Have you ever struggled to convince a stakeholder a test is needed?
I can honestly say that’s a very tough task when we try to growth hack not only startups but also big messy corporations. They have legacy and stakeholders all wanting different results, making your job much harder. If you don’t speak the same language, how can you be understood?
Here is what you can do:
A: Complain about the stakeholders not understanding the importance of a test, then hope that things change.
B: Adopt the “Profiteer” mindset.
If you choose Option B, I wasn’t expecting any less of you! I’m so, so proud.
It’s also where we come into play. We started teaching our team and clients what we called the “Profiteer” mindset - one of the three additional ways of thinking to gain a Growth Mindset 2.0.
Are you curious about what those different mindsets are? We’ve got you covered!
But first, if you’re not entirely sure of what the Growth Mindset is, check out our blog post about the Growth Mindset 2.0 or even the 7 pillars of Growth Hacking! You’ll learn everything you need there.
What is a “Profiteer”, and why should you become one?
We, marketers and growth hackers, love our metrics. Each tool has its own language and measurements. So which language do you speak? Another question here: which language does the CFO care about? Spoiler alert! He or she mainly understands one metric: Profit.
Your goal as profiteer is to speak their language, be able to convey the importance of some tests over others.
When you translate everything to profit you make it equal. 20% increase in CTR sounds terrific, but what does it deliver? How many hours did it take to achieve?
I fell down this rabbit hole just a few months ago. A colleague asked me to do a Google Ads audit for her client. After an hour or two, I thought about quantifying the impact of this audit; I quickly realised the audit had cost the client more so far… Unless the budgets went way up, Adwords is not the channel we should be focusing on.
Start high-level first
If I had started with the high-level impact, I would have filled in my numbers into my lift calculator and seen: an audit is not what we need right now. We need to see what other channels would deliver more impact or show the clients the economies of scale of increasing their budgets.
But I hadn’t, and I realised it after wasting four hours - let’s call them learning hours. Since then, I always push for a high-level profit analysis first.
Now the question is: how do you analyse profit?
Set up your analytic tools to measure and think in terms of profit
Another reason why we struggle to think in terms of profit is that often our key analytic tools don’t measure it. This is why I love to set up a Proxy Profit Metric:
The MVP version of this is setting up a calculated metric with an average cost that you subtract from the revenue to give an idea of profit.
The alternative is you do it per product/service and send that first to a custom metric. Then you can do the same and set up a more accurate calculated metric.
Profit is not the only important consideration. If you look at it closely, most people think too little in terms of profit rather than too much. We could all use a bit more a profit mindset.
To summarise, how can you be a profiteer?
- Start high-level and break it down
- Talk in profit, not CTR, conversions, etc
- Calculate long term impact of experiments for client
- Create revenue, save costs or provide learnings
- Make measuring profit easy