It’s the Little Things

What ends as a big advantage starts as a small one and compounds over time. Stop looking for big gains and start grinding on the small ones you can repeat day after day.

–Shane Parish, Farnam Street Blog

Small efforts for big outcomes

Shane’s perspective here is so good, bringing a cross-disciplinary approach to thinking about what contributes to our success as a person or business. For a close corollary check out Jim Collins on the Flywheel Effect in Good to Great. Jim doesn’t have a pithy quote so follow the link if you wanna dive in (if you’re a founder, it’s well with it).

One of the key features of both perspectives is timescale.  The timescale of the impact created by compounding interest in investing—and in the way Shane uses it—is measured over years or decades.

When thinking about business wins, many are prone to go for the home run, for “crushing it!” As Shane and Jim point out, the greater gain is more likely to be found in small wins and our willingness to grind on those key things that incrementally add value to the business over time.

Oh, and by the way grinding like this is… well, it’s a grind! Winning this way doesn’t have the glamour of things like product launches or closing a funding round.

This is hard. It’s hard to figure out that one thing to grind on. You may have to try a lot of different things—and test and measure—before you find something that’s going to have that impact.

And it’s frustrating! To be successful, you have to continue to execute consistently, to cope with the impatience that rises up—in the face of nothing apparently happening—at least in the short-term.

So, when should you start? Well, now, right?

The sooner you can start compounding, the sooner you can start putting energy into the flywheel, the more significant the results will be downstream—five years out, ten years out.

So how does this relate to digital marketing?

We believe that, to the extent your business is online, your business strategy and your digital strategy are one and the same.

Marketing is often talked about as an investment—even though, more often than not, it’s categorized as an expense. And as far as timescales go, the desire is to see results quickly, in months if not days.

Yes, there are strategies and tactics that we can employ that will produce results in the short term but to reap the results of compounding, or the flywheel effect, we need to be thinking about a longer-time scale.

As digital partners, we want to be looking for those areas of your business that are online—that are digital—that can be leveraged through small consistent efforts.

You might look at customer lifetime value (LTV), focusing on how you support and communicate to your existing customer base, as a place where a small consistent effort would produce gains over time.

Your newsletter, as an example, offers access, at a relatively low cost, to an audience—your customer base—that is (out of all possible audiences) most likely to listen to what you have to say.

If you focused on improving how you communicate about your business and your products to that base and took the time to create a feedback loop on those efforts that included an LTV measurement, you’d have a good shot at finding and building a virtuous circle that would grow value over time.

It’s not sexy, but if you can find the piece in that execution to grind on that will improve that LTV for each customer you acquire, you’re not only getting more of a potential economic value from each customer, you are also increasing the likelihood they will be advocates of your brand to others—attracting more customers, who will be more valuable and advocate for more customers, and so on.

As with the financial gains from compounding interest, it takes a long time for the impact of the effort to show up. There’s going to be a period where the gains are small, where it feels like you’re going nowhere—”feels like” being the key issue!

In those moments it’s easy to give up, to try something else. But you have to be persistent, you have to be consistent and you have to be willing to commit to something long enough for the effects to be seen.

Whether you’re just starting out, or further down the road, finding that input, identifying it, measuring it and feeding that input back into your business—closing the loop on that virtuous circle—will give you an outsized advantage in the market place over the long-term.

SEO & Compounding Results

Applied consistently, over time, SEO efforts can build slow and steady growth in organic (Google) website traffic. A positive increase in traffic—even a small incremental gain—sends a signal that Google follows, sending even more traffic to the site, producing a virtual circle of increasing demand.