Sunday, October 14, 2012

Seth Godin's Acute Heptagram of Impact

The Acute Heptagram of Impact

Not as catchy a title as Maslow's Hierarchy of Needs, but I hope you'll walk through this with me:

I can outline a strategy for you, but if you don't have the tactics in place or you're not skilled enough to execute, it won't matter if the strategy is a good one.

Your project's success is going to be influenced in large measure by the reputation of the people who join in and the organization that brings it forward. That's nothing you can completely change in a day, but it's something that will change (like it or not) every day.

None of this matters if you and your team don't persist, and your persistence will largely be driven by the desire you have to succeed, which of course is relentlessly undermined by the fear we all wrestle with every day.

These seven elements: Strategy, Tactics, Execution, Reputation, Persistence, Desire and Fear, make up the seven points of the acute heptagram of impact. If your project isn't working, it's almost certainly because one or more of these elements aren't right. And in my experience, it's all of them. We generally pick the easiest and safest one to work on (probably tactics) without taking a deep breath and understanding where the real problem is.


Friday, October 12, 2012

Use the Breakeven Tool Before Implementing Any Marketing Campaign

Before you begin any marketing campaign, use the breakeven tool to assess whether the campaign can reasonably expect to pay for itself.  In the example below, the campaign is expected to cost $10,000.

If your average gross margin is 35%, then you'll need to generate $29,000 in new sales to pay for the campaign.  If your average sale per transaction is $150, you'll need 190 new customers to bank the $29,000.  If each new customer is worth $1500 to you over the lifetime of your relationship with that customer, then you'll need 19 new customers.  And if you conversion rate of leads to sales is 30%, then you'll have to generate at leas 63 leads to pay for your $10,000 marketing campaign.

Does it seem reasonable that the $10,000 campaign can generate at least 63 leads?  If yes, then go ahead.  If no, then drop the idea.

Key Performance Indicators - What Are They and Why Do I Need Them?