Attention externalities

Philip Morgan

In the last few months of 2021, a client of mine (he's been in 2 of my workshops) booked 3 times his previous year's revenue. We caught up recently, and there are several remarkable things about what he told me.

I'll keep him anon here, but he and I are both interested in sharing the story in public when we can figure out an effective way to do that. His firm is small -- 8 people -- and has been building custom software for over a decade. They specialized something like 4 years ago and it's been going well. Maybe 3 years ago they started investing seriously in marketing, and that's where it gets especially interesting.

About halfway through describing the approach they've been taking to marketing, he just casually said something that surprised me. I've literally never heard anyone say they think about the cost of marketing the way he does. Here's a drawing to illustrate:

He looks at the cost both to him and his firm and the aggregate cost of the attention every recipient of his marketing is giving that marketing. To be worth doing, the marketing needs to be worth the attention-cost it incurs. Not just worth the cost of producing it, but worth the cost of whatever attention it requests of however many people it requests that attention of!

Let's say a broadcast email is going to get sent to 2,000 people. According to Ziprecruiter, the average Professional (LOL what even is that -- anyway!) in the US earns a salary of $48,094/year. Let's bump that to $70k to cover benefits and other costs and go with an hourly pay of $35/hour. Let's say this email costs recipients an average of 5 minutes to somehow deal with. This email then costs a total of 10,000 minutes x ($35/60) = $5,833. This is a crude and simplified way to make the point, but it makes the point!! As someone with close to 2,000 people on an email list I have to confess to not really thinking that I might be costing the world thousands of dollars every time I send an email to the entire list.[^1]

The obvious parallel is the idea of negative externalities in economics, and it leads my client to think of his firm's approach to marketing as "sustainable marketing". He insists that the math around his marketing work this way: over the time period of 5 to 10 years, the marketing must create more value than it costs including the attention-cost it incurs to every recipient.

Damn. That is one heck of a high standard!

Of course, I love it. It's what I would call brand marketing. In my client's case, the main gifts are community participation and "code leadership", which is like thought leadership but using software development skills to solve problems for a target market.

Here's the catch, and it's a big one. It took 3 years of relentless investment -- with only a very modest bit of visible movement in the leading indicators of marketing success -- before there was a tangible return on the investment. I have friends who run marketing firms and they do everything in their power to show tangible results in 3 months or less because they know many of their clients will churn if they don't. Very, very, very few people are 3-years-patient with a marketing effort.

My client went from getting 6-figure projects via word of mouth and repeat clients to being begged to bypass the RFP process on a 7-figure project and being on a microscopically short shortlist for several other 7-figure projects. Those other proposals also turned into sales, thus the tripling of booked revenue in a few months time. The timing of the revenue was more a factor of end-of-year budget dynamics than the marketing itself, but the magnitude of the increase was a direct result of the marketing approach.

Imagine that there's a "secret room" where big things happen. Big contracts, big money, etc. (I know, I know; if I just read that sentence in someone else's email without the context I provided above I'd think it's bullshit too.) My client felt like overnight he got invited into this secret room in his market. It was part invitation, and mostly earned access. He and his firmed earned it with his sustainable marketing approach -- with relentless, generous, focused investment over a longer period of time than the COVID-19 pandemic has been happening (as of the time of writing, obvs).

The marketing approach I'm talking about here is coherent with my client's normal mindset of investment and long-term thinking. This mindset shows up in other areas of his business too. It wasn't really a stretch for him to approach marketing this way, in fact he tried other more conventional approaches that weren't coherent with his mindset and rejected them on that basis.

It feels like LinkedIn broetry every time I say it, and yet I can't stop saying it: the best way to seek average results is to do average things. If you're getting below-average marketing results, then doing average marketing will be an improvement for you! Shamelessly seek average, my friend, and feel good about it! But my client here is a good example of what's possible with a not-average approach.

Is moving from referrals and 6-figure projects to being begged to do 7-figured projects after a sustained, focused, risky 3-year investment an average result for the brand marketing approach? I wish I knew. I wish more people would try it so I could know. But then, maybe over time that would make the brand marketing approach average and unremarkable. :) I guess we'll have to just dwell in this uncertainty and let fortune favor the bold.

-P

[^1]: If you've ever thought of demographic ads (Facebook/Instagram, etc.) as annoying interruptions, it's fun to think about that from a different perspective. Consider that many FB/Instagram users are there to waste time. Sure, not all of them all the time, but let's allow that some/many are there to waste some time. In that context, the in-feed social media ads they are seeing are less of a waste of their already-wasted time than a broadcast email to someone who has opted in to a list but doesn't get value from that particular email! That's a mind-bender to me, but I can't deny that it's at least partially true, or true under some circumstances.