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Dan Ariely: Wait for another cookie?
Posted in Marketing & Branding on May 17, 2011
There is not much place for waiting in today’s marketplace. In fact you can think about the whole capitalist system as being designed to get us to take actions and spend money now – and those businesses that are more successful in that do better and prosper (at least in the short term).
A recent study by colleagues of mine at Duke** demonstrates very convincingly the role that self control plays not only in better cognitive and social outcomes in adolescence, but also in many other factors and into adulthood … Controlling for socioeconomic status and IQ, they show that individuals with lower self-control experienced negative outcomes in [health, wealth, and public safety]…These results show that self-control can have a deep influence on a wide range of activities. And there is some good news: if we can find a way to improve self-control, maybe we could do better.
An interesting analysis. Ariely’s thesis is that over time, people who are better at resisting temptation tend to do better in life (at least with respect to health, wealth, and public safety).
What he doesn’t explore, however, is what happens to companies that are able to resist the allure of immediate gratification. Put another way, is there any material difference in “prosperity”1 between a company that focuses on quarterly profits versus a similar company that looks quarters or years down the road?
In many ways, Jim Collins’ Built to Last tried to answer this question. It profiled 18 companies and compared how they conducted themselves both internally and externally. And while Collins and co-author Jerry Porras concluded that it was better to focus on the long-term, what they couldn’t predict was that nearly half of the companies they profiled have had one trouble or the other in the decade since the book was originally published.
Ten years on, almost half of the visionary companies on the list have slipped dramatically in performance and reputation, and their vision currently seems more blurred than clairvoyant. Consider the fates of Motorola, Ford, Sony, Walt Disney, Boeing, Nordstrom, and Merck. Each has struggled in recent years, and all have faced serious questions about their leadership and strategy. Odds are, none of them today would meet BTL‘s criteria for visionary companies, which required that they be the premier player in their industry and be widely admired by people in the know.
So it seems that if we look long term and the companies that focused on the long term, not all have done well. What’s more, if we look long term at the companies that focus on the short term, some of them have done well, calling into question at very least the applicability of Collins’ conclusions.
And so the question remains: is it better to resist temptation and pursue long term profits, or is it better to give in to the temptation of short-term profits?
- However we choose to define that word, whether it be stock price, market cap, quarterly or yearly profits, or any other metric.
Dilbert on customer feedback
Posted in Random Musings on May 15, 2011
A tongue-in-cheek commentary on how marketers often can’t resist the urge to over-survey.
Can introverts succeed in business?
Posted in Random Musings on May 13, 2011
A few years I had a performance review in which I got heavily criticized for “not appearing engaged enough” in meetings and other social situations. As an extreme introvert (by Meyers-Briggs standards), I often find it difficult to relate to a large room filled with very exuberant and outgoing people. And while it’s far from being debilitating, my penchant for listening rather than talking has at times, as in the case of my former manager, earned me a reputation as aloof and unengaged, when in reality I’m simply listening rather than talking.
I spent a long time trying to change, until a subsequent manager helped me remember that each person is different and that the better manager tries to mold themselves to their people, not the other way around. This is not to say that I didn’t make my fair share of mistakes in that previous role – I did, many times over – but I came to realize that my former manager also missed a few opportunities to relate to me more successfully.
That story came back to me yesterday when I stumbled across a post by Carl King on the 10 Most Common Myths About Introverts. As a strong introvert, I definitely related to all ten of his points, none more than the last one:
Myth #10 – Introverts can fix themselves and become Extroverts … A world without Introverts would be a world with few scientists, musicians, artists, poets, filmmakers, doctors, mathematicians, writers, and philosophers. That being said, there are still plenty of techniques an Extrovert can learn in order to interact with Introverts. (Yes, I reversed these two terms on purpose to show you how biased our society is.)
It got me to thinking about the difference between introverts and extroverts in the enterprise setting. I don’t know whether it’s that we expect our leaders to be outgoing and charismatic or whether the outgoing and charismatic are the best at positioning themselves for advancement. Regardless, it seems that too often the strong introverts are, for whatever reason, overlooked. A recent study published in Harvard Business Press points to the necessary balance between introverts and extroverts on teams.
A new study finds that extraverted leaders actually can be a liability for a company’s performance, especially if the followers are extraverts, too. In short, new ideas can’t blossom into profitable projects if everyone in the room is contributing ideas, and the leader is too busy being outgoing to listen to or act upon them.
An introverted leader, on the other hand, is more likely to listen to and process the ideas of an eager team. But if an introverted leader is managing a bunch of passive followers, then a staff meeting may start to resemble a Quaker meeting: lots of contemplation, but hardly any talk. To that end, a team of passive followers benefits from an extraverted leader.
So it seems that the best teams benefit from the mix between introverts and extroverts. The problem, of course, comes when it’s only the introverts that recognize and promote the introverts, leading to silos of introverts and different silos of extroverts. Put another way, you get one group that only wants to think and plan and another group that is all to eager to execute, regardless of the level of planning involved. Each type brings a much needed skill – and check and balance – the other other.
Once I found my place in a team that recognized – and even encouraged – my personal style, I can say that I found a place where I could chase my successes.
Disruptive thinking
Posted in Product Marketing on May 12, 2011
Great article at Harvard Business Review’s HBR Blog about the difference between Big 1 and Small Companies’ approaches to changing tides in their industry.
A big problem is that these [big] companies tend to treat nascent opportunities the same way that they approach established businesses. They want data, even though data on non-existent markets is inherently fictional. So they focus on the market as it is today, where data are more easily obtained, and they employ the most conservative estimates about new sources of growth. They may also concentrate exclusively on what their customers want, which biases them toward incremental improvements of current solutions. As Henry Ford reputedly said of his industry, “If I had asked customers what they wanted, they would have said a faster horse.”
When they do go after an idea, big companies can pursue it so cautiously that opportunity slips through their fingers.
Entrepreneurs follow a different path for a simple reason: they have to.
A great analysis, which in turn generated a couple of other questions I’d love to see addressed in a follow-up, including:
- What happens when the Big Company buys the Small Company to “Level Up” in product innovation?
- Should the Big Company even try to pursue product innovation in the same manner that the Small Company can? Can the Big Company innovate in the way the Small Company can?
- Is the role of the Big Company to be the ones to buy the small company when the technology gets to the right place?
- Is it better to approach Small Company as a Strategic Partner or to buy them outright? What happens when the Strategic Partner Small Company turns into a Direct Competitor Small Company?
- This type of behavior is well established in Big Pharma … the Small Company does most of the preliminary development and shoulders nearly all of the risk. When the product/medicine progresses far enough, the Big Company buys the Small Company, essentially trading their in-house R&D for M&A. What can the broader business community learn from this? When is this not the right model?
- Full disclosure: I work for one of those Big Companies. That said, any opinions expressed or inferred from this post are solely mine.
8.5 billion? DOLLARS?
Posted in Product Marketing on May 10, 2011
New is breaking across the interwebs of Microsoft’s purchase of VoIP provider Skype, the audio and video conferencing tool that has always had a hard time defining a truly profitable business model.
Much of the commentary I’ve read thus far is either very critical of MSFT paying that much for Skype, fearful that MSFT will do to Skype what it does to, well, everything they make (MS Windows Vista Ultimate Home Small Business Premium Deluxe anyone?), or that MSFT will make Skype proprietary/paid/non-free.
The more interesting question, I think, is what does MSFT get from the deal? Andy Ihnatko has a good take on the different reasons “Very Big Tech Company A [buys] Tech Company B.”
Microsoft makes operating systems, business software, and consumer hardware and Skype helps them out in all three of their businesses. Now, Windows can offer its developers a videoconferencing toolkit for enhancing pretty much anything they’ve got going; Microsoft Office now has fundamental tools for business conferencing and online collaboration, and the Xbox becomes a phone network.
As Kris pointed out before, good marketing and good business are much more than just good ideas; they’re all about the execution. Unless you can turn those great ideas – and in MSFT/Skype’s case, the great potential – into flawless execution, then you’re just stacking up scribbled-upon cocktail napkins … which is fun, right up until the point that you run out of money.
Hopefully MSFT and whatever remains of the Skype team (assuming that the MSFT lawyers negotiated their payout clauses correctly) can turn the potential into some good execution, because I for one would love to see them actually deliver on the promise.1
- As an avowed Apple fan-boy, you might read some sarcasm in this sentence … I can assure you that there is none. I honestly am looking forward to what MSFT can do if they can just get out of their own way first.
The difference between a vice president and a janitor
Posted in Product Marketing, Random Musings on May 9, 2011
Steve Jobs On The Difference Between A Vice President And A Janitor
“When you’re the janitor, reasons matter,” Jobs tells newly minted VPs, according to Lashinsky.
“Somewhere between the janitor and the CEO, reasons stop mattering,” says Jobs, adding, that Rubicon is “crossed when you become a VP.”
Interesting quote from Steve Jobs, via an upcoming Fortune 1 article. It sounds like Steve expects his senior management team to realize that nothing is not their fault. And via another Business Insider article, it sounds like he practices a radical approach to accountability:
He gathered the troops [ed: the entire MobileMe team, from engineers to management] at the auditorium Apple uses on its campus to do demos of small products for the press.
He asked the team what MobileMe [ed: Apple's online suite of desktop and mobile tools] was supposed to do. Someone answer, and Jobs said to that person (and everyone else), “So why the f*** doesn’t it do that?”
Right there and then he named a new executive to run the MobileMe service.
Perhaps not the kinder, gentler side of corporate relations and HR practices, but probably very effective in it’s straightforward-ness.
- As of this writing, the original article was not available via the web for a link. It is currently only available via the Fortune iPad app via in-app purchase.
Placing product placement
Posted in Marketing & Branding, Product Marketing on December 20, 2010
A chilly Saturday
Saturday morning I went to put some gas in my car. After swiping my card and putting the handle in the tank, I was left to wonder why gas wasn’t being delivered to my car while I watched my breath freeze in the cool Wisconsin morning. A quick inspection of the gas pump display revealed an “upsell opportunity,” asking me whether a car wash appealed to me.
As a marketer, I understand the theory behind cross selling to increase awareness and revenues from other products in your portfolio. But as a guy standing in the freezing cold, I was just the slightest bit annoyed at having to press yet another button before the thing I had paid for was delivered to me.
Flash forward to Saturday afternoon. Kris and I took in a showing of Tron:Legacy. As has been the case for the past few years, before the actual movie played we were “treated” to a series of previews and other commercials, a combination of studios, in-house promotions, and soda company missives presenting us with opportunity after opportunity to buy things. And while the ticket says that the movie starts at a certain time, we all know that its really the ads that start at the time printed on the ticket while the movie starts 10-15 minutes later.
Are products placed in movies? Or are movies placed in product ads?
And then at some point in the movie, Kris mentioned that the product placements were so lacking in subtlety that they was becoming distracting. I spotted placements for Nokia, Ducati motorcycles, BMW motorcycles, and Coors beer. None were subtle, pausing for at least an extra moment on the brand’s logo. While they weren’t as disrupting to the movie’s flow as the scene in The Truman Show where Laura Linney turns to the camera mid-sentence and plugs laundry detergent, they did break up the rhythm and pull me out of the story for a few seconds.
I half expected the whole grid to be sponsored by Cisco, “The Human Network (TM)”.
Product placement is nothing new. It can be traced back to the earliest days of film and television, and its use today seemingly outpaces the traditional 30 second spot. You might say that its a small price to pay for ensuring that we continue to get quality entertainment at a reasonable price, that brands have the right to advertise their wares in any way they want so long as they pay for it, that its not really that bad.
My problem is not that it happens; my problem is that more and more its being done very very poorly. Something has changed in the medium in the past year or so. Whereas you would have never see James Bond pull up in his Aston Martin and, before stepping out, turn to the camera and read 10 seconds of benefit-selling copy, somehow its OK for the cast of Psych to sit and discuss the new Ford Fusion for 30 seconds before getting back to the story.
It occurs to me that the real problem here is not the subtlety with which the ads are placed, nor is it the skill with which the stories are told.
No, its the sheer audacity with which the marketers replace the customers’ goals with their own.
Its a lot like garage sales
Have you ever been to a garage sale where the items are grossly overpriced considering what they are? A situation where you just know the person took their purchase price, subtracted a few dollars, and wrote it on the sticker, never minding the fact that the item is 4 years and 3 generations old? Perhaps you’ve even been that person, trying valiantly to assign what you think is a fair price to something you have loved and cherished, not stopping to think that others might see it as only stuff (hat tip to Dan Benjamin’s The Pipeline podcast for the revelation).
The products placed in the movie, the pre-movie ads, the in-show car ads, and even the car wash offer at the gas station all share one critical similarity – they all lack a certain amount of contextual awareness that tells them that telling their story is not the most important part of the experience.
Put another way: they don’t fully grasp where they fit in the equation.
As marketers we spend a lot of time talking about unmet user needs, about developing products that address customer pain points, about understanding and extending the user experience.
But wouldn’t it be terrible if all of that hard work was lost because we couldn’t keep ourselves from annoying our customers?
Chasing lightcycles across the grid
Posted in Uncategorized on December 17, 2010
We don’t make movies to make money.
We make money to make more movies.
-Walt Disney
Over the weekend Kris and I are planning on taking in Tron:Legacy, the sequel to 1982′s cult classic Tron. An unabashed geek, I have fond memories of seeing the original shortly after it came out and, like many other geeks, wanted to re-watch the original before seeing the newest installment.
The only problem is that I can’t seem to find it anywhere. Not on iTunes (rental or purchase). Not at Best Buy. Not at Target. Not on Amazon DVD or Amazon Digital (I can find used copies being sold for $70-$200, but no new copies). Not at Netflix DVD or Netflix streaming.
Disney is no stranger to creating (artificial) scarcity of their products. Every few years we’re treated to commercials informing us that we can buy Snow White, Cinderella, Bambi, or some other Disney classic, “Now for a limited time!!!!” After a few weeks, those movies are removed from store shelves and put right back in the Disney Vault.
Artificial scarcity and limited time offers are both tried and true techniques to increase revenues within a set timeline, never as keenly felt as during the holiday rush.
This morning, however, I did a quick search of Bittorrent and found more than 1,500 seeders sharing copies of Tron 1, most in HD. There were even a few torrents of Tron 2 (the movie that just hit theaters this week), again in HD.
To be clear, I did not download a copy.
But I could have.
For free.
And so it would seem that in the 44 years since Walt Disney left us, the ethos behind that iconic quote has changed. Rather than focusing on making great movies, collecting revenues, and making more great movies, there are at least some within the company that are more concerned with playing games with customers.
The miscalculation, of course, is that artificial scarcity only works when the item isn’t fungible. Disney created a scarcity of the DVD copy, not accounting for our ability to substitute an easily obtainable digital copy for the physical one. Rather than taking my money (which I am eager to give), they both pass on the opportunity and ignore the possibility of that I can find a similar product somewhere else.
Make it easy
Posted in Communications & Social Media, Marketing & Branding, Random Musings on September 19, 2010
My wife is a huge fan of BravoTV’s Top Chef, and I have to admit that somewhere along the way, I got drawn into the show as well. And while I’m not a fan of reality TV as a genre, I do enjoy the food and watching the “cheftestants” prepare their meals.
Like any good multi-media, multi-channel marketing strategy, Top Chef has taken to the internet to provide some companion content to the show. Coming mostly in the form of blogs and twitter accounts from the judges, every Thursday we get some more context and perspective on what we saw the night before.
After a few weeks of my wife regaling me with snippets from Chef Tom Colicchio’s blog, I went off in search of the blog myself, only to be utterly disappointed and, at the same time, not at all surprised at what I found.
A fan of RSS feeds, I rely on Google Reader to aggregate and centralize most of my online content consumption. Twitter is a great way to surface important topics, but for me, nothing beats RSS for sifting quickly through large piles of content.
Like many of its contemporaries, BravoTV lacks any sort of RSS implementation on its blogs. Sure, there’s a Top Chef twitter account, but it doesn’t, as far as I can tell, include any links to the Top Chef blogs, which is itself yet another miss on Top Chef’s part. I’m sure it made sense in some meeting somewhere, the idea that dedicated fans will want – need, even – to go directly to a website to read the newest blog post the second it comes out. By doing so they’ll let us collect data, serve them ads, and cross-promote any number of other initiatives. A good deal for all.
The thing they’re missing, of course, is that the most loyal customers are the ones that follow your RSS and twitter feeds. Not only are they the most loyal customers, but they’re the most likely to promote your stuff to their friends. While its important for us to figure out ways to accomplish our business goals (metric tracking, serving ads, cross-promoting other initiatives, or whatever), doing so by increasing the number of hoops through which our “best fans” should reasonably go assumes a scarcity and uniqueness of content that will never be true again. (Hat tip to John Gruber, whose analysis of the Daring Fireball RSS Feed membership is one of my favorite takes on this topic).
So in the end its up to us to 1) get as many people to see our stuff as possible, 2) reduce the number of steps our fans go through to get the content they really want, and 3) figure out how to accomplish our business goals under that framework.
Because without readers/customers, it doesn’t matter how good the content is or how many different wants we’ve devised to meet our business goals.
Let the dataset change your mindset
Posted in Data Visualization on August 31, 2010
As someone who spends a decent amount of time creating and updating Powerpoint slides, I sometimes struggle to find the most effective way to present data. In one circumstance, a simple table of numbers might be sufficient to get the point across in the proper amount of detail. In another, a 2×2 matrix might do a better job conveying the interplay between 3 or 4 different variables.
There’s a great TED Talk given by David McCandless about visualization of very large datasets. Its an interesting look at how to “[squeeze] an enormous amount of information and understanding into a small space.”
As we continue to compile and sift larger and larger datasets, its up to us as marketers not only to distill the key messages from those data, but also present those key messages in an effective and compelling way.
McCandless goes through a few short examples in the talk and details even more in his books. I highly encourage you to check them out.
[NB: YouTube version embedded. You can also check out the original on TED.com]
Kris
Sam
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