Lean Marketing Principle #3: Analyze cause and effect

And the truth shall set you free! Fletcher Reede (played by Jim Carrey), Liar, Liar

What does it mean to analyze cause and effect in your sales and marketing process? Does it require statisticians to crunch numbers and produce complicated graphs? New procedures that will just add to the workload?

No, it’s not either of these. It’s simply another way to say that you are going to find the truth, the truth behind what is causing a particular problem in your sales and marketing process. Analyzing cause and effect is what enables you to understand not only what is happening, but why it is happening and what you can do to change it.

And, as Fletcher says in his moment of revelation in “Liar, Liar”, the truth shall set you free. It will set you free because you won’t be guessing what the cause is. Your team won’t be debating the cause based on opinion and anecdote. You’ll know what the cause is. You’ll know why it was causing the problem. You will have tested alternatives and found a way to remove it.

Chefs in a kitchen never just guess why a dish is turning out differently than expected. They analyze the steps in the process, isolate some likely causes, and test alternatives. Meat turning out too dry? Maybe it’s the oven temperature or time in the oven. Try different temperatures and cooking times. Maybe it’s the marinade. Try adjusting the ingredients in the marinade and the length of marination. They know the only way to remove the cause of the problem is with a systematic and objective approach.

Once a company starts to see marketing and sales as a process where it is constantly adding value to the customer, then problems that arise are viewed as process problems and can be fixed using process improvement methods. Direct marketing groups have been approaching their work in this way for a long time. Search marketers also adopted a process approach to optimizing web sites for search engines and to their paid search campaigns. The idea with lean marketing is to extend these practices to the rest of marketing.

One of the biggest complaints that CEO’s have about marketing is that they can’t measure the return on their investment. It is routine for marketing organizations to fund programs for public relations, brand promotion, trade show participation and even lead generation programs without a clear and quantifiable business case for which they are willing to be held accountable.

Once a company starts to bring lean thinking to its marketing process, this situation will improve and CEO’s will have better information with which to make investment decisions.

Here are some examples of situations where lack of measurement and analysis can lead to expensive and unproductive results:

• A company that swipes the card of every visitor to their trade show booth, captures the visitor information in their database, and hands the information to sales as a “lead”. Without analysis of the information and pre-qualification of the possible suspects, this creates wasted effort by sales people and resentment towards marketing.
• Pursuing all revenue as opposed to profitable revenue. Causes of this problem could be lack of information on profitability or the incentives in the sales compensation plan. In either case it leads to lower profitability.
• Too much focus on overall conversion rate on the web site without understanding the different groups that are visiting the site. Avinash Kaushik points out that an overemphasis on overall conversion rate means that we are not investing in efforts to create a great experience for the other segments that are visiting our site.