Frickin' Lasers: A Marketing and Advertising Tale Of Horror

I See Your Darwin Fish And Raise

Part of a continuing series of moments from my career, in which great breakthroughs came from great setbacks. The point, as always, is to work away from fear, and learn from every mistake. Besides, they make for better stories.

In early 2000, I took a gig with a hot start up. My new employers were a pair of college kids who started a Web site for musicians. Their concept was to start with a vibrant community by offering up great content, then expand it to commerce with peer to peer sales and online studio file sharing, then cap it all off by offering direct e-commerce sales. As direct sales to musicians were rife with hard sell abuse from commissioned salespeople and very high profit margins, there was definitely an opportunity to be disruptive. Besides, it was 2000, when you could get funding for the idea of shipping heavy bags of pet food over the Internet, just so long as you offered free shipping and talked about the Long Tail.

The site was beloved by a billionaire who was also a musician. The billionaire gave the kids $15 million in venture capital through his funding company, with the promise of as much as they could feasibly spend later, such was his love for the site and its vision. All we had to do was prove the concept and Get Big Fast. The kids hired some pros, and those pros hired more pros. I took the gig as one of the first dozen employees as a direct marketing manager.  Within three months, we had 60 hires, new offices, and plans to change the world.

My duties included generating a lot of selling copy for the e-commerce play, coming up with ideas for and doing the execution of sweepstakes to grow our house list, and serving as on-air talent at gear shows. My main duty on a week-in, week-out basis was to write e-commerce newsletters. We started from nothing, and through consistent effort, effective promotions, and appealing price points, quickly drummed up a six-figure house list.

The newsletters had some viral pass-along and good metrics on response and unsubscribe, and directly generated over 10% of all sales… but it started to plateau. I noticed that more and more of our competitors had better looking emails than we did. Ours were text only, with long URLs, and no images of the gear we were trying to sell. (Remember, it was 2000.) Theirs had images of the gear, and call to action buttons.

I asked our CTO, one of the two kids who started the enterprise, for help to bring us up to the new standard… and got pushed off, then pushed off some more. There were other priorities that we needed to take care of first. The newsletter ROI was doing just fine as is. Our core demo had low bandwidth (remember, 2000) and did not need rich media. We needed to wait for the second round of funding. And so on, and so on. Recognizing a wall for a wall, I worked on other stuff and waited for the second round of funding before I asked again.

Then one day, I came into the office and caught a whiff of something burning. Popping up from my cubicle, I found our founders poised over a conveyor belt with a complicated apparatus and monitor. This turned out to be an industrial engraving machine with lasers. They were using it to test for possible trade show use. The idea was that instead of buying stuff and paying to have our logo put on it, we’d burn our logo into goods. Well, OK then. I went back to my desk… and spent the rest of the week wondering when these kids were going to get tired of their new toy, as they pretty much turned into Beavis and Butthead in setting the laser on literally hundreds of objects, because hey, LASERS.

Within a month, the billionaire pulled out from the second round of funding. No one else in the industry stepped in to buy the company, since we hadn’t drummed up enough sales to prove the concept. (Also, well, they liked their old margins.) Nearly everyone lost their jobs. I still can’t see a scene in a movie with lasers in it without thinking of the experience.

Lessons learned?

1) In direct marketing, design is more important than copy.

Yes, this one hurts. I’m a writer, after all. Nevertheless, if your work cannot compete on a level playing field, there is only so much that you can do to overcome that. For the most part, it does not matter how good your copy is; imagery trumps.

2) Your competition is (always) watching.

Especially in email marketing, where signing up with a personal email address is beyond easy. If your work is not being looked at, your work is either too weak or compromised to be of interest, or your competition is criminally negligent. Our sweepstakes were copied quickly by the competition, and our pricing made life better for consumers in the category… but only for as long as we were around.

This also means that, in the event of company blowup, you might discover you have some fans. I wound up doing consulting work for another player in the space for many years.

3) The wrong venture capital or money will get you killed.

After this experience, I have ran into any number of people who have similar horror stories about the billionaire in question. He is infamous for it, really, though in fairness, the track record was not as pronounced back in 2000. Had we known the second round was shaky, there is no way we would have been as aggressive with our burn rate.

4) The wrong engineering will get you killed faster than the wrong money.

Why did my old CTO spend more time on lasers (frickin’ lasers!) than, well, something that might actually make money? Maybe because he already knew the jig was up, and selling more gear was not going to change anything. Maybe because he was in his ‘20s and really liked lasers. Maybe because he really believed that musicians in our world did not care about pictures. Maybe it was all an Andy Kaufman-esque performance art piece, or that we were secretly filming my reaction for a “Punk’d” style show.

In the end, the reasons do not matter. Either engineering gives you the tools you need to succeed, or they do not. And if they do not, you’ve got a massive problem.

5) Sometimes, it is better to ask for forgiveness, instead of permission.

If I had this situation now, I probably would not sit back and wait for the CTO to change his priorities to match mine. Instead, I would hire for the necessary skill, either on a contract basis or with a free-lance project, and run the test as soon as possible. If the test won, the CTO might have been annoyed with me for running an end around, but probably not aloud, since he would be on such poor political footing. If the test failed, I would give my blocking agent the good news that his future roadmap was now more open, and moved to testing other parts of the program, while learning something profound about our customer base. In any event, I would not have been sitting on my hands for the last month of employment.

6) Never sit on your hands.

Some sharks, even if they have lasers (frickin’ lasers!), have to keep moving to breathe… and so does direct marketing. If you ever find yourself in a situation where you are told to just engage in a holding pattern and wait for some outside force to act, it’s time to start looking for your next hunting ground. 

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You've read this far, so feel free to connect with me on LinkedIn. I also welcome email to davidlmountain at gmail dot com, or you can use the top right form on this page. All quotes are free of sharks, lasers, and cost. 

How Much Should You Pay For Marketing and Creative Services?

Not Racing To The Bottom

Marketing and creative costs are a constant question for entrepreneurs and small businesses, because they are new to the world of paying for this kind of work, and a price on service is always trickier than a price on a commodity. I've been on all sides of this question during my career, having been a client, part of the creative team, and now, the owner of my own agency. So here's what you should know.

Independent of any cachet or confidence that you have in your provider, there is a true minimum involved here, and that minimum is the cost of the creative professionals as an hourly rate for their standard of living. If you go lower than that, you are at a risk of not getting quality work, or having the provider become unavailable. It also means that hourly rate is highly dependent on where the principals live, their level of experience, what their other clients will pay, and how much time will be needed to devote to the project.

It's a little bit analogous to going out to eat. If you walked into a restaurant and saw a 39-cent dinner special, you might be tempted to go for it. It also might be palatable. But if that food is sub-standard, or likely to make you ill, it wouldn't feel like such a bargain. You also wouldn't return to the restaurant, or tell anyone else to go there. Or, worse yet, you might spread the word... and the restaurant might go out of business from selling too much food at a below market price, or might attract so much low-end clientele that it drives out their more affluent patrons.

Just like high-end cuisine, a true maximum for marketing ad creative service is somewhat theoretical. You and I might never spend four figures on dinner, but some might, especially if it's a defensible business expense. There are also some agencies, especially when it comes to brand marketing work, where no amount of money will get your project done, since the account isn't in their field of expertise. Those kind of businesses also need to have their current clients help to secure future ones. No long-term provider of quality will want to imperil their existing business, by booking time that puts them at risk of highly negative word of mouth.

So, back to the question. If you are working with an a la carte agency, you can do a rough estimate by looking at yearly salary levels for all necessary team members (copywriter, designer, coder) in your area, then dividing by 2,000 (a rough estimate of the number of billable hours per year, excluding nights, weekends and holidays). Next, you'll need to factor in any applicable expenses (image fees, proprietary fonts, coding templates), add extra hours for QA and management time, and add in likely time for revisions. You also need to know if your providers are efficient with their time, and how likely the end product is to satisfy your needs. That's why RFPs (Request For Proposal) are standard in this kind of work.

So what this comes down to is the eternal question, at least as to how it manifests for most agency projects, is Great, Fast, and Cheap. The best you can hope to achieve is two of those three. Let's get into your options.

1) Great and Cheap.

Possible paths: Catching lightning in a bottle by finding talent that's new to the field, and needs portfolio work to get established. Free-lance art through exchange sites, where a high rate of revision might be tolerable due to low rates. Or getting it so right on v1, that any v2 changes are minor.

Downside: If Great and Cheap are the only factors, projects can take a very long time. Damage to the brand can also result from approval as a matter of managerial fatigue.

Great and Cheap is usually the premise or pitch for "all in one" quotes, where you get X pieces for Y dollars. If there is incredible cost pressure, and you have enough time and discipline to manage personnel that might not share your primary language, it can work out. But at some level, it just seems like you are putting your venture at risk in a penny-wise, pound-foolish decision. It also usually winds up being something that you regret later, and revise quickly.

For clients that need Great and Cheap, it's best to establish a very stringent creative brief or direction before design work begins, stress that express turn or revisions are subject to market conditions, and limit testing options or alternatives.

2) Great and Fast.

Possible paths: Exclusive access to top-level personnel, either through a personal relationship or cost premium.

Downside: Hard stop to iterations, opportunity costs from non-prioritized projects.

Great and Fast can lead to spikes from overtime rates, especially when it's a situation where go-live on a certain date is critical. It's best used when services are re-sold, or when spend can only start on approval.

If you can write off creative costs in the face of other business factors, Great and Fast can be highly lucrative for all concerned... but it can also lead to burnout of your principals. Saving the day is a great feeling for a creative pro, but if you are saving the day every day, you start to look for easier clients to manage.

3) Fast and Cheap.

Possible paths: Exclusive access to a junior level designer.

Downside: Working to template work, with limited technical complexity. Can also lead to branding challenges.

This approach is feasible when you are working in small spaces, or in a clearly defined medium. It's the kind of work that is the most likely to be replaced by automation. As such, it's the least appealing job for any creative pro of quality.

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Finally, a question to those who want to offsource creative work for the lowest possible rate. It may come off as snarky or provincial, but that's not really my intent.

Why do you hate America?

I get that pricing, especially all-inclusive package rates when your designer is working in an area where costs of living are lower, can seem inevitable. If your only goal is to see many options, and you've got plenty of time and patience to shine up from v1 to v8, plenty of other people have made this choice.

But there's also something to be said for working with providers who share your relative time zone for easier revisions, don't have Second Language issues to overcome, and share similar cultural touch points. And getting what you need on v2 or v3 is just a better way to live your life.

When you keep your job domestic, you employ talented people who share commonality with you. They deserve a living wage for that talent, and will spend that money locally, benefiting local merchants and property values, and some of the revenue will multiply again, through tax payments and increased commerce.

It's a good thing, employing people who live in your country. It's also the only thing we do at this American agency. Beyond the patriotism. I've just never been able to get that mix of great, fast and cheap when I had to use those sources in the past. Or felt right about what I was being forced to do. 

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Connect with me personally on LinkedIn. If there's something we can work on for you, hit the form field at the top right of the page. I also welcome email at davidlmountain at gmail dot com.

The Wrong Data: A Marketing and Advertising Tale Of Horror

No One Wins With Bad Data

Part of a continuing series of moments from my career, in which great breakthroughs came from great setbacks. The point, as always, is to not work from fear, but to learn from every mistake. Besides, they make for better stories.

One of my earlier jobs in marketing was with a manufacturing service that had a wide range of marketing activities. We had a highly successful affiliate program, print ads back when those worked, regional events, co-promotional marketing books and more. But one of the most successful programs for us was an anomaly on the data, in that it seemed just way more effective than it should be. It was a local trade show, and one I knew very well, in that it was the place that I had worked at, prior to accepting a position with the manufacturer.

For years, my Marketing brethren and I wondered why we weren't able to replicate the success we saw from this trade show to other events. We upped our game into prime sponsorship promotions, and paid to have exclusive access. We sponsored soft-sell information panels that spoke to our advantages. We improved our booth presence, our swag, and our signage on badges and bags. Still, we didn't get to the local trade show level. We didn't even get close.

After a while, the data was just too predictable to question. There was something about our local area that was just special. Prospects who came to that show ran into a wide range of happy clients. Entrenched media and local industry talked us up. The trade show attracted a more serious group of prospects, which played into our branding. It was what it was.

Time passed. The business expanded dramatically as a result of new catalogs. The challenge to the business became one of production and customer service, not marketing. Our programs became less intense, and we went into a bit of a slowdown. Frankly, I was looking for something to do.

So I started auditing all of our customers for the source of their lead, just to see if I could find something that was worth our time. Maybe I'd catch a mistake or two that would give us a trade publication to stay in, or maybe find that the affiliate program was being over-reported. It was basically an unrequested fishing expedition, and as we had thousands of small clients and no way to automate the work, it took months.

What did I find? A classic mistake by junior call center personnel. When they entered leads from our local trade show, from long-term clients who had stopped by the booth and entered a sweepstakes out of just saying hi to their rep, they overwrote the old source (i.e., old client, no need for a fresh lead source) to the trade show. Just a huge mistake, and one that really spoke to revenue, since some of those clients were among our biggest sources of revenue. We should have caught it years and years ago. We didn't.

Our magic trade show wasn't magic. Once I completed the audit, we saw that it performed about 15 to 20% better than the others, not 2 to 3X. We had wasted a lot of time and resources, over several years, trying to optimize a program that was already functioning at near peak efficiency. And, worst of all, we had failed to spend every marketing dollar to the best benefit of the business.

Lessons learned?

1) Data makes its own marketing reality. We live in a universe of facts and stories about facts, and we tend to treat those stories as if they were facts. Presented with data that we believed to be clean, we quickly came up with reasons why the data made sense... even though it, well, never did. Especially with sample sizes that aren't statistically significant, or from sources that you aren't absolutely sure are airtight, hypothesis can be your undoing.

2) Messengers are, indeed, shot. Change was, as you might imagine, difficult. Some of my marketing brethren felt professionally threatened by the new data, and cutting down our commitment to the not magic show, especially as it was my old employer and I still had friends there, wasn't fun. There wasn't even the expected thanks that you might get from management, since they enjoyed being King of the World at that show, too. But it was the right thing to do for the business. Which is where your allegiance has to lie.

3) Data entry matters. Entering trade show postcards required keypunch data entry from our most junior people, and there was no cross-check of the work. It really didn't take too many errors to throw off the data, and put us on the wrong scent.

4) Bad news today is good news tomorrow. You can cry over the spilled milk, or you can feel very good that you aren't going to keep using that bad cup. I prefer the latter option, but your mileage may vary.

5) Experience helps. If I ran into this set of numbers as a pro today, it wouldn't have taken me as long to suss out the error, because over time, you pick up moments like this that inform your later decisions. Also, when you come into a meeting with more gravitas and war stories, it makes it easier to not go along with the party line. 

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You've read this far, so connect with me personally on LinkedIn. 

And I'd love to hear your Tale Of Horror in the comments below!