What is the expected value of that?

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When making any kind of financial decision, it can be interesting to look at the “expected value” of whatever you’re looking to buy. This can work particularly well for things like raffles and your sales.

Raffles

With a raffle it’s pretty simple. If you have a 1/100 chance of winning a $500 prize, the expected value of your ticket is $5 (1% of $500). I would guess that the cost of your raffle ticket is somewhere above $5 so they can make a profit.

It works on larger things too. If Publisher’s Clearinghouse is giving away $10M, and your odds of winning are 1 in 140M, then the expected value of your entry is around $0.07. If you have to use a stamp to send in your entry, it’s not a good decision for you to make (not to mention the value of your time relative to $0.07).

Sales

Expected value can help with forecasting sales numbers, too. Each week at GreenMellen, Ali and I spend a bit of time working on our “scorecard” for the past week, tracking key metrics that we want to watch as an agency. One of the items we look at is the weighed value of all of our leads, or our total expected value.

For example here, if we send out a proposal for $10,000 and we think we have a 75% chance of winning the work, then our expected value for that job is $7,500 (75% of $10,000). That doesn’t help much for one job, because the real value is either going to be $10,000 or $0.

Where it gets useful, though, is when you have a lot of potential sales in front of you. If you have 20 or 30 leads you’re working on, and you have fairly accurate estimates for the odds of winning each one, your total expected value should be pretty close to accurate.

You can see a bit more about this in a recent presentation that Ali and I did where we showed the items on our scorecard. If you don’t want to watch the full video, you can find the expected value piece around the 10 minute mark.

Follow-up is crucial

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A few years ago, we were all working in our office when a local company stopped by with a box of bagels and coffee for us. We didn’t know them, but they were reaching out to local marketing companies to let people know they exist (they were photographers, so potentially a good partner). They seemed nice, and it was a sweet gesture!

That afternoon, I connected to a few of them and looked for a time when we could chat further. They never replied, and never reached out separately. I still don’t understand how they were so organized and thoughtful to bring the food, but then completely disappeared.

I’d love to chat

Another time, also a few years ago, I attended a business luncheon where one of the sponsors was a local independent realtor. While we don’t often work with realtors, I certainly enjoy making those connections as you never know what might happen. In fact, she said “Please connect with me on LinkedIn and I’d love to meet any of you for coffee”.

I did, and suggested a few days/times, and… nothing. I’ve seen her at other events and we’ve had good conversations, but she never replied to that message so I didn’t push it. Again, though, this was someone that went though intentional effort and expense to create these connections, and then failed to follow-up

Follow-up can be bad

Of course, repeated follow-ups can be bad. I get spam daily from people that say things like “Hey, just bumping this back to the top of your inbox so you can call us for all of your blah-blah needs!“. That’s spam, that’s annoying, that’s bad.

It can also be a little frustrating at times. If we’re working with a client and need a photo from them, we trust them to send over the photo when they get around to it. Many times, of course, we have to follow-up a few times with reminders. It’s not that they’re intentionally forgetting to send, but in most cases it’s a chaotic inbox that makes things hard to keep up with.

There is one person I know that when I email her, if I don’t hear back within a few hours I just need to try again later. Her inbox is so out of control that once the message gets buried behind a few more, she’ll never get to it. It’s not a good look.

In the end, though, the fact that so many are bad at following up has been a great thing for our business. Simply keeping up with potential (and existing!) clients can put you at a whole new level.

Two tips

I’ll leave you with two quick tips, one from each side of the table.

For you to not be a slacker like the examples above, inbox zero is likely your best bet. Even if you can’t do that, if you’re able to stay organized, you’ll take care of what’s important. Really if you can just control your inputs, you can often stay on top of things.

To help with others, the “snooze” feature in many email tools can be your friend. When I send an email outside of my team, I often send it and then snooze the thread for a few days so it’ll pop back into my inbox as a reminder to check back in again. Depending on the situation, your task management system may do the job too, as you’ll continue to have that open loop to finish a task that requires your client, and you can just kick that forward a few days at a time.

What tips do you have to make sure you stay on top of the replies you need?

Be predictable, not polite

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When you’re driving a car, the best thing you can do is to be predictable with your actions. If others know what you plan to do next, the odds of staying safe remain quite high. Conversely, if you do unpredictable things, even with good intentions, things can go wrong quickly.

As a quick example, see the car in this gif stop suddenly to try to let someone merge in, nearly causing a major accident behind them:

The same goes for your business, and it’s why franchises tend to have such rigid rules for their stores. The idea is that if you visit a franchise location of something like a McDonald’s, you know what you’re going to get. If each store tried to customize everything, you’d have a hard time knowing whether the one you are stopping at will have what you need.

In other businesses, processes can be the key. If we just tried to put together a website without a plan and process, it likely wouldn’t go well. By having a predictable process, we can ensure an amazing outcome.

Process != Creativity?

To some, having a predictable process can limit creativity, but I disagree with that. It can if you’re not careful, but a solid process should help to encourage creativity along the way. Using the GreenMellen website development process as an example, it helps ensure that nothing gets overlooked, but still allows for full creative freedom at every step.

Our outcomes are predictable, but it’s the process that gets us there.

Predicting rain doesn’t count

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If you’re a weatherman, the ability to predict the rain is important. For the rest of us, the actions we take once we know it’s going to rain are really what matters.

As Warren Buffet has said:

Predicting rain doesn’t count. Building arks does.

The Nintendo Wii

Back in early 2012, I remember a quiet growing buzz about the upcoming Nintendo Wii. Nintendo was coming off the rather lackluster GameCube, and the early buzz about the Wii was huge. However, it was only really being discussed in video game message boards, and the world wouldn’t find out about it until later. I remember thinking that someone should buy Nintendo stock and it’d likely do well. I was right, and their stock went from around $12 in 2012 to a peak of around $57 in 2018. That’s a nice return!

The problem is that I didn’t buy any. I predicted the rain, but didn’t build an ark.

It’s easy to make guesses about the future, and I do that quite a bit on this blog. For it to really count, though, you need to put your money where your mouth is and build some arks.

Perceived value is all that matters

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When trying to sell your product or service, the value that it provides to your customer is essential. The problem is that the true value is largely irrelevant — it’s all about the value that your customer perceives.

The idea of Exchange Theory is that the perceived value of an item must be more than the perceived cost of that item. I heard David Salyers speak recently (he’s the former VP of Marketing at Chick Fil-A), and he summed it up nicely:

Customers want a value imbalance in their favor.

Value and cost are subjective

It’s easy to think of money when it comes to cost, but both value and cost can be seen in a variety of ways:

  • Time
  • Money
  • Pleasure
  • Effort
  • Power
  • Status
  • Love
  • Etc…

When we’re building a website for a client, their main cost is financial. However, it’s also going to take a good bit of time on their part, and that certainly weighs heavily into their decision as well.

The $5 bottle of Coke

Situations can matter a lot too. Years ago, our family spent a very hot day walking around parts of Stone Mountain. At some point we stumbled upon a tiny gift shop, and we were parched. They had a cooler with normal 20oz bottles of Coke, but they sold for $5/ea. That was $20 for the four of us, and it was the easiest money I ever spent. We were so hot and thirsty that the value of those Cokes was sky high.

Whatever it is that you’re trying to sell, you have two levers you can play with. You can work to make the perceived value higher, or make the perceived cost lower. As long as customers perceive things as being imbalanced in their favor, you’ll win.

That’s not my job

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A few weeks ago, we bought a Jeep Grand Cherokee for my wife. It’s an excellent vehicle, but I noticed something interesting during the sales process.

At one point they made a small financial miscalculation, but the finance manager ate the difference to make sure they stood by their word, which was appreciated. That was just good customer service. The weird part was the tires.

When we took it on a test drive, there were various lights on the dashboard warning about low tire pressure. “No problem”, the salesman said, “we’ll take care of that”.

So we got back to the dealership, and while we were doing the paperwork they took the car to the back, cleaned it up, and then brought it back to the front so it was ready for us. When we left, all the “low tire pressure” warnings were still on.

Now, this isn’t a big deal — we stopped by a gas station and filled them up, and all is good, but it made me think about how this happened.

My job?

When we initially got back after our test drive, one of their employees took the car to the back. Then, a little while later, one of their employees moved the car back to the front. It’s possible they didn’t notice the error messages, but Jeep makes those warnings very red and obnoxious, so that’s not the case. I think the problem is that it “wasn’t their job”.

I imagine the guy bringing it back up to the front saw the warning lights and thought “Steve was supposed to fix that. Oh well, it’s on him, not me.“

Employees taking ownership of “other” problems is key to a successful business. It’s similar to skipping things that they client didn’t ask for, but you know that they need.

Seth

Two of Seth Godin’s old posts touch on this a bit.

Back in 2010 he had a very short post about authority vs responsibility:

Many people struggle at work because they want more authority.

It turns out you can get a lot done if you just take more responsibility instead. It’s often offered, rarely taken.

And then in 2013 he talked about two ways organizations can promote responsibility:

There are only two choices available to any large organization:

1. Hire people who make no original decisions but be damn sure that if they are going to run by the book, the book better be perfect. And build in reviews to make sure that everyone is indeed playing by the book, with significant monitoring and consequences in place for when they don’t.

2. Hire people who care and give them the freedom and responsibility to act. Hold people responsible for the decisions they make, and trust their judgment.

The tires weren’t a big problem, but the lack of employees willing to step up and take action for something that needed to be done (even if it wasn’t on their list of responsibilities) should be a major concern for any company.

There is no magic bullet for your business

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As much as we want there to be one, there is no magic bullet for your business to make it succeed. The desire for one is what leads to all of the MLMs and online marketing sages that can give you “the secret” for just $299.

A great example of that is this video from Mike Winnet showing how “contreprenuers” work to sell you their magic secrets:

Stick to the basics

The real magic is just being consistent. A good example is a client of ours that we started working with last year. We performed some keyword research and began publishing regular content for them. There was nothing magical about it, and it wasn’t a ton of content, it was just steady work that built over time. Here is his traffic from Google for 2020:

The same holds true for any of your marketing ventures. Publish consist emails, be active on social media, and continue to make improvements to your website.

You’ll have the occasional post or video that goes viral, but that’s rare and random. Plan for the future, do the work, and the results will always follow.

Show people their super power

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In his book “Nothing you don’t already know“, author Alexander den Heijer shares a simple but powerful statement:

You don’t inspire people by revealing your super powers; you inspire people by helping them reveal their own super powers.

This applies to inspiration, but I also think it can apply to your website and marketing.

As explained by Donald Miller in “Building a Storybrand” (and virtually every time he speaks), your goal is not to be the hero to your clients. Your goal is to be their trusted guide, and help them to be the real hero. Help them find their super powers.

If you can make that happen, it’ll be hard to ever lose that trust.

Problems come from ignored complaints

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Businesses hate to see complaints, and we all know that. You work hard to put something out into the world, and then someone reaches out to explain why they don’t like it. As bad as a complaint may feel, though, ignoring it could be far worse.

As Nico De Bruyn said in We’re All Marketers:

“Keep in mind that a complaint only becomes a problem if you decide to ignore it.”

I think this is why so many people like to look at the bad reviews of a business, so they can understand how the company responds to problems. Personally, even if a company has a 4.8 rating, I want to see what happened to those few disappointed folks.

  • Did they misunderstand something?
  • Did the company mess up?
  • Did the company fix their mistake?

Some businesses make mistakes and try to bury them, while others try to learn from them. It’s pretty obvious which ones you want to partner with in the long run.

Email “thanks” versus a Slack emoji

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I recently heard an argument that email should continue to fade away in lieu of apps like Slack, which make for much more seamless communication. It’s a good consideration.

However, part of his argument related to acknowledging receipt of a message or small task. If you send someone an email with info, they’ll often reply with a short message like “thanks”, which adds a good bit of overhead to deal with a bunch of “thanks” emails throughout your week. However, if you send that same info on Slack, they might give your message a thumbs-up emoji to acknowledge it. That’s not bad, but there is a big difference.

With email, you’ll see the response.

With Slack, it’s easy to miss. Those emojis don’t give a notification, so you have to dig in a little bit to see if there was a response.

Which is better?

It’s hard to say. My initial response was email, as it’s a clear indication of a response that you won’t miss. However, it’s also a handful of clicks to open, view, and then archive the email away. With Slack, you just need to glance at the message to see the status.

This may seem trivial, but we have dozens of these types of conversations each day. Even at just a few seconds each, it adds up to many hours over the course of a year.

I think the answer here is situational, but I’m leaning more toward Slack for more of these kinds of things. This ultimately comes down to some companies that are creating policies of “no internal email” — if you need to talk to someone on your team, use Slack. I’m not fully there yet, but I get where they’re coming from. What do you think?