Wednesday, March 14, 2012

The Future is Futuristic

I have a friend who like me, has a friend. His friend had a thing against advertising, particularly outdoor advertising. He hated ads because he reasonably suspected that if people wanted shit they possess the skills to go out and find it.

Economists too, can't come up with a mathematical justification for advertising. But this was more simple, more basic. He regarded advertising as some kind of offense. Visual pollution if you will, and so would drive his ute up to a billboard get out a roller and simply paint over the ad in flat white paint. If anyone questioned him he would simply tell them he was supposed to be doing it.

The police eventually caught up with him and he did several stints in prison, such was the strength of his conviction.

I don't know how I feel about advertising, I guess some of it is good, mostly passive highly targeted advertising, like the ads in my BMX magazines that relate to BMX. It doesn't necessarily result in me purchasing anything from them, but it raises my awareness of various brands like We The People etc.

I applaud outdoor advertising initiatives like the Chinese governments total ban on it. It's ugly, probably ineffective and more to the point, ugly. Furthermore it is an incursion into the public space.

I read and watched H-Wangs post yesterday and it is interesting you should check it out.

'Thankyou' probably is the future, but this speaker was the first and only thing I've come across since Thomas Friedman's 'the world is flat' that I suspect like the book will catch wildfire amongst business people and amount in the end to nothing.

What I mean by analogy though is that Friedman's book like the keynote speaker seemed to be built up on thorough research and fundamental truths but emphasised the wrong stuff to come to a... I hesitate to use the word's 'wrong conclusion' but I can't think of something else.

For example, Friedman's book talks about the wonders of globalisation, thoroughly like 600-900 pages thoroughly, but he spends only a couple of pages on the shit that must inevitably derail the whole vision of globalisation as a source of good.

This guy, talks about how the key skillsets of success haven't changed in 100 years. (And probably not for most of the history of civilization and commerce) and that I fundamentally agree with. Nothing causes me more chagrin or makes me hate commerce more than it's obsession with modern technology and the constant 'new worlds' we are entering that are yet to produce little if any result.

So I feel compelled to provide a definition of a 'New World' that I feel has specific enough criteria to be validated. Okay being able to buy shit just by thinking about it in the presence of some Wifi device in the future is not a 'new world'.

A new world is when one of the fundamental experiences of being human changes. eg. You don't wake up wondering what it is you are doing with your life and where your life is headed. That is a NEW FUCKING WORLD. And it could be achieved in concievably good or bad ways.

I might write some posts about catching the fake rabbit, but fundamentally wondering how to stay competitive in a changing business environment is nothing new.

In fact even the concept of thanking high value customers isn't new. The keynote speech about 1-1 marketing or customer relations or whatever is I guess new. In that thanks to datamining social media like twitter whereas before thanking high value customers in a personal way required some kind of actual relationship, conversation etc and thus was restricted to Business to Business (B2B), you could employ somebody to find a web customer's twitter account, figure out what athlete they like, go to ebay buy some appropriate sporting memorabilia and send it to the person and they will be blown away.

Today. In three years time when such practice is widespread, they will simply just expect to be thanked. Until eventually big internet shoppers will be treated like IOC or FIFA board members, recieving a constant stream of bribes and gratuities that will not predict whom they will shop with next but most importantly - eat into everybodies bottom line.

And customers follow a Pareto distribution often, which is to say 90% of your sales come from 10% of your customers etc. Certain customers are more profitable than others, so what about the 90% of customers that contribute 10% of your business?

The 60 minute presentation says that Wine-library just gives them a phone call to say thanks. And I agree a business could easily fuck this up by trying to turn a thanks call into a sales pitch. But what if this practice becomes widespread.

I buy some books from Amazon, go over to Dr Jays and buy my attire for the next 6 months, then go to ebay and buy myself a watch. I then get a call from Amazon where a bubbly employee of the 'thankyou' department thanks me for my loyalty and wishes me a nice day. Followed by a bubbly employee from Dr Jay's thankyou department calling me to thank me for placing an order for the spring season, followed by three calls from ebay, the seller and paypal thanking me for bidding successfully, using paypal and shopping with ebay.

Almost everything undergoes inflation, groceries, education and even courtesy.

One of the most mindblowing concepts regarding the internet is that whenever you have an abundance in something (information) it will create a scarcity in whatever that something consumes (attention).

Perhaps I am old school, and again the presenter covered this, but when myspace was seen as a great way to launch your band, it was infact the opposite. Instead of having four people in line to hand a demo tape to the local radio presenter or record exec, suddenly you have a million people in that line. The internet made it harder for your band to break through the noise than it is to win the lottery.

The most successful bands I know at building a following do use the internet. But they also play a fuckload of gigs. Live gigs. At bars, bars that expose them to people.

The notion of 'thankyou' is nothing new, it is infact predicated on the observation that it still costs more to attract a new customer than it does to retain an old one. Look after your customers and your customers will look after you.

The principle would have been taught in business schools from at least the 1960's, maybe even earlier. This speech is about a specific execution, talking about the logistics availed by social media, ebay, secure internet shopping.

Thus I feel a greater service would have been done the audience if it was called 'fuck technology, learn your fundamentals' than 'how to apply tried and tested fundamentals of business in the new world.'

That's what I mean by saying I agree fundamentally, and suspect his predictions and visions of the future will wring true. Many of his observations are totally valid, like the fact that in the past pre-internet and pre-facebook we never would have phoned a friend to say 'mmm mm tacos for dinner om nom' but his notion of 'nobody gives a fuck about privacy' is the underpinning assumption and if you type 'how' into google then within the first 5 autofill search suggestions you'll see 'how do I delete my facebook account' so I think it dubious.

Thankyou departments probably will inevitably come in, the competive advantage value was depreciating the moment the speech was first made. Just like the first company to use telemarketing probably concluded it was the greatest competitive edge they ever had to proactively go after business, until everyone was doing it to the extent that legislature was enacted against it.

And maybe getting sent free shit by companies we buy from will always be welcome, if not paying off for the companies at least we get some free shit. Until ebay customers complain that everything gets bought up by institutional thankyou departments and instead of being able to buy their sporting memoriabilia themselves they had to place a $2000 order for wine and hope the company was reading their twitter feed. Or whether we discover we live in a world where the only way to see Radiohead's concert is to be the customer of some company.

It doesn't even compare to the 'frequent flyer points' competitive advantage, that at least paid off for business. The first company to introduce a frequent flyer points program (United Airlines?) described it as the 'ultimate competitive advantage' when they launched it. Within 24 hours competitors had their own programs up and running. It was instantly immitated.

Which didn't make it folly, by no means. What each program did was errect switching costs for their customers. That is once you had accrued reward points with one airline, you had an incentive to keep accruing with that airline rather than switching to the cheapest one. The switching costs created room for the airlines to raise their prices, and their competitors too.

So really a savy frequent flyer would probably have ended up cash positive by simply buying the cheapest flight available from whichever airline and never accruing frequent flyer points.

Even if it only costs 12c to call a customer and thank them, and abbundance of grattitude will inevitably create a scarcity of good will. I'm not saying it doesn't work and won't happen, just that in the end customers will wind up indifferent. It is why such a practice of thanking people probably dissappeared from practice - it became an unappreciated and insincere formality, so people probably just stopped doing it.

The speakers key advantage and insight I feel is not the specific execution of a thankyou department, or even the humanising of brands (that too isn't new) but his recognition of when people say they wont do something that they inevitably will do. (eg. people who said they would never get a mobile phone that wind up with one. people who said they'd never use facebook but do.) If he truly has a knack for it, then he gets the advantage of being an early mover.

I'm not sure though that this skill can be taught. It equates to 'buy low, sell high' investment advice, that for over a hundred years the bulk of humanity has proved itself, time and time again, to be incapable of doing. His advice may be 'recognise the next big thing while its still small, then get on board before it becomes big.'

There might still be time for me to set up a 'grattitude registry' website, where people cut out twitter and just list things they want companies they do business with to buy them to say thanks for buying shit for them. Then you can avoid double ups and ambiguities and false guesses and people getting freaked out by an audience they didn't intend datamining them and sending them shit.

But I'm too lazy and don't need the money.

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