Wednesday, 1 May 2013

Holmes Report extract: Redesigning B2B Comms to Boost the Bottom Line

Tasked with redesigning b2b comms from the ground up, what changes would you make? First on the list might be finding a more purposeful, commercial role for PR at the heart of the enterprise - at a fundamental level, driving revenue.

Coverage is valuable, of course. It certainly indicates engagement. But what really raises the pulse of the enterprise is growth. What role should PR play in customer engagement and lead generation? How can communications help to drive revenue? 

Thursday, 28 February 2013

The herd behaviour of Hollywood's loyal customers

How do marketers build loyalty for mediocre products? What explains the enduring popularity of the Eurovision Song Contest, or why some underperforming football teams attract unwavering levels of support?

The New Yorker columnist John Cassidy attempts an answer in his article, Was it Rational to Watch the Oscars? Given a backdrop of unfamiliarity with this year's biggest releases and a low tolerance to celebrity backslapping, it would seem rational to avoid the televised ceremony and spend the time doing something more productive. In this instance, the opportunity cost of watching the entire show, from start to finish, is high.

But, writes Cassidy, that would be ignoring the inherent value of common knowledge... and overstating the role our rational minds play in making the decision.

"...knowledge isn’t confined to an awareness of which films win or lose. If that was what people really cared about, they could simply look at the list of winners online, or in the morning newspaper...The common knowledge includes all the other goofy stuff... the wardrobe disasters; the unfunny jokes; the weird dance routines; the embarrassing acceptance speeches."

On their own, these elements aren't enough to inspire interest, let alone loyalty, but combined with the immediacy and peer leverage of social networks, the picture changes dramatically. The awareness that others may be watching, combined with the social pressure created by the possible requirement to display this knowledge at a later date, is enough to elevate low-level apathy into a much more sophisticated need. 

"The shared experience is what is crucial. The awareness that others are watching, and that you will be able to communicate with them about what happens, changes the cost-benefit calculus of the potential viewer, providing us with what economists call a positive network externality. The more people that are watching, the more the potential viewer stands to benefit from joining them. 

The end result, for anyone struck with a similar thought about the futility of the Eastenders Christmas Special, is that everyone ends up watching something that no one really enjoys. 

According to Cassidy, the era of mass communication, in enlarging people’s network of friends and acquaintances, has accentuated the significance of certain cultural events to the extent that they become too risky to miss. 

"It’s one thing not to have much to say to your co-worker in the elevator. Missing out on an event that dominates your Facebook and Twitter streams for the ensuing twenty-four hours comes with a higher degree of discomfort."

Psychologists call this herd behaviour - a flocking instinct that's rooted in self-preservation. It makes us feel at ease when our actions mirror those of our nearest neighbours and, conversely, uncomfortable when we stray too far from the norm. Herd behaviour is primarily about risk aversion. 

In an experiment to test how sheep react to the presence of dogs (in other words, why and how they flock) scientists from the University of Cambridge fitted 46 sheep and an Australian Kelpie working dog with GPS receivers. They then instructed the dog to herd the sheep towards an open gate. Using the data to calculate the middle of the flock, and how far each sheep was from that point on a second by second basis, the scientists found that when the dog got within 70 metres of a sheep, it would react each time by moving as close as it could to the centre of the flock, until eventually all the sheep formed a tight cluster. 

It's this act of self-preservation that causes herd mentality. The fear of finding ourselves too close to the edge of what's happening compels us to move closer to the centre. This knowledge has a practical implication for marketers, for whom turning detachment into desire, and then elevating desire into commitment, requires a complex chemistry of social risk management and perceived value. 

Given a platform for demonstrating to consumers what could be lost rather than what might be gained, marketers can create much more powerful engagement levers. Because in lieu of rationality, what we find engaging depends greatly on what we believe others will find engaging. It's a formula Hollywood has relied on consistently since the early days of cinema.