I felt a great disturbance in the working force, as if millions of marketing voices cried out in terror over what their new year’s resolutions should be. After all, none of us is really gonna lose that weight or write that novel, so we might as well focus on what we do best: make promises about marketing. So without further ado (or adon’ts), here are some suggested marketing new year’s resolutions in a format we business geeks understand – a slideshow…

By Sherif9282 via Wikimedia Commons

Are you oppressed by a bloodthirsty dictator? Do you want freedom and democracy without having to fight for them? Well, now you can harness the same power that’s made Ashton Kutcher and Justin Bieber leaders of their respective generations! It’s as easy as 1, 2, 3…

1. Start a Twitter account
2. Engage in conversations
3. Build relationships

A few tweets later, and you’ll depose that despot who’s been dominating you for decades!

But wait, there’s more…

To gain that critical foreign support, turn to Facebook and do the following:

1. Ask everyone to change their profile pictures to a color or cartoon character
2. Encourage them to like your revolution page
3. Circulate an e-petition

Just do that and — boom goes the dynamite! — your nascent democracy will suddenly receive billions of dollars in aid (no strings attached!), fresh water in remote villages, challenging schools taught by compassionate instructors, and good paying jobs with benefits, including dental! (Workers of Wisconsin not eligible.)

You see, social media cures everything. So just apply it once per day, and you’ll be revolting in no time!

Note: Batteries and internet service or even computers not included. Nor are thousands of awe-inspiring brave unarmed people willing to absorb truncheons or bullets for a cause. Nor are disgruntled military units willing to switch sides. If you have an insurrection lasting more than four hours, please seek medical attention.

"Oh, look, it's shiny and new – let's worship it!"

Q: What consumer and market research guided the iPad development? Steve Jobs: “None. It isn’t the consumers’ job to know what they want.” – from the New York Times

Customer centricity argues that companies should restructure their strategies and operations to put customers in the center. What’s wrong with that?

1. Many marketers think “customer centricity” simply means “great service” – a misunderstanding that could be devastating.

EVERY company claims that its customers come first – good luck finding one that doesn’t – but here’s the problem for marketers: Customers don’t agree on what’s “great service” or how much of it they want.

One customer might consider “great service” as simply getting what he wants quickly with no hassles; another customer expects to be waited on hand-and-foot. And while all customers say they want great service, many customer-centric small businesses went bankrupt as those same customers flocked to Walmart’s low prices.

In her post “Customer Service Alone Is Not Enough,” Harvard Business Review editor Karen Dillon wrote “Virgin Atlantic Airways provided me with the best customer service I’ve ever had… My thanks to them? I’ve never once flown Virgin again.” Her reason? “At the time, Virgin didn’t have a great frequent flier program.”

There’s also the issue of “over-quality,” where companies provide more than the customer needs. For example, McDonald’s could serve its food on fine china with silverware, but that would constitute “over-quality” for customers who simply want convenience and low prices. Indeed, some people find that too much service makes them uncomfortable, as I once felt in an over-solicitous Tokyo department store.

2. No two customers are exactly alike – even in the same industry.

When someone says, “Put your customers in the center of your strategy and operations,” you should respond, “Which customers?”

Customer service is expensive, so treat it as a resource to be allocated carefully. If you have hundreds or even millions of customers, serving all these disparate needs can sacrifice economies of scale and incur massive costs. That’s why smart businesses focus on their best customers. The “Pareto Principle” hypothesizes that 80% of results come from 20% of the causes. For Neiman-Marcus, 90% of their sales come from 20% of their customers, so Neiman Marcus does offer great customer service – but mostly to great customers.

In addition, customers regularly change their minds. Their indecisiveness can impede your operations and ability to build a strong brand. During a recession, customers might focus on price; during boom times, they might prefer quality and prestige. And as Steve Jobs would argue, many customers don’t even know what they want until they see it.

3. There’s a difference between the “customers you have” and the “customers you want” – and some are bad for business.

Let’s say you open a gourmet sushi joint, but most of your customers want hot dogs. Should you go “customer centric” and fire your chef and spend a lot of money to convert your restaurant into a fast-food stand? Or should you try to change your customer base?

Then there’s the customer who mistreats your staff and is extremely demanding. You could fire that customer, but if you had structured your entire business to serve them, it’s not so easy. Consider the costs:

• You have to train your employees regarding that customer.
• You have to customize your products to that customer’s needs.
• You have to subsume your own brand to the interests of the customer.

After all that investment, could you fire that customer? Could you then go to the trouble and expense of seeking out a completely different one?

I know an ad agency with a giant multinational client who treats the agency’s employees as servants and disdains creativity. Consequently, the agency regularly loses its top talent, forcing it to pay higher-than-average salaries to retain even mediocre employees. Over time, this has hurt the agency’s ability to attract new clients, which gives the abusive client even more power.

4. And what if that customer fires you?

If you are customer-centric and your customer leaves you, you suddenly have employees and structures in place dedicated to serving a customer who no longer exists. Many famous ad agencies have gone out of business from the loss of just one client.

Along the same lines, what if one of your key customer-service employees leaves? You’ve spent a lot of money training her, and she has acquired years of knowledge about your customers and their preferences. Now she’s taking all this experience and expertise – and perhaps even your customers – to one of your competitors.

5. You must balance the needs of your customers, employees and other stakeholders.

Where you set your balance depends on a number of factors, from the intensity of competition in your industry, to the nature of your investors (short-term or long-term).

If your industry is price-intensive, or if you have heavy profit-target and budget demands, spending a lot on your customers might be frowned upon by short-term shareholders, who want to see profits and growth NOW.

If you’re in a tech-driven industry, great service can attract customers, but the product is still paramount. GM launched the Saturn brand, whose key differentiation was its customer centricity. And Saturn succeeded… at first. Saturn’s product line, however, fell behind the competition, so its sales declined. Today, Saturn no longer exists.

A tech-driven company that becomes customer-focused also risks losing its best engineers, who, by nature, are product-centric. Mercedes, for example, could offer cheap basic cars to attract younger customers, but how would Mercedes’ top engineers feel about their “luxury” company becoming mainstream? What will Mercedes do when BMW comes and hires them away? And how will the previous Mercedes customers feel, since they paid a high price for the “prestige”?

Then there’s the community. You might be satisfying your customers perfectly, but if you offend certain interest groups or incite the media, you could get into hot water. I don’t think any of BP’s customers were complaining about the quality of its oil or its service before the spill. And the people complaining about the MTV series “Skins” are probably not its fans.

Finally, if your competitors (another key stakeholder) are focused on serving the same customers or customer base, you might wind up with nearly identical products, which could lead to a damaging price war. In such industries, it might be more valuable to be competitor-centric.

6. Customer-centricity does have its uses – for some companies in some situations.

It’s what I say about all “best practices”: what works for one company at one time might not work for another company – or even the same company at a different time.

Dell, for example, was once extolled for its customer-centric policy of customizing all computers and cutting out middlemen. This worked for a while – until Dell found itself on the floor, flattened by Apple’s more appealing line and HP’s cheaper computers. Now Dell sells pre-configured computers through a number of major retailers. Customer-centricity has been replaced by business as usual.

Apple, in the meantime, disdains even basic customer research, and Apple customers are given only a few options. But last I checked, Apple  isn’t doing too poorly.

Customer-centricity works best for companies that offer large scale, complex, customized products that take a long time to implement. If you’re developing an IT system, designing a skyscraper, building an aircraft carrier, or crafting an ad campaign, it makes sense to put that client in the center of your universe – but for that one project only. The high margins on such products cover the costs of service, and in the case of aircraft carriers, that customer may be the only one that exists. And yet, it’s still important for these companies to keep their other stakeholders in mind.

7. An argument for brand centricity.

Some marketers push customer-centricity because marketing consulting involves catering to a handful of clients. It works for the marketers, so they think it will work for everyone.

The reality: you have many options to put in the center of your company, so select what’s appropriate, not what’s trendy. Restructuring a company is disruptive and expensive, and most companies can’t afford to say, “Oops, that didn’t work. Let’s go back to what we were doing.”

One way to play it safe is to put your brand in the center of all your efforts. If everything you do is for the sake of keeping your brand well-liked and well-respected, everyone is happy – except your competition.

But that’s a topic for another post – this one has already gone on for too long, and from what I hear, my customers don’t like that.

Related Articles:

• Relationship? Relationship?! Sorry, Corporations, Consumers Just Aren’t That Into You
• A Side Order of Spaghetti: Why Listening to Customers is Nothing New — or Even Necessary
• Marketing Mix-Up: Being Treated Like Lois Lane

Larry learns that his ballad covers of AC/DC failed to impress the ladies. (painting: The Friendly Gossips, Eugene de Blaas)

Call it Public Frenemy Number One.

Google can be your best friend because it can help other people learn about you. Google can also be your worst enemy because it can help other people learn about you.

What’s the difference? It depends on the source…

Getting Schooled in Social Media

I recently spoke on a social media panel hosted by the Regional Independent School Communicators. One of my fellow panelists, Stephen Johnson, the Director of Communications at Windward School, noted that many schools won’t participate in social media because they fear what could be said about them. His response to those schools? “People are already talking about you.” These schools could sit on the sidelines and watch the conversations unfold, or they could get into the game and try to shape the discussions.

This isn’t just true for schools; it applies to any organization and even individuals. You can either speak for yourself or allow others to speak for you. Google doesn’t discriminate in that way.

Seek and Thou Shalt Find Some Good Dirt

One reason Google quickly claimed prominence in search was because it offered personal uses – very personal. Google’s ability to search for our friends, family, exes and even ourselves soon made it a household verb.

As we all know, Googling has gone beyond voyeurism to corporate and consumer research. Employers Google job applicants in quest of dirty laundry. Consumers seek out product and business reviews before making a commitment.

Because of this universal hunger for background info, review sites have sprouted up everywhere. Yelp enables anyone to review a business. Charity Navigator reviews nonprofit organizations. And now there’s a website that enables people to review other people anonymously. Yes, it’s a heinous concept, so I won’t name it or link to it, but it proves that even if you avoid the media to protect your privacy and reputation, you could still be dragged in.

So what can you do about it?

Open the Floodgates

An online reputation management industry has arisen because of these issues. Reputation management companies try to compel websites to remove negative mentions of their clients. This isn’t always possible, so these companies also flood the channels with positive mentions, using search-engine optimization (SEO) techniques to gain higher results in Google.

So if you don’t like what someone says about you, douse the Web with a tsunami of positive information. Nearly 90% of all clicks on Google occur on the first page, so bury that vile gossip to the second page – or better yet, the sixth or seventh. You could hire a reputation management company or, to save a few dinero, do it yourself.

Social media is a good place to start.

The Crayola Corollary

It was all about that wicked sharpener...

Now, as my students know, when it comes to social media – or any media – my favorite metaphor is the Crayola 64-crayon box. What kid wouldn’t want 64 colors (plus a killer built-in crayon sharpener)?

Well, actually, most kids don’t even want all the colors that come in that box – including such chromatic mutants as burnt sienna, raw umber and other crayons that look like someone left a rainbow in the toaster. Consequently, they wind up using up all the primary colors and leaving plenty of raw umber for little siblings to chew on.

Media is just like those crayons: just because one exists doesn’t mean you have to use it. Twitter may be all the rage and it definitely has its uses, but so do periwinkle and cornflower crayons. It depends on what you want.

I won’t try to teach my entire social media course here, but the key is to experiment with one (or more) media platforms, find one you’re comfortable with, and start plugging away. I personally endorse LinkedIn because it’s career-focused and offers a high Google rank. Google also likes websites that end with a .edu – yes, schools – so figure out how to get your name on one by, say, writing for one of their blogs.

One more quick tip: if you have a newsworthy announcement, learn to write and issue press releases (or hire a PR/journalism student). Numerous websites will post your press release for free or minimal cost. The goal here isn’t the news media (getting a journalist to pick up your story is challenging), it’s Google and other search engines.

Now that You’ve Jumped in, Make a Splash

Let’s now give this the positive perspective it deserves. Going online isn’t just a matter of drowning out negative voices; it’s about using the Internet to market yourself and your causes.

Keep it up, and you just might find that your reluctant venture into the wild wild Web will begin to generate actual value and rewards. Of course, you need strategy, creativity and continuous learning to maximize the results, but at least you’ve made a start.

The best part? You just might like it.

***

An earlier version of this article appeared in The Antidote.

Professionals? More like the bland leading the bland.

I recently got some fan mail about my post on resume writing: “I was liking your article, as I have others that I’ve read… However, I soon found the in-your-face political opinion rude and quite unprofessional to say the least. I just wanted to read a good professional article not something that would make the Huffington Post.”

Hmmm. How to respond?

Well, first of all, I love the Huffington Post. And if my blog were to ever become one-tenth as successful as the Huffington Post, I would combust in ecstasy. So I welcome the comparison. Thank you.

Second, this is, like, my blog. As in mine. I own it. Mine mine mine mine mine. And last I checked, that means I can write — drum roll please — whatever I want. I also offer it free to the public, without even a single ad to click away, so what’s this about “rude”? And — hold on, let me make sure — yes, my contract with myself says I’m not obligated to write a word according to the whims or stipulations of others.

Sorry, bro.

But what I found most intriguing in this fan mail was the use of the word “professional.” Or, to be more exact, its misuse.

There’s this inbred misconception amongst the creatively-challenged that “professional” means safe, boring, and completely devoid of color and character. To these clones, even the slightest touch of humor or personality renders any work “unprofessional.” They prefer dry, soulless and frigidly cold. And hey, that’s cool if they want their own work to have all the flavor of iced packing foam, but it’s completely and incontrovertibly uncool to try to impose their sterile thinking on others.

Don’t pull that Stepford act around here, buddy.

5 Ways to Define Professionalism

We’re entering the second decade of Century 21.0 already. The 1950s ended 50 years ago, and today the grey flannel business suit is worn by so few American workers, it’s been declared an endangered species.

And in the creative fields I love — like marketing and media — it should be extinct.

Creativity is the name of the game in today’s America. Whether you’re talking alternative energy, filmmaking, web development, bioengineering, gourmet cooking, automotive design, football coaching, high fashion, or advertising, success goes to those who break the mold in the name of innovation. Want lockstep thinking? No problem: China Eastern Airlines is departing for Beijing at high noon. Au revoir, zaijian — and don’t forget your baggage!

For those of us working to remake and revive this economy, I offer this multi-part definition of “professional”… (Note: I’ve alternated the pronouns “he” and “she” here; no gender slights should be inferred.)

1. Giving it your all: A true professional never delivers a half-assed effort, whether he’s composing the soundtrack for a film, developing a cure for cancer, or playing middle linebacker for the Pittsburgh Steelers. The professional rehearses and reviews to eliminate all errors, and continuously works to master his craft. Moreover, the professional takes pride in giving 100% in the pursuit of perfection.

2. Living up to your word: A true professional shows up at the appointed time and never misses a deadline. She may work from home, the beach, or her favorite coffee shop while slamming triple espressos and listening to vintage Joan Jett in her iPod — but she lives up to her word when it comes time to deliver. The only acceptable excuses are extreme emergencies, and even then she apologizes for the delay and tries to make up for it when she gets back on her feet.

3. Providing due respect: A true professional may talk smack about the competition and the clowns on Fox News, but he would never disrespect a colleague, client or collaborator. Phone ringing? Unless there’s a baby being delivered at the other end of the line, the physical human presence always comes first. Got an irresistible urge to text or tweet all the time, even during meetings? See an addiction counselor. A professional listens attentively while being spoken to and never interrupts. He can then rebut the speaker, but he does so by critiquing the ideas, not the person.

4. Being appropriate: A true professional understands the environment, audience and occasion, then comports herself appropriately. Yes, this sometimes means wearing a suit, but at other times, it might mean wearing jeans and an ironic logo T-shirt. (Though at no time does it ever mean wearing Crocs.) She speaks at the level of her audience, never over their heads, but without pandering to their slang or mannerisms. Joking around is totally fine — even encouraged — as long as her tone is appropriate for the audience. (Some groups don’t mind a strategic f-bomb.)

Note that using business jargon does not make one a professional — it makes one clichéd and incomprehensible.

5. Questioning the answers: A true professional challenges conventional thinking and undermines the status quo, because that’s what makes progress possible. He understands the difference between traditions, rules, etiquette, habits, ethics and so-called “best practices,” and he strives to create even better practices. Those who feel threatened by these questions and challenges will call them “unprofessional,” which is a sign that they’re starting to work.

Indeed, a true professional might decide to redefine what it means to be a professional. What does it mean to you?

Parting Shots on Blogging and Professionalism

There are thousands of mainstream business magazines and blogs online, most consisting of the bland leading the bland. They don’t cut it for me, so I created my own.

A blog should always be personal, and my politics happen to be a large part of me; hence, the political bias of Cool Rules Pronto. Is that unprofessional? Ask the Wall Street Journal, which takes an approach to business that’s just to the right of Attila the Hun. Ask Jon Stewart, who has transformed political satire and outperformed even mainstream journalists in exposing the truth.

True, I do risk alienating people, but my long-term goal is to create a distinctive brand, and that sometimes means alienating certain segments of the market… on purpose. That’s not unprofessional. That’s just business.

Plus, picking on Republicans isn’t being unprofessional; it’s simply being human.

And there are some customers you should always listen to.

The way social media-philes talk, you’d think that businesses had been ignoring customers for thousands of years. The socmeds ascend their virtual mounts and issue pronouncements like “2010 will be the year of listening to the customers needs” and “customer service is the new marketing.”

Nice sentiments — but hardly new, and not exactly the perfect business strategy, either…

Ye Olde Customer 1.0

You know the expression “the customer is always right”? The first variation can be traced back over a century to 1908, when legendary hotelier César Ritz advertised “Le client n’a jamais tort” (“The customer is never wrong”). Then came the great wave of department stores of the early 20th century. Department store founders Harry Gordon Selfridge and Marshall Field are both credited with giving Ritz’s expression its now positive English spin. John Wanamaker later used “the customer is always right” to promote his Philly stores.

Advertising slogans aside, how about methodically incorporating customers into formulating business strategy? That’s got to be relatively new, right? Only if you consider the 1950s recent. Peter Drucker wrote about the value of putting customers front and center in his book “The Practice of Management,” and about the same time, John B. McKitterick put it into practice at General Electric.

Indeed, I would argue that listening to customers intently dates back to the first nervous innkeeper taking drink orders from some heavily armed Xia Dynasty warriors. Over the ensuing 4000 years, waiters everywhere have had to endure the whims and whines of customers. The 1996 film “Big Night” (one of my all time favorites) brilliantly depicts one such scene in an Italian restaurant:

Now this scene also depicts what’s wrong with listening to customers: they’re not always right. In fact, as I’ve written in previous posts, customers can be infuriatingly out of their minds. Ask any veteran chef, painter, architect, filmmaker, writer, engineer or even doctor about listening to customers, and you’ll likely get an earful of rants about having to take orders from tasteless sacrilegious heathens. It’s the classic conflict between art and commerce made personal and amplified by a thousand new social mediums.

What’s more, customers don’t always say (or even know) what they really want. For example, they might say that they want great customer service, but then they’ll leave their friendly neighborhood mom-and-pop shop hanging high-and-dry in order to save a few bucks at Walmart.

Now I’m not saying that the customer is always wrong, either. I dig The Consumerist, and my two regular readers know that I frequently level potshots at companies who arrogantly commit crimes against humanity with their products (yeah, I’m talking about you, Microsoft… *$%#!ing Vista).

So what’s the solution?

Balance. Yes, listen to your customers and learn about their needs and issues. Then, when you’re done, turn to your experts — no, not the guy who splits his time between Twitter and Wikipedia: I’m talking the true experts with the top-shelf education and professional experience in the subject and industry. They might have some killer insights — after all, that’s why you’re paying them the sweet salaries with full dental coverage.

But don’t just stop there.

What is your competition doing? Watch their every move, as well. After all, if you and your competitors are both researching and listening to the same customers, there’s a chance you’ll produce an identical product, and if that happens, you could wind up in a devastating price war. Finally, don’t forget to train an ear on the members of your community: what you think is the perfect product might not sit well with a local politician, journalist or interest group.

In other words, customers are just one voice in the cacophony — it’s up to you, the manager, to listen to them all, to separate the worthwhile signal from the noise, and to strike the right balance between them. Yes, you might fail to find that balance, but that’s why you get paid the even sweeter salary with the stock options and executive retreats in Aruba.

Listening to customers is nothing new, nor is it any guarantee of success. Thanks to all the pseudo-experts online, it just happens to be il speciale del giorno. Nice suggestion — but keep reading the menu.

***

Related Articles:

• Don’t Believe Everything You Hear: Why Listening to Your Customers can be Hazardous to Your Health
• Cavemen On Fire! A Stone Age Look At Focus Groups

Arnie the Armadillo: Striking terror into the hearts of boring marketers everywhere.

It’s violent. It’s funny. It’s different from anything you’ve ever seen in business insurance advertising — or imagined you’d ever see.

It’s Arnie the Armadillo, the new mascot of Britain’s Kingsbridge Professional Solutions (KPSol). And it’s creating quite a stir among business-to-business marketers….

But, first, watch for yourself:

Sure, it’s taking some creative risks. But you know what’s even riskier in business? Being boring and having no one remember you.

KPSol is not the first B2B marketer to take a risk — nor even the first insurance company. AFLAC’s duck has significantly increased awareness and sales of a dry product. Quick: can anyone name another company that sells supplemental insurance? Though more consumer-oriented, GEICO’s cavemen, gecko, and talking pothole have actually made an insurance brand likable. (Gasp! The horror, the horror!)

Now consider all the free coverage that KPSol (who?) is getting because of Arnie. Would we be talking about KPSol – or even know who they are – if they used a stock photo of smiling suits in a boardroom, or stock footage of an elderly couple holding hands on the beach? (Excuse me for a sec while I purge my mind of those stock visions.)

B2B marketing isn’t end-of-life consultation; it’s business. As in money. Fame. Golf outings. Holiday parties. The “rule of boredom” in B2B marketing was imposed long ago by stuffed shirts who didn’t have a creative bone in their bodies. In order to get promoted by stodgy bosses, their young minions perpetuated that rule. There’s no logic to it — just corporate politics.

An armadillo, in fact, is a fitting symbol for business marketers who curl up in a ball and hope that whatever makes them nervous goes away.

B2B buyers are human, believe it or not, who also happen to be consumers in real life. Some actually do things like go to movies and dress up for Halloween. Unless the stagnant office depicted in “The Office” (harsh British version) is our ideal of business nirvana, then we business marketers need to lighten up.

I hope that the vibrant, fun-loving Millenials will ultimately put this false-notion of “business must be gravely serious” to rest. That’s one end-of-life consultation I endorse.

Shameless Plug: Want B2B advertising that’s not boring? Contact Atomic Tango!

Totally Flocked

“… fear of the unknown and our desire for certainty lead us to throw ourselves into the arms of perceived ‘experts.’ … We trust quantitatively flavored constructs to escort us away from the gloomy reality of unmeasurable uncertainty.” — Pablo Triana, “Lecturing Birds on Flying”

Quick quiz: What’s sillier than trying to predict human behavior?
Quick answer: Trying to predict human behavior using mathematics.
Longer, sillier answer: Trying to predict human behavior using mathematics in a field in which you have no personal working experience.

That longer, sillier answer is the premise of Pablo Triana’s new book, “Lecturing Birds on Flying: Can Mathematical Theories Destroy the Markets?” Triana’s field is finance, which he’s experienced as a derivatives trader and a university instructor. He criticizes “quantitative hodgepodge” — like the Black-Sholes-Merton model and the Gaussian copula model — churned out by “quants” (academicians, mathematicians and physicists). “Markets can’t be tamed with equations,” Triana writes. “Maverick, unlawful human action rules the markets, unexpected and unimaginable monstrous events shape the markets.”

Rant on, my brother!

I don’t know enough finance to verify Triana’s assertions, but a compelling article in Wired explains why the much vaunted Gaussian copula model failed miserably: “Recipe for Disaster: The Formula That Killed Wall Street.”

What I can talk about is marketing, which has also been infiltrated by mathematical delusions.

The Unholy Reign of Formula Marketing

As an MBA student, I took a so-called “Marketing Strategy” course hoping to learn how entrepreneurs could outwit and outmarket established megacorps. Instead, the professor — who, of course, had no real business experience — fed us one formula after another while ignoring creative branding, viral marketing (or any kind of media strategy), cross promotions/partnerships, alternative distribution models, or pretty much anything that uses the right side of the brain.

The gods forbid that a marketing strategist should actually have an imagination.

My classmates destined to become brand managers at megacorps P&G or Nestle found some of the exercises useful, since their jobs would entail crunching years of accumulated data to determine the price of non-dairy creamer in Des Moines. But for the future entrepreneurs and general managers in class, the useful lessons were few. And for the aspiring marketers looking to work in services and media (this was, after all, Los Angeles in the 21st century) the formulas were completely useless.

Take the Bass Model of Diffusion, for example:

Bass Model of Confusion

Pretty, isn’t it? That’s supposed to tell you how a product will penetrate the marketplace, with the following elements:

S_t = number of adopters at time t
m = ultimate number of adopters
Y_t = cumulative number of adopters to date
p = innovation coefficient
q = imitation coefficient

All those parentheses and sub-scripted letters lull users into a false sense of accuracy. But note: if just one number in that magical equation is off, your entire prediction is worthless. And what are the odds of one number being off? About 100%. Indeed, with this formula, you literally need to mind your p’s and q’s: those two coefficients are based on the historic performance of similar products. Yes, the words “historic” and “similar” should be setting off alarms in your mind. And how do you determine which products are similar? By guessing, of course.

For example, let’s say you invent a high-definition DVD player and want to know how quickly it will penetrate the market — but, alas, there are no p’s and q’s yet for HD DVD players. No problem: just use the coefficients for the next closest product — oh, say, traditional DVD players in the 1990′s — and that should tell you EXACTLY when your HD DVD player will hit a certain level of market penetration today, right?

What’s that? Most consumers aren’t buying high-def DVD players because they don’t want to replace their standard DVD collections? And others are now more interested in downloading movies than buying more dust collectors for their book shelves? Those inglorious basterds! How dare human beings not follow the formula?!

Indeed, this Bass Model of Diffusion relies on an absurd number of assumptions:

• The economy never fluctuates. Oops, there’s a recession? Well, consumers don’t act differently during a recession now, do they?
• No competition. Blu-ray who? Hulu what? Not only does the absence of competition in this fantasy world mean there’s no one to undermine your plans, it also means there isn’t an advertising war to bring attention to the category.
• No collaboration. Let’s conveniently ignore the role of video game consoles in promoting high-def DVD player adoption. We don’t need no stinkin’ relationships — we fly solo here!
• Similar products diffuse in the same way. Sure. That’s why Reeboks sell just as well as Nikes, and RC Cola sells just as well as Coke.
• All consumers behave the same way. Who needs market segmentation? Now, a professional marketer would identify favorable consumer segments or key individuals who could turn an unknown product into an overnight mass-market sensation — like, say, Oprah. But this is a formula, damn it, and that means all human beings are identical!
• Impact of price, place and promotion are negligible. Which do you think will penetrate the market faster: a $1000 product with no advertising that’s available only in high-end electronics stores, or the same product sold for $100 at Target and endorsed by that Oprah person? But why worry about any of that? Just use the formula and you’ll be a marketing genius!

Now, I know I’m gonna catch flack from my fellow academics who have devoted time, energy and entire academic reputations to mastering tripe like the Bass model. They’ll say that such formulas exist only to explain how the “perfect” marketplace works in theory, and to provide a reference point on which marketers can craft larger strategies. But if that’s true, what’s up with the faux precision? If it’s just an illustrative estimate, shouldn’t the outcome of the formula be “likely to have slower than average diffusion unless you advertise the hell out of it” instead of 38.2918?

The Slippery Slope of Faux Precision

Faux precision cons actual businesses to use formulas to predict real results for real products in real markets. When the numbers don’t turn out as expected, analysts snicker, millions of dollars evaporate, and heads roll. Toshiba was the company that pushed the late great HD-DVD format, and I’m guessing that they had a lot of projections of how wonderfully profitable HD-DVD would be… only to see Blu-ray blow them out of the water when Warner Bros., Netflix and other key participants stopped being team players.

Note also that the Bass model is for physical products. It cannot be applied to marketing a university, a social networking site, a new sitcom, an office building, a life insurance plan, red-eye flights to Argentina, or a gubernatorial candidate — you know, the products we American marketers are likely to promote here in century 21.0.

But the real world is beside the point. For the quants of academia, the prize is having your name attached to a widely used model that’s published in the Harvard Business Review, which in turn leads to tenure, publishing deals, and lucrative consulting gigs… Now that’s a killer business model! Want to get in on the action?

In my earlier post, “The Young Professor: How To Get Published,” I wrote a formula for formula fabrication:

Let’s quantify the saying, “Birds of a feather flock together.” First, create some variables:

CK = degree of avian Common Kinship
F = propensity to Flock
μ = a coefficient to qualify the theory and make it harder to judge
Then express the relationship as a formula: F = μCK

Take the first derivative of this formula to find the maximum propensity to flock. This means absolutely nothing, but it sounds like you’re dropping mad science, you beautiful mind, you.

Naturally, when I came across Triana’s “Lecturing Birds on Flying,” and a review describing it as “deliberately incendiary,” I felt a degree of avian Common Kinship, and my propensity to Flock kicked in.

After Math

Now I’m not saying that mathematics has no place in marketing. To the contrary, marketers must quantitatively analyze the myriad choices they face. Who are your most profitable customers? Which media outlets will reach the most prospects at the lowest cost? If you’re advertising online, should you go by views or by clicks? What price will appeal to consumers, keep competitors at bay, and generate the profits you need? Can you afford a loss leader? Is distribution through Walmart worth cutting your price to the bone, or should you dis them for a Target exclusive?

I also endorse statistically valid customer surveys (not focus groups) and deep scrutiny of the numbers presented by media reps and distributors. Even so, you should provide equal weight to qualitative analyses based on experience and insight. How do your prospective customers really feel? How do you think your competitors will react? What’s happening in the real world that could warp your best laid plans? Is Paris Hilton really the best choice to endorse your product?

Qualitative thinking provides key sources of differentiation. After all, if everyone is running the same formulas and statistical studies on the same customers, won’t they get the same results? Differentiation comes when you say, “OK, those numbers are cute — but what will really make a difference?”

Above all, I discourage believing in any predictions of success. (See Universal Pictures, “Land of the Lost.”) Such predictions might occasionally work for a few products, such as commodities that have years of accumulated data reflecting steady demand (Des Moines non-dairy creamer). But for a new product — particularly one driven by image or trends — don’t rely on a “quantitative hodgepodge”; that’s no more reliable than randomly asking people on the street, “Psst, how buddy, wanna buy a DVD player?”

“Sincerity is everything. If you can fake that, you’ve got it made.” — George Burns

The movement du jour amongst us liberal marketers is “authenticity.” It’s the impassioned belief that companies should be open and honest about who they are and what they stand for — not just because that’s a good thing to do, but because that’s the only way to succeed.

Sounds completely righteous, right? But wait, there’s more…

Authenticity is based on the premise that today’s consumers are too savvy, too jaded and too cynical to buy hype and commercialism anymore. Brands should be genuine, not contrived by ad agencies. They should be based on the true personalities and convictions of their founders and employees. And they should be rooted in the values of the communities they serve.

All nice thoughts, huh? Almost makes you want to break into a hand-holding version of “Kumbaya.” Unfortunately, it’s mostly fantasy and fairy tales.

No, Really, I’m a Liberal

First, let me assure you that I truly do hail from deep left field and am as liberal as MBA’s get. My business school classmates voted me “most likely to be a Marxist.” I then went on to write a satirical pamphlet about business school called “Mas Kapital.” (“Mas” being the Spanish word for “more,” and “Kapital” being the German word for “filthy stinkin’ riches that are MINE ALL MINE.”)

And yet…

Although I’m a self-avowed bleeding-heart tree-hugging cat-rescuing granola-crunching lefty, I’m also a realist about what it takes to succeed in a viciously competitive marketplace. While I love the values that the authenticity movement embraces, it’s fundamentally based on a naïve and idealistic impression of the consumer.

I recently read a Twitter post quoting some authenticity expert. I won’t name him, since I can’t confirm his statements, but the quote read, “Authenticity is crucial to producing higher quality, more valuable content. Consumers can spot the garbage!” This got retweeted by other liberal marketers as if His Holiness Jon Stewart Himself had delivered it as the 11th Commandment.

Ironically, that quote is pure garbage.

I’m a consumer. The people I love are consumers. Indeed, everyone I know is a consumer. I also teach consumer research and analysis. And let me tell you, most of us consumers not only can’t spot garbage, we lap it up. Examples:

• Take the movie “GI Joe.” Critics called it a “gaseous emission,” yet it’s made over $130 million to date.
• For years, professional wrestling was the hottest thing in spectator sports, even though it was actually scripted by former soap opera writers. (I met two of them.)
• MLM’s are a proven waste of time and money, yet millions still flock to them.
• Toyota advertises its Prius (a.k.a. “The Pious”) as good for the environment, when it’s simply less destructive than other cars.
• Fox News, which is as garbage as garbage gets, is the number-one rated “news” network.
• A Texas direct marketing wizard named Karl Rove hoodwinked the working class into voting against their own interests by electing Garbage W. Bush twice.
• Finally, to be bipartisan for just a moment, our recent gubernatorial freak parade of Palin, Spitzer, Blagojevich and Sanford proved that the worst hypocrites can get elected to run entire states — and even be considered for the Presidency.

So consumers can spot the garbage? Really?

It kills me when marketers sit together in ivory towers, sipping $4 decaf non-fat lattes, reinforcing each other’s high-minded theorems and projecting their personal values onto “consumers,” when they can easily discover what people really want by reading the newspaper.

Oh, I forgot. Nobody reads newspapers anymore — they get their news from Twitter. That explains everything.

“You can’t handle the truth!” — Jack Nicholson in “A Few Good Men”

In addition to a naïve misconception of the consumer, authenticity is based on the conviction that the truth sells. Rather, telling the unfiltered truth can plunge an “authentic” company into hot water.

Take the recent example of John Mackey, CEO of Whole Foods. For years, Whole Foods has fostered this image of being socially and environmentally conscious, a true member of the community whose prices cost an arm and an organic leg because, well, good food harvested and traded conscientiously is worth it, right? That translated into a business with a market cap of $4 billion and a devoted base of mostly liberal yuppies. Then, lo, Mackey writes an editorial in the Wall Street Journal in which he rips apart Obama’s healthcare reforms.

The article begins with an inane Margaret Thatcher quote (“The problem with socialism is that eventually you run out of other people’s money”) then devolves into a rich man’s approach to health care, arguing for tax-deductible health savings accounts and making it “easier for individuals to make a voluntary, tax-deductible donation to help the millions of people who have no insurance.” Yes, Mackey’s a tax-phobic idiot who has no concept of what it’s like to be poor, what health procedures cost these days, or how little Americans actually donate to charities, even the ones they really care about.

But here’s the thing: Mackey was being himself and expressing his true beliefs. Isn’t that being “authentic”? He didn’t put up a false progressive “I love poor people so please tax me more” front; he spoke his genuine thoughts — thoughts that didn’t contradict his passion for organic arugula or fair trade coffee. The products at Whole Foods remain the same, and the employee benefits are still some of the best in the country. The only thing that’s changed is that many Whole Food customers finally learned that the guy running their favorite fruit stand harbors bonehead conservative views and has the gall to express them.

For that moment of authenticity, the entire Whole Foods corporation — including its workers, many of them liberals not living high on the free-range hog — is being boycotted by liberal customers. As Mackey discovered, authenticity can be hazardous to your fiscal health.

Yes, Jack, you’re right: in many cases, we can’t handle the truth. Apple fanboys don’t want to know that Apple can be just as corporate and secretive as the “evil empire” called Microsoft. Dodgers fans don’t want to know that their favorite slugger is as much a product of the laboratory as he is of the playing fields. Parents of Miley Cyrus fans don’t want to know that a 16-year-old pop star might have a libido. And Fox News fans just don’t want to know.

Those are all successful enterprises and individuals. None of them is definitively “authentic.”

More often than not, success goes to those who portray the right image — authentic or not — to their target market.

We all know this, even on a personal level. We’ve learned that there are thoughts we dare not utter, no matter how truthful, in a job interview, on a first date, to a police officer, even to our mates and our families. We’re warned to watch what we post on Facebook (or in a blog), no matter how accurately those words and photos reflect who we are, because they could damage our chances of getting into college, getting hired by a great company, or getting elected to political office. (I’m so doomed.)

We even have a term, “TMI” (“Too Much Information”), for a confession that’s too personal or detailed. “Be yourself!” say the platitudinous Polyannas, but make sure no one knows that you’re an atheist, that you smoke pot, that you have sexual fantasies about vegetables, that you listen to Air Supply, that you hate children, that you voted against gay marriage, that you “borrow” office supplies for your home, or that you think your boss looks and acts like a Wookie — and that you’d still like to do him.

TMI, people, TMI!

So if you run a business, I do hope you’ll be open and honest about who you are and what you stand for. And I do encourage you to create a genuine brand based on your personality and convictions, and rooted in the values of the communities you serve. But do all that because they’re good things to do and they make you feel good, and not because some so-called marketing expert tells you that’s the secret to success.

To be successful, you have to be starkly realistic — and that doesn’t always mean being “authentic.”

"My hit HBO series is over, and my stock portfolio is worth dirt, and you're telling me to 'be resilient'?!"

Pass the paper bag, I’ve got emotion sickness.

I’m perusing Harvard Business Publishing’s website, and a headline snags my eye: “Use the Downtown to Your Advantage“. Hmm, that sounds compelling. What kind of killer advice could the gurus of Harvard Business bestow upon us mere mortals?

What I subsequently read makes my eyes roll like rubber dice on a craps table in a 6.7 earthquake.

The author, leadership consultant John Baldoni, had read a Wall Street Journal interview of Macy’s CEO John Lundgren. Baldoni then decided to relay the managerial lessons he drew from it. The result: an article filled with more hot air than a Rush Limbaugh balloon at the Macy’s Thanksgiving Parade. The lessons could be summed up in three quotes. Brace yourself for ‘em:

• “Make tough choices. Now is the time to get rid of anything and everything that does not add value to the bottom line.”
• “Look for the up and comers. When times are flat or in a downturn, look for new ideas. Challenge your best and brightest to make suggestions…”
• “Live resilience… Good leaders use these opportunities to describe what is going right as well as what is going wrong.”

Now some people are probably saying, Freddy, you’re way too freakin’ harsh. What’s wrong with that advice, cynic boy? It all sounds reasonable…

Sure it all sounds reasonable, but as business professionals, we should have higher standards for Harvard Business Publishing articles — indeed, any business articles — than reasonableness. Here’s my beef:

1. This article’s vague and generalized advice could — and should — apply to good times as well as bad. When does a manager not cut waste, look for new ideas, or point out what’s working and what’s not? Jack Welch preached the same kind of advice at GE back when the economy was hot. Those are practices that a CEO should perform all the time.

2. Is that advice for a multinational business, a family household, a community theatre company, or a team on “The Apprentice”? It could be any of the above — it’s that generic.

3. In a CEO profile from Harvard Business Publishing, I expect specific, concrete tactics, not inspirational pablum. This is the kind of article I would expect in Reader’s Digest targeting Avon distributors.

4. This article is supposed to tell you how to actually THRIVE in a recession. Note the word “advantage.” Businesses are wallowing in quicksand out here, and “live resilience” is supposed to help them get a leg up?

So what do I want to see in a CEO profile entitled “Use the Downtown to Your Advantage”?

How about specific strategies in a hurting industry, such as fashion retail?

• How is John Lundgren responding to fire sales by his competitors? When Saks offers 70% discounts, potentially luring away traditional Macy’s shoppers, does he recommend offering similar discounts, boosting advertising, or some combination of both? What does he think of Abercrombie & Fitch’s refusal to discount and suffering huge sales declines in the process, yet preserving their brand for a broader economic rebound?

• Would he consider cross-promotions with companies outside of his industry, but similar in brand position, such as Starbucks, Virgin America or Cadillac? If no, why not? If yes, what works and what doesn’t?

• What were his criteria for closing down the Macy’s stores in certain markets? When he laid off employees, did he favor seniority or “up and comers”? As he was closing down stores in L.A., did he consider concurrent expansion to thriving cities overseas, such as Shanghai, Moscow or Rio?

In other words, give me scenarios, deep insights and hard tactics based on singular real world experience.

Imagine reading a magazine on professional football coaching written by pro football coaches for pro football coaches. You come across an article by an NFL head coach on how to turn around a bad season. But rather than provide game-time strategies or player substitution tips, the coach says, “Make tough choices. Look for ideas. And be resilient.” How many of his peers do you think would say, “Gee, I never thought of that…”?

And yet, that’s essentially what Harvard Business Publishing is perpetrating here. It’s a quintessential example of what another business writer, Matthew Stewart, derides in his much more perspicacious article, “The Management Myth” published in The Atlantic.  Stewart founded and ran a management consulting firm that grew to 600 employees, but he detests management literature, describing it as a “collection of quasi-religious dicta on the virtue of being good at what you do, ensconced in a protective bubble of parables (otherwise known as case studies).”

See, I’m not the only cynic in business.

What also bugs me about flimsy articles like “Use the Downtown to Your Advantage” is that they serve mostly to provide reassurance. What’s wrong with that? We could all use an emotional boost in tough times, right? True, but the advice in articles like this is so limp, commonplace and obvious, even bad managers practice most of it. That enables the self-serving weasel who just received a government bailout to say, “Oh, hey, I do all that! I’m a brilliant manager! Now where’s my bonus?”

Notes Matthew Stewart:

“If it’s reminiscent of the kind of toothless wisdom offered in self-help literature, that’s because management theory is mostly a subgenre of self-help. Which isn’t to say it’s completely useless. But just as most people are able to lead fulfilling lives without consulting Deepak Chopra, most managers can probably spare themselves an education in management theory.”

Here’s a Hollywood metaphor (bear with me, I live in L.A.): Such vapid articles are like the therapy that Tony Soprano received from Dr. Melfi before she realized she was simply validating his sociopathic behavior. Vague reassurances and generic advice make the recipients feel good, but they don’t help ‘em get any better.

*****

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