The Privilege of a Privileged insight

This nice-sounding word that started doing the rounds a few years back, called Privileged Insight. Everyone from McKinsey to McDonalds was losing sleep over it and all the hot thought leaders were pounding their desks demanding it. This is a cool strategy, but what's our differentiator? What's the one competitive advantage that will remain our advantage? What's our privileged insight about the consumer? What do we know that they don't know?

Now we know that a lot of tough questions don't have answers.

We know what a Privileged Insight means (let's call it Pi for shortness's sake, I'm getting carpel-tunnel-syndrome from typing it each time). And we also know the magic of Pi, how we'll use Pi and how

it'll transform the world. The only thing most of us were unsure of is its existence, more than momentary-fleeting that is.

Now that I've had the fortune to work on emerging industries (like eCommerce, and yes, I know it's emerged to various extent in various countries, but in India it's called emerging or yet to emerge), I've

often hunted for Pi myself. I've sometimes imagined I have it figured, only to lose it again. It troubles me. What can give me the privilege to know any Pi to the last decimal? How do I keep it privileged evenif I do pin it down? I'll not be the only person in the company who knows, and people leave companies and join others. Plus the same customer talks to other companies too. The same research company /researcher talks to others in the game.

Bigger problem, if Pi isn't known, then we market-players have the same insights. Then we should have the same imperatives, the same strategy, right? Not really. Possible, but not necessary.

Sometimes I feel there's something like Pi, even if there's nothing that's 'exactly' Pi. Maybe the difference in my company and the next is not different insights, but the way we use them. Specifically, even if given same / similar insights, we take different punts. That's the difference between 'us' and 'them'. We go and invest in Rural while they invest in the Youth. We build out the smartphone experience while someone else grabs the SMS / feature phone platform. One, or both of us will win, but we'll be different.

Under the same sky, some plant more potatoes and some plant more onions. One of these farmers will make more money and people (including the farmer himself) may think he had this Pi thing figured out. A consultant will convince him, and a management guru will spell it out, it's 3.1415926....

What’s an Emerging Market?

What are emerging markets? Duh - Brazil, Russia, India and China (not in order, clearly), right? Or was it Brazil, India, China since Russia fell off some years back? Or is Russia back again? Or is this version outdated? Does the latest version of this definition contain Indonesia, Vietnam and blah?

Not sure. What we seem to be sure of is that we need a bucket to put emerging markets in. Why? Because they behave differently. Their needs are different, they are yet to evolve but have immense potential (some say population), they need to be invested in (some say spent on), nurtured with a long-term view (/ long breakevens  to be tolerated), and need a radically different approach (/ consultants to be hired). The logic, whatever it is, of having a bucket called Emerging Markets is sound.

The next part about putting the BRIC into that bucket pains me, especially coming from (over)-educated people wearing boring suits and smart glasses. Those four countries are huge animals to squeeze into the same bucket. Again, I get the need to treat emerging markets differently (just like the need to treat a child different from an adolescent to an adult or a geriatric). I just don't think India's one market, or China for that matter. 

I believe any market with a small size and a large growth rate is an emerging market. eCommerce in India could be emerging but Telecom probably isn't emerging anymore. Looks like Telecom's emerged fully, we can see the bottom and the bathwater dripping on the floor. And just for the sake of an example, maybe ayurveda or yoga or khadi in Europe is an emerging market. To my mind the logic of treating all these markets differently makes sense. The logic of treating everything in India, or every business across India, Brazil, Russia and China the same is tougher to get.

Come on, it’s 41% of the World’s population we’re talking about; just India + China is 36%, just for perspective.  

All Indians do not ride elephants (some do, I’ll concede), or charm snakes or work in BPOs or (I heard this recently) use tablets instead of notebooks. We have many different Indians in here. Indian businesses are also different. Snake-charming, elephant-riding is not emerging. Definitely. BPO did emerge but you’re very late to the party, some of us have forgotten the full form and just did a google-search on it to refresh. Only Tablets, as a business from that list could be emerging. 

See the difference?

Loyalty Programs versus Loyalty

What comes to your mind when you think of loyalty? My guess is, one of two very different things. You’ll think either of a loyalty-program (which is really a way of either incentivising repeat purchases or re-activating potential lapsers) or of Harley Davidson. Both, now that you see, are very different from each other. 

The loyalty I’d get through a points program is ‘purchased’ loyalty. You stop giving me points, I stop buying. This ‘loyalty’ is a reward for threatening to be disloyal, for being a bad customer. The Thums-Up or Laphroaig loyalty is not only unlike this but I suspect opposite. I mean if you do start incentivising / paying a Thums-Up guy to drink Thums-Up, he’d hate it. He wants to be seen as the guy who loves his soft-drink and doesn’t compromise. He’d rather drink nothing than drink Coke or Pepsi. He’d hate to be seen as the guy who drinks Thums-Up since he gets a discount. 

The other big(-ger) issue is on withdrawing benefits. Benefits in perpetuity stop making a difference, and temporary benefits leave the consumer with withdrawal symptoms. We’ve all read about the day-care that started monies for parents who picked up their kids late. The percentage of parents coming late increased, and what was worse was when they got rid of the monetary penalty, the percentage increased further. So translating a monetary value back into an emotional value is impossible. 

Moral of the story - it’s tougher, but much much better to start creating emotional loyalty. Get that experience, that taste, that message right. Re-consider what your ‘loyalty’ consultant is telling you. Re-think before you go down that one-way street. I’m not saying points are bad, I’m just saying that it might not solve the loyalty problem. What’s common to Islam, Pink Floyd, Classic Milds, Manchester United, Old Monk and Royal Enfield is that they don’t offer points. And the day they do, they’re no longer on this list.

Post-script, maybe can be split up into another post, is a note on B2B. This is different, please do not confuse that with this. That’s a different ball-game altogether. Employees of a certain company will fly the most expensive airline as long as the company pays their bills, and never for personal trips unless they’re redeeming miles. Some other company will stick with sub-optimal bill plans of some telecom operator as long as one admin / facilities person is really happy with the operator for some reasons. Interesting topic, that one too, clearly not the ‘loyalty’ we’re talking about here, so maybe some other time on that....

How do you fight a suicide bomber?

There’s a term called asymmetric warfare that is commonly used for terrorism. One party in this war (the Government) has to secure all vulnerable points to win, while the other (the Terrorist) has to penetrate just one to win. Naturally, in most cases, the terrorist wins. It is just so much easier.

Of late, I’ve been wondering if we should worry about another similar, though not same, problem. How do you fight competition that wants to blow itself up? You come to the meeting armed with logic, profit and loss, analytics; while this other guy just parts his jacket to show you a string of bombs strapped to his belly. This kind of competition is not rational, or maybe is, but not in your conventional sense. You seek victory while he seeks martyrdom. You seek P&L while he seeks valuation. He’s happy showing a 200% rise in traffic even if he can’t sustain it beyond the year because he hopes to sell some stake within the year (aside, I know the offline guys are giggling here, guess how much traffic we can build at our stores if we sell at a loss :D). Worst, our suicide-bomber will spend till the consumers are so drunk on a cocktail of discounts, cash-on-delivery, coupons, no-questions-unlimited-returns and a variety of unknown ingredients that any rational person can’t persuade them to listen to anything sensible. 

What is worse is that your hope of sanity prevailing is faint. When this particular guy runs out of money, the next free-drinks guy walks in, and till there’s even one joker left in the pack, the suicide bombing continues. Even if someone does it sporadically, you’re done. 

Like the Uncle who walks into your house and spoils your kids on ice-cream, now the businesses are left dealing with irrational expectations of spoilt kids. eCommerce consumers would ideally like everything free, next they’d like to be paid to use eCommerce I guess. Soon we’ll have to send chauffeurs to their homes, with iPads encased in soft blue velvet for the users to tap - all for products with negative contributions. 

If Soft-Drink Giants can agree (unofficially, of course) on pricing for 200ml of soda, why can’t we eCommerce guys have some sanity?

The Escalator Problem

Is stepping on an escalator easy or tough? The answer depends on whether you’ve already been on one. Imagine someone who’s comfortable on escalators (e.g. me) explaining “how to step on an escalator” to someone who’s not (e.g. my Mom) and I’d probably say something like, “you just take a step forward, that’s all - nothing will happen, worst case, just grab the handrail and you will be fine”. and no prizes for guessing how effective this is. 

Doesn’t work.

This is the escalator problem. However, it is not just an escalator problem. I have seen teachers (“maths is easy”) explaining it thus to students (“maths is hard”), and I see it happen every day now on eCommerce. Let’s face it, most of eCommerce is built by techies and not retailers, not consumers. Hence you have this common occurrence of people in the room (“eCommerce is easy”) not being able to figure why the traffic (“eCommerce is tough”) isn’t converting. How many of us working in eCommerce companies have taken efforts to design a site that’s easiest for the first-timer to figure? 

As a first step, we should try and understand the first-timer better. Identifying him / her is easy, researching his / her state is easy, creating a simple flow for, and assisting the first transaction is also easy (remember Microsoft’s paper-clip assistant that us evolved users found irritating? guess what, a lot of newbies loved it). What is not easy is convincing the nerds around the table who’d think this isn’t cool. These guys think it is cool to tell you there are 247,000 results for your search (and ten ways to sort the results), free-shipping is available for some articles and not for others, cash-on-delivery has a minimum limit, T&Cs apply on all these and the personalization engine knows there’s no history for you but is still trying to do a good job and therefore throwing junk at you. Remember the movie-sequences with the waiter asking too many questions, and the customer ends up ordering nothing?