The Lean Startup is a great book – if you want a little taste, here’s a quick review. While it’s predominantly aimed at entrepreneurs, there’s a lot of good advice and inspiration for marketers. I’ve taken a few of the ideas in the book, and tried to come up with a few ways to make your marketing more “lean”. Lean marketing is not for everyone, but I believe that any organisation could benefit from losing a few extra marketing pounds. So don’t be a fat sheep like everyone else – here are a few tips on how to get started.
1. Move from focus groups to experiments
Focus groups are the lazy marketer’s dream – they let you test a hypothesis (say new product launch) at a relatively low cost, risk-free, blame-free (there’s always a research agency to blame) and most of all – you don’t have to do anything. All you have to do is put your hypothesis in a research brief and off it goes. The problem of course is that all you end up with is just another hypothesis, that merely reflects what consumers who took part in the research claim they do. This may or may not hold for actual behaviour of the whole market, and you are pretty much where you started.
Instead, the lean marketing way is to learn and test hypotheses by running experiments that actually reflect real consumer behaviour. Unlike consumer claims, it’s real behaviour that will determine success or failure of our products in the market. But how can you run market experiments? There’s countless ways, but creative approach might be necessary. For instance, a new product packaging can be tested in just one of the distribution channels. New product can be launched in just one of the markets. An FMCG manufacturer could set up a “retail lab” – a mid-sized grocery store that will look and feel like an ordinary store to consumers, but will be designed to quickly and easily collect experiment data (think new packaging, new product, different price, category management, etc.) for the manufacturer. Similar service could in fact be provided by big retailers in their stores, and subsequently analysed. Pop-up shops or online marketplaces could also work quite well. The aim is to prove or disprove a marketing hypothesis using real market data, and then use this to make better decisions. Rather than betting the farm on a focus group-backed hypothesis, running small scale real experiments is the lean marketing way forward.
2. Stay away from vanity metrics
You’ve probably heard it a hundred times – don’t measure what is convenient, measure what matters. In Lean Startup, Eric Ries calls the former “vanity metrics”, and they can be dangerously misleading. Say your new product’s total sales are going up week after week following the launch. Before you throw a celebratory pool party, it might be worth thinking whether you are looking at the right number. For some products, repeat purchase rate is critical to long-term success. Is it going up, or are hordes of new consumers purchasing only once (induced by advertising or promotions) and never again? If positive word of mouth is key to your brand’s growth strategy, are your trialists spreading the word? Lean marketing way is to define the key metrics that will make a difference to your business depending on your strategy (fuel the engine of growth), and ignore the rest. These figures might not be easy to come by (and there might be tons of other data readily available), but they are the only figures that actually matter.
3. Switch from big launches to continuous iteration
Big launch = big risk. Marketing processes often dictate big launches – getting a cut from the communications budget, getting a listing at a retailer, getting promotional support – a million little things drive marketers to work in long cycles and launch new products and product versions with a big bang. To justify a grand launch, many features of the product tend to be new, from colours and flavours to packaging, taste, features or price. However, this is incredibly risky, and ultimately limits learning.
Lean marketers should switch to continuous iteration, and improve products one feature at a time. You can change the colour of the packaging and see what happens. You can add one new flavour and see what happens. You can add a feature, try a new version of the advertising copy, or add a new distribution channel – and see what happens. Every time you iterate, you’ll have a chance to learn what works and what doesn’t (if you of course measure what matters). In Lean Marketing, Eric Ries calls this validated learning. You’ll be able to learn faster what works in your market, and the risk associated with each new product version will be negligible compared to big launches. If this approach is impossible under the current marketing processes, perhaps it’s time to give them a thought and tweak them to support lean marketing. The benefits are worth it.