Have you ever bought tickets to a movie and endured the terrible plot and poor acting because you didn’t want the money you paid to go to waste?
That decision-making factor is the premise behind the sunk cost fallacy that Rolf Dobelli explains in his book, “The Art of Thinking Clearly.” And it’s a false justification marketers make all the time.
The term is defined as a biased decision individuals make to stop or continue a course of action solely due to past irrecoverable invested costs (either money- or time-related).
Dobelli put the term in perspective for marketers through the following example:
“Our advertising campaign had been running for four months and had not met even one of its goals. I was in favor of scrapping it. The advertising manager resisted, saying: ‘But we’ve invested so much money in it. If we stop now, it’ll all have been for nothing.’ Another victim of the sunk cost fallacy.”
I’m sure most marketers — including myself — have fallen into this trap. Who wants to invest time and money in a marketing initiative, only to pull the plug on the whole thing? I used to think it was just a component of optimism, but I’ve learned this fallacy can jeopardize your company’s entire marketing strategy unless you act quickly.
This idea came up recently when I spoke with one of our salespeople about a call she’d had with a lead. The prospect worked in the marketing department at a medium-sized company and relayed her hesitations about working with us: She’d already spent money and resources working with a PR firm, which turned out to be a waste, and she didn’t want to make the same mistake twice.
She was trying to avoid investing further in a sunk cost.
This lead wanted to gain name recognition for her brand, and her company’s PR attempts had fallen flat. Her vigilance to avoid the same scenario — and further lost money — had caused her to fail to make a distinction between what those companies offered (third-party mentions) and what we were proposing (a content marketing strategy). This marketer was so aware of avoiding the sunk cost fallacy that she was having trouble recognizing it.
Determining the right time to scrap your failed marketing efforts and take a new direction is often difficult. But focusing on tactics that will achieve your long-term goals can set you up for longevity in your industry. Contributing content can build your credibility and connect you with the right audience — and put you on track to becoming an industry leader. And that’s a big-picture objective many marketers are finding value in.
But before you begin producing content, you have to develop a content strategy that aligns with your company’s specific goals and needs.
Here’s how to kick-start that process:
1. Define your audience. Before strategizing or writing an article or blog post, you need to determine the type of people you’re trying to reach. By creating buyer personas, or character descriptions your team develops to pinpoint the type of person you want to reach, you can write for a specific person with unique needs and give your content a clear focus.
When outlining personas at Influence & Co., here are some things we try to include:
Get as specific as possible with each persona. It might take some time, but narrowly focused personas will lend tremendous insight into your content and help you resonate with each one.
2. Dive into your industry’s pain points and solutions. As you brainstorm ideas for the content you’re going to produce, research is the best place to start. By digging into industry trends, common customer pain points, and other interests, you can gather inspiration and begin to shape potential topics.
3. Produce helpful or engaging content consistently. We live by this motto at Influence & Co. Not only should your team be pushing out content on a consistent basis (once a week, twice a week, etc.), but quality should also remain a priority. Remember when I said 90 percent of marketers are using content marketing? The Internet is cluttered with content, so offering fresh perspectives and new information will be your differentiating factor.
4. Educate, don’t sell. This goes back to content marketing basics. Companies churn out openly promotional content every day. But your audience doesn’t want to hear about how great you are just yet; they want informative insight that guides them through their problems and decision-making process. Put the sales plug in your back pocket, and take it out during the sales call.
As a company starting (or amplifying) your content efforts, you need to have education at the top of your priority list. If your team writes an article that doesn’t educate or benefit a specific audience in some way, succumbing to the sunk cost fallacy will only tarnish your efforts and push your audience away.
Consumers value meaningful relationships with brands, and that lies at the core of content marketing. Don’t try to sell them; demonstrate your expertise by publishing high-quality, research-backed content that gives your readers exclusive insight so they consider you a go-to resource for industry knowledge.
5. Consider outsourcing options. Without a fully staffed content team — content strategists, editors, inbound marketing experts, and distribution teams — it’s hard to accomplish your goals in a timely, efficient manner. That’s where outsourcing comes in.
Influence & Co., for example, specializes in helping companies build credibility and become thought leaders through contributed content. When clients sign on, we work as another arm of their company to guide them through content creation, making the process more efficient and less time-intensive.
Choosing the right team is essential to your content marketing success. Be sure to ask the right questions when hiring a content firm or evaluate the pros and cons of freelancing before taking the plunge.
Break Past the Sunk Cost Fallacy With Thought Leadership
As you take the necessary steps to produce engaging, educational content, you should understand the role thought leadership plays in building your influence. Writing a blog post or signing off with “Industry Guru” won’t earn you a reputation as a thought leader; it requires educating with a purpose and providing cutting-edge, forward-thinking perspectives.
Here are key signs your company needs to implement a thought leadership strategy:
Positioning your brand as a leader in your industry will ensure your company’s success in the long run. If you’re finding yourself saying yes to one, two, or five of the points above, but the sunk cost mentality is holding you back, it might be time to sit down with your team, manager, or C-suite and consider amplifying your content marketing efforts with a thought leadership strategy.