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Posts Tagged ‘Jon Stewart’

Switching Costs and promising the impossible

October 14, 2012 2 comments

“Many consumers remain loyal due simply to the absence of a negative because it is often easier to put up with something that is less than perfect than go to the trouble, and potential expense, of switching”

PricewaterhouseCoopers summed up their findings above in July regarding cell phone and pay TV customer loyalty. In the midst of swirling hysteria over cable TV “cord-cutting”, their survey restated the power of inertia and loss aversion.

In the hysteria that is the US presidential elections, Jon Stewart showcased the FDR video clip recently on The Daily Show. It was used to underline the current predilection Governor Romney has for stating he can not only improve the financial and military strength of the country, but do so at no extra cost to the taxpayer. This has met with puzzlement in the press. Romney has yet to fully describe how he plans to do both these things at once. It smacks of promising the impossible (not that Obama has been much more candid in his own policy details).

In politics, as with brands. If you are asking someone to change their allegiance from one thing to another, said person must consider whether the pros of changing affiliation outweigh the cons. If a brand or political party wants to be that change, they must convince the buyer – or voter – that the switching costs are low enough for it to be worth their while.

This can lead to overpromising, which in marketing can lead to a disappointed buyer and post-purchase dissonance. (Sadly it is less easy to return your ballot and ask to vote again). The ebullience of the sell can ultimately damage the brand. That is why marketers must strive to be honest with the consumer. If long-term commitment to a product or service is what is being sought, hyperbole or a disengenuous call to action can permanently damage a brand’s equity. You just have to think about what makes your product or service truly stand apart from its peers. If this is too much to ask, then its to time to rethink your offering.

On Convergence

Today the problem lies not in acquiring information, but in how to apply it effectively and efficiently in order to solve the problem at hand. The impact of the increasingly easy access we have to information was scrutinised recently by President Obama at Hampton University, “With iPods and iPads and Xboxes [sic] and PlayStations—none of which I know how to work—information becomes a distraction, a diversion, a form of entertainment, rather than a tool of empowerment”. As Le Monde details, the speech as a whole was really geared toward warning people of the dangers of excessive use of technology; about making sure it is the parents rather than the X-box that tucks the child into bed at night.

The statement in of itself though, is strange, given the person saying it. It is generally agreed that Obama won the election with his revolutionary form of fundraising. It meant he raised more money than fellow Democratic nominee Hillary Clinton, who stuck to her old-school guns by going to uber donors in their sizable Upper East Side and Malibu residences. Not only that, but the way he went about it – a truly grassroots system of peer advocacy; viral awareness through social networks to encourage micropayment upon micropayment – showed he was intuitively in touch with the electorate, and with a new way of doing things. To hear these Luddite words from Obama, complaining about the X-box, is odd coming from someone whose campaign advertisements appeared on in-game billboards on the X-box’s Burnout Paradise, moreover from someone who is a self-confessed Blackberry addict. His self-deprecating manner is patronising and unnecessary; people elected him because he is elite, which should not be seen as a bad thing, as Jon Stewart points out, “The Navy Seals are an elite squad… why must the President be a dumbass?” Bill Maher has more: no longer has more because this content has been removed by HBO, sorry. It was pretty funny though.

The information we all now have access to over the Internet is truly staggering. YouTube now receives 2bn hits daily (though not without repercussions), which rivals that of this blog. However that is no reason for condemnation, as long as whatever it is (text, audio, video; i.e. content) can be accessed efficiently. The problem at the moment is that this is not the case. ‘Convergence’ has been a buzzword for what seems like a lifetime in the world of digital. It is happening, but only in fits and starts, and to some extent it is being hampered by conglomerates whose corporate interest (quite understandably) in the bottom line does not exactly dovetail with what convergence is really about – open source.

The constantly stimulating blog Only Dead Fish featured a very well-written and thought-provoking article on convergence. Having studied the matter as part of its Master’s degree, Zeitgeist thought it knew all there was to know about such matters. This article challenged any existing, simplistic preconceptions. The author quotes Grant McCracken, who says, of the iPad as a converged device,

“The iPad critics can’t see this third space because they work from a utilitarian point of view.  For them, iPad will create economic value only if it solves practical problems.  But Apple has always seen the economic proposition as a cultural one, as an opportunity to speak to the entire consumer in all of his or her complexity, not just the problem solver.”

The author goes on to reference Henry Jenkins’ ‘Black box’ fallacy, “sooner or later all media content will flow through a single black box”. This is indeed one interpretation of the idea of convergence, and it is not necessarily wrong. However, what Zeitgeist believes convergence means for the consumer is not about a black box; we enjoy being able to access content through our myriad devices. What it does mean then is seamless interaction between these devices, i.e. being able to watch my TV show on the commute from work, returning home to dock the device in my TV and have it immediately start playing there, etc.

Conversations over social networks will play an increasing role as these platforms converge (and privacy continues to erode). However, the question remains on everyone’s lips about how to monetise all these goings on. One colleague of Zeitgeist’s suggested a provider like Sky might end up providing an offering where consumers can pick a package that includes The Guardian, some music (Sky has a lacklustre service for this already) and the Cookery Channel, believing that people would be more willing to pay for content in packages rather than in small, one-off payments. Of course, News Corporation could, with little difficulty provide a similar service, whereby they provide access to The Times, The Sun, Sky Sports events, Sky Songs and new films released by 20th Century Fox as packages.

The American humourist Frank Clark wrote that “If you can find a path with no obstacles, it probably doesn’t lead anywhere”. Convergence as a term could easily turn out to be one of those unobtainable zeniths, along the lines of world peace; an abstract term. The possibilities though of seamless connectivity of content between platforms is an extremely attractive one, both for consumer and advertiser.