Life is simple. It’s just not easy. The same can be said for inbound marketing. There are lots of factors that will determine whether or not your inbound marketing initiative will be successful. Making a checklist of these factors is helpful but not terribly useful. I’m an engineer by education, so that means I love models. Recently, I stumbled onto a business concept that works really well for planning, managing and measuring an inbound marketing implementation. That concept is J-curve management.
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[ismember]Say Hello to My Little J-Curve
I was at a conference last week and had the great fortune to sit in on a three-hour presentation by Nick Setchell of RealTime CEO. You heard that right – three hours. And I would have sat there for three days. Nick is that good a presenter. He is a business turnaround specialist who has developed a set of tools that help mid-market businesses operate like Fortune 500 companies.
One part of his presentation dealt with J-curves. It’s a term used in several different fields – investment, economics and politics – to describe a curve that initially falls but then reverses course and eventually rises higher than the origin point. Setchell defines J-curve management as “Any strategic decision to spend money today for a benefit tomorrow.”
Like the strategic decision to invest in inbound marketing today for the benefit of more leads tomorrow.
Visualizing the J-Curve
When you deconstruct a J-curve, you find three fundamental phases:
- During the investment phase, your cash flow dips negative as you dedicate money and resources to the project.
- At some point, you enter the catch up phase once the investment starts to generate cash.
- Finally, you reach blue sky after enough cash is generated to pay back the initial investment.
Managing the J-Curve
There were several dangers Setchell warned us about. He has a set of rules he recommends for managing J-curve projects in order to prevent disaster and maximize results.
Managing Depth and Breadth
The first danger is that the average J-curve ends up twice as deep and twice as long as you think it will. In other words, projects always cost twice as much and take twice as long as they’re planned to take. What are some of the factors that can lead to this happening with an inbound marketing implementation?
- Underestimating the time required to create content is the classic problem with inbound marketing. It’s important to be realistic and generous with your content marketing budget.
- Even if your estimates are good, you can run into problems if personnel can’t dedicate the time necessary to implement the plan. I see this quite frequently when management tells employees they will dedicate “x” number of hours per week but don’t offload enough work to truly free up that time.
- A poorly conceived strategy can end up extending the time it takes to see results. Is your keyword research solid? Did the content strategy choose the right topics and channels? Is the website strategy working for you or against you? Is your conversion strategy turning enough visitors into leads?
- Poorly executed tactics will lead to poor results, which leads to more time and expense. The best strategy in the world can’t overcome lousy content. And nobody will read you content if you make an ass of yourself on social media.
Do Not Become Emotionally Attached
The second danger is a J-curve turning into a ski slope. It’s a very dangerous spot to be in because a psychological tendency called loss aversion tends to make keep throwing good money after bad. You’ve doubtless heard it before. “We’ve already spent $50,000 and I know we can get this over the goal line if we just spend another $5,000.” Three months later, it turns out that another $5,000 is the answer yet again. And so on. You need to know when to cut bait and when to fight through the bottom of the curve.
Move Quickly from Phase 1 to Phase 3
This sounds obvious, but there are pitfalls involved including personalities and politics. Setchell advises, “Focus on the critical transition between the innovator and the implementer by using clear communication, documentation, and procedures. And beware of innovators who will not let go of their baby!”
Conclusion
This concept really has me thinking about changing the way I pitch inbound marketing projects as well as manage them. It’s a great tool to illustrate to management how the project should unfold and also to monitor and report on it. And if you’re a business owner or senior manager at a mid-sized company, I highly recommend taking a look at RealTime CEO. I’ve covered just one of the incredibly handy tools Nick Setchell covered in his session.[/ismember]
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