Beware of The Fallacy of Sunk Costs
Don't let a previous investment get you stuck from making progress today. If you're in a hole, stop digging.
Almost every mistake I've made in business now and during my time as a marketing leader comes back to me being too attached to a sunk cost.
The sunk cost fallacy: "the human tendency to stick with endeavors in which we've already invested time, money, or other resources even when changing course would be the more logical choice."
- Hiring. It's "easier" to stick it out with the wrong hire because you've already invested time, money, emotional capital, and because it will be a challenging conversation to exit them from the business, so it's "easier" to stick it out.
- Tools. Well, I just paid $15k 6 months to re-do the website, so even though it's not working or it's now "wrong" because my business has changed or the market has changed ... I just spent $15k it would be a waste if I don't use it right? Even though it's the wrong website, the wrong message, the wrong tech.
- Agencies. Well, we spent $20k to have that agency do XYZ, we might as well slog through it and try to make it work. Even though it might be easier to throw it in the trash and start over. Or worse - we decide to not do something strategically because it goes against a cost decision we've made a few months ago. I know that X strategy is right, but we've already spent Y money on this other thing, so I'm going to try and make this work even though I know it's the wrong strategy.
Do you fall into this trap too? t's really hard to get out of. But it's a common pattern I see with myself and others in business, and with marketing it is VERY easy to stick to plans that are not working, agencies that are not delivering, tools you've already spent weeks onboarding etc.
And I can promise you it is almost ALWAYS easier (and better in the long run) to rip the bandaid and move on.
I think this is especially true with hiring and working with the wrong people. Hire slow, fire fast.
Beware of the sunk cost fallacy.
- Dave
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Podcast with Snowflake's Head of ABM
If you are in need of some ABM knowledge either personally or to get ideas to help your company's marketing strategy than you need to go and find this week's Exit Five podcast with Hillary Carpio from Snowflake.
Hillary runs a 20 person team focused on ABM at Snowflake today and we talked about:
- Why Snowflake has become an "account-based organization"
- ABM vs. Demand Generation
- How to measure ABM
- What an effective ABM campaign looks like
- Creating a tiered ABM strategy
- Why marketing exists to support sales at Snowflake
- How tools like ChatGPT and Jasper can help ABM marketers, and more.
How to listen: search for Exit Five podcast everywhere you listen to your podcasts and you'll see it.
PS. This has quickly become one of the most popular podcast episodes to date. Thanks for continuing to listen, share, and support the podcast.
Have ideas for future episodes and guests? Send your pitches to hello@exitfive.com.
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Thanks To Our 2023 Presenting Sponsors
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PS. Join 3,300+ members in the Exit Five private community today, risk free.
There are 3,300+ B2B marketing pros in the Exit Five community. Thousands of B2B marketers jump into the Exit Five Community daily to share tactical advice, give and receive feedback, and exchange ideas about what’s working in marketing today.
You can try it 100% risk free for 30 days - I am true to my word. If you join, don't get value from it, you can email us within the first 30 days and we send a refund no questions asked.
Here are some the most popular discussions from the community this week to give you a sense of what we talk about in there:
- (9 comments): Is Zoominfo the best in its category? Or are platforms like Cognism or Apollo better? Our ZS license is up for renewal and we are wondering if our investment is better off with other providers. Any advice, recommendations or suggestions would be greatly appreciated.
- (43 comments): Hey, Exit Fivers. I'm having an off week and need a good laugh. What's something that HAS to be part of your job as a marketer, but you lowkey despise? For me, it's got to be webinars. My logical brain says, yes, I see the numbers, I see the leads, these have worked for us sooo let's keep going. My emotional and personal brain says, these are lame and so much work.
- (7 comments) Any email delivery pros here? We're hitting spam/promo folder a fair bit with high-quality emails. I know that sounds like an oxymoron but our conversion/engagement is high on these.
- (15 comments) For those of you who have run successful ABM campaigns before, what did you find to be the most effectives pieces of content or content types that made a positive impact overall?
- (11 comments) G2 reviews: Any best practices on how to scale G2 reviews from a process standpoint? We have some ideas from our side: 1. PLG ....target our top 20 customers. NPS integration would be better! 2. Support/CS touch point..if the customer has a good experience, we can push for the review. This is one of the best options to scale, in my view. 3. Quarterly newsletter push (as a side topic) and $25 incentive (for first 25/50 reviews)
If you're not a member, we'd love to have you join us.
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