Marketing leaders can often struggle with scaling in a way where costs stay the same or go down, while still having memorable storytelling. In episode 484, Dave Mastovich discusses how to understand the science of storytelling to help increase lifetime value or patient value, get more qualified leads and close more business, and use science like predictive index to understand your marketing team and understand your target markets.
It’s the No Bullshit Marketing Show. I’m Dave Mastovich, CEO and founder of MASSolutions, the world’s only No Bullshit Marketing consultants. When it comes to marketing, I found that most people unintentionally fall into one of two camps. The first camp is marketing is creative, it takes creativity, marketing is an art. It’s about building brands and creating memorable stories through video and social media and other stuff. Marketing is creative, marketing is an art. Or the second camp is marketing is quantifiable. We can measure everything now. We can track impressions, engagement, conversion rate, return on ad spend. It’s all trackable. Marketing is a science.
Now, I’m not simplifying it so much to say that one camp is 90% or 100% one way, or 90 or 100% the other. I’m saying that there’s a clear unintentional bias towards either that creative aspect, that art aspect, or the quantifiable, trackable science aspect. And what I want to talk to you about is making it so your marketing and your storytelling are scalable. What do I mean by that? Well, companies try to achieve scale, economies of scale. Because when you get to a certain point, your production grows, and your cost per unit ends up going down when you achieve scale. So you’re able to then price your cost at market value, your product or service at market value, and you’re able to make more of it because you’ve achieved economies of scale, you’ve achieved scale. It’s easier in a manufacturing type industry, in a service industry. It’s harder in a professional services industry, like law firms or marketing firms or accounting firms, but we want to achieve scale as companies. And that’s usually from the production of whatever your goods are. Could be manufacturing, could be human capital. But what I’m talking about is scaling your marketing so that your marketing works more for you and the cost remains the same or goes lower so you get more for less. I want you to be able to do that with your marketing while still leveraging the power of creative, memorable storytelling. How can we do that? What’s the way that we’re going to approach that?
Well, it’s all about one of the core values here at MASSolutions, and that is: Scaling is about systems and science. Scaling is about systems and science. I heard a phrase that personality doesn’t scale, science does. And I think in our space, that’s a big challenge. I’d like to think I have a little bit of personality when it comes to marketing. But we have to make sure that things are scalable. And what we’re constantly doing at MASSolutions is saying, ‘How can we make it so that the team produces the marketing plan, the team produces the marketing strategy, the team comes up with marketing solutions and stories and activates those stories?’ And we’ve done that – we continually hone the MASSolutions, No BS go-to-market system for not only ourselves, but for our clients. But back to you, we want that marketing to scale through systems and science because personalities don’t, whether it’s your CFO, your head of marketing, your VP of marketing, your CEO. We want to make sure that your marketing and your storytelling are scalable. You can hit a point where you’re achieving more for your marketing and storytelling without your costs changing so your cost actually goes down. You get more for less by scaling your marketing, while still leveraging the creative power of storytelling. Maybe it sounds like a lot, maybe it sounds like, ‘That sounds okay, what the heck’s this guy mean?’ Let me give you a couple of things first, when it comes to your marketing, begin with the end in mind. Begin with the end in mind. Decide what your strategic marketing KPIs are, your key performance indicators.
Now, there are a lot of tactical marketing metrics. But the strategic marketing KPIs are different than a tactical marketing metric. What do I mean by that? They’re all important. The tactical marketing metric of bounce rate is significant to the marketing team. I’m not so sure the CEO and CFO should be spending a great deal of time worrying about the specifics behind the bounce rate, but they should understand the strategic marketing KPIs that the marketing leader works with the financial leader, the operational leader, the CEO and the entire senior leadership team, to say, ‘What are our strategic marketing KPIs?’ And the first one, I believe, should be lifetime customer value or lifetime patient value in healthcare. By looking at what is the lifetime value of a customer, it enables you to start to see what you can do from a marketing standpoint to get another customer. So you should understand what the lifetime value of the customer is. And you should also understand what the average annual amount per customer is. What does the average customer spend in a year? Now both of these are important KPIs that tie with another one, customer acquisition cost. I find a lot of people are taking stabs at customer acquisition cost – most companies. The lifetime value one gets a little bit foggy, cloudy, gets people nervous, patient lifetime value gets people nervous. I believe you have to commit to the lifetime value of your patient or your customers, average annual value of a patient or customer, and then you’re already doing your customer acquisition cost. When you combine those two, you look at lifetime value versus customer acquisition cost, you’re beginning to achieve what I said. Your marketing is scalable, while still leveraging the creative power of storytelling. Why? Because when you look at that lifetime value, and then you look at your customer acquisition cost and compare the two with the ratio, you’re able to see if you’re maybe leaving market share on the table, you may be able to see if you’re not sustainable because you’re spending as much as your lifetime value in a customer acquisition cost – that’s one scenario. If your lifetime value is $1, and your customer acquisition cost is $1, what do you got? You got a failing business. Now let’s say your lifetime value is $10, and your customer acquisition cost is $1. Are you sticking your chest out, ‘We’re doing great!’ Depends on the industry, depends on the situation, depends on whether you’re a startup, whether you’re mature. But in most instances, if you’re that high of a lifetime value to customer acquisition cost ratio, 10 to one, you’re probably leaving market share on the table. What do I mean? If you were to invest more in good marketing, and that brought that lifetime value and customer acquisition cost ratio down to, say, five to one, you’ve probably picked up market share, which gives you strength and maybe puts a competitor out of business or hampers another competitor. So you can look at those. So when it’s even, you know you’ve got an unsustainable business. If you’ve got it too high, you’re probably leaving market share on the table. So that’s what I mean by begin with the end in mind, and having your marketing scale through science and systems. Because first, begin with the end in mind by picking your strategic marketing KPIs, which are not your tactical marketing metrics of cost per 1000 for an ad or number of likes and shares or bounce rate. What it is is you’re saying lifetime value, patient value, customer acquisition, the ratio of the two, average annual value of a patient or customer, it would be good to have NPS in there because you’re getting a real time look at customer satisfaction and loyalty. And so we’re able to start looking at some key strategic marketing KPIs, key performance indicators. So that’s part of beginning with the end in mind, that’s part of scaling your marketing, while still leveraging the science and creative power of storytelling.
A second one of, ‘What is the science and systems of marketing that can enable you to scale your marketing?’ is understanding your target markets’ unique characteristics and attributes. Understanding your key target markets’ unique characteristics and attributes. What does this mean? This means having 3, 4, 5, even six characteristics or attributes about a customer. So if you’re in the B2B world, you might say, ‘We’re looking at companies in this particular part of the country that have this amount of size in annual revenue, they have a purchasing department or they don’t, they have an RFP process or they don’t, they have X number of employees.’ You’re using all these different attributes or characteristics so that you can understand your target markets better. We found our Pareto principle plus where we take the 80/20, or 80% of a company’s business comes from about 20% of their customers. We take that and apply a couple more things on our IP because we wanted to have systems and science so we could scale as a company and so we can scale as marketers. We believe that if you take that 80/20, that Pareto principle plus and you then begin to start digging into it, you find more characteristics and attributes that enable you to continually slice and dice some key target markets like your top five, your top 10, your top 12 customers is one. Another one is somebody that’s maybe buying a lot but they’re buying at a lower average cost. Another one is maybe they’re not buying much but they’re buying at a higher average cost. Another one could be you’re able to drill it down to this targeted segment because you have all these unique characteristics and attributes. You have four or five or six characteristics or attributes about each of the segments. That’s the second part of you having your marketing scale so that you can get more from your marketing at less cost, while still leveraging the power and creativity of story.
A third one is to know your marketing team. There are two parts to know your marketing team, both internal and external, because it’s not wise to have 100% or 90% of your marketing activities done by internal or external. There should be a hybrid team approach where you get a good mix. So by knowing your marketing team, internal and external, I’m talking about things like the science of how people tick, what energizes or drains them by using predictive index or something like Kolbe. These types of tools give you a science of what energizes and drains and what makes your marketing team members tick so you can help them work better with each other and understand how to maximize their skill sets. This is part of the science behind your marketing. So you can scale through science and systems.
We also like to talk about triple A, activities and accountabilities agreement. Internal and external marketing is what’s going on in most companies. You have an outside company like MASSolutions, and you might have a photographer, you might have a video, you might have someone buying media. You have all these companies, plus your internal team. You need to have activities and accountabilities agreement, triple A. You clearly map out who’s doing what, when, why, and who’s tracking to make sure we have activities and accountabilities. But we get agreement, because we have everybody involved in that process. That helps you to scale your marketing. It’s part of the science and system behind marketing. And when we scale our marketing, that can lead to massive growth in helping your company achieve scale and achieve top and bottom line growth.
The last part here that I want to touch on today, about how we want your marketing to scale, and leverage the science and the systems of marketing, is the storytelling that I mentioned. There is a science to storytelling. Storytelling is the one tool that goes across cultures, across generations, across geographical boundaries. It’s the one thing we’ve used to communicate, educate, and motivate since we were first able to speak as humans. Storytelling. But there’s a science to it. What our mind does when we meet someone, when we’re talking to someone, when we’re reading something, when we’re watching a video, we begin to formulate a story in our mind. And I challenge anyone that listens to this show, anyone that hears any of our content or views any of our content, anyone that works with MASSolutions, to understand the science of storytelling, so that you’re able to create your stories, your messages, that achieve all the things we’ve talked about today – help increase lifetime value or patient value, help manage the ratio between lifetime value and customer acquisition costs so you’re getting more qualified leads and closing more business, using science like predictive index to understand your marketing team and external vendors and internal team members, about understanding your target markets, the science of characteristics and attributes that make each target market difference. But then, parlaying all that into the science of storytelling. Build your stories in a way that match up with what the cognitive scientists say that we do when we’re listening to this podcast, and we begin to formulate, ‘Where’s Dave coming from? What’s his goal? Who’s he trying to reach and influence? What’s the challenge? What’s the obstacles? What are the lessons he’s learned? How do you summarize all this into one idea, one theme?’ About six words like the old Hemingway, six words. That’s what we do, subconsciously. That’s what the cognitive scientists have proven again and again, that happens, regardless of culture, generation, geography. The science of storytelling. So when I talk to you about scaling your marketing through science and systems, because that will drive huge growth for your company on the top line and the bottom line, I include the science of storytelling, I include characteristics and attributes of target markets, I include a triple A activities and accountabilities agreement amongst your internal employees and your external vendor team members, using tools like predictive index to understand that team so you can get more out of it, having strategic marketing KPIs, not just tactical marketing metrics, beginning with the end in mind, so you have an understanding of where you want to go with your marketing and what you want your storytelling to achieve. When you do these actions, and you’re committed and intentional about it, you will see top and bottom line growth, and you will achieve your goals because you will have scaled your marketing through science and systems. You’ve spent a lot of time scaling your operations, scaling your products and your offerings. I’m giving you the recipe to scale your marketing and still leverage the creative power of storytelling, the science of storytelling. That’s what you’re getting today. One of MASSolutions’ core values is systems and science scale. And that’s what we want to do for our clients, our customers. We want their marketing to scale, and they want to leverage the power of storytelling at its highest through the science of storytelling.
If you want to learn more about the science and systems and the No BS go-to-market system, visit MASSolutions.biz/NoBS. Thanks for listening to another episode of the No Bullshit Marketing Show recorded in our studios here in bold, beautiful, downtown Pittsburgh, Pennsylvania. Remember, ask yourself, what’s the big idea? And build your story around the answer. It’s all about bold solutions. No BS.