Your new advertising campaign has a 5% higher response rate than the old campaign you just retired. Good news, right? I would argue it depends...
A Quick Story
There was once a typewriter company that excelled at building the machines. The company was one of the first to introduce the electronic typewriter and many of the additional innovations that came after. The executives at the company knew having the fastest, most reliable, and ergonomic design was the key to dominating the industry. Dominate they did. Comfortable in their alpha position, they continued to push innovation boundaries.
With the advent of personal computers they saw their share of the typewriter market increase as their competitors began closing shop one by one. They misinterpreted this as a sign they were beating out everyone in their market and continued to emphasize pushing the boundaries of typewriter innovation - comfortable with the knowledge that the consumer preferred to see what they were typing on paper rather than looking at a small flickering screen with green text on a black background.
Then computers gradually gained better processors, more advanced programs, the Internet, HD screens, and everything else we have today. CNN reported in April 2011 that the final batch of mass produced typewriters in the world were leaving the only remaining factory and were making their way to the increasingly limited shelf space dedicated to selling them.
Context matters. And not just in the way the digital planner you recently hired keeps talking about (e.g. "Content is king, context is queen" or one of the many variants common in the industry now).
Many marketers in the business today are too insular in their focus on tracking results and performance. The emphasis is on increasing response rates, raising ROI, etc in raw percentage terms. No doubt, this is what we should be doing. However, what's generally neglected is tracking results relative to other measures like industry benchmarks, competitive activity, or even other business units within the same organization.
In other words... increasing your response rate by 5% is all well and good unless your top 3 competitors just increased theirs by 20% and are now running out of the gate miles ahead of you already. Or if the entire industry is riding a 10% wave and you're just catching the 5% surf.
What To Do?
Many happiness gurus tout one of the keys to contentment is to avoid regularly comparing yourself to others or to external factors - important wisdom for life, but not modern marketing. My advice: always compare yourself to others in marketing (Tony Robbins must be shaking his head right now). How else are you going to know if your idea has already been unsuccessfully tested, if you're not getting your fair share, or if your product is at the end of its life cycle?
Here's a starter, non-exhaustive list of things that we should be keeping an eye on regularly:
1. Competitor Activity
- Brand / competitive market research
- Third party benchmarking sources (e.g. Forrester, comScore)
- Competitors' shareholder reports
2. Industry Trends
- Wall Street analyst reports
- Industry newsletters
- Industry experts and webinars
3. Customer Sentiment
- 1st or 3rd party market research
- Social media trends
- Customer feedback
These are just a handful of thought starters. There are dozens more we should be keeping in mind. What else would you recommend?