Brand Marketing: Ignorance Is Bliss

When I was growing up, my father always told me to focus not on “doing things right,” but on “doing the right thing.”  This advice seemed to clash with the standard parental admonition to always do your best. It’s been drilled into us that “anything worth doing is worth doing right.” Did you read, for example, about President Obama’s recent speech where he took his daughter to task for scoring poorly on her science test? And, of course, to a degree, the President is right: it is very important to always do our best.

The Pareto Principle

What my father was trying to teach me, however, is  the principle known in marketing circles as the Pareto Principle, named for Italian economist Vilfredo Pareto.

These days it is normally called the 80/20 Rule, and it states that 80 percent of outcomes are a result of 20 percent of inputs. The actual numbers aren’t the important thing here; they don’t need to add up to 100, and they will vary from situation to situation.

The critical concept of the 80/20 Rule is that a minority of causes — whether that’s customers, software bugs, or employees — are responsible for a majority of results — such as revenues, system crashes or productivity.

For brand marketers, this has some important implications. As my father was trying to teach me, you should put your effort into the things that are going to give you the results you need. For example, Seth Godin points to recent research that says that only 16% of internet users are responsible for all of the clicks on internet ads. So if you spend lots of time optimizing your ads for clicks, but your target market isn’t part of that 16%, then you’re wasting your time.

So the low hanging fruit here is that you don’t want to expend marketing dollars in ways that are inefficient. This means Burton Snowboards wouldn’t advertise in the Ladies Home Journal, right?

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Pursuing the Right Customers

There is, however, an even more important aspect to the 80/20 Rule. Some marketers have, unfairly I believe, charged that using the 80/20 Rule results merely in maintaining the status quo. Their logic seems to be that, if you’re going to apply the 80/20 Rule, you focus all of your attention on the 20% of customers that are already making you profitable, rather than trying to gain more profit from the remaining 80%. And, to be fair, Noam Chomsky has admitted that many corporations do precisely this, trying to drive away less profitable customers through poor customer service and other techniques.

The problem with this interpretation is that it fundamentally misunderstands the real value of the 80/20 Rule, at least as it applies to branding. Rather than limiting your attention to those existing customers that supply the majority of your profit, the smart brand marketer tries to understand what it is about those customers that makes them different than the other, less profitable customers. Once you know that, you can go after more customers that resemble your most profitable ones.

As a brand marketer, you need to figure out who your core audience is — the 20% that wants to buy what you’re selling — and make sure that you are connecting with them on an emotional level. Then:

Ignore what everyone else thinks about your brand.

This is the hard part that trips up most marketers and companies. Many reflexively shy away from marketing that they think might alienate people. But I’m not talking about doing things that are risqué just for the sake of being edgy . I’m talking about connecting to your core audience, even if that means not connecting with the rest of the population.

Case Study: Fox News and CNN

Love it or hate it,

Fox News has figured out an absolutely brilliant branding program. They tailor their news programming to conservatives and independents who are disaffected with the government. And while Rupert Murdoch is clearly conservative himself, I don’t think that has nearly as much to do with Fox’s brand as does the fact that he has found an audience that makes him buckets of cash. Fox doesn’t care that their brand turns away a large portion of the American populace — heck, the controversy probably helps them to draw in a crowd.

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Now, let’s look at CNN. These people don’t have any idea who their audience is. Their branding steadfastly adheres to the idea that they’re a trustworthy news source. That may have worked in the 80s and 90s, but it’s failing them miserably today. CNN president Jon Klein insists that, “Excellent journalism is what we are focused on. We refuse to do the things that might get us a quick number or cater to the extremes that would alienate our core viewers”. In other words, they’re focused on doing things right, and desperately hoping that the customers will follow. But, despite Klein’s assertions, CNN doesn’t actually have a core audience at this point. Instead of just insisting that “excellent journalism” will save the day, Klein should be focused on doing the right thing and creating a brand that can emotionally connect with a large enough group of consumers to keep his teevee channel going.

In just about any successful brand, whether consciously or not, you will see this adherence to the 80/20 Rule. Those brands have figured out who their core audience is, and they tightly focus their marketing messages around connecting with those customers. Conversely, as soon as companies start trying to be everything to everyone, their brands lose coherence and start the slide into mediocrity and failure.