Re: [projectvrm] Theory of peak advertising

[Shannon Clark < >]

But could it not be argued that elements of "identity" could be extrapolated to help close a sale. 

Some examples :

Buyer A - male, mid-50's

and 

Buyer B - female, mid-30's

Assuming other data about them is similar (geolocation, language, browser platform etc) a car company or travel site may want to feature different products as the initial offer to these buyers. They may both eventually ask for a quote on the same minivan - but the site might start with different suggestions to get them there. 

Or to use an online version of an offline example :

A buyer comes to an ecommerce site for athletic gear from a race website for a race in three days. 

Compared to a buyer coming from a similar site for a race in 6 months the two sites might make different pitches to close a sale.

For the buyer racing in mere days price may be of less import than immediate delivery (ie google shopping express or ebay now same day delivery type services or next day shipping - a buyer with time as their primary factor likely doesn't care about a 10 or even 20-30 percent price difference)

For the buyer with 6 months to prepare for a race they may instead respond well to an offer of a discounted price perhaps if you sign up for a subscription or membership that might be bundled with training suggestions and reminders of when to swap out shoes and other items that wear out while training. They may be less time focused and more looking for advice , support and community - as well as a fair price and deal (and may be willing to commit to a larger purchase over time to get a better per unit price). 

These are somewhat forced examples but aren't by any stretch crazy ones. 

Specifically to price - it is worth remembering that unit price and the whole transaction price are likely different things but buyers mostly focus on the total they spend not the per unit price. 

Amazon offers a fairly clear example of this - if you look at the offers around many goods in many cases the low unit prices have high shipping  & handling costs that often result in total prices that are generally the same as the average price for that book or other good. 

Shannon

Sent from my iPhone

On Oct 18, 2013, at 10:48 AM, Kevin Cox < "> > wrote:

Identity based pricing fails the fairness test.  If the price varies based on characteristics (identity) of the purchaser rather than utility (value) to the purchaser then it will fail the monkey test.

https://www.youtube.com/watch?v=-dMoK48QGL8

Kevin

On Fri, Oct 18, 2013 at 7:13 PM, Graham Hill < " target="_blank"> > wrote:

Hi Iain

Most of my consulting, interim and private equity work is at senior and board level of multi-billion dollar banks, insurers, telcos and so on. I see these discussions played out on an almost daily basis.

I agree with Iain entirely when he says that customer experience is often overwhelmed by other factors on the corporate agenda. The fact is, customer experience was never particularly high up the agenda in the first place. It was introduced about 15 years ago on the coat tails of Pine & Gilmore's book 'The Experience Economy', largely as a replacement for CRM as it started to become less effective through over and mis-use. The thinking was that as CRM was starting to alienate customers - who found nothing in it for them - focusing on improving the end-to-end experience would be the next competitive battleground in customer-facing business. Despite a few high-profile successful examples, the majority of customer experience implementations are focused on the companies and not on customers, and as a result have failed to improve the lot of the customer by much. 

I agree with T.Rob too when he says that high-cost expenditures almost invariably involve senior management if not board approval. I have been involved in the planning of a smarter marketing capability for a major bank. Part of that involves building an enterprise-wide Content Management System so that appropriate content can be algorithmically served in almost real-time to support marketing interactions across different channels with customers. This requires a medium-sized investment of about $35-50 million for the CMS technology. Even for such a small sum (1/1,000 of the bank's turnover) the board has got embroiled in the discussions. However, once the investment has been agreed and after it has been implemented, decisions about how it will be used to serve real-time content to customers will be a 100% operational management decision.

Neither of these two activities are done with either an understanding of what customers need, want or can use, or with any interest in the customer over and above the bit of the customer that controls their wallet. Companies are simply NOT interested in their customers providing they keep buying. Of all the companies I have worked with over a 25 year career as a consultant, interim director and in private equity, the ONLY company that was genuinely interested in creating mutual value with customers was Toyota. It is the only company I feel privileged to have worked with.

Best regards from Bishopsgate, London, Graham

On Oct 16, 2013, at 7:01 PM, Iain Henderson < " target="_blank"> > wrote:

Quite right T-Rob. For all the hype and so called focus on 'the customer experience', there are many, many times when that gets kicked into touch by the product manager whose job is to maximise revenue and profit.

CEO's know that, and typically back the product manager, in the knowledge that to do otherwise could cost them their jobs.

There are CEO's and PM's who understand that dilemma, even some who try to do something about it; but the bulk get swamped by the need to hit those quarterly targets.

Thanks

Iain




On 16 Oct 2013, at 16:52, "T.Rob" < " target="_blank"> > wrote:

is really happening. Make believe stories of what happens in board rooms
of evil media tyrants simply doesn't move the discussion forward.

True I made that illustration up but the point was that the very thing we
are told we are supposed to be happy about is just as easily used against us
as it is in our favor.  If dynamic personalized pricing is available it is
possible to attract more business from price sensitive shoppers by offering
them personalized discounts.  Woo hoo!  I get a discount!  But it is just as
possible to *increase* the cost for price-insensitive shoppers and that's
already been implemented.  That implementation required proposal
development, executive reviews, significant investment in hardware and
software, and a LOT of discussion about how to present this - if at all - to
the customer.

So yeah, that boardroom discussion I alluded to was hypothetical.  It may in
fact be possible that our largest global retailers allow mid-level managers
to implement discriminatory pricing, including funding all the hardware and
the software development, without any executive oversight whatsoever.  I
don't have an MBA or anything and I may be extremely naïve in my thinking
but it just seems to me that some executive sign-off was required to do this
and that nothing of this magnitude gets implemented in production without
the board's knowledge.  

Regardless of the validity of the illustration I used, the observation was
that consumers are being asked to judge the worth of the system based on
incomplete information.  The system deviates both above and below a baseline
price, depending on the profile of the identified individual and does so by
conscious, deliberate design.  The criteria that comprise levels of price
sensitivity had to be identified, quantified, tested over time and refined.
That it charges more when possible was no accident.  However the individual
customers involved are never told that they might pay more.  The story we
are fed is that we are always better off for the personalization and
tracking and should therefore welcome it with open arms.  At least half of
the behavior of the system is hidden from customers and, again, deliberately
so.  

I don't see how calling for more equity and transparency in the relationship
fails to move the discussion forward.  Unless of course the trajectory is
toward even greater inequity and opacity and my approach would slow or stop
that momentum.  In that case I'd completely agree with your statement but
not the implication that reversing that trend is a bad thing.  In fact, I'd
say that establishing these as formal requirements is more likely to result
in an engaged and trusting customer relationship than not and if that's the
case, calling it out explicitly could be the textbook example of moving the
discussion forward.  I guess it depends on the discussion you want to have.

-- T.Rob

-----Original Message-----
From: Marc Guldimann | Enliken [mailto:marc@enliken.com]
Sent: Wednesday, October 16, 2013 9:39 AM
To: 'Don Marti'
Cc: T.Rob; 'Doc Searls'; 'Shannon Clark'; 'Katherine Warman Kern';
'ProjectVRM list'
Subject: Re: [projectvrm] Theory of peak advertising

No, that's not the adtech story, Don. The NYT is one of the biggest
proponents of programmatic advertising now:
http://www.beet.tv/2013/09/nytprohaska.html

Listen, if we are really out to find a better solution for consumers it's
important to drop the hyperbole and rhetoric and start talking about what
is really happening. Make believe stories of what happens in board rooms
of evil media tyrants simply doesn't move the discussion forward. Yes,
there are some bad eggs, as there are in EVERY industry, but for the most
part advertisers are simply looking to use data to increase measurement
and reduce waste.

I suggest reading http://www.adexchanger.com/ it's a great way of
understanding what is actually happening in the ad-tech industry.

Marc

e-mail: " target="_blank">
blog: www.iainhenderson.info
twitter: @iainh1

This email and any attachment contains information which is private and confidential and is intended for the addressee only. If you are not an addressee, you are not authorised to read, copy or use the e-mail or any attachment. If you have received this e-mail in error, please notify the sender by return e-mail and then destroy it.

<a href="http://miicard.me/b0F1Jsy5">Identity assured by miiCard : Click to Verify</a>

--

Dr. Graham Hill

" target="_blank">

UK +44 7564 122 633

DE +49 170 487 6192

http://twitter.com/GrahamHill

http://www.linkedin.com/in/grahamhil

Partner

Optima Partners

http://www.optimapartners.co.uk

Senior Associate

Nyras Capital

http://www.nyras.co.uk