Manage-Wise

Forget reality: perceptions rule

In the “reset” environment, the rules of leadership, business and communications have changed completely. Today’s consumers of information may be clients, employees, or investors, and they are empowered with instant and ubiquitous information. Consumers have infinitely more choices—and infinitely more information about how to make those choices. Brands have infinitely more competition. And all of us are inundated by a tsunami of information daily, the crassly trivial and the critically important swirling together in one crushing wave. Today, consumers of information feel overloaded. Yet, at the same time, they compulsively seek even more information. They have more choices in the marketplaces than ever before—yet they seek still more.

They are sophisticated and cynical consumers, and yet they are increasingly consumerist. They seek more information about every kind of decision, and yet they are buying on impulse more and on a bigger scale than ever.

Go figure. Better yet, go understand. If the world looks upside down, it’s because you are looking at it the wrong way. This frustrating consumer behavior leads many marketers to shake their heads and say, “I just don’t get it”.

Changing market behavior

But this radically changed market behavior is completely “getable”. You simply have to ask the right questions. And then (the hard part) you have to be willing to believe the answers. Most of the companies we work with have warehouses full of market data. But they still operate by anecdote: what the head of sales heard 15 years ago about the New England market, what the head of strategy thinks about people who go to Wal-Mart, what the CEO feels about CNN. That’s why across most industries and companies today, greater and greater marketing investments are yielding lesser and lesser results. The old tried and true has been tried and just isn’t true any more. Consumer perceptions and attitudes rule. They also change. And if you can’t change with them, you are lost.

In fact, what managers think isn’t very important in the great scheme of things. It’s the customer, stupid.

The great marketing innovator Joanna Jacobson once forced her entire sales force to put on T-shirts before entering the annual presentation of marketing strategy. In bold type on each of them were the words: “I am NOT the target market”.

Your marketplace reality is based on the perception and attitudes of customers and other key constituents. What they believe goes. You can try to shape their perceptions—it’s doable, but it takes time and money. Or you can shape your strategy around their perceptions. Forty years ago, in politics, President Lyndon Johnson famously discounted the value of trying to win an attitudinal war for public support of his Vietnam policies.

“Grab’ em by the balls,” he said. “Their hearts and minds will follow”.

Johnson was dead wrong. He and his successor Richard Nixon were forced to abandon the quest for victory in Southeast Asia because they failed to calculate how much more effective it would be to grab people by their hearts and minds. And today, the Powell Doctrine has replaced Johnson’s crass miscalculation: We will never fight a war that doesn’t have the support of the American people.

In Johnson’s time, of course, ignoring the public was a little easier. It was, in fact, the norm in American politics. Once you were elected, you were pretty much free to do as you pleased. Now even the most powerful person in the world, the US president, must essentially get his or her policies and programs elected every day. In this information age, every action is known or soon knowable. Today, the information revolution has empowered voters and consumers as a true force, not just on Election Day, but on any when their attitudes are being polled or their chat rooms are abuzz or their purchase decisions are being tallied. Market information is instant—and consumers know it. They expect constant product and service improvement. If you don’t provide it, they will look for it somewhere else.

Power of individuals

Individuals can make a very loud noise, and they know it. They can garner support and gather a crowd in a hurry. Today, Reagan’s nickname, the Great Communicator, has become the president’s job. The president must explain the complex working of the government to the American people. The president must gain consensus for his or her policies and for individuals in the administration. Further, the president must define the United States in the world—that is, must essentially communicate the American brand. And all this must be “elected” everyday by voters, by the press, and by influentials all over the country and, increasingly, all over the world.

Of course, we believe in democracy (as the baseball player said, “It’s been berry good to us”). However, all of us in Western culture have gotten more of it than we ever bargained for—the electronic democracy, instant, digital, and constant. The political conversations and market conversations are constant and flowing. As Richard Haas, President of the influential Council on Foreign Relations, has said, “The election is merely the culmination of the democratic process.”

So, in today’s business environment, you have to believe in marketing democracy. You have to treat all marketing communications as a two-way, interactive, and living conversation—inviting, carefully analyzing, and constantly responding in this dialogue. About 90% of marketers seem to be hard of hearing. Just look at their products, their customer relationship management, or their advertising. They are involved in a one-sided conversation. And, before long, they are just talking to themselves.

Without listening, this dialogue is impossible. Without constant, perception market research, effective strategy formation is impossible. The rate of change of perception and attitudes is getting faster and faster. The swings of national or market moods are getting more and more manic-depressive. The only choice in this environment is constant dialogue, the market conversation. It’s ten o’clock. Do you know where your customers are?

Excerpt from ‘The Underdog Advantage’ by David Morey and Scott Miller. Reproduced with permission © 2005, Tata McGraw-Hill Publishing Company Limited. Price: Rs 295. Vishwanath_Ghanekar@mcgraw-hill.com