Virtuous and vicious cycles
Anyone with a background or even minimal experience in finance knows about compounding, when effects add to themselves. Save some money in a bank account with interest, and compounding means that the extra earned interest also grows. Rack up some credit card debt and the interest on the debt also collects interest. This is the power of compounding, to magnify something that’s already there.
In business, compounding exists not only as a financial concept, but as an operational concept in many realms. A PR crisis becomes a crisis by the process of compounding, when audience feedback loops feed on each other. A product becomes a fad or a craze equally by the power of compounding.
Here’s the thing about compounding, about what are also termed virtuous or vicious cycles – they’re very hard to stop once they reach critical mass, once they develop incredible momentum. You’ve heard of companies being trapped in downward spirals, where cutbacks & layoffs reduce profitability which in turn lead to more cutbacks.
Cycles like this can appear to be positive as well, even when the net effect is a negative impact on your business. You’ve heard of companies being carried away by their successes, unable to scale quickly enough to make the most of their momentum, such as the early, whale-filled days of Twitter. Plenty of small businesses have discovered the hard way through daily deal and coupon programs that an attractive deal can do more harm to your business than good.
In physics and science, these sorts of phenomena are called feedback, where the effect becomes a cause in the next effect. It is to science that we must look for an answer for interrupting a feedback loop, especially one that’s decidedly negative. In order to stop a feedback loop, a runaway vicious cycle, it’s not enough to simply stop whatever you’re doing that’s causing it. Feedback loops sustain themselves after they reach critical mass. In order to shut down a feedback loop, you need to create interference that directly opposes the loop.
For example, with credit debt, it’s not enough to simply stop spending to get a compounding debt under control. In order to arrest the vicious cycle, you must actually pay more money than you owe in a minimum installment payment to start reducing it. To contain a PR crisis, it’s not enough to simply deny the problem or pretend it doesn’t exist – the best examples of PR problems brought under control involved very aggressive outreach and communication to mitigate the crisis.
If you want to create a positive feedback loop (which most marketing folks enjoy calling “going viral), look again to basic science. In order for a feedback loop to sustain itself and grow, every action taken must amplify the original signal. This goes beyond just “sharing” into having mechanisms built in for sharing that are triggered in every single repetition. The classic example of a true virtuous cycle I like to highlight is Hotmail, where a direct call to action in every message sent by the service encouraged additional users to join the service. One of the key mechanics behind all of the popular, successful daily deal/daily coupon services is that in order to get a deal or improve a deal, a minimum number of people must participate in it, thus creating a feedback loop.
Virtuous and vicious cycles are powerful phenomena. Before tampering with either, make sure you understand the basic science and mechanics behind what you’re confronting so that you know what you need to interrupt or reinforce to achieve the goals you’re aiming for.
If you enjoyed this, please click here and share it with your network!
Want to read more like this from Christopher Penn? If so, please subscribe right now!
Click here to read my blog on Google Currents on your mobile!
Marketing White Belt |
Watch me speak:
Attend virtually! |
I recommend: for Twitter audience building. |
What Thorium Ore Can Teach You About Profitability
Everyone is always chasing new. There’s a ton of competition in new. Whether it’s social media, mobile marketing, or World of Warcraft, people love new stuff. They’re starving for new stuff constantly and sometimes are willing to pay top dollar for new stuff.
In World of Warcraft, there’s a profession called mining which involves picking up rocks off the ground. (not exactly like real mining) In each new version of the game (currently Cataclysm), there’s a new set of rocks that are highly desired (currently Elementium and Pyrite). Competition is fierce for them, because you can melt them down and turn them into armor, weapons, and other trade goods.
At any given time, there are thousands of piles of the latest and greatest rocks in the in-game marketplace.
However, there’s an equally powerful market in-game that is woefully underserved: the rocks from 3 game versions ago.
Let me introduce you to Thorium Ore, found in lovely places like Silithus. Thorium Ore is boring. It’s in remote, unexciting zones.
Here’s Silithus, a part of the virtual world where thorium ore is plentiful, if filled with very large insects. It’s not a fun or exciting place to be. No one goes there. No one wants to go there. Certainly, no one wants to be mining there when there are the new shiny rocks to be had elsewhere.
Here’s the secret of thorium ore: for players at lower levels, it’s one of the most needed metals in the game to level your profession. No one wants it. No one wants to go get it. But a whole bunch of people need it, and as a result are willing to pay for it in the in-game market at a premium price, a price that is almost double what the new, shiny rock is worth! This is the recipe for incredible profit: high demand, no supply, no competition.
As everyone madly rushes to become a social media guru or a mobile marketing expert, ask yourself this: what other areas of marketing and media are being left underserved? What other aspects of your trade, your industry, your niche are being neglected as everyone makes a mad rush for the shiny object of the day? It is there you’ll find some amazing profitability because chances are, you’ll have almost no competition, and as long as there’s still need, the price is yours to name.
If you enjoyed this, please click here and share it with your network!
Want to read more like this from Christopher Penn? If so, please subscribe right now!
Click here to read my blog on Google Currents on your mobile!
Marketing White Belt |
Watch me speak:
Attend virtually! |
I recommend: for Twitter audience building. |
How to Set Up Facebook Insights For Your Website
Facebook announced not too long ago that its Insights analytics would be available for regular websites in addition to its very popular Pages. That day has come (actually, it came a little while ago), but it’s one of those features that tend to get glossed over since it’s neither sexy nor interesting to implement. Technically, it’s one of those features that requires little more than copy/paste skill to implement, so it’s something that your average social media guru can’t charge for, thus it gets very little love.
Well, here’s the love. Let’s walk through how to turn this simple feature on and see what it can do for us. First, go to the Facebook Insights dashboard.
- There’s a fairly obvious green button in the upper right. Click it.
- Choose the root domain you want Insights for, like your blog or your company’s website.
- If you want more than just you to have access to the data, link it to a Facebook Page. All of the admins of that page will then get access to the Insights For Your Website feature.
- This is the least obvious part and it’s poorly labeled. Copy the meta tag that appears at the bottom to your clipboard or a text file.
Don’t hit the Get Insights button yet!
Next, go over to your website. Open it up in an HTML editor or in your CMS dashboard. For example, in WordPress, use the built in editor or your theme’s control panel. Find the header file or your theme’s options for integration.
Paste the meta tag just above the closing tag. Hit Save or do whatever your website requires you to do in order to get something committed.
Now, go back to Facebook and hit the Get Insights button. If all goes well, you’ll see your website at the top of the Insights dashboard.
So what do you get for all this trouble? Well, assuming you have a Facebook Like button on your website, assuming that people are sharing your content (blog posts, etc.), you’ll be able to see how your site’s content interacts with Facebook. For example:
There are a lot of different metrics to look at, and perhaps another time or in a webinar we can examine them in more detail, but for now, pay attention most to the top line.
72 sharing actions of some kind took place in the last 30 days. That had a multiplier effect of 225x and turned into 16,228 impressions on Facebook – that is, my content was seen on Facebook 16,228 times. In turn, those impressions generated 104 clicks back to my website.
Why is this important? Facebook is showing me something that no one else has yet – the social feedback loop. I create content, it’s shared, it’s seen on Facebook, and then that additional exposure loops back to create more traffic for my website. That’s a huge, huge deal. It tells me how influential my content is – 225x – not me or my network per se, but how influential the information is itself, because the more influential it is, the bigger that feedback loop will be.
Now, what should I do? Encourage more Likes and Shares of my content. Take note of that wording carefully. I’m not encouraging likes of me, I’m encouraging likes of my content, because that’s what powers the feedback loop. The more I can seed the initial part of that feedback loop – the Site Actions – the more it’ll create everything else. I’ve made some modifications on the site to hopefully help with this, including setting up a sharing link that will work even in RSS readers and email newsletters, so please, if this article was useful, share it:
If you enjoyed this, please click here and share it with your network!
Want to read more like this from Christopher Penn? If so, please subscribe right now!
Click here to read my blog on Google Currents on your mobile!
Marketing White Belt |
Watch me speak:
Attend virtually! |
I recommend: for Twitter audience building. |
Write what you do not know
Write what you know is one of the most often repeated cliches when it comes to content creation. There’s good reason for it – by sharing the knowledge and experience you have, you can contribute more than, say, idle speculation or uninformed opinion (though there’s plenty of both online). Writing what you know is a great place to start.
There will come a time, however, when you find that you’re going in circles. There will come a time when you find that you’re not creating anything new, but saying the same things over and over again. If you’re a blogger and you find that you’re having to Google whether you’ve covered a topic already, then you’re at that point. If you’re saying the same thing over and over again on Twitter, then you’re at that point.
Once you’ve reached the re-runs stage of your content creation, you have to be brave enough, bold enough, and aware enough to shatter the “write what you know” truism. It served you very well up to this point, but in order to grow, you have to transcend it and start to write what you don’t know.
How do you write what you don’t know? Research. Investigate. Explore. Adventure. Find a direction and set sail for it, taking along all of your audience on the quest to new lands. A good number of them will go along with you because frankly, if you’ve only written what you know and you’re into re-runs (or worse, re-runs of re-runs rehashed), they’re looking for a new adventure too.
I’ll give you a personal example. Right now I’m investigating and learning about Like Gating on Facebook – content that displays differently depending whether you’ve Liked a page or not. I’ve got the very basic version down (it’s a PHP include at its core) but now I’m exploring to see what other data is available along with the basic method. By no means am I an expert in the topic or even a competent practitioner. I’m just starting out in this research, but what I’m finding will definitely be worth sharing as soon as I’m able to adequately explain it to myself.
The process of exploring, of writing about what I don’t know and learning what I don’t know, is reinvigorating. It’s opening up new ideas, new ways of looking at something, challenging old beliefs, challenging old cliches, and I love it. As Stephen K. Hayes says, it’s far more enriching to explore new ideas than it is to defend old answers.
What are you exploring now? If you’re stuck in a rut, if you’re stuck looking for things to share, what could you be exploring?
If you enjoyed this, please click here and share it with your network!
Want to read more like this from Christopher Penn? If so, please subscribe right now!
Click here to read my blog on Google Currents on your mobile!
Marketing White Belt |
Watch me speak:
Attend virtually! |
I recommend: for Twitter audience building. |
Premium Content Newsletters: A Case Study
Two months ago I set out to try an experiment, using the concept of premium content in my personal newsletter. I announced on March 4, 2011 that I’d be offering premium content to newsletter subscribers who completed their profiles with all required fields. I wanted to see what would happen in terms of newsletter subscribership and data completion.
Using the same two month period before and after the announcement, I had 922 new subscribers in the period 1/4/11-3/3/11, and 617 new subscribers in the period 3/4/11-5/2/11. It’s important to note that for about 2 1/2 weeks in the latter period, I was doing none of the usual things I do to promote the newsletter and the web site because I was overseas. When you take that into account, the drop in subscribers is about what you’d expect, and more importantly, it occurs during that time period, so premium membership is not a causal factor.
Using Blue Sky Factory’s excellent Publicaster software (disclosure: I’m an employee), I pulled the number of people who updated their profiles more than 24 hours after they were created (indicating that someone took the effort to come back and update their profile). This data set excludes people who opted out, unsubscribed, or bounced; it’s active subscribers only. Let’s see how premium content is working, two months later.
First, how complete is my subscriber information? I have four fields that I want people to fill out – first and last name, title, and company. A profile that has only an email address has a score of 0. A profile that has all four fields and an email has a score of 4. Profile completeness is measured as a percentage of completed data.
- Percentage of Profile Completeness Prior to Premium Content: 49.02%
- Percentage of Profile Completeness After Premium Content: 84.72%
The availability of premium content increased profile completeness by 72.83% – a huge jump for anyone interested in improving the data that’s available to them as marketers.
Next, how many people, once they learned about premium content and what was involved, came back to update their profiles? I did a quick benchmark to see what percentage of my subscriber base came back naturally prior to premium content as a baseline.
- Percentage Of People Who Came Back To Update Their Profiles Prior To Premium Content: 8.02%
- Percentage Of People Who Came Back To Update Their Profiles After Premium Content: 36.63%
Premium content increased the number of people who came back to update their profiles by a whopping 356.73%. If you’re looking to get people more engaged, this is definitely one way of doing it.
Let’s next take a look at is the age of the profile update – that is, how long on average is it between signup and profile update?
- Average Age Of A Profile Update Prior To Premium Content: 23 Days
- Average Age Of A Profile Update After Premium Content: 110 Days
This is very, very significant. Normally on a mailing list, you’d expect a profile update age to be about the frequency of a list. If you send monthly, you’d expect the average update interval to be monthly, as folks naturally come back to update their profiles.
What’s happening with premium content is that it’s bringing back much older parts of the list, people who are well outside the average updaters. It’s reactivating, re-engaging, and refreshing parts of the list that may have not indicated they were even reading the newsletter. If you’ve got a list that’s not performing, this would be one way to try resurrecting it.
Finally, how did list performance change? I took a look at the February and April mailings as benchmarks. Overall open rates in February were 17.3% with a 3% clickthrough rate. Overall open rates in April were 12.1% with a 1.7% clickthrough rate. That doesn’t tell the whole story, however. If we look at the subscribers who had completed profiles as a percentage of the audience, we find something interesting:
- Percentage of Profile Complete That Opened February: 16.36%
- Percentage of Profile Complete That Opened April: 25.09%
The folks who indicated they wanted premium content increased by 53.36% from the February to the April mailing. Premium content provided additional incentives to open and read the newsletter.
Does premium content work? Yes. There isn’t a single metric I’ve examined here that indicates otherwise. Should you be doing it? If you value any of the information I’ve shared here – more information about your subscribers, increased engagement, better data, more active list members – then yes, you should be doing it. Does your email service provider support it would be the better question, I suppose. Certainly Blue Sky Factory does, and I or one of our team members would be happy to help you set up a similar system if you’re a customer.
Finally, I would be remiss if I didn’t invite you to subscribe to the newsletter so you can see premium content in action.
If you enjoyed this, please click here and share it with your network!
Want to read more like this from Christopher Penn? If so, please subscribe right now!
Click here to read my blog on Google Currents on your mobile!
Marketing White Belt |
Watch me speak:
Attend virtually! |
I recommend: for Twitter audience building. |
Book Me to Speak
Got an event coming up? Learn why you should book me to speak!
• Download my 2012 speaking kit
•Book me to speak now!
Get Marketing White Belt
Grab my new book, Marketing White Belt: Basics for the Digital Marketer, and get better at marketing right now!
Blog Delivery
Things I recommend:
I recommend:
for Wordpress themes like this one.
I recommend:
for Twitter audience building.