Last week, I discussed the concept of opportunity cost and how it relates to the impact and value of resources such as money (if you missed that article, you can read it here).
Today, I want to focus on the ‘good enough problem’ and explore why many CMOs, business owners, and CEOs get hit hard and experience the downfalls of opportunity cost because things are “good enough.” When things are “good enough,” there is a tendency to neglect deeper analysis and efforts to improve the brand.
The ‘good enough’ problem plagues businesses and brands; Busy CMOs can accept running ineffective campaigns or lack focus on innovation or growing the brand because things are good enough. CEOs or business owners can pay another month toward a subpar agency or marketing manager because the work is not bad enough to go through the time, money and effort to onboard someone else.
The problem is that many don’t realize how this thinking negatively affects their business.
The “good enough” principle explains the mental justification we allow ourselves when a person, thing, or relationship is adequately sufficient and further improvement or change may not be necessary or productive. The “good enough” principle applies to all areas of life. Humans tend to hate change, and the good enough principle tends to be our natural fall-back tendency.
The “good enough” principle is most often discussed in fields such as psychology, economics, and engineering. We don’t talk about it enough in marketing and branding, but it is a huge weight holding most brands back.
The “good enough” problem is why many stay in relationships longer than they should or why that employee who needs to be let go hangs on for another year.
You hold yourself back longer by not addressing what needs to be changed now because something more urgent or important always holds you back from propelling forward.
Businesses suffer from the ‘good enough’ problem because they can’t see the business they are losing by not modernizing, changing campaigns, shifting priorities or rebranding. A constant comfort still exists, and other things take priority because it’s working enough. Alot of companies have no measure of how well something is really working, and because you keep getting the same repeat customers and maybe a handful of referrals, the fear of changing strategies can be crippling. What if you lose all that you’ve built? What if the investment doesn’t work? The real question that you should be asking yourself is, what will happen if you don’t change and adapt?
Brands that don’t change die.
The Good Enough Problem & The Case of Blockbuster.
Blockbuster, the once-dominant home movie and video game rental services giant serves as a cautionary tale of how the “good enough” principle can lead to failure if the brand refuses to innovate and adapt. Founded in 1985, Blockbuster peaked in 2004, employing over 84,000 people worldwide and boasting 9,094 stores. However, as the industry shifted towards digital streaming, Blockbuster failed to transition and embrace the changing landscape. In 2000, Netflix approached Blockbuster with an offer to sell their company for a mere $50 million. The story goes that the CEO of Blockbuster dismissed the offer, considering Netflix a small niche business that was losing money at the time and would never be in the future. We all know where the story goes– this decision would prove to be the final blow, as Netflix went on to amass over 103.95 million subscribers worldwide and generated a staggering $8.8 billion in revenue as of July 2017 alone. Blockbuster’s failure to digitize and modernize is a perfect case study of the good enough problem in the business world and how focusing on what was “good enough” can lead to missed opportunities and their ultimate downfall.
The biggest issue with the ‘good enough’ problem is that by the time the problem becomes obvious, it’s often too late or too expensive for a quick fix. The good enough problem is like a disease that continues to manifest until the symptoms can no longer be ignored. By the time you head to the doctor, it’s stage 5 cancer, and your options are limited.
Like in the example of Blockbuster, it was too late for Blockbuster to compete by the time it became clear that physical movie rentals were dying. They were starved for cash and couldn’t acquire one of the major players in the space. This isn’t an extreme example– trying to catch up to your competitors who are digitizing can cost a small fortune if you don’t start early. You can buy cheap if you start late, but the product won’t be as effective, and you will burn cash.
You may think your ten-year-old outdated website is fine, or the lack of modernizing your social media presence doesn’t matter because you still get word-of-mouth marketing, or you think your job is secure by not investing in a personal brand this month–you’ll do it next quarter, you say– your busy and your brand is Good Enough. The problem is that things move much faster in the digital age; it may still be good enough for this year, but ignoring your website for another year leaves it five years outdated next year. The difference between good and great branding is subtle details that are hard to place your finger on. If your customer is choosing between two options and your brand feels outdated, it’s a slight nuance that will leave you left behind. It may not be super obvious to anyone looking at it, but gut feels from customers can lose you millions.
Although business may be okay today, the core question you have to ask yourself is, what business are you losing because of this thinking?
This is where Opportunity Cost and the Good Enough problem overlap.
Because things are good enough, you don’t act now on things that could greatly help you tomorrow. The digital age poses a weird challenge for most business owners, especially those over 40. You’ve been successful in the past without being digitized, so you hold off year after year for making a move to invest in your personal brand or an improved digital presence for your company because things still feel good enough. The problem with this thinking is that by the time you realize the impacts of not modernizing your brand, a new website isn’t a band-aid that will make customers flock to you. Branding takes time; it’s not magic, and it’s not immediate. Waiting too late will hurt you, and you will be more likely to be taken advantage of by an agency that smells desperation. If you haven’t changed your strategy or focus in a few years, chances are you are probably suffering from this problem, and it is time to step out of the box and reassess the people in the driver’s seat of your marketing or how you approaching the branding/advertising for your business.
Thank you for reading this week–see you next week!