Events like Brexit and the COVID-19 pandemic are stark reminders for businesses of the need to plan for uncertainty. In a world of rapidly evolving social networks and technologies, businesses of all sizes need to develop more agile go-to-market strategies in order to adapt in line with shifting customer pain points and desires. Moving faster than the competition as conditions change is critical to success in an uncertain world.
The traditional approach to marketing strategy relies on precise predictions and stability. Underestimating uncertainty can be devastating. A good example of this is how in 2009, at the peak of the recession, Netflix launched its new streaming plan and gained 3 million new members. Just one year later, the video rental chain Blockbuster filed for bankruptcy. Despite being pitched a partnership by Netflix CEO Reed Hastings back in 2000, Blockbuster neglected new insight and understanding of emerging networks. Even with a marketing strategy that had allowed them to expand globally over 25 years, their resistance to adapt made them extremely vulnerable during uncertainty.
To produce any kind of clear strategic direction, an element of predicting the future is involved. Underestimating uncertainty can lead companies toward existential threats. At the same time, a lack of go-to-market experimentation can cause businesses to neglect the opportunities that periods of uncertainty can provide.
It’s common knowledge that a data-led strategy allows a business to adapt ahead of the curve and outlast less agile competitors. However, with limited internal resource and analytical expertise, too many businesses cannot deliver the varied go-to-market tests required in times of uncertainty. This narrows marketing activity to a single course of action, which could easily be the wrong one.
For startups who have emerged from the Morph stage of the startup J-Curve and working within the Model and Scale stages, spotting opportunities and risks in the market environment before competitors is key to continued growth.
Building processes which allow quick responses to rapidly developing opportunities allow startups to understand and act on opportunities/threats. For example, data-led insights could provide an understanding of whether the performance of current technologies is sustainable, the ebb and flow of in demand for certain stable categories of products, or the areas in which competitors are most likely to expand capacity.
Some uncertainties are signposted more than others, but early data signals offer the chance to plan for possible scenarios. Acknowledging and analysing these signals before they’re the talk of the town allows businesses to effectively balance commitment with flexibility. However keeping a constant eye over these signals is far easier said than done. The only way to do this practically is to define which uncertainties are most pertinent to your product or service. Further prioritising these threats will allow you to cut through the noise. With these processes in place, a strategy can shift toward a cycle of “execute, monitor and adapt,” steering the business toward the best opportunities before direct and indirect competitors can also move in the same direction.
While a more experimental approach may feel like choosing to fold risk into a strategy, companies supported by technical expertise and growth frameworks can mobilise quickly around the right choices. In the long-term this makes them more resilient. Strategies that are experimental and robust in uncertainty are therefore no less devoted to a bold, long-term ambition.
In order to deliver on a bold, long-term ambition, investments must be made to maximise upcoming opportunities rather than work reactively and allow the external environment to define the rules of competition. The best strategies incorporate a blend of these three critical approaches defined by Harvard Business Review:
These are actions that are deemed to benefit the company under any scenario. For example; making sure cost management is always closely monitored and consistently investing in increasing operational effectiveness.
Options and hedges
These are strategic tactics aimed at specific possible scenarios. These could include a series of experiments that can be scaled up or paused depending on performance. Other instances of this type of strategy include joint ventures that provide lower-cost market entry or changes to projects that might add cost but provide additional flexibility. Placing multiple small bets on a variety of options is the most common method of stumbling across new innovative processes.
These are large-scale commitments and investments that are predicted to deliver massive ROI in the result of a single prevailing scenario. For large organisations and startups alike, pulling the trigger at the right time can hugely effect a big bet’s impact. Advance planning is critical to moving quickly if and when the opportunity arises. A solely big bet strategy can be catastrophic if the opportunity never arises.
In times of true uncertainty, big bets are off, particularly for startups. To stay agile and maximise whatever opportunities are available, options and hedges must take precedence. To begin delivering an effective, experimental marketing strategy as quickly as possible, the following steps must be completed:
1. Design a roadmap
First step is to identify a key business objective to define the desired outcomes of your strategy e.g. acquire new customers or retain existing customers. With this objective in mind, you will need to produce an extensive list of experiments, each with a hypothesis outlining the predicted impact on your business objective. The final task within this stage is to prioritise your experiments and build a roadmap of weekly sprints. At GrowthMinds, we score and prioritise experiment ideas for our clients using our MINDS framework (Measurement, Investment, Necessity, Difficulty and Speed).
2. Launch and test initial experiment roadmap
With a detailed roadmap in place, you can launch your first sprint of experiments across platforms. Closely monitoring early data signals and conversions will allow you to respond to your initial hypotheses with new experiment ideas or adjustments to your roadmap. With your strategy in effect, you will gain evidence of which elements of your sales funnel are not performing as well as need be.
3. Delivering an iterative experiment programme
Delivering a programme of options and hedges across marketing platforms will allow you to begin scaling up tactics or pausing them depending on their performance. Applying this academic approach to priority stages in your sales funnel over time is the most efficient method of sustain growth and reach business objectives through periods of uncertainty.
The most common blocker to leaning into change in this way is the struggle to build a company culture around learning and growth. To stay ahead of competition, uncertainty must be reframed as a challenge to work through rather than a time to be inactive.
However you choose to manage uncertainty, we wish you and your teams the best of luck. If you would like any advice on how to adopt an effective, experimental marketing strategy at pace, please get in touch. Using our database of over 1000 growth hacking experiments, our team of strategists and growth hackers can design, launch and test an experiment programme in just a few days.