Friday, Leora Kornfeld gave us a guest post.  She complained about the use of the word "strategic" by consultants who often aren’t very.

Leora has an anthropological ear for language and especially for its abuses. I believe she’s been playing "buzz word bingo" in her head for many years, well before the invention of the game in the 1990s. 

I was rooting her on, until it occurred to me that her criticism applied to me.  The first time I met Virginia Postrel, I used the term to describe what I did.  Virginia asked me to explain.  This surprised me.  For my purposes, the term was self sufficient.  Her question implied, politely, that there had to be more to say, and if there was not, I had used it too liberally.  Oh.

In his comment on Leora’s post, Steve Postrel, reveals what Virginia might have done to complete my embarrassment. 

Just for laughs, when someone claims to be a strategist, you could ask them which tradition of strategy they represent. Economic? Then ask them to define a Nash equilibrium and see how they feel about Cournot vs. Bertrand models. Military? Then ask them about Clausewitz or John Boyd or Edward Luttwak. You can do the same thing with sports, chess, marketing, or any other domain they claim that has a tradition of strategic analysis.

Thank you, Virginia, for your constraint.

The question is what did I think I was doing?  (Apart from being a bumptious prat, that is. I am always a bumptious prat, so the designation is not acutely useful here.)  What I think I was doing was telling Virginia that I was not merely working as a marketer or a marketing researcher.  I was trying to say that I was not just collecting data but actually thinking about what I did.

And then the question is, why should this rhetorical misbehavior be necessary?  I am quite sure that other professionals do not suffer the temptation.  Lawyers, doctors, civil servants…they don’t use the term.  ("What kind of medicine do I practice?  Oh, I do strategic medicine, you see.  I don’t just identify symptoms.  I think about them.") 

No, the buzz word abuse that Leora spotted is a symptom.  The field of marketing and the fact that it is not in fact a profession at all.  I guess we could say that the MBA is a professional credential, but some of us agree that when it comes to cultural aspects of markets and consumers, an MBA is not much good at all.  Having an MBA says only that the player could manage to complete a program and not much more.

Without sorting, we are reduced to making boosterish, self aggrandizing claims, dressing ourselves up in the dignity of someone else’s language. 

It’s not clear how we solve this problem.  I agree with Steve that certification (or credentialism, as he calls it) is probably impractical.  Reputation helps of course.  It would help even more if those of us in branding circles had the depths of knowledge that distinguish the McKinsey consultant. 

I wonder when clients will begin to ask whether a would-be supplier is an active member of the blogging community (as a poster or a commentator).  This is I think a pretty good way of separating sheep from goats.  After all, it’s very difficult to sustain a presence in the blogosphere if you don’t have intellectual and creative resources at your disposal.  (Or it pretty easy to tell when you are just faking it.)

Out of naturally emergent communities, I think we have the foundations of a college, groups of people who have enough in common to sustain debate and enough divergence to engender it.  And this eventually becomes a kind of certification.  I had the good fortune to have a conversation with Sebastian Wendland in Berlin, and I believe we figured that a college on line could be largely self organizing and that it would, as a by-product, serve several sorting functions.

References

Kornfeld, Leora.  2007.  Buzz word watch.  This Blog Sits at the Intersection of Anthropology and Economics.  April 6, 2007.  here.

Postrel, Steve.  2007.  Comment on Buzz word watch.  This Blog Sits at the Intersection of Anthropology and Economics.  April 6, 2007. here.

[We need some way to create permalinks for comments.  Or am I missing something?]

Post script:

Those who are following my travels, I have finished my week in Brussels, (which proved to be unexpectedly beautiful).  And before leaving Brussels, I had the distinct pleasure of watch Cambridge beat Oxford and the Hanshin Tigers beat the Tokyo Giants.  (This could be the year for the Tigers!)  Paris is stunning, and I was left to wonder why you can’t remember how stunning it is from trip to trip.  Some things, sublime things, can’t be kept in memory.  (It’s a technical information processing issue, I think.)  On the other hand, it is also looking a little over-the-top, everything cleaned and regilded.  As if Paris really gives at all what tourists think.  (The moment France cares what a tourist thinks that will be the end of civilisation as they know it here.)  But the big news is that I have befriended a house plant that came in on my room service tray last night, and while I understand that this is the sort of thing prisoners do (well, without the crystal pot and the French carpentry, of course), it is nice to have a friend  on the road.  She is now taking the sun on the table, as pictured.  (If anyone knows how often I should water her, and what language she speaks, I would be grateful for these details.)  I am calling her Melanie, that is, until she tells me her real name.  (I know this is where Tom gets out the DSM handbook, but really, I’m fine.) 

I am distinctly the worse for ethnographic wear.  Leora Kornfeld to the rescue.  She send me an email today.  I think it captures an interesting and important abuse now evident in marketing circles.  I present it without editing and with abject thanks.

what is up w/ everyone calling themselves a ‘strategist’ these days?

Marketing strategist, communications strategist, internet strategist, etc

Does this somehow distinguish them from colleagues in the same field who pursue things non-strategically?

I was in a mtg w/ some web development guys a # of months back…and at the initial meeting they pitched their expertise as follows:

“we like to think we’re high level thinkers”.

To which I responded with a wry smile “so you like to think…hmmm”… the message being that just because you like to think of yourself as possessing these qualities does not necessarily endow you with these qualities.

And at the same time I don’t want to put forward a plenitude-quashing point of view, it’s just that things are swinging to a ridiculous end of the spectrum and people make wild claims about almost everything. One of these days I may actually be in a meeting with people whose web site doesn’t promote their work as “award-winning”.

Hopefully this isn’t too cynical, but…

LK

Thank you, Leora.

Post script:

The photo was taken this morning in the countryside outside Brussels.  Sunday, I am off to Paris for the week.   I have a couple of posts brewing on ethnographic practice.  I mean, I just feel it should be more strategic, right?
 

The early results are in.  On a "massive" investment, the RED campaign recently returned a mere $11 million. 

You could argue that these are early days, that it’s too soon to judge the Red campaign.  On the other hand, you could say that this much firepower, publicity and currency should have produced a bigger effect. 

It would be a lovely case study.  There are lots of bits and pieces here for scrutinizing.  Does the fault lay with any or all of the following factors:

1. Bono fatigue

2. the association with big brands

3. the association these big brands (the Gap, American Express, Motorola, iPod)

4. using a color as the thread

5. using this particular color

6. something about the marketing execution

I think none of these is the culprit.  I think the RED campaign was killed by the skeptics, the ones who insisted that RED was too little, a distraction from real problems and real solutions, and/or a way of disguising or obscuring personal and corporate responsibility.  These arguments established a shadow of doubt and this did the rest. 

After the skeptics, the RED project carried a secret message, one that suggested that the bearer of a Motorola was perhaps a poor, clueness dope who didn’t get a) how serious are the problems of this world, b) how little corporations care, c) now little this particular campaign could hope to do.  Now the consumer has to worry that the RED campaign positions him or her as someone who "just doesn’t get it."  And let’s face it, in certain circles, on these issues particularly, no one wants to look like someone who just doesn’t get it.  In a flash, all one’s credibility as a social actor disappears. 

Now, when someone wears a Gap t-shirt in hostile circumstances (a particularly hip coffee house, say), there is always the outside chance that he is doing so ironically, that it was a gift from a girlfriend, or that he got it as a give-away.  When the product is a simple t-shirt, the consumer is not obliged to "own" the brand.  And even if he IS obliged to own the brand ("but we have pictures of you buying it!)", it’s finally just a t-shirt , no real harm, no real foul. 

But if the consumer is seen packing an American Express credit card, after the skeptics have spoken, he really has to own the card, and its new shadow, the imputation that the bearer really has no idea of the larger, most pressing issues of the day.  Not so good. 

Now, I am betting that most of the skeptics lodged their skepticism reflexively.  On the grounds that you just can’t let the corporations get away with this act of white wash, green wash, red wash.  I mean you have to say something, if only because you don’t get a chance to state the position often enough.  We know the drill here.

But if the effect is the killing of the RED initiative and if funding is denied AIDS prevention in Africa, yikes, the skeptics have a lot to answer for.  There is suffering in the world that can be put at their doorstep. 

The larger marketing issue is also clear.  People build personal identities out of the meanings accessed from the branded world.  In this case, the intended meanings of the RED brand were subverted so that now RED adoption must necessarily  diminish the consumer’s claim to intelligence, sensitivity, worldliness.  People will pay any number prices to aid in the amelioration of social problems.  Participating in the ritual destruction of the social self is probably not one of them.  And we would be naive to expect otherwise. 

The take-away for RED, take it down and start again.  This campaign is truly cooked. 

References

Join the Red campaign here.

Fawkes, Piers.  2007.  After Huge Marketing Effort, RED only Delivers $11.3 M.
PSFK.  February 19, 2007.  here. 

Something remarkable is happening in the world of marketing.  According to Brandweek,

The tenure for chief marketing officers at the 100 top consumer branded companies has continued to decline…. Over the past three years CMOs at these companies have seen their time on the job drop from 23.6 months to 23.2 months, said Greg Welch [Spencer Stuart, Chicago]

So what does this mean?  Many things.  But one of them is that every CMO must now arrive at the corporation with a team in place. Specifically, the CMO wants to arrive with a "pre-existing" connection with an agency.  There's no time to play "getting to know you" paddy cake.  No time to audition the agency world.  You want to come with an agency in place.   (For the source of this image, Alan Turnbull's website, please go here.)

And what does this mean?  Many things.  But one of them is that the agency needs to start early.   It won't do to get to know the CMO as a CMO.  It won't even do to know the CMO as a brand director or brand manager.  No, it would be nice to spot CMO talent the moment he or she clears the MBA.

And this means, among other things, that the agency wants to reach out to b-school profs the way MI5 did.  MI5 (Thames House headquarters, as pictured above on Alan Turnbull's www.secret-bases.co.uk) is the security service responsible for protecting the UK against threats to national security.  In the old days, the British secret service relied upon a network of professors who kept an eye out for espionage talent.  It was all very discrete.  In the course of a conversation over lunch at the club, names would come up and references would ever so casually change hands. Approaches would be made.  Connections would be fashioned  The British secret service didn't need executive search.  It had a deeply intelligent, observant, thoughtful corps looking out for recruits who were in their turn deeply intelligent, observant and thoughtful.  

It could work in the world of marketing.  If the tenure of a CMO is less than 2 years, perhaps it's going to have to.

Go.

References

Babej, Marc E. and Tim Pollack.  2005.  Who Needs a CMO Anyway?  Forbes.com.  October 5, 2006. here.

von Hoffman, Constantine.  2006.  Length of CMO Tenure  Continues Decline.  Brandweek.  August 22, 2006.  here.

the website for MI5 here.

The Super Bowl on Sunday may represent a historic moment.  It is perhaps the first time that the corporation has reached out to consumers and offered them something like full enfranchisement in the world of marketing. 

Certainly, we’ve seen moments of consumer inclusion before. Converse solicited consumer created ads, as has Chevy Tahoe.  But on Sunday, consumers were not just participating on the margin, they had a seat at the table.  Or, to use the metaphor at hand, consumers have, so far, not got much further than the marketing’s utility squad.  With the Dorito spots on Sunday, they made varsity. 

I wasn’t crazy about the results, but that’s not important.  What matters is that consumer participation is truly upon us.  It’s time to ask where this experiment might go from here.  The true zealots will argue that we can look forward to a world in which all marketing content is consumer content, that marketing teams and agencies will effectively be reduced to clearing houses.   The near-zealots will argue that the better part of marketing content will be consumer created.  I believe both parties go too far. 

I think we can steal a page from political science and ask whether marketing enfranchisement might not look like political enfranchisement.  By this reckoning,  consumer participation will:

a) always be heralded as the arrival of complete inclusion

b) but it will not, in fact, enfranchise everyone

c) indeed, some consumers will never be included in any meaningful way

d) and some consumers will be effectively excluded from participation

e) consumer participation will bring consumers in according to their digital sophistication, their creative ability, and their connection to and mastery of contemporary culture.

This is another way of saying that consumers won’t be welcome to create content unless they have most, if not all of the properties of existing marketers.  Rank amateurs need not apply.  Even those consumers who are "pretty gifted" will not be included.  The Doritos Super bowl experiment told us, I think, that pretty good is not nearly good enough.

This is not to refuse the power of this idea.  In the long term, some consumers will participate more, and power at the center of marketing will become still more consumer-centric as a result.  But if we think that someday all marketing will be created by consumers, we are wrong.  If we think that someday all consumers will create some marketing, we are wrong.  If we think that any thing more than a tiny percentage of consumers are qualified to participate, we are wrong. 

Tops, a tiny percentage of consumers will participate.  Anything more than 10% is unrealistic, unless professional marketers are reworking the material in a very substantial way.  In sum, consumer created marketing has come of age…only to discover that there may be dramatically less to the the proposition than we thought.    

We learned today that the Pepsi can is changing.  Cie Nicholson, Pepsi’s chief marketing officer, says the Pepsi can will now change every 3 to 4 weeks.  There will be 35 new designs this year, with more to come next.

The Wall Street Journal speculates that the new designs will help Pepsi "connect with the sort attention span of teens and young adults."  And this is partly right.  Attention spans are now brief.  Familiarity comes faster.  Boredom descends ever more quickly. 

But the more pressing issue is sustaining Pepsi’s brand visibility in a turbulent culture.  Stillness and consistency were once a virtue. The old style marketers insisted on keeping things simple and repeating themselves endlessly.  Sameness was the name of the game.

New school marketing says the brand must meet change with change.  It must stream with dynamism to stay in touch with dynamism.  Thirty-five designs in a year.  This is precisely what the new school of marketing has in mind. 

The new can will help.  But by itself it is not enough.  Pepsi is going to have to build in dynamic tastes.  Now this really contradicts marketing orthodoxy, but I am prepared to wager that Pepsi will be varying its formula by the end of the decade. 

The old marketing is built into the big brands so deeply that it is almost impossible to see.  This is the challenge for the brand stewards inside the corporation, inside the agency, inside the consulting world.  How quickly can we change?   And how many of the now great brands will end up pulled down to the ocean floor by the weight of orthodoxy.

You think I’m kidding.  Pepsi lives in a declining category and it is still possible for the WSJ to offer this risk analysis:

By changing designs so frequently, Pepsi runs the risk of confusing or alienating consumers who rely on familiar visual cues to find their favorite brands among a change sea of products, some marketing experts say. 

Ah, if only doing nothing were still an option

References

McKay, Betsy.  2007. Pepsi’s New Marketing Dance: Can Can.  The Wall Street Journal.  January 12, 2007.

Acknowledgements

Thanks to Gary Beene for the image.  For his excellent website on Pepsi history go here. 

Pricing is an obscure piece of the marketer’s tool kit, the least considered of the 4 Ps (others being product, promotion, and place). Some people are good at it and those who are really good at it practice a fine art. 

For the rest of us, pricing is mostly a matter of calculating costs, estimating what the market will bear, looking at the competition, and reaching for a dart board.

But Microsoft has come up with a new approach.  The consumer who wishes to purchase tunes for a Zune must buy points.  A Zune point is worth $1.25 cents and a track costs 98.75 cents.  To buy a single song, the consumer must surrender $5.00.  If this consumer never buys another song, this is what the single song will cost them, $5.00.

We can guess that Microsoft thinks it’s doing: incenting the consumer to buy more tunes.  Kingsley-Hughes believes this pricing scheme will allow also Microsoft to increase prices much more easily than iTunes can. 

But could we consult Marketing 101 for a moment?  The first question of every marketing exercise is this: what problem are you trying to solve?

The problem for Zune is clear.  Microsoft is trying to break into a market that is occupied by an incumbent who precedes Microsoft by several years, enjoys deep brand loyalty, still has better technology, offers a more attractive product, and gives the consumer entry into a magic circle called "cool."  This is what we call an "advantage."

And the advantage is daunting.  Chances are Zune will not make it.  So the problem is adoption.  It is not repeat use.  I am quite certain most MBA students would see this.  Yes, I can hear someone calling out from the skydeck now. 

"Professor McCracken, tune purchase is not the issue.  The issue is getting the consumer to buy a Zune in the first place."

The Zune pricing scheme will not merely muddy the waters.  It will create confusion and coercion.  Let’s consult the Marketing 101 textbook for a moment.  Yes, it’s right here.  Confusion and coercion, bad.  Clarity and engagement, good. 

What is it about this corporation?  They get into the hardware business.  They decide to go toe to toe with a great competitor.  They produce (ok, buy) a piece of hardware that just might have a shot. (Hey, I’m giving them the  benefit of the doubt).  And then they allow someone on the marketing team to screw things up. 

Is there something self destructive about Microsoft.  Have they reached deep and come up with a will to lose, a wish for failure?  Are they now the Bobby Knight of marketing? 

References

Kingsley-Hughes, Adrian.  Crazy Zune Marketplace pricing scheme. Hardware 2.0. November 13, 2006.  here.

Public Relations sets itself apart.  There is something "high church" about the profession,   as if it were much too fine to mix with the rest of marketing, vulgar, beer swilling, louts that we surely are.

This is about to change.  Thanks to a good article in the Financial Times today, we can see that the corporation faces two new structural realities.

1) the corporation is losing its communications advantage.

The contest that Public Relations must modulate is no longer being conducted between press releases from on high and disorganized grumbling en bas.  Thanks to the internet and the blogosphere, every grumble is, potentially, available to every grumbler.  Grumble aggregation is now possible and for some brands, now certain.  Several "grumble Tsunami" have already come running off the internet to devastate several corporations.   

2) there is no place to hide. 

According to Chris Deri, head of Edelman’s head of corporate responsibility practice,  "The expose by some 19-year old blogger of a factory in Thailand is only months off."  This means that no constraints of time and space will protect the corporation from scrutiny.  Bangkok might as well be in Cleveland.  It’s a "see through" world.

Two reactions

The first reaction from Public Relations is raw panic.  Surely, the corporation is now poor Gulliver (as above), confined and attacked on all sides by little people who have no sense of responsibility or accountability. 

Once the panic passes, a second reaction sets in.  The profession reaches for a new metaphor.  "Right, then," the argument goes, "let us think of this as a conversation."  (Bob Langert, McDonald’s head of corporate responsibility calls it a "dialogue."  Alan Marks, Nike’s head of media relations, refers to "real time conversations."  See Murray for both, below.)

I think this is wrong.   The metaphor gives us a communications event in which the corporation and the non-corporation engage in a rapid, spontaneous exchange of views.  If there is a rule in marketing after "know your audience," it is "craft your message." The corporation must continue to engage in set piece communication, crafting each method with strategy and care.   

Parts of the old model must hold

This is another way of saying that Public Relations will continue to manage public relations, and not an open, daily conversation with many hundreds, or thousands, or millions of consumers.  The principles here will be what they are in the rest of marketing.  What are the ideas, the meanings, the concepts, the promises for which the corporation stands?  How do we make these meanings most effectively using the instruments at the professional disposition.

Parts of the old model must change

Here’s what I think must change: tone.  As it stands, Public Relations speaks with a grand and formal voice.   (And this gets us back to that "high church" positioning again.)  One can’t help feeling that this press release is authoritative, possibly definitive, perhaps from the CEO herself.

This is a strait jacket.  Communications from the corporation would do well adopt a tone that is lighter.  No more thundering from on high.  No more tablets from the mount.  What we want is that engaging tone that comes naturally to the football coach, especially the ones with an Arkansas accent.  This is a tone of voice that says, "I’m just saying," instead of "hear ye, hear ye."  It is confiding, sometimes almost conspiratorial.  It is candid when it can be, and tentative when that is, in point of fact, the only real option.  The new public relations will not be a conversation, but the tone will surely be conversational.

What about those party animals? 

Yes, there is a precedent: advertising.  The rhetorical rules here are entirely difference.  These messages may be funny, casual, beguiling, ironic, playful, counter-intuitive.  These are, willy nilly, messages from the corporation.  And no one says, "hold, this will not do."  If we are prepared to let brands speak in a various, variously engaging voice, why not the corporation?  (Certainly, I do not mean to say that Public Relations has the same of degrees of freedom, merely more degrees of freedom.) 

Yes, the corporation lives in a world that is newly symmetrical in terms of power and newly  see-through in terms of disclosure.  Yes, the Public Relations profession must change.  But I wonder if conversation is the model to pursue here.  Perhaps there is something to be learning from those drunken louts after all. Let’s all drink to that.

References

Murray, Sarah.  2006.  When blogs put brands at risk.  Financial Times.  November 8, 2006, p. 10. 

Smith Barney launched their "working wealth" campaign yesterday.  (To the right, a clipping from the homepage.)

I’ve written about marketing in the world of investment and wealth management before.  It is a wonderful thing to see an industry that previously would not "stoop to conquer" now actually addressing the consumer in a language he can understand. 

The industry is new to the game, so the results are uneven.  American Century Investments was, I think, wrong to use Lance Armstrong as a celebrity spokesperson.  The Citi ad that spoke of the "heart of new york" was not so much wrong as muddled.  On the other hand, recent Charles Schwab work has been exemplary.  I particularly like the ad that reads, "owning a house worth a million bucks is not a retirement plan." 

It is a pleasure to report that the SmithBarney campaign is a superb piece of consumer centricity.  It addresses the barrier in place: the fact that most consumers fail to fail to how money makes money.  Now, I know this complete confounds the financial industry. "What’s not to get?" they want to know.  But that is the point of consumer-centricity.  It doesn’t matter what we think.  It matters what the consumer thinks, and the further they are from our standard, the harder we have to work, the more due ethnographic diligence we must exercise. 

Consumers believe that money comes from a pay check.  They work hard. Someone pays them.  Now they have money.  Yes, they grasp the idea of "interest."  Yes, they understand, roughly, how the stock market works.  But the idea that this industry is all about and only about, money, this is as counter intuitive as a "virgin birth."  Money has to come from somewhere.  How can it  come, as if immaculate conceived, from other money. 

For the average consumer there is something impenetrable about financial planning.  It’s a mystery of the old fashioned kind, not something you can clear up with a flashlight and a basset hound.  No, this is one of those imponderables of the human condition, one of those things we will just never understand. 

And what a barrier this becomes for the financial industry when it finally decides to market to these consumers.  How does the consumer calculate risk in a decision making situation such as this?   Well, he just doesn’t, that’s all.  He practices avoidance.  This feels like the rational thing to do.  Marketing comes late to the game, and it must move mountains.

Oh, there is one thing that the consumer understands perfectly well: the moment he sits down with a financial adviser, he’s going to look like a rube and a dope.  Here’s another reason to practice avoidance.

What to do?  How to speak to a consumer in this frame of mind?  The Working Wealth is a great place to start.  If the Charles Schwab campaign demonstrated a knowledge of what the consumer thinks, this one shows us how the consumer thinks. 

The notion of "working wealth" complete with gears has an appealing literalism.  The first few lines of the body copy:

"Earn your first dollar by your labors.  Get up early, work late.  Get up the next day and do it again.  Keep doing it, even after the dollars start adding up."

Exactly on target.  Start with the what the consumer is thinking.

The campaign then proposes an equation, that at Smith Barney, capital works the way you do.  Hence the headline: "I am working wealth."  This is classic metaphor.  It allows the consumer to understand the unknown part of the metaphor equation (capital) with what they know about the known part of the equation (their working lives.)

Then Smith Barney invites the consumer think of himself as someone who has control of this process.  ("I am working wealth.")  Some part of their work-a-day world is a place of special control and competence for them.  Now the equation says, hey, what you know about your domain of competence, apply that to the way Smith Barney will allow you to manage your wealth.

In the symbolic logic of this ad, we step the consumer from where he is (capital comes from a paycheck) into a moment of identification (capital works the way the consumer works) into a proposition and a promise of control (I am working wealth.)  From the old world of capital to the new world of capital with a couple of phrases and around 100 words.   This is exemplary meaning management.   

The agency responsible for this exemplary work is Hill Holliday New York.  The planner was Lesley Bielby (now of Hill Holliday Boston).  The Executive Creative Director was Alon Shoval, who, with Charles Veprek, served as copywriter and, with Victor Anselmi, as Art Director.    

References

Anon.  2006.  I am working wealth.  Full page ad for Smith Barney. Wall Street Journal. October 31, 2006, p. A7.

For the Smith Barney "I am working wealth" website, here.

McCracken, Grant.  2006.  Marketing the Capital Markets.  This Blog Sits at the Intersection of Anthropology and Economics.  February 10, 2006. here. 

McCracken, Grant. 2006.  Marketing the Capital Markets II.  This Blog Sits at the Intersection of Anthropology and Economics.  February 14, 2006.  here. 

McCracken, Grant.  2006.  Marketing Financial markets: Schwab Triumph. The Blog sits at the intersection of Anthropology and Economics.  March 1, 2006.  here.

Acknowledgments

Pip Coburn, Coburn Ventures

Nick Hahn, Vivaldi Partners

Olivier Blanchard, Corante

Wharton reveals that consumer centricity is coming even to the health care industry.  In a Knowledge@Wharton interview, Mike McCallister, Humana CEO, says:

When we decided to set the strategy for this company after I became CEO
in 2000, one of the most important decisions we ever made was to organize and drive this company around the simple premise that the consumer had to be at the heart of health care. Now there’s a lot of talk around that idea today. Six years ago there wasn’t anybody talking about it and there weren’t many people going down that path. If you think about health care and the way it operates and has for a hundred years — very paternalistic, no information — it’s a mother and father "may I" kind of environment. To have the consumer at the core of how it’s organized seems so simple and seems so right — except when you talk to health care people, who think it’s crazy. That decision was a big one and has really guided everything we’ve done for the last six years with varying levels of success…. What’s particularly gratifying is that the rest of the industry has now decided they’re going to go down this path, too. We get the benefit of having been at it for a while, and we also take pride in the fact that we may have helped nudge the industry toward consumers. (emphasis added)

Wharton also reports the Pew Internet and American Life Project finding that 57 million American adults now read individual blogs.  But this does not impress one member of the marketing faculty, Xavier Dreze. 

Blogs are the latest forum for people who have nothing to say that others actually care about. […] I don’t see the point. It’s a bunch of people writing their opinions, and  those people have no credibility. The information content is very low.

Thank you, Professor Dreze.  Consumer centricity, I guess this has to work it’s way through the health care industry before it reaches the marketing faculty of a major business school.

References

Hunter, Dan et al., 2006.  To Blog or not to blog: Report from the front.  Knowledge@Wharton: Managing Technology.  October 18, 2006.  here. 

Useem, Michael and Stephen Wilson.  2006.  An interview with Humana CEO Mike McCallister: Letting the Consumer Drive Innovation. Knowledge@Wharton, October 25, 2006.  here.

Anne Saunders is VP of Global Brand Strategy at Starbucks.  Yesterday, she was named a "top ten" marketing innovator by Advertising Age. 

AA notes the things for which Saunders and Starbucks are so justly famous, especially the creation of a robust brand with a tiny budget and almost no conventional advertising.  (This year, Starbucks will spend 1% of its sales on marketing.)

Some of Saunders’ innovations are grass roots options like serving PTA meetings or sponsoring beach cleanups. Clearly, she was also the beneficiary of the extraordinary meaning making, brand building qualities of Starbucks’ "third space"  retail.

But Saunders also created innovation out of naturally occurring experiments that have occurred at Starbucks.

In the fall of 2005, a Starbucks barista in California gave a drive-through customer a free cup of coffee.  (She was apologizing for having got an order wrong.)  The lucky customer was struck by a moment of generosity and decided to pay for the person next in line.  This luckly customer did the same for the customer behind her, and an articulated act of generosity ran for 9 transactions until someone decided to take the coffee and run. 

This reminds me of Levi-Strauss’ discussion of patrons in a french restaurant.  Two men, perfect strangers sitting at separate tables, treat one another to a glass of wine.  Nothing changes (both men consume the same amount of wine) and everything does (perfect strangers acknowledge one another). 

In the case of the French restaurant, we are looking at a "tit for tat" reciprocity: I do for you what you do for me.  In the Starbucks’ case, we are looking at something more open-ended (in the anthro lingo: "generalized").  My gift does not "return" to my benefactor.  It goes to someone who may or may not reciprocate it.  There is an element of risk.  I give to you, without any quarantee that you will give to someone else. 

Reciprocity is a powerful device.  It creates or helps substantiate a relationship.  Generalized reciprocity of the Starbucks’ kind is still more powerful.  It has a way of transforming the customer from just another schmoe into someone new.

The person who gives without any guarantee of return is a paragon of generosity, someone who feels their generosity instead of risking it.  This is someone who is, in the Western and not only the Western scheme of things, a little god-like. After all this Starbucks customer just got a free coffee!  If they want to, they are free to break faith.  They can take the coffee and run. Those who decide to perpetuate the gift with a special kind of generosity.  And this stands as a special measure of their spirit and their goodness. 

Clearly, Starbucks generosity picks up on something at work in our culture, the "random acts of kindness" theme that is still operative well after the 1960s have come and gone, and even as the "new age" sensibility struggles to sustain itself in a time of post 9/11 severity.  It also plays out that "pass it on" theme for which, I believe a movie was named.  Finally, it plays out that idea that we don’t need to know the recipients of our generosity, and that, indeed, there was something charming about not knowing the recipient of our generosity.   Apparently, we like to participate in and help build networks where the nodes are unknown to one another.  Strange. 

Ok, here’s what Starbucks and Saunders chose to do with their stroke of good forture, that naturally occurring moment of Starbucks generosity. According to AA, "The marketing department created a coupon that told the story and asked recipients to hand the coupon to a friend or co-worker to invite them to have free cup of coffee." 

This is good but I wonder if there isn’t another opportunity.  Why not give the barista the opportunity to hand out free coffee as if they were passing along someone else’s generosity?  Sometimes, the recipient will take the coffee and run.  But sometimes they will step up to the opportunity and pass the gift along, with all the benefits to Starbucks and themselves that this entails.  "Oh," says the next customer, "some thing odd and interesting and sort of charming just happened."  The hum drum of daily life is relieved a little.  The growing hum drum of the Starbucks is relieved a lot. 

I like the way this strategy gives the barista something to work with.  As it is, many baristas appear to be engaged in a "too cool for school" demonstration played out in a drama called "how slow can I go."  The generosity play allows them to give coffee to people and see what happens.  Will the recipient pay for the next customer or not?  We can guess that baristas will compete to see who is best at choosing recipients who will pass it on. The world on the other side of the counter suddenly got a lot more interesting and engaging for them.  If this helps them speed up, or brighten up, by even 10%, Starbucks will pay for those free coffees many times over.

There are lots of cautionary notes here.  It is not entirely ethical to create the impression that a free coffee comes from someone else when in fact it comes from Starbucks.   But notice that what we are doing here is seeding the world with generosity. Presumably, one Starbucks’ gift will generate several others that are real acts of generosity.  Surely, this small deception may be forgiven on the grounds that it creates a larger social good. 

Some people will balk at taking a gift from a perfect strangers on the Miltonian grounds that there is no such thing as a free cup of coffee, and because they may have indebted themselves to a creep.  This will have to be addressed, monitored and finessed. 

There is also the danger that this will become predictable and the further danger that it will become a mechanical system to be worked.  And corporations have a history of taking good ideas and making them banal through the repetition and mechanization.   A system of this kind will have to take touch. 

What I really like about this is the anthropological revelation, nothing changes (everyone gets their coffee) but Starbucks has found a way to make my purchase work to your benefit, and our purchases work to everyone’s benefit.  Starbucks’ renews itself, the social world gets a little more interesting, and life takes on a new generosity, drama, and dynamism. 

This is brand building for the cost of a cup of coffee!

References

Mitchell Moore, Meg.  2006.  The Innovators: Anne Saunders.  Advertising Age. October 4, 2006.  here. (subscription required)

McCracken, Grant.  2003.  Tag, we’re it!  The blogs sits at the intersection of anthropology and economics.  January 5, 2003.  here.

Forgive me turning this blog into a book store window, but here’s another book I recommend to your attention.

Conflict of interest declaration: I wrote it. 

Flock and Flow has just appeared.  It applies complexity theory to the turbulence of contemporary cultures and markets.  It builds "early warning systems" for marketer.

Amazon has it here. 

I am still on vacation! 

Here he is in all his glory, the poet laureate of marketing, the now departed Theodore Levitt.  (I thank Pierre Berthon for the metaphor.) 

He was a magnificently clear writer, and, in this, a little like the poet laureate of anthropology, Clifford Geertz.  Both Levitt and Geertz wrote so well, they made the reader feel smarter by 20 IQ points.  Ideas seemed to move from mind to mind without intermediary, so transparent was the prose.

Geertz has the unhappy tendency of pretending that he is the only anthropologist.  His perfect little essay have a solipsistic quality.  Geertz does not cite other scholars and indeed he admits the data to his little crystal palaces only if they conduct themselves in strict conformity to the school master’s direction.  Yes, Geertz lets you think more…about less.

Levitt gave us clarity as a way to contend with messiness.  He wrote a disciplined prose for a chaotic world.  He blessed us with questions and strategies that improved our ability to manage what threatens now to be an imponderable world.

In the Marketing Imagination, he gave us the most compelling question of the profession: "what business are we in."  What a simple little question.  And how deceptive.  Ask this question and suddenly all bets are off,  all data welcome, every intepretive frame now possible.  Not so much a crystal palace as an English garden.  Not so much an English garden as a Ghanaian one.

Levitt prepared us for a world turned upside down.  "What business are we in," invites extravagant acts of intellect and imagination.  And not a moment too soon.  For this is what markets demand of us too.  (It’s worth noting that Levitt founded this question well before the sheer dynamism of the new capitalism can have been evident.)

More importantly, ‘what business are we in" anticipates a world in which things change so much and so suddenly that capitalism is no simple act of value extraction, with capitalists as mere miners, truding down the same shafts to the same coal faces in search of the same substance for exchange on the same markets.  Contemporary markets are now so liquid that the Levittian question is called for every day…because something crucial may have changed as we slept. 

Theodore Levitt, rest in peace. 

This Blog Sits At mourns the passing of Theodore Levitt.

Here is the way he was remembered yesterday by the dean of the Harvard Business School.

Theodore (Ted) Levitt, a legendary figure in the field of marketing, died early [Wednesday] morning at his home in Belmont after a long illness.  He was 81.  Ted joined the HBS faculty in 1959, was named the Edward W. Carter Professor of Business Administration in 1979, and retired from the faculty in 1990.  During his tenure, he served as an editor of the Harvard Business Review and as head of the marketing unit, among other responsibilities.  He was an extraordinary researcher, teacher, and writer, and a mentor to generations of scholars here at the School. 

This is not nearly enough but for the moment it will have to do.

later addition:

More details on Theordore Levitt’s life can be found here. 

Here it is 9:30 at night and like half of America, I am slogging away trying to finish a Powerpoint presentation. 

Funny thing, though.  Every hour or so, it loses 5 or 6 slides.  Just dumps them.  It’s never the same slides.  And I have tried to duplicate the loss but I can’t.

The good news is that I don’t have to give this presentation till Thursday.  (See you in Las Vegas at the Urban Land Institute meetings.)  The bad news is that this problem is going to haunt me until the presentation is finished.  And I already have quite enough pressure, thank you. 

As I said to the sympathetic guy sitting beside me on the train yesterday, "If it was 60 minutes to game time, I’d be desperate." 

Now, I guess it’s just me.  I have searched the internet.  No one else appears to be reporting this problem. 

But what if it isn’t me?  What if many people are having this problem, and they all think "it’s just me." 

That would be three things, at a minimum:

1) this is the software scandal of the century.  The "go to" software has a hole in it, through which our labor, our slides and our best creative efforts just disappear. 

2) Microsoft would have to know about this problem and not have said anything.

3) and this would be the brand scandle of the century, and might be the final blow to a teetering proposition.  After all, Google has taken away the Outlook and the browser.  There are now good alternatives to the Office Suite.  If consumers discovered that they were working with flawed software, who knows what they’d do?

After all, losing slides when you are working under pressure is unpleasant.  You are obliged to construct from memory when you are flayed by stress.  And everyone writes Powerpoint presentations under pressure.  (You have to.  It’s a law of the digital world, or something.  Clay Shirky has a lecture on it somewhere, I’m sure of it. ) I’m pretty sure they would want to punish Microsoft with an act of complete brand repudiation.  (Could it happen to a nicer company?)

I’m hoping that if other people who have suffered mysterious disappearances from their Powerpoint decks, they will share their experiences with me.  After all, maybe there are lots of us.  In which case, we need to band together.  Because you don’t actually need the Office suite to launch a class action suit.