Can Hammurabi Code Unlock the Power of Skin-in-the-Game Marketing?

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In 1901, French archeologists excavated the ancient city of Susa, now modern-day Iran, when they unearthed something unexpected. The research found stele in three pieces, which is considered the best-preserved legal text ever discovered.

The stele contains the Code of Hammurabi, a compilation of 282 rules drafted by the Babylonian king Hammurabi in 1754 BCE. The code is famous for the law of retribution, which dictates that punishment should be proportional to the offense. For instance, if one man breaks another’s bone, the offender’s bone will be shattered in retaliation.

Hammurabi’s code also contains construction laws that were way ahead of their times. One of the laws from the stele states that if the house the builder has built collapses and causes the owner’s death, the builder shall be put to death. The laws were designed to align the builder’s interests with those of the occupants. 

Researchers at Yale University have painstakingly translated all the laws into English, which can be accessed here. But if one were to demystify the Hammurabi Code, it was built on three foundational principles: reciprocity, accountability, and aligning incentives. 

Why are we talking about the Hammurabi Code, and how does it connect to marketing? It goes back to something I read on Scott Galloway’s blog, where he discussed the rot in the business world. He pointed out a growing trend among business executives, asking themselves, “How can I increase my compensation while lowering my accountability?”

Today, we are moving in the complete opposite direction of the principles that Hammurabi followed when he conceived the 282 laws. To say that the marketing executives have been untouched by this rot would be an understatement. 

The Hammurabi Code and Skin in the Game Marketing

Skin-in-the-game marketing has existed for a while. Over the years, I’ve seen several marketing agencies transition to a business model where they wanted to be accountable for results rather than just doing creative execution. 

The agencies either choose to include a variable component to their fees, which only gets paid when they deliver results, or some even invest a small sum into the brand they worked with to ensure they have some skin in the game.

On the client side, however, much has stayed the same. The incentive structure of the sales and marketing teams is still monolithic. While the sales team gets an incentive for every deal they close, marketing only gets a pat on the back.

When incentives are misaligned, there is a lack of accountability. Then, it typically boils down to an individual’s values, ethics, and integrity in conducting affairs. Just a cursory look at some of the balance sheets will show you many instances where the brand is known for its marketing efforts while the sales keep slipping quarter on quarter. 

To make things worse, you have this epidemic of marketing teams becoming increasingly risk-averse. Most of the content you see today, especially on the B2B side, is dull or what folks at System1 call “Dull.”

If you ask senior executives why they are not being accountable for their actions, they will most likely respond by stating how they lack direct control. They don’t have visibility or control over sales, customer service, and product quality. 

Over the past few years, I’ve interviewed several candidates who had zero visibility into what happened to the leads they handed over to sales. They also did not have visibility into basic business metrics like average order value, sales cycle, and margins. This has often left me wondering why the process is so opaque and if the business or sales team doesn’t trust marketing enough.

If you dive deeper, you can also blame the company culture and complexity involved in attribution as some of the challenges that led to this absence of accountability among marketing teams.

Now that we have discussed the root causes, let’s discuss how to solve this problem. The solutions that I’ve discovered are nothing out of the ordinary. 

Aligning Marketing with Revenue Goals

If your marketing team is not aligned with sales, then you have a problem that needs to be solved. Organizations have solved this problem by merging the marketing and sales teams or linking the KRAs of sales and marketing. I’ve often heard the argument that if marketing and sales functions are integrated, then brand building takes a backseat. 

If you ask me honestly, based on my experience, that isn’t untrue. But that often boils down to leaders of both functions and the benefits outweigh the cons. 

In a structure where marketing and sales are separate functions, you must ensure incentives are aligned for both teams. If the marketing doesn’t have incentives for generating MQLs (Marketing Qualified Leads), they will never put in the effort to go the extra mile. 

I’ve also seen marketing teams fudging the data to show an increase in MQLs, while some of the leads were passive and had no chance of converting. But if you had an incentive linked to generating these leads, you would be more serious about it. You can fudge leads for a few months, but not forever. 

Data-Driven Decision Marketing

If sales and marketing teams are aligned, data collection is the next challenge to address. With a decent tech stack in place, you can move from vanity metrics to metrics that genuinely measure business outcomes, including customer lifetime value, return on marketing investment, and account contract value.

You might struggle to initially identify the suitable attribution model for your business, industry benchmarks, and tracking conversions. But eventually, with the right team and cadence, you will figure this out. It takes anywhere between six months to three years to perfect the data practice, but once you do, you will never return to how you worked before.

Test and Learn Environment

Marketing isn’t an assembly line; you can’t run it like a kitchen brigade system. Of course, you need a system to work efficiently, but you must provide enough levay to allow your chefs to cook new dishes and experiment. It’s this culture of experimentation that makes good great.

Almost every brand that succeeds in India has kept this experimentation culture alive.  But to effectively do this, you must realize you must allow people to fail. Occasionally, take brickbats for your work; there is no obsolete way of determining what will work as a creative output. The only way to know is to put your work out there and find it.

Marketing Outcomes and Hammurabi Code

When you have skin in the game, your perspective shifts dramatically. You start caring about outcomes that you wouldn’t otherwise. You question your decisions using the principles of second-order thinking and have a deeper resolve for solving last-mile problems.

Babylonians knew the power of incentives and the importance of designing consequences for your actions. It’s about time the business and marketing world did, too.

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