The Physics of Marketing - Snell’s Law

Willebrord Snellius saw the light.  Well actually he saw the light do funny things, and then went on to describe why it was so.  The output was Snell’s Law, which describes how light travels at different speeds through different substances.  Ever wonder why that drinking straw looks different in the glass of water than it does above the glass -   Snell’s Law.  How about why on hot summer day there appear to be puddles of water on the road off in the distance, yet when you get to where they seemingly were you find nothing but blazing hot asphalt - again Snell.  It is all about refraction, or how light bends.

Different materials have different refractive indices, meaning that light travels at different speeds through everything.  A high refractive index indicates that light bends a lot as it passes through.  Conversely a low index means that light moves more quickly.

So how does this idea apply to Marketing?  Well there are about 50 ways to go with this one.  I am choosing to go with the following, but encourage you to choose one of the others and leave a comment.  So here goes my take.

In marketing, there is often the concept of the great idea.  You know what I mean… “How about we try __”  or “What if we make ____”  Internally a few people discuss the idea, and quickly it turns into a product.  Note that for this example we are going to assume that this idea makes its way through the process of becoming an actual product or service - most never get that far.

Okay, so the idea hits the market in the form of a product and it is a huge disaster.  What happened?  We thought it would be great.  It did everything we wanted.  Everyone will love it.  We knew it would work. One problem.  The consumer, or at least the one’s whom you approached, did not want it.  Things are received differently by different people just as light moves differently through different substances.  So making the right thing for the right people matters.

Successful marketers realize this principal and attempt to use this to their advantage.  For a product to become successful, marketers must find the innovators and early adopters for their idea.  Target them.  Talk to them.  Find out if they are influential with others.  Satisfy their needs.  Dazzle them.

Again, these ideas spread at different speeds.  Successfully getting through the innovators and early adopters moves you into the early majority of people.  This group is slower to respond, but just might come around with some coaxing from the other two groups.  This process might then continue onward through the late majority of buyers and into the laggards before your idea is replaced by another.  As the pool of people spreads, your idea becomes more commonplace, and the impression it makes distorts from the original image.

Again, the key is to realize who you are trying to target, how their response may be different from others in the market, and what the implications of those differences might be.  Making something for everyone from the start is a surefire way to fail.  Making something remarkable for a few people, who might decide to share their passion for your idea with the world is a much better choice.

How would you use Snell’s Law in the context of Marketing?  There is certainly something out there along the “Things are not always what they seem / All Marketers Are Liars” angle.  (Seth Godin, if you read this, please share a thought with us.)  There could be something along the lines of the Pete Blackshaw “An Angry Customer Tells 3,000 People” angle of what happens when you buy that water puddle and actually get hot air. (Pete, if you read this,  please share a thought with us.)   Or maybe you have a completely fresh take to add.  Give it a shot and leave a comment. (Please share a thought with us.)

The Physics of Marketing - Huygens’ Principle

You would think that if you did something like discover the rings of Saturn, discover Saturn’s largest moon - Titan - and then go on to invent and patent the first pendulum clock, that you would be a household name.  Now assume you not only did all those things, AND also collaborated with Robert Hooke, Isaac Newton, and Rene Descartes during your career.  Pretty impressive resume to say the least.

The person I am describing is 17th century Dutch Physicist Christiaan Huygens.  To say this guy was smart and influential is like saying Jimmy Hendrix was a pretty good guitar player who had a few good songs.   Huygens was a thought leader of his time, with a very impressive body of work.  One of his primary discoveries was that of Huygens’ Principle which predicts the progression of waves.

Huygens stated that “every point on a wavefront acts like a new source of wave energy, with matching frequency and phase.”  Thus when you drop a pebble in water, the wave front each of the ripples that spreads out in a circular expanding fashion represents a new set of waves.  Another example of this is observed when you hear someone in an adjacent room shouting, the sound actually enters the room you are in through the doorway.  So to you the sound, the vibration of air via soundwaves, originates at the doorway.

In Marketing terms this seem to equate nicely to the concept of word of mouth marketing.  Suppose you were to have an awful service encounter with a business, the initial wave would then be created.  If for example, this were in a restaurant where the food was bad, the service poor, and the experience was very disappointing, the initial wave might begin with those seated at your table and others within the restaurant.  If the experience were bad enough, this wave would quickly spread as you left the restaurant and told your friends “Don’t Eat At That Place!  Listen is what happened to us!”

Now all of those friends you told about your experience represent a new source of wave energy, spreading the message outward yet again. God forbid this is not an isolated incident.  In this case, as waves continue to spread and touch consumers, the results to a business are devistating.  Imagine when you told your friends about the bad experience if they responded “you are the 10th person I have heard from who had a bad experience at that restaurant.”   Now think about what happens when you get on the web and voice your complaint to the world.  Your experience is viewed by others, Google picks up on a new trend, and the wave continues onward…

Pete Blackshaw articulates this scenario brilliantly in his book, Satisfied Customers Tell 3 Friends, Angry Customers Tell 3,000.  He brilliantly describes the importance of word of mouth in a digital age, how to monitor and participate in what is being said, and ultimately why companies need to realize the fact that angry customers can make Tsunami sized waves that can literally destroy a business.

Returning to Huygens, it is imperative to realize that the transaction transcends the immediate and present set of circumstances.  It radiates outward.  No, losing one sale due to poor service might not cripple a business, but the resulting wave that this dissatisfaction generates might - especially if the event is systemic as opposed to an isolated incident.  The interconnected world in which we live makes it nearly impossible to do people wrong and live very long.

Conversely, the little extras that make a customer experience great might not immediately translate into huge profits, but over time, as the waves spread, these differences can create a ripple effect that builds deep customer loyalty and lasting success.

How would you apply Huygens’ Principle to Marketing?  Please share your thougths by leaving a comment.

The Physics of Marketing - Newton’s Theory of Color

It never occurred to me that someone invented the color wheel, but in fact Isaac Newton did just that and more with his Theory of Color.  Newton used prisms to show that white light was actually made by a combination of the “ROY G BIV” colors of the rainbow.  At that time there were varying theories regarding color and light, and Newton’s assertion, which seems like common knowledge today, was quite controversial at the time he introduced it.

Newton explained that objects appear to be a certain color because of how they reflect light, rather than color being an inherent property of an object - A red apple reflects red light which is seen by the eye.  Newton went on to place the colors on a wheel, where he could then illustrate the concept that by combining primary colors in various proportions, all other colors could be created.  This led to the idea of complementary colors such as blue and orange which when used together provided maximum contrast.

Newton’s theory of color has been studied and refined over time and is often directly applied in marketing though the design process.  Visit a graphic design studio and color wheels abound with countless shades and tones, which when combined correctly, offer dramatic visual appeal.  Who knew that graphic design had roots in physics?

So the big question becomes how to extend Newton’s theory into some broader analogy about Marketing.

Here goes…

Okay, so suppose the market is equal to white light. Each company has an ability to use the components of that light to reflect a given appearance.   Just as light can be broken down into colors, Marketing can be broken down into categories.  This traditionally has been represented as the 4 P’s of Marketing (Product, Price, Place, and Promotion) - although many other models exist.  For today, I will go with the trusted 4 P’s.

Marketing seeks out new ways to combine colors to create something of beauty and value for the consumer.  Some might like blue and orange (everyday low prices, no frills), others red and green (design and style).

Companies are tasked with choosing the right mix of the colors they have to tell a unique story to the consumer.  If this story resonates, i.e. the consumer perceives the colors to be different and chooses them, the company has a chance to succeed. This is the idea of the Marketing Mix.  What products to sell?  How much to sell products for?  How much attention to focus on service?  How much to spend on advertising?  Whether to open a store online in a shopping mall?  There are some combinations that work well, and some that result in ugly gray brown.

In totality all of these brands, all of the commercials, promotions, channels of distribution, and available products combine to make the consumer marketplace - white light.  Perception is the prism by which the market is broken down into segments, and in the end consumer gets to choose their own favorite colors.

What do you think?  How can you apply Newton’s Theory of Color to Marketing?  Please share your theories and thougths by leaving a comment.

The Physics of Marketing - Chaos Theory

Chaos Theory states that little things can mean a lot.  For example, the wind created from a butterfly flapping its wings in the jungle could result in a tornado forming in Southwestern Ohio.

Chaos Theory is why the weather can only be predicted for a few days out.  There are so many variables that come into play, that long term predictions become virtually impossible.  Over time variance in inputs result in patterns which can change in unexpected and unpredictable ways.

Chaos Theory was developed by Edward Lorenz, who was an American mathematician and meteorologist.  He devised the theory as a result of rounding errors as he was trying to compute weather patterns.  He found that these small changes in rounding of numbers could result in dramatically different outcomes.    Thus he concluded that minuscule changes in inputs can have enormous consequences on the ultimate outcome.

So how does this pertain to marketing?

I think that the analogy to marketing is rooted in my belief that everything a firm does is in fact marketing.  If this is true, than seemingly little things like how clean you keep your lobby, how you show appreciation to your customers, or how you handle complaints can have a huge impact on your success.  While it is not possible to predict exactly how each interaction will play itself out, it is certain that in this age of interconnection and transparency patterns will emerge.

Thus, just as Chaos Theory states that little changes can have a big impact, the same holds true in marketing.  Thinking of outsourcing your customer complaint line?  Yes it might be cheaper, but it will make a difference in the ultimate outcome.  That minor change could have a major impact.  Ask Dell about that.

We live in a time where consumers have unlimited choices.  Thus as marketing professionals, we must take great pain to make sure the the inputs that can be controlled are controlled.  We must proactively seek to improve the customer experience.  We must seek to add value relative to the price that is being paid.  We must make sure to notice the little things that most would not notice.

Some might argue that Starbucks was a victim of Chaos Theory.  Is their recent trouble due to the fact that they opened too many stores too quickly?  Was the brand just a fad?  Do $4.00 gas prices and rising unemployment come into play?  Are they hurting because they focused on things like music and credit cards instead of coffee and customers?  Did the change from the manual to automated espresso machines dilute the brand?  I have no idea which of these things actually caused their current problems.  It might be all of them, it might be a butterfly in the jungles of South America.  I would argue however that these things led to a pattern with a predictable outcome.   Taken on their own they are small, but combined they create a difficult situation that would have been difficult to envision just a short time ago.

So for marketers, control that which you can control.  Focus on delivering quality to the consumer.  Pay attention to changes in outcome.  And, pray that butterflies help you more than they harm you.

How would you apply Chaos Theory to Marketing?  The world is waiting to find out.  Share your thougths, and change the world with your comments.  You never know what outcome they might produce…

The Physics of Marketing - Brownian Motion

In 1827 Robert Brown was trying to observe the fertilization process of flowers under a microscope when he noticed slight movements in the grains of pollen, which were suspended in water.  “Were the particles alive?”  “No, so how did they move?”  The answer is Brownian Motion.  The pollen on the microscope’s slide was suspended in water.  Thus the movement of the pollen was not due to the pollen being alive, but was actually caused by the constant and random movement of the water molecules which were bumping into the pollen.  These collisions created the illusion of the pollen being alive.  In actuality the movement was a by-product of the movement of the water.

This phenomenon can be observed in the way that air pollution spreads, or how dust particles seem to dance about in a sunbeam gleaming through a window.  Brownian motion can be influenced by things like the type and temperature of the particular gas or liquid in which something is suspended.  For example molecules in warm water are more active than in cold water, and thus would result in more movement.

How does the concept of Brownian Motion pertain to marketing?

For me this is very similar to the concept of signal versus noise, discussed by Don Wheeler in his book Understanding Variation.  The central premise is that a data without context is basically meaningless, and that changes in numerical values are not necessarily representative of real change.  Wheeler asserts that “the first mistake in interpreting data is to interpret noise as if it were a signal.”  The second is to “fail to detect a signal when it is present.”

Much like Brown’s initial reaction to the moving pollen, business leaders can mistakenly attach value to motion.  So the 5% increase in sales that made everyone feel so great, could actually be the act of random motion.  The increase in the response rate on that piece of direct mail - might just be noise.  Conversely, the decrease in hits to your web site might just be the result of random movement.  There is a certain amount of variation inherent to everything.  Thus, making the numbers or beating the numbers can be misleading.

Just as happens in suspensions, every environment is different.  And just as temperature and chemical composition influence the amount of variation, so do things like competition, market saturation, market awareness, and other factors.  Some industries may have little fluction, some may have substantial changes.  As Wheeler states, The Voice of the Customer decides what you want from the system, the Voice of the Process decides what you will get.  “It’s Management’s job to bring the voice of the process into alignment with the voice of the customer.”  That is how real motion, not random motion, takes place.

As a marketer it is important not to attach too much importance to individual data points, (the numbers are up today, the numbers are down today) but rather to view the data as a whole.   Variation, or random movement, is inherent to nature.  One must take the time to separate the signals from the noise, and then to act accordingly.

How would you apply Brownian Motion to Marketing or Business?  Share your thoughts by leaving a comment.

The Physics of Marketing - Second Law of Thermodynamics

The Second Law of Thermodynamics states that in a closed system entropy always increases.  That means that when you put Coca-Cola in a refrigerator, the Coke will get cooler - but the refrigerator will put out heat into the world in order to make that happen.  Yes the inside of the refrigerator is cool, but put your hand on the back, and you will get the idea.  To make the inside of the fridge cool, the heat energy must be dispersed out of the system.  Cold objects have low entropy, or disorder, and hot items higher entropy (think of those hot molecules wildly bouncing).  Heat does not flow from a cold object to a hot one, but rather from hot to cold until an even temperature is reached.  The Coke does not absorb the heat from the air in the refrigerator making the can warmer, but rather, as would be expected, the can gets cold.

I must admit that relating this concept to marketing has been a challenge, so I am really hoping to get some good feedback from the scientists out there.   Still, I will take a stab at it, and hopefully learn in the process.

The thought that comes to mind for me revolves around product launches.  A hot new product is introduced, like the iPhone.  With a good marketing campaign, this product creates tremendous disruption in the marketplace.and as people begin to use it.  Over time it becomes adopted, prices come down, and the heat generated by the product dissipates.  The product introduced disorder, which ultimately created change dispersed throughout our universe.  The iPhone will yield cheaper copy cat products, and the technology will eventually become integrated into the population. (Now this example assumes that the product is successful)

Know that because of this law, the heat of success will cool.  You had better be able to introduce further innovation if you want to remain viable.  Why has Apple had such a good run?  They have continued to introduce entropy into the marketplace with hot new exciting products.  iPod, Shuffle, Nano, MacBook, MacAir, iPhone, etc…

Another example that came to mind was the idea of maximizing your strengths as opposed to trying to focus on areas of weakness.  By focusing on strengths, you are more likely to produce change - resulting in entropy.  Focusing on doing what you do well, finding ways to do it better, and developing ways to add new and innovative value is similar to creating something hot and sending out that energy.  Weakness on the other hand, represents low entropy to me.  If you struggle in an area, chances are your improvements will be marginal at best.  Thus you are only going to go from cold to slightly less cold.  You are unable to impact change with the weakness approach.  Ultimately if you can generate enough heat with your areas of strength, you can make weakness irrelevant - because the final level of entropy will be elevated to a greater extent.   Be the best in the world at what you do best, and hire that best in the world where you are weak.

I would love to hear from you.  How would you relate the Second Law of Thermodynamics to Marketing?  Please share your thoughts on this by leaving a comment.  Educate me and the rest of the world with your brilliance.

The Physics of Marketing - Ideal Gas Law

If you have ever climbed up a mountain, you know that it is much colder at the top than at the bottom. Have you ever wondered why? Well it is because the atmospheric pressure is much lower than if you were at sea level. There is simply less atmosphere above you.

This relationship between pressure, volume, and temperature is described the ideal gas law, and it was formally discovered in 1834 by French Physicist Emil Clapeyron. It states if you heat a gas, it will expand, increasing pressure. Also, if you compress a gas, it will increase the pressure.

So how do we apply this to marketing?

I view this law as analogous to “sale pricing.” Think of Kohl’s - a company that is big on sale pricing. If you visit Kohl’s, you will see big discounts for a limited time. This is designed to increase the pressure on you, the consumer, to purchase a product. Because the price is lowered the deal is hot, so the manipulation of this variable is akin to increasing the temperature. Now because the sale is for a day, a weekend, or at best a week, the window of opportunity is short.

Where Kohl’s really amplifies this is in their basic pricing policy. Now I don’t have scientific data to support this, but just go there and look at the price of something that is not “on sale.” It is well above what you would pay elsewhere. So, when Kohl’s marks something down by 70%, the seemingly good deal, is actually only marginally better than a regular price elsewhere. However, the pressure exerted by limited time and perceived discounting is extremely effective in generating impulse buys.

Now, imaging you buy that sweater for 80% off, and do get what you believe to be an amazing deal. Here is where they really capitalize. You now need pants to go with them. Because it is easier to just get them while you are then, instead of taking the time to go somewhere else, you purchase the pants at a price that delivers a huge margin for the store. Brilliant. Kohl’s maximizes this impulse by locating farther away from the competition in strip shopping centers - not in the mall where comparison shopping is easier.

Am I saying that the shirt you got for $4.00 marked 90% off was a rip off. No way. It was a great deal. Just realize that there is more to the sale than the cheap shirt - there is the rest of the outfit that comes with a price. Kohl’s is masterful in manipulating price and time to generate pressure to purchase. Thus, they are a great illustration of the ideal gas law in the context of marketing.

Where do you see this concept illustrated? Please share your thoughts by leaving a comment.

The Physics of Marketing - Hooke’s Law

Scientist, Physicist, Mathematician and all around genius Robert Hooke lived in the mid 1600’s.  Much of his work revolved around his law of elasticity, which stated that elastic materials stretch in proportion to the force applied to them.  Some materials are more elastic than others.  Understanding this principle allowed for sailors to measure longitude, architects to design amazing structures, people to use pocket watches, and bungee jumpers to… well… to jump of bridges and survive.  In short, strain causes stress, and certain materials respond differently to stress.

At risk of sounding redundant from last week’s post, I think this again illustrates the importance of treating different customers differently.  Choose your best customers and design your products, services, and your customer experiences to capitalize on their common elastic principles.  Give your best customers more of what they want, and work on giving value up front in exchange for bringing them back again and again.  Give to get.  Give more, get more, find new ways to give more and on and on.

Bear in mind, different materials have different elastic principles.  Some are highly elastic, and others not at all.  Consumers are the same.  Find the right group, and then do something amazing for them.

What is your interpretation of Hooke’s Law as it pertains to marketing?  Please further the discussion by sharing your thoughts in the form of a comment.

The Physics of Marketing - Simple Harmonic Motion

Think of a pendulum steadily swinging from side to side and you are visualizing Simple Harmonic Motion. From children on play gound swings to highly skilled engineers, simple harmonic motion surrounds us. It involves the give and take between potential and kinetic energy. In the example of the pendulum this would be height and speed.

You could even use the principle of Simple Harmonic Motion to prove that the world rotates. If you were to place a pendulum on the North Pole on a sunny day, the shadow it created would move in a circle as the day passed - eventually returning to its origin 24 hours later. However, this motion would not be evident at the Equator. So while the principle of Simple Harmonic Motion is evident in both places, deriving meaning from it is dependent on perspective. Yes the pendulum swings back and forth in both places, but the change in perspective offered at the North Pole would yield unique meaning.

So, on to the Marketing part of the post.

Here is what I came up with. Treat different customers differently. Create simple harmonic motion with your best customers. Develop a predictable experience for them, innovate based on their specific needs, and create something so remarkable that so they want to come back time and again. Do it well, and you should even be able to add a cyclical nature to this pattern thus creating predictability - simple harmonic motion.

Why treat your best customers differently? It is as simple as this. You can’t please everyone. If you are doing something interesting than there will be many, if not most, who will dislike what you do. Try to please everyone and all you will accomplish is mediocrity. The perceived safety of “the middle of the road product or service” only sets up a business to get hit from oncoming traffic on both sides.

instead, create a unique identity. Establish a deep bond with the right customers. Listen to them. And then use your strengths to regularly develop new ways to help solve their problems and improve their lives. This ties in directly with the product life cycle. What to make, why, when, how many, and for whom all can be tied into simple harmonic motion. All of these ideas work best when done for a specific group.

So that is my take. What do you think? Leave a comment and let me know your thoughts on how to apply Simple Harmonic Motion to Marketing. I welcome your contribution and thank you for stopping by.

The Physics of Marketing - Conservation of Energy

This week’s Physics of Marketing post is about energy. It is clear when someone has energy and more clear when they lack it. Starbuck’s has made a fortune on regularly selling me cups full of energy in the form of caffeine laden black coffee.

Energy takes many forms, and is probably best thought of in terms of change or motion. Both are forms of kinetic energy. Potential energy is less intuitive, but equally important. It is the boulder at the top of the hill, which if nudged would descend with tremendous momentum, crushing anything in its path. While at rest, it is potential energy.

Conservation of Energy means that energy is neither created or destroyed, but rather that it simply is transferred from one form to another. There is a finite amount of energy, but seemingly infinite manifestations of that amount. Energy is the E in Einstein’s famous E=mc².. Energy is a fundamental part of the universe, and again is neither created nor destroyed.

So, how does the conservation of energy relate to marketing?

Immediately I was drawn to the idea of the interaction between a company and the consumer. The product or service offering of a company is designed to address some unfulfilled need of the consumer. “Wouldn’t it be great if that were bigger, faster, better, cheaper, more, easier, smarter, less, …” You get the gist. The consumer chooses if the need is important enough to act upon, and if so, can choose to seek help from a particular company. This all represents potential energy. The goal of marketing is to convert this into kinetic energy - initially this is a sale. But it does not end there.

If the initial sale goes well, there is a good chance that more of the consumer’s potential energy is converted to kinetic energy. This may take the form of repeat business. If things go exceptionally well, the consumer may choose to actively participate in the conversion process by spreading the word to friends and family. This positive word of mouth can deliver more kinetic energy. This should ultimately result in cash for the company - potential energy. At which point, the company might choose to invest in future innovation - potential energy.

Conversely, if the sale goes poorly, the conversion of energy from potential to kinetic follows a different path. If the experience is mediocre, most of the potential energy will likely remain unconverted, or will be converted by another provider. The consumer goes away, and the transaction is a one-time experience. If things go very poorly, large amounts of potential energy will be converted - this time to the detriment of the company. An angry consumer in the digital age can spread negative word of mouth far, wide, and fast. In instances where others share a similar negative experience, the result for the company can be devastating. . Consumers will move to competitors, and the company will struggle to survive.
According to Abraham Maslow, all people have needs. These needs constantly change form but always remain present. Thus energy is always present in the marketplace. Marketing seeks out potential energy. Great marketing maximizes its conversion to kinetic energy, and then back to potential energy again.

What do you think? Draw your analogy between Conservation of Energy and Marketing. Join the conversation and leave your comments.

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