Looking to improve your LTV (Lifetime Value of a Customer)? I have a story for you.
My friend, a former CMO now a fitness entrepreneur, told me about his version of “The Big Problem.”
I’m willing to bet it’s a lot like the biggest problem you face in your industry.
The second week of every year is the biggest week of gym membership sign-ups. Talk about a great start.
After a visit or two, 9 out of 10 of those new gym members won’t be seen at the gym again.
Fewer than 2 out of 100 will be there by the end of the year.
Think about the influx of gym membership promotions you see leading up to the new year. When putting pencil to paper, that’s a lot of money for an advertiser (like you) to spend on customer acquisition when the retention rate is less than 2%. For all the cost of acquiring 100 new gym members, more than 98 don’t stay.
I can tell you similar stories across a broad range of industries. People don’t do what they know is best for them.
More often than not, they don’t follow through on their best intentions. Your job as a marketer is to help them. And our job is to help you improve your LTV by getting your customers to not only stick, but stay.
When twice as many stay, you improve your LTV by twofold, your growth accelerates, and you help many more people create habits that help them flourish. And those habits mean they will stick with your brand.
Would you like to improve your LTV? To get things going, we can give you a 3Ms analysis of your industry and show you how DiGo can blow that out into great creative for your brand. And great creative is the ultimate economic multiplier.
This story starts with a CMO getting fired, two months into a hundred million dollar campaign.
Fired, after hiring one of the best agencies in the business.
The campaign was expensive to produce. The whole team was so excited that they added a million dollars to the production budget to produce an additional spot.
The goal of the campaign was to recruit more users and activate them.
And here’s the rub – from the day it launched, this campaign drove recruitment numbers down.
Down is what led to out.
The CMO had been a strong marketer, with a record of selling consumer packaged goods, and sweet and salty snacks. But this was a different kind of organization – a behavior change marketing company.
The problem was, this company didn’t understand that they were in the behavior change marketing business.
All the senior leaders came from private equity or packaged goods. Yet this company had a mission to help people improve their wellness. It did so through memberships and subscriptions with a heavy component of education and community.
A year earlier, our friend and former client had gone over to this company to work for the now-former CMO.
Our friend also had a package goods marketing background. To help our friend succeed in his new role, we told him,
“You’re playing a whole new game now, and this game is different. It’s behavior change marketing. That means recruiting members, selling subscriptions, building relationships, smoothing out gaps, drags, and blocks in the membership experience, designing for motivation and momentum at each moment, building a community. You’re playing the long game now.”
He listened politely and then said, “I think you’re right, but I’m new here. My boss has a plan. Let’s see how it goes.”
A year later, after the failed campaign and selling season, we got the call.
“The game plan you were telling me about… I need that now. And I don’t have much time to show a success.”
Behavior change must be taken in steps. It is a series of actions.
Actions are the result of motivation and ease coming together at the same time. The brand can help drive motivation, while design informed by behavioral science can reduce friction and complexity.
Solving the wrong behavior problem at the wrong time is too common. In the true story I told at the top of this post, the failed campaign aimed to recruit new members but focused on a promise to help them through the challenging times down the road.
After that decision, nothing else really mattered. The wonderful creativity of the agency people who worked on the campaign didn’t matter. The amazing production values and gorgeous editing of the spots didn’t matter.
The brilliant integration across platforms, digital and traditional advertising didn’t. The excellent media planning and buying only served to spread the fatal message virus. The wonderful public relations program only ensured that failure would be a famous one.
If you are in the business of helping people make better decisions or form more empowering habits, you are in the business of behavior change. Whether healthier, wealthier, wiser, kinder, saner, calmer, less anxious, better for the planet, happier, fitter, more resilient, a better citizen, better educated, or even just better entertained, if you are helping people to become better versions of themselves, you are in the business of behavior change.
If you are disrupting a category, you ask people to make a different decision and build a different habit. You are in the business of behavior change. If you are working at a non-profit trying to scale positive impact, you are in the business of behavior change.
Marketing, branding, advertising, design, content, and community building for behavior change are different.
When marketers are new to behavior change, their agency contacts aren’t truly knowledgeable about the full range of behavior change marketing skills.
Most agency experience is still packaged goods experience. Shallow strategic thinking about awareness and preference may be appropriate for driving decisions between adjacent cans of soup on a grocery store shelf. This level of thinking is misapplied to behavior change
That’s why assembling a team to tackle these challenges is different too. When you work with the right team, you can achieve amazing and important things.
We can help great marketers become successful behavior change marketers. CEOs and Investors bring us in or recommend us for exactly this purpose.
This story has a happy ending.
We got to work with our friend on this brand and put in twelve quarters of record revenue growth before he left to take the CMO job at another company where his now proven behavior change marketing chops would be highly valued.
Of course, he hired us to work there too, so we got another great brand to work on. And the new management of the now successful first company have been great clients to us ever since.
Increasing recruitment led to over five million people enjoying the life-changing benefits of our client’s excellent service.
As one of our clients likes to say, “Now that ain’t salty snacks.”
About DiMassimo Goldstein (DiGo)
DiMassimo Goldstein (DiGo) is a Behavior Change Marketing agency, trusted by sophisticated marketers and committed change agents to understand complex situations quickly and to bring forward highly-effective creative solutions.
DiGo helps life-changing brands grow by helping people make more inspiring decisions and form more empowering habits.
The brand, advertising and design agency’s clients, from start-ups to blue chips, have built legendary brands that inspire action.
DiGo is applied behavioral scientists, growth strategists, brand planners, designers, writers, marketers, data storytellers, technologists, social and digital media experts, project managers, producers, artists and brand leaders – all of them change agents.
People talk a lot about KPI’s – Key Performance Indicators. They use various words to talk about them.
“What are your KPI’s?”
“What are your key metrics?”
“Do you have numbers you must hit?”
Merely accepting the first answer is a mistake. Remember, your aim at this point is to be a master appreciator. From great appreciation comes great inspiration.
Do not do what most people do. Do not merely accept the KPI’s, dutifully write them down to show you’re paying attention, and then move on to other things.
Instead, continue to drill in with questions in a Socratic attempt to appreciate why these are the KPIs.
When you understand why these are the KPIs, you will have built a mental model that allows you to think and imagine outcomes just as a CEO, board member or key investor in the company does.
If you understand why the KPIs are the KPIs, then you will be able to see change coming to those factors that affect success for the business. You will also be able to question the KPIs and help the client focus on the Performance Indicators that are truly Key.
For example, we worked for many years with an electronic broker. We asked the question, “What key measures drive the creation of value in the company? What key measures drive growth?”
After some discussion we got to three:
Increasing the total number of active clients. Increasing client trading activity Increasing the total number of assets in accounts. After some discussion, we decided that only the first two measures – the number of clients and their level of trading activity – were important drivers of value at that time. The reason for this was that interest rates were very low and therefore deposits were not a significant source of revenues, profits or business value.
Fortified with this appreciation of the drivers of growth in the value of this business, we were able to confidently move on to our next steps in generating that growth – asking and answering the question:
What key actions or behaviors drive those KPIs?
The KPI “increasing the number of total clients” was driven mostly by increases in the numbers of new funded accounts.
So, the behavior that would drive growth in this KPI was, “More customers opening new accounts and funding them.”
This was wonderfully focusing.
Increasing client trading activity was the second key driver of growth. Whereas in other categories, marketers are focused on increasing revenue per customer – for example, people who run shoe stores want to sell more pairs of shoes per customer and people who run e-commerce sites want to increase the average cart size – retail brokers had remained focused on acquiring new customers.
There were exceptions. We helped Tom Sosnoff, Lee Barba, Ainslee Simmonds and Lee McAdoo build thinkorswim (now part of TD Ameritrade) from a small and interesting digital options broker to a powerhouse with the industry’s most valuable customers.
Sosnoff, a savvy trader, was an even savvier entrepreneur, a born teacher and a natural movement leader. In short, he made options trading cool and never played down the risk or danger. This got thinkorswim to the summit base camp from which it would begin an even more rapid ascent.
Options traders trade a lot and pay well for their trades. When thinkorswim merged with Investools – a pioneer and leader in the online education space – they immediately had a way to dramatically scale the creation of new options traders.
People paid good money to Investools to teach them how to trade options. In exchange, Investools helped them to transform themselves into active options traders. Investools needed a platform for these student traders to trade on. It would have to offer simulated trading as well as real live trading.
Thinkorswim fit the bill perfectly.
Now, Investools students would learn to trade on the thinkorswim platform.
In addition, Investools substantial graduate list of tens of thousands of active options traders became available to thinkorswim for remarketing. Half of those former students became thinkorswim clients.
Next, thinkorswim began to integrate Investools training into its platform and customer service offerings. This increased trading volume and dramatically grew the value of the business.
The key insight here: new trading concepts and ideas lead to more trades.
We would mine this insight for our new client and take it even further, programming trade ideas into software apps that could also execute the trades.
Since our key driver of grow was increased trading volume, which we thought of as increased volume per client, the behavior that would drive this growth was defined as “one more trade per customer per month.”
This would make a real difference in the value of the business, and it was just a start. Just trading volume summit base camp, a milestone on our way to the top.
Since the behavior was “the client makes one more trade per month” we went to work to address the blocks to that behavior. Our clients were already more active than nearly all the other retail brokerage clients in the industry. But, what kept them from being even more active?
Remember that if you want to increase a behavior, you need to combine motivation and ease in the same moment – (MxE)Same Moment = Behavior.
We spent thousands of hours watching traders trade. We got to know their multi-screen set-ups and the joys – and sometimes intimacy avoidance – of their basement trading lairs. We interviewed scores of them and the interviews were so compelling that we edited several of the audio recordings and paired them with animation to create authentic and effective tv commercials and digital videos.
The motivation was there. They wanted to trade more. In front of their screen was the moment. They only lacked the ideas, they told us.
All the time that wasn’t spent trading was spent trolling for ideas. They loved the trading. The trolling for ideas was the hard work that made the trading possible.
More ideas, delivered in the moment they are in front of their screens, made as easy as possible to understand and execute, would unlock the behavior we were looking for.
Trading ideas, programmed and ready to download and execute like apps on a mobile device, did the trick.
Traders reported being more satisfied and improved their performance. We got our one more trade per client per month and that was just the beginning of the growth in trading volume.
As a master change agent, you’ll bring the much-needed clarity to each situation. You’ll walk into rooms where everything seems important and the list of things to be solved is as long a Vaynerchuk’s YouTube feed.
And you’ll go right to the essentials.
What measures most affect growth? What behaviors drive those measures? With those questions asked and answered, you’ll get down to work.
How do we make those behaviors motivating and easy (in the same moment)? You are well on your way to building your Theory of Change. The next steps help you prioritize and focus still further.
Here, I’m going to try to get you to do something that, for most of us, doesn’t come naturally, something that just feels wrong.
It will fly in the face of your professional training. You will find it very hard to get there by using your normal processes. When you even suggest doing something along these lines, you will face immediate resistance. People may think you’re crazy. People may call you crazy. People may use the “crazy” word to shut down all conversation around the idea and make the discomfort go away.
Most of us believe that marketing is trying to put a good face on our product or service. Most of us look for the benefits. Most of us believe that a certain amount of “positive spin” is absolutely essential to “work that sells.” And most of us have some successes to show for these beliefs.
If your product or service is good, if there aren’t great alternatives, and for a while, this level of marketing communications will probably work. And yet the greats have done something very different. They’ve told the truth that most marketers would view as ugly, and in doing so they have stolen the show, and significant market share.
Nike. Dove. Starbucks. Dominos. Telling the ugly truth is a strategy challengers use to become market leaders and market leaders us to remain market leaders.
Our core client is an organization or brand led by people who are committed to their doing good and being better.
That said, many potentially good organizations have much to feel embarrassed about.
There is a tendency to hide the struggle and the failings and thereby inadvertently hide the hero’s journey. As a business leader I have been guilty of this much of the time, missing the opportunity to engage others with the facts of our very human struggle.
I have sought out authentic entrepreneurs as clients so that I can be continuously exposed to the challenging and edifying example of people who tell the radical truth.
Change agents tell the truth. They believe in radical candor. The look for the truth that remains unsaid. They use it to unblock progress, and it works.
For the company with its heart in the right place, a sort of insane honesty can show confidence and clarity of thought and charm while earning trust. Here are some corporate PR examples, followed by some advertising examples.
Elephants, like humans, have wonderful memories. This is both a strength and a weakness. A superpower and kryptonite.
Look at this picture of an adult elephant tied to a small bar, with a lightweight rope. A grown elephant can easily bend that bar or break that rope.
But, sadly, they don’t.
The trainers start tying them when they are little. They learn that they can’t break the rope and as they grow they never again test that theory. To them, it’s not a theory at all – it’s just the truth.
“We tried that before and it didn’t work.”
But it’s worse than that. Bring the human equivalent of adult elephants together to envision possibilities and not one of them will even suggest tugging at that rope. It just won’t come up. They will focus on solving the problem of how to achieve their goals within the range that the rope allows them. The rope length will define their limits. I’ve watched it happen hundreds of times. I’ve been part of it hundreds of times.
There is a difference between an epiphany and a habit. Talking about possibility and feasibility together is a habit. In most places, it’s just the way things are done. There is a strong taboo against separating the two. Someone may suggest something foolish! Unprofessional! Incorrect! Impossible! Embarrassing!
But, breakthroughs don’t come from doing the right things. Breakthroughs come from doing brave, incorrect, inspiring things.
Twenty-five years ago, I developed a process that has driven my career and life ever since. It’s a process I built off of all I had learned in my career to that point, comparing successful projects to less successful projects, and a system for realizing possibilities that I learned from the pioneering executive coach, Trisha Scudder.
I had seen her breakthrough process shift the culture and results of a team from ordinary to extraordinary in just a few days. And, while Trisha taught many powerful concepts and processes, one stood out to me as the most powerful of all.
The brilliant sales and marketing consultant and author, Mark S. A. Smith says that, “We are in the epiphany business.”
Trisha’s most powerful idea struck me as an epiphany, and that epiphany has fueled my career ever since.
Here it is:
Discuss Possibility and Feasibility separately. Start with possibility.
Perhaps this doesn’t seem like very much to you. It didn’t strike me as Earth-shattering either when I first heard it. Trisha made it fun, so I was engaged. The results of the process she led us through, starting with Possibility, then moving on to Feasibility, led to some surprising breakthroughs. This stimulated my curiosity, always curled up like a cat ready to pounce. I committed to playing with this process and to keeping my eyes wide open.
Here’s what I noticed. People come into conversations about the future weighed down by the past and the present.
We’ve all heard the classic, “We tried that before and it doesn’t work.”
We’ve all seen that little chestnut over-applied.
“Are you sure it was THIS that you tried?”
“Are you sure we are proposing testing exactly the same thing in the same way?”
We’ve all witnessed this idea-killing malpractice. But, what I noticed is that most possibility killing is much more subtle. It’s the ideas that people don’t even bring up in the first place. It’s the invisible limits that people bring to these conversations.
By insisting that the first phase of the conversation be entirely focused on Possibility, while reassuring everyone that the next phase will focus on Feasibility, you will find you develop breakthrough results.
While possibility is all about what might be, feasibility is about, “What can we really get done.” Feasibility is important. Hell, it’s essential. But don’t let it get all mixed up in your discussion of the possible. Don’t let it cloud your vision.
Looking back, I see that this principle is so powerful when practiced that it has played a part in every breakthrough I’ve seen in my career. And, though I built my agency’s process around this epiphany, it is like a brain of which I’ve only used about 10%.
There is a difference between an epiphany and a habit, between having a process and using it. I see the possibility of using this process ALL of the time. I see that I can do so much more good if you use it too.
Let me know how it goes! I’m happy to help. You know where to reach me.
Some smart locals have brought the signs back, are selling them to locals, and have raised well over $100,000 to help people affected by the pandemic. You drive through Rye and see hundreds of them, all along the treelined streets.
If you want to inspire a community to action, nothing works harder than pride.
The Black Pride movement is still going strong around the world after fifty years or more. The Black is Beautiful Movement instilled pride and changed identities in the 20th century and beyond. In fact, the phrase, “Black is Beautiful” goes all the way back to a speech by John S. Rock, an African American abolitionist, all the way back in 1858. Once the seed of pride is planted, it grows for a long, long time!
“Keep America Beautiful” used pride to take a nation of Anchorman-like litterers and show that it could clean up nicely. And while this iconic commercial unfortunately features an Italian-American man playing a Native American, it had a huge effect by instilling pride and shame. https://www.youtube.com/watch?v=j7OHG7tHrNM
As a master change agent, pride is one of the most powerful tools in your kitchen. In fact, if identity is the most powerful concept in brand-building, marketing and change, then pride is the most powerful emotion.
Change agent, be proud of your tribe. Though all times and all kinds of crises, we have found ways to change things. Let’s keep using our change agent powers for good!
I wrote this answer on Quora, and you probably missed it because it doesn’t seem to have anything to do with business, branding, marketing, advertising, design, innovation or any of that.
Except, it does. It has everything to do with those things.
It was titled: “Why am I too lazy to study?”
So, yeah? Seems to be about studying. School. Laziness… but the answer has everything to do with why we do what we do and why we don’t do what we think we want to do.
And that has everything to do with the way we advertise in our own brain. How do I know this? Two ways.
First, I went from a young adult almost paralyzed by anxiety to a daring career as an entrepreneur, investor, brand and ad agency founder in scary New York City, speaker, tv commentator – let’s just say that while I’ve never jumped out of a plane, I’ve lived a life that required courage and a lot of effort.
I’ve learned what motivated and moves me and what doesn’t.
Second, I started my career in direct marketing. This is what led me to digital marketing, brand building and all the rest. This has afforded me a multi-decade laboratory in which to do experiments about what really motivates people with literally billions of dollars of other people’s money.
I know what moves people and inspires them to action and what doesn’t.
So, here’s my answer to that question on Quora. I hope it helps you untangle your own blocks to action and move toward the fulfillment of your dreams – or better!
Now more than ever, the world needs masters of change.
All that was civilized and predictable has become a Wild West.
For you, who forge new order, stop the bleeding, and make new growth possible – I am sharing this excerpt from the upcoming Change Agent’s Cookbook. It will provide you with some mythical support. Don’t scoff at the notion of mythical support. Myths are some of the most powerful tools in the change agent’s arsenal. In this case, you’ll take sustenance from the mythic archetype of the Fixer:
We know the end:
You’re respected. You’re respected because you respect yourself. You respect yourself because you know what to do to actually deliver on the promises. You respect yourself because you know how to think, you know what questions to ask, you understand what the answers mean. You respect yourself because you’re not just a specialist – you can talk business, brand, design-thinking, creativity, behavior change, data, media, technology, boards of directors, ceos, management teams — everything that adds up to growth. You are respected because you are able to show up as a master of change, in flow and having fun. Your confidence and positive energy are attractors. You are the embodiment of inspiring action. Here’s the beginning:
You have a WAY. You have a process, a procedure, a consistent way of operating
The Way of the Change Agent.
“Be regular and orderly in your life so you can be violent and original in your work.” – Gustave Flaubert
We’re obsessed with “fixer” characters. These are true professionals who show up and take charge, resolving seemingly unsolvable situations.
Harvey Keitel’s Winston “The Wolf” Wolfe from Pulp Fiction is a classic fixer character. Mike Ehrmantraut from Breaking Bad is another quietly imposing fixer. Olivia Pope, played by Kerry Washington in Scandal, is billed as “D.C.’s greatest fixer.”
There are so many more iconic fixers. Sherlock Holmes, of course. Jodi Foster in Inside Man. Julia Roberts’s Erin Brockovich in Erin Brockovich, George Clooney as Michael Clayton in Michael Clayton. If you haven’t seen the classic scene in which fixer Alec Baldwin as Blake attempts to straighten out a pack of sad-sack salesmen in Glengarry Glen Ross, go to YouTube and watch that right now. It’s the origin of the phrase, “Coffee is for closers!” Better yet, see the whole movie.
From their first entrance, our eyes track these characters like stalker ex-boyfriends. What makes them so mesmerizing is their competence and elegant confidence. They do their job with very little wasted movement. Like Jonathan Bank’s Mike Ehrmantraut on Breaking Bad and George Clooney’s Michael Clayton, they also bring the humility and realism that should come from experience. Yet they can be brutally frank when necessary.
They can also puff themselves up into larger, scarier beasts when required to establish dominance in the service of good order. This is what is so brilliant about “The Wolf” sequence in Pulp Fiction. Keitel’s character is as polite and officious as Gustavo “Gus” Fring can be in his Pollos Hermanos apron on Breaking Bad. But, when he needs to establish who’s boss, he becomes momentarily forbidding before returning to normal size again and complementing the coffee. Alec Baldwin as Blake in Glengarry Glen Ross infuses this character with a striking realism – we know that there are Blakes in the real world and that they are one reason salesmen die. Blake also represents the brutal logic of the fixer – the fixer only does what works, even if it hurts.
As Master Change Agents, we embody the archetype of the Fixer, with a little bit of magic thrown in.
A Fixer is, first, a professional of the highest order. What makes many of these characters interesting is that their professions are often seedy or at least morally ambiguous, not expected to be “professions” at all. The professionalism that they bring to such things as cleaning up lawyer’s messes, making political scandals go away, “cleaning” gory crime scenes and bringing rapacious salesmen into line is what makes for great drama. It works because it rings with an insight about the human condition – that we can develop professional ethics even where they are absurd. We respect professional ethics even when we can’t condone the results.
So, as a master change agent, you will be ready to show up professional in all situations. We’ll also be careful to work toward worthy results.
Fixers are also Tricksters, going beyond professionalism to work a little magic in the course of their work. The order of the Fixer’s method leads to epiphanies and flashes of brilliance.
Master Change Agents are regular and orderly in their methods so that they can be violent and original in their work.