I have always been fascinated time management, and especially with the Pareto Principle. The Pareto Principle was created by Management consultant Joseph M. Juran who first suggested the principle in 1941 and named it after Italian economist Vilfredo Pareto. Back in 1906, Vilfredo Pareto observed that 80% of the land in Italy was owned by 20% of the population; Pareto went on to develop his ‘principle’ after discovering that 20% of the pea pods in his garden contained 80% of the peas. The Pareto Principle has since been applied to many areas and is still quoted daily in marketing meetings and boardroom discussions;
The challenge for any brand looking to become successful should be to identify the 20% in any area in order to optimise their profits or productivity ~ thereby reducing wastage and in-efficiencies. Where marketing is concerned though, I always found principles like this sounded great in presentations, but lacked any real substance where planning or operations were concerned. When I worked for mobile phone retailer Phones 4U as one of the first head’s of social in UK, I knew that if they were going to be a successful social brand, I need a simple idea (like Pareto), that I could communicate to the whole team. Think big, smart small, scale fast, right?
Phones 4U was a brand just starting out as far as their social strategy was concerned. They hadn’t had one before and I was their first head of social media. There were also a brand that people followed because of the location, rather than because of what they did. The success of all bricks and mortar stores lies in their location, but that doesn’t mean you are destined to stay there. Urban Outfitters, Zara, Top Shop, Disney, John Lewis, Walmart and Levi’s all live on much higher levels and we’ll explore why shortly. Where Phones 4U was concerned though, they were at the beginning of their journey and I believed that the team had three main challenges.
As I started to break down all the challenges I was facing into manageable chunks of three, tasks started to become a lot easier. I was reminded of some advice John Maxwell had given me a few years earlier,
“If you make a list of the 10 most important things you need to do each day (prioritised in the right order), and then concentrate only on the top 2 items, you will likely receive 80% of everything you ever want to receive out of life”.
What would the Phones 4U equivalent of that be I thought to myself. It was clear that my three priorities were not equally as important as each other. I had an idea about what needed to be done, but I didn’t know how to go about it and how to best allocate the hours for each person on my team, in accordance with what mattered most. I thought back to some advice I was given by my business studies professor at college, when she tried to get me to stop daydreaming about big ideas and concentrate on what matters:
As soon as I started to apply this ratio to my little social media team, productivity and results exploded. In practise it was pretty simple and seemed to solve a problem that many marketing teams seem to struggle with ~ not enough time. What they really mean is that they are too busy doing things of lesser value, to add additional tasks, even if they may offer more value to the organisation.
I didn’t have a lot of resources to hand but I remembered one of my favourite quotes:
“Do what you can. With what you have. Where you are”. Teddy Roosevelt, 26th President of the United States (1858 ~ 1919)
So what did this actually look like? Suppose I had 100 hours available each week to deal with social customer care; the 60:30:10 rule might suggest that the team’s focus was split like this:
You can break the 60:30:10 ratio down into as many columns as you like, depending upon how big your team is or how many critical tasks your team has to accomplish. I acknowledge that this isn’t rocket science, and this common sense approach to time management works in any department, but in every instance where I have seen this model used ~ it has always been the marketing team who benefitted the most.
You might find your own creative uses for the 60:30:10 model and see if it works for your brand ~ but I applied it to campaign planning and it worked really well. As soon as I started to use this model religiously, it made my team much more responsive. In an industry where you only have 10 days to plan, create and execute a multi-channel campaign, we couldn’t afford to waste time. With the 60:30:10 model, we could start the campaign the second we knew what the timescale and the budget was. Bearing in mind that this was 2011 and Phones 4U was aimed almost entirely at 13-24 year olds, each time we launched a new phone (every two weeks), we launched a Facebook app ~ back in the days when Facebook apps really worked.
These tactical campaigns usually consisted of a game with data capture from the users social graph, a competition mechanic of some form and a media budget for Facebook ads to launch the campaign. Having less than a few days to plan my first campaign and no time to get the advice of our several agencies, I tried 60:30:10, more out of necessity than any clever thinking. The first 10% of our campaign budget was spent on strategy, planning and insights. This helped to make sure that whatever we were going to create resonated with our target audience. Once we had a plan, 30% of our resources were allocated towards creative – at Phones 4u this usually meant a Facebook connected game and an app. 60% of the budget was then allocated for paid media on the appropriate channels, to reach the audience demographic that we had already identified.
“Things need to be made simpler, but not simple”. Albert Einstein
The first time I employed this formula was to build a game called Face Invaders, to launch the Sony Experia PlayStation phone in the UK. It was a huge launch for Sony but we had no time at all the go through the lengthy agency planning processes. Using the 60:30:10 split, we quickly came up with the idea to use Facebook API’s to build a game. In the style of Space Invaders, it pulled in the names and faces of your best friends (!), who you had to shoot in order to try and win a phone. The game was so successful that Facebook security teams stepped in thinking that it had been hacked. It went on to have millions of plays and from that moment on, it became a winning formula I used on every campaign. 60:30:10 also helped us to launch quicker (and with more success) than all of Sony’s other media partners, many of whom had substantially bigger budgets and resources.
Whenever I have worked on campaigns since then, I have used the same ratios. £100,000 for a campaign? Easy, we’ll spend £5,000 on planning and strategy with an agency or in-house team, £30,000 on creative and build, £60,000 on media and £5,000 at the end of the campaign to measure and report on campaign performance.
Before the media planners of the world unite and shoot my 60:30:10 model to shreds, let me just point out that this is a starting point. Media planners are (usually) very smart and talented people, and I wouldn’t be so arrogant as to suggest there is a one-size fits all strategy for running a social or digital campaign ~ but since we are talking here about brands fighting for survival, it’s a good place to start in the absence of a better model.
As with all great marketing, a certain amount of multi-variant testing may be required, but I know from experience that this is as good a ratio as any. Instead of waiting days to get the outline of a media plan back from your agency when you are considering a new campaign, this media split may mean that you can provide rough budget numbers on the spot and start planning immediately ~ and providing your metrics are measured correctly, this is something that will win you a lot of love in the boardroom if you can estimate success rates there and then. For example, if you know you are going to commit 60% of your budget to paid media, and the budget for the campaign is £100,000 ~ you should have a good idea of what £60,000 is likely to achieve, based upon previous performance. I am obviously over simplifying as you need to make sure that £60K is split appropriately across each channel, but like I said ~ this is a great starting point for campaigns which need to be turned around quickly. Something that level #1 brands often struggle with the most.
I have seen 60:30:10 work many times over for campaigns I have worked on, as well as for brands such as Nike, Samsung, Rovio (Angry Birds) and Zynga (Farmville) – all of whom seem to use roughly similar splits. According to social media legend, Rovio built the $1 billion+ Angry Birds franchise for just over $100,000 having had their previous 40+ games fail, using a similar formula, proving that good planning wins (eventually)!
The 60:30:10 Model in Action
Writing a Book
Seth Godin spends 10% of his time planning a book, 30% writing it and 60% of his time promoting it. He often does this in blocks of 100 days. Leadership coach John C. Maxwell has a similar process. Both of them have written over 100 books, many of them New York Times best-sellers.
Social Media Listening
I have noticed that some of the most successful social brands (KLM, Red Bull, Disney, Burberry) spend 10% of their time creating content, 30% of their time listening to their audience and 60% of their time having meaningful conversations with them, or engaging quickly through customer care and case resolutions.
I once heard an interview on Oprah with Bill Rancic (first winner of the Apprentice with Donald Trump), and Bill encouraged people to be financially secure with his 50:40:10 model for personal finances. Not quite 60:30:10 but close. He stated that most people can live off 50% of their income with the right planning. 40% can be saved or invested. And if you are that way inclined, 10% can then be given away to charity or church.
Influencer Fan Engagement Programs
NPS (Net Promoter Score) is a metric used to assess customer satisfaction for many global brands (especially retail or CPG brands). An interesting observation I’ve seen over the years is that many of the fastest growing brands seem to have around 10% super fans – the evangelists who tell everyone about your brand. These are the ones that PR agencies and outreach programs love to target. 60% of consumers are usually passive. Happy enough to buy but not so excited as they tell all their friends. 30% of consumers are unhappy for one reason or another, especially if it is a new product or fast growing brand with operations or logistical challenges during accelerated growth periods. (The best brands focus on the unhappy customers first ~ we’ll cover that on level #4)
Steve Jobs’ iPhone launch keynote in 2007, arguably one of the best business presentations of all time, was split 60:30:10. 10% on industry trends and background, 30% talking about Apple as a business and 60% revealing the iPhone and talking about the product. In many of my own presentations, I usually spend 60% of my time talking about industry trends, 30% on specific customer examples and 10% about my company.
Working with a brand that spends it’s life fighting for survival is no fun. There are many challenges and we’ve looked at a few of them, but where there is a challenge, there is also an opportunity to make a difference. The 60:30:10 is a simple model to put into place if you don’t have enough hours in the day, or seem to be prioritising the wrong activities, but what if you are one of those “transactional brands” that is always competing on price, and you want to start to build real relationships with your customers.
You want your customers to follow you because they like you, not because they feel that they have to. As good a place as any to start is by building your team and trying to retain as much talent as possible in-house. Agencies and partners are great at many things, but asI discovered at Phones4U, bringing talent in-house is sometimes one of the quickest ways to go from survival to success.
I originally wrote this piece in my book “From Survival to Significance“.