Monday, July 31, 2017

The Return of...Marketing Investments (ROMI)

Marketing should have an ROI - or shouldn't it?
An article from the recent publication of Harvard Business Review  (July 25th) by Amy Gallo highlights the right manner of driving the ROI from Marketing Investments.

Though the article is largely generic, it does highlight the biggest challenge in calculating ROI from Marketing initiatives - what we should include in 'returns'!

As per Amy,
One of the downsides of marketing ROI is that it is easy to only recognize the incremental profits in short-term sales and underestimate the long-term benefits that marketing brings to brand value.

While Customer Lifetime Value can rationally explain some part of ROI, overall this is still a tricky area to touch.

On the other hand, Prof Byron Sharp does not believe in ROI for Marketing per se.
According to him, Do you want to lift your marketing ROI OR grow your brand (share/sales)?  Because ROI is seldom a recipe for growth.

or what he mentioned almost a year back
Why do people say ROI when they really mean $ sales or profit?  Which btw are vastly better metrics. ROI is for capital spends and not ad spends.
Those who believe in this are literally financially illiterate

Different schools of thought - however, as a student of marketing, I believe returns should be measured - Whatever investments/costs you incur, they should translate into sales - either short-term or long-term. You cannot spend without measures. "What gets measured, gets managed!" (Peter Drucker)

Given the outright rubbishing of heritage marketing principles by Prof Byron Sharp, am sure he would not be so likeable in the marketing circuits around, even though he is surely the blue eyed boy of Modern Marketing. As a Chacha Choudhary fan, if I was to recall the big fights between stalwarts, I can see a sequel on Marketing with him - Prof Byron Sharp and Marketing ki Wapsi. Time will tell who is Sabu and who is Raaka in the marketing world!

Wednesday, July 26, 2017

The mathematics of Indulgence

Most men would have cribbed about the shopping obsession of the women in their lives (not just wives!).
Men, who study consumers, (and not just their women) would describe this as 'retail therapy' - how you shop when you are stressed. Women shop when they are stressed.

A student of CAT preparation would apply deductive reasoning or syllogisms on these statements and conclude that Women are mostly stressed! (Wonder why is this not mentioned in any nuptial agreements!)

That could be true. However, there probably is more to it. What is the secret behind this? Why do women (as well as men) shop when they are stressed?

Shilpa Madan has an interesting logic to address part of this quiz - We earn moral credits by doing something interesting. 

Mathematically speaking, when you earn moral credits, you spend them on supposedly 'immoral' activities or indulgence as it is called! So every time you do something good, you want to spend that on something you would normally not do (because of your rationality, self-control, and discipline! ;-p)

Sadness / Stress is equivalent to earning moral credits, where you are the victim. So indulgence is the best way to spend those credits. Hence proven - the theorem of justified indulgence, I mean, retail therapy!

Some of the research presented is interesting. I remember studying similar behavioral patterns were articulated by Prof Dan Ariely and his studies around Behavioral Economics, but will park it for a subsequent post.

As a proponent of health foods then, does it mean that snacking on health foods would not happen in situations where people have earned moral credits? Unlikely they would want to spend on indulgent categories. When you celebrate or party, you would not want to do it with a pack of seeds!

So what is the solution?
Maths would suggest that let them earn more 'immoral credits', rather 'guilt credits' would be apter, and then let them spend that on something which reduces the guilt. Even a McKinsey study on Consumer behavior had quoted on how guilt was driving the healthy behavior of consumers!

Some experts believe that our brain is hard-wired to interpret the word 'snack' as free rein to eating something ridiculously naughty.

For the syllogistic stressbusters, however, Shilpa offers some tips - her solution to 'retail therapy' - "next time you get serenaded by the call of the your favorite store’s website and indulge in the mindless task of browsing, choosing, and most importantly, rejecting a few things. If you really like something, save it in your cart."

Seems to be worth exploring! Thanks, Doctor!
Image Sources - Burger, Snacks

Sunday, July 23, 2017

Weekend Home or Walking out Naked

Every year this time, some strong force of energy pushes me to introspect about my passion for writing - as if part of me is still incomplete and it is high time that I do something beyond brooding to get it moving.

Over the past few years, this introspection has entailed virtually one post reinforcing my commitment followed by few ramblings, followed by another resolve, and then few more ramblings, and so on, till the excitement tapers down.
Just a simple plotting of posts over the past 12 years reflects my diminishing enthusiasm towards writing and expressing myself. Ironically, if I was to plot the number of books and deep articles I have read over these many years, it would just be the reverse pattern.

As I wrote almost a year back...
Lets Restart. For I am not done. 
Not done to Let go of this passion of reading the world through my eyes 
Not done to stop learning as I keep sharing - not to increase readers, but for the joy of sharing 
Not done to stop reading - reading between the Ps around me...... 

Well, I have not held this blog tightly yet but I am not letting it go either. It just like those "weekend homes" that are advertised throughout the expressway - when you travel between Pune and Mumbai (Maharashtra) - you visit those places every summer, regret for not being regular there - then decide to nurture it, dream about settling there, making this a daily part of your wonderful life.....come back, spend few days in your regular stressful world and very soon, get back to your chaotic life.
The weekend home stays in your Wishlist, most likely till the next summer vacation!

My quest for perfection and social consciousness keeps me away from pushing the publish button. But why? What stops me? 
Maybe I should take a feather from what I learnt in my first year of engineering when we had just joined.

We used to be terribly scared of seniors and ragging and what all they will do to us. Word of mouth only translated into worsening nightmares initially! Every night we used to fret over the next few devils and when they would knock the door and barge in with their weirdest fetishes!

One day a senior gave us a piece of advice that worked wonders for us! He told us, "your fear is your biggest enemy. All you have to do is take away that from yourself. Worst case, be ready to walk out naked during daytime!" It was shocking for us - how could we? what would the world say? Wouldn't everyone laugh at us?
We started being open (pun intended) to everything. If someone asked us to take off our clothes, we did that without any emotions. If someone asked to make some weird positions, we showcased our inner talent without any guilt! After all, we were ready for the "worst case" - and then we saw it happen in front of us - seniors got bored of us quickly as we happily agreed to dance to their tunes, fear went away and we started enjoying those times. And in this entire fun, we made the best of friends as well. And all this happened without us ever needing to reach the worst case.

Maybe this learning needs to be refreshed and reapplied in a different avatar. Maybe it is time I take the fear out of myself to worry about what the world would think.
Maybe....I need to be ready to walk out naked!

[Pic Sources - Home, Lady]