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As we come into a critical sales period of the year, it is crucial to deliver and reach our business targets. However, if we only focus on results in the short term, we miss a valuable opportunity to build competitive advantage and drive performance in the long run.
A great way to look back on the year is to consider your Return on Learning or short: RoL. And no, it’s not rofl. One of my famous quotes highlighting the mindset behind comes from Edward Deming who stated that “Learning is not compulsory … neither is survival.”
What is your Return on Learning?
Unlike our normal metrics of Return on Ad Spend or Return on Investment, RoL is qualitative and cannot be measured in a simple way but as the old adage goes, ‘not everything that can be counted counts and not everything that counts can be counted.’ Return on Learning fits into the latter category but this does not make it any less significant.
So, Return on Learning is a way to understand and capture what you are learning in a time of constant testing and improvement. Having this concept for yourself and ideally embedded in your organisation – whether it is PPC, e-commerce or in general – reinforces learning and creates the ability to not only improve in the future but to do so consciously. And here you can find additional input highlighting the importance of compounding through marginal gains.
Performance data vs. Return on Learning
As Digital Marketers we operate in a world full of data and performance. This is brilliant and I often reflect on how lucky I am to operate in such a data rich business environment. However it can lead to short-term decisions as well as complex discussions about value (attribution, budgets, etc).
By having an additional focus on ‘what are we learning?’ we activate our focus on a longer term approach. This can radically improve our marketing knowledge and hence boost performance, placing more emphasis on the development of our people as a side effect, great. Moreover, it allows us to make sure we are at the centre of insights for strategic decision making.
You may ask whether it matters as long as KPIs are heading in the right direction; I would argue that it absolutely does over the long term. As David Nadler highlighted in the New York Times in 1989, “A productive failure is one that leads to insight, understanding, and thus an addition to the commonly held wisdom of the organization. An unproductive success occurs when something goes well, but nobody knows how or why.”
With some vendors building ‘black boxes’ when it comes to algorithms and optimisation, there is definitely the danger that you miss out on real insights and learning that improve performance.
Develop a test and learn mindset
The key starting point is to be curious to learn and improve; with that in mind there is little that can stop you succeeding. The real question is how many tests you can actually come up with and execute them thoroughly? Again, in Digital Marketing we are often in the enviable position of having a lot of opportunity to test, be it new features or enriching our approach with business data regarding inventory, price and/or margin. You might also be interested in reading more on Testing the solution: AI-based bidding goes live in Google Shopping.
It is also this point that makes it extremely easy to go from one test to another without truly learning what worked and why, which is a strong reminder to limit the amount of testing. The next question that comes up is how much to limit and the answer is always ‘it depends’; on team size, type of test, number of markets you are in and so on. I recommend a ‘less is more’ approach to testing (for instance no more than 3 tests at any one time), as it is important to stay focused than to boil the ocean.
Evaluate and challenge your retrospective
Agile approaches in software development have taught us a lot in the marketing world and conducting a retrospective is a good example of this. Essentially it is a simple way to ask yourself and your team:
- What worked well
- What could be improved
- What further support is needed
- How much commitment for the coming period
A retrospective can be used either at the end of each test or on a regular basis as part of reporting flows, such as during monthly business reviews. This means you have a written record that can be shared with other stakeholders, building bridges with other areas and sparking other ideas across your organisation.
Establish a feedback culture
Feedback is a gift, as we all have likely heard this expression, but it fails to capture the nuance and delicate nature of the topic. See feedback as two parts, one is the ability to give feedback in the right way, the other is the ability to seek and listen to the feedback. As you can imagine, the latter one often falls short.
A daily, weekly or monthly internal talk or session can help establish the routine necessary to benefit from the insights your teammates and colleagues already have. Make sure to focus on the gist of the feedback and translate them into specific, actionable items. By doing so, you are moving more into the direction of maximising your Return on Learning.
Practice to maximise your Return on Learning
The theory sounds great I can almost hear you say, but how can you actually apply what I have written down here? In order to answer that let me share a real example from when I have put this in place and it worked well. A couple of years ago my PPC team was asked what we could do in order to hit a new stretch target halfway through the year. This led to a brainstorm session with the whole PPC team and stakeholders.
Out of this session, we generated several actionable items that we could test and evaluate to gain better insights on certain topics. After some weeks of doing that, it became a real process that was executed with passion all along. But, most importantly, the format itself held its promises, as we discovered new ways to improve our understanding leading to some great long-term effects. The hard thing is that you need to be open and willing to really get to the gist of the feedback. It is genuinely underestimated how much practice this takes.
With so much going currently, it is even more important to activate conscious learning via reflecting on your Return on Learning. The next time you do a performance deep dive, make sure you bring to life what you have learnt utilising the techniques about, not just what your standard KPIs are doing. This will enrich your own performance and create valuable insights for your colleagues.
Stay tuned for tangible examples
In order to make this more tangible, I am preparing practical examples that worked well in the past. Stay tuned and find them in my next blog – already in the pipeline.