Ask the nearest hippie

In his dissent on the Supreme Court’s historic decision on gay marriage Justice Antonin Scalia offered this:

“Who ever thought that intimacy and spirituality (whatever that means) were freedoms? And if intimacy is, one would think that Freedom of Intimacy is abridged rather than expanded by marriage. Ask the nearest hippie.”

Regardless of where one stands on the question–and I stand firmly on the side of love–we should be impressed by Scalia’s ability to reach back some 50 years for a cultural reference, all the while doing virtuosic leaps of logic. Then again, perhaps he meant “hipster.” Also perhaps his marriage of 48 years ain’t going all that well. Maureen, you are in my thoughts and prayers.

But whether he meant hippie or hipster, he may be on to something.

Hippies defied convention.

Hippies valued love over war.

Hippies created lots of music and art that has stood the test of time.

Hippies were inclusive.

Hippies challenged the status quo, often pushing society to embrace new norms.

Many hippies were far more remarkable than those who shunned them.

Maybe we could use a few more hippies?

Ask the nearest hippie indeed.

And we just might want to heed their advice.

I fought the math and the math won

Emotion often trumps logic.

We buy the story before we buy the product.

How our experience with a brand makes us feel can overcome the simple calculus of pro’s and con’s.

Because of this, I advise start-up entrepreneurs and deeply experienced corporate types alike to start with the story, to envision the full experience we want to deliver, to design for how we intend the customer to feel and how we hope they will amplify our message to their tribes.

But then comes the math.

And, alas, there is no escaping a few basic equations.

You can’t escape the fact that customers can’t buy your product or service if they aren’t aware of it. In an increasingly noisy world, where the toll-takers who often control getting your brand in front of the right customers keep raising their prices, you had better crunch these numbers.

If you are in any kind of retail, you can’t escape the math that your sales are a function of the amount of traffic you drive to your store or website, your conversion rate, the average unit retail of the items sold and the # of items purchased. Failing to understand these dynamics–and the throughput at each stage–is often where things start to fall apart.

In any business, if the lifetime value of the customer is less than the cost of acquisition and ongoing costs to serve, your numbers will never add up.

If it’s costing you more and more to acquire new customers, while you are experiencing high-rates of churn among existing, lower cost to acquire customers, the wall is fast approaching.

If you are adding a lot of cost to become omni-channel while merely spreading existing sales over a now higher cost base, you don’t have to be Descartes to know that’s not a long-term winning formula.

There are two ways we fight math. The first is to ignore it in the first place. The second is to stick our head in the sand when it starts to become more and more obvious that our numbers don’t add up.

Math–like feelings, ironically–doesn’t go away because we ignore it. Math doesn’t care that we are all about brand building. Math doesn’t have an opinion on how disruptive our start-up is. Math couldn’t care less that we hope to get acquired and cash out before we have to demonstrate profitability. Math is immutable and dispassionate. Math is a stubborn you-know-what.

Fight the industry incumbents all day long. Fight The Man, the power, the haters and the status quo as much of you want. Math doesn’t care.

But at some point, your numbers will have to add up and multiply through. And you’re going to want math on your side.

Technique is overrated

Technically, Bob Dylan isn’t much of a singer. Neither is Jay-Z or Kanye. If Courtney Barnett turns out to be the next big thing it isn’t going to be because of her range or perfect pitch.

Kurt Cobain was certainly no Andres Segovia. Jimi Hendrix played his guitar upside down, backwards and strung “the wrong way.”

Not one of the Beatles could read sheet music. Neither could (or can) Duke Ellington, Eric Clapton, Jimmy Page, B.B King or Elvis Presley.

Growing up I can remember many times when my father would see some of the most influential Modern and Contemporary art and say “I could do that.” Perhaps he could. But he never did. Too bad, those millions would have come in handy.

Conventions, rules and technical standards obviously have their place. If you’re flying my plane or operating on my brain I’m counting on you to really know your stuff.

But for most of us, the work that matters doesn’t rely on a text-book approach, a finely tuned PowerPoint deck or a Board-certified anything.

The ability to evoke emotion, to connect, to create something meaningful, rarely requires mastery of an established protocol or any one tried and true skill or approach. The illusion that it does is what keeps us stuck.

If you’re waiting for perfection or just the right time, you’ll likely be waiting forever.

If you’re hoping that someone will tell you it’s okay to start, prepare to be disappointed. Chances are you’re going to have to choose yourself.

Do your research, study all you want and by all means, practice, practice, practice. Just know that you are going to have to start before you’re ready.

And if you really think you could do that, well then do it.

We’re waiting.

The tranquilizing drug of gradualism

In his “I have a dream” speech, Martin Luther King, Jr. challenged a slow and steady pathway to civil rights reform.

Those in favor of an incremental approach feared that making waves–that being too confrontational–would backfire. It was seen as too risky a strategy.

MLK argued that patiently working against the wrongs endured by millions created the illusion of progress. He worried that by merely chipping away at injustice, we were lulled into a sense of advancement when very little was actually being accomplished. Gradualism was not only misguided, it was actually more risky. Ultimately, our delusions prevented us from making substantive change; the change that was so desperately needed.

These challenges are hardly unique to the struggle for social justice.

Many organizations say all the right things but do very little. Companies invest piles of money and countless hours in largely meaningless tweaks to their offerings. Simple product line extensions count for “innovation” at most brands. New executive titles are created, and organizations re-shuffled, to give us a sense that we are doing something. Yet that something is typically more of the same under a different guise. All too often we become intoxicated by our words at the expense of our actions.

Continuous improvement amidst fundamental disruption doesn’t cut it.

A go slow approach to innovation when customers and markets are evolving rapidly only guarantees that we will fall further and further behind.

A frenzy of activity (supported by cool PowerPoint decks) may make us feel good, but until it ships it doesn’t count.

And unless we can rise above the clutter and the sea of sameness–if our work doesn’t make waves–we might as well not bother in the first place.

Send in the clones

How’s this for an idea?

Let’s sell products that are pretty much identical to everything else that’s already out there in the market.

And then let’s employ advertising that is virtually indistinguishable from our competition.

Every week we’ll have big sales–and if you’re really crafty, you can use our coupons to save even more!

Sign-up to be on our email list and we’ll give you 10% off your next purchase. And then, just about every day, we’ll send you an email highlighting some of our me-too products while also reminding you how much you can save.

Be a good customer and we’ll throw in free shipping. Oh, you hardly ever buy from us? No worries, you get free shipping too!

We’re all omni-channel and what not, so of course we’ll have e-commerce. And our site will look like every other site. We want you to feel comfortable.

Oh, you didn’t buy just now when you were on our website? That’s cool, we’ll just keep serving up ads on Facebook and everywhere else you go on the internet. Hope you don’t mind the little interruption.

And, after we do all this and we don’t get the sales we want, we’ll just launch a “loyalty” program that–wait for it–rewards you with gift cards so you save even more!

As silly as this sounds, it’s the play book for many retailers. They continue to swim in a sea of sameness. Most often, their default mode is to compete on price because, faced with a paucity of actual difference, it’s the only thing that seems to drive sales.

Unfortunately, the fact is most categories aren’t growing faster than the rate of inflation. The fact is most consumers have more choices than they can possibly sort through and make sense of. The fact is share of attention is the new battleground. The fact is almost all price wars end badly. The fact is any real growth needs to come from stealing share.

Imitation may be the sincerest form of flattery. And it may seem safe.

Yet the fact is it is just the opposite.

seth

Who’s it for? How are they persuaded?

I sometimes get asked why marketing is so complicated these days?

At one level, I agree with question’s premise. The world is noisier all the time and the distracted consumer is the norm. In virtually every category competition is intense and the number of ways to reach consumers is seemingly infinite. Acquisition costs are rising. ROI is often hard to measure. And on and on.

Then I reflect on the major mistakes I see most brands actually make.

In my experience, struggling marketers get lost in the data, the budgets, the media channel choices. They get overwhelmed by stuff, instead of focusing on the essence. Often, instead of diving into changing the logo or tagline, before blindly chasing Facebook ‘likes’ or pushing ‘send’ on a batch, blast and hope email campaign, their time would be far better spent nailing the answers to these two fundamental questions:

Who’s it for?

Whether you have a product or service, whether you run a corporation or a non-profit, you need a deep and nuanced understanding of your target audiences. You have to accept that it can’t be everyone, but is, instead, multiple clusters of someones, who will need to be treated differently. And if your segment descriptions sound something like “affluent baby boomers” you need to dig deeper. Demographic segmentation has the benefit of being straight-forward, but the shortcoming of being almost entirely useless.

Answering the “who’s it for?” question requires you to delve into customers’ desires, wants, attitudes, behaviors, how they wish to be seen by their friends or peers–and anything else that is helpful in precisely understanding why customers might choose you over all the other competition. It needs to paint a clear picture of their specific needs that you can address in a remarkable way.

How are they persuaded?

One of the key jobs of marketing (the good kind) is to persuade the people we care about to believe something relevant about our brand and take action on that belief. This requires us to get specific on two dimensions of how that mechanism of persuasion will work.

First, for each customer type we focus upon we need to understand how we might shift a set of beliefs they have about our organization and our brand proposition. It’s one thing to understand what a set of consumers might believe about brand and what we’d like to them to ultimately come to think and feel. It’s another to understand what story we need to tell to affect that change.

For some, it will be largely fact-based, for others a heart-felt story. Some need to have their fear of switching taken head on. Others need a discount to give us a try. In all cases, there will be some form of objection, some set of thoughts and/or feelings that poses a story-telling challenge. Our job is to understand the specific barriers to persuasion and customize ways to address them. And when in doubt, lead with emotion and follow with logic.

The second aspect of how persuasion works concerns the vehicles of persuasion. Here too we need to understand the nuances in detail and be committed to treating different customers differently. At one level. this is about media channel choice and the type of campaigns that get run. Yet,there are two core realities of persuasion. It rarely happens quickly and different people are influenced by different things depending on the type of purchase.

Inpatient marketers make the mistake of thinking one or two marketing interactions gets the job done. Well if you have a me-too product and are just pitching the lowest price, it just might. That’s not a winning long-term strategy. Persuasion–the kind that is powerful and enduring, builds over time, and is likely supported by multiple sources.

Lazy marketers don’t take the time or care to delve more deeply into the nuances of persuasion. They don’t invest in really understanding current and potential customers at a truly useful level. They don’t segment customers precisely enough. They aren’t willing to move beyond easy to execute one-size-fits-all campaigns to more customized marketing programs. They overuse certain vehicles because they are cheap, not realizing they are often highly ineffective.

At some level, the reality of the world we live in makes just about any marketing complex. But it becomes unmanageably complex if we don’t revert to first principles and drive all subsequent action from that principled understanding.

If you can’t answer the “who is it for and how are they persuaded?” questions, there is a good chance you are stuck in a lot of activity without much impact.

Creating meaning at scale

In case you haven’t noticed, there is a whole lot of bifurcation going on. And in many markets, the middle is all but collapsing.

bridges_down_01

At one end are the Walmart’s, the Home Depot’s, the Amazon’s–the low price, vast assortment guys. Their pitch is easy to understand. We have just about everything you could possibly want, virtually anytime you want it, at the low, low price. Operationally this is incredibly difficult to scale. But from the customer’s perspective, it couldn’t be more simple to grasp. Dominance and value (defined by price) creates meaning.

At the other end of the spectrum are the brands built around market niches, product differentiation and the somewhat intangible “brand personality.” What defines meaningfulness here is built on deep customer insight, emotional connection and, more and more, the ability to treat different customers differently.

Historically, luxury brands thrived by merchandising exclusive products in spectacular settings delivered face-to-face by well-trained sales associates. To the extent companies could replicate this model as they added stores, they could continue to create meaning and deliver it at scale. Yet, as all things digital become increasingly important, the notion of what constitutes a meaningful one-to-one “luxury” relationship is being challenged.

The best specialty stores have succeeded by curating merchandise for a particular “lifestyle” and presenting it in a distinctive environment that reinforced a unique brand image. These companies created a business model that was simple to replicate and led to the ubiquity of many of these brands in affluent malls and upscale shopping areas of most major cities. Now, with product choice and availability exploding and new micro-niche brands emerging online, the concept of “specialty” is being redefined.

The hyper-growth, venture-backed “pure-play” brands that have launched over the past few years–think Gilt, Bonobos, Warby Parker–found it comparatively easy to scale at first. They exploited many of the advantages of a direct-to-consumer model and employed low-cost acquisition techniques to build an initial base of customers–what I like to call the obsessive core.

But it turns out that creating meaning at the scale that will lead to profitability isn’t so easy (or economically viable). Too many newer customers of these high-flying brands have started to equate meaning with discounts. Others, it turns out rather predictably, need the meaning that comes from a physical presence to derive theirs. Many see this hybrid-model as an exciting new area of growth. Others see it as clear evidence that most e-commerce only brands are finding it very difficult to deliver meaning at scale.

In an anything, anytime, anywhere, anyway world, it’s getting harder and harder to break through the clutter, to win the battle for share of attention, to create the all essential meaning that matters for customers.

If you seem to be stuck in a sea of sameness, selling average products to average people, relentlessly promoting just to stay even, it’s time to get off the bridge. The collapse is near.

If your customer is choosing you mostly on price, you had better be the low-cost provider. Otherwise you will lose the inevitable race to the bottom.

If you believe you have the ability to be meaningful to a well-defined set of customers who choose you over the competition for specific, sustainable reasons, good on you.

Just remember, as Bernadette reminds us, it’s not so easy to create meaning at scale, particularly if you need that scale to stay in business.