Search Results

I’ve run more than fifty primary customer research exercises and have probably made every mistake there is to make. This is one of those tasks that seems simple on the surface but the devil is in the detail. I want to share my checklist that any marketer or strategy consultant should use when preparing to run customer research, focusing on online, quantitative surveys. This guide is intended for customer research to inform internal choices about strategy and tactics. If you are creating a survey to generate website content or PR coverage then some of the steps below may not apply – but I think most are helpful nonetheless. If you have any to add – please let me know, I’m sure that the list can always be improved. How to run great customer research Planning your survey Be clear on the hypotheses you’re looking to test and ties to specific questions to ensure you’ll get the answers you need. Helps to avoid surveys which are too long with sprawling logic Start with some small-scale qualitative research: a combination of one-to-one discussions and focus groups to inform questions and response options for your larger sample (expensive) quantitative research. I can highly recommend Kathryn Coles at White Rabbit Research for any focus groups you are looking to run. Don’t outsource the design of your survey script to an agency or someone who has never written customer research – crafting a survey script is a skilled job, and it is much harder to edit a lengthy script that you aren’t happy with. As a minimum, write the questions and a starting list of response options yourself. Targeting your survey When researching to understand customer acquisition behaviour, I normally exclude those customers whose last purchase is not within recent memory. Humans unfortunately have short memory spans for the finer details that you will be interested in capturing. The definition of ‘recent’ will broadly correlate with the significance of the purchase: e.g. the last week for purchasing a cup of coffee, but the last three years for selecting an ERP system. Target your survey at both customers and non-customers – this will provide invaluable context to the perspectives of your own customers. You’ll typically need to use a panel provider to reach non-customers. Decide the target sample size based on the statistical significance you aim to achieve and the number of ‘cross-tabs’ you want to analyse your data by. The rule of thumb is that for most businesses, where there is a large group of potential respondents (say more than 50,000), that you need a sample size of 380+ for a 95% confidence interval with a 5% margin of error – you can use one of many online calculators to help with this. If you want to introduce cross tabs then each subset of sample within the cross tab needs this sample size e.g. regional data, gender, age etc. That’s why most consumer surveys start at a sample size 2,000 eg to allow segmentation into five age groups when reviewing responses. If you are running a survey with senior B2B decision makers, I would be cynical about using large B2C-focused panel providers. Whilst they might ask their members about their job titles, they will do very little validation. I’ve seen panels with a surprisingly high proportion of Chief Executives! Instead you can use one of the expert network providers such as Third Bridge or GLG. You will pay a premium per respondent but I’ve found the quality to be much better. Designing your survey questions You will typically need a handful of screening questions at the start of any survey, to ensure that you are reaching your intended respondents. These are also an incredibly valuable way of understanding ‘incidence’ among the population. Make sure your panel provider sends out the survey to a representative sample, then when you ask a question like ‘do you own’ or ‘do you use’, the responses will give you a measure of incidence. As a bonus, many panel providers will not charge you for these initial screener questions. For many products or services, both B2B and B2C, include a screener question to confirm that the respondent was the decision maker in their business or household for the most recent purchase that you intend to ask about. Focus on actual, recent behaviour as opposed to expected behaviour/intentions – my own experience and lots of well documented research says that our ability to predict our own behaviours as humans is pretty limited and we end up giving the answers we think are expected. Ask open questions – in other words don’t lead the witness. This is a common issue I’ve seen with draft scripts. Avoid framing or anchoring in your question if you want valid answers. A fairly standard question that I include is around provider awareness and usage – a list of providers, with options for: ‘I’ve never heard of this provider’; ‘I’m aware of this provider but haven’t used them’; ‘I’ve used this provider in the past but not currently’; and ‘I’m a current customer of this provider’. Many survey scripts I see include questions about provider selection criteria – ‘why did you choose brand ABC’. These can be helpful, but I prefer to focus first on purchase triggers - ‘why did you decide to consider purchasing [product/service]’ - and initial research behaviour – ‘what did you do first to find potential providers of [product/service]’. As a marketer, I find these responses more actionable than selection criteria, which tend to be more about the product/service itself than the customer’s purchase journey. Linked to this, you can ask separate questions about why a customer has continued to purchase a product/service from the same provider. The reasons may well be different to those when they first purchased – including asking how hard the customer believes it would be to switch provider. I always include a Net Promoter Score question – for providers that the respondent has recent, direct experience of using. Make sure to follow this up to understand the reasons for high and low scores, and potentially also a free text field for ‘what would provider ABC have to change to achieve 10/10’. Use language your respondents will understand (and test this out) – avoid business jargon (even in B2B surveys) and include definitions for any terms there may be some ambiguity around. Designing your response options Ensure you provide a ‘mutually exclusive, collectively exhaustive’ (MECE) set of response options for respondents, in particular where you will ask them to choose just one response. This is where qualitative research can be a great front-runner to a survey to help inform your response options. Overlapping response options will cause confusion and result in poor responses. Include ‘I don’t know’ / ‘I don’t remember’ as options. You might get slightly fewer usable responses as a result, but you will get better quality responses by excluding guesses; and it is also an interesting datapoint to see whether respondents actually recall the detail you are asking about. When seeking sentiment-type responses (e.g. ‘agree’ vs ‘disagree’), use an even number of response options. When you have an odd number of response options, respondents tend to gravitate towards the middle, ‘neutral’ option as it is cognitively easier for them – remember than even in well-rewarded surveys, most users are trying to complete their responses as quickly as possible. Running your survey You will normally start by ‘soft launching’ your survey to a small set of respondents. Make sure to review the responses carefully, in particular any free text fields, to spot confusing questions, missing response options, and broken survey logic. When asking your question around provider awareness, include some spoof provider names (i.e. make them up) – this is a good way to subsequently exclude respondents who are speeding through the survey. Just do a quick online search to make sure you’ve not accidently come up with a real business name! Ensure you understand the true incentives for panel respondents and that these match with the length and complexity of the survey. If you underpay you risk getting poorer quality responses. A panel provider should be willing to provide this information, and you should be wary if they are not. Include a free text field at the end of your survey asking for any further comments or feedback. This is a useful way to find errors in the survey when you are soft launching. Customer research is an essential input to defining your customer acquisition strategy, and this checklist will help to ensure a smooth process and high quality output. If I've missed any items from your own checklist, please let me know. The one topic I've not covered here is how to test attitudes toward price in a survey, as that is worthy of a post by itself – watch this space. If you’d like to discuss how to run primary customer research for your business, please Contact Me . All views expressed in this post are the author's own and should not be relied upon for any reason. Clearly.

Have you been frustrated by conversions about pricing you’ve had as part of a Management team, or as an investor? Throughout my time as both a strategy consultant and investor, pricing strategy has been a topic that has fascinated me. Whilst I’ve had many conversations with Management teams about pricing, I believe that price has been consistently underutilised as a value creation lever. I’m planning to write a series of pieces on this topic, so I thought I’d start by introducing how I think about pricing, and why it seems so hard to focus on pricing strategy in SME businesses - not least when I still see TV ads for mobile phone contracts and broadband providers hiding a CPI + 3.9% annual price increase in the small print! Why is pricing an attractive value creation lever? There are five key reasons why price should be something that every CEO and investor thinks about when putting together a value creation plan: It can really move the needle - pricing changes rarely require additional costs, so a 1% price increase will be much more meaningful to profits than a 1% increase in volumes, all things being equal. My broadband provider hasn’t given me faster speeds after my 14% price increase earlier this year! There are typically multiple ‘quick win’ opportunities in SME businesses, who have rarely spent much time thinking about price until they start to consider institutional investment. A pricing opportunity review can be very evidence based. You can triangulate between historical customer data, external benchmarks, and primary research . Recommendations can often be proven in a small-scale pilot before being rolled out. There are many common pricing levers between different types of businesses, and consultants who have seen many examples of these working in practice. Such empirical evidence & predictability means that future investors may be willing to ‘pay’ for the benefits of a new pricing strategy even before it is fully implemented. Pricing as a value creation lever blends pure strategy, tactics, and execution – essentially there are lots of different sub-levers available, meaning that you have a high probability of identifying meaningful opportunities in a pricing review (at least enough to justify the effort of the review itself), even if they don’t come from the area you were initially expecting. Pricing is especially important in periods of high-cost inflation/macro-economic headwinds, when other sources of growth will be harder to come by (and potentially when customers are already primed to anticipate some pricing changes). Isn’t this just about increasing prices? Pricing is about much more than headline prices. In fact, I think of it about being about customer value, in other words understanding how customers derive ‘utility’ – value - from your product/service and matching up your pricing model to this. The perfect pricing model is one where every customer is paying the maximum they are willing to pay but not a penny more (otherwise in the long run they will all churn). As the saying goes – “some of your customers would have paid more, the challenge is working out which ones”. This is why at the heart of any pricing review should be a meaningful piece of customer research – to understand how much each aspect of your product/service is valued by different types of customers. As you start to break down your product/service offering into its constituent parts, you can uncover things that you may not even perceive as explicit features of your offering today. For example, having a named account manager, or a fast response to customer enquiries. These previously unrecognised features may be really valued by some of your customers (who are willing to pay more for them) and not at all by others (who risk feeling like they are over-paying) This is why many pricing projects focus on ‘packaging’ – how to create bundles that combine different aspects of your offering that are differentially priced, and appeal to different customer segments. The classic example is the ‘good, better, best’ ranges on supermarket shelves. A lot of pricing value creation can also happen without changing prices or packages at all, but rather by focusing on how your chosen pricing strategy is communicated and executed during the sales process. Are your sales team price getting as opposed to price setting? Pricing reviews often cover areas such as the use of discounts, the incentives of the sales team, or even the utilisation of existing contractual terms such as annual pricing reviews or volume limits. Why is it hard to change pricing? Given the multiple ways in which pricing can be used to create value, why can it be hard to convince Management teams to commit time and money to a pricing review? I think that the main reason is that pricing can be an intimidating subject, for a few reasons: It is often new and unknown for SME management teams (the flipside of there likely being multiple ‘quick win’ opportunities) It can feel ‘anti-customer’, which is particularly difficult to reconcile for founders who are often incredible customer advocates. This is a good spirit to retain so that you avoid pricing changes that might yield benefit in the short term but in the long run could be damaging – where they create an incentive for someone to start a lower-priced competitor business, or risk negative coverage of your brand. It can be hard to identify a single owner for pricing – should it sit with the Chief Financial Officer? The Chief Revenue Officer? The Chief Marketing Officer? A Head of Pricing? Recommendations can be hard to implement, especially when they involve changing the incentives and behaviour of a large sales team. It can be analytically complex, with techniques such as ‘Van Westendorp analysis’ and ‘Conjoint’ only adding to the complexity – and in my experience pricing consultancies can sometimes over-emphasise their analysis over the conclusions. As a result – many other value creation projects are prioritised over pricing, and money is left on the table. The most effective approach I’ve found to get past these objections are to frame a pricing review as a customer value project. If we get it right, most SMEs should be able to both increase pricing and increase (or at least maintain) customer satisfaction, as they will be better aligning our product/service offering with the customer’s willingness to pay. How can you spot potential pricing opportunities? This topic merits its own discussion but I think there are two areas I would start with when trying to build a case for investing time & money in a thorough pricing review: Ask some simple questions: Who is responsible for pricing in the management team? Have you increased prices in the past? What happened? Have you lost pitches, or customers, based on being too expensive? Do your standard contacts include routine (e.g., annual) price increases? Which parts of your product/service are most valued by customers? Run some simple analysis: How variable is customer profitability? If there is a lot of variability this could point to sub-optimal pricing What happened to customer retention after the most recent price change? What % of sales involve the highest discount % that salespeople are allowed to offer? How does your pricing and packaging benchmark vs competitors? This isn’t to say that you should copy your competitors, but it is helpful to understand the context in which a potential customer will be evaluating your pricing. For software businesses, review the product roadmap for features that are tied to specific price increases vs being included ‘for free’. These ideas are of course not exhaustive, but hopefully give you enough to at least start a conversation about pricing. If we keep focused on how a better understanding of customer value can yield both profitable growth and improved satisfaction, I believe that we will see more effective deployments of pricing as a value creation lever. If you’d like to discuss how to start identifying pricing opportunities for your business, please Contact Me . All views expressed in this post are the author's own and should not be relied upon for any reason. Clearly.

Compared to its importance in post-deal value creation and frequency of discussion around the board table, Customer Acquisition rarely receives much explicit due diligence (DD) pre-deal. As a topic, it will, of course, be discussed frequently by Management and potential investors. But the emphasis will typically be to appraise Management’s key assumptions and decide on inputs for the investment case model, rather than a deeper analysis of opportunities and risks. Commercial DD, which I have both written and commissioned many times, answers important questions about the size of the market opportunity for a target business, its competitive positioning and historical evolution, and might look at some of the underlying business drivers e.g., sales per rep and number of reps. However, there are rarely more than a handful of pages in a Commercial DD report that are dedicated to how sophisticated a business is in terms of customer acquisition and the resultant opportunities/risks. This suggests that there is a case for more consistent use of Customer Acquisition DD. Weighted against this is the fact that the number of DD reports is ever increasing, and these are in general more about understanding risk to inform appetite/pricing for an investment than uncovering opportunities. What I learned from my time as a partner in a Private Equity Fund is to position work on Customer Acquisition as a ‘future planning’ exercise as opposed to pure (risk-focused) DD. This can deliver outputs that are more usable by both investor and Management and be seen as a constructive exercise rather than a one-way interrogation as many other DD workstreams can seem from Management’s perspective. There were times when I was working alongside a deal team when an understanding of the customer acquisition opportunity was transformative to their appetite for a deal e.g., uncovering incredibly attractive unit economics that a Management team didn’t understand, or because we identified the potential for faster growth based on understanding the online competitive landscape and search volume trends. Other times it wasn’t as influential as value creation was more likely to be driven by M&A, but Management still found the work helpful, and it helped to ‘convert’ them to wanting to partner with us. What does Customer Acquisition Due Diligence include? The scope of Customer Acquisition Due Diligence is likely to vary based on the sector, business model, and current go-to-market approach of a target business, but will typically include: An assessment of the go-to-market strategy – is there a clear strategy, is there Management alignment behind it, and how well this is put into practice? Specific topics can include: Target customers / Ideal client profile Proposition – what problem are we solving for our customers Marketing channels used to generate demand. Approach to pricing and packaging Sales model e.g., online conversion, inside sales, enterprise sales etc. An assessment of the operational platform across marketing & sales – Roles, responsibilities, and org structure, Data – in particular the measurement of marketing effectiveness and attribution Use of tech tools to run the business and serve customers. Processes / ways of working, including the use of automation. Effective use of third parties An understanding of where Management sees the opportunities and risks related to Customer Acquisition A robust view on the starting unit economics, specifically the LTV:CPA ratio – can we afford to spend more per acquired customer, do we have a leaky bucket problem (i.e., high churn)? This is rarely something that will exist even if a superficial analysis has been undertaken as part of the investment process. ‘Flow’ market data vs ‘stock’ – it is important to understand the target’s share of clients who are looking to purchase e.g., in any given year, not just their overall share of the market as would be included in the Commercial DD. One approach to this for businesses selling online is to complete a search headroom analysis , perhaps supplemented with primary research . Competitor approach to customer acquisition – sophisticated competitors will translate to a higher cost of accelerating customer acquisition. Overall, we are looking at how well the target business has created / understands its own growth flywheel and what the potential is to get this moving faster. In a mid-sized, growing business there will be many areas that could be developed further, but do the Management team focus on the areas that will move the needle fastest? Are they willing to try new things but rigorous in understanding what is working/not working? How can you make Customer Acquisition Due Diligence worthwhile? This sort of work should always come out with a small number of high impact recommendations – sometimes on the strategy, sometimes on the platform, sometimes on the people. I’d suggest forcing that list to be small to surface those opportunities that could play the most significant role in value creation. These outputs should be fully quantified to make them suitable to include in an investment case model – including relevant metrics such as the number of new customers, revenue, margins, acquisition costs, team costs etc. Concluding that there aren’t any straightforward ways to accelerate customer acquisition is also a very valuable finding. I learned early in my time as an investor that sometimes there could be theoretical scope for improvement but that was unlikely to create much value – either because it was too stretching for the Management team, or because other value creation levers such as M&A were simply a better fit (several months trying to drive online lead gen in a very traditional telecoms business was a real learning curve). A lot of the value from Customer Acquisition DD comes from pattern recognition. Where assessing the current approach of a target business, I rely on a picture built over time of what the best performing, comparable businesses had achieved so can make a relative judgement. I always seek to leverage the knowledge of others who have direct operating experience in a particular market e.g., to sense-check specific metrics or business practices, from the investor’s existing portfolio, my network or using an expert network. As well as supporting the ‘conversion’ of the Management team, I also found that by approaching the work as a ‘future focused’ exercise, it is sometimes possible to access data that other potential acquirers may not have asked for. I try to offer to share findings with a target Management team whether the deal happens or not as a quid pro quo. Even a modest information advantage in a competitive auction process is worth having! Perhaps unsurprisingly, I think there is enough evidence that Customer Acquisition Due Diligence can play a valuable role in the investment process, whether led by an in-house value creation team or by a third party – but its value is multiplied if it is positioned as growth/future focused. I probably wouldn’t even call it Due Diligence! A good piece of work up-front can be a great foundation to kick-start value creation post-deal. If you’d like to discuss how you can approach Customer Acquisition Due Diligence, please Contact Me . All views expressed in this post are the author's own and should not be relied upon for any reason. Clearly.

What’s the most effective, cheapest, and in every case where I’ve measured it, the biggest marketing channel that will never feature in your ROI reports or marketing section of the board pack? The answer is customer advocacy. In an age where consumers are constantly bombarded with advertisements, the trust in a recommendation from a peer stands apart. I’d like to unpack why this aspect of marketing is so significant. Customer advocacy as a marketing channel I’ve asked the ‘what did you do to start your research’ question many times in primary research in markets as diverse as dentists and cyber security software, and invariably a recommendation from a peer has been cited by about one-third of the respondents. As well as it just being common sense to seek recommendations from informed contacts when you are making a purchase for the first time, there is something deeply social in asking for, and giving a recommendation. A great recommendation builds relationship capital – and a poor one can damage it. Now, pause for a moment and think about how much money your marketing team spends driving customer advocacy, versus say, running paid search ads or paying a team outbound SDRs to cold call prospects. The imbalance is often striking. Why are customer referrals so important? Customer referrals are incredibly effective. Why? Imagine customers talking to other customers in their own words, explaining how your product or service meets their needs. This interaction is imbued with trust, authenticity, and social drivers to take or make a recommendation. People trust the opinions of those they know and respect, making a customer referral far more potent than any commercial advertisement. Some may be sceptical about whether paid ‘refer a friend’ schemes work. Certainly, in some categories, like Uber, they do, but for many these can devalue a recommendation. It might just be a British attitude, but my instinct is that it is normally more impactful to earn a recommendation than to buy it. How can we measure customer advocacy? The measure that I’ve seen used consistently to measure and improve customer advocacy is Net Promoter Score (NPS) . While no measure is perfect, NPS has been by far the most correlated with the outcomes I’m trying to achieve. I’ve been able to test this by comparing the lifetime value of customers with the Net Promoter Score response after their first experience of a product or service. This example from a client is typical – LTV is twice as higher when the score is 9 or 10 (promoters) or versus 3 or below. How can we improve net promoter score? Improving NPS is not just about numbers; it's about truly understanding customers and making their feedback central to your operations. Here's how businesses can embrace and operationalise NPS: Make it visible : Display the scores and feedback prominently to keep them front and centre in your decision-making – in the board pack, in your weekly reports and at your townhalls. Improving customer advocacy is a whole-organisation effort. I’ve worked with a professional services firm where the delivery team was exceptionally client-focused, but the billing team chased invoices aggressively, leaving a bad impression with clients after an otherwise successful engagement. Get into the detail: Look for patterns, identify areas of improvement, and never get complacent. Focus on the potential actions that you could take that will move the overall NPS the most – is it better to solve a moderately painful issue that impacts all customers or a severe issue that impacts just a handful. I’ve worked with more than one CEO who had all granular feedback from detractors (those scoring 6/10 or lower) sent directly to their email. Consider where customer expectations may be mismatched: is it better to communicate differently and manage the expectations or solve the issue, for example response times to customer enquiries. Never get complacent: until you reach 100%, there is always scope to increase NPS. Don’t be distracted by comparing yourself to Apple or Samsung! Also remember that there are just some natural variations in how likely the average person is to recommend a type of product or service – I’m much more likely to recommend a film than the cinema where I watched it. Harness customers as advocates: The best businesses don't just measure and respond to customer feedback; they engage their customers as advocates, treating them well and thanking them. This could be a loyalty programme for B2C businesses, or a ‘user group’ / ‘client advisory group’ in B2B, where you get your most vocal client advocates together with select prospects. Customer advocacy is not just a buzzword; it's a powerful force that can transform a company's reach and reputation. By understanding its importance, measuring it effectively with tools like NPS, and actively working to improve it, businesses can unlock sustainable growth. It's a human-centric approach that acknowledges the timeless truth that people trust people, making it a vital component of modern marketing strategy. If you’d like to discuss how you can start to understand and increase customer advocacy, please Contact Me . All views expressed in this post are the author's own and should not be relied upon for any reason. Clearly.

Have you ever read the marketing section of your board pack month after month, read a long description of activities, but been unimpressed by the lack of any meaningful change in lead generation? You may be observing ‘Spray and Pray Marketing’ - a phrase that I find myself using to describe an approach to marketing that I think is generally to be avoided. As tends to be the case with English idiom, we rarely stop and think about the deeper meaning of such phrases and sitting on a train recently I tried to break it down and give it a proper definition that might be helpful to non-marketers. The phrase itself I believe has militaristic origins, referring to the use of automatic weapons without any sense of trying to aim, in the hope that at least one bullet hits the target. That feels like a good analogy for my understanding of ‘Spray and Pray Marketing’ but let’s take it apart. The ‘Spray’ This refers to marketers running a wide range of different activities, poorly targeted, poorly coordinated, with limited depth (unless you have an unlimited marketing budget). This is a problem because the ‘costs’ (time & money) to set up each individual marketing activity are often understated, as are the frictions introduced by task switching and greater complexity (e.g., creative/content across multiple channels, formats etc). To be clear, this is not about avoiding well-co-ordinated, multi-channel campaigns, but rather avoiding trying ‘a little bit of everything’. The “Pray” This refers to the lack of data to underpin the choice of marketing activities, and to the lack of robust measurement of outcomes. This is the big difference to the militaristic origins of the phrase – as well as not aiming very well, the ‘Spray and Pray’ marketer doesn’t even know if they hit the target at the end of the day. I also think about this as referring to situations where there is a suboptimal or disjointed customer journey that we expect prospects to go on e.g., lots of tube ads but only a ‘contact us’ form on the website – our marketing could be effective in driving demand, but we have no hope of achieving conversions. What is the problem with this approach? There are some situations where a ‘Spray’ approach might be acceptable – for example for a brand-new business that wishes to test & learn, or for a business entering a new category. But in my opinion, the ‘Pray’ aspect of this approach is to be avoided altogether! The consequence of ‘Spray and Pray’ is that our marketing activities are shallow (we just attend one trade show rather than a series, send just one direct mailshot, or only let digital ads run for a week) and we don’t have reliable measurement, so don’t really learn whether it works or not. It can quickly become a vicious cycle of constantly repeating the same activities in the hope that something might be different. As marketers we should aspire to get the right message, to the right people, at the right time, in the right medium. When we ‘Spray and Pray’ we are certain to get at least one of these wrong and potentially all of them! So why does it happen? There are some basic human factors at play in many cases. Marketers can feel a huge pressure to show ‘activity’ to their Management team colleagues – a new campaign, media coverage, ads visible online. Given the short average tenure of marketing leaders, the pressure of the sword of Damocles can lead to activity at the expense of thinking through the strategy and targeting that I’ve described. However, I think that the most common reason for this approach to marketing is that lack of a robust approach to measurement, that the marketer uses to make decisions. Perhaps even deeper than that a lack of commerciality. It is ultimately bad business to try multiple different marketing activities and have no idea which ones have worked. Most successful businesses I’ve worked with do just 2 or 3 things expertly – and that expertise can come from spending a long time testing and learning in each area, building institutional knowledge and individual skills. I’d recommend asking your marketing leader this one question to start testing this in your business. You can tell when you are doing ‘Spray and Pray’ when there isn’t an evidence-based hypothesis behind activities, when your small marketing team seems to be doing a hundred different things rather than 2 or 3. If you’d like to discuss how to refine your marketing strategy, please Contact Me . All views expressed in this post are the author's own and should not be relied upon for any reason. Clearly.

Perhaps your business has just received private equity investment, or you’ve recently joined a private equity backed business as the Chief Marketing Officer. Your first board meeting is approaching, and you’ve been asked to create a marketing update to include in the board pack. You want to make a good impression but have no idea what is expected. Based on my experience of both creating and reading many board packs, I’ve created this simple ten-point guide that might just save you time and a few long evenings, and hopefully help you to create a constructive conversation with your board. Demand indicators – think of these as your ‘inputs’: e.g., share of traffic in organic/paid search (ideally on more than just your Top 10 search terms ); partner introductions / referrals; content views. Funnel conversion metrics and change over time: this could be vs last year in a seasonal business or last month / quarter otherwise. You might not own all the conversion steps, but you are best placed to show the end-to-end journey. If you have a longer sales cycle – show your pipeline by segment (e.g., customer or product type), stage and change from last month. I’m always wary about using a weighted pipeline unless the %s are based on robust historical data, so as a minimum show both weighted and unweighted values. Overlay your target customer segment(s) / Ideal Client Profile(s) on your pipeline / won customers – to show whether you are winning where we want to be. ROI analysis of your marketing spend based on proper attribution – potentially on single transaction/ contract value and/or estimated lifetime value. Include a breakdown by channel to avoid the Flaw of Averages ! Depending on scope of your marketing team – include a focus on existing customer performance. This could potentially include lifecycle marketing, a separate pipeline and funnel for cross-sell and up-sell, together with gross and net retention metrics. Update on competitive positioning and relative performance – such as share of traffic, financial metrics where publicly disclosed, presence of direct competition in proposals for B2B, or any significant news from competitors. This is all about giving context on your performance and demonstrating that you are aware of what is going on in the wider market. Summarise customer feedback – including public reviews, and with a comparison to competitors where possible. Show the new/change rather than just the total or average which will move slowly. The gold standard is your own measurement of customer NPS (or a similar measure of customer advocacy) and a summary of the key issues for detractors with your plan to address them. In my experience, marketers are best placed to champion customer views, as opposed to leaving this for the operations section of your board back. Distil your main marketing activities into 3-5 initiatives and explain what you are doing, what outputs you expect, and how these translate into value creation (growth and/or improved margins) and reduce risk. For example – building a new suite of landing pages, thought leadership development, appointing a new agency, launching new marketing channel, developing an app. Provide a view on status and delivery timelines, with a clear summary of what the board should expect to see delivered ‘by next month’. This is last in my list, but could well be first in your presentation – a summary of key messages. You could write this as a list of things that are working vs need improvement, a summary by market, by channel or even just a summary of things that are on your mind. But think of this as your opportunity to shape the conversation you want to have with the board, as well as to demonstrate that you know what will be on their minds. Could these topics help to improve the quality your board conversations about marketing? Of course – please treat this list of topics as a starting point, you will clearly want to tailor this to your business model, the remit of your marketing function, and to evolve it over time. It might be that you don’t have all of the data available that I describe here – in particular if you are new to the business. It is okay to have a placeholder at first, or to describe that you are working on creating improved KPIs (and certainly better than just excluding a topic from your update). In terms of length, it is entirely credible to have just one page on each of the above topics, so 10 slides. You might have a couple of additional pages ad-hoc if you are sharing some deep-dive analysis, but the emphasis should be on clarity of communication. I thought it would also be helpful to offer some general tips to keep in mind when preparing your update: If you include an KPI, include a comparison and ideally a target. Numbers without context can be confusing and frustrating for those who aren’t in your business every day. Minimise jargon – talk about website visits rather than sessions, display ads rather than programmatic. Focus on the money – conversions, revenue, margins, spend and ROI. Use top of funnel metrics sparingly (e.g., ‘impressions’ or ‘eyeballs’). Avoid spin – you should give equal weight to what is ‘working’ and ‘needs improvement’. Your investors should understand that not everything will work first time and are instead looking to see that you test and learn at pace. If something ‘needs improvement’, be clear on your plan to get it back on track. Avoid historical description of activities and instead give a forward view of initiatives. Make sure your CFO is comfortable with how you are using financials – if an investor sees a discrepancy in the numbers this will be a distraction. Step back and think about your key messages. Run it through with a board member beforehand e.g., the Chairperson. Ask for feedback after your presentation. If asked for additional analysis, avoid them becoming regular slide unless necessary - otherwise your 10 slides will quickly become 20+ (I speak from experience!) Every company and board will be different, with established ways of working and preferences – so make sure to seek guidance from your CEO, chair and potentially investor ahead of preparing your board update. I hope that the above structure will help you to go into your first board meeting feeling prepared and demonstrating that you’ve tried to put yourselves in the shoes of your board colleagues and anticipate what they are seeking to understand. Have a try and let me know what you think, I’d love to hear your feedback. If you’d like to discuss how you can understand and improve marketing performance for a private equity-backed business, please Contact Me . All views expressed in this post are the author's own and should not be relied upon for any reason. Clearly.

'Would you tell me, please, which way I ought to go from here?' If there was one lecture at university that impacted my professional path more than any other, it was Mark de Rond’s very first ‘Introduction to Strategy’ at the Judge Business School. He posed the question ‘What is Strategy?’ to the assembled students, and received a few volunteered answers, which were all in the right postcode but didn’t quite seem to nail it. He then put a cartoon on the screen, an excerpt from Lewis Carroll’s Alice in Wonderland. In the picture, Alice is attempting to find her way home when she is met by the magical Cheshire Cat, and asks him ‘Would you tell me, please, which way I ought to go from here?’, to which the Cheshire Cat answers, ‘That depends a good deal on where you want to get to’. Professor de Rond argued that at its essence, business strategy is the answer to these two questions: where are you trying to get to, and how are you going to get there. This definition has stayed with me, and has shaped every strategy consulting project, strategic review, and investment case I’ve worked on since. I am drawn to its simplicity and obvious common-sense qualities. In a sea of buzzwords and stilted AI-generated content, this short passage from Lewis Carroll could well be one of the best (unintentional) pieces of business writing. The question ‘what is strategy?’ is one that is worth revisiting if your business is about to start a business planning process, or if you are developing a value creation plan. A strategy is not the set of detailed initiatives you will no doubt come up with, nor is it a financial model with its underlying assumptions. It is a set of choices, revisited periodically, that should shape every aspect of how a business operates and how it is structured. Where to play and how to win? I think Alice’s question maps directly onto my favourite language for framing strategy development - ‘where to play and how to win’. This originates from the work of Michael Porter on the theory of Competitive Strategy – that to succeed a business must deliberately chose a different set of activities (to competitors) to deliver a unique mix of value to customers. Using this approach to setting business strategy entails making two types of choices: The proposition of a business – such as the markets and customers a business will serve, the products & services it will provide, how it will charge for these services, and how it will grow (for example undertaking M&A and/or focusing on organic growth); and The advantages a business has or can build vs its competitors that will allow it to ‘win’ – such as unique intellectual property, access to the best talent, sourcing advantages, a superior brand or reputation, and operational excellence. Of course - these choices are not made in isolation; you should logically choose to play where you have at least some chance of ‘winning’. To quote Michael Porter, ‘the essence of strategy is choosing what not to do’. This is a helpful way to ensure a ‘tight’ definition of the market you are trying to serve, which in turn can lead to real clarity on your sources of competitive advantage. Most of world’s largest companies today started out just trying to serve one market where they built a clear competitive advantage (Amazon > books, Google > search, Microsoft > PC operating system). There are some common traps to avoid with this approach to strategy as well. There are many examples where businesses have assumed that the advantages that allowed to win in their existing markets would be the same in a new market, most commonly when expanding into a new geography for example Tesco in US, BestBuy in the UK, or Starbucks in Australia. What does it mean to ‘win’ in strategy? The definition of ‘winning’ will be different for each business and is dependent on the timeframe we are considering. Some common factors that I think define ‘winning': Gaining market share / growing faster than market – the clearest sign that a business has some form of competitive advantage. Top quartile profitability among a set of relevant competitors – to prove that a business is not ‘buying’ market share growth and that growth is sustainable. Clear path for future growth – current success is not just a ‘flash in the pan’. Meeting the needs of different groups of stakeholders: shareholders, customers, employees, community. If you can demonstrate success in these areas, then it is safe to say you are probably ‘winning’ and that any investors will be happy! So if you are about to start a strategic planning process, develop a value creation plan or start a strategy consulting project – take a lead from Alice in Wonderland and ask 'would you tell me, please, which way I ought to go from here'. If you’d like to discuss how you can create a strategic plan for your business, please Contact Me . All views expressed in this post are the author's own and should not be relied upon for any reason. Clearly.

I’m fascinated by nominative determinism – the notion that our names can influence our professions or personalities. Usain Bolt, William Wordsworth, Tom Kitchin – to what extent was their path in life even slightly, subconsciously influenced by their name? Is it possible to invert the historical tradition of a a family surname originating from the profession of the bearer (as any Archer, Fletcher, or Mason could testify)? The ‘Feedback’ column in New Scientist magazine coined the phrase 'nominative determinism' in 1994 and ran a regular column on the subject for a number of years. An academic paper was published in 2002 in the Journal of Personality and Social Psychology entitled 'Why Susie Sells Seashells by the Seashore: Implicit Egotism and Major Life Decisions'. The authors found that 'people prefer things that are connected to the self (for example, the letters in one's name)', and are hence disproportionately likely to 'choose careers whose labels resemble their names (for example, people named Dennis or Denise are over-represented among dentists).' I think that this concept extends into how we choose names in business – for teams, roles, processes, even meetings. The name we chose can have some impact on the outcomes that can be achieved if it has even a modest framing effect on the participants. Those in the UK will be familiar with the ‘ Ronseal effect ’ – based on the advertising slogan that the best-selling wood stain ‘does exactly what it says on the tin’. What is customer acquisition? Customer acquisition is the combination of activities that a business uses to attract and convert new customers. It can include the work of a marketing function, a sales team, and perhaps even elements of product and operations. It is influenced by the strategic choices made by the board and management team. It also includes the brand and reputation of a business, and the extent to which current customers are wiling to act as advocates and recommend it. All these teams, individuals and other factors can influence the number of new customers that a business wins over a given period. I believe that using the term ‘customer acquisition’ is a powerful way to make this point and show how counter-productive an organisation’s structure can sometimes be, for example, the myriad ways I’ve seen marketing and sales teams fail to collaborate (including in one case barely being on speaking terms). I prefer to other terms such as 'Go-To-Market' as I think it more readily meets the Ronseal test. Given its multi-faceted nature, to accelerate customer acquisition, we have to consider both the strategic choices that a business can make, as well as how these translate into day-to-day operations – the people, processes, technology and data - which come together to attract and convert customers. Businesses that can successfully join the dots have the opportunity to create competitive advantage from their customer acquisition efforts . This is the reason that I describe the work that we do at Coppett Hill as ‘accelerating customer acquisition’. Most of our work involves helping our clients to improve their marketing and sales efforts, to support future growth and improve efficiency. We could describe our services as ‘strategic marketing & sales consulting’ – but we could provide ‘strategic marketing & sales consulting’ and not help our clients to win a single extra customer. So we use the name that best describes what Management teams are looking for and what we aim to achieve – it’s all in the name. How could you use the ‘power of a name’ in your business? Renaming your weekly meeting to encourage action-orientation? Or even – changing the name of your marketing function to ‘customer acquisition’. If you’d like to discuss how you can accelerate Customer Acquisition, please Contact Us . All views expressed in this post are the author's own and should not be relied upon for any reason. Clearly.

Most of us have probably at some point written a list of the pros and cons, or advantages and disadvantages, of a particular decision in our professional lives. Perhaps you’ve even written one for a personal choice – like Charles Darwin, who in 1838 created a list of the pros and cons of marriage, concluding in the end that the pros outweighed such disadvantages as having less money for books or perhaps not being able to live in London. Sometimes however, we need to frame a more complicated set of choices or other data, and one dimension is not sufficient. That is where the consultant’s favourite decision-making tool comes in, the matrix, or four box grid. Years of conditioning as a strategy consultant mean that I get (too much?) satisfaction from untangling a problem onto the skeleton of a matrix or grid, but for many people it represents a simple and elegant approach to communicating something complex. The four-box grid (or in consultant shorthand, the 2x2 grid) can be applied in many different situations. For example, I’ve recently covered the Important vs Urgent matrix , or Eisenhower matrix, that I use to separate out those tasks which are important but not urgent in a business context. I also frequently use a 2x2 grid to compare strategic initiatives, perhaps in terms of impact and effort. You can also sometimes add a third dimension where the size of ‘bubble’ or shape on the grid is used to denote the size of an opportunity (e.g., profit potential) or another quantitative variable. Let’s talk about three of the most well-known four-box examples that you can use in your own decision making. What is an Ansoff Matrix? The Ansoff Matrix, also known as the Product/Market Expansion Grid, is a strategic management tool used to visualise and evaluate potential growth strategies for a business. Developed by management theorist H. Igor Ansoff in 1957, it presents four growth options based on the new dimensions of (i) products (new and existing) and (ii) markets, or customers (new and existing): Market Penetration: This focuses on selling existing products in existing markets. The aim is to increase market share, achieved through strategies like pricing, promotions, or increased distribution/marketing activity. Product Development: Here, companies introduce new products to existing markets. This involves innovation, research and development, and often requires understanding customer needs to introduce products they'll adopt. Market Development: This entails selling existing products in new markets. Strategies can include entering new geographic territories, targeting new customer segments, or using different sales channels. Diversification : normally the riskiest strategy, diversification involves selling new products in new markets. This can be related (a similar field or technology) or unrelated (in effect a completely new business venture) to your core business. I find this matrix particularly useful when a business is considering focusing on customer acquisition vs driving cross-sell and up-sell to existing customers. In general, I’ve found it to be a more straightforward route to growth for mid-sized companies to focus on acquiring more customers (in existing markets or new markets) rather than trying to diversify their product offering and cross-sell. What is a Boston matrix? The Boston Matrix, also known as the Boston Consulting Group (BCG) Matrix, is a strategic tool used by companies to evaluate their product portfolios. Developed in the 1970s by the Boston Consulting Group, it categorises products based on the two dimensions of (i) their market growth rate and (ii) their market share relative to competitors. This matrix divides products (think business units or brands, or even countries) into four categories: Stars: These are high-growth, high-market-share products, and are leaders in expanding markets. They often generate more cash than they consume in their routine operations but may also require substantial investment to maintain their position over time as the market evolves. Cash Cows : Products in mature markets with high market share but low growth. They generate more cash than is reinvested, providing funds for other parts of the business. But beware - these businesses are ripe for disruption as competitors will be tempted into the market Question Marks (or Problem Children ): These have low market share in high-growth markets. They often consume more cash than they generate, and their future is often uncertain. Strategic decisions must be made about whether to invest in them or divest. Dogs: Low market share in low-growth markets. They may generate enough cash to be self-sustaining but are generally considered for divestment. The Boston Matrix aids companies in allocating resources among products and deciding where to invest, maintain, or divest. What about a SWOT analysis? Possibly the most used four-box grid, a SWOT analysis is a strategic planning tool used to evaluate an organisation's Strengths, Weaknesses, Opportunities, and Threats. Strengths and Weaknesses are internal factors, reflecting a company's resources, capabilities, and internal processes. Opportunities and Threats, on the other hand, are external factors, emerging from the environment, competitors, or market trends. This might be controversial, but I see very limited value in a SWOT analysis vs a simpler ‘Opportunities and Risks’ analysis, such as Darwin’s list. It is hard to create a SWOT analysis without some level of duplication between Strengths/Opportunities and Weaknesses/Threats – there is an inherent relationship between internal and external factors. For me, SWOT analyses are up there with pie charts as on balance hindering understanding and communication rather than helping. When to use a matrix or four-box grid? If you’ve not had occasion to use a matrix or four-box grid to date, then hopefully you’ve got a sense of how this simple tool can help you to frame a decision or clearly communicate a complex dataset, for example when you are: Writing a 100-day plan (axes: impact vs effort) Creating your business plan (axes: impact vs effort) Creating your ideal client profile (axes: likelihood, likeability) Comparing marketing channels (axes: ROI, headroom) Evaluating your customer base for white space (axes: share of wallet, growth potential) You don’t have to be a consultant to use it, and I’d recommend giving it a go! If you’d like to discuss how you can make strategic decisions in your business, please Contact Us. All views expressed in this post are the author's own and should not be relied upon for any reason. Clearly.

The question of “how much to spend on marketing” is one that every business should ask itself. The answer is often “what we spent last year plus a bit more”. Imagine that instead of simply making tweaks from last year’s budget, you had a blank sheet of paper to design a set of activities and costs with the goal of maximising profit growth over a 3-5 year time horizon – a form of ‘zero-based budgeting’. When I took on responsibility for the consumer brands at CarTrawler, I had to answer this question so that I could build a strategy and budget at a time where my knowledge of each marketing channel was fairly limited, so I approached it from economic ‘first principles’. A recent conversation with a value creation leader at a mid-market private equity fund prompted me to try to set out my thinking and share it. In trying to answer the question of “how much to spend on marketing” through an economic lens, what we are really talking about is treating the process of acquiring customers as a demand & supply problem. In this problem, ‘supply’ means the number of customers that we can acquire at any given average Cost Per Acquisition (CPA) and ‘demand’ means the average CPA that a business is willing to pay for a given number of customers to meet its goal for profitable growth. I’m going to describe each of these components in turn, talking through the theory then coming back to the practical application of this way of thinking. The ‘supply’ of new customers & problem of diminishing returns A very common issue in business plans that I see when a business is seeking private equity investment is forecast year-on-year growth in the number of new customers alongside a reduction in CPA. There may be one-off factors that may explain this, but on the whole, if you want to acquire more customers you should expect your CPA to increase. The reason for this is simple – to add more customers you will have to start additional marketing activities which are likely to be less efficient and/or more costly than your existing activities (assuming some level of optimisation has happened over time to lead you to these existing activities). A good parallel to this is the oil cost curve – which plots different sources of oil against their ‘breakeven price’, i.e. the $ per barrel at which it makes sense to ‘activate’ these supply sources. When oil is >$100 per barrel almost all supply sources become economically viable, whilst when <$50 per barrel a range of sources become too costly to extract for the return you will achieve. Figure 1 - Oil Cost Cu rve, Goldman Sachs Research, “Top Projects 2022”, April 19, 2022) In marketing terms you could think about this as starting with word of mouth as your ‘cheapest’ source of new customers on the left side of the curve, moving through organic search, partnerships, through to paid search, then paid social and perhaps with sports sponsorship as the most ‘expensive’ on the right hand side. I would recommend thinking about what this supply curve looks like for your business – being sure to factor in the full cost per acquisition , including things such as agency & technology costs as well as personnel costs & sales commissions. It can help you to understand whether you are really maximising the potential of your most effective marketing channels before moving ‘up the supply curve’ to more expensive activities. For example – almost every marketing team is leaving ‘money on the table’ with a limited focus on customer advocacy . Of course in real life, the confidence you could have in such a curve would rely on the level of marketing attribution you had in place to allocate new customers fairly between the marketing channels that originated them. It would also be hard to account for new marketing activity where you don’t yet have the data to really understand the true cost per acquisition. It is important to note that we are thinking here in terms of average cost per acquisition. Such an average will almost certainly include some areas of marketing activity which have a very high, uneconomic cost per acquisition that you could focus on to find efficiencies - a great example of the Flaw of Averages in marketing. For some businesses, this curve will also look unusual, for example it might have a finite end – beyond a certain point you can’t acquire any more customers at any ‘price’ (cost per acquisition), because there aren’t any more in the market; or there might be step functions where beyond a certain volume of customers, CPA increases very significantly. How much to spend on marketing - the ‘demand/supply equilibrium’ for marketing I’ve asked many management teams: ‘if you could buy customers off the shelf at Tesco, what would you be prepared to pay for them’ – in other words, the maximum CPA you would pay. This is a difficult question to answer, but we can use our demand-supply thinking here to attempt it. If you’ve already got an understanding of your ‘customer supply curve’, then there are two factors to consider: Your expected customer lifetime value over a time horizon that makes sense for your business & how to overlay this on your supply curve to understand the profit maximising average CPA; and Other constraints for your business, primarily the maximum cash that you are able to temporarily invest in customer acquisition, for example as customers may be loss making for an initial period before they ‘pay back’ the cost of acquisition (this isn’t the same as your marketing budget but rather in finance terms the working capital required to fund marketing activities). Once you have these inputs, you can work out the cost per acquisition you should target in order to profit maximise over your chosen time horizon. For example, let’s assume that customers generate on average £800 contribution before acquisition costs in year 1, and a total contribution before marketing costs over five years - their lifetime value - of £2,500. We can apply this lifetime value of £2,500 to each point on the customer supply curve, to work out how much overall profit we would make: Lifetime Value of Customer Cohort = (LTV per customer – average cost per acquisition) * Number of customers. When we plot this curve on the chart, we identify that the ‘profit maximising’ cost per acquisition is c.£1,650, which will bring us 7,100 customers. At this level, we will spend £11.6m on marketing and an annual cohort of customers will make £6.2m of profit after marketing spend over the five-year time horizon. Targeting a higher average cost per acquisition will lead to more customers but less profit per customer, and less profit for the cohort overall effectively meaning that each extra customer acquired beyond this point is loss-making. Now, clearly if average CPA is £1,650 but year 1 contribution is £800, these customers are going to be 'loss making' at first - and not every business would be willing or able to support this. Let’s assume that you (and your CFO!) are willing to temporarily invest up to £2,000,000 cash (working capital) in customer acquisition at any point in time. We can this constraint into a maximum number of customers at each level of cost per acquisition and plot it on our chart: Number of customers = Cash available/(Year 1 customer lifetime value – average cost per acquisition) The point at which the 'Customer demand curve' line that we've added crosses your customer supply curve reflects the average cost per acquisition you should target, given the cash constraint. At levels of cost per acquistion below Year 1 contribution of £800, you can see that the line doesn't appear on the chart as you aren't constrained by working capital at these levels in this scenario. In this *highly illustrative* scenario, you would only be able to afford an average cost per acquisition of £1,270, hence your cash constraint would limit your marketing spend rather than marginal customer profitability becoming negative. In this simple example we are looking at customer ‘breakeven’ over a full year, in practice you might think about this at a monthly level or an even shorter timeframe – but the takeaway is that often from a ‘demand’ perspective, it is often (but not always) the appetite of a business to invest in temporarily loss-making customers that will set a ceiling on the number of customers you are willing to acquire - in particular in business models with subscriptions or other types of recurring/reoccuring revenue. In reality, other constraints will also come into play, such as the operational capacity of your business to service any given volume of customers, or perhaps that your input assumptions around unit economics will change because beyond a certain point you would end up acquiring less attractive customers. How to put the theory into practice I’ve found that this way of thinking about customer acquisition is a helpful way to evaluate marketing strategy and make decisions, rather than something to be used as a precise ‘model’. As with much economic theory, the real world doesn’t always behave, input data will always be imperfect and relationships will change over time. But if you have a clear enough starting point of your current marketing effectiveness and customer lifetime value, you can apply this approach in a few areas, for example: Use the concept of the customer supply curve to identify and prioritise improvements to your customer acquisition activities , for example improvements to your conversion rate, demand efficiency eg PPC quality score, or renegotiating partnership terms; Calculating the overall impact of improvements to customer lifetime value and the resultant change in your maximum cost per acquisition, for example when considering investments that could improve lifetime value; Answering my favourite question for marketing leaders of ‘where would you spend your next [£1m]?’ by identifying whether simply having a greater willingness to invest in working capital for customer acquisition could allow you to increase the number of customers you acquire profitably; and Use this approach to zoom in on a specific channel, for example we’ve recently used this approach with a client to deep-dive into non-brand PPC. This helped us to highlight that their average cost per acquisition was well above the profit-maximising level, and a lower cost per acquisition / higher ROI could significantly increase business profitability. If you’d like to discuss how you can accelerate customer acquisition in your business, please Contact Us. All views expressed in this post are the author's own and should not be relied upon for any reason. Clearly.