Wednesday, February 18, 2009

The Gambler and the Perfect Path; Retrospective Determinism in Marketing Analysis

Let’s say that your organization gets one of those “ideal” client wins – great logo, fair price, smooth sales process. If you’re like most, one of the things that you’ll probably ask is “how did we market to that organization such that the sales process went so well”. I think that’s one of the more dangerous questions that is being asked today. The reason I think it’s so dangerous is that it can lead to the slippery slope of thinking that the success can be replicated like a prescription. It can’t.

Taking a single, ideal, outcome, and then looking for a “perfect path” through a very chaotic, chance-driven process is what Nassim Taleb, in his book The Black Swan calls “retrospective determinism”. The problem with it, is that it ignores the vast number of data points from people who started the process, but did not end up as the ideal client win. Those who did not end up as an ideal client win do not make a story that is at all interesting, so their story does not get told with the same enthusiasm as the story of the ideal client win.

It’s a lot like the gambler who writes a book on his or her gambling strategy. The only gambler who would write such a book, by definition, is the gambler who was able to achieve success. Those who did not succeed at gambling are highly unlikely to become authors on the subject. The gambler will write about the successful strategy, and the proof is in the winnings. The problem is that because only a winning gambler would write the book, there is no way to tease apart the effects of strategy and blind luck.

B2B marketing is in a similar situation when looking for the “perfect path”. It is an amalgamation of 100s if not 1000s of influences that cause a client to buy a product of any reasonable size. We can analyze individual efforts in the chain, and look at certain measurable aspects to see how well they performed (on those measurements) compared to similar efforts. However, when we attempt to look for the “perfect path”, we are fooling ourselves into thinking that we have more control of a process than we really do.

In each marketing interaction that you have with a prospective buyer, many factors are well outside of your control or knowledge. What is happening in their organization, their mood, whether they are distracted by another thought at that moment. At a high level we can see one campaign performing better or worse than another in general, but predicting whether a given individual will respond to a campaign in a certain way is not possible.

So, the advice I always give to people who are looking for the “perfect path” in B2B marketing – don’t. Optimize individual tactics, look for which campaigns were the best contributors in general to results, but don’t fall into the trap of thinking that there is one perfect path through your marketing messaging that is waiting to be found. The world is too random for that.
Many of the topics on this blog are discussed in more detail in my book Digital Body Language
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