PeppercomBlog

Who are you calling ‘average’?

Posted by Milos Sugovic

How many companies actually serve the average consumer? Unless you’re selling a commodity like corn or wheat  (but even there you have some market segmentation and differentiation), there’s a need to target messages to target audiences.  We do it all the time in everyday conversation. Your boss gets a “Good morning,” your bud a “Wasssuuuppp!” So why is it so hard in marketing and communications?

Being all things to all people may seem like the dominant strategy, but it really isn’t. Yes, by maintaining centrality you appeal to the masses, but so what? Are you really trying to appeal to every possible buyer of your product or service? 

It always puzzles me when market research, originally intended to tailor a marketing/communications strategy, is conducted to uncover none other than the wants, needs and preferences of the average consumer. Granted, there is something to be said about the central tendency of your sample population, but deviations away from the norm are as important, if not more so.

What do ice-cream sundaes and correlation have in common?

Posted by Milos Sugovic

Nothing really, unless you’re in PR. 

Take a look for yourself: slide six of a VMS presentation titled “Measuring the Power of News on Advertising and Business Outcomes.” Is that really correlation? Last time I checked, correlation is a statistical relationship between two (or more) variables. So why would VMS, the leader in providing news and ad monitoring solutions, dumb down a statistical concept so much that they themselves look dumb?

Well, there are three explanations I can think of: First, and least likely, they don’t know better. Judging from the rest of the presentation and the credentials of the researchers, they know what they’re talking about. So let’s scrap that one. Second, and more likely, they talk to it when presenting. Fair enough, but why a graphic with one variable? Unless they’re talking about autocorrelation (self-correlation over time), which I highly doubt, it’s not a good illustration, period.

Which brings me to the third and most likely explanation: the obsession with “dumbing it down.” Statistics has traditionally struggled with making inroads into the public relations profession, and understandably so. On one end you have practitioners that rely on right-brain functions (nothing wrong with that), while on the other there’s a whole myriad of challenges one faces when dealing with qualitative data. But that doesn’t mean we should reduce powerful statistical techniques to the cravings in the hypothalamus!

Hand of a Frog

Posted by Milos Sugovic

Soccer (or football) is by nature a dirty sport; but that doesn’t mean cheating is acceptable. Unless, of course, you make the rules. 

It took the setting up of an easy play-off draw, two tough matches against soccer giants Ireland, an undetected offside, and a handball by captain and top scorer Thierry Henry for the French to barely qualify to the World Cup 2010. Great news for French fans but a shameful embarrassment for FIFA - Fédération Internationale de Football Association - a French acronym for the international football governing body.

In the aftermath of a match-fixing crackdown on 40 European games, last night’s referee blunder comes as a bitter pill for football fans to swallow. After Thierry Henry’s handball followed an obvious offside and a furious reaction by half-dozen Irish players, it’s curious how Swedish referee and chief culprit Martin Hansson and his assistants missed the blatant cheating. Or did they?

Path of Least Resistance

By Milos Sugovic 

Competitive differentiation is about survival. Your success depends on how your business is positioned vis-à-vis its competition, and rests on your ability to answer one simple question: “Why are you better?” Most companies struggle with communicating their niche and opt for the easy way out by taking their competitors head on.  

But why do businesses readily forget about the easiest route of all - or as it’s know in physics - the path of least resistance? What’s interesting about the path of least resistance is that it describes why an object or entity takes a given path, usually a motion forward through a system, as a result of resistance levels in its environment. As a metaphor for personal effort, it implies least confrontation - a person taking the path of least resistance avoids conflict in order to survive.  

J.D. Power(less) & Associates

Posted by Milos Sugovic

Do you know the definition of “statistical power?” Don’t count on the guys at J.D. Power to know; it seems like they don’t really care about all that. So I’ll take at shot at this one: The power of a statistical test is the probability that the test you’re conducting will find a statistically significant result.  So what’s the statistical power of a J.D. Power customer satisfaction study? Well, let’s leave it up to them to figure that one out. 

In the meantime, I call your attention, once again, to the importance of statistical significance. Either it’s becoming an obsession of mine, or there’s something seriously wrong with the set of studies I’ve come across recently. To be fair, it’s probably a combination of the two, but that doesn’t excuse the latter. 

I said it last week and I’ll say it again: Before you let anything affect your business plans, read the fine print. Look at this J.D. Power Customer Satisfaction Study, among many others, which ranks appliance retailers. Now look at the fine print if you have the eyes to read 4-point font. If not, I call your attention to the following statement: “Rankings are based on numerical scores, and not necessarily on statistical significance.” Interesting. 

Is Social Media a Function of Social Media?

Posted by Milos Sugovic

Peppercom recently conducted a social media audit to uncover the “white space” areas of opportunity for a client. In the process, we collected data on over 1,200 mentions or social media “hits” for industry competitors, measuring their share of voice vis-à-vis various messaging categories and sentiments. After examining data on Twitter and blogs primarily, as well as Facebook, YouTube, Ning, LinkedIn, Delicious, and MySpace, we decided to do a quick experiment and answer the following question: For each competitor, does a strong presence in one social media channel translate, correlate, or spill-over into a strong presence in another social media channel? The answer was “yes.” 

To answer the question we looked at blog and Twitter activity for three competitors. We graphed the number of Twitter and blog “hits” over the timeframe analyzed, and generated the following three graphs. Do you see any relationships? 

Where did the inputs go?

Posted by Milos Sugovic 

How many times have you heard this question: “Should we measure outputs or outcomes?” The discussion of measurement in PR is flooded with a debate over which is a “better” metric: outputs or outcomes. Can you guess what the conclusion is always? You got it right - it’s “both.”  

So why the debate? Well, in essence, it’s a discussion around opportunity cost of doing each, be it in terms of financial resources or time, and usually doing the former over the latter is considered to be “cheaper.” But as technology and software develop and data becomes more readily available, the discussion will lose steam. Untill then, it’s a valid debate only if you consider outputs and outcomes to be perfect substitutes.  

What is a “price point,” really?

Posted by Milos Sugovic

There’s a faddish bit of marketing jargon that’s overused and makes absolutely no sense to me: the infamous “price point.” To the users of such lingo, I sincerely ask: what does it mean and how is it any different from that other short word that frequently does the trick - price?

You see, what puzzles me most about “price point” is the following: I’ve studied economics for the past seven years (and counting) and have been exposed to a whole range of topics at four different universities, one of which happens to be the London School of Economics. Never, and I repeat never, have I heard a professor of economics juxtapose the words “price” and “point.” And you know why? Because it’s meaningless.

Data Savings or Data Faking?

Posted by Milos Sugovic

 

It turns out Andrew Gelman, a professor of statistics at Columbia University, was right when crying out about the use, misuse and abuse of graphs in academic research. It seems to me like businesses aren’t much better. To illustrate, let’s look at this typical problem as a 6th grade math assignment:

Source: Opera Turbo White Paper

          What’s wrong with the above chart?

           (a)  the x-axis isn’t labeled

           (b)  the y-axis isn’t labeled

           (c)  there’s no unit of measurement

           (d)  one cannot deduce the difference between the red and blue line

           (e)  all of the above

The correct answer is “e,” all of the above. The scary answer is: I came across the chart in a white paper produced by a software company. 

Trustbusters and Troublemakers

Posted by Milos Sugovic

Giants have every reason to dread the perception of price-fixing and the actions of their “competition,” at least until June 23 of this year when the most effective cartel-fighting tool expires. Tech titans, or Googlopolies, are already on the radar as the Obama administration revs up its fight on predatory pricing and price-fixing. It seems the feds are increasingly turning their attention to the latter, and will continue to rely on none other than the prisoner’s dilemma framework.

The prisoner’s dilemma has helped antitrust authorities protect consumers and fight cartels via a section of the Antitrust Criminal Penalty Enhancement and Reform Act of 2004. It worked thus far by providing tempting offers to crooked companies and letting them off the hook for ratting out fellow price-fixers. Giving a break to tattletales is nothing new; it’s the age old prisoner’s dilemma game which can result in and preserve sub-optimal market outcomes, or, if used strategically, can ensure market outcomes that improve the welfare for all.

How is the latter achieved in antitrust legislation? By tempting squealers.