5 Assumptions That Sabotage Your Marketing

Most people make dozens of assumptions each day. They assume their coffee maker will always work, their traffic light will always change, and their cellphone will always operate seamlessly. And then one day the java doesn’t flow, the light goes out, or a mobile dead zone makes their phone useless ‒ and they find out their assumptions were flawed.

But they aren’t alone in having faulty expectations; just check out these incorrect historical assumptions:

  • An 1876 Western Union internal memo read, “This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.”
  • Thomas Watson, chairman of IBM, said in 1943, “I think there is a world market for maybe five computers.”
  • The president of the Michigan Savings Bank was advising Henry Ford’s lawyer not to invest in the newly founded Ford Motor Co. in 1903 when he said, “The horse is here to stay, but the automobile is only a novelty – a fad.”

And the list goes on. Marketers’ worst mistake is making assumptions not backed by research, because when you guess rather than know with great certainty you can head down a time-consuming and costly path. Here are a few key assumptions that sabotage marketing efforts.

Assumption No. 1: We know what the customer wants.

It’s the marketers’ job to know their customers, and to accomplish this, they usually complete quite a bit of work – oftentimes creating personas and getting into the heads of each segment. But sometimes things go wrong. Marketers get off track and start assuming too much.

For example, the clothing company Gap featured the same logo for many years; it was what customers knew best. Customers saw the logo and knew what to expect – basic, functional clothing items. But the clothing company wanted to branch out and reach new customers. It decided to modify the existing logo and branding and just assumed that current customers would be on board.

This image illustrates how The Gap modified their existing logo and branding, and assumed customers would recognize the switch.

Immediately after launching the new logo, the company experienced a huge backlash from current customers. Not only did they not like the new logo, but they also didn’t appreciate the brand’s attempt to attract a more “hip crowd.” After two days, the new logo was gone.

Gap wasn’t the only company to invest heavily in revamping its logo to find itself in the midst of a storm. There are similar stories about Pepsi, AOL, and Tropicana.

Then there’s Netflix, the beloved media company that started out as a DVD home-delivery service. It was truly an ingenious idea that brought Netflix great success; that is, until it started taking new turns in its core functionality and stumbled when delivering those offerings to customers.

During 2011, Netflix was valued at $16 billion, but with technology quickly advancing, the company wanted to keep up. It decided to provide customers with streaming options, yet didn’t take the time to research how customers felt – a costly error.

That year, Netflix acquired a brand called Qwikster, which would provide an alternative to the company’s existing mail-order DVD service by providing streaming capabilities. The split felt complicated to subscribers, and customers who wanted both services would pay 60 percent more – a significant rate hike. Netflix had assumed too much about its customers, thinking they would embrace, welcome, and pay handsomely for the new digital service. Yet the company lost nearly 800,000 subscribers in the immediate Qwikster aftermath and experienced a stock price decline of 77 percent over four months.

Key takeaway. Don’t make assumptions about your customers, even if, as marketers, you know them well. Test your assumptions, use real data, and ensure the response that you will receive is positive before taking action.

Assumption No. 2: Social media is always a profitable venture.

There’s no arguing with it – social media is powerful. It’s like word-of-mouth marketing but amplified by thousands, and, in some cases, even millions. Don Draper of “Mad Men” famously said, “If you don’t like what is being said, then change the conversation.” But today, social media makes changing that conversion much harder.

Simply engaging on social media, however, is not enough. Even if engagement is high, that doesn’t write a check for higher revenue. In fact, a lot of marketers are making some dangerous assumptions about social media. But why?

For starters, social media is still young, and many marketers struggle with selecting the right key performance indicators (KPIs). Quantifying a return on investment, however, can be hard. It’s not for lack of data; social media metrics are simple to obtain. Yet if metrics show a 75 percent engagement rate on social media, is that really having a positive impact on the bottom line? This is where marketers start making dangerous assumptions. Here are a few tips for turning these assumptions around:

  • Start measuring your ROI. Sure, engagement is great, but at the end of the day, you need to look at ROI, because followers and likes don’t always translate into dollars and cents. Work with your finance department to understand the cost of customer acquisition and the total lifetime value of each customer. Once you understand these two metrics, you can work toward calculating ROI for each social media channel.
  • Generate leads. B2B social media should include some element of lead generation. But how? Include calls to action and lead-generating landing pages and forms that draw those who engage on social media into your sales funnel through offering gated assets, such as high-value reports, white papers, and e-books. Once you start capturing leads, you can easily track and calculate the value of your social media efforts.
  • Stop talking about your products. At the heart of every product is a pain point. Discover these points by staying in touch with those on the front lines – the sales team. Use this information to drive social media updates, content, and lead generation.
  • Select social channels carefully. Use marketing analytics software to understand how customers communicate on each social media channel.

Key takeaway. Don’t get caught in the dangerous assumption that likes and shares automatically translate to profits. Test that engagement to see whether it truly improves to your bottom line.

Access to data about general trends is valuable, but it shouldn’t be used alone to determine what to offer customers and how to market it. For example, during the ’80s, a new competitor soda arrived on the scene, challenging Coca-Cola’s place in the market. The company pulled together a blind study to identify just how big a threat this new soft drink truly was. What alarmed the company, however, was that the study revealed that customers preferred the taste of Pepsi to that of Coca-Cola. The beverage company decided it needed to act quickly.

However, Coca-Cola made a dangerous assumption that its product needed to be altered, and that decision would prove extremely costly. The company reworked Coke’s iconic, century-old soft drink recipe. “New Coke” was sweeter, like Pepsi, and the company proudly launched the new recipe to its loyal beverage customers – and right off the bat it was not received well (to put it mildly).

Customers liked a sweet beverage in the blind studies, but nobody asked how they felt about the idea of Coca-Cola altering its recipe. Turns out that most loyal customers felt the existing recipe was a beloved American tradition. After the launch, customers started hoarding older versions of Coke, selling it on the black market for inflated prices. The company soon realized it had made a grave mistake and quickly reverted to the old recipe, renaming it “Coca-Cola Classic” to ensure that everybody knew they were buying the original, emblematic version.

Key takeaway. General trends are useful; however, use them as a starting point and then conduct your own research. Do those trends apply to your customers? Modify your marketing approach as appropriate.

Assumption No. 4: All customers are equal.

Most marketers are familiar with the 80/20 rule, which was first introduced by Italian economist Vifredo Pareto. In business, this rule states that 80 percent of your business comes from 20 percent of your customers. With regard to productivity, it says that 80 percent of the results come from 20 percent of the actions. You get the point. However, some assume that all customers are equal. But a recent study found that when it comes to social media, as highlighted above, this is not always true.

MarketingSherpa found the vast majority of customers who follow brands on social media do so for the discounts, coupons, and sweepstakes. Moreover, these customers may not add the most value to your brand.

Key takeaway. Find out where your most profitable customers are spending time and refocus marketing efforts to grow those relationships and find more customers who fit that profile.

Assumption No. 5: Loyalty translates to high profitability.

Some marketers believe that customers who have been with the company the longest and purchase with high frequency are the most profitable. Yet this too is an assumption. Even though these customers are high-frequency purchasers, it doesn’t mean those purchases carry the highest profitability.

In fact, this Harvard Business Review article argues that loyalty is not a proxy for profitability. So managing loyalty and managing profitability are two entirely different things.

Key takeaway. Try examining loyalty and profitability in another light. Who are your most profitable customers? Build personas for those individuals. Are these customers also the most loyal? Look for overlap, and find areas of potential for new opportunities.

Moving forward with certainty

There are some things a marketer should never guess about – branding, logos, and even the colors that customers like best. Additionally, the simple elements of the customer experience, such as whether your customers prefer to talk on the phone or chat live on the website, can also become dangerous pitfalls when combined with assumption.

Use existing data, but also collect your own to create a better understanding of customers and, consequently, stronger and more powerful marketing strategies.

Have you ever made a dangerous marketing assumption? Which assumptions to do think are the largest pitfalls for marketers?