I previously meditated on the
potential and problems or urgency in consumer marketing: the way in which a
customer can be motivated to make a purchase now rather than later, and the way
in which these tactics have been so thoroughly abused that attempts to create
urgency are met with cynicism rather than compliance. I’ve since been asked whether the same
tactics (and problems) are applicable in B2B marketing or even in promoting an
idea within a company. My sense is that
they are.
Organizations are notably slow and
stodgy, designed to maintain current operations and resist change – whether
that change is buying a new product, switching to a different vendor, or taking
action on an internal proposal. This is quite often by design: the
organization realizes that rash decisions are often bad decisions, and places
procedures and committees in the way of any change – such that even good
changes require a great deal of effort to gain consent and adoption. An organization is even more guarded and
conservative than an individual, which makes the user of fear tactics much more
difficult.
Just as with customers, organizations
rank proposals according to the hierarchy of needs: anything that threatens the
status quo is dealt with first, anything that presents an opportunity to
improve the status quo is second. A
competitive threat to their existing market base is prioritized over the
opportunity to expand into new markets – even if the second is more profitable
than the first and the firm would be better off making the change.
The second criterion of
prioritization has to do with the degree of impact, which is generally
monetized into a ROI or ROE calculation.
Things that have the potential to have a high cost or generate a lot of
profit, relative to the investment required to act, are given higher priority
than things with a lower cost or profit potential. Ideally, this would be done
without regard to whether the proposal represents a threat or an opportunity –
but again, threats are seen as more pressing because they speak to
psychological needs that are much closer to the base of Maslow’s hierarchy:
hence maintaining business as usual is valued more than innovation.
The third criterion of prioritization
is proximity to the present time. If
the amount of profit or loss is the same among two or more opportunities, the
one that can be acted upon more quickly (or needs to be acted upon more
quickly) takes priority. This is in the
same way that a young employee prioritizes paying off student loans over paying
for retirement – he feels he has decades to deal with the second, and the first
impacts his everyday lifestyle in the present.
Net present value can help neutralize the proximity effect, but things
are not always done in a sensible manner.
Thus considered, an organization
faces the same fears and applies the same criteria as any individual does – but
it is most often done in a slower and more deliberate manner to avoid making a
rash decision. And while this seems
entirely sensible, it often means that time-sensitive opportunities are lost by
firms that move slowly to prevent the kind of mistakes that are made by acting
in a panic.
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