The English better learn English

A few months back I read an article warning Indians that if we wanted any tourist money we should learn English. Maybe they should do some research in their own backyard.

Because I couldn’t make anything of what bus drivers, waiters and hostel managers were telling me when I was down to Oxford last week, and fared little better with my English classmates.

Yes, it’s their mother tongue, but it’s not modern business English and they know that. Flabbergasting others is one thing; being hospitable is another.

Idiot salesmen and financial crisis

Whenever there is a crash in any sector of the financial market, or the market as a whole, commentators rush out to condemn the big guys, the bosses with million-dollar salaries and billion-dollar bonuses.

Obviously, they are to blame. But blaming them doesn’t help at all because they are beyond the reach of any authority. They did as the liked and will do as they like, no matter how loudly the rest of us scream.

Perhaps a better target are the idiot salesmen who peddle these financial products to unsuspecting laymen. These salesmen have no idea of finance, probability or statistics and should not be allowed within miles of insurance policies or mutual funds.

Instead they are given nonsense scripts to convert into useless advise. Their real sales tool is their natural gregariousness, which they use unashamedly and perhaps unknowingly to play with people’s trust.

In recent years, some industry bodies (like the ones for insurance and mutual funds) have introduced qualifying tests. But companies take great pride in how they negate these. It’s either “Everyone passes” or “The ones that pass are not the ones that sell. The agent makes his wife give the test and get the certificate, then he goes out and sells. What you need is feet on the street. Why do you need any knowledge? It’s all theoretical (i.e., rubbish) anyway.”

So tests are no good.

Unless they are applied on-the-spot.  

Imagine something like this: An agent comes to see you for product A; you log on to a site that generates 10 random multiple-choice questions about products of that type; this agent has to answer those questions; his score comes up immediately; if it’s below, say, 5/10, you don’t talk.

It can actually work, if the tests are not administered by an industry (i.e., sellers’) body but by a (for-profit?) testing organisation.

Alternatively, such tests may be administered to everyone buying a financial product, i.e., either the buyer or his agent has to take the test. A low score won’t stop sale, but the buyer would know that he (or his agent) doesn’t know, and shouldn’t complain later.

Will people take these tests? No. Or they would have read something now, which they never do. But at least governments would have an excuse.

Also, these tests can be used on samples from time to time, and the scores published (like JDPower ratings), so as to put pressure on companies to pay attention on training.

All you have to do is read this book

Prof Douglas Lamont’s online notes on international marketing has a longish passage on India, from which I quote (emphasis mine): “Is there a viable alternative to market capitalism that can bring forth prosperity and equity to the world’s masses? In the West, such fads as Fabian socialism, the admiration of Soviet central planning, the small-is-beautiful movement, and Third World dependency were researched, written up and offered as consulting solutions by university professors. In India, ‘tragically, they were translated into policies, with poverty-stricken peoples as guinea pigs.’

Singapore and Thailand that welcomed outside capital and developed export industries vaulted its people out of poverty into economic Tigers and middle-income countries.

India insisted on self-sufficiency, and its state-enterprises produced shoddy goods—that is, goods which could not be sold in export markets. India didn’t want its firms to make money so they could invest in jobs that would raise Indians out of poverty. Not until 1990 under the pressure of the IMF did India change its economy policies. Today, it has become a dynamic hub of software, Internet, pharmaceutical, and media firms. The Information Age is triggering the start of an economic takeoff towards long-term sustainable economic development.

Problem: Is IT another fad? If the IT and dot.com revolutions are over, should India invest in world-class manufacturing. Why cede this powerful engine of economic growth to China?”

Ok. Now the source of this wisdom. Gurcharan Das, India Unbound, (New York: Knopf, 2001).

Ah, and who’s Mr Das? A graduate in philosophy and Sanskrit from Harvard; who later ‘attended Harvard Business School (AMP), where he is featured in three case studies’; CEO of P&G India; MD, P&G Worldwide (Strategic Planning); author since taking early retirement in 1995; on the boards of a number of companies; regular speaker to the top managements of the world’s largest corporations.

Most impressive, but not omniscient.

Surely, there are others who don’t think the Indian government was quite so ruinous, and the post-IMF story has been quite so rosy.

So why not let students have a little of those views too?

If they’re not going to do business in India, one source is one too many. But if they are, one point of view is fatally dangerous.

Which reminds me. The famed Hofstede Dimensions of Culture counts all Arab countries, from Qatar to Mauritania, as one Arab World. And has some place called West Africa and another called Eastern Africa. But it dutifully takes Denmark, Norway, Sweden and Finland separately.  

Now, I’m not for a moment suggesting that those Scandinavian counties should be clubbed. I’m wondering how useful it may be to bunch together Arab and African nations, especially to someone who has to deal with Arabs or Africans.

 

Telcom gets its comeuppance

I was delighted to read, in yesterday’s FT, that India’s telecom is heading for doomsday. Of course, the paper didn’t say as much, but the fact that telecom is the worst performing sector in the stock market is consolation enough for the daily insults that stupid, opinionated telecom marketing executives hurled at us over the four years that I had the misfortune of working on telecom accounts. So petty and stupid were they, they shook to the core my hopes that Indians may someday be a race of professionals.

Of course, the fall of telecom had little, if anything, to do with them. In spite of all the bribery and big talk, in the end economics played its hand. We are just too poor to give telecom the sought of profitable growth it sought.

Moreover, telecom companies never fulfilled the rural quotas they were supposed to, over-saturating the urban markets instead. If the labourer in the city couldn’t keep in touch with his family back home, why should he fill the telecom companies’ coffers? The question was basic enough. Somehow, telecom companies never felt the need to answer it, perhaps because they could, till now, trick Western speculators (a notoriously gullible lot when it comes to India’s impending ‘rise’) to keep pouring in money.

Actually, the writing was on the wall years ago, when the Ambanis fought over Reliance Telecom. The matter boiled down to churn management, or its absence, with the younger brother questioning the older brother’s marketing spends into a bottomless bucket.

Strangely, little was written about it at that time. Even more strangely, the younger brother ended up with the telco when the empire was divided!

Useless Facebook

Apparently, the Coke’s Facebook site has only less member’s than Obama’s. Makes one wonder. If those people have nothing better to do than swat and squawk at a soft drink’s Facebook page, do they have any money to actually buy it?

The price of milk

Apparently Aldi, the German deep discounter, maintains P&L accounts for each product. Which leads to this tale: Tetra packs of milk sold much better than bottled milk in Aldi stores, but didn’t yield good margins because they leaked and the stores had to spend a good deal cleaning the mess.

So, they stopped stocking tetra packs.

This is supposed to illustrate the store’s commitment to price.

I’m afraid it doesn’t. Because product-wise P&L accounts is a prehistoric concept in these days of data analysis; what Aldi should look at is ‘basket-wise’ P&L accounts.

I suspect those tetra packs went into baskets of single people or childless couples who also bought a good deal pre-cooked and semi-cooked food. And also have more disposable income than other shoppers. Taking them off the shelves, ruins these customers’ baskets, and invites them to shop elsewhere, perhaps for ever – that is, when they are no longer single or when they have children.

Why viral hasn’t killed everything yet

Viral Marketing is upon us. Which means TV, radio and print should be dead. Because viral is free. HLL, P&G, Coke and LG should feel very unwell as well, because their market dominance depends a great deal on their deep media buying pockets.

Neither of the catastrophes have come to pass, yet, though they may be nearby.

Then again they may not. Why? Because the numbers don’t paint too rosy a picture.

A primary criterion for the success of viral – or for that matter, any form of marketing – would be its power to ‘infect’ a sufficient number of buyers in a reasonable time. Not forwarders alone, but buyers.

Let’s do a little thought experiment to understand where we’re heading. Lets say you need to sell 1,000 widgets. You have a conversion of 0.1%: You have to tell a thousand guys to sell a widget. Which means to sell a thousand, you need to ‘infect’ a million.

Ok, you start by sending out an email or SMS to 1,000 fellows. They’re your core, who’ll infect the 1st circle; who, in turn, will infect the 2nd circle, and so on.   

What’s the multiplier, that is, how much larger than is the n+1th round than the nth round? Let’s say the multiplier is some random number between 1 and 2.

So how many rounds do you need to ‘infect’ your million?

I repeated the experiment 80 times. The average (no of rounds) came out 17.02 (excluding the starting blast; st dev = 2.16). That’s a lot of rounds, a lot of time, very little control, and plenty of risk, isn’t it? (Here is the math: http://spreadsheets0.google.com/ccc?key=r-4-Cjzxmo4zO1iL2JRFcHA&hl=en)

Oh, we can try this with larger multipliers. Doubtlessly, someone’s already done that. But what matters is what we get in the real world, where everyone’s already unleashed their viruses, and everyone’s trying to get a life.

More awards than funds

Why do mutual fund rating services give so many awards? Best this, and best that, and best this of that? They are marketing tools, of course, but should there be some body to check on these awards?

The new consumer?

Open any book on marketing and it will tell you that the consumer has changed. She won’t fit into stereotypes any more, has a mind of her own, is adapting technology, and the rest.

In other words, mother was a cardboard cut-out but the ‘significant other’ is a real human being. Or a hyper-real human being. Or is whatever inane that you heard in the party last night.

How did the ‘paradigm shift’ happen? Was the Web suddenly able to connect purchases to people and shatter stereotypes? Possibly.

Or are marketers waking up to something that direct mail people knew all along: Psychographics is nothing; demographics is nothing; list is everything.

Was there any reason to believe that consumers ceased being different and diverse and interesting and unpredictable and neatly slotted themselves into segments? Why did the segments exist? To describe neighbourhoods (for distribution) or media (for advertising) or markets overall (for planning products and fixing prices)? Which of these really confirmed to type? Niche B2B magazines maybe? Yet we thought in segments and profiles, never asking which ones we fit into?

Most probably we needed ‘something’ to think on, and the stereotype was that something, a comforting explanation not unlike primitive man’s lava demons and rain gods.

What can you say about this man?

“He has bought Brand A. What does that tell you about him?” How many times have you heard this question? How many times have you had to made up a wonderful pen picture of this customer, based on this one single purchase and agreeing with brand manager’s reading of who constitute his market?

And how many times have you told yourself that this Sherlock Holmes act is totally absurd?

Holmes would at least have a well-used object, with plenty of tell-tale marks on it, to base his deductions on. All you have is a single purchase. And some completely unsubstantiated assumptions.

Yet brands’ creative and media plans are based on these mental gymnastics.

Is it so difficult to say, “The only thing we can tell about the customer is that he can, most probably, afford this brand. If we have additional data on customers, we can probably hazard a few more guesses. For instance, if we know that 67% of customers are Sindhi grandfathers with four-and-a-half gold-filled teeth, we can say, ‘There’s a 67% chance that our new friend is a Sindhi grandfather with four-and-a-half gold teeth.’ Beyond that we can’t say anything.”?

Why must we know our customers profiles? Why can’t we just restrict our interest to the whys and wherefores of their liking our brand?

We use many brands ourselves: In how many cases do we fit those brands’ (apparent) target markets? Or are we ‘beyond marketing’, non-slot-able, unique, different?