Wednesday, December 27, 2017

Consistency, Value, and Brand

Brand is about consistency.   The value of a brand, from the very beginning, was that it indicated to customers what they could expect of a specific product from a specific vendor.   Later, when brand began to accrue nonfunctional qualities, customers were attracted to the brand because they expected those qualities to be delivered.

So the value of an established brand is that it delivers the same quality, experience after experience, year after year, decade after decade.   Brands that advertise they have been in business for a hundred years communicate a long history of consistent quality.  Consistency with expectations is critical.

This is because human beliefs about anything are based on repetition and consistency.   When two things occur at the same time, we believe it to be coincidence and attach no special value to the correlation.  But when two things occur at the same time, over and over, we create an association and expect the two to be correlated.  

This is as true of brands as everyday experiences: a brand must be consistent to be meaningful.  There cannot be the sense that what the customer gets the next time will be different from what they got the last time.   Any change causes the customer to question the correlation, and to doubt that the brand has the qualities they expect – and for that doubt to become more generalized.  If it packaging is different, there must be other things that are different about the product it contains.

Whenever a brand changes, it takes some time to adjust: customers are displeased when anything is different, and need to be reassured that the qualities they value about the brand have remained the same.   Or when an unpopular brand changes, they must then convince customers who were disappointed in the past that things are now different and they should give the brand a second chance.

Firms tend to assume they know why customers buy their brand and are indifferent to any other aspect.   But the concept of a brand, or any object, is the sensory stimulation.   The customer cares not only about the taste of a food product, but it’s scent and visual appearance as well – change any one thing, even an inessential quality, and customers cannot refrain from reconstructing their conception of the brand.

So in that sense, consistency itself is a value: knowing what to expect of a brand means that the customer doesn’t have to reevaluate it each time they purchase.   This reduces the effort (cost) of buying, and ensures that the benefit-to-cost ratio remains favorable to the brand.

To leverage this, consistency is critical.

Wednesday, December 20, 2017

Conformity and Sales

Consider the phenomenon of the stampede: one antelope on the fringe of a herd perceives a predator and runs away, and other join in until the entire herd is running at top speed.   Most of the herd never saw the predator, but are running because they trust that there must be some reason that the others are doing so.  When one animal tires and stops running, the herd slows down and comes to a halt.  Again, it is not because they know the threat has passed, but they are imitating the behavior of others.

And if you think that human beings are different and more sophisticated, then consider a common prank in which a person stares of into the distance as if he sees something interesting.  Other people stop and stare as well, trying to see what the original person saw – they did not see it, but are responding to the original person’s signals.   A group of people gathers, and continue to pause until someone suggests that there’s nothing there and wanders off, at which point others give up the attempt to see it – and again, they are reacting to the behavior of the person rather than to their own perceptions.

For all our pretenses at individuality, human beings are also social creatures who are prone to the same behavior: reacting to the actions of others, without evaluating environmental stimuli.    The effects of this cannot be underestimated – but neither can they be overestimated.  They apply where purchasing and consumption are social activities, not when they are individual activities.

Social conformity is often leveraged by advertisers.   An advert with a person is generally more effective than one that shows the product, because the person in the advertisement serves as a model to be imitated.   If the person in the advert is looking at an item, the tendency of the viewer is to follow their cues and focus their attention on the same thing the model seems to be looking at.  Eye-tracking software confirms that the most viewed portion of a page is the perceived focal point of the model – people look to the person first, then look at whatever that person is looking at.

But it goes even further than that: people do not simply tend to do what others do, but they feel what others feel.  If the model in an advertisement seems excited, the viewers of the advertisement tend to feel excitement as well.   If the model appears self-confident when using the product, people who use the product accept that this is the proper emotion to feel.

And while emotion can be a gimmick, the same applies to logic, as best demonstrated by the experiments conducted by Asch.   In these experiments, a test subject was placed in a room with stooges who would intentionally give the wrong answer to a question (generally comparing the length of two lines).  In most instances, the subject will go along with the answer given by the stooges, even when it is obvious to him that the answer is wrong.  This is not automatic, but it is significant: at least 75% of volunteers gave incorrect answers when asked in the company of stooges, whereas only 1% gave an incorrect answer when they were questioned alone.

So in the end, social influence may be stronger than an individual’s own inclinations, emotions, and logic.   The consume acts a s a puppet, imitating the puppet whose strings are pulled by the brand.   And in turn, the first imitator becomes a model for the second, the third, and so on, until the consumers are reduced to the mentality and behavior of a stampeding herd.

Wednesday, December 13, 2017

Six Personas for Online Behavior

In developing personas for my own use, I went on a search for generic ones that could be adapted, and am consolidating my notes from multiple sources here.  In comparing the lists I found, there seen to be six common kinds of generic persona (and a handful of one-offs that I’m not preserving).   They are:

The Socialite

Individuals who seek to interact with others via text communication.  This can be private communication via email or text, or group communication through message boards and public posts (blogs, social media, etc.) 

The socialite may communicate as their genuine self, in a quest to find like-minded people, or they may interact disingenuously.  When they do the latter, they present a fictional self, which may be their genuine self with a few enhancements (how they wish to be perceived rather than how they are) or an entirely fictional self.   It is not who they are, but how they want to be perceived, that governs what information they share.

Because of this, it is unwise to trust a socialite or believe in what he says, as one can not be sure how much of his online “self” is a valid representation.

The Professional

Individuals who are seeking employment – whether as a permanent employee or a hired service-provider – share information about themselves with a specific objective in mind (to secure income).

While it is possible for the professional to present false credentials, this is rarely done because the consequences of discovery can be dire – the loss of employment and a tainted reputation.   However, this does not mean the online persona is entirely accurate: while outright falsehoods are rare, it is common to present only positive information, possibly with some exaggeration, and suppress anything unflattering.

While the professional tends to be honest, this persona also tends to be self-serving: their purpose of interacting with others is to get something for themselves.   Specifically, the professional will not be interested in any interaction that does not have the potential to lead to employment, career advancement, or bolstering their professional credentials toward one of those goals.

The Financier

The financier interacts with banks and financial institutions, tending to be more transparent.  It is understood that these organizations have access to records to confirm any claim, so making false claims is of little use. 

And, as with the professional, the discovery of false claims can have devastating consequences, so the financier may be selective in providing information or exaggerate to some degree, but most are honest in their financial communications.   Exaggeration may occur, but to a lesser degree and with plausible deniability.

The exception is those financiers who communicate with other people rather than financial institutions.  Often, they tend to see finance as a competitive game, and believe that they can “win” by causing others to “lose.”   Hence the conversation among customers on financial sites is untrustworthy: some people are clearly attempting to mislead others for their own financial gain, or to harm others to "beat" them in what is perceived to be a contest.

The Citizen

The citizen is an individual who expresses political and religious beliefs.  They may be seeking like-minded individuals, or they may be attempting to promulgate their world-view for others to accept or, at the very least, to contribute to the causes they espouse.

Citizens tend to be very clandestine about their personal identities – holding “the wrong” opinions can be detrimental to their social interactions, including their employment.   A person may safely communicate their genuine ideas when hiding behind a false persona, and will seldom be entirely honest about political/religious matters when communicating under their genuine identity.

In terms of honesty, the citizen communicates the truth “as he sees it.”  He may be ill-informed or employee specious logic, but most citizens genuinely believe the things they say to others online - though it is possible to adopt the manner of the citizen in an attempt to defraud others.

Some sources suggest a "miscreant" type of persona, who poses as a citizen but does not honestly espouse the beliefs they promulgate.   They are simply trolls, who delight in creating conflict and drama and do not have any genuine interest.   My sense is that such people may be considered to be a subcategory of "socialite," though "anti-socialite" might be a better term.

The Patient

The patient is an individual who seeks self-help information online, usually of a medical or health nature.  When communicating with experts (medical institutions, health insurers, etc.) they are largely honest – but there may be some deception, either to hide unflattering information or to gain access to more than they are entitled.

The patient represents an embodiment of needs – those that give care to patients are acting in a different capacity when offering information and advice (the professional or the citizen personas, generally).

The patient is also goal-focused, like the financier: he is seeking help with a particular topic and is not interested in interactions that do not serve his needs.

Those who seek practical information of a non-medical nature (for example, someone who needs help or advice for repairing their computer, finding a service provider, etc.) also fall under the "patient" category - the defining characteristic is not the topic, but the need for advice and assistance.

The Consumer

When purchasing online, consumers generally interact with merchants, and do so in an honest manner in regard to their needs – because giving an accurate representation of need is critical to finding a solution that will address them – but they may not be as honest about their finances, as they wish to appear less capable to pay in order to pay less (or to avoid being overcharged, at best).

The consumer, like the patient, is a person in need – when advocating for products to other consumers, they are acting as a professional or a citizen, with the same cautions and limitations.   General advocacy tends to be more trustworthy, but is often tainted by narcissism – the advocate is often justifying his own decision regardless of the functional outcome rather than evaluating it objectively.

The customer is goal-focused: he is seeking help with a particular need and has little interest in interactions that do not lead to the solution of his needs.


This six personas relate more to behavior than to people – a single individual may act in different personas at different times depending on their needs and interests at the time.

It also occurs to me that there is a great deal of overlap in these personas, and that they might be better schematized according to goal – the underlying motive for which a person is seeking to interact with others.   So I may need to reconsider this altogether – but for now, this seems adequate and helpful.

Wednesday, December 6, 2017

Extrinsic Goals, Perpetual Dissatisfaction, and Sustainability

There is a clear difference in consumer expectations, or rather more of a division between intrinsic and extrinsic goals.  Some customers are focused on the intrinsic value of a product (the functional benefit derived from its use), whereas others are more concerned with the extrinsic value (the esteem that a person derives from being associated with a product).

It is a common mistake to suggest this is an evolution – as it is not. Preference for the intrinsic is prevalent amount the Silent Generation, Generation X, and the iGen whereas extrinsic is prevalent among Boomers and Millennial Generations – but even within the generations there are customers of both kinds, not to mention that each individual has a mix of extrinsic and intrinsic goals when approaching any purchasing decision.

It is plainly evident in advertising messages that some firms seek to associate their brands with the intrinsic value of their product, whereas others seek to associate with the extrinsic value.   I believe the latter to be a tactical benefit and a strategic mistake because extrinsic motivation does not support a sustainable competitive advantage and, in fact, creates a business model that is inherently unsustainable.

This is mainly because the extrinsic qualities of a brand are entirely beyond the maker’s control.   They may believe that they have command of the market, that their advertising dominates customer perception, but it does not: the market may hear the voice of the brand, but it often comes to its own conclusion.

Moreover, the intrinsic value of a brand is immutable, whereas the extrinsic is extremely mutable, and mutates in a manner that is entirely whimsical.   If a brand is popular because it is fashionable, it may find that it becomes unfashionable in an unpredictable and inexplicable manner – or at the very least new customers reject the brand because of its acceptance among old customers from whom they wish to dissociate themselves.

As a concrete example, considering the advertising campaign that proclaimed “This is not your father’s Oldsmobile.”   The market heard and rejected it, voting with their dollars that, in fact, yes it is my father’s Oldsmobile, and because I want to be perceived as being different from the older generation, it is not the vehicle for me.   And on that hill, the brand lost the battle.  It failed entirely to shift the extrinsic value of the brand to meet the expectations of the younger generations, and it died when its previous customer base left the market.

Not only is it impossible to predict the whims of the extrinsic market, but satisfying such demands can lead only to short-term success.    It is typically the younger generation, which is perceived as being capricious and fastidious, never satisfied and constantly complaining – but it is also true of older extrinsic customers, and it is because of a simple maxim, that “money cannot buy you happiness.”  The extrinsic goal may be achieved, but it is a limited and short-term success.

The extrinsic customer is seeking to become something he is not by associating himself to a specific brand.  But instead of the customer being perceived differently because of the brand, the brand is then perceived differently because of the customer.   That is, if working-class people buy a brand because it is associated with the wealthy, then they are not perceived as being wealthy – at least not in a sustainable manner.  Instead, the brand loses its glamor and is perceived as a working-class brand.

To go again to the automotive market, consider the mistake made by Mercedes-Benz in putting out an economy version of its marque.  The affordable C-class (and the extremely cheap A-class) did, for a time, make their blue-collar drivers feel like they had advanced their social status, but the wealthy then saw the brand as being more of a working-class vehicle, low-quality and cheap, and the Mercedes brand has correspondingly fallen from grace, and the maker had to launch a new brand to recapture the luxury market.  Though they may find commercial success in serving the mass markets, they may never again be regarded as a luxury brand.

Back to the point, the extrinsic customer who seeks to change his status by associating himself to the brand will be dissatisfied because the status of the brand will be diminished by his patronage.  In much the same way, a person who purchases a brand with the assumption that ownership will make him seem smart, clever, and sophisticated will still be the same stupid, dull, and vulgar person he was the day before he purchased it.  The ability of a brand to adjust perception is thus only temporary.

This considered, any appeal to the extrinsically motivated customer must be regarded as a happy accident, rather than a sustainable brand strategy.  And brands may ignore this to their own peril, as they will invariably  discover that the sustainability of their firm derives from the sustainability of their brand – it is unwise for long-term objectives to be pursued by means that are inherently temporary and capricious as fashion and those who follow it.

Wednesday, November 29, 2017

Perception, Abstraction, and Brand Identity

One elementary quality that distinguishes the human mind from that of animals is in its ability to construct meaning.  Our perception and our memory are mechanisms by which we survive.  We do not react automatically by the superficial appearances of things – but instead we distinguish food from poison, threat from opportunity, and friend from foe by the use of our perception and memory

Our perception and memory are generally reliable – but at times they can lead us astray.   The greater the complexity of our situation, the more likely we will make mistakes, sometimes serious ones, by applying overly simplistic reasoning.   But it would be equally simplistic to assume that emotions overthrow the rules of logic.  Perception can be limited, and logic can be fallacious, but belief is inherently based on a rational process.

Abstract thinking can also tend to lead us astray – because an abstraction is based on a subjective assessment of what qualities are the most important.  Compare any sketch or drawing to the actual object, and you will quickly notice which features the artist considered to be significant and which he chose to ignore in creating his representation.

Abstractions are also not necessarily reductive – many can be additive.   Consider the tendency to anthroporphize things.   When we project thoughts and emotions onto animals, objects, organizations, and other non-human phenomena, we are adding to our beliefs based on things that are entirely imaginary.

In the same way, a “brand” was originally a mark burned onto an object to indicate its owner or maker.   The brand is a kind of mental abstraction – meant to represent something in minimal detail, in which we have ignored many of the actual qualities and added other attributes that are based on oru own imagination.

Brand exists in the mind of the customer, not the maker. Certainly, the maker wants customers to believe certain things about their brand and wishes to influence the way in which it is perceived.  But actual experience will override anything a brand had to say about itself.  A brand may claim to be high-quality, but our experience of it may suggest otherwise – as well as the reportage of others who claim to have experience.  

The maker is an external voice, suggesting what customers ought to think of his brand – but ultimately, customers decide for themselves, and they do so based on abstraction drawn from their limited and skewed perception.

Wednesday, November 22, 2017

15 Decision-Making Flaws

In reading about customer behavior, I’ve put together a list of decision-making flaws.    Not much in the way of commentary here – just making a note of the list itself:
  • Ambiguity Aversion – Avoiding making decisions when the relevant information is unknown or uncertain
  • Anecdotal Evidence – Being persuaded by anecdotes that agree with beliefs, even when they are anecdotes of unusual situations
  • Availability Bias – Making a decision based on information that is readily available even if it is not the most relevant
  • Rules of Thumb – Applying simplistic rules to complex decisions, even when they do not apply
  • Status Quo Bias – Preferring the solution that causes the least change rather than a more effective alternative
  • Default Effects – Agreeing with what is suggested rather than considering other options
  • Self-Control – Seeking the easiest solution rather than the best
  • Procrastination – Refusing to decide or act when a situation is perceived as being too far in the future to matter
  • Hyperbolic Discounting – Grossly underestimating the negative or positive impact of events that are further in the future
  • Emotionalism – Choosing the option that has the most positive or least negative impact on the emotions during the decision-making process
  • Reference Dependence – Creating an arbitrary benchmark against which other alternatives must be weighed (without proving the validity of the benchmark)
  • Choice Bracketing – Making choices in isolation, ignoring the impact they have on other factors
  • Framing Effects – Limiting the consideration of a subject to the context in which it is framed
  • Choice Architecture – Constraining decisions to an arbitrary set of options
  • Cognitive Filtering – Making a quick decision and giving attention only to information that supports it
I don't expect this is comprehensive, just a listing of the ones that one author chose to mention, but it's a good start on a more extensive exploration of the topic.