Huge amounts of marketing dollars are spent to convince customers to come back. They try the product, leave, or just shop around, so we spend to get them back.
If marketing really was a war, as the analogies often go, it would be the same as expending resources to take a hill, then abandoning it to the enemy, only to have some general say take that hill, so the grunts go through the hell again.
How much easier to have kept it once taken.
Why are we so hung up about ethical sourcing of coffee??
What about the electronics industry, and shoes, rare earth minerals, and many others?
Who bears the responsibility for the conditions of workers in the supply chains of successful businesses.?
Apple is the biggest, most profitable company the planet has seen, but the depredations in the supply chain at Foxxcon are well known.
If the labour cost of an iPad is, as has been calculated, less than $15, adding a few dollars onto the price to lift wages would do little to damp the demand, or indeed, Apple could make a few dollars less, reducing its whopping billions in cash flow by a miniscule amount, but would it be a few dollars less?.
A significant number, albeit a small percentage, of coffee drinkers appear willing to pay a bit extra for the “ethical” badge, surely the same would be the case with an iPad, fancy shoes girls cannot walk in, and many other product categories where differentiation is a key challenge. Benneton does, why not others?.
The current Australian government has a marketing problem.
Their other problems, trouble with the hung parliament, zealous credit card expenditure by MP’s, inability to out-communicate the drivel of the opposition, a rebellious electorate, a failed “moral Imperative” and others, are just the symptoms.
Every useful marketer knows that success depends on a relentless focus on clearly articulated longer term goals. When focus is allowed to shift to the crisis of the day, from the “main-game”, whatever that may be in your circumstances, to responding to the day to day, the marketing effort fragments and stumbles for lack of a solid foundation.
The problem with this Government, and the Opposition as well, is a lack of any long term goal the electorate understands beyond their selfish objective of retaining/gaining power, and if the electorate cannot buy into the government of the day’s priorities for various reasons, they at least understand the “why”, as a process of explanation has occurred.
Generally the pundits say the Government has a communication problem, but it is much deeper than that, they have no idea of what it is they wish to communicate beyond the press release of the day that they hope will dose the fire started yesterday. They have a fundamental strategic marketing problem, not just a communication problem.
This is a term coined by Peter Drucker when talking about contract management, particularly in relation to older contractors who bring a wealth of experience and hard won wisdom to the table.
Using contractors, particularly high level ones brings a number of huge benefits:
Our economy is undergoing structural change, management productivity is under scrutiny, so it makes sense for businesses, from start-ups to huge multinationals, to take advantage of the big pool of highly experienced, mobile, and motivated older contractors.
Anyone who can read can read a Keats sonnet, but not everyone can “see” the lyrical quality, and feel the passionate introspection most have at their core. Those who can are truly literate in English poetry.
Data Literacy, a term I like, similarly implies not just an analytical capability, but also an intuitive capacity to understand the nuances and hidden gems in data, rather than just the capability to be informed by apparent outcomes.
Have you ever seen people making stupid decisions while pointing out that the data justified them?
I see it all the time. It seems to me that there should be a knowledge building chain here, rather than just a data analytical one:
Not all numbers are equal, some are more reliable and informative than others, simply because they are the result of tested assumptions, and more and better informed questioning. The development of literacy takes time, effort, and resources, but is worth it.
Another paradox surfaced by the emerging business networked models is that of ownership of IP.
In the old days, just a few years ago, ownership of IP was top of mind in many if not most development situations, but then along came digital collaboration.
Linux is now the dominant operating system installed on large servers, a loose collaboration of nerds has significantly outperformed Microsoft, one of the smartest companies of all time, with access to the most and best resources, and a dominant starting position. How can this be?
Nobody owns the Linux IP, it is a common license,
Toyota for years has encouraged, perhaps demanded, innovation from its tier 1 suppliers, often using non quantified descriptions of outcome as a substitute for detailed specifications, and Boeing, in the design and construction of the 787, set out to “co-innovate” with its suppliers, as they recognised the development task was simply too complicated to do alone. Despite huge problems, the exercise has yielded technology advances that Boeing believes will give them a big advantage for many years.
The key in building a network business model is the recognition that IP is no longer the end game, simply a means to an end. Businesses are now prepared to own some, share it, give it away, and have others generate it, just to ensure that the benefit from the knowledge flows through to the product.
I recently completed a business plan for a client which called for a high degree of collaboration with other complementary institutions, all of whom have at their core, a reverence for IP. In considering the drivers of success, and writing a plan to harness them, ownership of IP was always going to be a big stumbling block, it turned out to be a terminal one. However, the plan did get a few people thinking, so perhaps down the track a bit the benefits of a networked model may be seen to outweigh the C20 preoccupation with IP ownership, after all, it is how the IP is leveraged, not who owns it, that counts.