Bigger isn’t always better

As part of my ongoing Diploma, I have to write several assignments based on the company I work for.

This is pretty good in that it means my studying ultimately has some practical benefit. But the reading literature isn’t making it easy.

Leaving aside the fact I’m not a marketer (and that Essential doesn’t even have a marketing department), the textbooks all carry the implicit assumption that the reader is working in a large consumer-facing organisation. Which is silly.

Obviously a lot of marketing theory surrounding processes becomes redundant in small companies, but that doesn’t mean they should be ignored.

According to government statistics recently published, “Small and medium-sized enterprises (SMEs) together accounted for 99.9 per cent of all enterprises, 59.4 per cent of private sector employment and 50.1 per cent of private sector turnover.”

Another constant theme in the literature is that companies should strive for “bigness”. Growth is the engine of the economy, and thus organisations should aim to grow.

Fine, but growth doesn’t have to be in unit sales. If there is an excess demand, basic economics states that the price should be increased. Growth can be maintained through higher profitability.

And for the service industry, bigger isn’t always better. Quality should be prioritised over quantity. A company is built on the vision of the founder(s) – the larger the company gets, the harder it is to maintain that vision and the more reliant the company becomes on work delegated to colleagues. Careful training and recruitment (“Always hire someone smarter than you”) are one thing, but they don’t compensate for that experience or existing relationship.

A restaurant is a good example of this. I enjoyed reading this article about the Great Lake Pizza shop. The founders insists on making each pizza by hand, and are unwilling to compromise. In their words:

Ms. Esparza: [Expansion] would change our values. That is the American way — to expand without really thinking.

Mr. Lessins: We really enjoy the work that we’re doing and we don’t want to cheapen it. Consciously or unconsciously — probably both — we’re trying to create a manageable way to earn a living and still maintain our sanity. We value time as much, if not more so, than money.

I believe Franco Manca, in Brixton, operates on a similar principle.

It might seem painful, but putting a notice outside of the restaurant saying it is fully booked can often be the best thing it can do. It must be busy for a reason, and so people are prepared to queue, and even pay a premium for it. A restaurant relies on its good reviews, and for this it needs to have satisfied patrons.

Being small isn’t a hurdle, or a restriction. In many ways, it is a benefit.

sk

Image credit: http://www.flickr.com/photos/emeryjl/2676435494/

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Cluetrainplus10: Thesis no.2

This is my blog post on thesis 2 of the Cluetrain Manifesto, forming part of cluetrainplus10. This is a project set up by Keith McArthur to celebrate the ten year anniversary of the manifesto’s publishing. I am one of many bloggers who has picked a thesis to cover today.

I feel like a bit of a charlatan, as I haven’t read the full book. I feel like I have, since the book gets referenced and rehashed so often but I should really go to the source at some point the get the version without embellishments and misinterpretations. I have at least read the manifesto though, and there was a thesis available that I wanted to cover so…

2. Markets consist of human beings, not demographic sectors.

Without wishing to revert to school essay-writing style, it is important to deconstruct the parts of this thesis.

Firstly, markets. Straightforward enough – an exchange of a good or service between a giver and receiver. The economy is made up of a vast number of complex and interconnected markets.

Secondly, demographic sectors. Now the tighter definition of a demographic will look at the objective population characteristics of that segment. Age, gender, ethnicity and so on.

However, loosening this could incorporate location-based, attitudinal, behavioural or lifestyle factors. Segmentation is not a science, after all.

Prisoner Patrick McGoohanThirdly, and finally, there is human beings. We have consciousness, emotions, motivations and free thought. We are not numbers, we are free men.

So, on a tight reading, the thesis could be saying that we shouldn’t be grouped into segments or demographic sectors, but treated as individuals that can fluctuate in and out of pre-defined targets as and when we please.

Technically correct, but this works better for pull-markets than push. In a pull market, the seller has ceded a degree of control. I self-select myself to customise the experience within the constraints to give myself maximum utility. The web has been a great enabler of this.

But most markets are still push markets. Unless your population is a super-select group (e.g. multi-billionaires), it is technically infeasible to treat all potential traders as individuals. That is where demographic sectors come in useful. Population characteristics are pretty outdated and completely overlook the fantastic diversity of our society. Attitudinal or behavioural demographics are much more useful (and fluid).

This reading also overlooks an important element of the thesis. As human beings we are plural. We may be individuals, but we also act in groups. Some might say that we have an inherent herd mentality.

So it is feasible to target groups by attitude, but we should treat them with more grace and humility. With humanity. Not calling them targets, for one thing.

And this works both ways. We should be human ourselves. Organisations should display this emotion, free thought and consciousness that defines us as who we are.

This gets to the heart of the thesis, in my opinion. And it is ever more relevant as the economy gets destroyed by rampant, greedy capitalism. It may not bring the short-term efficiency of a quick trade on the stock exchange or a last second snipe on ebay, but it creates meaningful and long-lasting relationships. Which ultimately benefits both sides.

We are people. We may be grouped, but we are not homogeneous. We are not faceless, we have multiple faces. Our name is legion. And we should recognise this.

We have been slowly learning to treat the customer with respect by using various platitudes.

“The consumer isn’t a moron. She is your wife”David Ogilvy

Now it is time to respect ourselves.

sk

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Links – 1st February 2009

Part 2 of the Good Stuff, following on from links yesterday to top articles on insights, marketing and advertising, online video and music.

Social media

I haven’t yet read it but I’m sure it is brilliant: danah boyd’s PhD dissertation

The Vitrue top 100 social media brands of 2008 (with methodology included)

Charles Frith provides an excellent case study of how brands shouldn’t engage with social media. Whether the person was officially representing Miller or not, he got pwned.

A Wired journalist experiments with various geo-aware applications and finds out that they are not all that they are cracked up to be

Mozilla have proposed a free, crowd-sourced usability tool which sounds, from this at least,  fantastic

Technology and the internet

One one hand, Kevin Kelly argues that ownership may soon be a thing of the past, and that access is far more important. Bodes well for tools such as Spotify.

But on the other, Jason Scott argues against the Cloud, as it can’t be trusted to safeguard your “possessions”

John Willshire lists several free tools that can be very useful in tracking online consumer behaviour

Discover Magazine offers a counter-argument to Nicholas Carr’s Atlantic article. Through outsourcing the effort required for recall, Google can in fact make us smarter. Not sure I necessarily buy this, but interesting nonetheless

Business and ideas

A great interview with Nassim Nicholas Taleb, author of the Black Swan, in the (UK) Times

Henry Blodget’s plan to fix the New York Times includes cutting costs by 40%, raising the price of the print edition and – controversially – reconstructing a walled garden for premium content

John Willshire (again) live-blogged the recent PSFK ideas salon in London, and it is well worth a read

Copyblogger has six ways to get people to say yes

A lovely story of a designer recounting his experiences with notebooks. I’ve recently started using a notebook for more than transitional note-taking, but it remains to be seen whether anything useful will come of it

My Favourite Business Book – crowdsourced opinion

And, as always, I’ve been posting slightly more miscellaneous links to my Tumblr blog, which in theory now has comments enabled through Disqus.

sk

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Links – 31st January 2009

As Des’ree once bemoaned, “Life, oh life, oh life, oh life”. A hectic few weeks are *fingers crossed* finally over. Rather than just watching the evening news and eating toast in that time, I also managed to read and bookmark some interesting things posted on the internet. Here is part 1 of a two-part collection of said stuff.

Insights

I’ve enjoyed the back and forth discussion regarding the nature and usefulness of insights. Richard Huntingdon used Simon Law’s presentation as a basis to provocatively state that insights do not come from the research department but from a combination of within (presumably not from those within the research department though), real life, academia and “weird shit”. This inspired several other posts.

Rory Sutherland sought to distinguish between an idea – creative – and insight – deduction.

Kevin McLean, a Qual researcher, felt that a little humility could have been used in the argument.

Will Humphrey offered a balanced summary, arguing that research findings should promote creativity and lateral thinking, but that planners should be more “ballsy” when pushing for decent research.

In terms of being ballsy and challenging, Dave Trott offers an inspiring story of changing a slender brief to a truly impactful one after going away to research the product

My own thoughts? Bad research, and bad researchers, exist. As do bad planners, creatives, account managers, product directors and so on. A project is more likely to succeed if each stakeholder is capable of implementing the necessary vision. This requires dialogue on each side – utilising specific skills and expertise to challenge, mould, amend and hone a brief. It is a researcher’s duty to provide a bespoke solution that will provide real, accurate, tangible outputs. If they don’t then they have failed. But other people in the chain have just as big an opportunity to succeed or fail.

Marketing and advertising

Rory Sutherland wonder if we can outsource media planning to the public through recommendation mechanisms within social media.

John Willshire followed up on that post with the notion that this removes control on how the message is propagated. He gives a great example of how such a scheme can easily be commoditised.

Ad Week looks at the rising relevance of shopper marketing in times of media fragmentation.

Faris Yakob uses a brilliant (fan-made) Thundercats trailer to illustrate the power and benefits of recombinant marketing

Iain Tait has a minor rant about the trend of using the themes of connection and collaboration within TV advertising

Graeme Wood remarks on ways in which the internet and social media can be used to deepen involvement in a television show

A NY Times article on ways in which the internet is being used to promote new novels

“Trust Me” – a new shot set at an advertising agency has launched in the US (NY Times). Within the show, real life brands and campaigns are placed. Personally, I think this is a great way to involve brands into entertainment in an organic way. However, in the UK product placement is currently illegal and so I wonder whether the show could ever be shown over here. Precedents are mixed e.g. we may get James Bond films with the “kerching” moments uncut but the Coca Cola drinks within American Idol are pixellated.

Rohit Bhargava on how advertisers can use consumers to help promote them

Ad Rants takes a look at Bob Garfield’s overview of the widget economy. I’m now locked out of the original article, so if anyone has access I would appreciate it if a copy could be sent my way 🙂

Claire Beale on Walker’s campaign to crowdsource a new flavour of crisp

Online video

Jim Louderback makes an excellent point in that, online, the third dimension of depth – or engagement – is far more important than reach and frequency

Mark Cuban believes online video is overhyped because the technology isn’t stable enough for mass simultaneous viewing. I would argue that this is what TV is for; online video is not TV and its benefits are different, but complementary.

And to highlight that difference, because the web is much more about discovery and experimentation, we see a huge drop off in viewing between episode 1 and episode 2 of a web series. Newteevee has a great overview of a recent report

Music

A Freakytrigger post shows that the number of new entries in the UK charts has dropped off a cliff in recent years. A negative effect of the long tail?

A very interesting Music Think Tank post on a pull music paradigm shift. There is some dissension in the comments but I found it fascinating

Tomorrow’s update will feature articles on social media, technology and the internet, and business and ideas

sk

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Links – 17th January 2009

Aside from links, this blog probably won’t be updated for a week or so. I’m trying to stick to my quality over quantity aim, and my schedule is pretty full at the moment.

Marketing

Paul Isakson posits that weird and wonderful advertising works because of the prompt that our brain receives, irrespective of what the actual message is

Advertising has been about persuading people to purchase things they don’t need. So, with overconsumption being scaled back, Brian Morrissey wonders how the industry will react

Demanding a read/write city – why interactions such as graffiti should be encouraged (Anti-Advertising Agency)

The best and worst logo redesigns of 2008 (Brand New)

Fred Wilson predicts that display advertising will become so cheap that it will outperform search. I somewhat disagree – prices may fall, and effectiveness may improve but publishers can justify premiums due to the surrounding content and context. Network display is more likely to be filtered out. However, the piece is worth reading

Technology

The Feltron 2008 Annual Report – Nicholas Felton has collated a huge amount of data about his life, and published it.Are the benefits of this self-analysis worth the expended effort? I’m not convinced but the report is fascinating, and his interest has led to the development of daytum

CJR has a fascinating two part interview with Clay Shirky

Russell Davies has some excellent ideas in his new schtick

Graeme Wood’s post on the future of television and TV advertising dovetails nicely with my post on targeted TV ads

Business

Umair Haque has a brilliant guide to 21st century economics – he argues that we have to reinvent the global economy

The mistakes that are made in the hiring of NFL coaches (via Ben)

Music

Do the BBC’s Sound of 2009 and other such polls encourage a narrow and homogenised outlook on upcoming music? (Sweeping the Nation)

Interesting look at the remuneration (or lack of) with perceived promotions e.g. I didn’t know that US radio didn’t pay royalties as it claims it is free marketing

Websites

Stack – a great idea for magazine subscriptions – a pick and mix from leading independent titles

I Wear Your Shirt – another social media get-sort-of-rich quick scheme. Pay (fee rises at $1 per transaction) for a guy to wear your t-shirt and promote it online

For the time-pressed, particular recommendation goes to Clay, Russell, Umair and Graeme

sk

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Learning from textbooks

Are textbooks valuable?

They encourage rote learning, are open to malignant biases, are frequently tedious and the contents are promptly forgotten about before they can be digested.

So why are they so commonly used? Simplicity? Equality? Continuation?

Personally, I find them useful. Up to a point. I wouldn’t attempt to fly an aeroplane, but I might attempt a few choice words of Cantonese with a native speaker on completion of an instruction guide.

Where do marketing textbooks fit on the scale?

marketing by paul baines, chris fill and kelly page

I wonder because I have recently read one. This one (Marketing by Paul Baines, Chris Fill & Kelly Page), to be precise. My apologies to the folk at Research Talk for leaving it so long, but I am holding true to my word by blogging about it. I did say that it may take a while.

I studied Philosophy, Politics & Economics at university (though it turned out to be more like History & Politics) and so my knowledge of marketing is accumulated from various bits I’ve picked up on the job, through courses, magazines and blogs. However, I wished to know more and so picked up the book.

Because of the chasms in my knowledge, I have appreciated another benefit of textbooks. They offer a logical and consistent guideline to work from. Many elements sounded familiar but I had never fully considered the surrounding context and implications. There is now a degree of coherence unifying my thoughts.

Textbooks should only be the first step in learning, but they provide a base to build upon. A base where thoughts and theories can be evolved through experiences, interactions and feedback. After all, textbooks will expound the prevailing wisdom and as the old aphorism goes; “Conventional wisdom is always conventional, but rarely wisdom.” We can learn from our mistakes and progress (even if the experts are just as wrong as chimpanzees).

And as far as textbooks go, this was a very readable and well-paced example. It gave a decent introduction to topics, which while basic contained thorough references for further reading and plenty of case insights. A broad range of topics were covered and it can equally be studied for 5 minutes or 5 hours at a time.

I would suggest two additions to the book. Firstly, more competing or emerging theories where applicable; alternate theories tended to supersede rather than sit alongside. Secondly, an additional chapter on changes to communications due to the ubiquity of mobiles and computers would have been welcome, but I presume this runs the risk of fast obsolescence.

Unsurprisingly, I learned many things by reading the book – some small nuggets; other major theories. A few of my takeouts include:

  • STP – segmentation, targeting and positioning
  • DMAP targets – distinct, measurable, accessible and profitable (I’m a fan of using acronyms for mnemonics)
  • The difference between opinion leaders and formers is that leaders ar in same social circle
  • The five characteristics of service products are intangibility, inseparability, variability, perishability and non-ownership
  • RATER dimensions of service quality – reliability, assurance, tangibles, empathy and reassurance
  • Porter five forces analysis
  • Bettman’s memorisation processes affecting consumer choice include factors affecting recognition and recall, effects of context, form of coding objects in memory, effects of processing load, effects of input and effects of repetition
  • The six types of relationship are partner, advocate, supporter, client, purchaser and prospect

Now the trick is to put them into practice before they’re forgotten

sk

Image credit: http://www.flickr.com/photos/stephenliveshere/

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Perfect Pitch: The Art of Selling Ideas and Winning New Business

The Art of Selling Ideas and Winning New BusinessI’ve recently been re-reading my notes from Jon Steel’s book Perfect Pitch and am reminded of what a great resource it is (incidentally, Seth Godin has some typically insightful tips on getting the most out of business books).

The central argument of the book is an obvious but often overlooked one – using your content to engage with the audience. The book is written in a compelling manner with some fantastic examples. For me, the litmus test of a good business book is whether it provokes me into not only considering or approaching an issue differently, but implementing the tips. This book passes the test with flying colours. I would highly recommend it.

Jon works in fives (as another sidenote, the book I am currently reading would have a theory on that). He sees a pitch constituting five jobs – those of researcher, writer, producer, director and performer – and there being five distinct stages

  1. Grazing, and gathering raw materials. We should combine research, general knowledge and learned knowledge. He uses a Post-it note for every bit of relevant information and then re-organise it into themes.
  2. Looking for meaning. Drawing everything together and looking for connections
  3. Dropping it. Rather than working 24/7, we can let our subconscious work on the problem while we take our conscious mind off it by doing other things
  4. Adapting and distilling. There should have a central theme that could be repeated in 2 minutes. With the full presentation, each part should engage and surprise. It can be broken down into an inciting incident, progressive complications, a crisis, a climax and a resolution
  5. Writing the presentation. Jon believes the script should be written down to the last apostrophe. It gives control – both in terms of content and timing. If you know the content inside out, you can deviate from it if necessary

And adapting Jon’s method, here are five elements to his thesis, with five nuggets under each heading

1. Prepare

  • People work better on one task than several at once
  • Work in a small, tight, committed team
  • Take control. Taking control means keeping work and social life separate, not allowing interruptions, having space for thinking, treating others as you would like to be treated and looking after your brain
  • Start quickly and devote equal time to each aspect
  • Practice makes perfect

2. Recognise the competition

  • The focus should be on beating the competition and not finding the perfect answer
  • Belief has to be turned into action – this is done by persuading that your idea is the best
  • Save energy for the big issues rather than proving the obvious
  • Either say something different or say the same thing better
  • But a USP of some description is needed to stand out and plant doubt in the competition

3. Ensure a narrative

  • The best speeches are done using the simplest language
  • Presentations should tell stories
  • A good presentation has a start, a middle and an end
  • A few well chosen questions can be a powerful tool
  • Use minimal slides with a prose leave-behind

4. Keep the tone engaging

  • The five key elements are truth, beauty, excitement, significance and persuasion
  • Communicate; don’t lecture. The best presentations are question marks; not full stops
  • Communicate one idea at a time
  • Be inclusive as the audience doesn’t listen to what you say but what it means to them
  • Passion breeds success. When you believe, giving ground is tantamount to failure

5. Connect with the audience

  • Own the room
  • Minimise space between the presenter and the audience
  • Give a sense of what it would be like to work with you
  • If one answer is given, don’t give a second if it involves repetition
  • Keep consistency of message and openness of mind and manner

The above is just a small extract of the wisdom encapsulated in 288 pages. I would recommend reading every last page.

sk