On the Origin of Customers – Evolution and Marketing Compared

By , August 10th, 2011 in A/B Testing | 9 comments

Over 150 years ago, Charles Darwin released his book “On the Origin of Species”. He forever changed an entire scientific field with his theory of evolution and had a massive impact on the 19 century world. He also kick started a debate that still rages today…

The theory of evolution and survival of the fittest can be seen very much in the business world as companies come and go, grow and shrink and one gets absorbed into another.

But what comparisons can be drawn from evolutionary biology in the evolution of our businesses and what influence can we exert over our own evolution so that we can adapt to the environment we find ourselves in.

To distill Darwin’s theory we look to evolutionary Biologist Ernst Mayer to summarise the key points raised in Darwin’s book, On the Origin of Species.

Below I will draw comparisons between Mayer’s summary of Darwin’s points and aspects of our marketing efforts.

Every species is fertile enough that if all offspring survived to reproduce the population would grow

If we think of a species as our market segment and the customers within that market segment as the population. Then if our business is good enough, we have the potential for the population to grow.

But what of being fertile and surviving? Well maybe we can look at the lifetime of our customers. How long do they stay with us? If we can increase the length of time out customers stay with us then customer retention (survival) increases and our population (customers) will grow.

If we also provide a good message to market match for our market segment then we can attract more new customers and our population will also grow.

If we have done our market research correctly, before even going after a market segment then we should be fairly certain that segment is fertile enough to support our business. And if customers stick with our business into maturity then the population of lifetime customers will continue to grow until we become number 1 in that market.

What you can do today

Look at your top landing pages on your Website. Where is the traffic coming from. Is there a good message to market match between where they are coming from and your landing page and is there an obvious call to action on the landing page.

Despite periodic fluctuations, populations remain roughly the same size

If we make no attempt to grow our business then we recruit new customers at a steady rate and customers stay for a while, but leave at a steady rate, our business stays roughly the same size.

We might spend lots of money on attracting new customers but maybe don’t put the work in to make sure they stay with us. So our number of loyal customers will remain the same. Our business doesn’t grow.

To help our business to grow, we need to identify the areas for improvement and change. Where are the opportunities for improvement and change? On every touch point we have with the customer.

What you can do today

Write down all the touch points you have with a customer? Your top web pages, all the emails that go out, all your social media channels, typical customer service calls, all your mailings, all your campaigns.

Now, is the customer getting a consistent message across all touch points? Can you find any weak points among all these touch points? All weak points have the potential to lose you customers.

Resources such as food are limited and are relatively stable over time

In business terms, our resources could be seen as our products and services. This is how we feed our customers.

In the natural world, populations of species will grow, if the food source grows and reduce as food becomes scarce. In the same way, our businesses can grow if our products and services are good and reduce if they are poor.

To remain stable over time then we don’t make any changes to our products and services. But if we want to influence the growth of our business, we need to improve our products and services. To do this we need to listen to our customers.

If our products remain static then we will attract a certain number of customers so that our business will grow to a certain level that matches the quality and standard of our products in the same way that a population in the natural would grow until it meets the limit of its food source.

But if we find ways to improve the quality and standard of our products, then more customers will be retained. In a similar way, if we broaden our product range then we may appeal to more customers and our number of customers will grow.

Looking beyond products and services as resources we see the more business oriented definition of resources… human resources. If we have the best and brightest human resources, then we should have the best products and services.

What you can do today

Find out what your customers like and don’t like about your products and services. You may discover surprising reasons why your customers like you. Can you include these testimonials in future marketing campaigns? For the things they don’t like, what can you do to improve and change. Make sure you test and track the impact of any changes.

A struggle for survival ensues

We are in constant struggle for survival in our businesses. The struggle for survival here can be against market influences as well as competitor battles, customer apathy and employee motivation.

In the economic climate of the past few years, plenty of businesses have disappeared leaving those who are left to pick up market share and grow.

Here are ways in which we can come out on top in the struggle:

  • We always need to be wary of our competitors, make sure we strive to lead the market with top class products and services. If not, customers will defect and look elsewhere.
  • Continue to please our customers. If our existing customers think we are taking them for granted then they won’t hang about too long, but if they know they can rely on us to give them what they need (and more) at a reasonable price then they”ll stick with us and reward us with their loyalty.
  • Continue to keep our staff happy. Our businesses are run by the people we employ, not by the machines in between, if we can keep a happy workforce and recruit the people that can help us grow then our business will be in a happy place.
  • Continue to balance the books so that our accountant stays happy and the banks and investors extend our line of credit.

What you can do today

Heed the 4 points above.

Individuals in a population vary significantly from one another

Boy is that ever true! We can do all the analysis we like and produce statistics on everything down to how big the middle toe is in our average customer, but if we forget that our customers are individual human beings then we are in trouble.

Folks will always be folks and want to be treated as individuals and made to feel special. So appeal to them with the correct mix of emotion and common sense, understand their problem and provide a solution, then you’ll be well on your way to making them happy.

What you can do today

Don’t just look at the numbers. Pick up the phone and talk to your last 5 customers. You’ll probably find they’ll be happy to hear from you. You’ll be surprised what you will learn from them.

Much of this variation is inheritable

Not necessarily inheritable in the same sense as one customer produces another, but certainly we can see common characteristics in our customers. Where above I say that we need to remember that our customers are all different, now I backtrack and remind you that the statistics and data are essential in letting us know what makes our market segments tick.

What you can do today

Are you getting the most out of the mountains of data you collect? If you don’t think so, get in touch with some web analytics professionals. If they’re any good they’ll pay for themselves with the improvements they bring to your business.

Individuals suited to the environment survive; individuals not suited don’t survive

We can say that our happy long-term customers are “suited to our environment”.

What are the characteristics of these happy long-term customers? Why do they like us so much?

If we know the answer to these two questions, then we should try and target more people like this in the future.

For those customers who are not suited to our environment, then do we know why not? Not everybody is going to be suited to our environment and that’s fine. But some customers “don’t survive” because they’re not happy about something.

So go out and find the people who used to be your customers, but aren’t any more and ask them what the problem was. Use this feedback to improve your business.

What you can do today

Become more familiar with your customer database. Who are your long term customers? How long have they been with you? Why have they stuck with you? Make sure you thank them for sticking with you.

The traits of populations mold the process of selection

Bingo! This is where we are going.

We need to look at the traits of our customer to mold our process of selection.

Instead of mother nature doing the selecting, we are the ones that can do it.

So how do we know what to test? The inputs to the selection process are the hard work, the data, the research, the talking to people, the product development, customer service fine tuning, business model tweaking. All these things influence selection.

In nature various traits are tested against each other and the best ones win out in the end.

In our business we choose what to test and use a scientific approach to test it. The traits that we test on our Landing Pages for example will be our headlines, images, content, our offer and more. Our testers are our our customers. They’ll tell us which traits they like best.

In this way the process of split testing can be seen as being analogous to natural selection in nature.

Split Testing ≈ Natural Selection

In the natural world, these tests are being carried out all the time over an incredibly long time frame. They result in an optimized version of a species, where the species are highly tailored to the environment. In the business world we can put these tests in place and get the results incredibly quickly.

This should be the goal for our business. We should be constantly testing and optimizing all aspects of our business, not just Website pages so that eventually we will become highly tailored to our market.

What you can do today

If you haven’t tried split testing before, then get started today. If you are already familiar with testing then have you read the great books on testing that are available, such as Tim Ash’s Landing Page Optimization and Bryan Eiesenberg’s Always Be Testing.

This slowly effected process results in populations changing to adapt to their environments, and ultimately, these variations accumulate over time to form new species

What we find over a long period of time is that our business settles into a rhythm and adapts to the environment it exists in. And lo and behold we discover that our business is living and breathing just like any organism in the natural world.

Just as every animal under the sun has evolved to adapt to their specific environment, then our business evolves and adapt to the environment it is in.

So what happens next?

Once we have adapted to our environments, then we can start to expand and grow our businesses over time. Not to form new species, but perhaps to introduce other products and services that our existing customers and future customers will love, until we choose to retire and go and enjoy all the wonders of the natural world around us.

What you can do today

If you think you can improve your business with the suggestions above, then start on that first. Come back to expanding into new products and services later. But start thinking ahead about the extra value you can offer to your customers in the future. Again, talk to your customers to see what products and services they would like to see you providing.

Conclusion

We need to ensure the markets we go into are fertile enough so that we can gain a significant market share and eventually come to dominate the market. In order to continually grow we need to make efforts to optimize every aspect of our business.

We should constantly try to understand the traits of the customers that we need to tailor to and test and optimize so that we tailor our business to our customers. We should be looking at the environment that we exist in to see how we can strengthen aspects of our business to make sure we win the struggle for survival.

If the theory of evolution is all about natural selection, we can learn from and use the techniques employed by nature to grow our businesses and in some ways we can see that Split Testing and Conversion Rate Optimization are not very different from Natural Selection.

– Kevin McCaffrey

This is a guest post, entered in the 2011 Unbounce Conversion Fest Blogging Contest. All opinions are those of the author.

Kevin McCaffrey provides conversion rate and landing page optimization services through his company Conversion Rate Services. Kevin has recently written a White Paper on conversion rate optimization called "How Your Online Business Can Make 20% More Money in The Next 10 Weeks" that outlines all the techniques he uses to increase conversion rates for his clients.

Comments

  1. Yomar Lopez says:

    Touch points and a happy workforce.. All this stuff makes me think about how marketing is really about managing your image and quality in everything you do.. and everyone that represents you and your brand. Traditional marketers focus on one piece of the puzzle: the brand identity, the story and image created but not necessarily upheld consistently.

    There is tremendous opportunity here when we consider what you’re saying…

    What are you doing to align well with the image you’ve created?

    Do your guarantees just look good on paper or are you going above and beyond to meet and exceed service standards?

    Is your customer service top-notch? Do you penny-pinch rather than try to please customers, within reason?

    …That’s all marketing! When we can take recurring customers and subscribers, evolve them into avid fans and brand loyalists, then the exponential growth you discuss becomes a possibility.

    Of course, you also have to think about capacity. It’s something us “solopreneurs” are not always well-equipped for. This is where I say that embracing the competition is better than merely trying to one-up them. Referrals generate income and build credibility too! Let’s not forget that sub-contracting certain work positions us to take on more strategic roles where we can focus on quality more.. That can be almost PURE profit there.

    I think some of these rules are better for bigger businesses, though there are lessons to be learned in each section you present so well done! I’d go beyond just following up with customers. Look at your entire network. Focus on the most engaging and receptive people. Chat it up and you’ll learn a lot.

    On that note, I find that establishing an inner circle and, within that, a tightly-knit mastermind group of fellows in similar places (or a little further ahead) in their lives helps a lot. There’s always fresh perspective there to draw upon and keeping your personal network engaged sets up even more opportunity.

    In fact, I’ve had folks that I had no intension of “selling” to come back to me for paid/premium services, just because I checked in often and listened to them. Show that you care and your business will evolve. Of course, this approach takes more time so, certainly, your recommendations can be faster at generating referrals and improving retention of both your human resources and customers.

    You really brought the hyperbole home here, Kevin. Kudos and good luck! 8)

    • Thanks for the extensive comment Yomar.

      Yeah I like to take a holistic approach when working with a business and not just think about the marketing function. Maybe because my background wasn’t in marketing but in problem solving with very diverse businesses.

      You’re right some of the lessons only apply to bigger businesses but the idea that the solopreneur can evolve into that big business through a kind of organic growth fascinates me.

      I also like your approach of selling by not “selling” and just checking in with people. That’s cool. It means you really enjoy what you’re doing and connecting with people like me. Just to say hello to people is great and if your genuine about it then you can come without an agenda. In the long term you get the pay back.

  2. Hi Kevin, apologies for the Twitter critique, it’s impossible to be constructive with 140 characters.

    My first issue is that the article is just too long. The only reason I read it in the end was because I happened to be looking at a bunch of articles using analogies. When analogies work well they help to simplify complicated concepts, but so often they’re used as a gimmick and end up creating poor contributions.

    I generally agree with the analogies you’ve made although it seems inconsistent and overly complex, eg: you seem to be changing between the business and the customers being the living breathing organism or the environment, or are they both living creatures within the environment? So I think a fair bit of this will be lost on people because the analogy itself is quite complex and the concepts you’re relating evolution to aren’t really all that complicated.

    What works well in this is the actions “What you can do today” – there’s some sound advice in these. I’d just worry that people will miss them because the article looked too long or because they’re over-thinking the analogy.

    I appreciate the invite to post a comment so I hope this extends on my post a bit and I’d be happy to further clarify any points I’ve made. I think this is a fairly good post it just seems difficult for people to read and really take in your main points.

    Paul – MvsM

    • Yomar Lopez says:

      I think there were some longer articles in the #ConversionFest lot, Kevin, so I would not worry. Usually, I’d be the one saying that gimmicks are a turn-off.. But this analogy worked and the way you chunked everything made it easy to scan so, for those with shorter attention spans and/or busy schedules, the meat of the message was easy to pick apart.

      Eek.. If you guys are getting such criticisms with wonderful articles, I can only imagine what will happen to me in a few hours… =oX

    • Paul, thanks for taking the time to comment. I appreciate that the long article isn’t for everyone, but I wanted to try and tie in with the main evolutionary points in the headings.

      Yeah there probably are plenty of inconsistencies in there, and I’ve maybe made it over complicated, but that’s more to do with writing it after half a bottle of wine and not having more time to spend on it ;). Mind you if I had more time it would be even longer.

      Thanks to Oli from Unbounce for suggesting the “What you can do today sections”.

  3. Kristi Hines says:

    I love the four points under a struggle for survival ensues. You have to stay ahead of the game when it comes to competitors, and you definitely must have happy employees who will keep your current customers happy while spreading the word to potential new ones. And throughout it all, you have to make sure your books are still in order otherwise you’ll definitely go extinct!

  4. Hi Kristi, yeah to stay ahead of the game there’s always more to be optimised than landing pages and conversions. Struggle for survival can sound pretty brutal can’t it. But then business can really feel that way sometimes!

  5. [...] Kevin McCaffery@ConversionRate_On the Origin of Customers – Evolution and Marketing Compared [...]

  6. [...] Kevin McCaffery@ConversionRate_On the Origin of Customers – Evolution and Marketing Compared [...]

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