Why do the lessons we learn usually come from our mistakes not our victories? And why do optimal outcomes usually come from our doing things within our core competencies while outsourcing the rest?
Recently, I had two different conversations with prospects who sold rather complex consulting services, both of whom were in significant pain in terms of marketing their businesses effectively. The issues they spoke of included struggling to explain what services they provided in a compelling way and generating qualified leads for their sales folks to convert into business. These, by the way, are the most common struggles I hear from prospects so if that sounds like you, don’t feel bad and consider calling me to talk.
Anyway, in both cases, these two prospects had not yet learned what their marketing struggles were costing their business or costing them personally.
Yet they both admitted something needed to change, a sign they are moving closer to resolution. One went so far as to say he needed to “stew in it” (his marketing struggle) a little longer before he would seek outside help– translation the pain of paying someone for help was greater than the pain of wrestling with it himself.
All of this perfectly illustrates: Opportunity Cost.
Business Dictionary defined opportunity cost as: Benefit, profit, or value of something that must be given up to acquire or achieve something else. Since every resource (land, money, time, etc.) can be put to alternative uses, every action, choice, or decision has an associated opportunity cost.
In the case of the two prospects, their time as a valuable resource was not being considered as part of the cost of their business problem. Their executive time could be put to better use rather than stumbling around with their brand’s positioning strategy, marketing outreach plan and even graphic design.
The example I remember from business school was the opportunity cost of changing the oil in one’s car. Sure we may all be somewhat “capable” of changing the oil but considering the time (and learning curve) involved, our time is actually worth more than the money we would pay someone else (a car care expert) to perform this service.
You may also hear opportunity cost associated with build or buy/outsource decision-making. I have a healthy outsourcing mindset, for example, I outsource advertising and graphic design, SEO work, some copy writing, computer repairs and web hosting, among other things. Why? Because at my hourly billing rate, it simply does not make sense for me to try and do all of these things myself— the opportunity cost is too great. Plus there’s usually an intangible cost for folks like me, the frustration level that comes with knowing that “do-it-yourself” does not always translate into optimal outcomes.
As you plan for 2010, think about how you will create YOUR optimal outcomes and if you need to make a few mistakes along the way, that’s ok they’re not really mistakes if you learn the opportunity cost lesson.
About Pecanne Eby, MBA
Pecanne is an independent Marketing Consultant in Denver, CO. With 20 years of marketing practitioner experience, she helps clients become fearless about their marketing decisions through one-on-one consulting engagements and group Brand Boot Camps.
