Monday, 30 April, 2007

Searching the opposite

For no particular reason, I once Googled the 1967 Israel-Arab 6-Day War. The first dozen and half dozen pages (perhaps more) of links said the same thing, that is, little Israel pulled off the greatest air victory in history by destroying every inimical Arab air force on the ground in a few hours of bombing.

I had almost given up hope of anything different, when I hit an oddly named and badly designed webpage, http://thewebfairy.com/nerdcities/Palestine/some-wars.htm.

In a few short sentences it gave a completely new (to me) picture. I need to quote it in full:

‘The 1967 war was a sneak attack by the Israelis, no different from Pearl Harbor or Operation Barbarossa. It was even justified in the same manner as Operation Barbarossa and the Pearl Harbor attack.

Note the similarity to the German and Japanese justifications for their surprise attacks.

The Israelis claimed that it was only a matter of time before they would be attacked by the Arabs.... so they attacked first. Hence, by Israeli logic.... the Arabs "started the 67 war against Israel".

The Germans claimed that it was only a matter of time before they would be attacked by the Russians.... so they attacked first. Hence, by Israeli logic... the Russians "started the war against Germany".

Israel claims that the blockade of the port of Eilat was an act of war, which forced them to attack. Hence, by Israeli logic.... the Arabs "started the 67 war".

America was enforcing an oil embargo against Japan. The Japanese considered this embargo an act of war, which forced them to attack. So by Israeli logic.... the United States started the war against Japan.’

Suddenly, here was an interpretation that’s diametrically opposite to the usual! The data hadn’t changed, their reading had.

It taught two important lessons in marketing: (a) If you search deep enough, you may be (pleasantly) surprised; and (b) Data by itself can never be enough: It needs to be interpreted with imagination, rigour and an open mind.

Two statistics

“Professor doesn’t understand business requirements. He is more interested in statistical rigour and exploration.”

The implication is that there are two statistics, one, the professor’s, the theoretical one, and the other the executive’s, the practical one.

Of course, practicality consists of agreeing that the data supports the executive’s haunch. Or throw up a miraculous solution - one that is bound to break down in real life, no matter how promising it looks on the computer - to the executive’s problem.

The parallel that immediately comes to mind is a little boy discovering that there are two kinds of cooking, his mother’s and the chatwalla uncle’s. Unfortunately, professor, paid by the executive, can’t play mummy.

Thursday, 26 April, 2007

Creative Chapsari

A client told my agency that a very well-known mainline agency offered to do their leaflets for Rs 1,100 each. He couldn’t understand how we could expect an amount several times that? We argued about specialisation, quality and the rest. Nothing cut ice.

We shouldn’t have. Instead we should have asked a simple question, “If you’re paying them Rs 1,100 how much are they paying their employees?”

Let’s take the minimum-strength agency, a copywriter, an art director and an operator. These three also fill in for accountants, servicing executives and peons.

And let’s say they split the booty in a ratio of 5:5:1. That gives the copywriter and his art partner Rs 500 each. The poor operator gets Rs 100.

How many leaflets do the creative talents have to do a month to make as much as a chaprasi, assuming the latter makes around Rs 5000, all inclusive? 10. That’s about 2½ a week, written, laid out, approved, art worked and paid for. Which is what most copy-art-operator trios normally do.

I’ll be the first to agree that the quick-math is extreme oversimplification. But would the great agency to admit to criminal undercutting? I wonder what they got out of it.

On second thoughts, in all probability it was the client who was playing dirty, using a rate out of a package deal to bring down the quote for a one-time fee. It was almost like asking a restaurateur to discount his breakfast because the hotel gives it 'free' in its 'bed & breakfast' package.

If you are so smart, why aren’t you rich?

Wait a moment. Why should a smart person be rich? Or a rich person smart? That is, assuming ‘smart’ means ‘above average in intelligence’ (And exactly what is ‘intelligence’?). Is there any statistics that shows income and intelligence are correlated? Or otherwise related? Does the relation hold across all income ranges? Or does it cease to hold in the stratosphere? How about the gutter?

Till someone enlightens me of this, let me indulge in some numerical hocus-pocus:

Which, of course, means that the scientist who makes the fundamental discovery probably makes the least money; the engineer who turns this into something of practical value makes considerably more; but he’s a beggar compared to the executive. (This wonderful piece of inference proves that I have the makings of a front-rank scientific socialist.)

I suppose the poor scientist can’t become the rich executive even if he wanted to. And vice versa. And that this may have far more to do with personality traits (whatever they mean) than with brains. And that phrases like ‘If you are so smart, why aren’t you rich?’ are as unsubstantiated as they are insulting. But why bother if you can fling them around to make people shut up.

Wednesday, 25 April, 2007

Two fundamental questions

Open any database marketing or data mining book and you’d be convinced that business should be completely numbers driven.

Switch back to the real world, and you’d be hard-pressed to find a single marketer whose marketing is founded on numbers. (Crazy sales targets fall under dreams, not data.)

Why is it so?

If we take off the frustrated direct marketer’s cap and pull on an unbiased amateur anthropologist’s, we may find some solace.

At any rate, we do find two fundamental questions:

First, at what stage does the store clerk’s memory become inadequate? How many customers, regular and irregular, does the store have become matters go out of hand for the unaided salesman? How many categories and brands can he handle? Are we trying to introduce software, database marketing and CRM into a market that can still make do with traditional shop keeping?

Second, at what stage does the presence of techniques and technology begin to compensate for the absence of the ‘genuine human touch’? Whether B2B or B2C, it’s foolish to discount the role of unquantifiable human element. Perhaps there is a certain value threshold beyond which customers are prepared to be sold by an efficient system instead of a fellow human.

Which leads to another question: Does the answer of the 2nd question begin where that of the 1st ends? Is there a gap between the points where humans become scarce and machines kick in. If there is a gap, what do database marketers do in a market trapped in that gap?

It’d be naive to expect easy answers to these questions. Yet they must be asked. Surely someone has researched these basic points? Please enlighten.

Pratibha and Nabanita

“May is (gap) speak to (gap) ...Pratibha Chatterjee?” “May is (gap) speak to (gap) Na-ban-nita Chodry?” And these are pardonable ones.

...Now pabitra is a common word. Even the smallest vocabularies contain it. It occurs in all Indian languages, and is pronounced in the same way in all of them. (Bengalis pronounce it as pobitro, but that’s a minor point.) Admittedly, it is not a common first name.

While Nabanita is quite popular in Bengal as a feminine first name, I am yet to come across a non-Bengali with this name. On the other hand, its masculine version, Navneet, is hardly rare outside Bengal. In fact Navneet Publications dominates the guide book business in Central India.

So why do tele-callers mispronounce these two simple words.

I have several hypotheses, all of which are probably true:

1. The brand is incredibly sharp. This is a sales tactic. By mispronouncing the consumer’s name, the brand, though its representative, the tele-caller, signals, right at the beginning of the conversation, who is the boss.

2. The brand is insufferably stupid. To a consumer, his name, not Coca-Cola’s is the world’s most valuable brand. But the brand doesn’t understand this simple thing.

3. The brand is impossibly ignorant. Basic stats can help rank prospects, prioritise calls, and humanise the load on tele-callers, so that they can, as a minimum, read the suspect’s names in their heads before calling him. And this is not just about improving manners; it may improve efficiency and conversions too.

Unfortunately, the brand and its church measure work in exertion, not results. So they must shackle tele-callers to call quotas, and whip them with auto-calling software. It’s not very different, basically, from judging a bowler purely by balls bowled, assuming that it has a very simple and sure correlation with wickets taken ("All it takes is hard work").

Sex awards

Let’s say you hold a contest for performance in bed. And in your contest the yardstick isn’t actual prowess beneath the sheets but good looks.

Now that would be quite a logical thing to do provided (a) you could define and compare ‘performance’; (b) you know exactly how performance depends on looks; and (c) you can also define and compare ‘looks’.

For the second condition to hold all your judges should go to bed with all your contestants, in some sort of round-ribbon contest.

Immoral? Maybe. Absurd? Probably. Worthwhile? Almost certainly not.

Yet we hold ad and DM award contests every second weekend. “Wait a moment,” you say, “How dare you compare hypothetical judges of a ridiculous contest with industry experts evaluating the year’s best work?”

It’s admittedly irreverent, yet, aside from that, are the two situations that different?

The hunt and the carcass

You spend millions on ads, on sales promotion, on dealer deals, on salesmen’s bonuses and on everything your MBA course taught you to spend. The customer buys.

And you promptly banish him to a ‘database’ where his name is misspelt, his address is unreachable, and his email id bound to bounce. You probably get the phone number right - that’s the one he prayed you’d get wrong.

He finds it more than a trifle ironical that he who was so valuable as long as he didn’t buy became so completely worthless the moment he paid you money.

He doesn’t understand the marketing mind. The hunt is for its own sake; then the carcass rots.

Tuesday, 17 April, 2007

Probability in direct marketing

I have put up some calculations at http://spreadsheets.google.com/pub?key=pjtNNMP33Dgum6Yup4umFMw.

It tries to answer a simple question: ‘Would it make sense to mail again?’ using simple probability with some almost arbitrary assumptions. The results are interesting.

Perhaps we’d come the same conclusions by applying simple statistics. Nonetheless, I wonder why direct marketing books don’t include anything on probability. Will it not help in planning? Can anyone suggest some good books or sites on the application of probability, especially basic probability (the equivalent of business statistics), to marketing in general and direct marketing in particular?

The economics of outsourcing

If Indians are to supply creative or analytics services to the West, they must do so at a small fraction of Western rates. Otherwise, the work wouldn’t exist. There would be no cost advantage. Sounds logical.

But does a Western copywriter or analyst living in a village charge less than his counterparts in cities (I assume it costs less to live in a village than in a city)? Where does the logic of the factory manufacturing end and that of professional services begin? Which universal and basic economic law am I breaking by asking this question?

How about training?

Ever heard a CRM saying that training his staff to be courteous, considerate and proactive can be the best CRM for his customers? I haven’t. Would that not cost a lot less than a loyalty programme? Most probably, yes. Wouldn’t it have a better chance of delivering results? Most probably, yes. Would that have improved morale enormously? Most probably, yes. Do they do all they can already?

You buy the most you need the least

The man with the biggest library buys more books. The man with the most suits buys more suits. Is this simply ‘collecting’? Why do people collect? Why are the best customers in a category the people who need it the least? Is this babble or something worth thinking about?

The dinosaur’s thumb

An archaeologist would probably be able to tell you a dinosaur’s dietary preferences by studying its fossilised thumb, but do we really believe we can profile a live person by a single purchase? Are brands that strong that their purchase decides your personality? What many people does the manager average to create his ‘typical buyer’? Why are we so sure that being able to describe every detail about the ‘typical buyer’ will open the lock to untold riches?


Has anyone researched the gaps between marketers’ pictures of their market and reality? I strongly suspect it’d make revealing, if not amusing, reading.

What will you do if you know?

Will you build a factory if you didn’t know what you’ll make in it?

Or open a shop without deciding what to sell?

Or employ an executive without a defined job profile?

Yet it is routine to find marketers who want to launch a loyalty programme with nothing more than the vaguest aims about loyalty, repeat purchase and data collection. Can they not put down a simple wish-list? Wonder how the rest of their marketing runs.

Worshipping response

Every direct marketing book and website venerates response rate and rightly so. Yet response is to direct marketing what score is to cricket. The real learning is in the journey to response: A mere reading of scores tells next to nothing.

The sensible student pays attention to every ball and stroke, not just their totaled result. I remember Sunil Gavaskar rate a match-saving 50 above all his innings, because he scored it under heavy pressure, on a bad wicket. During my childhood, Sportstar would bring out a series called ‘Their Greatest Moment’. In many cases, this moment wouldn’t be that of their biggest victory, but their most difficult one.

Another statistic that does the rounds – I don’t know if it has any basis in fact – is that Sachin Tendulkar rarely scored big in matches India won. Even if this is true, shouldn’t one also look at matches (he may have) saved?

All-data-zero-information is as harmful as no-data-all-opinion. Perhaps more so, because data makes everything seem very systematic and scientific, therefore replicable. Before you realise, an observation becomes an empirical law (We call these rules of the thumb).

Thankfully, there are a few first-class case studies that include sufficient details. Unfortunately, they are vastly outnumbered by case-lets that reveal little but damage much.

Monday, 9 April, 2007

What happens to the contest SMS

We often wonder what TV programmes do with the literally hundreds of thousands of SMSs they get in response to their inane contests.

Do they call a random sample of senders to research what sort of people watch the show and what do they like in it?

Do they pass on such research as profiles of the show’s audience to advertisers? (Can the SMS senders be called representative of the show’s audience?)

Do advertisers hand the unsuspecting SMS senders’ numbers to tele-callers as ‘leads’? Why does every programme have a contest?

Can someone help us with these questions?

Kill the pilot

Your boss wants you to find out if direct marketing will work. You call five agencies. Order them to present. Tell them nothing else. They ask nothing, so it’s not all your fault. The most desperate one comes with speculative creative. Which you put on a presentation and show your boss. He nods. They have the job.

You start haggling. They agree to slave rates. Once the relationship is established… the whore will become the wife.

You’ll run a pilot, on profit-sharing basis. Even as your company pays a multinational consultant millions for advice you’ll never use. They must, if they believe that direct marketing can produce results, share the risk. Never mind your share, as a fraction of your marketing spend, is a tiny fraction of their share, as a fraction of their turnover.

The pilot ‘fails’. The agency insists it’ll succeed if it’s scaled up. You know better. Direct marketing cannot work for your industry. Why leave it at that? No, let’s go a step further. Direct marketing doesn’t work in India. Because nobody reads.

If only the couples of this country piloted sex as marketers pilot direct marketing, our population would have been a tiny fraction of what it is today.

How do you measure loyalty?

Humm…

How do measure love? Or hate? Or interest? Or indifference? Perhaps psychologists can. Maybe they can measure loyalty too. But can brand-building business executives make sense of their methods and measures?

More to the point, who is loyal customer? In an ad agency, he can be very different persons to the account executive (trusts me, asks me, doesn’t order me, wants ideas and second opinions) and, say, the account manager (lets me raise bills), not to mention the accountant (pays bills, on time). Such differences are bound to exist in every company and industry. When you talk about ‘the loyal customer’, are you sure that everyone who needs to understand understands, more or less, the same thing?

Also, why do you want to measure loyalty? Because the past will show the future? Does it? Will it? In your company, in your business? Do you want to know how many will respond to your next marketing scheme? Or who should you be extra nice to? Or who’ll form the 20 of your 80:20 four years from now?

Do you really run your business so systematically that you can obtain, leave along use, information of that nature? Can anyone? An astronomer may be able to predict how the heavens will behave a million years from now? But ask him to do it for a business, and he’ll almost certainly recommend you see an astrologer instead.

We are not, of course, saying something as stupid as ‘Burn your plans,’ merely suggesting that the plans may have to depend more on observations, experience and ambition than on numbers. Perhaps they always do, and numbers are only put down to distract busybodies.

Finally, why do you believe that the data you have can predict loyalty?

Let’s say we define loyalty as ‘probability to dine again’ for a restaurant. We’d know the courses ordered the number of dinner companions, the time and date, the waiters, the special instructions, and what not.

But would we know the tip? What if it’s paid in cash (tips are taxable income) and the restaurant doesn’t have a system of recording and splitting tips? ‘Tip’ is supposed to be an abbreviation for 'to insure promptness'. When would the diner want this promptness? On a future dinner, obviously. So a good tip not only says, “Thank you,” it also says, “Keep it up, because I’ll need you again.” Isn’t it possible that the unrecorded tip would prove to be a better predictor than everything that is so carefully measured?

We should stop measuring then? Or wait till we have discovered that universal applicable and universally understandable clear measure? That’ll be like stopping breathing till we realise the meaning of life, wouldn’t it?

All we are suggesting is that debate and discussion be not always equated with intellectual masturbation. By that yardstick, let's-do-it measuring is numerical rape.

(In The Ultimate Question Fred Reichheld announces that the Net Promoters is this measure. Please see www.ultimatequestion.com for an introduction. And do let us know what you think. Mr Reichheld is the greatest guru on loyalty. Yet, it’d perhaps not be a sin to debate about him.)

“Let’s compare and we’ll know.”

We often hear executives say that we only need look at the figures and we’d know which way to go.

What they do is dangerous, destructive and frankly disgusting. Without the slightest thought on what those figures mean or how they came into being; without any idea of what is significant and what’s not; without any questions as to if there were easy, commonsense explanations for variations, they rush to judge, theorise, and change.

Which doesn’t matter for them, because nobody is going to check the final figures.

It can, however, devastate the people on the job, unless they switch off their brains and accept orders like zombies.

We beg them to read a basic book on statistics. Even popular math books will do. It’s heartening to observe the popularity of books like Freakonomics and Undercover Economist, and the availability of excellent textbooks in low-priced Indian Sub-continent editions.

One hopes one will soon see their effect.

And that the next big thing will be translation. For many Indians, English remains a difficult language. We feel deeply ashamed about it, but do nothing about it. The more intelligent races translate each other’s works and get on with their lives.

“Have you done market research?…

Really?

First, if you wanted market research, why are you asking me? I (the singular, in our case, embraces the plural, unless stated otherwise) am not the market, nor a market researcher. You wanted my opinion, didn’t you? And are very angry it doesn’t match with yours.

Second, what makes you think every question can be answered by market research? The buried need must be dug out by ceaseless observation, interspersed with flashes of inspiration, when things ‘sort of connect’. That’s called insight, I suppose. I wonder if any but the best market researcher can contribute to insight.

Even if you were to have a team of master market researchers at your side, would they be able to eliminate risk?

Third, did you do market research? If you did, was there any special reason for not showing it to me.

I wish, for business’s sake, executives learnt to take disagreement better.

Relationship

Everyone wants to enter relationships. Your phone, your car, and your jeans.

Only you won’t to play.

In ancient days, you’d have a nodding acquaintance with the ne'er-do-well who ran the phone booth, were friendly with your neighbourhood mechanic, and regarded your tailor as a true artist.

Those good old days won’t come back. And, honestly, you don’t miss them much. Those ‘relationships’ were quite unimportant to you.

This would be perfectly obvious to any child. Yet CRM gurus refuse to see it. They keep insisting that lonely humanity must now bond with the plastic card. One wonders why.

PS: What would you say to a person of the opposite sex who offered you a relationship even before getting properly acquainted?

The other

A few days ago we bought a satellite TV connection. After the installation was completed we were asked to fill in a profile form, so that we may get offers from brands.

Noble intentions. Except that the options to this question gave away the chances of any real good:
Q. Which of the following do you own?
A. [] Plasma TV [] Four-wheeler [] Washing machine [] Microwave… [] Others

Others! How on earth do we own that? Data collected so idiotically can only translate into one thing. Garbage.

The tragedy is that this is typical, not atypical, of how things are done in our country.