The limitations of reason – lessons for marketers.

I was reading an article recently in the New Yorker by Elizabeth Kolbert (Why Facts Don’t Change Our Minds – New discoveries about the human mind show the limitations of reason.) which had some fascinating insights into how people think.

The article quotes a number of experiments at Stanford and elsewhere looking at  how people form their views, the role of peer pressure in their thinking and how reason and evidence don’t always come into the decisions we make.

A number of observations stand out:

Firstly, “Once formed,” the researchers observed, “impressions are remarkably perseverant.” Even after the evidence “for their beliefs has been totally refuted, people fail to make appropriate revisions in those beliefs,” the researchers noted.

Secondly, the article asks us to consider what’s become known as “confirmation bias,” the tendency people have to embrace information that supports their beliefs and reject information that contradicts them.”

In this experiment, students were asked to respond to two studies about capital punishment. One provided data in support of the deterrence argument, and the other provided data that called it into question. The students who had originally supported capital punishment rated the pro-deterrence data highly credible and the anti-deterrence data unconvincing; the students who’d originally opposed capital punishment did the reverse. At the end of the experiment, the students were asked once again about their views. Those who’d started out pro-capital punishment were now even more in favour of it; those who’d opposed it were even more hostile.

Thirdly, researchers see an effect which they call the “illusion of explanatory depth,” just about everywhere. People believe that they know way more than they actually do

“As a rule, strong feelings about issues do not emerge from deep understanding,” two of the researchers write. “And here our dependence on other minds reinforces the problem. If your position on, say, the Affordable Care Act is baseless and I rely on it, then my opinion is also baseless. When I talk to Tom and he decides he agrees with me, his opinion is also baseless, but now that the three of us concur we feel that much more smug about our views.”

So reason is not what we thought it was. It seems to be much more about our social interactions and social standing than it is about objectivity and factual evidence. It is often about being right in the sense of being able to win an argument, rather than being “right” in terms of objective facts.

People use “reason” to reinforce beliefs and confirm their opinions, and then this bias becomes deep seated and difficult to shift.

There are lessons here for marketers and anyone involved in developing successful brands. For instance, to what extent do we use market research to truly uncover new insights, or to what extent do we use it to confirm existing opinions and prejudices in our marketing strategy?

The experiments also reveal the importance of creating the right “first impression” and to recognise that, once formed, opinions about brands will be difficult to change and information will be filtered depending on how individual consumers perceive them.

It also speaks to the power of social media and confirmation bias when numbers of people come together to agree on a point of view and filter out any conflicting evidence.

People are not as rational as they would like to believe – and that is why Marketing has always been an art, not a science.

Full article:

https://www.newyorker.com/magazine/2017/02/27/why-facts-dont-change-our-minds/amp?__twitter_impression=true

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University marketing – every little helps

Despite all the awards, NSS scores, TEF evaluations and the millions spent on campus upgrades, the fact is University marketers are selling into a market where the competition either has products that are just as good as theirs or they have products that are perceived by students to be “good enough” in comparison, and choice often comes down to location.

Robert Cooper in his book on product leadership offers these “seven ingredients of a unique, differentiated superior product with real value for the customer”:

  1. Meets customers’ needs better than competitive products.
  2. Is a better-quality product than competitors’ (however the customer defines quality).
  3. Has unique benefits and features for the customer.
  4. Solves customers’ problems with competitive products.
  5. Reduces the customer’s total in-use costs (better value-in-use).
  6. Has highly visible benefits for users.
  7. Is innovative or novel — the first of its kind on the market.

So, if you judge them against these criteria, it’s clear Universities are operating in a market where true differentiation is very difficult (as witnessed by the interchangeability of mission statements, vision statements, key messages and brand values!)

In that sense, Universities are very much like supermarkets who all offer similar product ranges, similar shopping experiences and similar pricing strategies.

So how do we (and they) develop winning marketing strategies in what are basically undifferentiated market sectors?

The first thing is to focus primarily on the customer, not the competition.

It is easy to take your eye off the ball and fall into the trap of becoming defensive and reacting to the competition but it is critical to stay focused on the customer’s needs first and foremost, and then to manage the competitive challenge by asking key questions such as:

  • Who are we competing with and what is the customer’s perception of us versus them?
  • In the eyes of the customer, what are they doing exceptionally well and poorly and why?

The second thing is a focus on the product. Theodore Levitt says there is no such thing as a commodity because “the generic thing is not itself the product; it is merely, as in poker, table stakes; the minimum that is necessary at the outset to give the producer a chance to play the game.”

When the generic product is undifferentiated, the offered product makes the difference in getting customers and the delivered product in keeping them.

To differentiate itself from competitors, a supplier may offer the customer more than he expects – ‘an augmented product’. This could be innovation, product variants, flexibility to tailor products or service to exact customer needs, financing, consultancy services to improve the performance of the customer’s organisation, and many other enhanced benefits.

In other words, the offered product is differentiated, though the generic product is identical.

We all know this – it is marketing 101 on most syllabuses.

But I wanted to restate it, along with Levitt’s view that it is the role of management to identify the best way to add value in customers’ eyes through enhancements to the product itself or by developing value added services and by a relentless focus on the customer experience.

Crucially, it is superior customer insight that enables management to succeed in this task and it is suppliers of undifferentiated products that need it most.

Which brings us back to where we started.

Tesco saw the problem in simple terms – the only true differentiation in their sector was around customer service and the customer experience which was about all the big things and all the little things which needed to be in place from sophisticated logistics to having enough trained till-operators.

It also put marketing central to its thinking in the drive to understand the customer and ensure products and services matched their expectations.

This is the true role of marketing and is why it should be at the top table in determining university strategy.

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Degree apprenticeships – a classic marketing problem

Background
From April 2017, all businesses with a wage bill of over £3m will pay an annual levy of 0.5% of the total. The levy will establish a national fund from which employers can draw to pay for apprenticeship training. The new levy will apply to the new higher and degree apprenticeships as well as intermediate and advanced level apprenticeship schemes.
There will be ninety per cent funding for businesses that are too small to pay the apprenticeship levy; large businesses will have 24 months to use their apprenticeship levy before it expires; and there will be funding for individuals to undertake an apprenticeship at the same or lower level than a qualification they already hold (if this allows them to acquire substantive new skills.
In addition, apprenticeships now apply to any job role – including management, financial and digital – and can be used as a route to a degree or even a master’s qualification.
So the combined impact of the new apprenticeship levy and new degree-level apprenticeships is set to transform graduate recruitment.
Strategic issues
• Degree apprenticeships with the best employers could become as sought after as places on degree courses with top universities.
• Levy-paying organisations are investing in degree apprenticeships and as a result are set to abandon their graduate scheme programme.
• Degree Apprenticeships are a substitution threat to traditional on-campus degrees rather than just offering the opportunity of additional student numbers.
• Degree Apprentices will split their time between university study and the workplace and will be employed throughout – gaining a full bachelor’s or master’s degree from a top university while paying no fees, earning a wage and getting real on-the-job experience in their chosen profession. The cost of course fees is shared between government and employers, meaning no cost to the student
• Recruiting students on to Degree apprenticeship courses will require a partnership between employers and universities, with joint development of programmes, agreed numbers of students per employer and recruitment and assessment carried out by Universities.
• Degree apprenticeships are likely to be lower margin than traditional degree programmes
• Even more so than with traditional degrees, schools and parents will have a major influence on the take up of the degree apprenticeships

Marketing questions:
Many Universities, understandably, are putting considerable effort into degree apprenticeships.
They are gearing up to supply the right programmes, to partner with prestigious employers and to put people and systems in place to recruit students.
This is partly in response to a commercial opportunity, and partly in response to their mission to act as catalyst for their regions and support regional development.
However, there are strategic marketing questions that need to be answered such as:
• What level of substitution will there be as opposed to genuinely new business? Has the University “done its sums” and come to a view about the likely level of substitution and the impact on the bottom line?
• What will the market look like in five years time? Has the University got a plan to deal with the impact?
• To what extent do Universities need to invest in educating the market about the new apprenticeships as well as recruiting their own requirements?
• Whom will these programmes appeal to? What are the likely profiles and locations of the target market?
• Which employers do Universities wish to partner with? Other Universities will be chasing them too – so what is the USP that will make employers choose one University over another?
• What will be the impact on the overall University Brand?
• Is there a need to differentiate degree apprenticeships from traditional degrees so that the £9000 fee can be sustained?
• Will the content of the degree apprenticeships need to be adjusted to recognise the vocational/training/skills development requirements?
• What process, people and skill sets do Universities have to develop business with employers and recruit, assess and mentor students?
• How important will the University’s brand be in student choice, versus the brands of its partner organisations?

Marketing strategy
Universities need to look at the questions above (by no means an exhaustive list) and review the potential for Degree Apprenticeships in a rigorous marketing framework covering:
Markets and market segments;
Customer attitudes;
Competitive threats;
Routes to market;
Pricing;
Brand differentiation
Impact on the bottom line.
This is a classic marketing case study and – for those Universities thinking of offering a Degree Apprenticeship in management- they could do worse than test out their proposed programme on the rigour of their own planning process.

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Comprehensive universities – the wrong solution to a systemic problem?

An article on the BBC web site highlighted a recent report by Tim Blackman, vice-chancellor of Middlesex University, which contends that the university system, with its obsession with hierarchies and rankings, has become a barrier to meritocracy. http://www.bbc.co.uk/news/education-40654935

Instead of driving social mobility, he says, the university system has become a mirror to existing inequalities and is amplifying social segregation.

Even if more young people from disadvantaged families are going to university, there is still a strong pattern of better-off teenagers getting into the highest ranked universities.

He says this creates a system in which a “good” university is likely to be synonymous with being the most selective, which is the opposite of what the country needs from a higher education system.

As with the debate of grammar schools versus comprehensives, the argument goes that the brightest students should be spread across the system, rather than being clustered in a small number of universities crammed with other similar youngsters.

“The root of these problems is academic selection, which has created a sector based on social class advantages,” he says.

I am not sure the problem is academic selection.

We know from parental behaviour that they assess schools and Universities based on academic performance and selection criteria (higher tariffs are seen as proxies for price and value – if the entry barrier is high, it is seen to be a “good” University)

There has also been a relentless increase in pupils achieving A* grades, presumably because they want to be able to get on the course they want, at a university they perceive to have a good reputation – so selection works both ways.

Although we know that poorer young people are still less likely to go to university than their better-off classmates, higher fees have not deterred students from applying to University and Students from all backgrounds are more likely to go to university than ever before – including the poorest, with numbers rising through the years of fee increases. http://www.bbc.co.uk/news/education-40511184

So the “barrier to meritocracy” seems to be a very nuanced one of opportunity and standards at school level, support given at home and the economic environment and attitudes to education, not simply academic selection at a University level.

Focusing on academic selection is the wrong target – or maybe we should just do away with selection criteria and simply have University catchment areas as we have done in the school system?

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Robert Pirsig

I was sad to read of Pirsig’s death a couple of weeks ago. His book “Zen and the art of motorcycle maintenance” had a profound effect on me when I read it as an impressionable teenager and the concepts he expounded have stayed with me ever since.
From a marketing point of view, the concept of static and dynamic quality is worth exploring.
What is static and dynamic quality?
Dynamic quality cannot be defined but can be described as the force of change in the universe moving towards higher and better value.
It is recognized before it can be conceptualized. This is why the dynamic beauty of a piece of music can be appreciated before a static analysis explaining why the music is beautiful can be constructed.
Pirsig says when an aspect of quality becomes habitual or customary, it becomes static and it turns into static patterns.
These static forms of quality are given names, described and interchanged with other people, thus continually building the base of knowledge for a culture.
The important thing here is to recognise the importance of both static and dynamic quality.
Dynamic quality is by definition chaotic, creative, pushing boundaries, destructive, disruptive and undisciplined.
Static quality takes this disruption, formalises it, turns it into systems and processes and incorporates it into the culture, but it can also have negative aspects in terms of closing down options, putting up barriers, setting boundaries.
They work together – without dynamic quality nothing would change; without the ratcheting effect of static quality, nothing would be retained and built on.
Does this sound familiar?
In all organisations, we need to find ways to release creativity and innovation without constricting it to established thought-patters, but we also need to capture successful innovation and turn it into workable new patterns of activity.

How is your organisation doing this?
RIP Robert Pirsig

 

 

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Snowflake students

What are we to make of the changes to Higher Education policy, which are making the sector more “consumer-led?” and causing concern amongst academics?

The Higher Education and Research bill outlines the proposed Teaching Excellence Framework (TEF), where universities will be awarded gold, silver or bronze medals on the basis of a range of factors including student satisfaction, and will determine their ability to raise fees. http://www.telegraph.co.uk/news/2017/01/08/universities-warned-snowflake-student-demands/

Baroness Wolf, a professor at King’s College London (KCL), warned: “Universities are increasingly nervous about doing anything that will create overt dissatisfaction among students because they are being told that student satisfaction is key. It has had a real effect on the willingness of universities to stand up to student demands which in the past have been removing statues, safe spaces and no-platforming. This whole movement is a direct threat to academic standards and the freedom of speech.”

This came at the same time as another story about students at SOAS wanting to remove “white” philosophers from their course in a stand against colonialism. http://www.telegraph.co.uk/education/2017/01/08/university-students-demand-philosophers-including-plato-kant/

There has been an ongoing debate since the introduction of fees about whether students should accept the academic framework, content and processes of a University, or whether, as consumers paying fees, they have a right to expect service and standards as with any other consumer market.

This is the danger of privatisation in a sector like education (or the NHS for that matter) where there are other motives and imperatives rather than profit and where “market forces” do not necessarily drive up standards, but rather have unfortunate and unforeseen consequences (such as on freedom of speech) causing long-term damage to the system.

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Brexit and marketing

When I started out in this great marketing profession of ours, I was told to treat every problem as an opportunity.

Well, if recent events are anything to go by, Brexit has to be seen as the mother of all opportunities!

Falling stock markets, a fractious and divided electorate, antipathy from our European neighbours and threats of devolution in Scotland have all combined into a perfect storm which no-one seems to have seen coming and which our leaders seem unwilling or unable to address.

In terms of the Brexit camp “be careful what you wish for” comes to mind, and for the Remainers “Never assume.”

One of the major themes has been the need for business to have “certainty.”

Time and again, business leaders have said business needs certainty in order to thrive any yet, it there is one thing certain in business, it is that there is no such thing as certainty.

Porter told us in his “five forces” model that business life is dynamic, with threats from new technology, new entrants, substitute products and the changing dynamics of buyer and supplier power.

If there was certainty, we wouldn’t need a marketing strategy

In the post-brexit world, the UK will need to get back to what made it successful from the 19th century on – making and selling goods and services the world needs.

To do that, we need strong, intelligent marketing leadership where understanding and retaining good customer relationships, analysing markets and spotting opportunities  and developing competitive products will become paramount.

For too long we have focussed on the EU not only as a market, but as a business environment which sought to make decisions for its members within a set framework.

It’s time for us to reach out to world markets and make our own success by doing what we do best – defining marketing strategy, building strong brands and attracting and keeping customers.

Yes, it really is the mother of all opportunities.

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Brexit – a case study in poor change management

The EU referendum has been fascinating to watch with the “remainers” pulling out all the stops on project fear which they believe worked so well in Scotland.
Every day, we are treated to another set of statistics or another set of experts warning of the dire consequences of leaving the EU. So, we are told that households will be £4300 worse off by 2030 if we leave (though how economists can forecast so accurately over the next 15 years is another debate entirely…), that house prices will fall, that Obama says we will go to the back of the queue on trade deals and leaving the EU would make war more likely.
And yet, the polls are closer than they would like suggesting project fear is not having the effect intended.
On the leave side, despite some speeches attempting to paint a positive picture for a world outside the EU, a similar negative approach is evident. There are dire warnings about being swamped by immigration, by being ruled from Brussels, losing control of our laws and so on.
And yet, the polls are closer than they would like, suggesting project fear is not working on either side.
Change management is a crucial skill for senior managers and politicians alike, and yet so many of them are poor at implementing change.
There are three vital components for implementing change:
Where are we now? – What is the current situation? Why isn’t it sustainable? What are the likely consequences if we do nothing?
Where do we want to be? – A positive vision of the future. A clear idea for how change will help address the problems we face.
How do we get there? – What is the process? What will we need to do and what issues will we need to address?
Behind these three components, the overriding element is engagement.
You must engage those affected in discussion and ideas around where you are and why you need to change. Indeed, a well-managed discussion will enable buy-in to the vision and often elicit the steps needed to make it happen.
What we are seeing from the EU campaign is a focus on the first component “where are we now” without the vision or process to move to a different place.
And we certainly are not seeing the public being engaged in discussion and debate to get their buy-in one way or the other.
This one could go down to the wire.

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To thine own self be true

The Co-operative Group was in the news this week as it launched a major rebranding of its business in a bid to shake off the crisis and scandal that rocked it three years ago.

The group is bringing back the blue and white logo familiar to older shoppers but which was phased out in the 1980s, with a new discount system aimed at helping it compete in the fierce price wars battering supermarkets.

In a move to recover its community image, it will direct some of its profits to community projects to be chosen by members locally.

The discounts and community donations will amount to about £100 million a year.

Co-op Group hit crisis in 2013 when a financial black hole at the Co-op Bank drove the group to a £2.3 billion loss. Exclusive revelations by The Mail on Sunday of drug-taking by then chairman Paul Flowers heaped scandal and humiliation on the group.

Under the new plans, Co-op members will pocket an automatic 5 per cent discount on all own-brand products including food, insurance, legal services and funerals, starting in the autumn.

A further 1 per cent – about £15 million a year – will be allocated to 1,500 community clusters of Co-op businesses.

Staff will draw up a shortlist of projects and members will be able to vote on how the money is spent. Eventually, the Co-op plans to allow members to propose their own projects.

The blue and white logo, which the Co-op said had been updated, will be rolled out across stores, funeral homes and other buildings in an ongoing £1.3 billion investment plan.

The cloverleaf-like design will look familiar to loyal members of the Co-op, because it was first launched back in 1968 and abandoned a decade ago when the group decided a more corporate look was needed.

So, what are we to make of all this?

Is it another example of a company trying to shake off the past with some fancy new brand livery or is there something more fundamental going on?

In a recent statement, Steve Murrells, chief executive of the food business, said (my italics):

“Hindsight and reflection would say that, for a period of years, the society lost its way. When we moved to a more corporate logo it was probably the right thing back then, but it has become abundantly clear that we do need to go back to our roots.”

“We are putting money back into the hands of members and communities. We don’t believe we are considered a profit centre,” Murrells says. “Everything will be put back into the community or given directly to members when we have effectively paid down the costs of running the business. The more customers who shop with us, the more good we can do.”

“Back as far as 2012, it was clear to us that the younger generation was very sceptical of big business and very aligned to the model of co-operatives,” he says. “The signals were there and we knew as a business we had the chance to reach out to younger people.

“So the [new] logo will resonate with members that have stuck by the Co-op and with new, younger members. We have been working towards this day.”

One of the first precepts of a successful brand strategy is “to thine own self be true.”

Branding is more than logos and livery, it is about the values that drive the business.

tote bag.jpg

As Simon Sinek says, people don’t buy what you do, they buy why you do it.

The statements above suggest the Co-op has indeed gone back to its roots, and rediscovered what its purpose was and why people should engage with it.

The return to the 1968 logo is a statement of intent and a huge legacy to live up to.

It will be interesting to see whether they can deliver on their promise and reverse the reputational damage the Co-op has suffered in recent years.

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What is Corporate Identity?

What is Corporate Identity?

I often get into discussions with clients about “branding” and “Corporate identity” where they talk about one when they mean the other, or they separate the two and fail to see the relationship.

If we define a brand as a promise kept, it is by definition the whole business enterprise – product content, service support and reputation and image.

The questions brands have to answer in the mind of the consumer are:

What “market” am I now in?

What brands have I heard of?

Which ones do I trust?

So Corporate identity is part of the process of projecting : “The overall image of a corporation or firm or business in the minds of the public (customers, investors and employees.)”

Corporate Identity is part of the process of establishing the brand, and the colours, logos, typefaces and writing styles should all reflect the personality and “promise” of the brand.

Brands (and therefore Corporate identity) have three components:

Design

  • Logos
  • Uniforms
  • Colours

Communication

  • Advertising
  • Public Relations
  • Information

Behaviour

  • Personality
  • Values
  • Norms

Just taking colour as an example:

  • Colour increases brand recognition by up to 80%.
  • Colour ads are read up to 42% more than similar ads in black and white.
  • Up to 90% of snap judgments made about products can be based on colour alone (depending on the product).

But it all flows from the Brand’s personality.

Think about Apple’s and Virgin’s Brand Personalities for a moment.

Apple’s brand personality is about simplicity and the removal of complexity from peoples’ lives and its values are around Lifestyle, Imagination, Innovation, Dreams and Aspirations.

Virgin is often described as maverick, rebellious and even a bit edgy – but that is combined with a sense of fun and appreciation of pleasure. This enables Virgin to challenge and shake up many industries whilst keeping a strong emotional appeal to customers.

Now think about their logo’s…

Think about the colours they use…

Think about the PR programmes, the cult of the founder…

Think about their advertising….

That’s Corporate identity!

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