Good Post On Pay Per Call Internet Advertising

Anita Campbell has a very interesting post on pay per call advertising. I have never heard of this type of product before, but it definitely seems like something worthwhile to explore for small businesses (and businesses in general for that matter). This kind of product seems like it would help to eliminate click-through abuse as well as set the bar a little higher on screening customer prospects in certain biz models.

A Case Example Of Where Pricing Changes Give Us Agita

My wife (Suzanne Shu) is quoted pretty extensively in an article in the Seattle Times by Drew DeSilver. The article is entitled, "Gas Pump Angst: Why Rising Price Riles Us Up". Nice job, Drew and Suzanne.

Update (8/15/05): I guess folks were pretty impressed with this article. I just learned that my wife has a TV spot on NBC this afternoon at 4:00pm.

Update (8/15/05): NBC link is here. Actually this aired on the 6:00pm news at the top of the hour.

Update (8/16/05): Two airings for my wife on the 5:00pm and 6:00pm news. Link is here for the next 21 days. Looks like you cannot view it in Firefox (only Internet Explorer).

Update (8/17/05): Another article with the Dallas Morning News stemming from the article here. Also, Bloomberg NY radio station did a live interview this morning. Don’t know if the audio is available online, but I may find out.

Update (9/2/05): Denver post article.

Speaking Quotably Versus Incoherently (To The Press)

Something I need to work on. For those who don’t know, I’m more of a right-hand man than a front-man. What this means for me is that I’m good for a "on the one hand there’s this" and "on the other hand there’s that" type rants. Doesn’t mean I’m a slouch for having a definitive opinion, but for persons that have played a facilitative role in consulting or other areas, being balanced and level-headed comes with the turf. I’m familiar with the scenario where the client CEO confronts you in the elevator and you need to give the 30-second pitch on where the engagement is at while at the same time justifying your existence. All said, giving an executive business summary is a bit different from "speaking quotably", the latter which is required for talking with press reporters.

Ford Harding, in his book "Rain Making" (a very good book for those looking to hone their skills in attracting new clients in the professional services or consulting world), has some good examples of speaking quotably (categorization is mine):

  • Colorful words – "… like Bambi caught in the headlights …"
  • Cliches – "This is only round one."
  • Dramatic – "That issue is as dead as the flat earth theory."
  • Despair – "Many will never work again."

This past Friday I was called by a reporter as related to an article on corporate blogging just being finalized for one of the major East coast newspapers. The reporter was extremely friendly, smart, nice, and precise about her work. Have no idea whether the statements I made will be used, but it made me realize I have something to work on.

Caught off guard I was. Use this encounter as a signal I will. Make improvements I shall. Have any thoughts do you?

Are Marketers the Future for the Next Generation of CEOs?

Based on some of my posts related to Seth Godin, Somill Hwang of Bite Communications brought to my attention the results of a new study by the Institute of International Research, which polled 1,300 business leaders and discovered that 29 percent believed that marketing is the most important area of expertise among next-generation leaders.

Here’s the question the IIR posed and a snapshot of the results:

What will be the most important area of expertise for the next generation of leaders?
      Marketing: 29 percent
      Operations: 22 percent
      Finance: 14 percent
      Sales: 8 percent
      Engineering: 8 percent

Now it’s always a bit hard to interpret these kinds of survey results very deeply. That said, it’s an interesting question when one considers that many CEOs have come from second-in-command positions like CFO or COO positions. What do you think about these results?

Steve Shu

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(S*X and B*NDAGE) For Software Marketing in 2005?

I swear the timing was by accident. I wrote this post on software marketing in 2005 for the Sand Hill Group over two weeks ago (I think) not knowing when it would be posted. Then yesterday I facilitated this post for my wife. In any case, the first post motivates the need for sex in software marketing. The second post, er … well, it recommends suggests bondage and handcuffs as an option to constrain consumer choice.

Steve Shu

Marketing Bondage: How Companies Can Benefit By Giving Consumers Handcuffs

Steve Shu here. OK. I took a little liberty with the title of this post as my wife is away for an extended period teaching in France at the business school at INSEAD, and she asked me to help her post the next blog entry in a series of posts on marketing. As some may recall, these posts are based on a talk she gave to the PR firm, The Richards Group.
The Richards Group represents a number of well-known clients such as
AIM Investments, Comcast, Corona Beer, Fruit of the Loom, The Home
Depot, M.D. Anderson Cancer Center, Nortel, and Sub-Zero Freezer
Company.

Here’s what has been covered so far in this series on marketing:

Now we have a post on bondage and putting on the handcuffs for corporate and organizational benefits … well, you decide what the title should be. I don’t think I’m too far off though.

Steve Shu (for Suzanne Shu)

/***********************************/

My previous comments focused on marketing trends toward
increased choice for consumers, and the possible negative side effects of all
that increased choice. One side effect, documented by Barry Schwartz and
others, is that too much choice can be overwhelming for consumers. Dealing with
so many options requires that we know what we like, or that we can get fast
feedback from the choices so that we can refine our future selections
accordingly. The other negative side effect of increased choice is increased temptation.
Having a bigger selection of chocolate pastries at the buffet’s dessert bar
always means that I’ll end up eating more dessert than I intended to. To deal
with these temptations, we often impose self-control rules to limit our
behavior. I’ve learned to limit myself to a single visit to the dessert bar for
a single choice, no matter how tempting the rest of the selection is. (An even
better option is to send Steve on my behalf, so I don’t have to see everything
I’m missing out on!)

As a marketing professor, I’m intrigued by companies that
have found creative ways to help us avoid temptation. These companies actually
make a profit by helping us restrict out own choices. Note that I’m not talking
about the simple approach taken often by credit card companies and banks, which
has been to just depict consumers with self-control problems in their ads. This
style of advertising recognizes the problem but leaves it to the customer to
actively decide how to tackle it. It also implies that exerting self-control
requires a lot of hard work, not necessarily a message that customers want to
hear. The best solutions are more clever and subtle, and (I think) more
successful at helping consumers constrain their own choices. Several years ago,
a couple of decision-making researchers investigated movie selections made in
rental stores and at theaters. While many movie watchers expressed good
intentions for watching serious, Oscar-worthy films (like Saving Private Ryan),
they often gave into last minute desires to switch to more entertaining
blockbuster comedies and action flicks. The researchers suggest that this is
why many serious movies are released in single-screen theaters, where last
minute temptations are constrained. A more recent example involves cell-phone users
making drunken late-night phone calls to ex-lovers or bosses. Cellphone
companies now offer customers, for a price, the opportunity to block outgoing
calls to specific numbers before they start hitting the bars. In other words,
they are offering their customers a way to limit their own future choices.

The result is a difficult balancing act. Consumers want
choice and control, but they also realize they have self-control problems. And
yet they also do not want to hand over control to someone else. Instead, what
they really want is a way to control their own self-control problems – rather
than having an external provider restrict their choices, they want to be the
ones setting their own restrictions.

Let’s return to the retirement savings problem to see how
such a solution might work. SMU, where I work, has decided on behalf of its
employees that too many of us lack the self-control needed to put money aside
for retirement, so 401k deductions are mandatory for everyone over age 35. But
is forced saving the only answer? A more clever solution, now being used by
many companies with the help of 401k plans like Vanguard, is a program called
Save More Tomorrow. Their program recognizes that many individuals know they’re
not saving as much as they should, but that it’s also painful to increase
savings immediately. So employees are encouraged to pre-commit to future
savings increases timed to start simultaneously with their next raise. The
results from implementing this program have been dramatic in terms of increased
savings rates for employers who have adopted the plan; average savings in some
companies has increased from under 3% per year to over 10%. Again, the key is
that individuals realize that they have self-control problems, and the solution
allows them to restrain their own
future options, rather then imposing restrictions upon them from an external
source.

Suzanne Shu

Increased Choice, More Temptation

I left off my last post by asking why having an increased
number of choices works well at Starbucks, but seems to cause confusion when
buying jam. The difference often comes down to knowing our own preferences. For
everyday decisions with immediate feedback, like buying coffee, we are able to
establish our favorites relatively easily. And if the wrong choice is made, the
cost is low and we’ll only have to live with it for about an hour. Choosing the
wrong jam may stick with you a little longer – perhaps a month, depending on
how often you enjoy jam on toast. And consider really big decisions like where
to put your retirement savings – it’s a decision made rarely, with no immediate
feedback and very high stakes for choosing wrong. Too much choice can certainly
be overwhelming in such an environment.

Luckily, we can propose solutions for individuals
overwhelmed by choice. We can find ways to provide faster feedback so poor
choices can be corrected quickly. We can also help consumers deal with choice
by offering more information and assistance in discovering the relevant
attributes and tradeoffs, thus helping them discover their own preferences. Or
we can provide a hierarchy of choice, so that as a consumer’s preferences
become more refined over time, more customization becomes available to him. For
example, we can offer starter packs of a variety of small jam jars, or ask more
questions about when and where you eat jam, or devise rating scales that help
you better quantify your jam preferences. Although greater choice has the
downside of sometimes being overwhelming, it is a downside we can manage, and
the extra effort is often worth it.

But with all the focus on how overwhelming too much choice
can be, a different downside to unlimited choice and increased control has been
somewhat overlooked: the threat of temptation. (This also happens to be the
aspect of choice that I find most interesting.) Think again of the buffet
table. Once you overcome your initial surprise at just how much there is to
choose from and you begin loading your plate, you face a new problem: how to
know when to stop. It’s hard not to overeat with so many good options in front
of you! As a result, many weight-conscious individuals have devised personal
rules to constrain themselves, such as only a certain number of trips to the
buffet line per visit, or a certain number of buffet restaurant visits per
month, or even no visiting buffet restaurants at all.

It isn’t hard to think of lots of other self-control rules
that people impose on themselves to rein in the temptation that comes with
increased choice. Shoppers put budgets on how much they can spend during a trip
to the mall. They vow to visit only the store that carries the item they intend
to buy that day, without making any other stops. They only allow themselves to
buy tempting grocery product if they’re on sale or have a coupon. One of my
personal favorites – they vow to drink certain bottles of wine only on special
occasions. Unfortunately, although these rules work well to control
temptations, they can also make the consumer worse off overall. Untold bottles
of special wine have gone bad waiting for the special occasion that never
arrived
.

So how do we, as marketers, find ways to help consumers deal with the increased temptations that come with increased choice? And is it even in our interest to do so? In my next post, I’ll talk about how companies who are aware of these self-control problems have found some creative ways to help consumers save themselves from their own bad behaviors.

Suzanne Shu

Consumer Choice and Self-Control, Part I

As promised last week by Steve, I’m going to be
guest-blogging a little this week on some topics that I’ve been thinking about
as part of my research efforts. My job description says that I’m a marketing
professor, so you’ll see that these musings are heavily oriented toward a
consumer behavior view of the world. But my training is in behavioral economics
and decision theory, so I’ll borrow heavily from those fields as well.

Ask any consumer about the amount of choice he or she would
like in their daily lives, and you are likely to hear a preference for
unlimited choice and complete control. So it is no surprise that consumer
trends have been toward increased choice, even to the point of completely
customized offerings. On the grocery shelves we’ve seen an explosion of variety
– you can now find dozens of types of toothbrushes (an item that used to be
considered more of a commodity), along with new varieties of pasta sauces, snack
crackers, and salsas. The old “cup of joe” has been replaced by a completely
individualized venti decaf triple shot
hazelnut nonfat latte
at your local Starbucks. Online, you can visit an
auto manufacturer’s website and customize a long list of options for your new
car, even down to the unique paint job. And in restaurants, perhaps nowhere is
unlimited choice better represented than the buffet line that seemingly
stretches for miles. We are also seeing the trend for increased choice and
control affect public policy, as it becomes part of the debate around
privatizing social security. Proponents of privatization point out the benefits
of allowing individuals control over their own investments, a sentiment many
find enticing.

But at the same time as the number of choices has increased,
dissenting voices have come forward to point out the downside of the trend.
Perhaps most vocal has been psychology Professor Barry Schwartz, author of the 2004
book The Paradox of Choice: Why More Is Less. Schwartz pulls together a long
list of academic research in psychology and marketing to demonstrate that too
much choice can leave consumers overwhelmed and overstressed. Consider, for
example, an often-cited study by Professor Sheena Iyengar of Columbia University and some of her colleagues. They set
up a jam-tasting table in a grocery store, stocked with either six flavors or
twenty-four flavors. With only six flavors, shoppers were able to choose a
favorite, and jam sales went up. With twenty-four flavors, shoppers felt
overwhelmed and often left without buying any jam. In other words, too much
choice ended up being a bad thing.

But is too much choice always a problem? Why does more choice work well at Starbucks, but not when buying jam? I’ll address this conundrum in the next installment, plus offer some prescriptive advice for dealing with increased choice. And then we’ll consider whether there’s another "dark side" of increased choice that we also need to pay attention to. Stay tuned!

Suzanne Shu