Resistance to Parasitic Change

In a case-study I was reading on scientific management, it was mentioned in passing that the cost-savings of an efficiency improvement was split three ways: a third of the cost-savings was kept by the company as profit, a third was returned to the workers in increased wages, and a third was passed on to the customer as a price reduction.   It dawned on me that this is not at all the typical arrangement in the current age.

In the current day, virtually all of the cost-savings are pocketed by the company, and the workers and customers are offered no reward for having made the change to the company's benefit.   And I say "virtually all" as a concession to the few and rare occasions in which this might occur - though no example comes readily to mind.

With this in mind, the reason that customers and employees are so resistant to change is that there's nothing in it for them.   In their various roles, people are generally motivated to take action when they perceive a benefit to themselves.  That's not to say individuals are entirely self-serving - as people some some willingness to accept inconvenience and individual effort for the benefit of others - but when the relationship becomes entirely parasitic, with one party constantly demanding accommodations from another for its own benefit while offering nothing in return, even the most charitable individual becomes irritated and disinterested in continuing to be fed upon my an ever-hungry mouth.

People are most sorely neglected in their role as employees, constantly demanded to make changes to their working patterns without compensation because the arrangement will be better for the company.   The word "bonus" is like the word "bigfoot" - a creature allegedly seen by someone else - and salary increases have for over two decades lagged well behind the rate of consumer price inflation.  And yet, corporations speak highly of their "productivity," dollars in revenue per dollar in expense, and take pride in claiming for themselves a greater and greater share of the revenues that employees create.

On the consumer side, customers have experienced steadily diminishing quality of product and service, all in the name of keeping prices low - but there seldom if ever is a return to the customer for accepting less.   The supermarket is a prime example: you cannot find a pint-sized can of anything, as the original 16 ounces was reduced to 14 or 12.5 and customers are being asked to perform the duties of a checkout clerk, scanning and bagging their own purchases.  The cost-savings is not passed along, and the reply that prices are not being increased has been so overused that it is no longer fooling anyone.

It occurs to me that this likely sounds like the ranting of a socialist, but there is some thread of truth that cannot be denied: companies want for themselves ever-increasing profits, and rare is the firm that sets as a goal to keep profits steady, or even accept a small decrease, for the sake of taking better care of their employees or customers.   It is entirely a one-sided relationship - so if customers and employees seem fed up, their reaction is entirely understandable.

And it is likely for this reason that the scientific revolution in management has failed entirely to accomplish its goal of a better and more productive society for all - in that one group have hoarded the rewards of change and improvement to themselves, and the other two groups have largely lost interest in accepting changes and compromises that offer them no benefit, but are entirely parasitic.  There are some broader cultural implications to be considered - the manner in which this sort of parasitism has degraded society in a broader sense - but that is likely a separate topic.

And likely the only way to end this meditation on a positive note is to observe that, in some regards, competition in the marketplace is nudging the relationship back toward a more healthy and sustainable balance, at least insofar as consumers are concerned - as it is becoming necessary for firms that wish to be competitive to consider the customer's experience and their perception of value in the relationship. In terms of the relationship between firms and employees, that will likely remain much neglected while unemployment statistics are unfavorable and employees are disempowered to negotiate for a fair share - but this too is likely to change over time, as it has in the past when there was a greater demand than supply of labor.  Perhaps it is unrealistic to expect the pendulum will ever come to rest.

One Hundred Books

I’ve recently completed a goal I set for myself about four years ago: to read one hundred books on topics related to my profession: design and usability, social media, mobile, web analytics, marketing, leadership, project management, strategy, economics, and various other topics.   They’re annotated on my personal web site, as my intention was to study these topics closely rather than read at leisure.

I’ve mixed feelings on the completion of this goal: I read a lot of very good books and a few fairly bad ones, and spent a great deal of time meditating on some of the perspectives I’ve encountered.    In a way, it feels a lot like graduating from an academic program, with a wan sense of pride in the accomplishment but knowing that it’s all been preparation for something I can’t quite conceive.   I waver between the sense of having accomplished something quite significant, and the sense that I have wasted quite a lot of time.

Perhaps that’s just melodrama grown of intellectual exhaustion – it really has been a long slog, and along the way I’ve amassed a reading list of additional topics I’d like to study that were not closely enough related to my primary goal to invest the time.   The more you learn, the more you realize there is still to be learned, and perhaps that’s the reason for the melancholy state in which I find myself at this moment.

At yet, I remain faithful to the pursuit of knowledge – anything you learn, even if it is of no immediate practical use, enriches your intellect and renders you capable of understanding things that leave others dumbfounded.   Thought it is with some sense of irony that the knowledge I have gained leaves me dumbstruck at the complete lack of its evidence in the world, such as it is.

All of this is likely a very odd way of bragging about an accomplishment, yet rather than feeling like I have climbed a hill, I instead feel as if I have climbed to the place I imagined to be the top of a hill only to find myself at the foot of a mountain.   It’s a very strange thing and I’m not sure if I quite like it .

Infomercial Sales Tactics

This past weekend, I settled into one of my periodic bouts of melancholy and ennui and did what I suspect quite a few people do when they find themselves in the doldrums - deposited myself on the couch and watched mind-numbing junk on television for a couple of hours until disgust and self-loathing prompted me to find something else to do with my time (i.e., housework). In particular, I watched a series of infomercials for products I am wholly uninterested in buying and have a difficult time understanding why anyone would - while that kind of thing is candy to my inner cynic, it is also interesting to study the sales patter to understand how hammy sales tactics are intended to work.

The old-school hard selling tactics are contrived and obvious, following a four-step process:

1. Tell the mark that they have a problem
2. Show the mark how your product solves this alleged problem
3. Convince the mark that your product is cheap and easy to obtain
4. Usher the mark to the register 

In a commercial or infomercial, this sequence is repeated multiple times.   One of the infomercials I watched managed to do this seventeen times in thirty minutes - which is impressive, but hardly the theoretical maximum: I've seen thirty-second spots that run the process twice, so in theory a half-hour infomercial could repeat the sequence 120 times.

My sense is that once is likely enough - or more aptly, 0.25 times is likely enough for most prospects, because they can likely determine whether they are interested at the end of the first step: do you have trouble getting grass stains out of your umbrella?  Do you spend hour after tedious hour peeling hard-boiled eggs the old fashioned way?  Do you have trouble figuring out how to use a blanket?   If the answer is "no," everything else that follows isn't worth your time or attention.

As an aside, I have the sense that this is where the specious claims about the dwindling attention span of the American public comes from - the reason we tune out after seven seconds is we have already decided that it's not worth paying attention to the rest.  It's not a matter of diminishing capacity to pay attention, but improving abilities to decide whether it's worthwhile to pay attention to filter out the clutter in our environments.   But that's a different rant entirely.

What I was most stricken by is that even softer and more sophisticated sales tactics also fail at the first hurdle: they begin by assuming that the prospect has a given problem  and if they do not, then they stop paying attention: they ignore the sales patter, toss the direct mail piece in the trash unopened, or simply do not give attention to anything online that seems to have the appearance of being an advertisement.

This leads directly to the conclusion that advertising needs to be better targeted in order to be effective.   But even that is assumptive - in that it presumes that anyone at all would be interested in the product that is being sold ... that somewhere out there, there are a sufficient number of people who are mortified by the grass stains on their umbrellas, struggling to peel a crate hard-boiled eggs, and can't figure out how a blanket works.

It likely doesn't help my argument that some of them are entirely right about that, as products that solve these ridiculous problems sell by the millions and make their inventors very wealthy indeed.   But I would posit that these are the exceptional cases rather than the typical and that, these exceptions aside, the problem of selling in general is less to do with the tactics than the presumption of the needs of the prospect.

Customer Interaction Styles

I blanch at the way in which customers are stereotyped by vendors - particularly in this recent fad of "personas" that attempt to give the firm a better sense of the kinds of characters it is dealing with, but which are ultimately based on a one-sided set of assumptions that observe customer behavior without much consideration of the reasons customers behave the way that they do.

The vendor-customer relationships is a relationship like any other: each party interacts with the other on the assumption of what they expect their values and motives to be - and this perception ideally rectifies itself over time as they observe how the other party actually is, rather than how they are assumed to be.   Thus considered, behavior is not indelible, but more importantly it is not irrational - people behave in specific ways because they feel it has been successful for them in the past, on the assumption that future interactions will follow the same pattern.

So while it's well and good to make assumptions about consumer behavior, it's also important to consider how that behavior arose - how customers came to be the way that they are - and to consider our own conduct in the relationship.  In our first encounter, they are the way they are because of previous experience with other vendors but in second and subsequent interactions, their behavior is a reaction to our own.


How Customers Are

I'll start by considering, in a general sense, the way that customers behave in an encounter with a vendor.  It is, in essence, a relationship in which they need something they cannot furnish for themselves, and are looking to the vendor to provide it.   The way that customers are, at least at the first encounter, is a reflection of the way they have been treated in the past.

In a broad sense, they are collaborative, neutral, or hostile.  This is not a trinary switch, but a continuum - though I do have the sense that even "continuum" is not quite correct as it is the confluence of three different continuums:

• Collaborative - The customer expects the vendor to be attentive to their needs and is amenable to being advised, believing that the vendor is trustworthy and will make suggestions that contribute to their welfare.
• Neutral - The customer expects the vendor to be indifferent to their needs and is cautious about being advised, recognizing that the vendor has good intentions but, at the same time, is pursuing an agenda that may not be compatible to their personal welfare.
• Hostile - The customer still expects the vendor to be indifferent to their needs but is resistant to being advised, recognizing that the  vendor is pursuing its own agenda that is contrary to their personal welfare.

The three key elements in each of these states are the vendor's attentiveness or indifference to the customer's needs, the objectives they presume the vendor to have, and the effect that the agreement or difference between the two has on the expectations of the customer. All of this derives from the basic consideration of whether the product on offer is really a solution to their needs.

In relation to customer behavior, the way in which they will interact with a vendor reflects their assessment of this relationship: a collaborative customer will be relatively easy to sell, a neutral one tougher, and a hostile one nearly impossible.   And again, this relationship will be level-set based on the customer's previous encounters with vendors who fit the archetype - when buying a car, the customer expects the vendor to act in the same manner, and with the same agenda, as the last vendor that sold them a car.

This is where assessing the customers' attitude toward the industry or product category is significant, as it is the starting point at which their expectations are set and upon which their behavior will be based.   Ideally, the vendor wishes to be approached tabula rasa so that the customer will judge the vendor on its own merits, without the negative baggage created by others - but this is inevitable.


How We Made Them That Way

The notion that customers "are the way they are" is ignoring how they came to be that way - and, too often, assuming that their style of interaction is going to remain consistent and there's nothing that vendors can do to change it.   This is not correct at all because both parties bear responsibility for the relationship - we made customers the way they are, and we can choose to accept, support, or change their general attitude toward us.

As mentioned, "we" begins in a vague and general sense of all marketers, or all markers in a given industry sector (as categorized in the customers' schema rather than our own) but slowly shifts to be appropriate to the individual relationship.   We can act to support their existing attitude, or we can act to adjust it.   Primarily, this results from the way in which a firm interacts with the customer:

• Supportive - We can seek to understand and serve the needs of the customer, and serve them in the way they wish to be served
• Indifferent - We can remain aloof from the customer, proffering our merchandise and expecting customers to undertake the effort to serve themselves
• Parasitic - We can attempt to control the customers, indifferent to their needs but attentive to our own desire for profit

What I mean to imply here is that our behavior toward the customer shapes their behavior toward us.  A firm that is supportive encourages customers to be collaborative, one that is indifferent encourages them to be neutral, and one that is parasitic encourages them to be hostile.  The notion of encouragement is important, as it would be exceedingly ignorant or arrogant to assume our control is such that the customer will react a given way.

But encouragement is important in that it changes the nature of the relationship.  We have the ability to warm up a hostile customer by acting in a supportive manner.   We also have the ability, though we may often lack the interest, to change our own behavior in the relationship, such as when a collaborative customer voices a complain because they expected us to be supportive but found us to be indifferent.

And in that way, we shape the behavior of the customer - we inherit their attitude from the firms they have interacted with in the past, change their attitude during the course of our own interaction, and reset their assumptions for the next firm they will interact with.   We have the ability to do this for better or for worse.

This is not in the nature of an option we may choose to purse.  It is in the manner of a consequence we cannot avoid, not matter how hard we wish it were not so.

Persuading Customers When They Ignore Marketing

I've recently read a book on the topic of persuading customers who seem impervious to marketing - which is a bit misleading because the authors don't really reject the notion of marketing, but merely suggest a different approach to the practices of marketing.  While the logic is a bit specious and its assertions are entirely theoretical, backed by anecdotal evidence when any at all, there is among the flotsam a few good points that merit some consideration.

Primarily, the global marketplace has glutted customers with options for satisfying their needs, which is a significant change from previous eras in which there were relatively few suppliers to whom customers had access, and they were limited to choosing among the options available from retailers in their geographic location.  As consumers, we tend to take this for granted, and few people seem to remember the pre-Internet era in which local retailers had a stranglehold on supply, challenged only by the odd mail-order merchant who offered a few alternatives for those who were patient enough to wait six to eight weeks for delivery.

Another critical point is that the global marketplace is also glutted with information about options, and that the manufacturers are not the only source, nor the most reliable one.  Customers have a wealth of third-party information and regard the perspectives of those without a commercial motive to be more credible.   This, too, seems to be taken for granted, with few who recall the time when most product information was available from mass-media through paid advertisements and even the editorial content was written in fear of giving offense to potential advertisers.

The problem is that the principles of marketing hail from a bygone era: many brands do not seem to realize that there has been a radical transformation in the consumer markets, and continue playing by the old rules.   To the extent that none of their competitors has broken from the herd, this approach has remained successful - but in industries where a maverick firm has broken away, sizable firms have crumbled and more will continue to fall as they remain tethered to older ways of doing business with customers who are no longer required to tolerate it.

That perhaps sounds a bit general, and I don't often throw in with those who believe anything old is no longer applicable.   There are many theories of marketing from the previous era that remain viable, but some are clearly failing and will eventually fail completely, as will the brands that play by outdated rules in a game that has rapidly changed.

I don't think the authors of this particular book have the solution, but they do seem to at least be aware of the problems that will need to be solved - and that I do expect will be solved, though likely by entirely different providers.