Immersion Active presents Ageless Marketing

Drucker's Consumer Population Conundrum

Peter Drucker writes in Management Challenges for the 21st Century, “The most important single new certainty – if only because there is no precedent for it in all of history – is the collapsing birthrate in the developed world. (His italics.)

Collapsing birthrates are drastically shrinking consumer populations. Germany: from 85 million to 25 million in this century. Russia: from 146 million to as little as 85 million by mid-century. Japan: from 126 million to about 100 million by 2050.

Some people say, “Don’t worry. Population growing in Asia, especially in India and China will come to the rescue.” But we should note that these countries are developing the means to make at lower costs much of what they now import.

I recently talked to a German businessman about his nation’s plummeting consumer population. He answered, “Those are only numbers.” Others have said to me, “Who knows – maybe we'll see a new boom in births." Too many people are taking an ostrich’s approach and choosing not to think about it.

It's the under-50 population that's shrinking. The 50-plus population is actually mushrooming in developed nations. So, rather than acting like an ostrich, companies should be trying to figure out how to tie their growth to the lift forces of burgeoning older populations. God knows, growth is not going to come from younger markets.

Maybe tying growth goals to older consumer populations is not a perfect solution, but it’s the best one most consumer product companies have. How many do you know that are dealing with Drucker's Conundrum?

The Criticality of Brand Personality

Don Pepper and Martha Roger have claimed that 1:1 marketing makes branding obsolete. They say offering customers products on an individually tailored basis makes branding irrelevant.

These gurus of 1:1 marketing don’t understand what branding is about, nor the crucial role it plays in shopping and buying behavior.

They ought to read Margaret Mark and Carol Pearson’s The Hero and the Outlaw (at the left under “Must Reads”).

Drawing on extensive quantitative analysis, Mark and Pearson illuminate the qualitative aspects of brand personalities. They infer that brands fall within 12 archetypal personalities, ranging from Pepsi’s and Harley-Davidson’s Rebel archetype to Hallmark’s and Victoria’s Secret’ Lover archetype.

Consumers evaluate brands through human personality traits, whether you’ve imputed traits to the brand or they’ve done so because you haven’t. Of course, this is largely an unconscious evaluation.

It’s critical to avoid projecting conflicting personality traits, as Coke did a while back in two commercials that projected a Rebel personality which conflicted with its classic Innocent personality. Coke drew a torrent of consumer complaints.

One commercial showed a soldier home from boot camp, storming away from his welcoming party when told there was no Coke in the house. The second showed a wheelchair-bound elderly woman throwing a tantrum and tripping a guest at a family reunion when told no Coke was available.

A Duke University study found that brands, somewhat unique among proper nouns, are processed primarily in the emotional right brain. That and other research indicate that brand loyalty depends on emotional arousal. As with humans, we will reject brands that lack attractive and consistent personality characteristics.

The Myth of CRM Customer Centricity

I just read a piece by Stuart Lauchlan at [email protected] entitled, “We've got CRM - but we don't have decent service.” He began the article:

"’The company should act as one organisation to every single customer, knowing who I am, what I want, whether I'm happy, or not happy,’ declared Siebel's David Schmaier this week. ”Hear hear, say I. Wise words indeed. Unfortunately this holy grail of the CRM industry seems to remain as stubbornly elusive as ever.”

Lauchlan’s holy grail won’t be found in the bits and bytes of data mining platforms. Nor will the mindset that drives CRM lead to its discovery. CRM’s mindset is too product centric to discover that holy grail – despite CRM being regularly touted as customer centric.

CRM is about as customer centric as the stereotypical used car salesman. At base, CRM is merely a high tech way of doing what marketers have always striven to do: get more product into consumers’ hands and more money out of their pockets.

CRM It is more about customer relationship manipulation than customer relationship management. A more honest name for what CRM stands for would be CDM – for customer data management.

One Reason Direct Marketing Response Rates Are Off

A direct marketer complained to me the other day about falling direct market response rates. He noted however, that with Marti Barletta’s help (Marti wrote the truly “breakthrough” book, Marketing to Women), he has managed to improve response rates.

Other direct marketers have shared similar complaints with me. Their problems lie not so much with ad clutter, as many say, as with message styles and content that fail to resonate with consumers.

The fact that Marti Barletta successfully helped one direct marketer increase response rates by changing his messaging approach in women’s markets suggests that message style and content is a bigger problem than many marketers realize.

What marketers know and do is rooted in experience with younger consumer populations of the past. Approaches that worked best in those markets do not work best in today’s older consumer universe – among both women and men.

How consumers mentally process marketing messages progressively changes from around the mid 30s. This is not theory. It’s revealed as fact by substantial empirical research that indicates mental processes become less analytic and more intuitive, less rational and more emotional as people reach higher levels of maturity.

Sooner or later, the marketing community will learn how to adapt their messaging to the mental processing styles of today’s older customer majority. But wouldn’t it be great for everyone if they relied less on trial and error and more on known facts about how with age, consumers change in how they perceive and respond to marketers’ messages?

Brand Positioning Ain't What It Used To Be

Al Ries and Jack Trout became justifiably famous through their seminal work on brand positioning that first surfaced 1972.

According to the marketing gospel of these two positioning evangelists, getting a brand fixed in customers’ minds is most effective when it travels into the cerebral folds of the brain on wings of simplicity and without equivocation: Avis: We try harder. Miller Lite: Everything you want in a beer. And less. Coca-Cola: The real thing.

But the rules of brand positioning have changed. Ries and Trout’s ideas about positioning were spot on when the product was “the real thing.” Now, the customer is “the real thing.” Brand taglines like BMW’s “The Ultimate Driving Machine” are passé. Apple’s “Think Different” and Microsoft’s “Your potential. Our passion” is au current. Neither tagline reflects the absolutism that Ries and Trout touted. They both are conditional and allow subjective interpretations of their meanings. I think different (sic) from you. And my potential is not your potential.

Changes are taking place in marketing that represent an epochal shift in perspective from objective foundations established by marketers' definitions of products to subjective foundations in which consumers define products. This is like the shift centuries ago when belief that the earth was flat and the center of the universe gave way to the belief that the earth was a sphere orbiting around the sun. Nothing was the same ever after. Something similar is happening in marketing as products cease being the center of the commercial universe and consumers take over that position.

One Reason United Airlines Is Struggling

Last week I called United Airlines to make a reservation. After working through the telephone menu, I waited for a live human being. Instead, a recorded voice greeted my to urge me to go online. I was then told, “If you want to talk to an agent, due to an unusual volume of calls, we cannot connect you. Please call back.”

No doubt the suits in United’s C suites are wondering how to get United back on track. Take a page from the value airlines, I say.

A week earlier, I called JetBlue, was greeted by a recorded voice thanked me for calling and saying JetBlue likes to please its customers, like the one who called last week and asked for some travel information, “so we gave it to her.” That tongue and cheek repartee brought a smile to my face and in a moment I was connected to a live human being.

Sure, value airlines keep operating costs low, and generally have better bottom lines than the big guys, but value airlines that are doing best also deliver customers high quality experiences. That doesn’t seem to a very complicated way of being successful to me. Why do most companies I deal with seem oblivious to the connection between how they make me feel and my loyalty to them?

Getting Outside the Box

In Tom Stoppard’s play Arcadia, the mathematician Valentine reflects on the massive waves of change challenging us in today’s world and observes, “The future is disorder. A door like this has opened up five or six times since we got up on our hind legs. It’s the best possible time to be alive, when almost everything you thought you knew is wrong.”

Valentine’s words come to mind every time I hear that “getting back to basics” is the way to solve a problem that resists solution. Looking to the past for solutions to a vexing problem also brings to mind Einstein’s famous dictum, “A problem cannot be solved in the same consciousness that created the problem.”

GM was unsuccessful in saving Oldsmobile when it tried to save the venerable brand while working from the same consciousness in which Oldsmobile’s problems arose. It has done better in breathing new life into Cadillac by entering a new consciousness. IBM’s Lou Gerstner entered a new consciousness to turn the lethargic behemoth around and succeeded. Coca-Cola is beset by problems that it is still working from an old consciousness to solve. Mighty brands usually expire because no one has entered the consciousness needed to solve a brand’s problems.

It’s not easy to move from one consciousness to another. We often hear about the value of entering a new consciousness to solve problems in the metaphor of “thinking outside the box.” However, most people who feel that they are thinking outside the box are simply looking out the window from inside the box.

A New Slant on Marketing

A few years ago, I attended a weekend retreat on storytelling. A Trappist monk named Abbott Joseph reminded us that great religious and political leaders were usually great storytellers. He went on to say, “Storytellers help us process our lives.

Suddenly, a thought blossomed in my mind: marketing should be about helping customers process their lives.

Later, I came across a book by Melinda Davis, The Culture of Desire, a book that explores the theme of companies and their marketers helping customers process their lives. A bit later, Shoshanna Zuboff’s book, The Support Economy appeared. As the title suggests, Zuboff’s book is about helping customers process their lives.

The idea of helping customers process their lives is a new slant on marketing that could give real life status to the doctrine of customer centricity, which thus far has been more of an empty buzz word than a reality.

What Your Customers Can't Say

An article I wrote, “What Your Customers Can’t Say,” ran in the February 1998 issue of American Demographics. It generated the largest reader response in the magazine’s history. Five years later, readers are still sending me emails.

The article challenged one of the most basic premises of consumer research, namely, that consumers are the best single source of information about their behavior. In a number of crucial respects, recent brain research indicates otherwise.

Consider this: When people process researchers’ hypothetical questions, they use different brain sites and mental processes than when processing the same information in real life scenarios. Thus, consumers are not liars when they mislead researchers; they’re split personalities, presenting one personality to researchers, another to retailers.

Or consider researchers’ questions to consumers about their motivations in light of what the famous neurologist Richard Restak says about self-awareness of motivations: “We have reason to doubt that full awareness of our motives and other mental activities may be possible.” Another well-known brain researcher Bernard J. Baars says, “Our inability to accurately report intentions and expectations may simply reflect the fact that they are qualitatively not conscious.”

So, considering that brain researchers are undermining much of the way consumer research is conducted, we ask, “Is the $6 billion market research industry to rethink how it goes about figuring out consumer behavior?”

Brain Science for Marketers

Time's May 10, 2004 cover story was titled, "The Secrets of Teen Brains." The article is not only significant for its insights into teen behavior, but for serving as another example of the mainstreaming of brain science.

What brain researchers are learning about human behavior augur to radically change how we think of consciousness, free will, the formation of motivations and the processes of emotion, perception, thinking and decision-making.

It may not be overreaching to say that changes being made by brain science in how we view the human condition will have as far reaching effects as the discovery five centuries ago that the earth was neither flat nor the center of the universe. The altered view of earth's place in the cosmic scheme of things challenged Church doctrine, and aided by Gutenberg’s conversion of a wine press into a movable type press, led to the erosion of ecclesiastical control of science and learning and the power of monarchies over the common folk, and to the ultimate emergence of modern democracies.

I've been writing and lecturing for nearly 20 years about the mother lode of information brain science now offers marketers, but mostly as a lonely voice in the marketing wilderness. Lately, however, some big name companies such as Coca-Cola are turning to neuromarketing research using elaborate neuroimaging technology in an effort to learn more about consumers.

Ralph Nader and others have lobbied against using neuroimaging in consumer research while others question whether it will really lead marketers to the consumer behavior insights they covet. I have not been greatly excited about neuroimaging consumer research because more than enough information about consumer behavior has been produced in brain research over the past two decades to significantly increase marketing effectiveness.