Author Archives: ghotchkiss

Brand Live and Die Face to Face

iStock_000004520845XSmallThe more I dig, the more I’m convinced that a big part of a brand’s success is the quality of its customer touch points, specifically, the face to face ones. Consider this overwhelming evidence:

The more emotion there is in an experience, the more vividly we remember it. It’s known as imprinting. So if we have very positive or very negative experiences, we remember them longer and more completely. Let’s say we visit a restaurant. If we have a terrible experience, we’ll remember it forever. If it was an amazing experience, again, we’ll remember it forever. If it’s mediocre and falls in the middle, it will tend to fade away.

Our memories are altered by the context in which we remember them. Let’s go back to our restaurant example. Whatever our experience, we will tend to alter it if we’re talking to a person who also had an experience with the same restaurant. If they had a great experience, but ours was negative, we’ll tend to alter our memory to make it more positive. Alternatively, if we had a positive experience, but someone else’s was terrible, suddenly we’ll alter our memory to make it less positive. This doesn’t tend to swing memories all the way from good to bad, but it alters and reshapes memories to better fit the context of recall. And over time, it can erode a once very good memory, or build up a rather negative one. Memory is not an accurate snapshot of an event, it’s a malleable story. So consistency of experience is important.

We get a much richer channel of communication when we’re face to face with a person. Studies have shown that receive only 7% of our communication from the words that are used. The other 93% is a combination of body language and tone of voice. So no matter how carefully you script your frontline customer encounters, the success will depend on the person delivering the message. We have very finely attuned credibility detectors.

The quality of the face to face interaction is the biggest factor in how satisfied we are in a product experience. Malcolm Gladwell used the example of doctors being sued for malpractice.

“Believe it or not, the risk of being sued for malpractice has very little to do with how many mistakes a doctor makes…. Patients don’t file lawsuits because they’ve been harmed by shoddy medical care. Patients file lawsuits because they’ve been harmed by shoddy medical care and something else happens to them.

“What is that something else? It’s how they were treated, on a personal level, by their doctor. What comes up again and again in malpractice cases is that patients say they were rushed or ignored or treated poorly. ‘People just don’t sue doctors they like,’ is how Alice Burkin, a leading medical malpractice lawyer, puts it. ‘In all the years I’ve been in business, I’ve never had a potential client walk in and say, “I really like this doctor, and I feel terrible about doing it, but I want to sue him.”

Medical researcher Wendy Levinson found that doctors that weren’t sued spent 3 minutes more with patients than those that were (18.3 minutes versus 15). But it wasn’t just time, it was the quality of time. More simply, it was the tone of the doctor’s voice. Recordings of interactions with doctors were recorded and then were played back for study participants, who then put the doctors into two groups, those that would be sued and those that wouldn’t be. The recordings were altered so participants couldn’t hear what was said, all they could judge was the tone of the voice. And even with this, they were able to judge with amazing accuracy which doctors would be sued. It wasn’t what was said, it was how it was said.

When you look at corporate examples, the power of person to person connections are clear in cases like JetBlue and Saturn. In both cases, the extraordinarily high level of customer satisfaction was due primarily to the quality of the face to face encounters. JD Powers rated the Saturn among the highest vehicles in terms of satisfaction not because it was a better car. It was because their dealer network didn’t follow the typical industry model, which was more like a school of piranhas. JetBlue’s employees had a mandate: make flying coach suck less.

Why is this important to remember? Because of the coming workforce crisis. The baby boom is shifting the majority of our workforce to the end of their working lives, and there’s a severe shortage at the entry level, typically the recruitment bed for service based businesses. This means good people are going to get tougher and tougher to find.

Also, there’s a move to cut costs by streamlining and outsourcing those vital customer touch points. Self serve customer service models are becoming more common, and in many cases, they’re backed up by a customer help line that’s been outsourced to an overseas call center. The call center has been provided the appropriate scripts, and, in most cases, adequate training on how to field a complaint. But, as we’ve seen, that’s really only 7% of the problem. The other 93% is connecting with a person who really cares about your problem and is trying to help you. That’s something you can’t script.

Let me give you an example. My wife and I recently flew to Lisbon on British Airways. We had to connect through Heathrow. I booked my flight directly through BA, but my wife flew on points, so that flight was booked through a partner airline. Both flights had less than an hour layover in Heathrow, and we had to change terminals. I didn’t really notice this at the time of booking, but soon, my partner airline notified us that they had moved my wife back to a later flight to allow her to make the connection. As anyone who has connected through Heathrow will tell you, the odds of making a connection with less than one hour is slim to nil.

I called British Airways to get my flight pushed back and was connected to what was obviously an overseas call center. The person on the other end, if they were considering a medical career, would be a sure bet to be nailed with a malpractice suit. The manner was brusque and indifferent. He informed me that they could change the flight, but there would be a $200 change fee, about 1/3 of the total cost of the flight. Plus, I would have to pay any difference in fares. I tried to explain to the person that the layover time wasn’t adequate and that BA screwed up with the initial booking, but to no avail. Finally, I hung up in frustration, to allow myself to cool down a little.

I resigned myself to the fact that I was going to have to cough up the extra $200, and phoned back a week later to make the change. This time, I got a much friendlier person who looked up my reservation and informed me that my flight had automatically been pushed back because an hour wasn’t an adequate connection time. I asked when this had happened and what had triggered the change. They said it was a flag that was automatically put up in the system so many days prior to a flight and had nothing to do with my previous call. It was the system correcting itself.

Everything worked out okay with BA, and the flight was actually one of the best transatlantic flights I had. But the poor quality of one encounter left an overall negative impression rather than a positive one. And, as reinforcement of it, when I was talking to a friend who had recently flown to Spain on British Airways, they had had exactly the same problem. Our respective memory retrievals quickly turned into a BA-bashing spree.

Realize the importance of person to person, and if you have to short cut anywhere, don’t short cut here. It’s the most important part of your business.

Yahoo! Big Idea Chair

Yahoo BICAn hour of make up and that’s the best you can look?

Yes, that’s the best I can look. The Yahoo! Big Idea Chair Shoot in Toronto is wrapped and the results are in. If you’re interested, you can see the ad pdf and the video they shot.

http://ca.advertising.yahoo.com/BIC.html

Thanks to Maor and the Yahoo! Canada team for thinking of me. Despite my disparaging remarks about makeup, it was a lot of fun and an honour (Canadian spelling intentional) to be considered.

It was also pretty exciting to be considered along with Nancy Vonk and Janet Krestin, the brilliant ladies behind Ogilvy’s famous Dove Evolution campaign (which cleaned up at Cannes), Laura Gaggi and my friend, Mitch Joel of Twist Image. Nancy and Janet, I often blow off about agencies not getting it, but your work was simply breathtaking on this one.

And yes, Bewitched actually did get me into advertising

The Whys of Buy: Impulse Buying

chickenebayThe other day, we were talking about what makes us buy (an appropriate topic for today, the biggest shopping day in the US) and Barb Newman, our General Manager, wondered what made us impulse buy? She was trying to figure out why she had dropped way more money than she intended on a purse. Being intrigued by the buying mechanism that seems to be locked in our skulls, I decided to do a little digging to find out what’s going on when we just seem to pick up something off the shelf on sheer whim.

Spool’s Impulse Buying Study

On doing some digging, I found a study done by Jared Spool, a usability consultant I have a tremendous amount of respect for. And Jared found that market research, as I posted about a few days ago, has its limits. As Jared’s starting point, he looked at survey’s conducted by The Yankee Group and Ernst and Young. Both surveys asked why respondents would make impulse purchases on the web. With the Yankee Group survey, 75% indicated because of price. Ernst and Young’s survey said that 88% of purchases were made due to price. Again, these were surveys where buyers were asked to rationalize their behavior. And saving money seems like a pretty rational reason.

But Jared wanted to see what real people shopping for real products did. As most usability people do, he wanted to observe real world behavior. So his group got 30 people, who had real things they wanted to buy, gave them some money and sent them on an online shopping trip to a few preselected sites that had what they were looking for.

What they found was significantly different that what the Yankee Group and Ernst and Young surveys showed. While many of the participants bought what they were looking for, a significant number, 34%, also added other items into their shopping cart that weren’t on their original lists. Was it because the prices were irrestible? No, in fact, only 8% of the impulse purchases were because of price.

Jared and his group purposely picked out shopping sites that had promotional offers and seasonal sales in prominent display positions, especially on the home pages. But very few of the purchases were of these sale items. The impulse buys were spread across 41% of the sites in the study, including everything from pet shops to computer accessory stores. Almost none of the items were on sale. They were just things that suddenly tweaked the shopper’s interest.

Here’s the other interesting thing about the study. Most of the impulse items were chosen while browsing through the category pages. They had chosen a category based on what they were shopping for and had found related items that struck their interest and were subsequently added to their cart.

The Nucleus Accumbens Made Me Do It

So, why do we impulse buy? I’m still not sure, but here are some hunches, based on some of the other research I’m doing in the mental mechanics of buying.

A study earlier this year by Carnegie Mellon, Stanford and the MIT Sloan School of Management might be able to shed a little light on Spool’s findings. Using fMRI imaging, they also gave participants money to go shopping. They then monitored activity in various parts of the brain.

They found that when we anticipate buying something, the pleasure center, the nucleus accumbens, is activated. We begin picturing ourselves in possession of a product and visualizing ourselves using it. We start to build neural pathways that reinforce what it would be like to have the product. But, if the price is excessive, the study found that the brain has a shut off mechanism.  A part of the brain known as the insula is activated and the part of the brain we use to balance gains versus losses, in other words, is the product worth the price, the medial prefrontal cortex, begins shutting down. We literally put the purchase out of our mind because the price is more than we’re willing to pay.

So, let’s go back to Jared Spool’s study. I suspect we get into shopping “modes” where the parts of the brain associated with acquisition of a product sustain some activity. We’re prepared to buy, so the nucleus accumbens kicks into gear and keeps firing. We’re in “buy” mode. And we’ve accepted that we have budget available. We start out looking for the product we intended to buy, but, on the way, if we see something we also decide we need, especially in a related category, our “buying” mechanism is already activated. We’re already primed to consider purchase. We’re not looking for a bargain (although finding one certainly wouldn’t hurt), but by the same token, an outrageous price would probably shut down the process by kicking in the insula. Think of the insula as the brain’s sprinkler system, snuffing out any impulsive sparks before we burn ourselves. As long as the price is reasonable, and doesn’t introduce significant “pain” we’re more likely to purchase.

The fMRI study also showed that once we flip into buy mode, we tend to stay in this groove. This is why it’s much more dangerous to shop with credit cards than cash. Credit cards allow us to put off the “pain” that might kick in the insula, letting the nucleus accumbens have its way. When cash runs out, it runs out. It forces us to pay more attention to the “pain”.

In Spool’s study, the pain had been effectively removed by giving the participants money to spend. And by browsing through categories where they already had interest, there was a greater likelihood to pick related products and purchase them through impulse. Bargain basement prices really had nothing to do with the process. It’s just that most of us don’t understand the mechanics of buying that happen at the subconscious level.

Back to Barb’s Purse

So let’s get back to Barb’s purse. Was it really a impulse buy? Well, not really. As I chatted more with Barb, she indicated that she had seen the purse earlier in a magazine, fallen in love with it, but the price was much higher than she wanted to pay. So Barb’s nucleus accumbens had gone into overdrive, but Barb, being a practical shopper, had quickly doused the flames when her insula kicked in. The pain was too great to make a purchase.

But, a few months later, she’s in the mall and sees that the store that carries the purse was having a 25% off everything in the store appreciation sale. Suddenly, the nucleus accumbens is reactivated, primed by all the visualization that Barb had done since first seeing the purse, thinking how great it would be to own it. The 25% off sale lowered the pain threshold enough to keep the insula from kicking in, and the next thing Barb knew, she had put down a deposit and put the purse on layaway. She didn’t know what hit her. Now, she knows it was a little bit of gray matter hiding deep in subcortal brain called the nucleus accumbens that’s to blame. But this wasn’t a true impulse buy. It was more like a delayed buy.

So, if you overspend today, remember, it was the nucleus accumbens that made you do it. Try explaining that one to your significant other.

Why We Have to Keep Doing Market Research

Following up on my previous post about the problems with most market research, here’s a plea why we should keep trying to get it right.

At the recent London SMX show, I presented on the Ad Testing and Research panel. Like other times I’ve done this panel (this is probably the 3rd or 4th time) I hear about skillful practitioners employing various A/B and multivariate testing methodologies. Ad testing is a definite must do, but before my presentation, which came at the end of the session, I took a few minutes to provide an alternative point of view.

I asked the small crowd how many of them were doing regular campaign management, checking click through rates, conversion rates and optimizing their campaigns based on what they saw. Almost everyone put up their hand. Then I asked how many did A/B testing. This time, a little more than half put up their hands. Next, I asked how many were doing multivariate testing. This time, about one third of the crowd. Finally, I asked how many had actually sat, watched a customer interact with their site and then asked them questions. We dropped down to about 10% of the group, and most of these were in a fairly structured usability test, with limited or no opportunity for interaction with the user.

Now, campaign optimization, A/B and multivariate testing are all best practices and should be done religiously. But I urged the marketers in the room to step back from their data heavy, spreadsheet  bound view of the world and pick up a book on cognitive psychology, social science or simple usability. Better yet, spend some time just watching how real people interact with your site. Try, for a moment, to look at the world through your customer’s eyes.

The problem with the typical, quantitative methods are that they’re all lagging indicators. You don’t get an idea of what’s happening until after customers have interacted with your ads and your site. You generally get a good sense of what they did, but it’s very difficult to determine why they did it. To do that, you have to dig beyond the numbers. You have to try to get into that subconscious mind. And that’s not easy. Typical market research methodologies won’t cut it. To get some idea of what’s required, read Clotaire Rapaille’s The Culture Code, or Gerald Zaltman’s How Customer’s Think. Do some digging into the work of Herbert Simon.  It takes a deft combination of psychiatric know how and detective skills. But here’s why it’s worth it.

For the past Century, we’ve largely refined our marketing practices based on trial and error. Pretty much everything has been done through seeing what’s worked, changing something, and seeing if it worked better. That’s been okay, as long as the channels we used to reach customer’s were relatively limited. With limited channels and a certain amount of control inherent in the process, we could do this. But those days are over.

Now, rather than a few controlled channels that run pretty much straight from the advertiser to the customer, we have an explosion of information that turns the typical buying process into a Gordian knot of unbelievable complexity. We can’t control the variables anymore. When there are so many channels, so many interdependent factors and so much of it affects customers below the conscious level, trial and error is just not an effective testing methodology anymore. In fact, it was never an effective methodology, for all the reasons I stated in my previous post. It’s just the best we had.

Let me use another example. The way we did marketing was pretty much like jumping in a car, randomly making decisions whether to turn right or left, keeping track of our success rate in getting nearer to our destination, and using this method to eventually pick the right route. This method might eventually work okay in a town of a few thousand people, but try doing that to navigate through New York or Los Angeles. We don’t have enough time in our lives to leave this much to chance. A map (or better yet, a GPS) is a much better alternative.

But we’re just starting to put that map together. And it won’t come from market research. Market research, at least in it’s current incarnation, is hopelessly flawed. It will come from diving deep into the workings of our brains. And once we begin putting the map together, it will allow us to begin to measure leading indicators. It will keep us from the trap of relying on self reported rationalizations and dig deeper into all the activity that’s happening below the conscious surface of our minds. That’s where the answers will be found.

Here’s another reason. Our brains are not only complex, but they’re also highly adaptive. As we do new mental activities more often, and abandon previous ones, new routes are established through the neurons and old ones become overgrown and eventually, unused neurons are cut away. It’s called “pruning” and “neuroplasticity”. It’s probably why you’re much better at using a search engine now than you are doing the geometry you learned in grade 9. We’ve worn new paths in our brain.

This is also true of how we’re buying. The way we buy now is bearing little resemblance to the way we bought in 1975. As time goes on and we rely on the Internet more and more, the paths that we used to use for our consumer decisions will become overgrown and we’ll clear new ones. This will happen not only at the conscious level, but also the sub conscious level. We will literally rewire how our brains decide what to buy. So the body of market research that has laboriously been gathered over the past several decades will become obsolete. And to discover those again through trial and error will be an long and potentially impossibly task.

So, a word of advice. Step back from the spread sheet now and again. Take a break from looking at “what” and start to explore “why”. Dig into things like the triune brain, selective perception, bounded rationality, working memory and some other basic cognitive concepts. It will be time well spent.

What’s Wrong with Market Research

sharingbrainWhen we first started doing research at Enquiro into how people used search, we found very quickly that what people say and what people do are very different things. It just happened that we were doing a survey and a focus group at roughly the same time. In the survey, where we got the results first, we asked if things like the position of a listing was important in whether people read it or not. We asked people to rank a number of factors on their relative importance, including position, relevancy and trust in brands and vendors shown. Almost without exception, in the survey, people indicated that relevancy was the key factor. They also indicated that they read listings pretty carefully and gave a fair amount of thought before selecting one. Finally, many said they would never click on a paid listing.

Then, we invited about 30 people into our labs and actually recorded their interactions with the search engines (before our eye tracking studies) and it quickly became obvious that how they said they used a search engine and how they actually did were two different things. The vast majority of clicks happened in the first few listings. Many who indicated they wouldn’t click on paid listings actually did, and perhaps, most interestingly, the average interaction was around 10 seconds or so. Subsequently, we’ve seen this type of behavior repeated in eye tracking after eye tracking study. Of course, the famous golden triangle study we did with Eyetools and Did It, and subsequent ones conducted by Enquiro, have shown over and over how quickly we interact with a search engine and how much of our scanning activity is “top loaded”. Also, we don’t really skip over sponsored listings, but in some circumstances (research based activity) we’re less likely to click on them. We’ve used this body of research to come up with a fairly consistent model of how people interact with search results. The results belie what people indicated in our very first survey. Well over 60% of the clicks happened in the first 4 or 5 listings, including the top sponsored ones. People generally spent just a few seconds on the page (around 10 to 12 seems to be the average) in which they scan (not read) 4 to 5 listings. There was almost no deliberation. People click quickly, and if they don’t like what they see, they click back. It would take the average person about 2 minutes to actually read all the results on the average search results page. Even if we just read the top 4 or 5, we’d be spending about 30 to 40 seconds on the page. It takes about 7 seconds to read one listing. But we don’t spend much longer than this covering 4 to 5 listings, about 2 seconds per listing. Obviously, we don’t give a lot of thought to the credibility of the search listings.

So, were all 1600 of our original survey respondents liars? Were they intentionally misleading us? No, they were just being human.

What we found was the systemic fault with almost all market research. And there’s a very good explanation for it. We’re generally not aware of 95% of what we do or why we do it. That’s because much or what we do is hidden in our subconscious. I’m currently reading How Customers Think by Gerald Zaltman and he pinpoints the problem with traditional market research. In almost every case, we ask people to tell us, either verbally or through writing, what they’re thinking. Just by doing this, we kick in the cortex, the rational seat of our intellect. But Zaltman tells us that at least 95% of every decision is made subconsciously. There, in the murky depths of our brains, predating the evolution of our cortex by many millions of years, thoughts are created through tremendously complex connections of memories, beliefs, instincts and intuition. In many cases, our decisions are made long before they bubble up to our conscious minds. The conscious mind exists to put a little polish on them and, in most cases, to rationalize a decision that was largely based on primal instincts. We may have done what we did because our flight or fight mechanism kicked in, or because our need to procreate surfaced. That’s why we chose the minivan, or the red convertible. It really had nothing to do with the Consumer Reports rating. But, being highly evolved humans, we convince ourselves that our choices are much more rational than those of a lizard (our basic brain core, which rules many of our decisions, is basically the same as a reptile’s brain).

In our case, our initial respondents indicated that they deliberated over which search result they chose. In actual fact, there was little risk in choosing a wrong link (it’s not like our lives, our family or our money is at stake), so we cut off the amount of deliberation we did and after a quick scan, picked the result that seemed to be most relevant to our intent. The lack of deliberation wasn’t lack of intelligence, it was a survival instinct bred into us by eons of evolutionary refinement. If there’s no immediate risk to us, why should we kick in our brains and spend unnecessary time and cortex processing power to come to the optimal decision. It’s not required. A simple scan and click will suffice. Our brains are simply doing what they’ve been programmed to do. And it’s not that the decisions are bad. As Malcolm Gladwell shows in Blink, often these decisions prove to be better than the ones that we endlessly deliberate over. Our brains, especially the 95% that remains under the surface, are amazingly adept at making good decisions.

But there’s a more fundamental issue here. If what we experienced in search is typical in all market research (which it is) how do we ever find out how people actually make purchase decisions?

This is a significant challenge, the extent of which might not be obvious at first glance. Let me use an analogy to further illustrate. Remember the tale of the shoemaker and the elves? Let me use that and adapt it slightly for my purposes. For those of you unfamiliar with the story, a poor shoemaker only has enough leather left for one pair of shoes. He cuts the leather and lays it out for stitching the next morning. He awakes, amazed to find the shoes made, and meticulously crafted at that. Elves apparently helped out during the night, soon to bring fame and fortune to the shoemaker.

But what if the elves didn’t exist. What if, instead, the shoemaker was actually making the shoes in his sleep? The idea is not so ridiculous. Rumor has it that Coleridge actually wrote Kubla Khan during a dream, and managed to scribble it down before it faded from his consciousness. As any psychiatrist will tell you, we’re closest to our subsconscious when we’re hovering between sleep and wakefulness. It’s about the only time we get a glimpse into those murky depths.

So let’s say our shoemaker actually makes the shoes in some bizarre bout of sleepwalking. He awakes every morning, to find the shoes nearly perfectly finished. All he needs to do is add the laces and a bit of polish. And the shoes are fair more carefully crafted then he could ever accomplish while awake.

The shoemaker really isn’t aware of where the shoes come from. In fact, as time goes on, and as he receives more and more recognition for the quality of his workmanship, he begins to believe that it’s solely due to the little bit of work he does while he’s awake, threading the laces and adding a little polish. He learns to ignore the 95% of the work that’s done while he’s asleep.

Now, imagine someone comes to ask him why his shoes are so exceptionally crafted. Would he admit the truth and say he doesn’t know? No, pride and genuine lack of knowledge would keep him from saying that. He has no idea what he does while he’s asleep. It’s almost as if someone else did the work for him. His conscious brain would kick in and come up with some perfectly rational but completely untrue explanation. Clotaire Rapaille, in his book The Culture Code, cites an example of this:

In a classic study, the nineteenth-century scientist Jean-Martin Charcot hypnotized a female patient, handed her an umbrella, and asked her to open it. After this, he slowly brought the woman out of her hypnotic state. When she came to, she was surprised by the object she held in her hand. Charcot then asked her why she was carrying an open umbrella indoors. The woman was utterly confused by the question. She of course had no idea of what she had been through and no memories of Charcot’s instructions. Baffled, she looked at the ceiling. Then she looked back at Charcot and said, “It was raining.”

This is what happens in almost every instance of market research. Our buying decisions are like the shoemaker’s shoes. They’re usually quite good, but we have little idea how they came into being.

For most of the history of marketing, we’ve been restrained by the limitations of market research. It’s only recently, through advancements in cognitive psychology and brain scanning technologies that we’re beginning to get a glimpse of what might actually be happening. My next post (tomorrow) why it’s important that we keep trying.

Edison Also Asked: “When Will People Get It?”

First published November 15, 2007 in Mediapost’s Search Insider

Over the past few weeks, my general theme has been “why don’t more people get it?” Why don’t agencies get search. Why don’t CEOs get search? Why don’t more search portals get that it’s the user that determines your success? Why don’t more people get that the world is changing, quickly? What’s with us, anyway?

Well, this week, I gained a little insight; thanks to a paper by Paul David called “The Dynamo and the Computer.” Maybe we just need some time. It’s not the first time this happened. Let me tell you the story of the light bulb.

Lighting Up the Industrial Age

Edison introduced the first practical incandescent light bulb in 1879. The first generating stations in New York and London started their dynamos spinning in 1881. Profound changes were to follow. Productivity was to grow by leaps and bounds.

Factories in the 1800’s were dark, noisy and not particularly pleasant places to spend a day.  At the center sat the steam engine: a huge, hungry and finicky behemoth, connected by an extended system of belts to the operating machinery of the factory. Even the early electrical engines were smaller, cleaner and much more efficient. Electric lighting made 24 hour shifts more practical. The benefits were obvious. Electricity was the ultimate “no-brainer.”

Still in the Dark

But by 1899, almost two decades after the introduction of the light bulb, only 3% of homes were “wired.” And the much-predicted impact on the North American industrial engine would have to wait until the 1920s to take hold. It took a half century for electricity to make much of a difference in America.

You see, technology tends to move fast, but people move slowly. It’s because transition tends to be dependent on many factors. It’s not like the flicking of (quite literally, in this case) a light switch. It’s more like waiting for a long series of dominos to fall into place, each drop contingent on the previous one.

In the case of electricity, significant money had been invested in steam power. You don’t just rip it all out and start over again, no matter how compelling the advantages might be. So factory owners waited for things to break down, and then retrofitted with new electric engines. But even this retrofitting had to wait for the supply of electrical engineers to catch up. In 1899, not many people knew how to design an electrical delivery system. The skill gap had to be eliminated. And this lack of expertise also showed up in less direct ways. America also had to wait for a new generation of factory architects to appear, who could design factories built to be powered by electricity. For every obvious benefit of electrification, there was a long series of factors that had to fall into place first. That’s why it took five decades to turn on the light.

History Repeating Itself

This technology adoption curve has been repeated over and over. The replacement of horsepower with steam power. And more recently, the information technology revolution. We can get as frustrated as we want with the snail’s pace reluctance of many to grasp the realities of the new world, but the fact is, we’re just being human.

Technology adoption usually follows a predictable path: introduction of technology, commercialization of technology, layering the technology onto what preceded it, and finally, throwing out the old completely and building from the ground up to embrace the technology. Each step depends on the step before it. And in every case, legacy investment slows the speed at which we move from one to the other.

If we look at the adoption of Internet technology and compare it to previous technology adoption curves, we’re just starting up the beginning of the long and steep part of the “S” curve. There’s no doubt we’ll get there, but it will take time.

Android and Pondering the Future from Portugal

AlgarveSagresThis afternoon, I saw what was, at one point, probably the most exciting and terrifying place in the world. Sagres is the southwest corner of Portugal. From this point, sailing west, you leave the Mediterranean and enter the vast expanse of the Atlantic. Beyond Sagres was no man’s land. Everything safe and familiar was behind you. New worlds of discovery and vast expanses of the unknown lay beyond. It was a powerful personal experience. Sitting on a rock overlooking the cliffs, looking at nothing but water, you discover something primal in yourself.

It was also metaphorical. We’re on the cusp of our own voyage. In our world, there’s a lot of unknown that lies ahead. For anyone that has pondered where we’re at, and what it might mean for us in the future, the possibilities are as exciting and frightening as they must have once appeared from the vantage point of Sagres.

It was somewhat fitting that the day I visited Sagres was the same day that Sergey Brin announced Google’s support of Android developers, to the tune of $10 million. No one doubts the potential of mobile. We all know that ubiquitous computing and access to the Internet will change everything. It will put the world in our hands.

And Google’s move into the space is interesting to think about as well. They’re betting on the power of community and open source to be the best way to reduce the friction so prevalent in the mobile space. Lack of standards, in fighting between telcos, convoluted politics between hardware manufacturers and service providers: Google is saying to hell with it, opening the door and letting things fall where they may. It’s a greenfield ripe for exploring, so the more the merrier! If our bets pay off (and in the grand scheme of things, $10 million is less than a pittance) there’s more than enough potential here for everyone. Forget control, let’s just get the ball rolling.

So, not to get all metaphorical on you, but if you compare it to the exploration of the new world, with many of those voyages rounding the point of Sagres, you’ll find a lot of similarity. Unlimited potential, a lot of unknowns, great odds that somebody’s going to get rich and, if you really think about it, scary as hell. But then, that could just be the Madeira talking.

Satisficing, Bounded Rationality and Search

150px-HerbertSimonHerbert Simon came up with some pretty interesting concepts, among them satisficing, bounded rationality and chunking.

Before Simon, we commonly believed that humans came to optimal decisions in a rational manner, based on the information provided. We took all the data that was accessible, weighed pros and cons and used our cortexes to come to the best possible outcome.

Simon, in effect, said that this placed to high a load on us cognitively. In many cases, there was simply too much information available, so we had to make choices based more on heuristics, cutting the available information down to a more manageable level. He called this “satisficing”, a blend of satisfy and suffice. And Simon started saying this a half century ago. Imagine how this translates to the present time.

We have never had more information available. At the click of a mouse, we can access huge amounts of information. There’s simply no way we can process it all and come to rational decisions. And this brings us to another concept, that of bounded rationality. We’re more rational about some decisions than others. It depends on a number of factors, including risk, emotional enjoyment and brand self identification. Think of it as a chart with three axes. One axis is risk. We put more rational thought into decisions that expose us to greater risk. In consumer decisions, risk usually equates with cost, but in B to B decisions, it could also include professional reputation (related to but not always directly tied to cost). We’re going to put a lot more thought into the purchase of a car or house than that of a candy bar. Another axis is emotional enjoyment. This is a risk/reward mechanism to most decisions, and if the reward is one that is particularly appealing to us, we tend to be swayed more by emotion than rational decision. If we’re planning a holiday, we may make some irrational decisions (or at least, they might appear that way to an outsider) based on a sense of rewarding ourselves. We’ll treat ourselves to a few nights in a 5 star resort, when the 3 star resort would offer greater overall value. The final factor, and one that is usually buried somewhere in our subconscious, is how we use brands or products to define who we are. Now, no one usually admits to being defined by a brand, but we all are, to some extent. This touches on the cult-like devotees that some brands develop. Harley Davidson, Rolex, BMW, Apple and Nike all come to mind. Is a Rolex a rational choice? No. But a Rolex defines, to some extent, the person wearing it. It says something about the person.

Bounded rationality says that there are boundaries to the amount of rational thought that we can and we want to put into decisions. The amount we decide is sufficient depends on the three facts discussed.

Now, the use of Search tends to plot somewhere along this 3 dimensional chart. If risk is high and brand identification is low (buying software for the company), there is a high likelihood that search will be used extensively. If risk is low and brand identification is high (i.e. buying a soft drink or a beer) there is almost no likelihood that search will be used. In this case, the two factors usually work inversely to each other. Emotional enjoyment isn’t as directly tied to search activity. We will do as much (or as little) searching for a purchase that will give us great enjoyment as for those that won’t.

It’s interesting to watch how these factors impact search intent and behavior. Satisficing leads to a classic sort of search behavior, what I call I category search, where we use fairly generic, non branded queries that broadly define the category we’re looking at. Let me give you an example. Tomorrow my wife and I are headed to Europe for a week. We’re going to spend a few days in Portugal, then fly up to London for SMX (where I’ll be talking more about these ideas in some of my sessions). We’re flying into Lisbon, then renting a car and driving down to the Algarve region. I have GPS navigation software for my PDA, but only for North America. I wanted to get European software, but because of the limited use of it, I didn’t want to spend too much. The developer of my North American software didn’t make a EU version, so I turned to search to find a suitable candidate. Here there was no brand identification, some degree of risk (if it didn’t work in Europe, I’d be lost, literally) and no emotional enjoyment factor. My first search was what I call a “landmark” search. I wanted to find some sites to plot the landscape. Sites that listed and compared my alternatives would be ideal matches to my intent.

I searched for “pocket pc gps software”, knowing that “gps software” would be too broad. I soon found the sites were pretty much all about North American versions. Few of them offered or reviewed European versions. I spent several minutes on the TomTom site trying to order a European version from Canada but to no avail. Apparently TomTom doesn’t believe people in North America would ever choose to drive in Europe.

In classic “satisficing” behavior, I wanted to cut my research workload by setting some basic eligibility criteria: it had to work on a Pocket PC, it had to be reasonably priced (under $100 preferably) and it had to offer coverage for all of Europe (we’re going back to France and Italy next year and I’d like to use it then as well). My next search was for “pocket pc gps software europe”. This gave me what I needed to begin to create my satisficed list. Ideally, we want 3 or 4 alternatives to compare. I did find the TomTom choice, but I was already frustrated with this, and the price was over my threshold. Destinator also offered an alternative that seemed to be a little better match. It matched all the criteria, appeared to have some decent reviews and was available on eBay for about $75, including shipping. Sold! Was it the optimal choice? Maybe not. If I had spent hours more doing research, I could have probably found a better package or a better value. But it was good enough.

Chunking has to do with cognitive channel capacity, and the amount of information we can store in our heads, accessible for use. Again, we tend to maximize the available slots by creating chunks of information, grouping similar types of information together.

When you look at Simon’s work, even though the majority of it far preceded search engines, it sheds a lot of light on how we use search in a number of cases. If you want to tap into user intent, I would recommend finding out more about bounded rationality and satisficing. Chunking is probably worth a look as well.

Caution Will Kill You in the Search Game

First published November 8, 2007 in Mediapost’s Search Insider

A strange thing started happening to me in the last two years or so. As I became more vocal about my opinion, people started seeking it out more often. The more I shared it, the more people nodded their heads. And the more obnoxious I got about it, the more people jumped on my own little opinion bandwagon. It you look at comments to this column as an indicator of striking chords, it seems like I touch cords either when I’m being a total dickhead (increasingly frequent) or introspective and emotionally deep (a much rarer occurrence). But other than a “right-on” post or comment, and the vigorous nodding of heads, I’m not sure it will go much further than that. Inside, we all like to be smarter than our bosses and a little bit revolutionary. But on the surface, where we live and work, we go with the flow. I call it the Cluetrain Conundrum.

The Cluetrain Manifesto was posted in 1999, when the Internet was still new and bold and gritty. Much of the initial grass-roots appeal that tweaked the interest of Messrs. Locke, Weinberger and Searles has since been paved over to make room for commercial storefronts. At the time of publishing, as an in-your-face, spit-in-your-boss’s-coffee and laugh-all-the-way-to-the-corporate-bathroom call to action against the cluelessness of the command and control establishment, it attracted its own rush of “right-ons.”. In fact, since it went online, thousands have signed the Manifesto. It seemed like the world could change. But now, eight years later, we’re still waiting.

You see, it’s one thing to say you’re ready to change. It’s another to convince the rest of the people in all the cubicles in all the offices in all the world that you’re right. You know it, and the person in the next cubicle knows it, but the chowderheads in the X-0 suites seem intent on running the company off the cliff. Why? In a word, caution.

No, Really, Tell Me what You Think…

In the last few months, I’ve been asked for my opinion on how to improve certain search properties. I think the people asking me are hoping for an answer like this: “You see all these ads you’re trying to get people to click on? Well, all you have to do is move them here and put this colored box behind them, and people will sprain a finger trying to buy from your advertisers. It’s that simple!”

Of course, it’s not. It’s understanding all the things that the Cluetrain authors were trying to get across. It’s understanding that markets are conversations, that we’re sick of advertising, that we long for authenticity and transparency, and that we can sniff insincerity and BS a mile away. It’s saying that you have to worry about users first, build up truckloads of trust, and then figure out how to make money. And that’s just not likely to happen when you already have an existing search property.

The problem is that you’re already somewhat successful. There’s existing revenue and advertisers. Generally speaking, although attrition is higher than you’d like, most of the advertisers keep coming back. And as long as they’re doing that, management won’t be very motivated to change. Because the changes required are not simple fixes. They’re stripping things down to the foundations and rebuilding for the user. And that means a lot of money, and almost certainly lost revenue in the short term, against the remote possibility of long-term gain. That’s a ton of risk, and it’s not surprising that someone in the C-level executive wing is unwilling to stake their corporate reputations on this particular roll of the dice. There’s a lot better chance you’ll go down in flames than be crowned a hero.

The Illusion that You Have a Choice

But the irony here is that while it appears you have a choice, you really don’t. Because if you don’t take this chance, someone with a lot less to lose will. And eventually, that someone else will win. They’ll win, and you’ll lose, because Web traffic is a zero-sum game. Just ask every search engine who’s not Google. So while it appears there’s way too much to lose by reinventing your business model, it’s much, much riskier not to. Because as much as you think you’re in control of your business, you’re not. The users are, and you have them now by the simple virtue of there not being a better place to go — yet. In the Internet world, there will always be a better place to go, eventually. Either you build it or someone else will.

Last month, in a hotel lobby, I was having this conversation with somebody who had asked me my opinion. I basically told him what I’m telling you today and asked him if his company had the courage to do this. He wasn’t sure, and asked how important it was. I said it depends on the competition. He was a little reassured, because their competition is even more cautious. The reassurance was short-lived when I replied, “Ah, but that’s the competition you know about. Chances are, this is going to come completely out of the blue and you won’t know what hit you.”

I suspect people are going to stop asking my opinion.

Interfaces are only Skin Deep

Steve Haar had a great comment on my post about Ask breaking through in the search market share battle:

I agree about the interface being much better with Ask. But, what about the search results? I took a look at them compared to the others and, between sites for adsense and dead links, the results were so poor I was embarrassed for them. I wonder how many of the searches were from repeat users vs once and gone?

I think Steve points out a fundamental concept that we might tend to forget from time to time. The best interface on a piece of garbage just gives you nice looking garbage. Now, I’m not saying that Ask is garbage. But I’ve seen some cases (and heard anecdotally many more) of some issues with spam and I do think they have some work to do. Ultimately, it’s the quality of the results that will determine marketshare. In fact, a nice interface on top of poor results will kill Ask quicker than ever, as it draws more trial users (as Steve alludes to) and generates more negative word of mouth. This is exactly what Ask doesn’t want to happen.

I’m the first to speak up about the importance of the user experience, but it’s important to remember that the interface is only one small part of that. Ultimately, there needs to be enough under the hood to meet and exceed the user’s expectations. Steve (and others) are indicating that Ask might be falling short in the relevancy horsepower department.