Friday, October 28, 2011

Marketing is an Ongoing Love Affair

Why can't we have a commonsensical approach to business in general and marketing in particular? We have this habit of complicating things way beyond what is necessary. There are instances when marketing managers get into an intellectual masturbation by using data points, pie charts and cross tabs without there being any reason for it. Graphs and data are meant for clarity and not to confuse.

What is marketing? It is a relationship which you build with your customer through various means/ devices. And coming to think of it pretty much like a love affair!

Since I am experienced in these worldly matters let me explain.
  • You need to decide which girl is right for you. Some are good and some are not the match - Consumer Research 

  • Based on your thoughts you have an idea who she is. You decide to focus on her - Target Audience 

  • Then starts the huge task of wooing her. You ask her out for dates, meetings, etc. At every right moment you try to connect with her. You obviously show your best behavior - Advertising/ Direct Marketing/ Promotion 

  • She has many people wooing her and you are one of them - Consideration Set & Competition 

  • Since you have show you are the best  you are obviously showcasing the best in you - USP & Product Benefits 

  • Obviously she is impressed with you and decides that she likes you amongst the various guys she knows - Consumer Adoption & Purchase

  • Once she decides to date you starts the next phase. She does not like to be ignored . She needs to be listened to, her needs to be addressed - Customer Service 

  • Once in a while since you have to be the best for her and you decide to make her feel special again by buying some goodies like roses, gifts, treating her on special days and not so special days - Customer Relationship Program 

  • An investment now will last a lifetime and the returns can be good like marriage and..... - Lifetime Value 

  • In case she says she has had it with you, she dumps you! - Customer Dissatisfaction. Yuck! Maybe she was not the correct TA! 

  • You woo her back, you correct your mistakes - Service Recovery
I could go on and on but then again this blog is not to confuse but show how simple marketing is! Actually marketing begins in your own backyard! There are small and big examples around you, relate to them and then solve problems.

Marketing was never easy but then again neither was maintaining a relationship! You have to keep working on it and working on it!

Saturday, October 22, 2011

Learning from the Business of Crime

(Note: I do not subscribe to criminal activities nor am I justifying them. Such activities are anathema to me.)

I was narrated a very interesting anecdote by my friend. An acquaintance of his was asked to consult with a man of questionable credentials (from a business perspective). While the acquaintance was deflecting the topic of working with the man, finally the man spoke up and actually said - “In my kind of work only one thing works and that is trust. Without trust we cannot survive".  The acquaintance was surprised and later took the assignment and it was to her, one of her best.

In a world of increasing competition between companies and between employees within these companies, business relationships are guarded and safe guarded by legalese. Reams of papers with clauses and sub clauses bind these relationships. On the other hand, crime and criminals are held together by the minimum of documents (for fear of being caught and providing fodder for prosecution). They are infact held together primarily by trust which relies largely on a verbal agreement.  Incidentally there are high risks involved in such an agreement. Many of the institutional safeguards designed to compensate for the consequences of, such as the legal system (which comprises of courts, police and other sanctioned bodies like law enforcement agencies) are unavailable.  Trust, it is said, reduces the uncertainty regarding the behaviour of potential accomplices to a tolerable level and thereby stimulates the willingness to co-offend (Weerman 2003; Zaitch 2002). The importance of trust is best highlighted by Nkilas Luhmann  "Without trust, only very simple forms of human cooperation which can be transacted on the spot are possible, and even individual action is much too sensitive to disruption to be capable of being planned, without trust, beyond the immediately assured moment. Trust is indispensable in order to increase a social system's potential beyond these elementary forms"

Apart from this there is need and also a tendency of the criminals to be part of the 'clan' - a kind of kinship which explains to a large extent the trust factor between them. Kinship creates a sense of belonging and it is this feeling which drives criminals to stick together. Infact kinship and the resultant trust is a competitive advantage in the crime business. These bonds created through kinship are seen largely in the organized crime business which functions much like a parallel corporate business without the professionalism.

Given the situations these persons work in, it is without doubt extremely difficult. Fear exists of being caught unaware, fear of being caught by the legal system, fear of being caught by rivals, fear of no legal recourse and last but not the least the fear of the ultimate punishment - death!  It is in these extreme emotional conditions that these criminals are expected to perform efficiently. Working under pressure usually separates the men from the boys.

Apart from the emotional angle the very same conditions along with the fact that most activities have to conduct clandestinely makes it even more taxing physically.

In a corporate scenario, in the failure of a relationship and especially if it gets nasty, the option to turn legal always exists and hence the need to such have long drawn out legal agreements. In the criminal world it is less if not non-existent. Infact as is seen by the documentation the Indian legal system has been able to implicate so called powerful politicians. Since the criminal system eschews documentation - any break down in relationships/ dealings cannot go the legal way. However justice in this case can be drastic.

Failure to commit a task or even breaking the trust (in different ways) can result in retribution which can be also of the final order - life threatening. In such a scenario where punishment can be in the crudest form of emotional and physical torture, the downsides are very very high!

While I do not have to delve deep into the various factors which I have listed above with respect to the regular corporate world, there are times when I do think that corporate life can be 'not so pleasant' if not a vicious experience - a political minefield so to speak. Factors such as trust, belonging etc., seem to be a memory of the distant past. One-upmanship seems to be the order of the day. It is important for any organization to function as a team/ family. Disparate messages create dissonance.

I have noticed that people are not committed to the cause of the organization, they are merely there as travelers. They are not bothered by failure and look at short term goals. When time for analysis comes in - the person is long gone!

With such a dynamic and rapidly changing environment it become more than imperative to roll up one's sleeves and face the battle in the marketplace. Business today can be emotionally and physically draining. The rules of business are constantly changing and it is best to be prepared for it. Many employees come in with the intention of taking it easy!

It is for us to take the better parts of the criminal system to understand where we stand in the 'real' world. There is no substitute for hard work and there cannot be a parallel system. However it is startling that the parallel economy is half the size of the main economy in India! Therein lies the success and the worry!

Saturday, October 15, 2011

KISS - Keep it Simple Stupid! (The Complexity of Simplicity)

When I was in school I remember my mom telling me to clear up my table which was always cluttered. Arrange your books, toys etc. It would be easy to search. Very simple straight forward thinking!

Imagine the plight when you cannot find what you want – it is physically and mentally exhausting. Where is it? Where else can it be? It is not surprising that someone has theorised that that clutter is actually emotionally exhausting too. As humans are constantly scanning their environment, the more the clutter the more the physical and mental power needed to process.

In the present day world how I wish everyone followed mom’s thinking. It’s greed. What the &%*$?  Humans want more and more. Be it money, be it food, be it gadgets or be it anything. And this thought has percolated into all parts of life. From the simple water tap to the technologically superior television. I have had instances where we had TVs with 200 channels but we do not use more than 30. I look at the TV remote and wonder if this is from outer space. Look at the PC keyboard and I notice I don’t use many functions as I don't understand them.

Why and how is it that all the things that were supposed to make our lives so easy instead made them more complex? Why is so much technology still so hard? And the more we want – the more complex it gets.

Interestingly the consumer behaviour polls say something unique.  In a 2002 poll, the Consumer Electronics Association discovered that 87% of people said ease of use is the most important thing when it comes to new technologies.

Philips deployed researchers in seven countries, asking nearly 2,000 consumers to identify the biggest societal issue that the company should address. The response was loud and urgent. "Almost immediately, we hit on the notion of complexity and its relationship to human beings," says Andrea Ragnetti, Philips's chief marketing officer. Consumers told the researchers that they felt overwhelmed by the complexity of technology. Some 30% of home-networking products were returned because people couldn't get them to work. Nearly 48% of people had put off buying a digital camera because they thought it would be too complicated.

This is probably the greatest human – innovation paradox:  We demand more and more from the stuff in our lives--more features, more uses, more functions, more power, more of XYZ --and yet we also increasingly demand that it be easy to use. It's a conundrum--between the need to load it with arguably cool features and the need to make it simple to use. How paradoxical it sounds when the sales pitch harps on “fully loaded” (features –yes! complexity – full loaded!)

One of the problems is that the engineers, marketing men and designers operate in silos that make delivering on the simplicity promise so hard. They are far removed from the demands of the customer or as in many instances one department holds sway over the other.

You can also blame it on arrogance. My son cannot figure out why both my wife and I go to him for some tech issues in our PC. He has an air – oh that’s simple, you could not get that?! And to be honest, I do it with my mom too. Some of the engineers and marketing folks cannot believe that are people who have problems even finding out the reset button on a mobile phone.  Some find it difficult to even use a Blackberry Messenger.

  • Blame it on competition wherein the order of the day is ‘mine is better than yours’. ‘My TV has more buttons on the remote than yours!!
  • Blame it on technology where the incremental cost to add features is minimal – thereby adding a little more becomes the order of day.
  • Blame it on a competitive landscape in which piling on new features is the easiest way to differentiate products, even if it makes them harder to use.
  • Blame marketers who don’t think "ease of use” is a USP.  It is easier for a marketer to market technology over ease of use. It’s sexy to talk technology; I don’t see any marketer saying it is sexy to talk ease of use.
  • I think technology itself is to be blamed for this. The chips and transistors get smaller and smaller making themselves more complex.

However there are few brands whose hallmark is simplicity and that according to me that has been the key success factor.

Google - The technology that powers Google as complex as it can get. I am told that in a few nano seconds, the software solves an equation of more than 500 million variables to rank 8 billion Web pages by importance. And  in the actual experience  all you get is a clean, white home page, typically featuring no more than 30 lean words; a cheery, six-character, primary-colored logo; and a simple  search box. It couldn't be friendlier or easier to use.

Compare this with its competition namely Yahoo & MSN/ Bing. Google's design has been mimicked on the search pages of MSN and Yahoo, whose portals are messy throwbacks to the "everything but the kitchen sink" school of Web design. ( However the Bing standalone page copies Google – imitation is the best form of flattery). The popularity of Google pretty much rests its case.

Apple – According to me, if I were to credit Jobs for anything it would be ‘ease of use’ in the Apple products.  Starting with the Mac to the now ubiquitous iPad, simplicity has been at the forefront at all levels. The product design – simple, clean & classy. User Interface – simple, common sensical and easy to use. Add ons – Easy to connect and again easy to use. For example – the mouse has only one clickable surface! (And Apple actually created the mouse).

There are other examples of too. Philips changed itself from an organizational and product perspective. Its famous campaign, christened "Sense and Simplicity," required that everything Philips did going forward be technologically advanced--but it also had to be designed with the end user in mind and be easy to use experience. Philips invited 15 customers to its Consumer Experience Research Centre in Bruges, Belgium, to see how they unpacked and set up a Flat TV. After watching people struggle to lift the heavy set from an upright box, designers altered the packaging so the TV could be removed from a carton lying flat on the ground.

How do you make your company's products simpler? The erstwhile CEO, Gerard Kleisterlee actually started by simplifying the company in 2002. Instead of 500 different businesses, Philips is now in 70; instead of 30 divisions, there are 5. Even in mundane things like business meetings have had a simplicity touch: The company forbids more than 10 slides in any PowerPoint presentation.

Often, when hearing about compelling user experiences, people immediately associate it with flashy productions with lots of visible bells and whistles.  And that’s a problem.

In a complicated world getting even more complicated, great user experiences don’t have to be flashy with infinite buttons on a remote to innumerable icons on your PC screen.  They need to be easy and obvious (as a reminder, feel free to go visit Google or Twitter).   Choose the right approach for what your user wants and needs and everyone will be happier and less distressed.

Oh! I am reminded of a phrase from the past  - KISS - Keep It Simple Stupid!

Sunday, October 09, 2011

What You Don't See is What You Want to See

Sitting back at a favorite restaurant of mine, was wondering what appetizers do. Do they stimulate your appetite or do they create a setting for better food to come?

Actually they do both. And funnily enough they are related. The appetizers set the tone, the tone for better food and the main course which we would expect to be even better than the appetizers.

I am sure we would have all heard ' you can't imagine' how good it was'. This will get us thinking as to how good it was!

Imagine a extremely attractive girl (and I'm talking from a male's point of view). There are two scenarios, in one she was fully clothed and in one she was at her sexy best - mini skirt, an appropriate cleavage and a generous amount of skin show. There are no guesses for what will grab your attention - skin!

(Since I am not sexist) This is pretty much like a strip tease by men. The women are teased and teased and teased for the expected end result. The very act is exciting for many. Just like some foreplay before sex!!!!!

Why is it so exciting? Humans by nature are inquisitive and curious. Inquisitiveness results in humans wanting to know more about what they have not seen or heard. Exactly why gossip is so exciting for many.

Pretty much like our canine & feline friends, we humans are thrilled by the  chase. Whatever comes easy is not as exciting. If we were to put a naked man/ woman next to a person who is undressing slowly I am pretty sure the latter will get the votes for excitement!

There are similar parallels to marketing especially communications. The more we tease the customer the more mileage we will get because humans by their innate sense of curiosity will try to want to know more. Case in point - Look at product launches like Iphone, Galaxy or Kindle Fire. All these launches were  shrouded in secrecy resulting in tantalizing amounts of speculation, rumors and grist. The hype creates more curiosity and..........

Pretty much like a teaser ad. Teasers can create excitement. If the question is why don't many brands use this? I think it is primarily out of commercial considerations. However many brands use Public Relation activities to drive this curiosity. And if properly done this can create a lot of buzz. Look at how Apple milks PR to provide fodder to the rumour mills! I m pretty sure that Apple by themselves will providing selective news bites which tickles the appetite of the public.

The motion picture industry has done a very good job of this. Just before a release, there is a blatant disregard of anything sensible; and consideration for everything sensational. There will be the traditional hero heroine link up, the spats between the stars, how the stars got injured and many other 'newsworthy' items.

Actually communication by itself is pretty much a teaser to the real thing. All advertising creates excitement towards the product/ service with the hope that customers will try them.( However, how advertising should be - is a topic for another time).

So for a marketer, the more curiosity you create, the more buzz, the more buzz the more curiosity, so on and so more!

Tuesday, October 04, 2011

Blurring the Boundaries of Business

The Amazon Kindle Fire just set fire to the tech world. The pricing is exciting and the features very good. But what is a online merchant/ retailer doing with an Ipad competitor?

A few years earlier a software/ hardware manufacturer Apple had turned the music industry on it head by creating a gadget (ipod) which is made listening easy but more important that turned the distribution of music on its head. If that was not enough, Apple extended the same innovative thinking into a phone. the question was then whats a HW/SW company doing with phone? I don't think that really warrants an answer now!

The IT space has seen a transformation of sorts. IBM is a software services firm. Dell transcends both hardware and software and HP is confused. Consulting major Accenture has IT services and BPO wings.

Starbucks faces its biggest competition not from Caribou or Costa but from McDonald's and Dunkin Donuts. Whats a burger company doing with coffee? McCafe and I am told that do make a good cup of coffee.

In turn McDonald's faces its biggest threat from a brand which sells chicken - Col. Sanders creation - KFC aka Kentucky Fried Chicken which had its name shortened to expand into other categories than just chicken pieces. KFC sells some interesting burgers and other eats which directly takes the Big Mac head on.

If that was not enough, many brands especially in the premium and luxury space have transcended from their parent category to others. Benetton, FCUK, Nautica etc. has watches, foot wear amongst its product portfolio. Even in the formal/ semi formal space - CK, Louis Phillipe amongst others have transformed themselves into a wardrobe brand than just apparel.

Closer home we have many examples especially within large corporate houses both out of necessity due to the erstwhile licence raj and now out of choice. Be it the Birla's or Tatas, they have have fingers in various businesses. Infact the Birlas incubate new businesses through the existing ventures and then later spin it off.

The list is endless and I can fill a few pages on how brands have been extended into various categories. Al Ries will probably have to relook at his book " Focus" and probably have to rewrite to his book. Core Competency be damned, sorry Mr Prahalad.

The hunger for  more is what keeps business growing and this hunger can drive organizations to take turns which are not really a part of the core business. Some succeed and some don't.

While I do believe that Focus is important, given the dynamic nature of business today it has become important to look at alternative areas to grow. But as they say ' the grass is always greener on the other side' and this can result in mistakes which are detrimental to a company's growth.

All organizations cannot be an Apple or even a 3M. Interestingly organizations like these have a strong innovation led culture with healthy risk taking ability as a part of their DNA. This helps the organizations to adopt and adapt depending on the environment.

When the boundaries of business get blurred, organizations loose focus and a confused message goes out both internally and externally. Quite literally - a blurring of vision. A clear case is Starbucks which had to go back to its roots and stick to its core - coffee. And they soon got their customers back!

My take on this. As far as possible  each new venture should be treated as a separate company with a separate team otherwise there would be a tendency to carry the baggage of the past which cloud the venture itself. IBM is a good example - the software services arm was different from the HW division.

Saturday, October 01, 2011

Self Centered Personal Interest Drives Revolutions

Nassim Taleb would be happy that the Black Swan Theory has shown its face in various parts of the world. Tunisia, Syria and closer home Nepal.

In a sign of increasing courage and confidence, people from various parts of the world and interestingly mostly the Arab world have been raising their opposition. There has been a surge of people power rising up against the rulers.

These rulers had treated the land as personal property with ad hoc and whimsical decisions which were warped and unjust. Fundamentally the rules they framed were biased and skewed to helping a certain minority.

The natural inherent behavior of humans is selfish & being self centered. The degree of which changes and varies with different people. When a situation is perceived as unfair, this creates dissonance in peoples minds. This dissonance has again various levels. An agglomeration of dissonances creates a huge cumulative dissonance or mass explosion. And that's how we have a revolution. I will not deny that there are exceptions but more often than not the main motivation for people to revolt is personal interest.

However it does not reach the levels of egocentrism where people have the tendency to perceive, understand and interpret the world in terms of the self

These dissonances are lesser in many countries and hence revolutions of the kind (mentioned earlier) are not seen in such places. However smaller but effective campaigns like Anna Hazare movement against corruption in India.

It is seen that in largely democratic nations, the people are a lot happier than the non democratic ones. The fact remains that in democracies people get more avenues to voice their opinions and get themselves heard without fear or repercussions.

My predictions for the future - Burma, China  Watch Out!

The Age of Distrust and The Age for Trust

Loss of Faith The last few years have seen an increasing ‘loss of faith’ against politicians and media (because all communication happens ...