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Reinventing marketing

October 2009 - Posts

The Attention Economy?

 I’ve just been revisiting a debate which flared up a couple of years ago and which seems to be returning: are we moving towards an attention economy or, perhaps an intention economy?



Thinking about it, I don’t think we are moving towards either because they are both sub-sets of something much bigger. When push comes to shove, economies are organised around human beings’ physiological, psychological and social needs and wants. How we address these needs and wants changes over time and this is driven by decisions: we achieve our goals by making better decisions, and implementing these decisions better.

 

Call MAIDB for short: Making and Implementing Decisions Better.


The more I look at this, the bigger it gets. It's the defintion of consumer value

Alan Mitchell     www.ctrl-shift.co.uk

Posted Oct 30 2009, 08:38 AM by Alan Mitchell with no comments

Have you got a VPI strategy?

 From what I can see, CRM can never deliver its hoped-for benefits because of a series of intrinsic, structural flaws in the ways it gathers and uses personal data. In the new digital environment, I suspect marketers are going to have to recalibrate and redirect their customer data strategies - progressively reducing their reliance on data collected about customers behind their backs, and increasing their reliance on information elicited from them ('Volunteered Personal Information' or VPI for short).

 

Of course, this begs the question: "why should I bother?" The equally obvious answer is: "because there's something in it for me". In other words, the data relationship with customers needs to be redesigned to deliver a) a win-win value exchange and b) trust.

 

I've written more about this for MyCustomer.Com here. For more about research which values the emerging market for VPI and its likely evolution go here.

 

Alan Mitchell    www.ctrl-shift.co.uk

Marketing's missing metric 2

Marketing’s situation with metrics has an analogy with the metrics turmoil currently embroiling physics and astronomy. Back in 1998, cosmologists realised that 75% of the universe is made up of something their measuring instruments had never measured before: dark energy.



Writing about dark energy, Scientific American noted that it almost certainly shapes the evolution of the universe – stars, galaxies, galaxy clusters. “Astronomers have been staring at its handiwork for decades without realizing it.”



I think something similar is happening with customer metrics. It’s the customer’s metrics that shape the evolution of markets, big and small. But because marketing metrics only measure the marketer’s side of things – how much marketing campaigns and activities cost and what ‘changes’ they induce to the marketer’s metrics (brand awareness, sales uplifts etc) – they have failed to measure something (to ape Scientific American’s words) that “holds the fate of the cosmos/market in its grip, but to which we are almost totally blind”.



The usual objection to this is “Ah! We do have customer metrics – we measure customer satisfaction.” That’s all well and good, but it’s not good enough on two counts.



First, customers measure what is important to them, not what is important to marketers. Marketers want to know how valuable or satisfying their product is; customers want to know the relative costs and benefits of alternative ways of achieving desired outcomes or goals in their lives. Marketers need to know how their products or services fit in to this broader customer perspective.



Second, customer metrics cannot be reduced to a single money number. In addition to money, I think there are at least five other dimensions of value people’s behaviours are shaped by:


o    time costs and benefits (Accenture has recently recognised the importance of this theme in this article);
o    the physical work/energy required to achieve the desired outcome;
o    the information, knowledge and skills that are needed as a pre-requisite to achieving this outcome or which need to be acquired or shared;
o    the emotions generated along the way (positive or negative); and
o    the amount of attention the customer has to, versus wants to, devote to it.


Quite simply, marketing ‘works’ when it improves these customer metrics. This applies to both the product itself and its marketing, and it’s the marketer’s job to work out which metrics the customer is trying to improve and how to do this. Of course, this is impossible if we don’t know what these metrics are.



In its article, Scientific American said dark energy’s discovery will almost certainly require the development of new theories of physics. It will also require the development of new measuring instruments/approaches. I think the same is true of customer metrics and marketing.



Our current approach to metrics is not the way forward it’s so widely touted to be: e.g. the way to ‘demonstrating accountability’ and therefore ‘boardroom credibility’. It’s what is actually holding us back.

 

Alan Mitchell     www.ctrl-shift.co.uk

Posted Oct 19 2009, 08:40 AM by Alan Mitchell with 2 comment(s)

The metrics muddle

Commenting on my last post on ‘stimulus-response’ Andrew Weir says: “In my humble view marketing should focus on delivering great brand experiences (experience of a product, service, brand) as well as brand promises (stimulus-response?). It is vital that the promise matches the experience (alignment).”

Thanks for your comment, Andrew. I agree with you on the delivering great experiences bit, but I think you might be missing my point about stimulus-response.



In my view, marketing is currently suffering from a bad case of schizophrenia.



On the one hand, marketers say their job is identify and meet peoples’ needs – or, as Andrew put, ‘deliver great brand experiences’. This is all about aligning what the company does to what the customer wants.



On the other hand, marketers also believe their job is persuasion, to change consumer attitudes and behaviours in their brand’s favour. Here, the marketer is trying to align what consumers do to what the company wants.



Sometimes they might amount to the same thing. Sometimes they are complete opposites – and that’s the point: this ‘sometimes’ is a source of endless confusion.


I now believe it lies behind marketing’s current metrics impasse. When marketers measure the effects of their marketing activities, what are they measuring? How good they were at aligning what they did to their customers’ priorities? Or how good they were at changing customer attitudes and behaviours?



As long as we jumble these opposites up in the same metrics, our metrics will never tell us much. We are measuring chalk and cheese at the same time, without being able to distinguish the two.



In my view this isn’t a trivial problem. It’s a roadblock stopping the progress of marketing: it means we have to rethink marketing metrics from scratch: do we actually know what we are measuring?



I’ve written more about this in Marketing magazine this week.

 

Alan Mitchell     www.ctrl-shift.co.uk

Posted Oct 13 2009, 08:39 AM by Alan Mitchell with 2 comment(s)

How wrong can we get?

OK. This is a real biggie. It’s about an error – a misperception – that pervades everything marketers do: their beliefs about how marketing works (and therefore what they are trying to do when they do marketing), how they seek to do it, and how they measure success.

 

 

What’s more, like the evidence of the sun orbiting the earth – evidence that’s apparently confirmed by our actual experience every day of our lives – these mistaken beliefs seem to be supported by mountains of ‘hard evidence’.

 

 

So what is this error? It’s the belief that marketing is a ‘stimulus-response’ activity – an activity where marketers send out various types of stimuli to consumers, whose attitudes and behaviours are then changed, to elicit certain desired responses.

 

 

I don’t believe this is how marketing works at all, and I believe there’s a growing body of scientific evidence to back me. If I’m right, it means:

  • Marketers are investing/wasting huge amounts of money, time and energy looking for a holy grail that doesn’t exist
  • When their marketing does work and when it doesn’t, they are ascribing the wrong reasons for success and failure, thereby guaranteeing that they can never really learn from their experience
  • Their metrics aren’t measuring what they believe they are measuring, thereby compounding these first two problems.

 

 

Unfortunately, stimulus-response assumptions are really deeply ingrained into the modern marketing mindset, so to tackle them it requires quite a lot of unpicking - part of my current research project … so apologies for the length of what follows!

 

 

How we were led astray

 

Stimulus-response has its origins in 19th and 20th century psychology starting with Konrad Lorenz who noticed that greylag geese fixated on the first thing they saw moving. Usually, in nature, it’s the mother. But in Lorenz’s case it was his Wellington boots.

 

 

Ivan Pavlov built on this observation in his experiments with dogs. He showed he could get them to salivate at a signal which they had come to associate with food – a ‘conditioned’ or learned response.

 

 

John B Watson then took these learnings to develop the school of behaviourist psychology whose founding belief was that:

 

"...the goal of psychological study is the ascertaining of such data and laws that, given the stimulus, psychology can predict what the responses will be; or, on the other hand, given the response, it can specify the nature of the effective stimulus."

 

“Psychology,” he wrote, “is a purely objective experimental branch of natural science. Its theoretical goal is the prediction and control of behaviour …The behaviorist, in his efforts to get a unitary scheme of animal response, recognizes no dividing line between man and brute. The behavior of man, with all of its refinement and complexity, forms only a part of the behaviorist's total scheme of investigation."

 

 

The great behaviourist psychologist B. F Skinner followed Watson with a research effort dedicated to the study of learning as ‘conditioning’ (association of stimulus with response) for the purposes of control.

 

 

Skinner argued that the human mind was a ‘black box’. We don’t need to look inside this black box to understand what’s going on. Indeed we shouldn’t, because inside there are just subjective thoughts and feelings. To be ‘scientific’ we need to study only objective facts – the inputs that go into the black box (stimuli) and the outputs that come out (responses).

 

 

Skinner believed we could understand all animal behaviour, including human behaviour, in terms of correlations between stimuli and responses; and we could use this understanding (by using rewarding stimuli to reinforce some behaviours and punishing stimuli to stop others) to ‘condition’ animals and people to behave as we want them to behave. Thus, for example, behaviourist child care manuals taught mothers not to attend to babies that cried, because this ‘rewarded’ crying behaviour. Babies rewarded in this way would ‘learn’ to cry more. Instead, mothers had to ‘teach’ their babies to be ‘good’ by ignoring (i.e. punishing) crying behaviour, and by ‘rewarding’ non-crying behaviour.

 

 

What we need, Skinner wrote in his behaviourist manifesto Beyond Freedom and Dignity (1971) is “a behavioural technology comparable in power and precision to physical and biological technologies.”

 

 

The task of psychology, he continued, was to:

 

“dispossess man of his autonomy” by transferring causation to the environment. “Effects once assigned to states of mind, feelings and traits are beginning to be traced to accessible conditions, and a technology of behaviour may become available. A scientific analysis,” he concluded, “shifts both the responsibility and the achievement to the environment.”

 

 

This was the intellectual milieu in which modern theories of marketing were developed: with branding as a method of imprinting the consumer’s mind so that he or she follows the brand as Lorenz’s goslings followed his Wellingtons; with ‘the marketing mix’ as the toolbox for effective conditioning, deploying rewards and disincentives to create ‘brand associations’ and learned behaviours so that consumers mentally salivated at the thought of their brand as Pavlov’s dogs salivated at the sound of a bell.

 

 

Thus, writing soon after the second world war in his book The Process of Persuasion Clyde Miller, a professor of education at Columbia University, wrote:

 

“It takes time, yes, but think what it can mean to your firm in profits if you can condition ten million children to grow up as adults trained to buy your products as soldiers are trained to advance when they hear the trigger words ‘forward march’.”

 

 

OK. We’re not so naïve now – or are we? If you pick up marketing textbooks such as Philip Kotler’s Principles of Marketing – upon which recent generations of marketers have been weaned – you will find the same behaviourist psychology swallowed hook, line and sinker.

 

 

On page 143 of my edition of Kotler for example, he has an illustration showing “marketing and other stimuli” entering the consumer’s head (labelled “the buyer’s black box”) and coming out the other side as the “buyer’s response”. The accompanying text explains:

 

 “The central question for marketers is: how do consumers respond to various marketing efforts the company might use? The starting point is the stimulus-response model shown in Figure 5.1. This figure shows that marketing and other stimuli enter the consumer’s ‘black box’ and produce certain responses. Marketers must figure out what is in the buyer’s black box.”

 

 

Of course, since Skinner, there have been countless sophistications and embellishments around this basic theme. After a while, for example, cognitive psychologists began to study the thought or perceptual processes that intervene between the stimulus and the response. More recently, neuroscientists have used new techniques such as fMRI scanning to study how the brain processes incoming stimuli.

 

 

Along the way marketing has also adopted a number of its own sophistications and embellishments leading to a number of warring schools of thought. Their main ‘fall-out’ factor: which stimuli works best to get the desired response.

 

 

In the olden days, marketers influenced by economists’ pink-elephant theories of human rationality prioritised the ‘rational’ appeals of unique selling points. They were challenged by the school of emotional appeals: the belief that consumers are better influenced by brands’ ‘emotional associations’.

 

 

There are also divisions over whether conscious or unconscious stimuli work better – is ‘effective’ advertising all about conscious attention and memory? Or is it best delivered under the radar of consciousness by carefully placed ‘somatic markers’?

 

 

More recently, a new fault-line has opened up with a division between those who think that personally targeted and ‘relevant’ one-to-one stimuli work best, versus the ‘social’, ‘viral’ or ‘herd’ stimuli of the crowd.

 

 

What they all agree on, however, is the underlying assumption of stimulus-response.

 

 

In fact, I challenge you take any modern theory of marketing you like, peel away the outward layers of apparent sophistication and look at its inner workings and assumptions. Please, please tell me if you can find a theory of marketing or advertising that doesn’t take behaviourist stimulus-response assumptions as its starting point: ‘we issue this stimulus (a brand message, an emotional association, a unique selling point, a promotional incentive) in order to get that response’.

 

 

Nonsense on stilts

 

 

Trouble is, it’s all nonsense. The phenomena we are looking at are real enough. Of course, human beings are bombarded with stimuli: thousands – millions – of them every day. And of course, there are occasions where we demonstrably respond to external stimuli, as when we sit on a drawing pin for example. What’s wrong with behaviourist theories of marketing is the way they extend something that's true for one or two percent of behavioural phenomena to become a catch-all explanation of everything. At the heart of this is their cause-effect assumptions – that it is outside stimuli created by marketers that ‘cause’ internal emotions and thoughts which in turn ‘cause’ responses.

 

 

In fact, recent discoveries in psychology seem to indicate the exact opposite. Yes, human beings are constantly scanning their environment for opportunities and threats, but they process this in-coming information largely according to their own internally-generated agendas.

 

 

So, incoming stimuli do not necessarily ‘cause’ us to think this or feel that. A huge part of the brain’s processing function (probably by a factor of over a thousand to one) is devoted to filtering out incoming stimuli and ‘deciding’ which ones to ignore (the vast majority of them).

 

 

Most of this is done unconsciously. You can get some idea of the scale of this stimulus-filtering process by stopping right now …and becoming aware of your surroundings.

 

 

Think of the sounds you can hear, the sensations of your skin against your seat, your clothes, your shoes; all the things you can see in your peripheral vision, the feeling inside your mouth, what you can taste, the droopiness of your eyes, the hair at the back of your neck, and so on. These are all stimuli which our brain is monitoring for us, and deciding not to respond to.

 

 

So, in reality, the only stimuli which we respond to are the ones which we decide matter (most of these decisions taking place unconsciously). We pay attention to – or ignore – incoming stimuli depending on what we already think and feel and what we are currently trying to achieve.

 

 

It is not external stimuli, then, that ‘cause’ us to behave this way or that, but internally-generated goals and motivations. We ‘choose’ which stimuli to respond to, and we also ‘choose’ how to respond. It’s not the cold outside that ‘causes’ me to put on a jersey for example, it’s my desire to stay warm. You may decide that you want me to put on a jersey, and to achieve that, you may decide to reduce the temperature of my surroundings. It might work. But you might be disappointed. I might decide to get warm by building a fire, doing some physical jerks, moving to a different environment, or hugging you. Or a combination of all five. And if your ‘stimulus’ worked at all, it only worked because it connected with my pre-existing desire for warmth and comfort.

 

 

The real ‘cause’ of human behaviour, then, is these internally-generated choices which have very little to do with the stimuli that constantly bombard us. And most of these internally-generated goals are ‘hard-wired’ into us by millions of years of evolution: instincts of survival and safety for example. (Hard-wiring is a terrible term, because actually, the brain is not hard-wired at all. It’s much cleverer than that. But let’s stick with that terminology for the moment).

 

 

In fact, ironically, the very experiments the behaviourists used to prove the power of conditioning actually demonstrated precisely the opposite: the pervasive nature of this ‘hard-wiring’.

 

 

 ‘Imprinting’ doesn’t work on geese younger than 13 hours and older than 16 hours for example: geese are ‘programmed’ to imprint during that window and not to imprint at other times. No matter how hard you try, you will not be able to condition an adult goose to fall in love with your Wellies. It’s already made up its mind.

 

 

Likewise, dogs can never be conditioned to salivate at flowers, because they want food and they’re not interested in flowers, except for territory marking purposes. This ‘wanting’ isn’t caused by an external stimulus, it’s internally-generated. Ditto: dogs cannot be conditioned to not salivate at the sight of food no matter how much you punish them, because the salivating process is hardwired and has nothing to do with conditioning.

 

 

In fact, so scant was the laboratory evidence of the power of conditioning that Skinner’s own students at Harvard University formulated the ‘Harvard Law of Animal Behaviour’. It goes like this:

 

“Under controlled experimental conditions of temperature, time, lighting, feeding and training, the organism will behave as it damn well pleases.”

(Quoted on page 177 of Steven Pinker’s book The Blank Slate.)

 

 

 

 

Facts and evidence

 

Every sinew and instinct of every marketer is drawn naturally towards stimulus-response theories of marketing. It’s what marketers appear to do every day. “Look. We issued that stimulus, and look there! You can actually see the responses!” (If you’re lucky you can count them too).

 

 

These experiences are real. Just as the experience of the sun rising in the east and setting in the west is real. We can see the sun move.Yet, it is we who are moving, not the sun.

 

 

Something similar is happening in marketing. Marketing ‘works’ when it aligns to what people want. That’s about all we need to know. When it aligns, people pick it up and use it. In such cases, they appear to be ‘responding’ to our ‘stimuli’.  When it doesn’t align, they ignore it. When this happens, we assume that there must have been something wrong with the stimulus. There wasn’t. There was something wrong with the alignment.

 

 

This distinction is important because the belief that marketers’ ‘stimuli’ can ‘change’ consumer attitudes and behaviours sets them on to a wild goose chase – the search for ever more powerful stimuli rather than ever better alignment.

 

 

When pushes comes to shove, the belief that the right ‘marketing mix’ can change consumer attitudes and behaviours in ways that marketers want them to change is a  dangerous conceit. It has as much intellectual foundation as the alchemists’ conceit that they could turn lead into gold. Both conceits spawned enormously wasteful wild goose chases.

 

 

Yes, OK. This bald, bold statement does need a little bit of tempering. There are some short-term, superficial layers of effective influence – where marketers take advantage of consumers’ ‘predictable irrationalities’ for example. It's very important we measure these effects. But their ultimate effect is only to obscure the underlying reality, just as friction helps obscure the underlying reality of matter always being in motion.

 

 

 

What does this mean for us?

 

 

Behaviourist inspired stimulus-response theories have five devastating effects on marketing.

 

 

1. They place marketing on about the same scientific level as alchemy. The alchemists built up an impressive body of ‘knowledge’ in the form of known facts, experimental results and correlations. But they could never understand why these results occurred, so they ended up repeating the same errors again and again.

 

Stimulus-response has the same effect on marketing. It means we can never learn from our mistakes, because we cannot distinguish between what’s mistaken and what’s not mistaken. (Ever heard the maxim ‘50% of my advertising works but I don’t know which’?).

 

 

2. As with the alchemists and their quest for the magic ingredient of transmutation – the philosopher’s stone – stimulus-response places marketers on the wild-goose-chase quest for the perfect, all-powerful stimulus. It doesn’t exist. We will never find it.

 

 

3. In the meantime, the same stimulus-response theories tell marketers not to look where they should be looking: how to generate and deliver greater alignment, not only with their products but with their marketing, with customers?

 

 

4. Stimulus-response assumptions have made a complete dog’s dinner of marketing metrics (saliva included). Stimulus-response theories induce us to: 

a)      focus our attention on measuring the wrong things

b)      misinterpret the measures we do use (because, very often, these measures aren’t measuring what we think they are measuring)

My next article for Marketing magazine (published October 14) goes into detail on this.

 

 

5. The practice of stimulus-response marketing tactics generate adversarial relationships and destroy trust because it treats human beings as a ‘target’ for stimuli – like a punch bag. The stimulus-response marketer inevitably ends up on a quest for control: the philosophy and practice of ‘using’ other people, including their weaknesses, for his own ends. Guess what? People don’t like being used – something Skinners’ poor old tortured rats could never tell him.

 

 

Put these things together: a theory which misdirects attention and creates confusion rather than clarity, metrics that compound and reinforce this confusion, and practices which undermine trust and you have a recipe for … well, you tell me.

 

 

As I said, this is a biggie. We have to get over it. If we don’t, we will never be able to reinvent marketing.

 

 

Alan Mitchell                            www.ctrl-shift.co.uk


The Consumer Decision-Making Revolution

 I tried to do a summary of what the long-term effects of new discoveries in psychology might be on marketing here.

 

If you're busy, I've also done a quick 8-point summary.

 

The bottom line is very simple. There are lots of people out there touting the belief that, at last, companies are on the verge of discovering the secrets of effective influence; the ability to use psychological insights to get customers to do what we want them to do.

 

I suspect the opposite will turn out to be true: the more we understand about human decision-making, the greater the pressure will be on brands and organisations to help their customers make better decisions

 

The implications of this are quite profound. One of them is that brands will have to evolve into 'information services'. I did a talk about this recently to the Association of Publishing Agencies. You can see more on this here.

 

Alan Mitchell    www.ctrl-shift.co.uk

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