Six Perils of Partnership

Partnerships among brands are seldom a pairing of equals: they are most often parasitic.   Large, successful, and established brands seldom seek out partnerships with small, unknown upstarts – and when they do, it tends to be a tactical maneuver that is ultimately recognized as a strategic mistake. While partnering with a start-up can enable rapid development of products or expansion into new markets, there are a number of perils to the stronger brand.

The first peril is the denigration of the stronger brand.   It is inevitable that when an established brand is applied to new products or markets, its identity becomes split and diffused: the brand is compromised by partnering, and the short-term profit of the partnership is seldom worth the damage done to its perception by its established customer base.   The more incongruous the image of the weaker brand, the more damage will be done to the stronger one.

The second peril is loss of control over brand identity.  The weaker brand usually has a completely different culture and agenda, and seeks to feed on the equity of the stronger brand without maintaining or contributing to it.  Because the partnership, from the perspective of the weaker partner, constitutes growth, the brand equity of the stronger partner is of little consequence to the weaker partner – it will invariably seek to sacrifice the esteem of the stronger partner for its own benefit. 

A third peril is the damage done to quality control, as the weaker partner is weaker because it does not have the capability of maintaining the level of quality of the stronger one. Again, the compromise of partnership constitutes a step down for the stronger partner and a step up for the weaker, such that the quality of both the product and experience of the stronger partner is not preserved when it is handled by the weaker partner.

A fourth peril is risk to the supply chain, particularly distribution control over the retail outlets at which the joint product will be sold and the touch points of customer contact where the weaker partner’s operations are concerned.   There is a significant difference in the way that a company manages its own brand experience and the way in which a retailer manages the brand experience of the products it stocks – and the same difference exists when the weaker partner is in custody of the stronger partner’s brand.

A fifth peril is fragmentation and discord in the representation of the stronger brand. Consider that brand equity is not built by accident, but by careful management of the brand and its related experiences.    Where the weaker partner represents the stronger partner’s brand, less care is taken in the maintenance of the brand identity.  Because the weaker partner has made no investment and holds no stake in the establishment and growth of the brand prior to the partnership, it feels no commitment to represent the stronger brand appropriately.   This conflict will not only diminish the equity of the brand, but dilute its very identity.

A sixth peril is the risk to customer experience.   A strong brand is defined by its experience, more so than the qualities of the good or service it provides.  A weak brand tends to be defined by more practical matters more directly related to the quality of its product, as its brand is not strong.  It if were capable of building a strong brand, even of understanding what is required to build a strong brand, chances are its brand would not be weak.

There are likely other factors that jeopardize the value of the stronger brand, and certainly many more practical concerns that represent more functional detriments to the stronger partner in terms of tactical and operational factors.

Globalization of Demand

Demand for products is culturally derived: while human beings have certain universal biological needs for consumption, the manner in which these needs has historically been influenced greatly by culture.  All humans need to eat, but exactly what foods are eaten has been dictated by culture.  In the consumption of non-essential goods, culture plays an even greater role in determining what individuals will seek to consume.

And historically, culture has been highly diverse – but it is becoming less so.   Humanity once existed in the form of isolated tribes with little contact with one another, and each tribe developed its own culture.   But since the early twentieth century, and particularly during the last fifty years or so, humanity has become more interconnected.  Meeting someone from another culture is common, an almost daily occurrence to anyone living in an urbanized area of a developed economy – and globally, the population has become more developed and more urbanized.    There is less isolation and less insulation between cultures.

The result of this is cultural democratization: whenever a person witnesses a difference between his own culture and that of another person, there is the moment of evaluation in which he asks himself whether he should adopt the customs and consequential consumption patters of another – in smaller words, he wonders if only for a moment if “their” ways are better than his own.   And over time, this leads to the adoption of exocultural behaviors – first as a novelty, but eventually as a matter of course, until the cultural difference becomes a cultural commonality.  

The same can be said of the social classes, which across all societies are becoming leveled.  There are still the “haves” and “have-nots” but this tends to be in terms of quantity and frequency rather than in the identity.   The rich consume more than the poor, but when they have the means to consume, the social classes tend to consume essentially the same things.  There are very few luxuries for the rich that are not available, in a cheaper and more vulgarized manner, to the poor. The wealthier classes consume an upscale version – better quality of the same thing.

International trade provides markets easy access to products that were previously unavailable – but it is the democratization of culture that causes these products to be demanded, and demanded on such scale that they can be effectively commoditized and mass-produced to capture every market segment that is demanding them.    It is no longer the ability to obtain a good that distinguishes one culture or class from another, but the desire to obtain it – and that desire is becoming less distinctive across classes and cultures.

Whether the loss of cultural distinctions is to be celebrated or mourned is a separate matter, and one that seems to be largely subjective based on the appetite for diversity and the sense of which cultural artifacts are “winning” the market.  The point here is that fifty years ago, exposure to the artifacts of other cultures was practically unheard of; today it has become commonplace; and perhaps another fifty years hence, it may be of little relevance: global culture will likely have become largely commoditized, with the differences among cultures being few and superficial. 

Brand and Social Identity

It is suggested that the desire for a brand is a desire for identity – that a person (usually) chooses to consume a product to satisfy a functional need, but selects a brand based on a need to achieve or maintain a given social identity.   Internally, they wish to be the kind of person who uses that brand; externally, they wish to associate with the kind of people who use that brand – to maintain social affiliation with a group.

This is arguable, and it’s certainly not the sole reason for brand selection – but the point of the present meditation is not to argue that point, but to consider the importance of social acceptance.   Man is a creature that is capable of autonomy, but who often chooses a social existence – and this is not often explored.   It is taken for granted that a person wishes to belong to a group, but why is this so?

In all, it seems that very little attention has been given to the psychology of isolation, but it has been observed that prisoners who are kept in solitary become psychologically dysfunctional.   It is speculated that social interaction is “interesting” and a necessary part of our mental health – that people alone undergo completely different processes, and tend to focus on negative emotions and anxieties.

For a time, there was a fascination with sensory deprivation that lead to experiments in which subjects are deprived not only of social interaction, but all sensory stimuli – and it’s suggested that that they enter a kind of hallucinatory hypnotic state.  While prisoners in isolation are not completely deprived of sensory stimulation, their isolation causes their thoughts to turn inward and for their perspective to be dominated by “the hell hounds of the mind” and there is ample observational accounts of the severe mental changes that prisoners undergo.

In terms of manipulation, an isolated prisoner finds that the only social contact he has is with his captors, and he becomes dependent on them and willing to accept them as authority figures to whom the prisoner is inferior and upon whom he is dependent, and whom he must please in order to avoid further hardship or gain comfort.   Relegated to this position for an extended period of time, an individual is easily controlled and manipulated.

It’s suggested that the same effects can be seen to a lesser degree even for prisoners who live in the company of others, where discord is sown.  If the guards can cause prisoners to distrust one another prisoners will cut themselves off from one another out of suspicion and distrust, even without physically isolating them.  They then avoid forming social bonds with other prisoners and become connected to and dependent on the guards.  The same can be seen in civilians in society, which is the reason politicians are fond of divisive issues that fracture their people and prevent a sense of a united community – when everyone is an enemy, the politician is their only friend.

It’s also significant that this is a common tactic in interrogation – to break down a prisoner’s sense of belonging to his own army (or country) by suggesting that they are alone.   They do not have any friends among their fellow inmates, their commanders and even their country does not care about them, and the only people who will help them are the guards.   A person who feels deserted and alone, betrayed by his old friends, will embrace the offer of friendship from his captors and do what they ask of him.

In modern society is it observed that religious cults and extremist political groups often seek to recruit “misfits” because they are easily manipulated - being alone and feeling hated by others, their desperation to find a society that accepts and supports them makes them highly susceptible to recruitment and highly loyal once recruited.

While the studies focus on authority and domination in a controlled environment, the same can be observed in the wild.   When an advertiser seeks to establish an affiliation to the brand, his tactics are not much different to that of a prison guard or charismatic leader: to cause the individual to feel a sense of isolation and dissatisfaction with their social affiliation, to propose that allegiance to the brand is a means to re-establish social identity and connectedness, and to depend on their mindless acceptance of this proposition.

Perhaps this is a bit melodramatic or extreme, but I have the sense there is some truth to it.

The Desire for Autonomy

Any practical consideration of human behavior tends to lead to an ethical quagmire: when we attempt to influence a person to do something, we cannot be certain that what we are doing is truly in that person’s best interest.   Even when it can be objectively and mathematically demonstrated that the person is better off for taking the action that we have persuaded him to undertake, there is still the question of ethics because, outcome aside, we have interfered with his autonomy.

This comes from the implicit assumption that people wish to be autonomous – to exercise their free will and enjoy the benefits of so doing.  Even when the exercise of free will would have negative consequences, it is argued that suffering the consequences of liberty is also of value in the long term.   In this sense, any attempt to interfere with autonomy, even for beneficent reasons, is considered ethically shady.

But this rests upon the assumption that people wish to be autonomous – and while this is assumed to be universal, it certainly is not:  there are personality types and even entire cultures in which there is an obvious desire to be controlled – people who would rather be told what to do than to decide for themselves, and who will gladly surrender themselves to the dominion of others. Whence this urge to be conditioned, to conform, and to obey?

Essentially, it is an escape from having personal responsibility – of making difficult choices and accepting the blame for any unfortunate consequences.  Even people who are quite autonomous and strong-willed will eagerly seek out authorities to tell them what to do in specific instances – to see a doctor when they are sick is to yield to the doctor’s authority.  Those who are less intelligent and strong seek out authorities more often, for less significant things.   Anyone who undertakes to diet is essentially admitting they are not competent to choose the foods they eat, and has placed themselves in the hands of an authority, and is glad to be told what to do.   Life is so much easier when one is relieved of the burden of thinking and can simply obey orders – and even if the outcome is bad, there is someone else to blame.

The willingness to compromise is the basis of human society.    While living with others is beneficial in many regards, it is also detrimental in others – and man chooses to participate in society because the good outweighs the bad.   The same can be said of an individual who submits to any system of control: so long as he perceives that the benefits of obedience outweigh the costs, he will remain obedient.   In many instances, this is faith in institutions that, like religious fervor, is based on belief rather than any evidence that can be presented – life in a totalitarian regime may be miserable, but if it is perceived to be better than the past, or hoped that it will be better in future, people will accept and support the authoritarian state.

It is not accurate to state that such people have been conditioned – they are voluntary participants and coercion and deception are unnecessary.   Those who need conditioning are the ones who do not perceive that the benefits of obedience outweigh the costs – and if the state cannot change the balance by its actions (providing greater benefits at lesser costs), then it may attempt to change the perception of such individuals: to convince them that the benefits are greater than they are, or the cost is less than it is.

To the autonomous individual, the greatest cost of subordination is his own dignity and humanity, hence the most common technique for gaining is compliance is to abolish both: one he has been dehumanized and stripped of his dignity, he has nothing to lose by cooperating with those who wish to control him.   If freedom is not an option, he can only choose which master to whom he will enslave himself.   If thinking for himself is not possible, he can only choose who will do his thinking for him.  And this is the basis of all forms of conditioning – to adjust an individual’s perception of cost and benefit – and its ultimate end is to produce the malleable man, whose perception of authority is positive regardless of cost or benefit.

And at this point, it seems I’ve strayed a bit too far from my intended subject (advertising)  - and should come to a close.

The Conditioning of Man

Most of the “skills” we possess are merely patterns of behavior to which we have intentionally conditioned ourselves.   We learn that a given behavior is connected to a given outcome, and this becomes part of our mental programming.  It is not always intentional: connections are formed based on experiences, whether or not we mean to make associations, they are made.

There was an experiment (Razran) in which a group of students was treated to a series of luncheons.  For the test group, the same music was played each time.   Later, the students were asked to evaluate a number of pieces of music and indicate what the music made them think of – naturally, the group associated the music that had been played at the luncheons with food or eating.  It is because the two coincided that the connection was made, even though there was no intent or overt awareness.

However, it’s noted that conditioned reflexes are a temporary adjustment that requires reinforcement.   Once Pavlov’s dog had been conditioned to associate a bell and food, it would salivate at the sound of the bell even if no food was presented.  But over time if the bell was sounded and no food was presented, the association would in time be broken.   It is not a matter of a coincidence always/never occurring, but an assessment of the probability of a coincidence.   While it is highly unlikely that dogs can consciously calculate probabilities, they may be unconsciously estimated according to the  recentness, frequency, and intensity of the association and related stimuli.

In more complex behavior patterns, a person develops skill at a task my learning a pattern of activities and behaviors that lead to success.   He continues to follow the same pattern in the past, expecting the same outcome in the future.   If he fails to receive that outcome, he tries the same activity again, assuming he did something wrong.   It takes a few attempts for it to dawn on him that the procedure that worked in the past is no longer working (under new conditions) and to consider a different approach to achieving his goals.  The more complex the pattern or the more protracted the process, the more difficult it is for the individual will recognize the connection, hence it is harder to train and harder to break training for complex tasks.

And so, conditioned behavior is part of human life, and is often used in obvious and beneficial ways.   We develop good habits and learn skills by conditioning ourselves – and when we raise a child, teach a student, or train an employee we are leveraging the exact same mechanisms to condition them.   It is even being leveraged when we attempt to learn something by trial and error: the natural consequences of action being the reward or punishment that reinforces or discourages behavioral patterns.

On an ethical note, there is some argument to be made whether this conditioning should be considered education or brainwashing – but the difference is entirely political: it depends on whether we agree to the end to which these techniques are used.  Parents and teachers “trick” children into developing good habits and the “treatment” given by therapists can be intentionally done without informing the patient of their intentions. 

Happiness and Materialism

Anyone who truly believes that money cannot buy happiness has led a charmed life, or is conveniently forgetting a time in which they suffered for the lack of something that money could easily obtain.   

Most people can recall a time when they went hungry for a few days for lack of money to buy food, or nights when they worried about being evicted or having the utilities shut off for their inability to pay.  Many can recall a time when money would have made a significant and lasting difference in their quality of life – by enabling them to obtain a better education, or to relocate for a job opportunity that would have been a turning point in their lives.   For some, the lack of money is a constant distress.

In that sense, money does not buy happiness so much as it keeps anguish at bay: happiness is correlated to wealth up to about $75,000 per year – before that amount each increase in income has a corresponding increase in happiness, after that amount the slope flattens out considerably.   People in that income range have the money they need to satisfy their basic needs and to obtain some level of convenience and comfort – anything more buys luxury that does not increase happiness.   And this, perhaps, is the level at which more money cannot buy more happiness, at least in a general sense.

And then there is the matter of the hedonic treadmill, a theory that suggests people become accustomed to a certain level of stimulation.  When they experience a new sensation, their pleasure is intense – but as that sensation perpetuates, they become inured to it and need more stimulation in order to experience pleasure again.   So what is needed is not a stable level of income, but an ever-increasing one, such that there is a constant increase in the stimulation they sense.

However, that does not ring true given the slope of the material happiness curve: the amount of pleasure gained from a certain amount of money would not flatline after a certain point – there would still be a marginal increase in happiness per unit of income, and that is not evident.

There is also evidence that money is not a sufficient cause for happiness.  Historically, wealth has increased significantly over time and people today are nearly three times as wealthy as they were fifty years ago – this is across all social classes, even the poor are richer than they have ever been in history.   Meanwhile, studies of happiness show little improvement.  

What is needed to prove or disprove the correlation is a study in the change of wealth – to correlate happiness with wealth is a good start, but three people at a given level of income may have different histories.  The person who has been at that level of income for several years may be moderately happy, one who has recently risen to that level may be ecstatic, and one who has experienced a misfortune that reduced their income to that level may be miserable.  The average score would average the three together, washing out the effects of the change.

So to correlate material wealth to happiness would also require a study of the changes in wealth – while it is entirely reasonable to assume that there is a correlation between change in wealth and change in happiness, to my knowledge this has never been quantified.

Who Comes First?

Ethical dilemmas are often posed in the scenario of a crisis situation.  If there are only so many seats on a lifeboat, or so much space in a bomb shelter, whom do you take in and whom do you turn away?  It is presumed that the choices people make in a difficult situation reveal their true values.

The same is said of companies who face a crisis, and people watch to see “who comes first?” as a way of gauging the company’s ethical values.  Propaganda aside, whose interests does a company seek to protect when a crisis arises? Do the managers set up golden parachutes from themselves?  Do they seek to protect profits?  Or do they take care of their customers and employees?

There is a strong distaste for firms that put profits first, and the widespread perception that when companies are faced with a product recall, this is an opportunity for the firm to show their true colors and demonstrate whether they care about customers.  Particularly in industries where human life is at stake, people expect firms to put profits aside and do the right thing – as almost every firm will claim it does when there is no crisis at hand.

Unfortunately, the traditional approach of companies is first to attempt to cover up the incident so that no-one will ever realize that a mistake was made.   If it cannot be hidden, to maintain a stiff upper lip and show no sign of panic so that people think that they are well in control of the situation.   This sort of cold reserve that gives battlefield commanders the mien of valor comes off as being cold and unconcerned, or even ignorant or in denial, in non-emergency situations.

There is some merit to the notion that people will recall companies that have to issue defects as being incompetent, but survey results do not bear that out.  No-one expects perfection, and the majority of people recognize that even the best-run companies can make mistakes.

And if this bears out, then it is correspondingly true that very few people will assume that a company that makes a mistake is entirely incompetent.   Accidents will happen, and the true competence of the firm is not in producing perfection, but in responding competently when mistakes occur.

Haphazard Training

The unfortunate truth is that practices in teaching workmen skills is very haphazard.   Schools teach students the skills they might need in an abstract form, often buy rote and with little to no practical application.   When a new employee is hired he is sent to the shop with little instruction, expected to observe and figure out the job with little guidance.

This is even more so of the knowledge workers than laborers.  An individual who is meant to fuel an engine is shown how to shovel fuel into the boiler, but one who is meant to sell a product is simply told to “go sell” without any instruction.   It is to his credit that, by some haphazard process, workers can teach themselves to do a task with some level of proficiency – but this ability is too much relied upon by the vast majority of employers.

For employers, this leads to employee turnover. Employees who might have become competent with instruction are unable to figure things out on their own and leave in frustration, or are dismissed for being less productive than needed.   As such a person may learn a piece of the job in one shop, another piece in another shop, and over the course of several years come to develop competency in his trade.

Learning by experience means learning by mistakes and successes – which carries with it the necessity of making mistakes, and some of them quite serious.  “The burnt child avoids the fire” summarizes the issue of haphazard learning: it would be better if the child were taught to avoid the fire without getting burned.

This is not merely a theoretical consideration of what might happen – looking at the high turnover rate in businesses in general, and certain industries and positions specifically, it is a widespread problem.

Advertising and the Natural Capacity for Attentiveness

Physiology tells us that the human brain is largely identical from one person to the next, buy psychology clearly demonstrates that this organ is used in different ways by different people.   There is some argument over whether slight differences in the biological organ cause some to behave differently from others, or whether this is merely a matter of their upbringing and training – but it is moot, as the brand does not have the ability to raise its customers from childhood, it must confront prospects such as they are.

Some individuals seem to have a natural proclivity to focus their mind on a very specific goal and disregard all the rest of the world.   Some of the greatest inventors and artists have demonstrated this single-mindedness to great ends.   Others seem to be scatter-brained, unable to attend to one thing and constantly hop from one thing to the next, unable to see an idea to completion before something else “pops up” in their minds.

Some individuals can read a book with perfect satisfaction, whereas others consider reading to be intolerable.   Some can focus their minds on reading in a noisy environment, others cannot.  By the same token, some individuals can work in an environment of distraction, giving their attention to a certain subset of stimuli of their choosing, others cannot.

Some individuals can maintain attentiveness to their tasks, and to do what might be considered excellent work even when they are deprived of sleep or even intoxicated.  Others produce horrible work when they are slightly tired or barely intoxicated.

The most sought-after individuals are those with high levels of concentration, who seem to be able to focus their minds when others cannot.  Such men are precious, but such men are rare.  One cannot expect a market to operate as if every prospect can keep pace with the fastest and best, any more than one can yoke horses together and expect the slowest and weakness to keep up with those with unnaturally high strength and stamina – it tends to be the other way around.

In addressing the mass market, a brand may attempt several campaigns that function at different levels of attentiveness – and in general will find that the speed of the least attentive prospect sets the pace of sales.  If they gave as much care to their audiences as they do to their campaigns, realizing that each must be reached within the limit of its natural capacity for attentiveness, they would find that the performance of their campaigns to be as efficient and effective as their targeting.

Reasonable Expectations

Not every customer expects the best – they know they can’t afford it, and sometimes they just want a basic solution at a cheap price for something that is not that important.  They have reasonable expectations – some might go so far as to say they have low expectations – and delivering something beyond those expectations is not going to impress them.

Moreover, delivering capabilities beyond basic functionally may frustrate and annoy a certain segment of the market.   Those customers who pursue a basic product understand that they are not getting the bells and whistles of  a more expensive model, and this is often the result of careful consideration: the customer knows that the additional functionality comes at additional cost, and has determined that the incremental value of the upgraded version is not worth the incremental price.

For example, consider the customers who choose to shop at a discount merchandiser.   They are well aware that they are not going to get the same level of attention and service as they will in an upscale boutique, but they are also well aware that the exact same product will cost less than half as much because a discount merchandiser spends less on rent, staff, and décor.  

It is also not necessarily a trade-off of price versus quality: a customer may choose a discount merchandiser for the sake of avoiding the level of “service” that boutiques provide because he finds being constantly “served” by sales associates to be an unpleasant experience.   That which the retailer considers to be a premium is actually undesirable to certain segments of the  market.

As a result, not every firm has to be “the best” at everything – because what is “best” is determined by the customers, and not everyone wants the same things, either from the product experience or the retail experience.   In fact, many of the largest and most successful retail brands are downscale mass-marketers – whereas those that serve the upscale market tend to be smaller, trendier, and more short-lived.

Employees as Stakeholders

It is a common failing of employers to be entirely self-centered: to seek to accomplish what they want with indifference to the welfare of their employees.    Performance appraisal systems are similarly aligned: employees are given goals based on the needs of the organization and expected to meet them, with no consideration of the employee’s personal motivation.

Particularly in the present day, employment in a specific firm is a choice, and if an employee’s personal needs are not being met, they will leave.  Or they may feel compelled by other factors (a poor job market) to remain with a given organization, but tend to do the very minimum to keep their job until environmental factors change.   And companies that manage their workers in a self-centered and inconsiderate manner find that they are uncompetitive: they are not as efficient or as innovative as firms who manage their people well.

For people, motivation occurs when they perceive the benefit of undertaking an activity is worth the cost and risk associated to it.   Few management systems consider this: the employee’s only motivation is to keep their job, gaining nothing more than they have now, in exchange for an increasing level of exertion.  In time, the balance shifts to the point the individual loses his motivation.

Historically, the motivation for employment was extrinsic – people work to earn a wage – but in the present day, compensation factors less and less into what people consider to be the factors that create job satisfaction.   They are motivated to do something meaningful, to develop skills, to experience growth.  These too can be considered part of their compensation, the benefit they receive from working, and increasingly this compensation is being withheld or even taken away.  

Obviously, something has gone seriously wrong with management in general.   Job dissatisfaction and even hostility toward employers is not something to occurs in rare instances, but has become so pervasive that it is part of the culture.   Everyone hates Monday (the return to work), stories of frustration with superiors and organizations are a staple of casual conversation, and few people have anything positive to say about their working lives.   

The reason is a systemic issue with the priorities of organizations.  The objectives of an organization are generally geared toward the investors, with little consideration of the customer, and even less of the employees.   And when this becomes exaggerated, companies lose the stakeholders whose needs are not served.  This is not, by any means, effective management.

Design and Experience

If you seek information about design from professional educators, or read the blogs of the unemployed, you will quickly get the sense that design is about art and experience.  A designer crafts objects that give pleasure to those who use them, either through the aesthetic experience of through ease of use and ideally a combination of both.   

None of this is wrong – but neither does it consider why it is important to deliver a pleasurable experience, or more aptly, the importance of the usage experience in the greater context.   It would seem axiomatic that users would prefer a pleasant experience to an unpleasant one (though there are in fact instances where people actually desire an arduous experience, this situation is atypical), the point of using something is rarely to enjoy the user experience, but to achieve an outcome by means of that experience.   

Where the quality of outcome is diminished to facilitate the pleasure of the user experience, then it undermines the purpose of undertaking the task at all.   In this sense, focusing on experience to the detriment of efficiency and effectiveness leads to ultimate failure: we enjoy the process of performing the task, but fail to achieve the outcome for which the task is undertaken – or at best, we achieve an inferior outcome.   In smaller words, design for experience alone results in an easy way to do a poor job.

There are few instances in which experience is the sole reason for undertaking a task – and these are all leisure activities that are done for the pleasure of doing them, not for the sake of achieving a desired outcome.   That is, they are entertainment activities, that have no value after their performance has ended.  Because there is no outcome, or the outcome is entirely unimportant, the experience is all that matters.  But this encompasses very few activities, and those activities are of very little importance.

Here, consider that value is subjective and that each person may seek a different value from the experience he is performing.  One person may play recreational softball because he enjoys the experience of playing, whereas another may play because he wishes to socialize with his teammates and not care about the game at all, and still a third may be seeking for psychological reasons to win the local league championship.   Whether they are ultimately pleased with a game, or the entire season, depends on whether the value they sought was delivered.

And this is where experience must focus on the user rather than the object: to design a solution that provides value, one must research the users to know what value they seek. For some, it is the value of the experience, but for most it will likely be the value of the outcome.   To claim to “design” without knowing what end is to be achieved is contrary to the basic principles of design itself.

The Consumption Value of Esteem

A generic product is usually consumed for its functional value – it is a means to an end, and the consumption experience is evaluated according to the effectiveness of the product in achieving the desired end.   A branded product, however, is usually consumed for a non-functional reason: the consumer seeks the product for its functional value, but any brand of that product would be equally effective in achieving that functional value – so the choice of brand is for reasons other than functionality.

Once such reason, arguably the most significant, is the esteem of the brand.   To consume a brand is a statement, “I am the kind of person who uses this brand,” and in that sense the brand aligns to the perceived personality of the perceived user (perception being significant in both instances, as few consumers conduct much research to determine the actual personality of the actual users of a given brand).

The most common and easily understood aspect of esteem is in social recognition of conspicuous consumption.  A person consumes a given brand because of the expectations that others will witness this consumption and, in so doing, recognize or at least consider the consumer to be in line with the kind of person that consumes that particular brand.   It is part of their declaration of social identity, whether the identity that they are declaring is actual or desired (as people commonly seek to associate themselves with what they wish to be rather than what they actually are).

A less recognized aspect of esteem is self-esteem, the declaration of one’s own standing to oneself – regardless if the act of consumption is witnessed by others.   The individual consumes the brand not so that others will recognize them, but so that they will recognize themselves – to feel that they are the kind of person that consumes a particular brand, even if no-one is there to witness it.   Brands that are privately consumed, in the home for example, still rely upon this form of esteem.

And while it is generally considered that the desire for esteem is always upward bound, this is not always so: a person of integrity may wish to be identified precisely as they are, and at certain times in history (the present included), there is a certain fashion to nostalgie de la boue, which would cause an individual to adopt a brand of a lower stratum of society.   The three are by no means mutually exclusive, and in fact they can often be witnessed in combination.

Failing to Accept Failure

While perseverance and tenacity are generally admirable qualities, they can be taken to far – to the point that they become dysfunctional.   In individuals, we can quickly recognize those who have a pathological need to spin their histories to make even their most dismal failures sound like success stories.   In organizations, we can also witness those who insist on propping up unprofitable products and programs for years in spite of the harm that they are doing to the health of the organization as a whole.   Nobody wants to fail, so there is a lack of knowledge, education, and etiquette for failure – except to deny it and keep fighting a losing battle.

Ironically, working in new product development in a change-averse organization has taught me to anticipate failure.   There is seldom much excitement about the prospect of success, and every review and checkpoint that a new idea must go through seems to be based on the presumption that the product will fail – the sponsor must work hard to develop an ironclad case that addresses every imaginable contingency, and those along the approval gantlet can be very creative in imagining contingencies that would cause the product to fail.   As a result, very few new products have been introduced in decades.

But it’s been remarked that there is no such rigor for existing products.   Shall we continue to offer a product or program that has been losing money for years?   The default answer is “of course.”   The decision has already been made, people have already committed, and we have to work hard to make keep a failing product afloat.  How embarrassing it would be for everyone who signed off on that product, and how detrimental to all those whose profession is to support it, if we were now to admit that it is a failure.

And so, the failing product lines trudge on, their expenses compensated for by successful product lines.  The successful product lines do not evolve, and they cannot be competitively priced because their revenue must compensate the firm for the weight of one or more failing products that the firm refuses to abandon.   There is no periodic checkpoint at which an established product must re-prove its merit in the same way (and certainly not to the same level of rigor) as a new product.  There is no sunset plan to elegantly phase out a failing product or program.

The exception to this seems to be when there is a change in management.  A new leader can be objective about standing products and programs – he had no part in their creation, nor in their perpetuation to date, so he can call something a failure without losing face because it was someone else’s work.  Often, this “someone else” is the previous leader, who is already being demonized in his absence.   Even so, this seems to happen less and less in the present day: new leaders enter an organization without making a splash, and barely a ripple, as they perpetuate the old products and programs without many dramatic changes.

And this reflects back on a cultural intolerance of failure – “success or death” rather than admit to having made a mistake, or admit that times have changed and a once-successful product or program has lost its appeal.  The more it happens, the more difficult it is to see perseverance and tenacity as noble qualities when they lead, inexorably, to catastrophic failure instead of success.

The Need for the Hard Sell

In a conference session about marketing, there was rather a long digression on the difference between selling and offering that seemed to be belaboring the difference in the hard-sell and soft-sell approaches, in favor of the latter.   In the presenter’s mind, the days of hard selling are over and it’s time that all industries switch to a soft sales process.    I cannot disagree more.

Soft selling is a tool, a good tool, and the right tool for most jobs – most, but not all.   The soft sell works when there is a motivated and informed customer, who has accurately recognized and diagnosed his problem, correctly identified the solution (product) he needs to achieve his desired goals.   And while customers today are more informed than the information starved masses prior to digital media, there is a significant difference between “having access” to information and actually “accessing” it – and then understanding and applying it.

For the customer who does not recognize that he has a problem, who has not accurately diagnosed it, who does not feel empowered to solve it, or who does not know the correct way to solve it, hard selling is still necessary.   You cannot simply sit back and wait for the customer to come to you, but must convince the customer that he can and should leverage your product to solve a real problem.   You have to go to him, help him recognize the problem, show him the solution, and make him feel empowered and motivated to act.

All of this can be snake-oil in the wrong hands: making people believe they have problems when they really do not, suggesting your product is a solution when it really is not, and stirring people to action that they really don’t need to take.   It depends on the situation.   And the soft-seller is not immune to unethical selling – when he passively allows a deluded person to purchase his product and shrugs off any responsibility for the negative consequences because he played no active role in helping the customer make the appropriate decision. He is the proverbial “good” man who does nothing when action would prevent harm, which is not a very good man at all.

Ethics in salesmanship means matching customer problems to commercial solutions – regardless of the sales tactic – a prerequisite to which is accurately recognizing the level of sales assistance that is needed.   Where customers accurately recognize and diagnose problems and identify and employ solutions, stay out of the way and give them what they ask for.   Where the cannot do all of those things, provide assistance – and whether it is ethical assistance or unethical pressure depends on the customer, the product, and the situation.

It is no more correct to soft-sell in all circumstances than it is to hard-sell in all circumstances – and to suggest otherwise is an act of ignorance and immorality unto itself.

The Slow Pace of Technology Today

Something I recently read stuck in my mind: that the pace of technology has slowed considerably in recent years.  The author pointed out that the twenty-year period from the mid-1980s to the mid-2000s brought a whirlwind of change, and every couple of years there was some revolutionary new capability: the personal computer, networked computing, the Internet, cellular phones, mobile computing, and so on.   But in the past fifteen years or so, nothing of that magnitude has happened.

While progress has not ceased, its has been limited to making minor efficiency improvements: processor speeds are getting a little faster each year, display resolution a little better, network speed a little faster, components a little smaller, etc.  But no new device has come out that has changed the way that people interact with technology in any significant way, or extend it into any aspect of life in which it didn’t previously exist. That is, technology hasn’t delivered anything truly impressive or impactful in more than a decade now.

It may be that we have reached a point where the core technology – the computer – has been fully extended.  It is as fast, as small, as portable, as connected, etc. as it needs to be for any functional purpose.  Engineers are out of ideas for new ways to apply it – or at least, new ways that are meaningful to the market, or at least valuable enough for the majority of people to see it as a must-have device or capability.

And in daily life, there does seem to be a certain ennui and even distaste for technology – the tendency of people to question the value of technological advances and even seek to moderate their technology consumption, questioning if it is really worth the money, time, and attention to adopt the latest fads, or even continue using previous fads once their novelty has worn off.

I’ve looked for examples to the contrary, and have thus far been unable to find anything that has been as impactful.   The only thing that comes close is wearables – the Apple Watch, Google Glass, and FitBit – but even these technologies failed to have much of an impact.  They certainly haven’t become a must-have technology that makes their predecessor (the smartphone) obsolete, or even extended the capabilities in any meaningful way.

So I’m left without grounds to dispute – the pace of technology really has slowed, the really has been nothing new and revolutionary – and likely the next step, societally, is to find a more sensible integration of technology into life – which means questioning the value that technology affords.   That, at least, seems a refreshing notion.

Brand Unawareness

A fellow shopping for auto insurance asked an unusual question: what repair shop would we use in his location for body work.   Some years ago, he had an accident and was sent to a shop that did rather a poor job, leaving him so displeased that he changed insurance companies.   And then, when he had another claim, the new insurance company sent his car to the very same body shop for repairs, and he was again disappointed.  He wanted to change insurers again, but wanted to make sure that the new company would not send him back to the same shop.

In the years I spent in the insurance business, I had listened in on many phone calls – a few hundred or so – and this is the only one I can recall in which a shopper took this level of interest in our suppliers.   Everyone cared about the price, and to a lesser degree about the kinds of coverage that price included, but nobody seemed particularly curious about exactly how the benefit of the product would be delivered: what company is really going to do the work that they are paying for in advance?

There are many buying situations in which consumers are unaware of the brands they are purchasing when the company with which they are directly transacting is merely passing on the product of another firm.   No insurance company, to my knowledge, has a nationwide network of repair centers that it owns and controls, but sends claimants to a local provider.   And where the product is a good rather than a service, the invisibility of its providers is clear: you have no idea what brands you are consuming when you order a meal in a restaurant, nor what company refined the copper in your computer.  You are only aware of the brand of the seller, not the maker.

And in the present day, where most firms are vertically dis-integrated and business operations are outsourced, chances are that when you consume any product, you are consuming dozens or hundreds of brands that you are not aware of.   The more complex the product, the more hidden brands you are consuming without being aware.  I would venture a guess that no-one, ever, has investigated the full supply chain of every product they use – there simply isn’t enough time in the day.

That’s not to say that the brand of a supplier is of no value – it is of great value to their direct customer, the reseller, though invisible to the ultimate consumer.  And in this space, the values of the reseller are significantly different: is the supplier reliable, will delivery be timely, is the quality of goods consistent, and so on.   These are entirely different to the values that customers espouse, or pretend to espouse, in evaluating the brand of the reseller.   They are generally concerned only with the last link in the supply chain.

Targeting the Gullible Market

A brand is trusted by its existing customers because of its past behavior: if the brand kept the promises it made, then it is trusted to repeat the same behavior in the future, and this trust extends to any new promises that the brand makes to the customer that has already experienced its reliability.  But when approaching a prospect, who has not interacted with the brand, earning trust is difficult – the brand has not had the opportunity to keep its promises to the prospect, and the promise itself is not trustworthy because it comes from an unknown brand.

Granted, some level of trust depends upon the trustor – whether or not the prospect has a trusting nature.   In general, a brand that approaches any market can depend upon the trust of the most gullible members of that segment – but a more measured approach would consider the qualities of an individual who will trust without experience and seek to define a target market in which gullibility is baked in.

The inherent problem is that gullible people are not respected people – their peers and acquaintances know them to be exceptionally gullible and do not put much credit in their endorsements.    In that way, a brand that targets the gullible may have some success in gaining the initial trust of people whose recommendation carries little weight with the rest of the market.   Hence the short-term and unsustainable success of many new products.

And even the gullible market segment is not sustainable: the most gullible individuals can be fooled once into putting trust in a brand – but if the brand fails to keep its promise to them, then it will be difficult to make a second sale even to the same individual.   They are likely to extend credit to brands once, but not a second time once their trust has been violated.

One notable exception are individuals in whom there is an unfortunate coincidence of gullibility and narcissism: the person who has been tricked, but whose ego will not allow them to admit that they have been tricked.  These individuals will give rave reviews of horrible products, pretending to be satisfied so as to avoid admitting having made a mistake.  Going by the number of five-start product reviews on websites, there are quite a few of them, who feel compelled to repurchase and advocated for a bad product to maintain their self-esteem.

But, again, this leads to the problem of second-hand trustworthiness: it is not only the brand, but its users and advocates, that must be regarded as trustworthy in order for the brand  to gain acceptance in the broader market.  The testimony of dupes and fools is no more convincing that first-hand promises made by a brand, and it may in fact be more damaging to have the wrong kind of brand advocates.

Generational Marketing Mistakes

Being as it’s about halfway through 2018, it seems that market researchers have suddenly become aware that the next generation is entering their adulthood.  They haven’t figured out what to call them yet (centennials, generation Z, iGen or whatnot) and there’s not a lot of agreement on when, exactly, the generation began (somewhere between 1990 and 2000, depending on what they’re trying to prove) … but apparently, they are understudied and there’s money to be made by being the first to market with a study that defines what this new generation is all about.   Even if it’s completely premature and wrong.

The same thing happened with the Millennial generation: studies came out describing their attitudes and habits when the generation itself was prepubescent and hadn’t had time to form attitudes and habits.  And sadly, the “findings” that were published in the early days tended to form a cognitive filter.  So the profile of the Millennial today – pushing forty, paying a mortgage, advancing in their career, and otherwise doing the “adulating” thing – has changed little from the time when they were teenagers still living at home and working part-time jobs.   

And though I would happily be proven wrong by time, I strongly suspect the same is happening with the market research on Generation Z: they are talking to teenagers about their spending and financial habits, about their tastes as consumers, about their attitudes toward the workplace – well before they have had any experience leading an adult life.   

I’d feel a bit less panicked about it if I were to see a present-day study of the Millennial generation – and better, to see it done by one of the experts who studied them prematurely, who admits to having jumped the gun and come to the wrong conclusion.  But sadly, these are the same “experts” who see the new opportunity in misrepresenting the next generation – to admit they were wrong in the past would be to discredit their present work.

And their clients are little better.   Rather than recognizing their folly and straightening themselves out, updating their research in order to better serve the Millennial market, they are simply moving along. They are writing off the last generation and pursuing the next, gearing up to make exactly the same mistake.  Lather, rinse, and repeat - and watch as history repeats.

Chewy: Pooching Customer Recovery

Recently, a colleague of mine had an issue with an online pet store – which would be one of those unremarkable “yeah, these things happen” incidents except for how poorly the company handled the attempted service recovery.  

A bit of background: the colleague in question adopted a shelter dog that had a number of serious health issues – it’s an ongoing saga – and she ordered some medications from Chewy, an online pet supply store that has only recently opened its pharmacy business.   And here’s how they attempted to recover after bungling the order:

The lame humor in the message, bad puns that elicit more of a groan than a laugh, might be understandable and perhaps mildly amusing in the course of routine correspondence.    In the wake of a botched order, being cheeky with the customer is probably not a good choice.   And when the botched order prolongs the suffering of someone’s pet because it was a pharmacy order, it’s definitely not a good idea to kid around.

The second problem is that what is being described in the message, an inability to merge orders, has nothing to do with what Chewy had done wrong.   They had mishandled a prescription, initiating a game of phone-tag with themselves and the veterinarian to straighten things out, and causing further confusion as to whether the problem had been addressed.

The third problem is that the offer of a refund, which generally a nice gesture, is not something that helps recover from the problem: it is not that they caused the customer a loss of money, but a loss of time by mishandling the order.   A more appropriate action would be to expedite processing and provide free overnight delivery to help minimize further delay.

And the fourth problem is the missing fourth step of the basic apology model: to provide some reassurance that the problem will not recur in the future, so that the customer won’t be as hesitant to engage with the brand again.   To omit that step seems either arrogant (believing future business can be taken for granted in spite of the problem) or dismissive (not really caring if the customer does business with the brand in future).

In all, none of these things constitutes an egregious error – but it is the combined effect of a lot of small problems that makes this a model for poor customer service in a critical situation.

Bad Ambassadors

The desire of brands to win advocacy is a generally good thing – it causes firms to think beyond the one-time sale, to providing a product that leaves customers so satisfied that they will not only repurchase but also advocate to other prospects in favor of the brand.   However, like any good thing, it can be done to excess – and at some point pursuing advocacy for the sake of having advocates becomes harmful to the brand.

The consumption of a product is for its functional benefits – but the consumption of a brand is often for non-functional benefits.   I add “often” because some brands are valued for their reputation for quality in terms of functional benefits, but in most cases products are commoditized: the offering of one brand is no better or worse than the next in terms of its functional qualities, such that the only difference is psychological.  This is generally true of most crowded markets where product offerings have become commoditized.

One of the chief psychological benefits is social recognition: Brand X and Brand Y are functionally indistinct, but are associated with certain social groups.  “We” use Brand X and “they” use Brand Y.   So the distinction between the brands is social identity – belonging to one group rather than another.   Hence a person chooses the brand that aligns with the identity to a group to which they wish to belong, and shuns the brand that aligns with any group whose membership is mutually exclusive to the desired group.

And therein lies the problem: when a brand is selected by a group that is considered undesirable by its existing consumers, the alignment of the brand becomes unclear: is it still aligned with “us” or is it now aligned with “them”?  And if it is no longer “our” band, then there is no longer any value to being associated with it – and possibly value in distancing from it because it is no longer in line with the identity of the desired social group (and is in line with the identity of an undesirable social group).

Where the undesirable group has selected the product of its own accord, there is very little that a brand can do to regain its esteem: brand exists in the mind of the customer.   If the brand decides to go with the flow, to embrace the new breed of customers it has attracted, it can remain viable, though the character of the brand and the qualities of the market it serves will undergo a dramatic transformation – in effect, the brand will have changed markets.    If the brand resists the flow, rejects the new breed of customers and attempts to retain its loyal market, it may find that it is fighting an uphill battle.   Success at this will be very difficult.

However, it is very often the case that the brand initiated this selection: it marketed to the undesirables in an attempt to grow its market, foolishly believing that its loyal customers would remain loyal even when the brand became adopted by the undesirable new customers.  It seems to be counting ambassadors, failing to recognize that not all ambassadors are good ones.  This is suicide.

Putting People Before Profit

At a recent event, one of the attendees stood up and proudly shared a very dubious success story:  he had been listening in on a phone call in which one of his company’s service representatives was dealing with a customer who was closing an account, and the rep spent about fifteen minutes with the customer to talk them into keeping the account open with a one-dollar balance in case it would be needed again.   In the speaker’s opinion, the rep had done a wonderful job of saving the account.

Not everyone applauded at the end of his story – maybe three-quarters of the audience – though there is no telling how many of them thought the story truly represented a laudable success or were just clapping to be polite.   It is to be hoped that most of them recognize that what this fellow was praising as a success story was not at all a good thing, and a sign that the company is paying attention to the wrong numbers.

In case it isn’t obvious, the value of a one-dollar account is negligible.  At current rates, a dollar of capital might earn five cents worth of revenue while incurring about three cents in expenses, leaving the company with a two-cent gross profit every year the account remains open.   If the account remains open for fifty years, it will earn one dollar and, after G&A expenses, add a couple of dimes to the company’s bottom line.  Meanwhile, the fifteen minutes of CSR time likely had a fully-loaded cost of around 15 dollars.   Net loss, fourteen dollars, even if you don’t discount the value of future revenues for inflation.

The reason the speaker thought this incident to be a success is because he’s thinking of one statistic: the number of customers the firm has.  It’s likely because he’s being managed to do so – incentivized to grow and retain the number of customers without paying attention to whether the accounts he’s getting and keeping are at all profitable.   The more such accounts he creates and saves, the more his company loses rather than gains on the bottom line.   It's counterproductive performance, and the sign of a siloed and blindfolded culture in which each department thinks of its own goals regardless of their impact on the organization as a whole.  

The firm likely has enough good customers to keep it afloat – it can afford to take some losses.  But this is also a myopic perspective.  Every dollar in expenses incurred to retain unprofitable accounts is a dollar in interest that should be spent on retaining the profitable ones (or a quarter in interest, if the firm keeps the rest for itself).   I checked his company’s interest rates , and they are far below the market leaders – so much lower that it doesn’t make financial sense to do business with his firm.    Chances are, the cost of maintaining unprofitable accounts is at least part of the reason.

How many good and profitable customers are leaving his firm, which cannot pay to retain them because of the losses taken to retain unprofitable ones?  One can only speculate.   The truth is kept well away from the public, and perhaps is even unknown to decision-makers at the company, who continue to watch and press upon their employees to chase a growing head-count without consideration of whether the “heads” are worth having or how long the firm can sustain itself in this manner.

Defending the Routine

Everyday life is boring and uneventful: people follow their well-worn paths and make little progress through small and safe steps, avoiding risks and anything that is out of the ordinary for them.   And as dull and boring as it seems, we are creatures of habit – and like being creatures of habit.  We will defend our humdrum lives against the incursion of anything that might change the status quo.

While we seek to minimize risk, we do not seek to eliminate it entirely.  We recognize, at times, there is a need to take unusual risks to make unusual progress.  It is not always acceptable to continue along the path of small and safe steps – but instead to take a calculated risk where there is a chance of loss but the potential to make greater than normal progress.

This is not something that most people seek to do often – an unusual level of risk is not part of daily life, and it is not sustainable.   Take any risk often enough, and the odds of failure will eventually play out: the risk-taker will lose, and if he has staked too much upon the chance, his loss will leave him unable to continue to take chances.   He will be physically, financially, or psychologically crippled and forced to change his habits to return to the mundane, until such time (if ever) he is able to recover the ability to step outside of the safe and the usual again.

And while there is an attraction to risk, our appetite for actually participating in a risky proposition is actually quite small.  We often satisfy our desire for risk indirectly – literature, film, spectator sports, and even history provide the vicarious thrill of seeing someone else take risks, attempting to empathize with the risk-taker rather than stepping into the actual role.  

For most people, most of the time, entertainment and fantasy is the extent to which they will engage in risky action.   For the armchair quarterback, his daily life is not at all affected by whether his favored team won the match – though he finds emotional rewards in witnessing this simulacrum of action.   Even if he has placed a bet on the game, it’s seldom enough that winning or losing will make a difference in his life afterward.

This considered, attempts to modify behavior in a significant way – to cajole an individual into deviating from his usual practice – is a very difficult proposition, and the prospects of success are limited if the consequences of gain or loss are significant.