entrepreneurs have created a quick risk versus reward analysis they can quickly run through when faced with larger decisions. There are many reasons to take a risk. Below are five common reasons (paraphrased from numerous articles on the topic):
- Risks can be calculated
When taking a major risk, it is important to calculate the potential results (AKA the reward) and have contingency plans in place. While many movies are made where entrepreneurs take the “ultimate” risk, no risk which puts your business in jeopardy is ever advised! Note that the opposite is also true. If you spend all your time calculating the results of a small risk, you’ll never get anything done. Knowing your personal risk tolerance is key to finding the right balance.
“Take calculated risks. That is quite different from being rash.” - General George Patton
- You’ll never know until you try
For the majority of business owners, a risk is taken to advance the organization in some way. But you have to be comfortable with not really knowing if it will pay off or not. There is only one way to know. You have to try it.
“Progress always involves risks. You can’t steal second base and keep your foot on first.” - Frederick Wilcox
- Risk helps to distinguish between leaders and followers
If you are in a competitive business (Who isn’t these days?), risk-taking typically is what you do to get ahead and/or differentiate yourself in the market. I’m tempted to quote Ricky Bobby from Talladega Nights here but instead, I’ll go with a quote that has always motivated me when I was faced with a decision to take the safe, proven route or to trust my instincts and do something less conventional.
“Leap like a lunatic
Over the chasm below
Erupting as you Go
Your true self awaits you
And you will Know”
- The Leap by Jane Evershed
- To innovate we need to take risks
Whether you’re considering a new hire, changes to an existing product, or launching a whole new business, nothing new ever came from doing the same thing. In fact; it’s often described as the definition of insanity — doing the same things and expecting different results.
“Life is either a daring adventure or nothing at all.” - Helen Keller
- It is a chance to learn
If we didn’t take risks and try new things, we’d never learn anything. Those lessons can be positive or negative, but either way, you learn something just by trying. For whatever reason, failure is especially lasting. It sticks with us and teaches us lessons that hopefully make us better risk-takers in the future.
“Sometimes you win. Sometimes you learn.”
Examples of Small Marketing Bets
One of the facets of the Agile Marketing Manifesto is that you should always go with numerous small experiments over a few large bets. With the speed of change today, you could miss an opportunity simply because you planned too long for your launch campaign.
One of my favorite examples of a bad, large bet was the Kendall Jenner Pepsi campaign in 2017. In summary, the ad was supposed to speak to protesters bridging the gap between themselves and law enforcement with a Pepsi. There was limited market research done and it took months and millions of dollars. When it actually launched it was seen as out of touch, tone-deaf, and ridiculous.
“Perfection is the enemy of progress.” - Winston Churchill
Instead of planning, creating, and perfecting something for months, consider these examples of small bets in marketing:
- Digital Advertising: You don’t know what is going to work until you put something out there. You can do your research to get the right words, and use experienced copywriters and designers so your creative is solid, but you cannot put all your eggs in one basket. Make multiple versions of your ad, try it on different networks, set a daily budget, and stick to it for a few months. Go broad with your messaging, but small with your targeting so you can learn, iterate, update, launch, and then measure again.
- Outbound Email Marketing: Don’t roll your eyes. It’s so easy to find contacts that should be in the market for your services or even append/cleanse your old contact lists to make sure you’re still reaching out to the right people. Create a list of 500 targets within a specific vertical and send them three educational emails (repurpose old content) with a soft offer to connect to learn more. It’s a simple, quick way to test a product, a campaign, and a feature.
- Create a single, SEO-targeted pillar page (versus a whole website redesign): If you’re working on new positioning or a new product line, don’t get caught up in a major redesign project. Sales or pillar pages are a great way to summarize what you are trying to do and who you want to help. You simply drive traffic from the campaign to that page versus your whole website.
- Validate the market before you actually change your product or develop a new feature. If you haven’t seen it, the Dropbox launch campaign is a great example. They sent out multiple campaigns asking people if they would use simple features through animated videos to describe what the software would do. Note that I said, “would do”. They did not actually program it until they validated that the market wanted it. The best part? Once it was market-ready, they had a hot list of leads all queued up.
Here’s the Catch — You Cannot Manage What You Cannot Measure
All this talk about small bets comes with a mighty caveat. If you don’t have systems in place to track the metrics of your small bet, you’ll never really know if it paid off or not. And if it didn’t pay off, you cannot confidently scale it and invest more in that same campaign again. There are three steps to implementing a small bet marketing methodology in your company. In summary:
- Get comfortable with your acceptable risk and know what you’re willing to lose to learn.
- Let go of perfection and roll with good enough. If you can’t crank out the tests, you’ll miss your opportunity to lead and compete.
- Implement a system of tracking marketing efforts so that you can measure to manage (thank you, Peter Drucker). We love Hubspot and all the ways it helps us track everything we do so that we can continuously improve and PROVE what works and what doesn’t.
Interested in taking some small bets together? Click here to reach out to us.