I recently read The Ascent of Money, and I was fascinated by the term circuit breaker applied to financial markets. The idea is simple. When certain conditions are triggered such as a massive decline in the market, all trading is halted. In brilliant and typical finance-speak, the SEC describes it this way:
The securities and futures exchanges have procedures for coordinated cross-market trading halts if a severe market price decline reaches levels that may exhaust market liquidity.
Stuff like that cracks me up, but, in simple terms, idea is to remove irrationality from the market. I started thinking, shouldn't every company have marketing circuit breakers. We should define conditions that trigger changes in tactics and possibly even our strategy.
Often I see brand managers making random decisions based on gut feelings or emotion. I've seen agencies fired in the midst of being very successful for weak and ambiguous reasons. On the other hand, I've seen emotion drive decision-makers to hold on to agencies that are clearly failing. I've seen a campaign killed after only a few days in the marketplace because it didn't immediately lift sales, sometimes when that was never even a stated objective. Most frightening to me, I've seen tactics repeated again and again, with little regard for effectiveness.
Here's a few examples of marketing circuit breakers:
- No increase of NPS (Net Promotion Score) when tested each week for X weeks
- Insignificant increase in awareness from survey 1 to survey 2
- 2 consecutive quarters of missing increased sales, if that was the goal
For a marketing circuit breaker to work it has to be characterized by three things. First, it presupposes a crystal-clear objective. A marketing circuit breaker will not function properly if there is ambiguity. Second, it must be based on a varifiable. This means both the agency and the client has to be commited to having proper metrics in place and that the client will pay for any testing, surveys or research required to get that number. Third, there has to be a reasonable and clear response if the circuit breaker is tripped. It can be as simple as reviewing the media plan or as expansive as questioning and possibly re-defining the brand position.