Triangle marketing

This blog post is based more on how I have bought rather than how I have sold. The basic concept is that when you hear about a product or service from two or more independent sources, you are more likely to buy it.

The threshold varies by the kind of product you are looking at. When it is a low touch item like a book, two independent recommendations are enough. When it involves higher cost and has higher impact, like a phone, it might be five recommendations. For something life changing like a keto diet, it might be ten (I must mention I tried keto for half a day and gave up, not least because I figured I don’t really need it – I’m barely 3-4 kg overweight).

The important point to note is that the recommendations need to come from independent sources – if two people who you didn’t expect to have a similar taste in books were to recommend the same book, the second of these recommendations is likely to create an “aha moment” (ok I’m getting into consultant-speak now), and that is likely to drive a purchase (or at least trying a Kindle sample).

In some ways, exposure to the same product through independent sources is likely to create a feeling of a self-fulfilling prophecy. “Alice is also using this. Bob is also using this” will soon go into “everybody seems to be using it. I should also use it”.

So what does this mean to you if you are a seller? Basically you need to hit your target audience through various channels. I had mentioned in my post earlier this week about how branding creates a “position of strength“, and how direct sales is normally hard because it is done through a position of weakness.

The idea is that before you hit your audience with a direct sale, you need to “warm them up” with your brand, and you need to do this through various channels. Your brand needs to impact on your audience through multiple independent channels, so that it has become a self-fulfilling prophecy before you approach to make the sale.

What these precise channels are depends on your business and the product that you’re trying to sell, but the important thing is that they are independent. So for example, putting advertisements in various places won’t help since the target will treat all of them as coming from the same source.

Finally, where is the “triangle” in this marketing? It is in the idea that you complete the branding and sales by means of “triangulation”. You send out vectors in seemingly random directions trying to build your brand, and they will get reflected till a time when they intersect, or “triangulate”. Ok I know my maths here is messy ant not up to my usual standard, but I guess you know what I’m getting at!

 

Branding and positions of strength

I had an invitation to attend a data science networking event today. I had accepted the free pass for option value, but decided today to not exercise the option. Given I was not going to speak at the event, I realised that the value of the conversations at the event for me would be limited.

One of the internet gurus (it might be Naval Ravikant, but I’m unable to locate the source) has this principle that you shouldn’t go to networking events unless you’re speaking. Now, if everyone applied this principle events would look very different, with speakers speaking to one another (like in NED Talks!).

Thinking about it, though, I see clear value in this maxim. Basically when you go to a networking event and speak, you can network from a position of strength, especially after you’ve spoken. This is assuming you’ve done a good job of your speech, of course, but apart from elevating your status as a “speaker”, speaking at the event allows potential counterparties in conversations to have prior information about you before they talk to you.

So there is context in the conversation, and since you know they know something about you, you can speak from a position of strength, and hopefully make a greater impact.

It is not just about speaking and events. For a long time, a lot of my consulting business came from readers of this blog (yes, really!). This was because these people had been reading me, and knew me, and so when I spoke to them, there was already a “prior” on which I could base my sale. Of late, I’ve been putting out a lot of work-related content here and on LinkedIn, and that has sparked several conversations, which I have been able to navigate from a position of strength.

A possibly simpler word to describe this is “branding”. By speaking at an event or putting out content or indulging in other activities that let people know about you and what you do, you are building a brand. And then when the conversation happens, the brand you have thus built puts you in a position of strength which makes the sale far easier than if you didn’t have the brand.

You need to remember that position of strength as I’ve described here is not relative. It is not always necessary for the brand to elevate you to a level higher than the counterparty. All that is necessary is for it to put you at a high enough level that you don’t need to talk from a position of weakness. And if you think about it, cold calling and door to door sales is basically selling from a position of weakness – while it might have worked occasionally (which makes for fantastic stories), it is on the most part not successful.

And in some way, this concept of branding and positions of strength is well correlated to what I recently described as “the secret of my happiness“. By being really good at what you are good at, you are essentially putting yourself in a position of strength, so that people have no choice but to tolerate your inadequacies in other areas. Putting it another way, being really good at what you are good at is another exercise in brand building!

Brand building efforts can sometimes fail. There are times when I have given talks and got few questions – clearly indicating it was a wasted talk (either I didn’t talk well, or the audience didn’t get it). I have put out content that has just sank without a trace or any feedback. The important thing to know is that somewhere it all adds up – that these small efforts in branding can come together at some point in time, and make it work for you.

 

Segmenting leisure hotels

The original idea for this pertinent observation comes from the wife. However, since she’s on an extended vacation and hence unlikely to blog this soon, I’m blogging it.

Hotels are traditionally classified into “business” and “leisure” hotels. As the names suggest, the former mostly cater to business travellers and the latter to vacationers. The lines can be a little blur, though, since business and leisure travels have complementary seasonality, thanks to which hotels practice “revenue management” by using their capacity for both business and leisure.

However, as we discovered during our vacation last week, leisure hotels can be further segmented into “couple hotels” and “family hotels”. Let me explain using the example of Vythiri Village Spa Resort where we spent most of last week. Based on our reading of the hotel, it was initially built to be a “couple hotel” but perhaps based on the kind of clientele they were getting, they turned it into a “family hotel”.

Now, the difference between couple hotels and family hotels essentially has to do with how child-friendly the place is. Vythiri, for example, had a “kids play area”, the balconies had been shuttered up with windows (creating greenhouses inside the balconies which made them horrible to hang out it, but making them safer for kids),  had a pantry area (the balcony had been converted into a pantry – so people wiht babies could bring their electric cookers and cook!) and activities such as “guided nature walks” and “artificial waterfalls”. Even at its deepest the swimming pool was not more than three feet deep (no I didn’t test it).

The reason I say that the hotel was built for couples is to do with the large bathroom which also included the walk-in closet. Given that you might want to multiplex between one person showering and another dressing at the same time, this design made it obvious that it only works for couples, but not for people with kids – most parents are shy about letting their kids see them in various stages of undress.

Then this resort advertised itself as a “spa resort”, and a massage was included in our package. This is again a “couple thing” for people with kids are unlikely to be able to take time off from their kids to visit the spa! So everything about this resort told you that it had been designed for couples, but then changed its positioning to become a “family resort”!

I guess you get the drift. And so whenever the manager would accost us and ask if things were good, the wife would quickly nod him a “yes”, and then privately tell me that we were the wrong target segment for the hotel, and so our feedback didn’t really matter to him!

And so we stayed there, for three nights and a bit, looking at screaming kids every time we hit the restaurant (the buffet spreads were nice, so we didn’t order room service); looking in bemusement at people “going on nature walks”, ignoring the “entertainment” at the “gala Christmas dinner” and so forth.

We had a good time, though, eating, sleeping, talking, hanging about – mostly within the confines of the room. The service was great, the staff extremely friendly and pleasant. Only that we were the wrong target segment for the hotel, and we didn’t realise that while booking!

PS: I tried looking for a “marketing” category to put this post under but realised that none such exists. Goes to show what I’ve not been blogging about!

Offline marketing of online services

Using snail-mail for marketing is an effective strategy for it grabs more of your attention. But messages need to be more personalised to have effect.

This came in the mail yesterday. If you are an old-timer like me, you will recognise it as an “inland letter card”. The edges are frayed because it had been so long since I’d received one such card that I’ve forgotten how to open them.

bigbasket

You will notice that this inland letter came from Bigbasket, the online grocery shopping firm. At first look, it is bizarre that an e-commerce firm is using snail mail for its marketing. On second thoughts, though, it isn’t that bizarre!

The thing with online modes of communication such as email or SMS is that the cost of sending a message is low, very close to zero. What this leads marketers to do is to bombard you with messages. For example, I bought something from Jabong a couple of weeks back and they’ve since sent me at least an SMS a day. I promptly delete them without reading. On my email, I’ve been unsubscribing wherever possible from promotional lists from which I get messages – for they are too frequent and too “vanilla” (it’s bizarre that even marketers who know much about me refuse to use that information in their communication).

In short, there is too much clutter in online (email/SMS) marketing, and the chances of any promotion really standing out and getting the user’s attention is minuscule.

Sending snail-mail, on the other hand, is expensive. It costs you to buy the paper, print out the letters and then you pay for postage. This means that with the advent of cheaper means of communication, most marketers have moved away from it. What that has done is that you get much lesser snail-mail than you used to a few years ago. Which means that the amount of attention you devote to each snail-mail is actually more!

So with snail-mail being the more expensive form of marketing, it is actually more effective for marketers because it draws your attention! (You can think of it as a multi-player prisoner’s dilemma where the marketer wants to maximise her claim on your attention (relative to her costs), and can do so by either using email or snail-mail. The optimal solution, I believe, is a kind of “mixed strategy” – mostly email, but the odd snail-mail here!)

So an online sales company reaching out to you by snail mail is not that bizarre after all. If only they had customised the mail to put my name on it (not hard to do at all), and made it seem like a personal letter, it would have been even more effective!

There have been two occasions in the last five years when I’ve actually responded to upsell campaigns. One was by Airtel who called and offered me a 3G data plan for almost the same price as what I was then paying for my 2G plan. I had been intending to upgrade and I took it.

The other was by Tata Sky, who sent me a beautifully crafted personalised letter printed on thick A4 paper, indicating I was a “premium subscriber” and asking if I wanted to upgrade to Tata Sky+ HD, and giving me a number of a dedicated call center who I had to call to upgrade. It is likely that had it been email I might have discarded it (or if I were using today’s Inbox, marked it as “Done”). Snail mail drew more attention, and the personalisation made me feel good. And I upgraded.

The cross-selling epidemic

Cross-selling is the phenomenon where you try to get more value out of your existing customers by selling them other things. And from the looks of it it is reaching epidemic proportions in India.

Yesterday a guy came up to me at the gym and asked me to try out some “power yoga” group exercise classes. I told him I wasn’t interested, and he continued to talk (I was on the treadmill so couldn’t run away). Of course my membership includes any group classes so I don’t have to pay more to do “power yoga” but the economics are not the same from this guy’s perspective!

Then for the last two weeks my gym (Gold’s Gym in Jayanagar) has been full of advertisements for protein supplements. And today some of their salespeople had even set up shop inside the gym hawking their stuff. From conversations I overhear in the locker room I know that several other members of the gym regularly take such supplements but the kind of advertising within the gym was way too intrusive!

Later today I had gone to visit a dermatologist (who I found via Practo) for a rash I have on my hand. The doctor seemed least interested in checking me and more interested in putting me through a battery of blood tests (which were done in the lab attached to the clinic). I don’t know why I went along but after becoming poorer by a thousand and three hundred rupees I figured that the tests included liver function and thyroid function test! Why a dermatologist would need such tests I don’t know! Anyway I’ll just pick up the reports tomorrow and run! Oh and when I was walking out the receptionist helpfully pointed out that I could buy the prescribed medicines at the little pharmacy also in the clinic! I refused an walked out!

A few months back I’d gone to my ophthalmologist for a routine checkup. After having got my eyes tested I asked him to check for my power on contact lenses also. He said he’ll do so if and only if I were to buy the lenses from his clinic! Since I’d found those lenses to be of poor quality the last time I’d got them, I scooted. Oh, and this guy has been my regular ophthalmologist for over twenty years!

This brazen cross-sell seems so suboptimal that it possibly drives away customers (but from what I hear, if every doctor indulges in such practices there isn’t much choice anyway!). I wouldn’t have minded paying an additional sum (over and above what I’d paid for my generic eye test) to get my eyes tested for contact lens power also. But this option (which would’ve worked out more simply for both of us) wasn’t available! Bizarre, I tell you!

Marketing

I’m in a conversation with a friend on marketing my consulting services and he gave me a most genius piece of advice

You can say you do supervised learning instead of saying regressions.

Last month I was at this big data conference. Everyone I met said they were into big data or analytics or some such. The follow up question would always be “and what exactly do you do?” Followed by a laugh about how these are much abused terms.

Teaching marketing

Recently, the Alumni Association of IIM Bangalore had invited alumni to give interviewing practice to second year students at the institute. This was in an attempt to help them prepare for their “final” placements that are coming up in March. With a view towards brushing up my interviewing skills (haven’t interviewed anyone for close to three years now) and also to check out the kind of people that go to IIM nowadays I decided to volunteer. And ended up interviewing some five or six people.

I had told the organizers that I’d be interviewing for a hypothetical job in my firm and that they should preferably send students with an inclination for “quant” and for consulting. Perhaps there was a mismatch in communication, and perhaps I sent my “requirements” too late, but it so happened that at least half the people who came to were “majoring” in marketing (nowadays they’ve introduced the “major-minor” system at IIMB. If you do five electives from one “area” you “major” in that. Three electives from an “area” gets you a minor. There is no compulsion to either major or minor, though).

Given that the questions that I’d prepared were inclined towards interviewing for a quant/consulting/analytics kind of role (basically whatever I currently do in my “job”), I decided to not veer too far from that while teaching these people. To each of them I put forth a “case”, where the central problem was marketing-related but needed numbers to “solve”. In fact, I made up the case on the spot after one of these students told me he had interned at an e-commerce firm.

So I told them that they are the marketing manager of an e-commerce firm and the firm has launched a few advertising campaigns and now needs to test the effectiveness of such campaigns. I asked them how they would measure this.

Given that they might have just about started off practicing for their placements, I realized they didn’t have much expertise doing “case interviews”, and so tried to help them navigate the case. So for each of them I started by asking them what kind of metric they would use for measuring the effectiveness of the campaigns. And this is the stage that each of their “interviews” came unstuck.

Incredibly, each of them independently started off with “we will first understand what segment this campaign is targeted at”. And then their process of measurement involved identifying a sample of customers of this segment and then “measuring if they had got the intended message of the campaign”. When I told each of them that they weren’t allowed to do a survey, and added for good measure that a focus group discussion is also out of question, they all seemed absolutely lost. I couldn’t really proceed with their cases.

I find it incredible that the three of them (granted – small sample) who are second year students in one of India’s better business schools (at least I hope so) completely failed to imagine that the effectiveness of an advertising campaign can be measured in terms of “sales” or “website hits” or “click through rate” (depending upon the “intended message” of the campaign, one of these becomes the appropriate metric). It seemed to me that their management education had clouded their ability to think intuitively.

In my limited experience in interacting with marketers, I’ve found that a large number of them are fairly resistant to using numbers in their business, and speak in terms not fathomable to the common man (I once made the mistake of applying to a marketing analytics firm, and was promptly sent some questions about measurement of “brand feeling” and such like. I withdrew my application). The impression I get from my small sample is that marketers’ way of thinking is completely divorced from that of other people in business, and have always wondered about why this is. I had assumed it might be a function of getting ingrained into certain marketing jobs, but now it seems like this way of thinking is more deep-rooted.

I was taught core marketing by a somnolent professor who was renowned to be a “great marketer”. He clearly didn’t market marketing too well, for I didn’t take any marketing electives after that. However, I think I “get” related fields such as game theory and behavioural economics, and try to understand marketing using those frameworks. Usually it doesn’t take you too far in a conversation with marketers, though.

Based on my interactions with the three marketing major students I interviewed, it seems to me that something is wrong with marketing teaching, especially at IIMB. It seems to me that marketing is taught as a rule-based discipline, rather than based on first principles. Perhaps that is how recruiters of marketing majors want it to be like, but it seems like this kind of “education” is only going to create poor quality marketers.

PS: I admit to small sample bias, extrapolation and such like.