There’s a key scene in the movie “Moneyball” that says a lot about how Billy Beane’s formula was designed to work. Beane is surrounded by his staff of scouts, grizzled old baseball men who have been the determiners of who gets signed and who doesn’t. They have their formulas about what it takes to succeed as a ballplayer, and for years they have been right more times than not.
What they have failed to realize is that under their feet the entire system had changed – money altered the equation in a fundamental way, allowing players with demonstrated skills to go wherever they wanted, and teams created an open market for their services. That’s a market the As couldn’t compete in – Oakland had a small market team with limited resources. The As were constantly outbid by their big market competitors and the best players on the team inevitably left.
In the scene, Beane is trying to get these older men to see things in a new way. They have to find the players other teams undervalue – read that as cheaper players – and to do that, they have to measure everything and turn the formulas inside out.
Instead of assessing a player based on batting average, home runs and earned run average, they go back to what might seem obvious, but is central to what it takes to win: getting on base and scoring runs, and keeping opponents off base and not scoring runs.
In this new way of looking at baseball, they quickly found that a walk can be as valuable as a long single, and a fly out on one pitch is better for a pitcher than a multi-pitch strike out.
So, what does this mean for us as we look at social media, marketing and public relations? I think we are looking at a very similar situation in the marketing world. Between an emerging generation of users embracing new tools on a daily basis, and constantly changing technology that is becoming commonplace in our society, the entire system of communicating to consumers has changed under our feet. Now we need to find a new perspective on how we work and profit.
Here are some lessons that we can learn from Moneyball’s intriguing parable:
- Measure everything and take apart all of the formulas your company has been living by. CPM may be as meaningless to advertising to 18-24-year-olds as RBIs are to the success of a team in a given late-inning situation.
- Find a way to do more with the dollars you have. For instance, if you haven’t reassessed your banner ad strategy lately or the traditional press releases that don’t get picked up, you might be spending money with little to show for it.
- Use research to find out the elements of your business your competitors – and you – have been undervaluing. Billy Beane picked up pitcher Chris Bradford for next to nothing because teams didn’t like how he looked when he pitched. Not how he pitched or how successful he was, they didn’t like how he threw the ball. It could be that an email marketing campaign might not be as sexy as an iPhone app, but it may be a better use of your marketing money.
- Don’t swing at every pitch. Moneyball compared each at bat to a hand of Black Jack with every pitch forcing you to reassess your strategy. In marketing, that can mean not jumping on every trend or new technology, but being patient and assessing the opportunities before making a move when it makes sense for you.
- Don’t accept anything at face value. The traditional assumptions may be completely wrong in the new paradigm, and one of the worst things you can do is to continue to operate as you always have for no reason other than tradition.
- Don’t accept failure with the hope that you will get lucky. The As scouts started with the assumption that they couldn’t replace Johnny Damon, Jason Isringhausen and Jason Giambi and still win. As the movie sought to prove, the As had other options besides either overspending or losing more games. By working smart, and using measurement and analysis, they could beat teams with much larger payrolls. So, can you.