In the world of psychology, there is a concept of illusory superiority. Illusory superiority, better known as the Lake Wobegon Effect, refers to human tendency to overestimate one’s achievements and capabilities in relation to others. This name comes from the radio show A Prairie Home Companion, which is set in the fictional town Lake Wobegon, Minnesota, where “all the women are strong, all the men are good looking, and all the children are above average.” Obviously, everyone can’t be above average.
In our recent benchmark survey, conducted jointly with Allocadia, we found that when it comes to agile marketing planning and budgeting, most marketing teams live in Lake Wobegon. The majority of respondents self-identified as using best practices around budgeting and planning. However, comparing their responses to questions explicitly designed to verify best practices, the number of marketing teams which are “best in class” quickly diminished. Here’s one such example of what we saw.
When asked how quickly marketing can shift its priorities, plans, and budgets based on current status and results, ⅔ of respondents indicated they can adapt quickly to changing circumstances. That’s very impressive if true. But it isn’t true.
Based on our real-world knowledge and anonymized Allocadia client budgetary data, we know that the number of companies budgeting and planning in an agile fashion is low. In addition, the respondents themselves undercut this claim. 20% of respondents indicated that their marketing plans are adjusted on an annual basis and 50% said that they adjust plans on a quarterly basis. Adjustments done on a yearly basis are anything but agile and quarterly, though better, isn’t anything to boast about. This is like creating a marketing plan in June that’s based on data from March in a world that’s far more dynamic than implied by that schedule.
The Iron Horse insight.
Having a gym membership isn’t the same as going to the gym. Just because you “can” exercise and “could” go to a cardio class doesn’t mean that you’ve developed endurance or lean muscle mass. You actually have to go to the gym to do that. In the same way, if you believe you could quickly shift priorities, plans, and budget, but in reality you only adjust your plans and budgets a couple of times per year, you’re suffering from Lake Wobegon Effect. Dig deeper into what your organization actually does and not what it “could” do for marketing planning and budgeting and take steps to make your team more responsive to changing market conditions. As a result, you’ll drive a more significant impact on your organization’s bottom line.
