Immersion Active presents Ageless Marketing

Alan Greenspan Makes a Startling Revelation on the Daily Show

Alan Greenspan, the master of obfuscation whose cryptic pronouncements as chairman of the Board of Governors of the Federal Reserve could trigger three digit rallies or slumps on Wall Street in nanoseconds delivered a startling revelation in the clearest of terms on John Stewart’s Daily Show this week:

“I’ve been in the forecasting business for 50 years. I’m no better now than I was then and nobody else is. Forecasting was a good or bad 50 years ago as it is now.”

John Stewart slumped back in his chair in mock despair and declared, “You just bummed the s--- out of me!”

That is an incredible admission by arguably the world’s most influential economist over the past two decades. Greenspan in effect said that the billions of dollars spent on computerized information gathering and analyses haven’t bought us anything we didn’t already have.

Fifty years ago the likes of Alan Greenspan used electric motor-driven calculators often costing less than $50 ($365 in 2007 dollars) to process information. Today, economists are using super computers costing as much as $2 million or more and getting no better results.

Matters are no different in marketing. Researchers are no better today in predicting customer behavior than their counterparts were 50 years ago in 1957. And, indeed by my lights, they often reflect a less acuity than the top minds in marketing had a half a century ago. The reason is that today’s older population is less predictable using traditional research techniques that were developed when younger and more predictable minds were the marketplace majority.

Greenspan says economic predictions depend on figuring out human behavior in markets, and we’re no better today in doing that than economists were 60 years ago.

As regular readers of this blog know, I view consumer researchers and marketing practitioners as generally handicapped by their lack of in depth knowledge of human behavior. A surprising number have gotten marketing degrees with little more than Psych 101.

The truth that few seem able to embrace is that people can’t be reduced to numbers, which is what much of market research is about. In effect, the marketing community by and large operates on the principle that statistical science makes it unnecessary to get into all the “theory stuff” about human behavior.

So companies keep on wasting shareholder dollars on useless research and marketing programs that fail because the people involved don’t understand human behavior. And that’s why as much as 90% of all new products and product line extensions don’t succeed.

Go figure…

The Foundations of a New Marketing Paradigm (Part 5)

How Life Focus Changes with Each Season of Life

Each season of life has a characteristic primary life focus. Life focus is a catalyst of personal development and has the largest influence on our worldviews – not on what we believe, but in how we connect to the world. A young child, for example, connects perceptually to the world quite differently than a teenager does.

How we perceive the world changes by season of life, in large part because our primary life focus changes by season of life:

SPRING: Play is the primary life focus. Among higher form animate creatures, play is critical to learning. Even small salmon can be observed darting in play among freshly fallen leaves that have not yet flattened out on the riverbed. This play helps to build muscles that will be need on the return trip home to spawn a few years hence. Kittens, puppies, lambs, kids, calves and colts all play to develop motor and other skills they will need for a self-sufficient life.

The imperative to play draws human juveniles into activities that aid physical development, but also psychological development. Modeling life is a big part of play in Spring, whether it involves Tonka trucks and Barbie dolls in the single digit years, or dreams about heroic achievements, material accomplishments and career possibilities in later adolescence. Modeling of life scenarios is essential to achieving the primary developmental objective of Spring: acquiring basic intellectual, emotional and social skills needed to enter adulthood with reasonable prospects for success.

SUMMER: Work is the primary life focus. The fruits of work enable people to achieve self-sufficiency. It is also the activity people depend on to establish their social value and give material proof of their accomplishments, and their social and vocational potential.

Competition for social and vocational status is generally the most intense during Summer. As true throughout most of the animal kingdom, young people aggressively vie with each other for mates, social standing, and career advancement. Work, and the material gains it leads to is central to social and vocational competitiveness. It is the single most important activity for fulfilling Summer’s primary developmental objective: becoming someone socially and vocationally.

FALL: Life Balance begins replacing work as the primary life focus. Of course, not every person entering midlife responds to the inner self ‘s call of the for life balance. However, it is the emergent life focus of Fall that represents a midlife shift in worldview away from the often all-consuming, often fiercely competitive season of Summer when most people end up with little time to devote to their own, deeper inner needs.

The inner self, long submerged by an outer-world directed agenda, seeks a simpler life in which focus shifts from becoming someone to being someone. This facilitates fulfillment of the primary developmental objective of Fall: inner-self and spiritual development that reveals the ultimate meaning of one’s life

WINTER: Reconciliation is the primary life focus in Winter. Concomitant with the development of a greater sense of connectedness, comes a desire for reconciliation with life’s harder moments. This reflects the universal desire to be at peace with self, family, friends and the world at-large as one draws one’s last breath in fulfillment of Winter’s primary developmental objective: reaching a transcendent state that deepens life satisfaction and increases resilience in the face of untoward conditions the future may hold.

Prospects of marketing success rise when marketing communications are keyed to both the primary developmental objective and the life focus of the coveted customers.

Next: How the stories we live by change by season of life.

How Maslow Saved a Hotel Chain

Boutique hotelier Chip Conley has written a book that captures the ethos of what we call The Age of Transcendence in our own book, Firms of Endearment. Conley’s book is Peak: How Great Companies Get Their Mojo from Maslow.

Conley founded the Joie de Vivre hotel brand in the 1980s, in San Francisco. His business plan called for catering to niches that do not typically show up on the radar screens of legacy names like Marriott. For example Conley’s first hotel, The Phoenix, is a funky establishment that caters to artists, friends of artists and sundry others inclined to travel away from the mainstreams of society.

Getting all the way down to a “niche of one,” the Joie de Vivre web site invites you to answer five questions. Yvette will then match you up with a Joie de Vivre hotel that best fits your personality. This honors Conley’s intention that a Joie de Vivre hotel experience delivers “identity refreshment” to each guest that validates him or her as a distinct individual.

Peak recalls the darkest days in the hotel industry since the Great Depression that occurred in the wake of the dotcom collapse and the horrific events of 9/11. Occupancy rates plunged to 50 percent in Joie de Vivre’s markets. Some competitors filed for bankruptcy, including hotels operated by the biggest names in the business. But Joie de Vivre hotels averaged about a 20 percent annual market share pickup before the hospitality business returned to normal.

Abraham Maslow is the hero in Conley’s story. As improbable as it may seem to some, he attributes the success of the Joie de Vivre brand to the creative application of the ideas of Maslow. Conley's heaviest Maslovian focus is on promoting the self-actualization of employees, customers and investors.

Maslow defined self-actualization in its simplest terms as “being all you can be.” Once in the zone of “being all you can be,” a person has a frequency of “peak experiences” not available to those yet to reach the lofty maturational levels of self-actualization.

People who still toil away to meet basic survival needs or who are still preoccupied with achieving greater social, vocational and material success have only occasional peak experiences.   

In describing his Maslovian-grounded recipe for saving and growing his company, Conley writes, “I came to realize that creating peak experiences for our employees, customers and investors fostered peak performance for my company.”

Peak shows why Maslovian-grounded management is not a New Age inspired approach to running a company. Rather, it is an eminently practical style of management that can produce superior results. It promotes peak performance throughout an organization at less net cost per employee than a more traditional style of management could achieve.

Take marketing costs, for example. With over $200 million in sales annually, Joie de Vivre spends less than $50,000 a year in print advertising.

Other benefits of the Joie de Vivre style of management include lower employee turnover, higher employee productivity and the deeper customer satisfaction and loyalty that inevitably flows from highly motivated, committed and satisfied employees.

Joie de Vivre is a quintessential "firm of endearment" – FoE. It follows the multiple-stakeholder operating model that is fundamental to the FoE way. Joie de Vivre is operationally organized as a network of teams rather than as a hierarchy based on title and function.. Like many FoE brands, Joie de Vivre hotels achieve virtual cult status in the eyes of many customers. That is the biggest reason FoEs typically have significantly lower marketing costs than their competitors have.

In the course of extending his points beyond the Joie de Vivre story, Conley cites other companies whose management reflects a Maslovian orientation. These include Whole Foods, Starbucks, Progressive Insurance, Harley-Davidson, Google and Best Buy – all of whom are FoEs that we hold up in Firms of Endearment as exemplary followers of the multiple stakeholder business operations model.

Conley has performed a great service by showing everyone including competitors how he steered his company through times of nearly unprecedented challenges and built it into the second largest chain of boutique hotels in the world.

Peak is a book for the times. It poignantly demonstrates the others-centered bent of a new breed of CEOs who have rejected the traditional ways outlined in Jim Collins’ monumental best seller, Good to Great and set out to build great companies through a more humanistic style of management.

The Foundations of a New Marketing Paradigm (Part 4)

Advertising Great Bill Bernbach: Human Nature Hasn’t Changed for a Million Years

Each person’s life is a story, unique in some respects, but to a remarkable degree – more than we like to admit – like every one else’s story. But we spend so much time trying to convince others (and often ourselves) of our uniqueness that we don’t give much thought to how alike others we are.

There is a big payoff for the marketer who would invest time in getting deeper insight into how we are all pretty much alike.The truth is marketers gerenrally know less about customers than they should, given the $6 billion a year companies spend trying to figure out what makes them tick.

Consider this: Thanks to huge advancements information technology, marketers have more customer information available to them by an order of magnitude than their counterparts of a generation ago had. Yet, by various ways of reckoning, marketing has become less effective and more costly.

Bill Bernbach, one of advertising’s greatest minds, would understand the problem:

“Human nature hasn’t changed for a million years. It won’t even change in the next million years. Only the superficial things have changed. It is fashionable to talk about the changing man. A communicator must be concerned with the unchanging man – what compulsions drive him, what instincts dominate his every action, even though his language too often camouflages what really motivates him.”

Bernbach was not a psychologist, but had an uncanny intuitive grasp of human behavior. While most of us may lack the intuitive competence of Bernbach, we can get to know our customers better by acquiring a deeper understanding of unchanging man.

We cannot get that understanding through traditional customer research. We must look into people’s life stories as they unfold over the course of a lifetime to get to where he was in knowing the intricacies of the human mind.

Our life stories share much in common with the life stories of others because as we pass through each season of life our deepest needs are quite alike those of others passing through the same season.

Our life stories unfold across four clearly distinct seasons. A person’s core needs –needs that must be satisfied for healthy personality development to occur – are determined by the season of life through which he is currently moving. Each season has a primary developmental objective. Meeting this objective depends on how well the needs it gives rise to are met. By -season of life, the primary developmental objectives are:

-Spring (the first two decades of life): acquiring the basic intellectual, emotional and social skills needed to enter adulthood with reasonable prospects for success.

-Summer (the second two decades of life): developing into a socially and vocationally successful personality.

-Fall (the third two decades of life): determining the ultimate meaning of one’s life as part of more fully developing the inner self.

-Winter (the remaining years): achieving a transcendent sense of oneness with all that deepens life satisfaction and increases resilience in the face of adverse challenges the future may hold.

No more than an infant determines what her core needs are, an adult has no voice in shaping his core needs. Core needs are determined by instructions in human DNA for personality development that have been handed down over thousands of generations.

Of course, people do vary in how they go about satisfying their core needs. How3ever, though style of satisfying core needs may change over time, the core needs themselves never change. But even then, some of the means for satisfying core needs may never change.

Take, for example, the core need of the young to project a distinct identity into the outside world. This need motivates behavior in pursuit of enhancing prospects for social and vocational success. Since long before recorded time young people have generally relied on body adornment.to help satisfy that core need. Tattoos have been a popular way to gain get social recognition across the ages. And though tattoos sported by today's young are quite different from those of aboriginal youth a thousand generations ago, tattoos as a means of getting attention have been part of the human drama as far aback as we can see.

Next: Primary life focus underlies the satisfaction of each season's primary developmental objective.