I came, sunk cost and conquered

As Wikipedia discribes it: A sunk cost dilemma is a dilemma of having to choose between continuing a project of uncertain prospects already involving considerable sunk costs, or discontinuing the project. Given this choice between the certain loss of the sunk costs when stopping the project versus possible – even if unlikely – long-term profitability when going on, policy makers tend to favour uncertain success over certain loss.

Real life application = painting the walls

1. Day 1. Starting point: the colour chosen for the walls.

2. Day 1. The first results are not good. Wall colour is non white, so top colour gets darker than expected.

3. Day 1. Thinking within structure, not reasoning back from goal: additives to make paint lighter

4. Day 2. Three bottles of paint additive, no change. Pride dictates it is waste not to use the current paint.

5. Day 2. Drastic measures. Adding white paint. Proces has life of its own. Curse words used (Still can’t believe what Mum called me).

6. Day 3. Strategy over structure. New lighter shade of paint.

7. Day 3. Happy labour, happy management (taking pictures).

8. Day 3. Result.

Even though sunk cost dilemma feels like MBA theory, it has real life effects, most of us have learned the hard way: projects start, attain a life of their own, failing to deliver the most basic of goals. Yet we keep making (ego) defensive moves, to protect the (social) capital already invested.

The best way to counter it is to step back, swallow pride, look at next steps based on potential of these steps to reach our goal and forget the cost (time, money etc) already invested.

Sounds simple enough. If not for the fact that sunk cost carry value in certain situation, such as building a reputation for perseverance or loyalty. Again the key is to ask, “does it bring us closer to our goal”.

Like I said: simple enough. If only we weren’t human.

Brought to you by Christos: another branding diagram/brief

Being neither a branding expert, nor a digital master, I really get bored with discussions of what campaigns/strategies/briefings etc, should look like. It seems to always to end up being a more tactical discussion as oppose to a strategic one.

What is marketer to do? And then it hit me (right after that ouzo at Christos ). Below you will find a way to, for me at least, bring talk back to a more fundamental level, from a marketer/client/creative point of view.

Social vs Civic axis (hattip @ markearls for this one): this gives us a simple way of understanding how to strategically position the campaign when looking at conventions in the market, competitors, and stuff happening in society. It also serves as a way to reality check clients as to the consequences of choices.

Social would be well, Old Spice/Cadburry/Budweiser stuff.

Civic would look like Levi’s Go Forth

Casual vs intense axis: gives us a way of thinking about of the ways to best interact with the target group, again based on the context of society, product, etc… (stolen from @eranium at Christos while talking about gaming)

Casual would look like the stuff that Live Strong did: all we want you to do is simple, low intensity/effort stuff that could make a great difference.

Heavy: Is of course the opposite of casual in terms of complexity, commitment (both from the company point of view as from the customer point of view). Think World of Warcraft vs MaffiaWars.

From commercial points of view, it makes you think more about the painpoints in the “customer experience” (fuck me I hate these kinds of words), how to perhaps pick up groups not your core, former customers who have not seen your product as still relevant.

By combining the various possibilities one can play with ways to answer the clients problem while making sure clients aren’t overreaching, or underselling the possibilities of the situation. And in the ideal situation all elements would play a part at some point, cause humans are never on or the other all the time.

As with all diagrams/briefs the above one is simple and incomplete. Nevertheless, it can serve as a good conversation starter and a way of looking at the market in a broader sense then just catergory, or going into digital vs analogue type conversations.

Note to self: Up in the Air pt 4

So last weekend I went to watch Up in the Air. A movie about a guy (Clooney) who fires people on behalf of companies (or as he likes to say: he helps people steer their boat through desperation towards the dim light of hope…before throwing them of the boat and telling them to swim).

His life is turned upside down when a young MBA (played by Anna Kendrick) comes in and figures out that by doing the firing online and from one central location, the cost of business can be reduced by 85%. Clooney tries to convince her that this is not as clearcut as Kendrick thinks it is.

The contrast between Clooney and Kendrick serves as a nice backdrop for some practices we all know but sometimes need reminding of*:

Culture vs category Culture leads to better understanding of category

There are many problems in the lives of people, that may not directly relate to our products, but offer a chance to solve problems with tangible solutions.

Kendrick came in and saw one thing from her limited exposure and training. ” If we can cut the cost of flying by doing it via internet, we can make a killing”. Of course she is right.

Cutting cost would have made the fictional company more money. Yet what she had not experienced, was the stuff that happens all around the product they offer (in this case the firing of people).

There are issues that play a big part in the lives of the fired ones that have no relation to getting fired. Yet could have offered her company opportunities to be of bigger additional value to clients and customers than just being cheaper.

Culture (or let me rephrase that large word: an understanding of the wider lives of customers other than their behaviour when interacting with our clients catergory product) can be a fertile place for cash. But it means widening our scope.

There is this story about the public service system in Mexico around the 1950’s. It was notorious for its ineffectiveness. But gradually the productivity went up, without active involvement of the Gov. Nobody could, on the surface find a reason for this change. Turns out it was the aircondtitioning.

The siesta was something very strongly engraved in Mecixan live. Whether they be public servants, bankers, mechanics or farmers. The practice was part of the country.

So when the Mexican governement started installing airconditioning machines in city halls and other places where the servants worked, it had unexpected results.

The siesta was used for killing downtime around the hottest time of day, because it was dangerous to be outside (or that was the orginal practice, which carried over even when not entirely true for civil servants in the 1950′s anymore). Now the temperture was being kept steady at a workable one with the help of airco’s.

Slowly but surely this had an effect on the behaviour of the servants that led them not to take siestas and thus upping productivity.

Imagine if the sellers of the airco had pitched it as a means to up productivity or effectiveness, based on this insight and possible new use of product? Would that have been better than just a device to keep people cool?

I don’t know (all history tells us is, that they were bought on the strenght of other considerations), but if we had to sell airco in this day and age it would be an interesting, appealing and memorable pitch compared to standard pitches of just keeping cool.

People are influenced by all kinds of things: the context of interaction, people we look to/at, folklore, the physical world around us, previous experiences, fears, insecurities, much more… and the category product. Use it all to be of better service and ultimately more profitable.

This concludes this series of posts.

*For arguments sake I leave the morality of working for/with a company that fires people for a living out of the equation. Same goes for the actual movie. No accounting for taste.

what is the real brief: upstream thinking leads to interesting questions

upstream

So there was/is this debate in the Netherlands about the age of retirement. Most likely is going up to 67 years from 65 (early retirement being 63, which is also going up). The reasons are well known, demographics, empty pension funds,etc..

But listening to a conversation between a minister of the Cabinet defending the policy and someone from the opposition, I came across a great couple of lines, that encompas everything that is often wrong, lacking and great about the agency client relationship.

cabinet minister: Because of various reasons the people will have to get used to working longer, or in this case the age of 67. The country needs this from it’s citizens in order to ensure our current retirement system will not totally colapse in a couple of years.

Opposition politician: Can you garantuee work for people aged 60 and over? If you want us to work longer, you need to be able to provide work in the first place. Reality is that many companies are trying to get rid of older employees to cut cost and wages. Tell me minister, have you thought about that?

With one swoop the entire conversation went from “ask what you can do for your country” to “sure we want to help, but have you thought about other needs and not just your own” ? Not hard to figure out, who the public thought made more sense.

Which of course sits at the hart of the everyday struggle we have to face. Balancing the wants of the clients, with the needs of the consumer (not forgetting we can manufacture consumer needs very well, but that is a different conversation).

The above also shows the need for us to keep questioning to find out what the real brief is. Is it to convince people of the need to work longer (straight b2c), or to make sure people will have jobs once they get to market undesirable ages (upstream b2b)? The objective in both cases is the same, the strategies could not be more different.

Face value is skin deep for a reason. ABC: Always be Questioning (fonetically it makes sense, ha).

what if…loaded words + ambiguity = interesting t.v.?

A little concept (kinda candid camera meets talk show meets gonzo porn) I have been playing with and can’t quite make work yet..

Here it is:

You get a host and you make him put on a t-shirt. On it he has a word. Just one word. Say, Halliburton or Tibet or Abortion. that’s it. And he walks the city. Waiting for someone to approach him and ask what he means by wearing the shirt. Better yet u get some one coming up and taking a stand pro or against the word.

The host than takes the opposite view and tries to start a semi spontanious debate with passers by.

What I like:
the thought of ambiguity. A word in itself is just that. a word. But the implicit connatations attached to it are your’s. So by not being overtly pro or against we can play with the implicit connatations.

the fact that it’s legal and democratic with a twitst. It’s legal to wear a shirt with the word abortion on it right dead center in Vatican City. Would have to check the facts, but a shirt with the just the word Jihad is not illegal to wear in Down town New York or at Capitol Hill.

the p to p effect. I kinda see it as a possible thing for everybody to contribute to. Whatever you feel you wanna debate, do it by putting just one word on a shirt, check if it’s legal and start a debate, film it and send it in.

What I don’t like:

The businessmodel. Can’t see how I am to make money of it. It’s basically a creative comms format.

That’s it…so if anybody wan’t to shoot some holes in it, please do..