Jed Cohen

An Archive

Archive for the ‘marketing’ Category

The Art of Inception in Our Reality

leave a comment

The following contains spoilers regarding Inception, and also assumes you’ve seen the film. Consider yourself warned.

There’s a lot of analysis possible with Inception. There’s the questions about the nature of reality (see the Matrix). There’s the examination of how Mal influences Cobb’s actions, much in the same way our own subconscious influences us. And there’s what may be the central point of the film – the nature of the idea and the ways we share ideas with others.

Inception does take a decidedly sci-fi approach (although Margaret Atwood would probably classify it as speculative fiction). This works to engage our ability to suspend disbelief, meaning we better accept a world where dream sharing is possible, where a small team of experts travels the world stealing ideas straight out of people’s minds, and where we are the master of our thoughts….except when we aren’t.

I think the marketing parallels for extraction and inception are pretty clear. It’s not terribly difficult to get someone to tell you what they think (although determining if they’re telling the truth may be hard). Extraction, then, is comparable to the kind of advertising that commands you to do something – buy this, watch this, do this. Inception is organic. It’s growth. It’s planting a small seed of an idea and letting it slowly expand until it drives an action.

Unlike the kind of inception practiced in the film, we can’t expect the goal to be influencing someone without their knowledge. Instead, it’s about creating immersive experiences that don’t lecture, but instead engage. It’s about understanding your target and tailoring your message to them. And it’s about simplicity of form, if not of execution.

We can argue that this is what social media and viral marketing are all about. But just because some modern marketing techniques are better at this than others doesn’t mean that they’re used properly. It’s way too easy to use Twitter and Facebook to bludgeon potential customers over the head with your message. And this can distract both you and your audience from what really matters – assimilating your idea into their world.

One of the most iconic examples of this idea building comes not from today, but instead from over 80 years ago On marketing the piano, Edward Bernays wrote,

“The music room will be accepted because it has been made the thing. And the man or woman who has a music room, or has arranged a corner of the parlor as a musical corner, will naturally think of buying a piano. It will come to him as his own idea.”

Yes, this can be creepy. And hopefully dependent upon us acting in an ethical manner. But doesn’t it also sound an awful lot like inception?

Written by Jed

August 15th, 2010 at 11:32 pm

Variable Costs, Variable Profits

leave a comment

I just finished reading this post from Seth Godin about how businesses can play with their margin to afford promotions.  Godin writes about a fictional pizzeria:

The marginal profit of one more pizza is high. You’ve already paid for the rent, the oven, the sign, the ad in the Yellow Pages, the hourly wage, the uniforms, all of it. Whether you sell that last pizza of the day or not, all those costs are fixed. So, if your ingredients cost $2, your gross margin is $8…

If someone offers to run a coupon…[offering] a large pizza for $2, is it worth it for you to run it? That’s 80% off! Surely, this is too expensive. You can’t afford 80% off.

On the margin, of course you can. You got a new customer for free. Unless your store is at capacity, with people waiting in line, one more pizza sold at cost is a great way to build your business…

Let’s break down the economics a bit (not that it’s terribly complicated).  There are two general kinds of costs, fixed and variable.  Fixed costs are what Godin lists above – rent, oven, employees.  There’s really nothing that can be done to lower them.  Variable costs change depending upon a few different factors.  If we continue with the pizza example, then the more pizzas you sell, the more tomatoes you need to buy.  You might need more gas for the oven.  And so on.  Also, a rise in variable costs doesn’t necessarily have a linear relationship with sales; by purchasing more, you might be able to obtain the same quality goods for less via wholesale.

Godin is in a way proposing a variable margin, a reverse of variable costs.  The idea is that the more you voluntarily (and temporarily) lower your margin, the more you sell – if not now, then in the future.  The key really is repeat customers, which means a product that is at least somewhat impermanent (think clothes or music, not houses or cars).  By providing potential customers with a reason to initially consume your product, you create the chance for them to become loyal to your brand.  The next time they purchase from you, your margin has been restored.

Of course this is nothing new.  It’s why we have sales, coupons, “special one time offer only” and “buy now while supplies last.”  What I think is new (or at least refreshing) is the approach.  A variable margin means a focus on future profit instead of immediate gain.  It means building trust before building sales.  And it means understanding that loosing unrealized gains now (discounting your product) is often preferable to loosing everything tomorrow (when nobody purchases from you).

You might not have to be as extreme as Godin suggests.  You might not gain more customers from discounting 80% off over 50% off.  We could probably throw together an experiment to see.  But either way, it’s still worth trying, right?

Written by Jed

April 14th, 2010 at 9:13 am

Posted in marketing

Tagged with , , ,

Inside Outside Upside Downside

one comment

We all want to be on the inside.  It means we’ve got it (whatever “it” is).  Being on the inside means that you know what’s going on, that you have access to information that those on the outside may not know.  It means that you are in a position to find out information that your friends aren’t.  And it means that we can cloak ourselves in the aura of exclusivity that comes with being “in the know.”

There are times when we want the line between inside and outside to stay concrete.  Research and development and public relations both strive for this; in R&D you want your secrets to stay secret, and in PR you want the company line to be the one everyone hears.  Conversely, sales and support agents may jump to the end of the pitch or reach for the most complicated solution because they’ve been inside for so long they’ve memorized the basics.  After all, it’s easy to fall into the trap of expecting the questions we know the answers to or not explaining the fundamentals because we know them like the back of our metaphorical hands.

In a way getting to that stage is a good thing; experience and expertise means that a) your company is still alive and b) you can have better interactions with your customers.  But it has its problems.  As demand increases, so does the chance that some element of the purchase or support process may become transactionalized instead of individualized.  The technology we employ often doesn’t help this either – when was the last time you had a pleasant conversation with an automated phone system?

In the end, the human element may be one of the few things that can keep the flow of information from in to out steady.  Creating an open corporate culture can help us step away from the transactional elements of our interactions with others.  And providing opportunities for both mentorship and the fresh perspective of the outsider is another step we can take from building impenetrable barriers between the inside and the outside.  Because once that happens, chances are that both you and your customers will experience the downside of your success.

Written by Jed

December 11th, 2009 at 4:20 pm