Posts tagged alignment

facts and creation

“Without the hard little bits of marble which are called ‘facts’ or ‘data’ one cannot compose a mosaic; what matters, however, are not so much the individual bits, but the successive patterns into which you arrange them, then break them up and rearrange them.” - The Act of Creation

I find it tragic to watch bright, energetic youth become lethargic and uninspired in the workplace.

Yes. Tragic. Because it is such a waste of not only mindpower but, well, will power.  And it is also tragic to the work company because lethargy does not lead to ideas/ideation/creative thinking.

To me? The real problem lies with the older folk (in manager positions) who seem to lack a comprehensive relevant view of learning.  Or maybe better said … they have an archaic way of viewing the way it should be done.

There are a lot of leaders (management whatever you want to call them) who appear to be guilty of classifying learning as being a difficult and frustrating experience.

This is in combination with the fact they also tend to have odd views on ‘how to make it fun.’ Oh. And to complete that thought … they have a belief that they have to ‘make it fun’ because learning is difficult/frustrating. Therefore it is a flawed belief system.

Look.

Creative thinking and innovation does not arise out of a vacuum but must be supported by a culture that encourages people to experiment. To experiment with facts, with ideas and products. With the hard little bits of marble as it were.

Original thinking and new ideas has to be nurtured and rearranged in successive patterns … not destroyed and scattered.

We can all encourage creativity by helping young people learn to assess the bits of marble and take intellectual risks in their work & ideation. Does this have to be “made” fun? Nope.  And it is, frankly, silly to think it has to be.

Instead this is like providing a spark to combustible matter. I am not suggesting it should be painful but rather fun is slightly less relevant than providing the inspiration to learn and become engaged.

Ultimately I don’t believe management should teach people how to create ideas.

The goal should be to prepare young people to be competent and original in their thinking.

Do that and they will create mosaics like you have never seen before.

Oh.

And in successive patterns.

(by the way … that is a good thing)

the more things change the more they stay the same

First.

Because of the business I am in (marketing advertising business consulting) I am constantly inundated with the buzzwords associated with the “new and unique” … and all the pontificators who spout them … and how people are constantly suggesting the world is changing – like it has never changed before.

Second.

Because of the age I am at  …. I am constantly inundated with how people of my generation suggest <state> how today is more difficult for people than ever before.

I admit.

I kind of chuckle when I hear all this.

I often seem to create a maelstrom of conversational misery when I state things like “change is the constant companion of every generation” … or say something like “it isn’t any more difficult for this generation it is just different.”

Frankly. Most people my age think I am nuts when I say it. Shit. Most people any age.

Or think I am out of touch with what is happening around us.

Ok.

If I were sensitive, I would care.

Or more likely I would care if I didn’t find quotes like this.

“… my spirit is also cheered by the obvious tendencies of the age in which we live. No nation can now shut itself from the surrounding world and trot around the same old path of its fathers. A change has come over the affairs of mankind.  … intelligence is penetrating the darkest corners of the globe.”

This sure sounds like something you may have heard on CNN or BBC from someone talking about what is happening in the Middle East or Russia.

Or maybe on CSPAN talking about the shifting global economy.

But.

Think 1850 (or abouts).

Think Frederick Douglas in a speech in NYC.

Think about the fact that each generation has faced some radical change and thought process and attitude.

Yup.

The more things change the more they stay the same.

what also stays the same?

Each generation gets “left behind” as another races toward what will be.

And there is friction between generations.  It is friction created because the generation always being left behind is the older one.

The one that is supposed to be smarter.

The one that is supposed to know the best.

Well.  Is this a generalization? Sure. But the truth? Mostly.

Pieces or parts smarter and know the best?  Yes. Sure.

On the whole?  Nope.

Ok.

To be fair.  A minority of those being left behind actually enjoy the ride. They empower the youth. Fuel it. Guide it. Not restrict it. Those few get to enjoy a longer thrill ride.

But they are few.

On the whole the majority of the older generation holds on for dear life to what they know and makes them comfortable. And it would possibly be okay of they did that and remained silent … but instead they complain about what is lost within the following generations and try and slow change.

It is too bad.

For by focusing on what is lost they neglect to have the amazing opportunity to see what is gained.

But.

Regardless.

In the end.

Change comes upon us whether we want it or not.  As Frederick Douglas said in 1850 … ‘you cannot ignore the intellect of the world.’

True in 1850.

True in 2011.

True in 2172.

Ok. Moving on to business.

Yup. A comment on the business aspect of this thought (older generations holding on to older thoughts).

This is the craziest aspect.

Big business is always (ALWAYS) slow to change. It is part of their personal survival-thinking DNA.

But its actually death-thinking DNA.

Creative Destruction is all about the small (entrepreneurs) disrupting and destroying the status quo and that of ‘the big’ and through the destruction they begin recreating what is right and good for the economy.

So.

After reading that you may think “old” entrepreneurs would be part of the minority “happy few change agents.” (the few who recognize that the more things change the more they stay the same)

Well.  Nope.

Most typically they are actually the worst ‘non-change’ offenders.

Yes. All generations exhibit more conservative less risky behavior as they age.

But. Successful entrepreneurs, turned successful independent business owners, seem to most often exhibit this conservative (on steroids) behavior. My guess it is driven mostly by fear of losing what they gained (by the way … thinking this way isn’t exactly a stupendous growth strategy nor a healthy business environment if you want to have millennials as employees). But I also believe there is an aspect of refusal to let go of things that brought them that success.

That which made them successful they now disregard, and have discarded, under the guise of “maturity” or ‘mature businesses need to be managed differently than growth businesses’.

Oh.

And it is all compounded by their belief that past failed attempts should be avoided (even if someone has a thought on how that “failed” scenario could be viewed differently and therefore maybe the learning from that experience may have been flawed).

Now. I am not suggesting all past experience should be ignored. Or that successful entrepreneurs need to completely relive their aggressive risk (but smart) behavior that carved out their success.

But older business owners need to let go of some ‘beliefs.’  Not because they are wrong but rather because they are wrong ‘now.’

In addition sometimes new people provide new perspective on their growth (success & failures) experience.  The new people possibly have just seen “from the other side” and discern different learnings.

It is fresh perspective.

And most independent business people lose perspective as time goes on …. because they have cocooned themselves within their successful behavior.

Regardless.  This rant post all comes down to several overarching thoughts.

Each generation faces radical adversity.

Each generation facilitates extraordinary change (beneficial as a whole).

Each older generation is extraordinarily reluctant to release that which is comfortable to them (and what they “know” … or believe to know).

And, lastly.

We older folk, manager types, should reflect upon this.

Why?

Because we are managers. And we are managers of those who will beget what will be better than what we have done or created.  That doesn’t diminish what we have done. And we should embrace the fact we have created an environment for others to go farther than we were able to go.

We wonder why managing young people (call them millennials if you would like) is so difficult?

Well.  It is because we are holding them back (in general). It’s like trying to tame mustangs in the Wild West. Except we, unlike the savvy old cowboys, don’t reflect on the beauty of the wildness of the mustang as we try and tame them. We simply see the wild untamedness and believe it is a shame they are so wild.

Older managers, to be successful, need to admire the beauty of the untamed.  And not seek to break the mustangs but rather guide their energy to enable them to take the herd to the heights it deserves.

A poetic metaphor (bad one)? Maybe.

But certainly something worth thinking about.

The more things change the more they stay the same.

a company of adventurers

Leadership is a tricky thing.

It is walking a fine line of truth (grounded in what is real as well as ‘not lying’) and aspirational (giving people a glimpse of what they can be).

And, as with anything, this is about some functional practical things and emotional soul searching things.

Oh.  And connecting them.  It is the connection aspect that great leaders do well.

But, ultimately, those leaders who figure it out end up leading high energy, high performance organizations.

And I tend to believe when you see an organization that ‘thinks small’ (or acts small) it is because their leaders do.

Regardless.

Just as I wrote recently about the fact we are in the ‘selling hope’ business I tend to believe great organizational cultures are also grounded on hope. Hope for being better.  Being a better person.  Being better at what you may do daily (even the smallest task). Being part of something that betters the world.

Great organizations, at their core, feed their people’s hope.

And great leaders figure out a way of showing them that hope.

In practical terms and aspirational terms.

All that said that leads to me to some words that made me think about this.

Sam Meek. Sam was the CEO of of the advertising agency J. Walter Thompson in the 50’s/60’s. And the words below were delivered in a 1965 speech.

Within the following words there are little scraps of hope littered throughout for people to pick and choose from. Scraps of the practical. Scraps of aspirational. Scraps of lessons that can be implemented daily in actions. All littered on a ground of a solid attitude focused on the horizon.

These are words that make you feel good about being part of the organization and yet words to challenge every one to be better and work harder (“we are a permanently dissatisfied company”).

I am not above stealing great words and reapplying them.  I use these words all the time and, frankly, I seek to work within organizations that like these words:

When I talk of this company, I am not thinking just of a legal or business entity. I am using the word in the older sense, as in a company of scholars, as a company of adventurers, or a company of voyagers. I think our companionship partakes of all these things.

There had to be something special about this enterprise to attract the talented and venturesome people who have come together to exercise their considerable talents and to derive from it the things that make for full and satisfying life.

Our relationships are subtle and highly sensitive relationships ….

Our job must be to share authority without losing it …

The whole staff must have a proprietary feeling about the company’s work.

We are a permanently dissatisfied company and so far as I can see, we shall not run out of things to be dissatisfied about. I think our work, in most instances, is the best of its kind in the world – and yet not good enough. Not as good as it is going to be. There has not been and there should never be a year when it is not better than the year before.

Our audience is getting more demanding all the time – it is not a question of talking down to them. The problem, the opportunity, is to talk far enough up to them.

Lastly.

I use the quote below all the time.

I am not sure I have ever seen nor heard words from a leader that captured the essence of both functional practical and aspirational better than these.

“We must be dynamic for purposes bigger than ourselves.“

I admit.

I do hate when an organization “thinks small.” That doesn’t mean they shouldn’t think practical but they should think about impact.  What kind of impact, or imprint, do they truly want to make.  And I don’t necessarily mean making people’s lives better.  I mean ‘doing good or great shit.’ Making an impact through what they do and who they are as an organization.  Impacting whatever world they affect. It doesn’t have to be global (like a JWT) but it can be local or even within their own circle of friends & business relationships.

Creating a great organization, a company of adventures, needs leaders who say, who mean, who live, these types of words.

And all words that are said within a truth that it isn’t rhetoric but rather it is the soul of the organization.

Be dynamic.

Whew.

That alone is a great thought.

So go be.

hope, low prices & marketing (part 1)

ok.

Working in the marketing business I often find myself in some heated debates about whether advertising & marketing is “selling” (or it is often stated “oh, so you are in sales”).

Here is the answer.

It’s not sales. It may not even be selling (in the traditional sense).

Sure.

Ultimately marketing & advertising wants to “sell stuff” but the craft of communications itself is not about selling.

Or convincing.

Or persuading (in some weird and creepy way) someone to do something they don’t want to really do.

Is it about “persuading” in the sense I want someone to “choose me!” to be on their wallet team? Sure.

Is it about persuading someone through some trickery to buy or do something that is bad for them? Nope.

Because in the end It is really about attitudes (creating or aligning to a ‘truth’ – a real truth not a made up one) and behavior (understanding why someone does something they do and inserting a choice into their existing behavior … and sometimes modifying that behavior if you can truly offer something better for them as an alternative).

So marketing & advertising is really about informing so someone can make a choice – whatever is the best choice for them.

Therefore. Marketing & advertising is not in the selling business.

It is in the choice business.

And while choices have dollars & cents attached to them and features & benefits and all that truly functional crap … a person’s final choice preference is never any of those things.

A choice may be made based on them (that truly functional crap) but typically it is only made that way for lack of an alternative.

And that is why communicating “choice” is an art. Because communicating choice is about education and emotion and, well, hope.

Because the bottom line is that people want to make the choice that gives them the most hope.

Now.

That may sound hopelessly lofty but its not. In fact it is what marketing & advertsing & frankly just about any consumer business is all about.

We are in the hope business.

Hope of something (it doesn’t have to be some big audacious hope … sometimes it can just simply be some small glimmer of hope in an otherwise hopeless day).

Yes.

This is truth (and some businesses may cry & weep & gnash their teeth … I just wanted to type gnash).

People don’t really want cheaper prices.

People don’t really want better technology.

People don’t really want faster answers.

People don’t really want more time.

People don’t cooler features or more flashing widgets.

People even don’t really want more money at the end of the month.

None of that really matters to customers.

They want hope.

They want to know that they are going to be ok.

And they want to know that it can get better for themselves.

In a world where natural disasters wipe away lives in a second and leaders make decisions that take billions of dollars from hard working saving & investing people the only thing people can truly hold onto is a belief of something better.

Yet.

In our ROI-driven marketing world we not only seem content to pretend that a “faster, cheaper, better” is what people want but we also relentlessly pursue ineffective marketing communicatiosn initiatives expounding upon a litany of usefless features and functional doo-dads.

And we are wrong. Dead wrong.

People want hope.

In a lot of ways ‘the people’ are no different than you & I (because oddly enough we are people also).

They want to be listened to.

They don’t want to be lied to.

They don’t want you to talk over them.

They want you to validate their concerns.

They want their questions answered.

They don’t want you to ignore them.

They want you to inspire them.

They don’t want a sales pitch.

They don’t want you to be annoying.

They don’t want to hear about you.

They do want a distraction from real life.

They don’t want to be pressured.

They want to know that you have problems too.

They want a consistent partner.

They don’t want you to fake it.

They want truth in answers (the first time & every time).

They don’t want you to tell them what they want to hear.

They want to feel like you care.

They want you to hear what they aren’t saying.

And most importantly …

They want more than what they have (not materialistically but “happinesswise”)

They want more than what they expect (not just functionally but in life)

They want something better (not just functionally but in life)

They want optimism (based on truth not blarney).

So.

Enough of that.

People want hope.

(that is the common denominator in all the things I just typed)

And if you aren’t providing that in your marketing you … will …. not … be … successful.

Sure.

You can buy some sales and a “consumer relationship” with lowest prices & coupons and cool features and some functional widgetry but those people aren’t buying “you” they are buying the ‘feature of the day.”

In my words? You have bought a date not a relationship.

And you have missed an opportunity to be a hero. Instead you are a salesman.

You have missed an opportunity to have offered,and given, hope.

C’mon. be honest with yourself as you read this.

Think of all the times that were hoping that someone really cared about how bad you hurt inside. Or recognized the pain.

So ii guess if you really feel like you have to ‘sell’ … then sell hope.

Because as Hugh Macleod drew in his cartoon at the beginning of this post … if you can sell hope you can get someone to buy anything.

hope & marketing (part 2)

Ok. I had so much to write about in “hope, low process and selling” that I took this part and thinking and put it in its own lil post.

Here we go.

Fact.

Communicating choices with the intent to persuade someone to “choose me” is an inexact science.

In fact.

It is not a science at all (despite what ROI driven purchasing people suggest and desire).

Yes.

There is a discipline to crafting communications (c’mon … given the amount of time people have done things there is certainly a list of ‘trial & error’ learnings to use as benchmarks).

But.

Advertising iconic hero Bill Bernbach said: “I warn you against believing that advertising is a science. Artistry is what counts. The business is filled with great technicians, and unfortunately they talk the best game … but there’s one little problem. Advertising happens to be an art, not a science.”

And this dude, and his agency DDB, created some good shit (and still does).

So.

So, because being in the choice communication business (and selling hope) isn’t a science, the truth is (another fact) the more research conducted to “strengthen” choice communications (i.e., marketing & advertising) the more functional the communication has to be judged on … because that is the only thing research can quantitatively measure.

Emotion, or something you just feel in your gut, cannot be measured.

(note: there are some wacky research tools out there that attempt to do so but regardless of their best efforts no one I know can use ‘brain wave’ or ‘twitch muscle’ research to truly tell you what your gut tells you)

And (as noted in the previous ‘hope’ post) functional doesn’t win in the long run.  Emotion or some higher order value wins.

Bottom line?

Two things lead to mediocrity and conformity in communications: research and rational benefits.

Interestingly this thought goes way beyond communications and advertising.  It runs true in just about any transaction-based relationship (i.e., shopping).

Another fact.

Shopping isn’t simply a transaction. Shopping is an experience.

And I don’t necessarily mean experience in the “walking around and looking and touching” perspective. One expert said it best:

“We dream of shopping for beauty, truth and perfection, and if we do not shop for a perfect society, at least we shop for a perfect self.”

Yes.  Correct.  And, yes, again.

We shop and we make choices as an extension of ourselves – of who we are and what we want to be.  That, at its most psychological Maslow-like level, is the pursuit for a perfect self.

Sound like a bunch of mumbo jumbo? Maybe sounds like it but it ain’t.

We talk transactions but we behave emotionally.

(how often has your head say “he is all wrong for me” and then you go ahead and let your heart tell you what to do?)

Anyway.

The same expert also suggested that she believes “the noblest aspect of shopping is finding a community, a discovery that usually happens at a place like a farmer’s market or a neighborhood store, where interaction among customers is fostered. Rallying for these public spaces rather than buying things, she argues, should be what we use shopping to achieve.”

Poetic words.

Maybe even sounds a little too lofty.

But its not. Because if you ignore the thought behind the words you simply fall back into the functional/rational zone of sameness (and then, I guess, it does become a science).

If it helps … simplistically she is suggesting  creating spaces so that “birds of a feather can flock together” and be happy amongst others.

So why is all this important?

Well.  If I want someone to ‘choose me’ I have to understand the challenges.

Understanding motivation for behavior is one thing (and a very very important thing).

Understanding HOW to communicate is another.

Bill Bernbach again: “Eighty-five percent of all ads don’t even get looked at. Think of it! You and I are the most extravagant people in the world. Who else is spending billions of dollars and getting absolutely nothing in return? We were worried about whether or not the American public loves us. They don’t even hate us. They just ignore us.”

So even if I am in the ‘selling hope’ business I have to deliver the message in a memorable, interesting and artful way if I want whatever I am marketing to be chosen.

Notice I used art in there.

Because, once again, it is not a science.

I cannot simply say “hey, look over here, I am selling some hope-on-a-rope.”

I gotta be creative and offer up some communication that stirs someone emotionally and lets them arrive at the benefit all by themselves.  That is a powerful communications when that happens.

And there absolutely can be some discipline in the approach but the ultimate output is art.

A maddening art.  I often call it the “glorious mistakes when we blunder into an incredible way to say what we want to say.”

Why a ‘glorious mistake’?

Well.

Often the most insightful communication is partly flawed. Likeable.  Believable.

And I ended on believable because while communications is art … truth is just that – truth. No grey. Just truth.  And that is ultimately what makes things believable.

Bob Levenson (hired by Bill Bernbach) may have said it best when he responded to a Time magazine contest in the 1960′s. Ad agencies were invited to create an advertisement in the public interest. He wrote a manifesto for the ad industry (see below). It conveys the honesty that the advertising/marketing profession is founded upon.  And still should uphold as the beacon for everything every marketer (at any level) should do in the communications business.

Bottom line?

Share truth.

Sell hope.

And enjoy, share, and DO THIS OR DIE.

The Hurricane Checklist

This is the Hurricane checklist (and Hurricane is a London brand content & social marketing agency)

Ok.

I was digging around for something (I cannot remember what) and I came across a marketing agency in London that has an awesome website with a bunch of well articulated thoughts.  I really liked their website because they permitted their people to just write and share their own point of view in their own voice.  Not many companies are confident enough to let that happen (they fear someone is going to say something crazy and some really important person is going to randomly come across it online and never ever ever want to speak with the company ever again … ever.)

So it is companies like this Hurricane group that give me hope companies can let an individual voice, of an employee, shout something from a hilltop without looking over their shoulder (and editing).

All that said.

These guys came up with an awesome 6 point checklist for developing campaign strategies that straddle traditional and “social” (see web based) marketing plans of action.

Kudos to these guys.  Smart.  Well articulated. Understandable.  Believable.

I would hire these guys.

Oh.

I work for an agency. Oops. Guess I can’t.

Here you go:

Trying to juggle the demands of integrating traditional media with digital/social media can be a nightmare. With the rules changing on a daily basis, what can you do to try and make sense of it all and still create great campaigns that deliver even greater returns?

Here at Hurricane we’ve been talking about our 6C’s checklist for several months now and the more we use it ourselves the more we swear by it. No seriously, hyperbola aside it’s effing awesome.

When looking at developing a campaign strategy for brand or lead generation activity, this checklist should form part of your campaign plan.

Here’s the low down.

1: Credibility – your primary motivation in the new world has to be customer NOT shareholder driven. You need to have a clear and authentic story as to why your product or  service “will make a difference” and not just line the pockets of investors and shareholders. What’s your story? Why is it authentic? Why should this matter to your audience?

2: Consent – just because you have a database of 10,000+ customers does not give you the right to spam them with emails and direct mail. You have to earn the right. This means focusing on understanding the needs of your customers first and taking a thought leadership stance to be able to engage rather than sell. What is your view of the market or category you play in? Can you create a thought leadership stance that goes against the accepted view of the market? Can you genuinely deliver against this position? Can you make it exciting and relevant?

3: Content – what can you create that will be of value to the unique buying tribe you are trying to engage with; whether its IT decision makers of  Financial directors. Make sure you nail your value proposition so that your content strategy has real focus. Then you need to think how you can inform, educate and entertain them. Aside from great data capture, great content moves people through the sales cycle quicker. I know you all know how important the right type of content is, but creating it in new and engaging ways (Audio, video…) and syndicating that content across paid for and social networks can really amplify your message and create positive interaction with your customers and prospects.

4: Communities – It’s more important than ever before to understand the unique buying tribes and communities where your brand or product has the strongest rational and emotional fit. These self gathering online communities wield huge influence and their networks and peers can help amplify any brand or marketing message. They are an active resource for all types of market insight and when motivated can be an excellent co-creation and crowdsourcing partner. You need to know where they are, what makes them tick, create content that creates a buzz and encourage them to participate and share in all aspects of your sales and marketing. Devoting yourself to these core communities is a sure fire way to create success.

5: Conversation – in the old world you would send out a rock solid piece of DM, follow it up with an email and back that up with a white paper. It was robust, logical and ticked all the boxes. However, in the new world you also have to be able to kick start the conversation. This means ultimately that you need to be interesting first and right and relevant second. Tapping into the socially connected world means giving people the ammunition to be part of the conversation. Nobody ever emailed their work colleagues a dull email about total cost of ownership. Always think about the BUZZ factor. How will this campaign get people talking about my product or service? What can you do to throw a curve ball into your market place that will get people talking? When you get this right, it’s what we call a Contagious Customer Experience!

6: Creativity – There is more clutter in our lives today than at any other point. To get through you have to make sure you have a stand out brand identity,  a meaningful set of beliefs and brilliant communications to bring it all to life. Social and alternative media have not replaced the big idea. The big idea is your highway straight into the mind of your customer. How does this creative idea make my brand stand out? How does this creative idea get people buzzed? How does this creative idea compel people to share it?

So there you have it, a checklist that quite simply could make you famous (honestly). Oops.

That last sentence (and the italics) are their words.

Interestingly they are words I have also used.

I cannot figure out of it is plagiarism if you think the same thought and use the same words and type them surrounding their thought (which you agree with).

Regardless.  I hope they don’t mind.

And remember … while this thinking may not make you famous (as they suggest) it will certainly insure you are smart.

watching the budget shopper

Watching the aspects of consumer behavior – why people do the things they do – is a fascinating business.

Particular if you are in the “behavior management” business (advertising & marketing) like I am.

The point here is that there are differences between consumer attitudes and shopper behavior. What I mean by this is that managing what a person thinks (that’s the consumer side of the equation) and what a person actually does in store (this is the shopping side of the equation) can be significantly different.

And in recognizing this as a marketer you become one step closer to understanding how to ultimately create satisfaction (and loyalty .. the holy grail).

Misalignment between the thinking and the actual doing is ultimately going to create friction.  And friction is not good.

Anyway. I will use budget grocery shoppers as a case in point.

As consumers the budget grocery shopper attitudes are focused on value and maximizing their budget (and maximizing their shop visit/experience).

But.

As shoppers their behavior shows they actually don’t save money in store.

The fact is budget shoppers try really hard to save money. In fact, in today’s economy, they try harder than ever. But the fact is they actually don’t save money and I many cases are doing worse during shopping.

I say this because grocery stores should pay attention and understand the budget shopper.

Because many budget shoppers get frustrated when they don’t save money (and wanted to).

And these frustrated shoppers translate into ‘less money spent’ as well as an underlying dissatisfaction with the store.  All this despite the fact the store may have done everything right – clean store, wide aisles, incredibly low prices, etc.

Who are these budget shoppers?

Well. Not all budget shoppers are truly low income but we should remember that one in seven American households lives in poverty. Another one in six can afford only basic necessities, such as housing, food, and health care. Because I will end up discussing the psychological aspects of this attitude/behavior scenario I will point out that this ‘housing/food/healthcare” is what Maslow calls “basic biological & psychological needs.  And that Maslow psychological profile is possibly even more important a distinction than the true functional “spending within budget” aspect.

Regardless. These economics facts suggest that, at minimum, nearly one in three U.S. households must carefully plan its budgets and spend accordingly.

Budget allocation and spending behavior models often implicitly assume that shoppers with budgets are knowledgeable about the total price of their shopping baskets as they shop. However, because in store shopping behavior actually reflects estimating of the prices of their shopping baskets it mitigates the relationship between budget allocation and actual in-store spending.  So lets try and understand whether and how they estimate this total basket price.

Because inaccurate estimating has implications on:

-       Real consumer welfare: the shopper is maximizing neither time nor budget (suggesting the consumer is not meeting basic Maslow hierarchy need).

-       Consumer perceptions: the consumer perception afterwards is twofold (1) somehow I wasn’t smart enough to maximize my budget <or> I wasn’t smart enough to implement the budget plan I had in place (therefore attacking self esteem/self actualization) and (2) the store made me look & feel stupid (consumer & shopper dissatisfaction)

-       Retail performance: the store didn’t maximize the transaction opportunity

A study was conducted by Georgia Institute of Technology to uncover understanding how shoppers on predetermined budgets might estimate the total price of their shopping baskets and whether, when, and how they keep track of in-store spending. The study had three objectives:

-             to determine whether and when budget shoppers keep track of how much they spend while shopping

-             to understand how they estimate the total price of their shopping baskets

-             to examine the implications of estimation biases for consumer welfare and retail performance.

Methodology: The research was conducted in the context of grocery shopping, for which people shop multiple times per month and often spend 15%–20% of their income on ten or more items per trip.

The research, a field study and two laboratory studies, concluded four key generalizations about budget shoppers in grocery stores:

1. They predominantly use mental computation strategies to track their in-store spending

2. They adapt their mental computation strategy to the dominant range of price endings of items in their shopping baskets

3. Those who try to calculate the exact total price of their basket are less accurate than those who estimate the approximate price

4. Motivated shoppers are less accurate than less motivated shoppers (because they tend to calculate instead of estimate the total basket price).

The key conclusion from the research, to a grocery retailer, is that shoppers who overestimate the total basket price most likely spend less than they budgeted for––that is, they do not maximize their own utility under the budget constraint.

Furthermore, they might reallocate the “saved” money to a different (mental) account, which could entail a financial loss for the retailer.

Beyond that conclusion the study uncovered the shoppers who underestimate estimated calculations.

Shoppers who underestimate the total basket price are more likely to spend more than their grocery budget. This means they unintentionally reallocate more money to the “grocery account.” This reallocation in turn may trigger a chain of budget and spending decisions that could cause shoppers significant financial distress.

Very importantly is that a second field study demonstrated that shoppers who underestimate the total price of their basket are more likely to overspend, leading to negative store satisfaction.

Where to go from here?

The easiest thought for Grocery Retailers is to begin educating shoppers about computational estimation strategies may enable them to become more informed shoppers. In other words turning wild guesses into more educated ones.  More difficult, but the path with the highest ultimate return, is to not just educate but actually facilitate an estimation strategy in store almost to the point of “calculation” rather than “estimation.”

The benefits of exploring a solution:

Consumer Welfare: Real consumer welfare should improve, because shoppers can maximize their utility given their budget while minimizing the likelihood of spending more than they can afford.  This is true functional value to a shopper.

Consumer Perception: This is where functional and psychological meet on several levels (and Maslow hierarchy plays a role in what is important):

  1. A budget consumer attitudinally has had his or her behavior match expectations. Attitude and actual behavior is aligned.
  2. With alignment the shopper feels smarter translating into a higher self esteem (because they have “self actualized” a perception)
  3. Consumer self actualization is typically shared with the shopping environment (I find higher value in the experience because they were able to deliver upon what I desired attitudinally)

In the end. When perceptions match reality there is a heightened sense of satisfaction.

Retail Performance: Enabling budget shoppers to accurately track their in-store spending—for example, using shopping cart scanners—may represent a win–win solution, enhancing consumer welfare and retail performance. There is a secondary “loyalty” aspect in which shoppers whose behavior is indicative of self worth and maximized utility or significantly more likely to replicate the experience (Maslow basic need & self esteem satisfied at same time).

In conclusion.

Shopper behavior analysis is not anything new. We looked at it in the 80’s when I was at JWT.  We just called it ‘the consumer buying system’ and analyzed all aspects of perceptions, attitudes and shopping behavior. I have even seen an agency self-advertisement from the 1930’s that basically outlined managing consumer attitudes and matching them with in store shopping behavior. I say all of that not to suggest studying shopping behavior isn’t important.  In fact I say it to suggest it is.  People have been studying it for years and shouldn’t ignore it if they are in the marketing business.

The retail business is multi faceted.  It is about understanding what people think and what motivates them outside of the store as well as what they think and motivates them once they are inside the store.

Ignore an aspect at your own peril.

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Source: 3/2010 Koert van Ittersum, Joost M.E. Pennings, & Brian Wansink College of Management at Georgia Institute of Technology

expectations as an economy

This one is about those pesky demanding consumers. And their pesky attitudes & expectations.

Oh. Expectations. Expectations are truly tricky things. They elevate quickly (even moreso in the web-based transparency driven world) and they decrease grudgingly. Once a consumer has experienced a truly 100% perfect experience the bar has been set. And in today’s world? You (a consumer) doesn’t even have to personally experience it … you can simply virtually experience it … and your expectations have been reset.

Let’s face it.

In the past a company (or a brand) could get away with not performing at its peak.   Or maybe taking a day off performance wise.  All because consumers didn’t experience full transparency of the best, the cheapest, the first, the most original or the most relevant.

Well.

That’s all over.

And things are bound to get even more radical.

trendwatching calls this phenomena The Expectation Economy. And it is not just a generational thing.  While it is a given for the younger generations who are unburdened by an era of mass production, mass advertising and above all mass ignorance … older generations are quickly stepping into this world wondering what the hell all these youngsters know that they don’t.

Oh.  And every day the older generations are getting more online savvy (even if it is simply to make sure they aren’t getting screwed) and are creating the same expectations as the younger generations.

The Expectation Economy is a consumer trend chock full of experienced well informed consumers from the US to China who has a high list of expectations that they apply to each and every product or service or experience on offer.   Their expectations are based on years of self training in hyperconsumption and the flood of online information readily available.  All of which helps them track down and expect not just basics even for the basics (in other words … there is no such ting as “basic” any more).  Not just the lower level standard of quality but the “best of the best” for what they are willing to pay.

They have redefined quality.

Quality is now based on what they are willing to pay.

“Yes.  I have one dollar.   But now I know what to expect for one dollar.  Oh.  And it ain’t just one dollar worth of value.   Its something more because I know, even though it’s just one dollar, someone out there is willing to give me more than one dollar of value because they want my one dollar.”

So.

What this really means is that in this expectation economy your product or service is no longer just judged against other products and services in your category but by experiences created by other products and services in other categories you cannot even imagine are your competition.  Ok. They aren’t your competition in a true definition of the word (it is not like they are stealing sales) . But.  They are stealing expectations. They are resetting the expectations in your category.

Geez.  How fair is that? You aren’t even competing against them.

Well.  In the new Expectation Economy face it.  You aren’t just competing against those you think you are competing against but also competing against expectations being set by other companies in other categories.

The biggest difference from five to ten years ago? Word of mouth now travels the world in a flash, making product launches instantly global, turning every new brand, big or small, into a potential ‘player’ in the marketplace. Small businesses and brands can become big businesses and big brand overnight.

Basically, this is the Creative Destruction theory (Schumpeter) gone ballistic. Remember. Creative Destruction is all about how the small constantly overwhelm the big to improve the overall marketplace.

And it is happening because never before has intelligence on the best, the cheapest, the first, the most original and the most relevant been so openly available to consumers. And never before have consumers enjoyed doing research and comparisons (lets call it ‘personal competitive analysis’) as much as they do now. In fact consumers are conducting the competitive analysis more diligently than most corporations do (including possibly the most anal comparative corporation of all time P&G).

Blame (or thank) sites, blogs and magazines such as:

This avalanche of consumer competitive intelligence has even spawned consumer information as a job – where consumers inform each other on the best of the best without feeling the need to actually purchase anything or even get paid for what they are doing.

What started with amateur “cottage industry” travel, chef & shopping experts is now applied to virtually every industry or any object that consumers’ desire. In fact consumers can now vicariously consume everything and anything through the eyes of curators/experts and other consumers, and the written/spoken/taped reports they freely share (note again … without getting paid to do any of this).

And all this sharing of knowledge leads to creating expectations.  Expectations with regard to everything. And that leads to …

Irritation and Indifference

Think about the consumer as someone with ongoing annoyance interspersed with occasional boredom and indifference.

Whew. Now that sounds tough for any marketer out there.

Why will consumers’ moods be like this?

Once high(er) expectations have been set, they are bound to go largely unmet, since the majority of brands still choose not to keep up with the best of the best (because that “isn’t our positioning or what we are about” or they simply just cannot match the best of the best).

Well informed consumers will thus find themselves in a perpetual state of indifference and/or irritation.

Indifference will hit those brands that consumers know are underperforming, and that they can avoid due to sufficient availability of the best of the best. If you’re working for one of those underperforming brands, the scary thing is not just selling less (or nothing). It’s that indifferent consumers will stop being forgiving, they will stop being cooperative and giving you feedback on how to be more like other, better performing competitors. They’ll just leave and never return, without telling you why.

Perpetual irritation is just as bad: this will occur when consumers are forced to buy from an underperforming brand, due to limited or no availability of what they already know is the best of the best.
In this light, pay special attention to fake loyalty and postponed purchases:

-          Fake loyalty: consumers will continue to purchase from underperforming brands if the ‘real thing’ isn’t available. To the underperforming brand, all may seem quiet on the western front, until the best of the best suddenly does become available. Good examples of fake loyalty can be found in the airline industry: millions of frequent flyers around the world know that Virgin Atlantic, Singapore Airlines and Emirates offer a superior experience, but since these airlines don’t fly on all routes, consumers have no choice but to fly with subpar airlines now or then, or all of the time. Count on them to vote with their wallets every time new routes are added by these ‘best of the best’ carriers, even if they’ve never flown with them before.

-          Postponing purchases: some ‘best of the best’ brands like Apple actually manage to indirectly convince consumers to postpone certain purchases. Many consumers would rather wait for the iPhone or MacBook Air to become available, than to buy a new phone or laptop. Again, due to the dissemination of information, even local product launches are instantly global. Digital services have already succumbed to phased distribution; the physical world is next.

The Next Generation

Let’s face it: in the past a brand could get away with not performing at its peak, since consumers didn’t enjoy full transparency of the best, the cheapest, the first, the most original, the most relevant. That’s really over. And things are bound to get even more radical: the EXPECTATION ECONOMY is a given for younger generations, who are unburdened by an era of mass production, mass advertising and above all, mass ignorance.

So: not knowing who’s doing exceptional things and setting your customers’ expectations is not an option. Which brings us to the following:

Looking cross-industry is Imperative

Sure, we know that what you really, really want is to look at which trends will dictate your industry. If you’re in automotive, you want to know about the future of transport; if you’re in food and beverage, you’re no doubt interested in everything healthy and green and organic. And of course you have a near-obsession with what your main competitors are up to. But in an EXPECTATION ECONOMY, business professionals should obsessively think and look cross-industry, as opposed to suffering from industry tunnel vision.

Here are three reasons why looking cross-industry isn’t just great for inspiration, but a prerequisite for understanding how to succeed in an EXPECTATION ECONOMY:

1. Your Competition could be Anyone

First of all, focusing solely on your own industry will obscure the fact that in economies of abundance, consumers are increasingly spending their ‘play money’ on goods and services that net them the experience, the indulgence, the excitement, the satisfaction they’re looking for at a specific moment. Which could be new sneakers (even though they already own five pairs), or a new cell phone (even though their current one is perfectly fine) or a long weekend away (even though, if they’re European, it’s probably their fourth getaway this year). So if you’re, let’s say, Nike, you’re definitely competing with Reebok and Adidas and Onitsuka Tiger once a consumer has made up his or her mind that it’s sneakers he or she desperately wants. But before minds are made up, when shopping for a certain kind of excitement, it may as well be Nokia or Starwood Hotels. Or Zara. Increasingly, you’ll be competing with anyone and everyone, which means you need to keep an eye on anyone and everyone.

2. Expectations are Often set Outside your Industry

Secondly, limiting yourself to your own industry will make you miss important changes in consumer expectations, and will thus put you at risk of disappointing or even annoying consumers. Every industry has its own ‘innovation competence’, and the innovations they’re bringing to market not only excite their own customers, they also shape their expectations for other industries. Whether it’s Singapore Airlines’ sense of status, Starbucks’ understanding of indulgence and rituals, H&M’s obsession with making up-to-the-minute fashion affordable, or Apple’s prowess in design and usability. And while flawless execution is never easy, the thinking and attitude behind it isn’t impossible to mirror. Consumers know this, too. Hence their aforementioned indifference and irritation when it comes to the non-H&Ms, the non-Singapore Airlines, the non-Apples.

3. Just copying Competitors is a Race to the Bottom

Last but not least, if you’re obsessed with what your direct competition is doing, you will always end up copying new concepts in your industry. Which means that, unless you’re comfortable with being a ‘smart follower’ and being really really good at it you won’t be successful.

Now, all of this is of course not to say that you shouldn’t actively track what’s happening in your own industry. But also constantly ask yourself: who are our other competitors? What experiences could our product or service be traded in for? And what can we learn from other industries setting consumer expectations across the board?

Oh.

Smart follower.

That’s management speak for waiting to see whether innovative initiatives by more creative and daring competitors are worth copying: if they are, you’re too late, and if they’re not, well, by then they’re probably working on something newer that does work.

Being a smart follower is not a science.  In reality it is all about mixing experience, intuition, and knowing your sources.

In my world i grab a notebook and camera and start taking notes and pictures roaming the streets.  And secondarily scanning the list of best of the best sites/publications. Note that I prioritize “the streets” first.

Always remember. “The streets howl with the truth.”

Find competitors and non-competitors, big and small, who are setting consumer expectations much higher than you’ve ever been able to (because whether you like it or not you are being compared to them).

Maybe they’re more fun.

They have better design. Their stuff tastes, looks, feels better. Their customer service actually responds to emails. They’re cheaper.

Then build what you think are the standards for which you will be measured against. Those are the expectations you need to manage whatever it is you do against. That is where you need to start thinking.  Maybe in developing new products or services or just experiences.

But in this new Expectation Economy you have to at minimum incorporate people’s expectations into what you are doing. And, of course, seek to outdo them somewhere.

Ah.  The Expectation Economy. It certainly isn’t dull.

source: thanks to trendwatching for contributing to this post.

500 & my Mother asked what makes me credible

So.

Yesterday I celebrated my 500th post. On 400 I broke down everything I had written to see if I was being useful to anyone (and in my own mind looking at the numbers I said “yes” …. Oh … but I also wake up every morning and look at myself and say “my, what a handsome man” to the reflection so I may tend to discount the ‘yes’ slightly).

But on 500 I remember number 1. And my mother.

When I told my mother I was going to start writing about things and build a website she hesitated a second … and then asked me “so why should people care about or believe what you say?”

And, interestingly, recently I was faced with a similar question in the workplace.  It was kind of a “feel you make things up” and “why should someone care about your opinion?”

So.  On two fronts I faced an issue I guess I haven’t faced in … well … years I would guess.  For years based on my experience and curiosity based knowledge gathering personality I have been able to stand up in front of some of the smartest business people in the world and have my point of view seriously considered.  Without question.  And acted upon or facilitated the discussion that needed to take place.

Both situations are versions of the infamous credibility question.

And I guess in both situations I was a little dumbfounded (but I guess, in the case of my mother, a fair question – even though I am her son … the other still has me scratching my head a little).

Well.

Let’s see.

Let’s talk a little about credibility. Mine or anyone’s I would imagine.

I am reasonably smart.

I can add up to ten without an abacus (although using an abacus confuses me).

I know not to put my hand on the hot water pipe (although I did against my parents’ instruction when I was about 6).

I know the difference between there and their (but I do have a nasty habit of dangling prepositions at the end of sentences).

I do know to capitalize the first word in every sentence but I tend to write everything in lower case (don’t ask me why … I have no answer).

I know that the web is worldwide now (and possibly intergalactic we just haven’t found anyone to confirm usage in another galaxy yet).

I know Perez Hilton and Paris Hilton are not related nor sisters.

So.

How about education? (I wonder if that counts towards the whole credibility thing).

Geez. I have a degree. A couple in fact. But I am still unclear how I got them and admit I was pleasantly surprised they offered them to me graduation day.

That said. I have met as many idiots with Harvard degrees as I have brilliant minds (so maybe a college degree isn’t the code).

And I have met people with only high school degrees who have PhD level common sense versus people with PhDs and high school common sense.

And experience?  Geez.

I have met senior vice presidents who had administrative assistants who were smarter (but not as politically savvy).

So what the heck is the code for credibility?

Christ. I have no frickin clue.

A great resume? Ok. How many people highlight times they may have received a bad review or a time they may have been passed over for a promotion?

So. Maybe not so much.

Great recommendations? Ok. How often do you ask an enemy to write about why they hate you?  (none is the answer in case you didn’t know).

Great grades in school?  Ok. What happens if you didn’t go to school? Or maybe had two bad semesters?

I further struggle as I pose hypothetical situations in my head.

If I were an economist would I would be more credible if I had a statistics degree?

Would I have a more credible opinion on law if I had a legal degree?

Well.

Hate to break the news to people but non economists can have some pretty articulate and smart thoughts on the economy.

Oh.

And while someone may not be able to quote Finch versus Mockingbird 1888 tort reform (boy. I bet I just hacked that one up) there are a lot of people who can tangle with a legal trained mind (I would exclude supreme court justices cause I kinda think they are in a league of their own).

Wow.

Moms are tough enough as it is but this is a humdinger of a question.

So here is what I do know.

I cannot answer the credibility question for everyone.

But here is how I define it (and hope I am judged the same way).

Ultimately it comes down to the face to face encounter (face to face can be in person or in a piece of their writing), i.e., what someone says face to face or in what I read from them.

I seriously cannot judge without that stimulus.

Sure. I guess I am not surprised if I read something from someone and it is really smart and articulate and they say they graduated from Yale or Stanford.

The trouble is I am equally unsurprised if I find they list Devry as their higher education.

I believe people have opportunities to collect moments of learning (and some don’t collect).

People have opportunities to do different things (and some don’t do).

I guess what I find most credible is a combination of depth of learning on a topic (doesn’t have to be a degree just learning) and perspective (call it a counterbalance knowledge).

Ok. I guess an asteroid physicist if all they know is the physics of an asteroid they would be credible.

In the end.

So what do I tell my mom? (and I guess people at work if pushed)

Why should anyone believe what I have to say? Heck. I don’t know.

On day one with my website I didn’t have shit to say (do not have that problem at work).

Today? (maybe about 11 months and 500 posts later)

Gosh.

Maybe what I say makes sense.

Maybe I offer up a logical reason to believe.

Maybe in my own little world people have actually listened to what I had to say (so for some warped non linear logic flow I reason that other people will listen).

I have some education (but others have more and less).

I have some experience (but others have more and less).

Maybe all that matters is if I say something that makes sense and I can defend it, well, who cares if I am credible as long as my ideas are credible.

There’s the answer. “Mom, people should listen to me because my ideas and thoughts are credible.”

Whew.

I hope that is all that really matters.

Hopefully after 500 posts and articles written and published I have achieved some level of credibility.

On the other hand if I don’t … I can also hearken back to my original post which suggested all that was important was that I write for me and if no one came to my party I wouldn’t be disappointed for I had not waited for people to attend to have fun.

I had a party all by myself.

(but if anyone is reading this and actually believes I have written anything credible send me a note so I know I wasn’t at the party alone).

Thanks.

Ok.

On to article 600.