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 - Absloute Zero

At just about -273 degrees Celsius, you reach the point at which all molecular motion ceases.  There is no heat.  None.  This is known as Absolute Zero, and it was developed in large part by Lord Kelvin.  In his honor, the Kelvin Scale, in which 0 degrees equals -273 C,  was named.  While scientists have some close to reaching absolute zero in laboratories, it may be impossible to accomplish because the act of measuring would require some level of heat be introduced.  Still, scientists have gotten really, really close to this temperature that is really, really, really cold.

There are some really “cool” things that happen to certain elements when you approach absolute zero, such as condensates - super cold liquids that can overcome adhesion and gravity to spontaneously flow out of their containers.  Needless to say, funny things happen near absolute zero.

So, from a Marketing Perspective, what is analogous to absolute zero?

I am inclined to say that the concept of the Long Tail, introduced by Chris Anderson, is analogous to this concept in some way.  The Long Tail states that, among other things, the internet empowers infinite consumer niches, and thus in a digital world where inventory is not much of an issue, there is a demand for just about everything.  So, that record you and your buddies made in the garage in 1976 might have one person out there somewhere, besides you, who is interested in it.  That record - once thought to be completely void of heat - now possesses a minuscule amount of movement.

Marketing professionals are paid to move products and services away from absolute zero - as far away as possible.  Marketing is some sense is about using resources for generating heat around a product or service, capitalizing on the Second Law of Thermodynamics (Thanks Geoff) to maximize the return on investment.   As the product life cycle would dictate, nothing lasts forever and today’s hot product becomes yesterday’s news pretty quickly.  Marketing moves on, and the product or service often loses heat until it finally dies - theoretical absolute marketing zero.

Still, the long tail being what it is, absolute zero for a product may never actually be reached.  As products or services approach this temperature, weird things happen.  Small groups of people may decide that they don’t want to let go of a product or service, and demand comes from seemingly out of nowhere to defy conventional wisdom.  That is why someone will pay $27.00 for the Shirt Tales lunch box on ebay.  Sometimes this remains isolated and sometimes the product begins to generate heat again and moves away from Absolute Zero.  Pabst Blue Ribbon comes to mind as a brand that was once near death, and then, somehow got to be trendy.  Now, bars in Columbus, Ohio can’t keep enough of it in stock to meet demand.  While this definitely differs from the absolute laws of physics, the ideas seem to be similar.

I am curious to hear from you on Absolute Zero.  How can you apply this to Marketing?  Please share your thoughts and join the discussion with your comments.

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 - 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.

The Physics of Marketing: Newton’s Laws of Motion

Isaac Newton lived from 1643 - 1727, and is about as close to a superstar as any scientist could be. People far beyond the world of physics know Sir Isaac. He helped to invent calculus, and was actually the first scientist to be knighted in Britain. Newton’s work is widely known and has been the basis for much of modern science. While some of his theories were disproved, or proven only to be applicable in certain circumstances, his contribution to humanity is immense. But what can he - or his theories - contribute to modern day Marketing? Well, I will list his theories, and then we can discuss just that.

Newton’s Laws of Motion

1. Bodies move in a straight line with a uniform speed, or remain stationary, unless a force acts to change their speed or direction.
2. Forces produce accelerations that are in proportion to the mass of a body. (F = ma)
3. Every action of a force produces an equal and opposite reaction

I am curious to see how you would apply these laws to marketing?

I will chime in later, but certainly I could envision discussions of small versus large businesses, competitive strategy, change management, pricing, product life cycles… oh my mind is just racing. Please accelerate this discussion with your actions and leave a comment. Address one of them, each of them, or all of them… whatever moves you.

Newton’s laws of motion - Wikipedia, the free encyclopedia

The Physics of Marketing - Mach’s Principle

Ernst Mach, was an Austrian Philosopher and Physicist. He lived from 1838 to 1916. His principle proposed the idea that “mass there influences inertia here.” That means that the gravity of far away things affects how nearby things move. Thus motion is only meaningful when measured against another object. For example, we know the earth is spinning because we can measure it relative to the stars. Without the stars, or some other point of reference, motion would be meaningless. Because Mass is the critical factor in motion, and every object in the universe is pulling on every other object, true motion can only be determined by examining mass.

[ Albert Einstein seemed to view Mach's principle as something along the lines of:

"...inertia originates in a kind of interaction between bodies..."^[3] ] - wikipedia

So what does this mean to marketing? How can you take the principles of a 19th Century Scientist and apply them to the modern discipline of Marketing? What is the analogy?

On an aside, please stay away from “this is the guy that the Mach 3 razor is named after.” While this is a pretty easily demonstrable way that Mach impacted Marketing, lets stick with Mach’s principle this week.

Please educate me. Drop some science knowledge and leave your comments.

Mach’s principle - Wikipedia, the free encyclopedia