In my last post about your Marketing Backlog, I talked about how to organize your backlog so it’s easy to prioritize new work and also effective for showing alignment with executive-level direction. I gave an example of how a backlog might be organized if your executive-level direction was simply some high-level goals regarding new customer acquisition and existing customer retention. This time, I’ll spend some more time discussing backlog metrics related to strategic goals.
Before we get too warm and fuzzy about “strategery” (and my spell-check doesn’t know execu-speak so it’s freaking out about that word), let me give you the definition I like to use:
Strategic decisions, as opposed to tactical, require a significant investment of time and/or resources such that changing such a decision or direction would incur great cost in time and/or resources and also significant opportunity cost.
That’s an amalgam of various definitions I’ve found, sprinkled with some of my B-school studies, and a dash of reality from working in several large corporations. With that bit of wordsmithing out of the way, let’s continue.
One of the most interesting discussions I have with people in my Agile Marketing Boot Camp class is about the famous (infamous) Coca-Cola 2020 marketing strategy. We watch Coke’s overview video in class and then discuss some of the interesting connections with Agile Marketing – Coke emphasized a lot of the same principles as the Agile Marketing Manifesto even though it came out a year before. If you have a few minutes, watch the video on YouTube (http://youtu.be/LerdMmWjU_E) and then jump back here.
The part I’m going to touch upon here is their 70/20/10 marketing investment strategy. If you didn’t have time to watch the video, here’s the gist:
- They will spend 70% of their budget on low-risk, bread-and-butter marketing tactics and campaigns that are responsible for the bulk of their revenue goals.
- They will spend 20% of their budget on ideas that extend the bread-and-butter in new directions, finding new ways of doing otherwise familiar things.
- They will spend 10% of their budget on ideas that are explicitly experimental and really push the boundaries.
The other complementary part is how they invest their time across those same buckets:
- The 70% bucket only uses up 50% of their time. After all, it’s stuff they already know how to do and do it well so it’s somewhat easy.
- The 20% bucket uses up 25% of their time. It’s proportionately harder to execute as it involves new work.
- The 10% bucket also uses up 25% of their time. It’s the proportionately most time-intensive investment as it involves exploring new concepts, potentially from the ground up.
What’s really powerful about this strategy is that it’s self-sustaining. The 10% experimental stuff will produce a lot of duds, but it will also uncover some gems and give the organization solid ideas to use in the 20% extension space. And the stuff that’s a “novel extension” this year will likely become part of the low-risk, bread-and-butter 70% next year. Brilliant, huh?
If you adopted a similar strategy (and a LOT of class attendees really like it so kudos to Coke), how could you actually do it? Or in other words, how could you manage marketing operations to ensure you were investing your budget along the 70/20/10 split and your time along the 50/25/25 split?
The traditional approach to marketing would have you do the following:
- In Q4, start creating a marketing plan for all of next year.
- Try to think of campaigns to fill up the three buckets. It’s going to be easy to think of all sorts of novel and experimental stuff a year ahead of time and under intense pressure, right?
- Fiddle with budget and headcount allocations until you kid yourself into thinking you really will spend your budget and time along the 70/20/10 and 50/25/25 splits respectively.
- At the start of next Q4, look back and do a post-mortem on why you were so horribly far-off from the strategic allocations. You will naturally conclude that you need to do even more rigorous and detailed planning for next year. Because doing something wrong but doing it even harder will make it better, right?
If you already know how Agile Scrum works, you can probably guess how an Agile Marketing team would approach this:
- Create marketing backlog buckets (or “themes”) called “bread-and-butter”, “extension” and “experimental”.
- Use your team’s relative sizing estimates and velocity to track how much time your team is spending on different buckets. The marketing owner adjusts the backlog from sprint-to-sprint with an eye towards achieving the 50/25/25 split.
- As your team delivers work from each bucket, keep track of actual spend from sprint-to-sprint and adjust with an eye towards achieving the 70/20/10 split.
- Plan for 70% of the budget and 50% of time for the year up-front since it’s the same bread-and-butter stuff your team has done before. The rest of the budget and time planning is done just-in-time before the work gets done.
- As great ideas with proven metrics appear, start to move them from the “experimental” bucket to the “extension” bucket and from there to the “bread-and-butter” bucket.
How to keep track of actual spend? Like my previous post explained, you can simply add a metric to your scrum board next to each backlog bucket and update it periodically – every sprint seems like an easy choice. If you’re using an electronic tool, this feature most likely doesn’t exist, but you can easily create a campaign dashboard and link to it from your scrum tool. Not quite as good as having everything in one place, but at least it’s only a click away.
See how much easier it is to actually plan, track and adjust your marketing operations to a strategic plan using Agile Marketing versus the traditional approach? Another great thing to point out, the last bullet above can happen from sprint-to-sprint – unlike traditional marketing planning you don’t have to wait until next year’s planning cycle to take advantage of great new ideas.
Next time, I’ll go into a more detailed example of how to add tactical metrics. Until then, what do you think of the 70/20/10 strategy? If you’re not using Agile Scrum, do you think you could do it?