LACK OF SMARInsight
And yeah, I know how bad it must hurt
To see me like this, but it gets worse.
-Demi Lovato, “Sorry Not Sorry”
Mammoth Lakes Tourism spent $3.5 million for its advertising firm Mering Carson’s services last year. Mering Carson representative Amanda Moul came to MLT’s Strategic Planning meeting this past Wednesday, and based on the presentation that she gave to the board, that money would have been better spent on magic beans.
Her presentation attempted to inform the board on how it should spend its money next year. It relied on a model from a market research firm the Mering Carson partners with called SMARInsights (Strategic Marketing And Research Insights).
SMARInsight’s model showed the economic impacts of different amounts spent on advertising, for example, how many visitors will come if MLT spends $300,000 on ads in the fall, or $400,000, $500,000, etc.
The model was poorly received. Here are some quotes from MLT board members:
“This modeling definitely needs more work.” – Sean Turner
“It doesn’t make sense. I’m sorry, it just doesn’t add up.” – Brent Truax
“The fall number makes no sense.” – Scott McGuire
Point-of-fact: their model made no sense.
For one scenario, it said that if MLT invests $666,667 in the fall it will bring in 75,551 visitors. In another scenario, it said if MLT spends $300,000 in the fall, targeting the same audience, it will bring in 85,427 visitors.
10,000 more visitors for 366,667 fewer dollars?
Denise Miller, the representative from SMARInsights who video-called into the meeting, floundered when the board asked her why fewer marketing dollars bring in more visitors. We include the quote in its entirety because it is an all-time classic:
“And, and, so there are a lot of things going on here, and it makes it challenging. In the first, I’m going to start with the first scenario and why it goes down in the $2 million versus the $1.5 million. So, we have a curve. We, we, we generate what the projected increment would be at different levels of spending, and, as I’ve said, given that relationship, it goes up for a while and then as you start to spend more money on more people it goes down. So, what happened in this scenario, and, again, we did all the $1.5 million scenarios, we did different scenarios and put numbers in, and then we didn’t sit and try to reconcile them all because we decided we need to get direction, and they’re basically a tool overall to kind of give you the idea of what’s gonna happen.
“So what would happen between these two is the awareness would go up with the $666,000, but the increment, so once we got the number of more households, the increment, the difference in travel, is lower. And so again it’s a multiplation (sic), multiplay (sic), multiplication issue, you know…”
Her defenses were pointless because the model was indefensible. Not only did the numbers not make sense, the model was looking at the wrong time frame. It calculated returns on investment one year in the future. Yet, this presentation was supposed to inform a three-year strategic plan. McGuire asked that Mering Carson bring a three-year model next time.
If SMARInsight’s model seems familiar to you, it’s because it’s the same model used to land the Hindenburg.
But it gets worse … Miller, because she was on the phone, could not hear the questions that the board members asked. Every question had to be restated by Moul to Miller, who was deemed an expert on SMARInsight’s model (which is like being an expert on horse manure, except horse manure is good for something).
This sad game of telephone was reminiscent of the Karl Marx quote, “History repeats itself, first as tragedy, second as farce.” The board members would point out the tragic flaws in SMARInsight’s model, and Moul would have to repeat the evidence of her firm’s inadequacy to Miller every time.
Eric Clark: “In scenario 3, we spend $300,000. In scenario 2, we spend $300,000, and they derive different incremental trips. How does that work out?”
Moul: “So the question is, ‘In scenario 3, we spend $300,000. In scenario 2, we spend $300,000 …”
Had this presentation been given in business school, it would have received an F. But instead of a grade, what Mering Carson has actually received appears to be nothing short of a lifetime contract.
It’s lucky for the Mering Carson employees that MLT didn’t grill them even more for their disgraceful performance. I can’t imagine the board of any successful private company treating incompetence so graciously. By the end, MLT board members were reaching desperately for some nugget of wisdom to draw from what Mering Carson had given them.
“The model helped us talk strategically,” Clark offered.
Moul said that when Mering Carson comes back in May for the next step in the strategic planning process, it will have something more useful for MLT.
“This was square one,” she said. “Thank you for sitting tight with the model.”
Breaking: Benham tells me that SMARInsight’s model was also used for iceberg detection on the Titanic.
And from Lunch: Gorman doesn’t realize how lucky he is. Wednesday’s MLT meeting ranks in the annals of all-time great Town meeting moments, such as when former Finance Director Brad Koehn revealed that his slow growth economic model showed a five-year return for Mammoth of 29% … starting in 2008. Or when Public Works Director Kim Jong Duttun promised we’d all be skating on a new ice rink for Halloween, 2017.
I mean, how could you ever trust anything this company brought forward ever again?
There really is only one response to SMARI’s (Stricken Mammoth Annihilated by Rapacious Invoicing) presentation. The MLT Board must put out an RFP (Request for Proposals) to solicit other ad agencies for its business.
A competitive bid would serve as a nice wake up call to a company which billed MLT $3.5 million last year. To my knowledge, there was never an RFP initially put out for Mering Carson. MLT Executive Director John Urdi just handed them the business.
No good deed (and sweetheart deal) goes unpunished.
By the way, here’s my own SMARInsight moment of the week.
Last week, I reported Klassen’s snowboarding video had about 2 million views and MLT’s million-dollar 360 video had 1 million views.
The real numbers are apparently 50 million for Klassen and about 6.5 million for MLT. So the ratio isn’t 2:1 but about 8:1. Smarvelous.