10 Things I Learned from Joanne: Lesson 4
Inside vs Outside the Model
This is the fourth article in a series I’m calling 10 Things I Learned from Joanne. Joanne O’Connell is the co-author of the book that we recently published called Intentional Marketing: A Systematic Approach to Optimizing Performance.
The other articles posted on the Anduro Blog are:
In the first lesson, I learned that each level of the marketing and sales model must be measurable. Joanne’s logic is that if you have a level in the model with no measurement, why bother with the level? I agree, wholeheartedly.
In the second lesson, I learned the difference between a measure and a metric. Read the article to discover Joanne’s genius and the magic between collecting and calculating.
In the third lesson, I learned that the basic components of marketing are simple but need to be in “alignment”. You need a product that solves a problem, a market that wants the problem solved (and is willing to pay for the problem-solving product), and a series of marketing activities that connect the market with the product.
Inside vs. Outside the Model
“Inside the Model” refers to all the numbers (measures and metrics) in the Customer Acquisition Model that the company controls. “Outside the Model” refers to information, trends, and forces that may have an impact on the company but are outside the company’s direct control.
This concept, once you get it, is obvious. Until you hear it you don’t really think about it. Unconsciously, every marketer will know what Joanne is talking about. However, the distinction that Joanne makes between inside the model and outside the model helps to simplify marketing and make it less overwhelming. This is a critical component of the Intentional Marketing System as described in our book.
Inside the Model
Let’s start with Inside the Model. “Inside the model” refers to the numbers that measure each level of the model and for comparison between levels. Everything inside the model comes from the measures that are collected and managed by the marketer. The measures are sourced from within the company (this is a critical concept) and added to the marketing statement (page 66). As I learned in the second lesson, the metrics are calculated as described in Phase 2 – Build the Model (page 72). The beauty of Joanne’s idea is that you only need to collect the measures. Once you have figured out the formulas for the metrics, they are calculated automatically. Brilliant.
The generic levels of the model with seven measures and ten metrics are illustrated below. I described this in detail in 10 Things I Learned from Joanne: Lesson 2.
By Tanya White
Outside the Model
Next, let’s look at Outside the Model. In contrast to the numbers collected and calculated “inside the model”, information “outside the model” is gathered from outside the Customer Acquisition Model and also outside the company. This information is not added to the model. Instead, this information is gathered to help you understand and interpret the context of your current marketing strategy and efforts. This aspect of the Intentional Marketing System is described in Phase 4 – Improve Alignment (page 105).
In our book, we use the following illustration:
By Tanya White
As you can see, the Customer Acquisition Model is inside the circle. The company has access to all these measures. As described above, the metrics (not shown in this illustration) are calculated automatically.
Outside the circle are the sources for more information that may (or may not) be relevant to you and your business as you make investments in marketing and develop campaigns to generate a positive response from the market.
Joanne’s entire career has been in the field of market research. We don’t use the words “market research” frequently in our book but Phase 4 – Improve Alignment (page 105) is all about market research. Market research is looking outside the company's walls to find opportunities to find more customers and identify threats that may force the company’s marketing system to be out of alignment.
Conclusion
Our book has two major parts:
Part 1 – The Big Picture (page 1) This is FREE.
Part 2 – The Details (page 20)
Part 1 includes a short (but important) summary of the Intentional Marketing System describing the difference between inside and outside the model (page 4):
“The system is based on developing two different types of excellence in marketing.
The first involves developing a level of excellence in optimizing performance within the existing customer acquisition model. Performance is optimized when the numbers within a model—based on the company’s existing product, market, and marketing—have reached the best level of performance that marketing can achieve.”
THIS IS INSIDE THE MODEL – This is what the company can control.
“The second involves developing a higher level of excellence related to improving alignment between the components of the product, the market, and marketing. This is reached when the company has developed a business model where the product, the market, and marketing all support one another in fully complementary relationships. The market wants and needs the product, and marketing supports the purchase of the product.”
THIS IS OUTSIDE THE MODEL – This is what may have an impact on the company and is outside the company’s control.
In other words, for marketing to be effective, you need to know what is happening inside the company AND what is happening outside the company.