Marketing principles - The law of settlement

The law of settlement

Been there, done that, and got the tattoo.

Once a decision has been made and acted upon, it shifts state from fluid to solid. Once a decision has been made and acted upon, it is difficult or impossible to change for a minimum period of time. Depending upon the agony that went into the decision making process and the nature of the investment in the deed, that minimum period might be measured in decades. If you buy a house or take a spouse, all other alternatives evaporate for a while. Sometimes it is for a long while.

As one who wishes to influence other people's decisions, there is a window of opportunity while the question is under consideration and still undecided. Once the deed is done, the window is sealed shut for the winter, and the matter is settled. If, as a marketer, you miss the window of opportunity, you are just out of luck.

Marketing principles - The law of authority

Because of a human infant's unusually long period of total dependence upon parents and family for survival, humans are conditioned at a very deep level from the beginning to obey authority figures. In later life there may be an element of selection as to whom or what one accepts as an authority, but the psychological response of follow-the-leader is built in as part of our behavioral foundation.

An "appeal to authority" is a well recognized logical fallacy, where it is argued that a statement is correct merely because the statement is made by a person that is regarded as authoritative. It is such a well recognized logical fallacy because it is encountered so frequently, and it is encountered so frequently because it works so effectively to influence behavior. This form of false reasoning even works to influence the thinking of people who recognize it to be a logical fallacy. It is bred in the bone.

Being an authority figure is relative. For every authority figure there are always bigger authority figures around somewhere, and lesser authority figures below. To a sheep, a sheepdog is perceived as an authority figure.

Marketing principles - The law of confusion

A mental and emotional state of confusion, the combined subjective experience of being confused, frequently is felt as acute anxiety. Mental confusion is potentially dangerous, from a survival point of view. Confusion triggers an immediate and sometimes frantic search for meaning and clarity, to reduce the anxiety caused by uncertainty. If you have ever lost a pet and don't know what has become of her, or Heaven forbid if you have ever misplaced a child, you understand how extremely urgent finding a solution to the mystery becomes.

The anxiety that comes with confusion produces several strong responses.

1. Increased attention and alertness.
2. Frequent scanning of the environment for clues to the puzzle.
3. Increased likelihood of grasping at straws, or willingness to assume causal connections that are not true.

In short, confusion is a problem to be solved. If you have a working solution that solves some type of common confusion, you potentially have a product to sell. The conditions are ripe for success. This who are confused are looking for a solution (you) and they will latch on once they find you.

"Anybody who is confused is likely to jump to conclusions by holding onto the first apparently reliable piece of evidence that he detects through the fog of his confusion." Watzlawick p. 28

Marketing principles - The law of the middle

The law of the middle

Always color inside the lines

Some decades ago McDonalds sold only two sizes of soft drinks; an 8 oz. small and a 16 oz. large. When McDonalds introduced a new 32 oz. large size and re-named its 16 oz drink as 'medium,' total sales increased. A significant percentage of customers switched from the small size to the new medium size, even though the absolute size of the drinks had not changed. The perception had changed.

One theory involves a human tendency to avoid extremes. With only two options there is nothing but low price - high price extremes. The addition of a third size created a middle option, and people feel comfortable keeping to the middle. Not only does it work to introduce a middle ground where none existed before, it also works to raise the average sale by adding higher priced options to the menu. Moving the high side extreme up moves the middle up too. This has been demonstrated to work, even if the highest priced options are never purchased themselves.

If the theory has validity, one might expect the same effect should be seen on the bottom side when lower priced options move the minimum extreme down. Average sales will decrease when the middle shifts lower.

But, maybe make it up on volume.

Marketing principles - The law of games

Classic game theorists have called out two general categories of games: Zero-sum and non zero-sum. Broadly speaking, a zero-sum game necessarily involves a win/lose transaction. Sport competitions can be viewed as zero-sum games. When one team wins it means by definition that the other team has lost. Non zero-sum games allow for the possibility that both parties can win, or both parties can lose, as a result of a transaction.

Classic free-market economic theory explains voluntary market transactions as being non zero-sum games by bringing more value to both buyer and seller at once. Classic game theory and classic economic theory have both embraced the use of mathematical modeling and analysis. These models seem to work best with easily quantifiable units, such as money or money equivalents, and where the participants are most rational. These theories find practical application in financial markets and mass marketing. It is a game of playing the odds, trusting the numbers, and measuring results. It's pure business.

Direct marketing to people, on the other hand, does not derive much benefit from the classic theories. There are many reasons for this, and the first may be the fact that marketing to people is not particularly rational.

Eric Berne's definition of interpersonal games may be more useful:

"A game is an ongoing series of complimentary ulterior transactions progressing to a well-defined predictable outcome. Descriptively it is a recurring set of transactions, often repetitious, superficially plausible, with a concealed motivation."

Being a psychiatrist, Dr. Berne was preoccupied with the examination of neurotic games, but it's hard to deny that a lot of neurotic game playing goes on in marketing, human resource management and customer relations.

It's a big topic.

Marketing principles - The law of opinion

The law of opinion

Everyone always has an opinion about everything

Just ask and you will usually find that everyone always has an opinion about everything at the drop of a hat. If you're lucky, they will wait to tell you their opinions until you ask. The speed with which humans appear to form new opinions is an illusion. The human mind is designed for speed and efficiency, and not for deliberate rational analysis. The mind does not so much quickly form new opinions as it swiftly classifies new people or situations into already well established mental categories. This very dominant part of the mind is programmed to do a quick sort on the most superficial criteria.

It is a survival issue. The fundamental question that must quickly be answered in any new environment or encounter is this: "Is it dangerous?" That, at least, is one issue upon which everyone has an opinion about everything, and the answer we come up with is always based upon the past. Past experiences, training, and indoctrination determine the answer. That is why it is so quick. It does not require any thought.

The mind is a self-organizing adaptive information structure that is also general purpose. The fact that it is general purpose suggests the opinion-forming process that works so well for survival purposes will also be used for other non-survival purposes. Thoughtless opinions are therefor the norm, and not the exception.

Marketing principles - The law of affinity

The law of affinity 

We buy from those we like 

The marketing principle of affinity is simply stated. You are more likely to buy something from someone you like than you are from someone you don't. As a business marketer, then, the challenge of invoking the affinity principle in your favor is to get people to like you. How to do that?

This too is simple: Like them first. 

People like to be liked. It tickles their fancy and it makes you appear friendly. People who appreciate being liked by you are very likely to like you right back. Someone has to get the ball rolling in the first place, and it might as well be you.

Although it's true that giving and receiving occur simultaneously in eternity, everything is simultaneous in eternity. In time, such as we are, the giving must come first before the receiving is possible.

Proactive friendliness has been proven through long experience to produce beneficial business marketing results. The opposite tactic can be well described as waiting for a fried chicken to fly into your mouth.

Marketing principles - The law of leadership

The law of leadership

It's better to be first than it is to be better

Reis and Trout state that the basic issue in marketing is not about offering a better product, it is about creating a category in which your business can be in first place. Maybe that's true and maybe it's an exaggeration, but either way Reis and Trout have been good at challenging conventional thinking. I'm inclined to think that the basic issue of marketing is to generate business profits.  Whether that is short term profits or long term profits, large scale profits or small scale profits, the issue of market position ought be secondary to return on investment, however that is measured. Maybe I'm a closet bean counter.

There is no reason to believe that the second largest company cannot be more profitable than the company with the largest market share.

Reis and Trout make the point by reference to memorable historical events, as in, "Who remembers the second person to fly across the Atlantic Ocean solo?" But the flip side to that is, "What good does it do Charles Lindbergh for me to remember him?" Just as what good is it that I can remember the words to the Oscar Mayer wiener song from decades ago? You say "wiener" and I say "Oscar Mayer," but it's not the brand I buy when it comes down to it.

Memorable is not enough.