Marketers, Tear Down These Walls!
Marketers, Tear Down These Walls!
There are Two Kinds of People....
People who think there are two kinds of people, and people who don't.
Why is our urge to think in absolutes so pervasive? One simple answer: This is the way our brains work. Psychologists know that when we encounter a new object (or person), within milliseconds our immediate response is to put it into a familiar category. Good or bad? Weak or strong? Binary code: 0 or 1? Regular or decaf? Ready-to-wear or haute couture ? Swipe left or swipe right?
Build a wall, and firmly plant people on one side or the other. Perhaps this mindset is a holdover from the caveman days, when the choice about how to label a person literally was life-or-death. Imagine a prehistoric man wandering across the savannah. Suddenly he spies a stranger heading his way. It's time for a really quick judgment call: Friend or foe? The wrong answer can turn out quite badly for him, to say the least. Today we short-circuit this dilemma with a handshake, a gesture that evolved to assure others that you are not holding a weapon. Even with this more civilized solution, our "good-or-bad" decision process isn't that much different from our ancient forefathers.
This book is about putting consumers into neat little categories -- and why unlike that comforting handshake this familiar habit can come back to bite you. You may find it convenient, but your customers sure don't. They want to be liberated. But don't despair -- that yearning to escape from walls also opens opportunities for you. Let's see how.
A Chinese curse decrees, "May you live in interesting times."
These certainly are interesting times for marketers. For years, we've put customers into tidy little boxes, such as age groups, income groups or gender groups. Business school professors ( mea culpa ) indoctrinate the next generation of executives to this way of thinking: We teach our MBA students about tidy 2 x 2 experimental designs that vary some factors and hold others constant so that we can identify what causes changes in consumer behavior. If we do observe a change after we manipulate one or more variables, we are more confident that something in what we varied caused the shift. Even then, we're never certain - most studies establish a confidence level of p < .05, which means that the odds are less than 5% that the change we witness was caused by chance. After all, the most rigorous study cannot totally establish a causal link. The best we can do is to increase our confidence in the likelihood that altering one variable causes a change in another. Scientists who make a more definitive statement than that are operating above their pay grade.
A typical 2x2 experimental design.
In another Marketing lecture to our MBAs, we extol the value of the widely used BCG growth-share matrix . This allows the strategist to classify a firm's product portfolio in terms of a category's growth rate and a brand's relative growth rate. Again, we construct a comforting 2 x 2 scheme that allows us to distinguish among cash cows, dogs, stars, and question marks.
The widely used BCG (courtesy of the Boston Consulting Group) growth-share matrix puts a firm's product portfolio into tidy little boxes.
At least since General Motors pioneered the concept of market segmentation in the 1940s (Chevrolets for some, Cadillacs for others), we've assigned labels to consumers. Then we develop products and services for those who land in each neat box. Marketing strategy is largely about dichotomies: Male or female. Introvert or extravert. Light user or heavy user. Black or white. No room for shades of gray (much less 50 shades!).
Market segmentation: Cadillac for some, Chevy for others.
The Truth is Out There