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How Lambda and Sigma Are Squeezing Inbound Marketing

Anaconda Vise

Inbound marketing is feeling the vise-like squeeze of Internet trends.

I attended Hubspot’s Inbound13 conference this past week. All I can say is, “Wow.” I’ve been going for four years and the growth in quantity and quality have both been staggering. I felt a bit like a pre-adolescent girl at a Big Time Rush concert, as some of my favorite marketing thinkers and doers were there; Seth Godin, Mitch Joel, John Jantsch, et al.

In several of the keynotes, they referenced two statistical distributions I’ve mentioned on this blog several times; normal and power law. But keynotes from Seth Godin and Nate Silver made me realize it was time to revisit those curves and update my thinking about what they can teach us about inbound marketing.

Editor’s Note: I promise this post will not give you an ice cream headache from the math involved. The graphs tell the story quite well!

And the story is this: Being average is a moving target and it’s not quite as comfortable to be there as it used to be.

Two Important Inbound Marketing Curves

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The first curve I want to talk about is the normal distribution, or bell curve. This tends to describe the frequency distribution of random data patterns. There’s a big hump in the middle – the mean – and it tails off quickly on both sides. The height and width of the curve is determined by the standard deviation (or sigma) of the data population. The empirical rule of statistics tells us that 99.7% of all observations fall within three sigmas of the mean.

In his keynote, Seth Godin talked about average companies who sold average products for the average consumer. In the pre-Internet days, this was fine because sigma was very small. Consumers didn’t have many choices and it was difficult and dangerous for a business to try to earn a living outside of that three-sigma area. But the problem today is that sigma is getting bigger. No. It’s getting HUGE. The choices we have as consumers are exploding. As Godin said in his keynote, if you were looking for a “purple, left-handed banana slicer” you could probably find one on Amazon. And if not, then you could probably find someone to make it for you.

Inbound marketing sigmas

As sigmas get bigger, average becomes more crowded and less profitable.

The same is happening with inbound marketing. As more and more organizations jump into content marketing, the sigmas get bigger and average is looking less and less remarkable. It’s getting harder to earn a living in the middle and we’ll all need to keep moving out on to those edges in order to make it work.

The second curve goes by many different names. Mathematically it’s a cumulative distribution function but most of us call it by the Pareto or 80/20 rule. It describes a statistical distribution in which 80% of the cumulative total takes place in the top 20% of observations. Put another way, you can achieve 80% of a desired result through the first 20% of effort. The steepness of this curve is determined by a coefficient called lambda.

Inbound marketing lambdas

As lambda get larger, it’s faster and easier to reach 80%.

As lambda increases, the curve shifts to the left, indicating that you can reach the results faster and more easily. In other words, the 80/20 rule becomes the 90/10 or 95/5 rule. This shift is happening, too. The tools available to marketers and the number of inbound marketing practitioners is steadily growing. We’re becoming more efficient at adapting and leveraging these tools in our efforts.

Many companies who adopt the “inbound marketing religion” begin to see results fairly quickly. This is because they’re using many of these tools (blogging, social media, landing pages, email marketing) for the first time. Even if they aren’t very good at it in the beginning it works because mediocre inbound marketing is better than no inbound marketing. However, after the initial sugar rush it gets harder and harder to drive results.

The Marketing Lesson

I wish I had better news for you, but the bottom line is this: It’s easier than ever to go from zero to average and less effective than ever to be there. It means that businesses who may be enjoying a competitive advantage right now can’t coast because their competitors can catch up very quickly. And it means that your average blog or average ebook isn’t going to cut it like it might have a couple of years ago. Remarkable doesn’t happen in the middle; it happens on the edges.

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