2005 - Page 17 of 23 - Christopher Carfi

The shark, she’s been jumped.

April 2, 2005

The Psychology Of Scarcity

“When people are told they can’t have something they want it all the more. As a result incredibly powerful emotions are released which go on to drive actions often deemed irrational under normal circumstances.” – from The Psychology of Scarcity

Google is doing it with Gmail…putting a “limit” in place that, in actuality, isn’t much of a limit at all (2GB is a fair amount of email to store). But it feels like one. Ditto with the ability to “get” an “invitation only” Gmail account.

Hugh is doing it, and creating a microtulipmania in the process. He’s producing just 200 of each of his cartoons as t-shirts, and only having four designs available at a time. The interesting thing is, he’s got a huge backcatalog of designs to pull from. So, as long as he is making them available, there will always be a few hundred shirts available, as new designs could be rolled in to replace the old ones that have gone “out of print.” It feels like one needs to act “right away” in order to get a shirt, even though it’s quite possible that there will always be some available.

We see this all the time.

Among a number of interesting dimensions of this “artificial scarcity” is the emergence of secondary markets that are completely irrational. When Gmail first launched, the “undersupply” of Gmail invitiations caused a rich secondary market to spring up on eBay, with people selling Gmail invites at, well, an infinite profit.

(here’s what Andale had to say about the over eight hundred auctions over the past few months)

Completed eBay Listings (February 21 – March 20)
Listing Title…………………………………..Sale Price
100 Gmail invites 1000MB Space each//Instant delivery…$10.50
50 Fresh Gmail Invite – NO Reserve – Instant Delivery…$10.00
GMAIL GOOGLE NEW E MAIL E-MAIL ACCOUNT INVITE ON………$9.99
GMAIL 3 INVITES PLUS 1 CUSTOM AUCTION TEMPLATE SAVE……$6.99
50 Fresh Gmail Invite – NO Reserve – Instant Delivery….$6.50
FIVE 5 GMAIL ACCOUNT INVITES,GOOGLE Mail, 1GB MAILBOX!!..$5.50
.
.
.

Three things spring to mind:

One: If you are the creator of something, and you have the discipline to not need to wring every short-term cent out of something you’re doing, the resulting buzz based on the scarcity comes back to you, in spades.

Two: This thinking may help to build relationships and (perhaps) community as well. If there are only a “few” of something available, connecting with others who share that thing can be a starting point for a relationship. This applies to both members of the community, as well as to between the creator of the “thing” and the community members themselves.

Three: This kind of scarcity creates a huge opportunity for arbitrageurs in a secondary market.

If the above three points are valid, the relationship-driven folks live in worlds One and Two, and the pure profit-maximization folks live in world Three. All three worlds are valid. Understand which world you’re in. And why.

April 1, 2005

Then Again, Maybe This Would Work If You Were Selling To Squirrels

(or, “Everything That’s Wrong With Sales, All Wrapped Up In One Piece Of Spam From My Inbox”)

Company name changed. Everything else verbatim.

“Build lasting business relationships with Manassas Roadhouse Peanuts!

Have you noticed that as the economy picks up, prospects are harder to reach? A recent study shows that it often takes salespeople seven to ten phone calls to get a prospect to return their call. Manassas Roadhouse offers a better solution. We can help you.

1. Get to new prospects faster, shorten your sales cycle and book more business
2. Establish trust and credibility, before you even get your face-to-face meeting
3. Quickly re-awaken a prospect’s interest in your proposal or lead reluctant customers to take action

Since 1929 our family-owned and operated business has delivered delightful surprises to the taste-buds of our customers around the country. Take a look at the world-class gourmet nut gifts and discover the secret to getting your prospects out of their shells.”

Yes, that’s right. These people are telling us that you can build business relationships…you know, things that take years to develop, are based on mutual trust and respect, collaborative listening, conversations, and the like…by bribing people with salted snack foods (and bad puns, apparently). Greeeeaat.

March 31, 2005

Hugh…DeBeers?

This just in, from the “seeking to understand” department…

Hugh Macleod, of gapingvoid fame, is bringing t-shirts to market, featuring his cartoon designs. Hugh, a question for you. You state:

“As I said before, each design will be limited to an edition of 200. That’s it. No more. Once they’re gone, they’re gone.

I shall start with four designs, the “Hughtrain/Infinite” design above, the “Good for you” design and two others. As soon as one sells out, I’ll introduce another. But there won’t ever be more than 4 designs, 200 of each, available at one time…I think they might become quite collectable, in their own little way. I certainly have no wish to flood the market with them.”

You have hundreds (thousands?) of cartoons you’ve drawn over the years. Of the four you pick at any one time, there will be some folks who like them, and pick them up. But isn’t it considerably more likely that a far greater number of folks would want some other design that you are not producing?

By way of comparison, there’s (frankly) no reason why an individual can’t, say, grab one of the .jpgs of one of your cartoons, upload it to CafePress (or their local t-shirt shop), and make themselves a t-shirt of it. Once those images are out (and a lot of them are), there’s really nothing preventing that. And if that individual is just producing that one shirt for his or her self and not selling them, it’s likely you’d never know.

Doesn’t the faux-scarcity path fly in the face of the direction things are going? Why not give abundant choice, and get the Word of Hugh out farther and faster?

March 30, 2005

Holding Up Your End Of The Conversation (Part 1)

“Fezzik…jog his memory.” – from The Princess Bride

Was tipped off to the BlogPulse “Conversation Tracker” feature today, and yes indeed, it’s nifty. (hat tip: nevon, shel) This is a capability that shows how, where, and when a “conversation” is moving through the blogosphere, by tracking links and how they are disseminated over time. Very sharp.

But then, started thinking more about some of the things discussed here, and started doing some poking around…and tripped across a very interesting bit of research that came out of AT&T within the last couple of years (couldn’t find a pub date in the doc, but some of the cites were as late as 2001, so I’m guessing it was published around ’01 or ’02). Entitled “Managing long term communications: Conversation and Contact Management,” this piece focuses on the different challenges that arise when individuals attempt to have conversations over time, and the coping mechanisms that they employ in order to do so. (No, you’re not the only one who re-sets the “unread” flag on emails in an attempt to remember what to do next.) Fascinating stuff. The key pull-quotes right from the first ‘graph:

“Contact management and conversation management are linked. Many busy professionals discourage voice calls and messages, because email enables them to better manage their time, conversations, and contacts. People also spend large amounts of time transcribing voicemail, browsing email archives and writing todo lists – all of these activities are intended to help track the content and status of outstanding conversations.” (emphasis added)

and

“Key properties of technologically-mediated conversations identified were: (1) they are extended in time, which means (2) people typically engage in multiple concurrent conversations, and (3) conversations often involve multiple participants. These properties led to a significant memory load for our informants: they spoke of the difficulty of keeping tracking of conversational content and status, as well as the identity, contact information, and expertise of their conversational partners.“

Bam. That’s it. That’s the core of what’s wrong with so-called “Customer Relationship Management” or “Contact Management” systems today. It’s not a technology issue. (Well, duh. It rarely is.) It’s a mindset issue.

There needs to be a movement away from the “pipeline” mentality which, by definition, thinks about using a CRM system as solely the means to “manage” the ~~relationship~~ interaction between a customer and a representative as a closed-ended transaction (“the prospect gets to the end of the pipeline, and a discrete, one-time transaction, either a win or a loss, occurs”). Instead, we need to start thinking about these tools (CRM, Sales Force Automation, etc.) as ways to augment our capabilities in remembering where we are in the ongoing conversation with a particular customer.

Update: Conversation continues here.

March 24, 2005

Give Customers Just The Hits? No Thanks.

Saw a post over at Matt Homann’s site (hey Matt, turn yer comments on, would ya?) that led me to a post by Andrea Learned entitled “‘Editing’ in the Retail Environment.” The pull quotes from Learned’s post:

“Not every laptop known-to-man needs to be available at your consumer electronics store. Rather, do some research and reflect that you know your customers: deliver the top 10 sellers or the ones about which your customers requested most information in the past few years. … If your camera store, clothing store, appliance store or computer store has done its work, you will have discovered the “top 10″ of your women customers’ favorites and those will be the ones you provide and the products for which you train your customer service staff to know EVERYTHING about.”

and

“In a retailer’s situation, narrowing product selection can just reflect an excellent understanding of the store’s core customers.”

Some thoughts on this, cross-posted in the comments over at Learned’s site:

Interesting. But a question…isn’t this fundamentally disconnected from the direction that things are going? Chris Anderson argues that we now have the option for infinite selection.

(I’ve argued this as well.)

Retailers limit selection because of limited shelf space. Now, well…there’s infinite shelf space.

You state above:

“…women want to know and trust your store to edit that first layer or two of extraneous product for them”

and

“…in a retailer’s situation, narrowing product selection can just reflect an excellent understanding of the store’s core customers”

The first statement is a broad generalization, the second is a rationalization.

To respond to the first statement, what if, instead of having to “read the detailed instructions,” a customer (woman or not) had the ability to know which items solved the problems of others with similar problems to themselves? It might not be one of the “Top 10.”

And to the second, what if, instead of focusing on homogeneity, the retailer was able to focus on the customer’s unique needs?

Opinion: The “sell just the hits” approach is fundamentally flawed, and changing. Selling just the hits, frankly, leads to the case where we have WalMart everywhere, selling the same stuff. Every intersection has the same strip mall. And every woman has one of the same 10 laptops, or one of the same digital cameras.

Now, that last sentence sounds OK at first blush. What’s wrong with “editing” things down to make search and selection easier?

Here’s what’s wrong. It’s not just about the commodities. Don’t you feel that every individual (woman or man) has *some* aspect of “themselves” that they need/want to express uniquely? And connect with others who share that idiosyncrasy? Sure, for some, a laptop is a laptop is a laptop. But what about things that someone might be passionate about, and *not* want to buy off-the-rack? There are going to be some dimensions (be they music, media, fashion, or interests, etc.) that everyperson – woman or man – has a unique perspective on. Without choice, and when being forced to select from just “the hits,” those unique aspects of a person’s personality atrophy over time, and eventually the homogeneity seeps in and bleeds over into, well…everything.

Oh yeah, one other thing:

“Barnes & Noble only stocks 130,000 books, yet more than half of Amazon’s revenues from books comes from titles outside of the top 130,000 books.” (source: Rick Klau)

Companies that focus on the hits-only model will be leaving money on the table. And a lot of it.

March 23, 2005

GM Fastlane Blog Does It Again…And Very Well

GM keeps breaking big-company ground with their Fastlane blog. They’ve just released their first podcasts in a few weeks (one, two), which are billed as “conversations with the personalities behind GM…”

The podcasts are set up as an interviews between “host” Deb Ochs and GM’s Director of High Performance Vehicles John Heinricy (for the Caddy interview) and with Clay Dean, director of design for small and mid-size vehicles for the Solstice interview. As opposed to the first podcast they did a few weeks back (which met with mixed reviews, and was basically a repurposed auto show presentation), these podcasts set expectations much more effectively, billing themselves as a “FastLane Radio.”

The ‘casts are well-produced, with an intro sweeper, etc. and are focused on the messaging (most powerful, etc…) for each car. Lots of stats, feeds-n-speeds, etc.

Assuming the typical audience of these podcasts would be GM enthusiasts, both editions give the kind of “behind the scenes” skinny that is appropriate. In particular, both Heinricy and Dean give the feeling they’re definitely passionate about the cars, and each gives the clear feeling that they are very engaged with what they’re doing.

Yeah, the “questions” from the interviewer are contrived, but overall GM is moving in the right direction on this one.

The best bit, at the end: “We’d like to hear your comments and suggestions for FastLane Radio. Please email us at [email protected].”

I think I’ll do that right now myself.

March 21, 2005

Customer Conversation Management?

Doc just served up a softball with this headline:

“Because ‘Customer Relationship Management” is about management more than customers‘

I’m originally from Chicago, where softball is a religion. Where “softball” is anything but. Where the ball is the size of a grapefruit, hard as granite, and gloves are not allowed (do a search on “mallet finger” some time, if you want the full effect).

I know from softball.

And to that headline I say…absofrigginlutely.

Now, “Customer Relationship Management” is typically thought of along the following three dimensions:

Sales Force Automation
Marketing Automation
Customer Support

And Doc is spot-on. It is the rare occasion that any of those three dimensions is considered from the customer’s point of view.

Focus on just the first point, where “Sales Force Automation” is oftentimes equated with “Customer Relationship Management.” And again, the point is spot-on…SFA is about tracking numbers of leads, it’s about “managing the pipeline,” it’s about pushing a customer through the defined selling process of the vendor. It’s not about the customer at all. It’s about management, and quarter-end roll-ups, and “30% probability of closing.”

We’re at a time where we have the opportunity for a fundamental shift in this thinking, even using the same underlying technologies. And here it is:

Vendors: Stop thinking about moving customers through a “pipeline.” Start thinking about holding up your end of the conversation. Literally.

Yes, the “conversation” term is being overused, and runs the risk of becoming a cliche. (And if anyone has a thought of a better way to distill this concept down, please share it.) But there is the opportunity here for a shift in thinking that doesn’t require any change in the underlying technologies that are in place in order to do this.

How do we do this? Start using these types of systems more, but in a totally different way. Start keeping actual track of the actual conversations that you, as an individual, are involved in. Not from an “I checked off these three steps in the selling process” sort of way, but rather in a “here’s what we were talking about” sort of way.

Danah Boyd has pointed out that there is an increasing amount of research being done in the area of how we, as individuals, can use technology to involve ourselves with persistent conversations. And that’s exactly right.

Christopher Allen (and if he’s not on your blogroll right now, you’re missing a lot) states:

“For instance, my experience with most politicians and many salespeople is that I will be forgotten as soon as I leave the room.”

Bingo. And why does that feeling exist? Because those salespeople and politicians are not really embracing the concept of a relationship. A relationship is a series of linked, persistent conversations.

To be involved, one needs to make a commitment to hold up one’s end.

Year: 2005

Well, That Didn’t Take Long