POINTLESS POSITIONING AND PERSUASION
HERE’S A COMMERCIAL that you may have seen in 2011: Mark, Tom, and Travis of the rock band Blink-182 are working in the garden, when suddenly their bodies start to glow in light blue. Perplexed by what’s happening, Travis Barker (the band’s drummer) asks:
“Why are we glowing blue?”
A young woman, obviously a fan, who’s just about to take their picture from across the fence, explains:
“Hey, don’t be nervous. It’s just because my new phone has the ‘Facebook Share’ button. When there’s something to share, it glows.”
“Oh, that’s a reasonable explanation,” guitarist Tom DeLonge mumbles as the voice-over wraps up: “Share it faster with HTC Status from AT&T. The only phone with a ‘Facebook Share’ button that glows anytime you take a photo, video, or anything else worth sharing.”1
This commercial is obviously trying to position this new phone as “the Facebook phone.” Positioning is rooted in the idea that product perceptions are driven by product presentation relative to other options. Instead of evaluating the product based on its actual value, you presumably evaluate it under the influence of the marketer’s communications strategy. So it is not the product’s absolute values that matter, but rather, it is the prescribed relative values—the product’s recommended position relative to other products. It’s difficult for us as consumers to decide which car rental company is the best. When Avis positioned itself against the competition (“We Are No 2. We Try Harder”), it made sense to our comparison-hungry minds. Al Ries and Jack Trout, who many years ago wrote the book on positioning, described it as a battle that’s going on in the consumer’s mind. Their idea was that each marketer has to find an area that is not occupied in the consumer’s mind and capture it (that is, be the first brand that comes to mind when the consumer thinks about a certain attribute). In the automotive industry, for example, Volvo captured “safety,” Ferrari got “speed,” Lincoln stood for “luxury,” and Toyota captured “reliability.”
Following this logic, the idea of positioning a phone around Facebook made some sense. No other phone “owned” the position of “the Facebook phone” and the marketers perhaps imagined millions of young Facebook addicts (and Blink-182 fans) who would kill to have this phone. In the past this might have worked just fine. But this phone was introduced in an era when things work a bit differently. These days “finding a unique angle” isn’t enough. It has to be real. And in reality you can easily share on Facebook from all smartphones and everybody knows that.
That “Facebook phone” was dubbed by some the “Failbook phone.” User reviews were pretty bad and teens reacted to the new device with a big “whatevs” (today’s version of the 1990s’ “Whatever”). They simply didn’t buy into the positioning that the marketers tried to establish in their minds. Nice positioning statements compiled in corporate meeting rooms are less likely to be adopted by the market these days. Marketers can save themselves a lot of money by avoiding doomed-to-failure positioning attempts.2
Don’t get us wrong: If your product has a real advantage over your competitors, you should highlight this differentiating factor. But when marketers talk about differentiating, they often talk about finding a unique angle that no one has yet covered. Trying to make a product appear unique by adding fluff or emphasizing a feature or claimed differentiator that is of limited use or relevance to most doesn’t work as well as it used to.
That is just part of the problem. Even when you think your product is differentiated enough, positioning is less effective than it used to be, because a new product is likely to be evaluated based on its absolute values. In contrast, the manner in which it is portrayed or positioned by the marketer is likely to have much less influence on consumers’ perceptions and choices. In 2013, HTC, in collaboration with Facebook, launched another phone—the HTC First—positioned as the Facebook phone. This one had somewhat closer integration with Facebook, which may appeal to some consumers (although as this book goes to print, this phone too doesn’t seem to be successful). The main problem is that positioning won’t protect the product from the usual expert and user scrutiny. One review of the HTC First, for example, recognized the special Facebook-related features but immediately continued, “However, as smartphones go, the First is decidedly average, and it has a substandard camera. . . .”3
Here’s another TV commercial that helps illustrate this point. This one, too, involves an HTC phone but this time with Verizon. A guy walks out of the subway in New York City. We hear cars honking and other street noise, but when he puts on his earphones, the background noise is gone. He presses a button on his phone and listens to a rap song. As he walks on the sidewalk, a parked car explodes right behind him, trash cans shoot into the air, but he’s totally consumed by the music. Doesn’t seem to be bothered. Even as a police car flips in midair, with a yellow cab following suit, the dude just walks around listening to his music. To those who didn’t get the message, a voice-over delivers the punch line: “Experience your sound like never before. The HTC Rezound with Beats Audio built in on the Verizon 4G Lte network.”
In this commercial (and in other promotional efforts) the marketers were apparently trying to position the HTC Rezound as the “sound phone.” Again, in the past, this should have worked just fine, especially since HTC had something unique to offer. About a year before the phone was launched, HTC had bought a majority stake in Beats Electronics, a digital sound company known for its Beats by Dr. Dre headphones. The HTC Rezound was the first to incorporate Beats audio.4
But what happened in reality? Reviewers on the Web evaluated the HTC Rezound like any other cell phone. We’ve read dozens of reviews of this phone, both by experts and by users, and most have not isolated sound as the single attribute to pay attention to. For example, PhoneDog, a popular YouTube channel that reviews mobile devices, dedicated a long video review to the phone. It wasn’t a bad review; it’s just that most of it wasn’t around the special sound capabilities. Almost all reviews gave pretty equal coverage to attributes like thickness, display, speed, and so on. When evaluated on all these attributes, the HTC Rezound was not superior to the Droid Razr or the Galaxy Nexus, which were introduced at about the same time without the music positioning.
In the old days, when consumers were much more influenced by information from marketers, it was possible to make them compare a product primarily on one attribute, as the marketers were attempting to do with this campaign. Executed effectively, it was possible to convince the consumer that your brand stood for some unique concept; but when consumers use diverse and detailed sources of information, chances are slim that they will all focus on one feature and neglect other pertinent considerations.5
Volvo was the symbol of safety for a long time, but once consumers found out from reliable sources that other cars are just as safe, Volvo’s claim to fame dissipated. “We Are No 2. We Try Harder” was a brilliant slogan, but its impact must be lower when a traveler can get detailed information about the actual rental experience: How long is an average wait for the shuttle at the airport? Are they pushy or friendly at the counter? Are there any surprises when you return the car and it’s time to pay the bill? The tools that are available at the present are not there yet in terms of providing accurate, branch-specific information. But when a traveler will be able to peek in advance at the answers to these questions, smart positioning slogans will not make much of a difference. It’s not that positioning is completely useless (especially for products such as laundry detergents, where the quality is hard to evaluate), but it’s much less useful than it used to be, and this trend will accelerate as marketers’ ability to affect consumers’ perceptions continues to decline.
ORGANIC SEGMENTATION
It’s tempting to imagine that businesses succeed as a result of well-executed positioning and segmentation strategies, but the truth is that segments these days often cannot be foreseen and, instead, evolve organically. Think about Twitter, for example. Twitter (like many other Web companies) did not have a positioning or segmentation strategy. They offered a service and certain “target” segments emerged and positioned it as they liked. Twitter can be different things to different people.6 Granted, this type of “organic segmentation” doesn’t always happen and we are not suggesting that marketers introduce products without putting any thought into who’s going to use them. Planning products to appeal to certain segments continues to be important, and segmentation before and after a product launch is imperative. Still, it’s worth exploring three points about segmentation as they relate to positioning.
First, marketers should realize that they have less control than before over the actual segments that buy their products. When marketers controlled their information, they could decide who would get their catalog or brochure and (more or less) what they should think about it. In contrast, when information is everywhere, anyone can pick it up and go with it. There are still some things that marketers can do to steer particular groups toward their offerings (for example: Nike can seed a new shoe in certain demographics, or sell it through exclusive distribution channels). Yet organic (demand-driven) segmentation and positioning of the type seen with Twitter are going to occur more often than in the past. Marketers should still plan for certain segments but also be ready to be surprised and quickly adjust as the product is adopted in the marketplace. Nintendo did a good job in this regard when they introduced the Wii. The primary target of video games until then was 4 to 40-year-olds (depending on the genre). Then came the Wii, and a surprising new segment emerged—the elderly. Detecting that older people just loved Wii Sports (and especially Wii Bowling), Nintendo was fast to embrace this segment, for example, by actively promoting the game to AARP members.7
Second, organic segmentation also means that, counter to the common belief in marketing, you can sometimes be all things to all people. In the past, marketers were supposed to predefine different benefit segments and tailor products for them. The rule was that you should not use the same product for multiple segments, because that would create an ambiguous position. Today, as long as the product can satisfy wants, many of which cannot be identified a priori, chances are that suitable consumer segments will emerge organically, regardless of the seller’s preconceived ideas. In Chapter 7, we described the adoption of Pinterest and the Apple iPad, which very much followed this pattern. Consumers’ access to granular and detailed information can help organic segmentation in more traditional markets, too. Suppose you own a hotel. If you follow the “don’t be all things to all people” idea, your hotel should be clearly positioned as either a business hotel, a family hotel, or a romantic hideaway. Advocates of strict positioning would tell you that if you try to be all three, your message will be muddled. But in reality, many hotels have always been able to maintain “multiple personalities.” And it’s even easier today because a traveler can see the hotel exclusively from a particular angle. A business traveler who goes to TripAdvisor can read only those reviews of your hotel written by fellow business travelers. A couple planning their honeymoon can focus on those reviews written by other couples. Parents traveling with kids can read reviews written by families. In the past, if these parents saw that your hotel was “for the business traveler,” they would be apprehensive. Today they can get an accurate picture of what it means to stay at your hotel with kids.
Third, a related segmentation strategy that is losing its effectiveness is selling very similar products under different tags. Known as “versioning” in the marketing literature, some consumers refer to it as “crippleware,” “defective by design,” or “damaged good.” Fifteen years ago you could position two nearly identical laptops under two different labels. One would be “the business laptop” and another one would be considered “the consumer laptop.” The difference would usually be a feature that has been disabled in the low-end model. Today there are two problems with that. First, versioning is less likely to work because both businesses and consumers can quickly figure out the similarity between the laptops and get the better deal regardless of the label marketers put on it. The second issue is that versioning is often seen by people as unfair, and since the fairness of an exchange can play a significant role in how consumers evaluate an offer, this can lead to a bigger problem. Researchers Andrew Gershoff, Ran Kivetz, and Anat Keinan showed in a series of experiments that versioning may be indeed perceived as unfair and unethical and lead to decreased purchase intentions for a brand.8 Beyond product versioning, what might be called “price versioning” may also become more transparent for consumers and therefore less effective. For example, in 2013 AT&T Wireless changed the price of the HTC First—the first-ever “Facebook Phone”—from $99 to $0.99. The pricing change reflected the apparent new target segment of the phone: lower-end wireless users. However, observers quickly pointed out that, once the corresponding change in the cost of the data plan is considered, the price reduction is less than it might first seem.9
POINTLESS PERSUASION
You surely remember the scene from Annie Hall: Woody Allen stands in line at a movie theater while an opinionated man behind him explains to his girlfriend the works of Fellini, Samuel Beckett, and Marshall McLuhan. When Allen can no longer stand the endless drivel, he tells the man that he doesn’t know anything about Marshall McLuhan. But the fellow sounds pretty convincing when he lays out his credentials: “Oh really? I happen to teach a class at Columbia called ‘TV, Media, and Culture,’ so I think that my insights into Mr. McLuhan have a great deal of validity,” he argues. When the guy says he teaches at Columbia, he’s using a pretty common influence tactic, one based on source credibility theory. Symbols of authority such as titles or clothing can help in persuasion. This is why salespeople wear well-tailored business suits, and why the actor who recommends a new drug on a TV commercial is wearing a white lab coat.10
Yet not much of the man’s persuasive power is left after what happens next. Woody grabs Marshall McLuhan himself from behind a pole, and McLuhan turns to the man: “I heard what you’re saying. You know nothing of my work.” Even someone with the finest rhetorical skills would understand that it’s pointless to now try to persuade his listeners that he’s right. Marshall McLuhan knows Marshall McLuhan.
The persuader’s power is reduced (in this case annihilated) at the presence of a reliable source. And this is happening more and more in marketing. Advertisers and salespeople are armed with numerous persuasive techniques that can be quite effective in isolation. We’re not going to list them all here, but let’s just mention a couple (in addition to authority, which we just discussed). One is liking: The more we like someone, the more we want to say yes to them.11 (Salespeople live by this.) And such emotional responses often precede and affect evaluation of reasons. Reciprocation is another common influence technique: Give your prospects something small at the onset, and they will feel indebted to you.
Yet the effectiveness of these techniques takes a dive when they compete with facts delivered by credible sources. These tricks of the trade have one thing in common: They are not about the merit of the product but about something else. A big part of advertising and personal selling can be seen as the art of relative persuasion—finding shiny objects that would sway customers to prefer one product over all the others. Instead of letting you make your choice by assessing your likely experience with a product, the salesman or the advertiser tries to have you base your decision on something unrelated—an athlete endorser, a man wearing a white lab coat, a good example, or an enticing story, the fact that the salesman gave you a T-shirt or complimented you on your hair. . . . Those influence methods may still work. The only problem is that companies no longer serve as the source for quality information, so these persuasion techniques don’t matter as much as they used to. Consumers rarely pull a “Marshall McLuhan” on companies (although this happens, too). It usually happens in a less dramatic way. There’s simply a better act in town that consumers turn to—their peers.
What are the implications to marketers? Where consumers rely on more credible sources, companies should focus less on persuasion attempts or on trying to shape people’s preferences. There isn’t much of a point in trying to persuade consumers that the tablet your company makes is better than the one made by your competitors. There are still good reasons to point out important features and advocate your company’s design (especially to those who will review your product), but by and large, your company’s ability to persuade is greatly reduced. Don’t fire your marketing department just yet, though. They still can make a difference in generating interest among consumers, a task that is becoming more difficult in the noisy world in which we live. We’ll discuss this later, too, but it’s worth mentioning right away that generating interest in the categories most affected by the trends we discuss here can rarely be achieved by pouring tons of money into advertising. The reason is that consumers in these categories are focused on new sources of information (experts or other users), not the marketer. The best interest is generated when these sources will draw the consumer’s attention to your product.
What does all this mean to advertising agencies, sales forces, and other persuasion agents?
As persuasive advertising and personal selling are becoming less important, one might expect marketing institutions and departments to change accordingly. For example, marketing communication agencies will have to adapt to focus less on persuasion or preference formation and more on generating interest, or they may face increasing challenges in justifying their added value. Simultaneously, PR agencies and other organizations that can help generate interest in ways that make sense in this new era are likely to further develop.
Companies may also expect a shift in the importance of their sales forces. In the past, salespeople served as a major source for information, helped reassure customers of their choices, and did a lot of hand-holding, functions that are less essential in certain areas. These days there are more efficient ways to transmit information than through salespeople. While relationship will continue to be important, and there are so far no indications that B2B companies downsize their sales forces, one would expect the impact of relationships on vendor choice to decline over time.
Positioning statements represent perhaps the ultimate “relative” tactic. Instead of evaluating the product based on its actual value, the consumer is supposed to evaluate it relative to other options that the marketer chose to highlight. It’s easy to see why it doesn’t work as well in today’s environment, where consumers rely on multiple information sources that are not under anyone’s control. The same applies to companies’ attempts to “reposition” their brand through a new logo or a catchy phrase. Changing people’s perception, which has always been exceptionally difficult, is even more difficult today. It’s pointless to try to reposition a company without actual change on the ground. What you say (or how you say it) is less important today. It’s more about what you do. The name of the game is merit.
In Part I, we discussed the shift from relative evaluations to absolute values, which is driven by the emerging socially intensive information environment. In Part II we saw how this changes marketing forever. Now let’s move on to Part III, where we discuss a new framework that should help marketers make more effective decisions.