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…
Chaos Theory – I took a class on this many years ago when I was in college. Very interesting class and it definitely changes your perception of the world around you. I remember my professor giving a good example: Imagine a drop of rain falling on the peak of a mountain in the Continental Divide. If the rain drop fall just a fraction of an inch on the west side of the peak, that rain drop ends up flowing out to the Pacific Ocean. If the rain drop falls just to the east of the peak it will end up in the Gulf of Mexico. A very slight change in initial position can have a drastic change on the final position.
You can see chaos everywhere. 22 years ago I got a call on the phone that turned out to be the wrong number. Well, through that wrong phone number I ended meeting my wife and we now have three children. That one minuscule event altered my life forever. My wife uses terms like destiny to describe such behavior. But if I tell her our relationship can be described with simple chaos theory, I’m all of a sudden the insensitive jerk.
The weather is notoriously chaotic in nature, but a definite pattern exists (a chaotic attractor). I can’t tell you exactly what the temperature will be tomorrow at 2PM. But, I can say with a high degree of certainty that it will not drop below freezing or likewise exceed 120F. The world around you is not completely random, historically speaking I could say that the temperature this time of year will be around 90F. It is these patterns that you can study and leverage to make predictions… just not with a high level of certainty.
David,
If I’m working in a direct customer support position (which is an aspect of my job), I’d first respond accordingly to irritated customers by listening to them… accessing the situation and then either solving the problem myself–OR–finding a co-worker who can help.
Then after the problem was solved, I’d follow up with the customer to make sure the problem hasn’t arisen again.
And if appropriate, on that follow up call I’d recommend an add-on product or service that may help prevent similar problems in the future.
Good post David.
Nick Wright
With business, this is absolutely true today. Why did the video of the Comcast repair guy sleeping resonate with so many people? Because it is part of a larger pattern of bad behavior by the company. Could they have predicted that he would do this? No. But the fact that they have made so many consumers upset, creates a pattern where by this can happen. It is symbolic of their service. Thus, I can’t tell you with a high degree of certainty when a company will implode, but I can say with confidence that if you treat customers poorly it will haunt you. You never know when that customer is an influential blogger or a connected consumer. When you find out, if it is indicative of something larger, you are in big trouble. Little things like being nice, accepting responsibility, treating employees well (so they do the same for customers) all make big differences in the final outcome.