Key man insurance is merely life insurance on the key person in a business. It’s been proven year in and year out that companies cannot live without key man insurance. There is also key product insurance. The concept is since nothing technically lasts forever because of entropy and mortality, most major companies today understand that just as much as you need key man insurance, you need key product insurance. However, did you know that there is also key marketing insurance? Learn more about how you can buffer the product insurance and the other products you’re coming out with through marketing insurance.
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Go On Defense To Explode
This is where my wife and I live life and review case studies of growth that happened either inside the company or outside the company. We were speaking at LTV, Lifetime Value, a conference in New York City. We witnessed people talking about certain growth techniques and one of them caught my attention because it was reverberating and was received well in the audience. I wanted to make sure I reminded people of this kind of technique or marketing move, if you will, to sustain growth. The title of this show is Go On Defense. If you’ve ever heard of key man insurance, key man insurance is when larger companies hire an executive that is going to bring such an amount of intellectual property that if this person gets injured or harmed or dies or in any way and can’t perform their duties, there is going to be a vacuum or a void, or as one gentleman put it, such a severe sucking sound financially that they will need to cash in that insurance policy to compensate their books until they find a replacement.
What companies started doing many years ago is they would literally insure the key members of a company that have intellectual property, either in systems, marketing or R&D that are part of what is keeping the company’s revenues to what they are. Key man insurance would be virtual suicide for the Top 500-plus companies in the world not to have it. It’s been proven year in and year out that companies cannot live without key man insurance. Here’s one for you. Did you know that most major companies have key product insurance? What is that? Key product insurance is something to a degree I’ve spoken of before at nauseam, but I hit it from a different angle. Jack Welch coined it years ago as an S-curve and Stacking S-curves. If you could just picture what the letter S looks like, it slants to the right a little bit, and then picture stacking another S slanted to the right on top of that.
Innovate or die. Click To Tweet
The middle part of the letter S is the growth or maturity phase of a product line. At the top of the letter S, every product line must die. It’s just part of life. Buggy whips pretty much no longer exist because someone invented this thing called the car. Of course, there are still buggy whips in the world but the majority of the world switched to a car. The concept is since nothing technically lasts forever because of something called entropy and mortality, most major companies now understand that just as much as you need key man insurance, you need key product insurance.
Jack Welch started his twelve-month jaunt as what most people believe the greatest CEO that has ever lived. He came into GE. They had two product lines and they were doing $4 billion a year. Twelve years later, their two product lines were still doing great, but they now had twelve product lines and they were doing $44 billion a year. What in the world did he do over twelve months? It was simple. Every time a product matured, he went out and got key product insurance. That’s a fancy word for he leaned on the research and development team, which means you need one, and he said, “Of the three major things you’re working on, what one has the most potential to launch right now?” Not which one’s ready. None of them are usually ready, but he says, “Which one has the most potential for us to dominate with right now?”
They did 22 attempts and ten succeeded. They wouldn’t have had the ten if they didn’t try in the 22. When was the last time you looked at your company and said, “What is our main product line? What is our key product insurance where we’re backing that up with another product line?” Jack Welch has these ten rules of growth. Rule number two is to innovate or die. He basically says you run two businesses, the one you’re in and the one year becoming. The one you’re becoming is much more important.
Let’s go to number three, and to me this is more important for the medium term than even the key product insurance, and I call it key marketing insurance. I’ll give you an example. Key marketing insurance is when you look at your current company, you can usually very clearly say, “Our number one traffic pattern bringing eyeballs to our product line is such and such.” It might be TV advertising, radio, Facebook, Google, pay-per-click, whatever. Everybody has a number one marketing channel. The question is what is your marketing key man insurance? What is your key marketing insurance?
The rule of thumb for most major and mature companies is they have three active funnels; one major, two minor and then they have two R&D categories for marketing. Meaning they may be really strong in the one medium strong and two, but they are definitely on the fringes testing out up and coming social platforms, up and coming ecosystem platforms, AI technologies, different things like that. I talked about the original Fortune 500 list from 1955. One of the most staggering statements I’ve ever made is of that 439 of the original Fortune 500, those companies are no longer with us, which is sad.
You’d think they were the biggest companies, the best marketing budget, the best minds, the best intellectual property. I’ve said this all over the world and people come up to me and they say, “Ken, that was 70 years ago. It’s almost a hundred years ago.” The reality is 439 of the 439 product lines of the companies that failed, meaning 100% of the product lines like toilet paper, cars, paint brushes, these companies that were making fundamental products, the companies failed. Yet those product lines are still around. Why did the company that was the leader in the world fail in a product line that is still kicking butt? It’s really simple. They didn’t have key marketing insurance. 80% of those companies that failed simply failed to shift how they were doing their marketing.
One of the greatest obvious ones is the Sears Catalog. They were one of the biggest, baddest companies in the world, let alone the United States, let alone the world at some point. What happened to them? Some say they hung onto the catalog too long. We are not in a print world anymore. We shifted very quickly and the leaders of that company were not necessarily convinced that they needed to shift their marketing. When was the last time you looked at putting a small budget into marketing channels that you’ve never even heard of? I would start by attending marketing conferences, especially internet marketing conferences. I would read blogs. I would go to Google Hangouts and Facebook groups, YouTube channels.
Do some homework before you attend an event. Get your butt to Traffic & Conversion. These organizations have 3,000 businesses attending and speaking and promoting. Do some homework. Get that number one product line. Surround yourself with product insurance and then buffer the product insurance and the other products you’re coming out with, with marketing insurance. Make sure you’re not just pounding down the same throat you’re used to. Start trying other things. I hope this helps. Take care.