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Marketing Lessons You Can Learn from “Moneyball”
Suppose you own a small contracting company with a couple trucks. Whether you operate out of Washington, DC, Philly, Chicago, Los Angeles, or any other metro area, you’re competing against dozens of comparably sized contractors AND at least three or four companies that are considerably larger than you. The larger contracting companies most likely have bigger advertising budgets, fancier websites, more trucks on the road, hundreds of online testimonials and much, much more. It’s easy to look at the “big guys” and infer that what they’re doing with respect to advertising and marketing is working – and think that you should copy it.
“If XYZ is doing highway billboard ads, it must be working – they’re huge. We need to do billboard ads too.”
Don’t do this!
Small business marketing is a war and to beat the big guys, you have to think and act differently.
Take a few tips from the movie “Moneyball.” The plot of the movie is simple (don’t worry – we won’t spoil it for you): Small scrappy team uses unconventional thinking as a competitive advantage to beat up on the big boys. The New York Times (accurately) described it as David and Goliath meets “The Bad News Bears” meets “The Tipping Point.” Brad Pitt plays Billy Beane, a former MLB player destined to be a star, but, for reasons unknown, he never quite manages to find success. He ends his career with the A’s where he walks off the field and into the front office to become a scout. Eight or nine years later, Beane is the GM of the team. The trouble is, the A’s are a losing team in a small market with a laughable payroll (compared to the teams they must compete against) and Beane wants to win the big show – bad. It’s unclear how Beane is ever going to be able to turn things around, but, under his management, the A’s make the playoffs five times over the next eight seasons!
Great underdog story aside, what does a baseball movie have to do with business? As it turns out, there are a lot of lessons small business owners, contractors and marketers can learn from “Moneyball.”
Here are a few:
Data + Gut Intuition Beats Gut Intuition
The winners in today’s advertising and marketing landscape are data-driven. The losers rely on gut intuition and follow the rest of the pack like a bunch of lemmings. In “Moneyball”, the scouts for the A’s, many of whom are former players, rely on qualitative methods for evaluating players. They throw around subjective statements like, “he doesn’t have a big league face” or “he won’t work because his girlfriend is ugly (which means he lacks confidence).” Beane, recognizing that the traditional approach to building a winning ballclub is overly reliant on qualitative reasoning instead of quantitative analysis, surrounds himself with statisticians and economists. He uses new metrics to pick his players, assemble the team and win games. Traditional ad agencies are like old school scouts. Blue Corona is taking the Billy Beane approach.
You can’t win the game if you don’t know the score.
Better Data = Better Results
When it comes to data and analytics, it’s junk in, junk out. In “Moneyball”, Beane eschews traditional metrics like batting average and runs batted in. Instead, he shifts his attention to overlooked, but, as it turns out, incredibly relevant metrics like on-base percentage and slugging percentage. If your advertising budgets rival what your competitors spend on pens, you’d be wise to think like Beane. Take for example, a metric like Cost Per Click (CPC). Whether $10 per click is incredibly cheap or outrageously expensive depends on a variety of secondary, and ultimately more important, metrics. In “Moneyball”, Beane and his staff focus on metrics not being considered by the bigger teams to identify market inefficiencies and undervalued players. You can do the exact same thing to market your business! By identifying – and monitoring – metrics like:
- Visit to lead conversion rate
- Lead to sale conversion rate
- Target cost per sale
You can accurately determine whether $10 per click is a bargain or a rip off. Without the metrics above, it’s a total shot in the dark. If you have a smaller advertising budget than your competitors, you need to think and act differently. You need to use overlooked, but ultimately more important, metrics to guide your advertising decisions and marketing strategy. If you accurately track your print yellow page advertising, you’ll never have to wonder whether or not you should renew your ads or – even worse – base your decisions on what your competition is doing.
DrinkMore Water, a local bottled water company in Maryland, did exactly this. President and founder, Bob Perini, used unique phone numbers (not owned by the yellow pages) to track every single print yellow page ad. The next year, when his competitors were renewing – and in some cases buying even larger print ads – Perini was canceling everything and shifting budget to then overlooked strategies like Pay Per Click and SEO.
Let your larger competitors overpay for what they consider to be “the money keyword.” Let them think you’re an idiot for not bidding on it – or not outbidding them for it. Why do you think companies are rushing to add the Facebook icon to prominent locations of their website? Let me tell you – it’s NOT because it generates more leads and sales. They’re doing it because they see their competitors doing it – and, in many cases, it’s idiotic. Use advanced website tracking to make your website’s landing pages look different and you’ll outperform the big guys.
Similarly, when interviewing SEO companies, be very careful about companies that focus heavily on keywords and the number of keywords for which you’ll be ranked/optimized. Focus instead on the true measures of SEO success – like return on SEO spend, cost per lead (from non-branded organic search) and qualified web visits (from non-branded organic search). Whether you’re site is being optimized for one keyword or 10,000 doesn’t matter. It’s all about choosing the right keywords and whether or not this happens is more easily determined by the numbers listed above.
If you want better answers, you have to start by asking the right questions.
Winning the Last Game Matters Most
Every business owner wants to rank on the first page of Google’s search results to increase website traffic. This is a great goal, but remember: rankings and traffic are worthless if you don’t convert them into leads and booked jobs. Why spend thousands of dollars driving traffic to a website that ‘can’t close’ or generate phone calls for a customer service rep that always seems to be having the ‘worst day ever’? It makes absolutely no sense, but that’s what many of your larger competitors are doing. They’ll spend thousands of dollars on advertising and marketing to get more visitors to their website, but zero on tracking and conversion rate optimization.
Think and act differently. Start by tracking the phone leads you receive from every single marketing strategy. Have your advertising-generated phone calls recorded and reviewed on a regular basis. If you do this, the results will be absolutely eye-opening. Listening to how poorly some of your customer service and sales staff handle calls is tough medicine to swallow, but it’s absolutely necessary if you want to beat the big guys.
If you’re not listening to every phone lead (or paying someone like us to do it for you), you’re losing customers to your (smarter) competitors.
Instead of trying to beat your larger competitors, change the game. Take a data-driven approach to your advertising and marketing. Data combined with gut intuition trumps gut intuition every single time, but you have to focus on the right metrics. Better data and better metrics equal better results. Don’t let advertising salespeople shape the way you think about marketing by pushing you to focus on (relatively erroneous) metrics like cost per click and the number of keywords included in their magic SEO package. Lastly, rankings and traffic don’t matter if you’re not converting them into leads, booked jobs, revenue and profit. Spending all your marketing money on rankings and traffic and leaving nothing for tracking and conversion rate optimization is idiotic, but it’s exactly what your larger competitors are doing. Think and act differently and you will beat them at the new, data-driven, marketing game.
Be a Billy Beane.
About The Author: Ben Landers is the President and CEO of Blue Corona, a data-driven, inbound internet marketing company. Submit an inquiry to book Ben to speak at your next conference or event.
View more blogs by Ben Landers