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.
Energy indeed has many forms, one of which is mass. Mass is the ‘m’ in Einstein’s widely recognizable, elegant, and misunderstood E=mc^2 equation. When a company builds mass, they build energy. To paraphrase some previous readers’ ideas on this, it is akin to compressing a spring or lifting a matchbox car to some height before releasing it; it is the potential. When the matchbox car (product or idea) is released, it stimulates consumer energy, either positive or negative. In either case, as you have highlighted, this results in the company gaining more mass (profits=more potential energy) or losing energy at the expense of itself (the energy is not lost mind you, it is only converted to some other form, possibly to be gained by a competitor). The same is true on the consumer end. Again, as you have touched on, a consumer’s reponse to a product/marketing campaign can send shockwaves throughout a particular group. This momentum (another conserved property) is spread throughout the marketplace like scattering billiard balls.
An interesting analogy also arises when you consider mergers (fusion) or splits within a particular group (fission). In the case of a merger (of ideas or a company), jobs are eliminated and processes consolidated such that energy is released and mass is reduced! Similarly when a company splits, smaller groups arise, possibly producing more energy each with a smaller total mass. This sounds contrary to conservation rules, but when you consider the equivalence of mass and energy (they are interchangeable), the rule still holds true. The same is true for fission and fusion. The mass sum of the parts ends up being less than the sum of the whole; the difference being the energy released in the process. This is known as mass defect and occurs on a subatomic level, though its ramifications can be seen all over (i.e. the sun, nuclear reactors, thermonuclear bombs, etc).
Keep up the good work.
Hello David:
I love your article!
You’re so right in saying that marketing is energy. In fact, everything is energy.
We’re living in a giant soup of energy. And the person who can focus and organize energy to fulfill his needs will always have his needs met.
Energy is constantly transforming.
It’s always present.
And can never be created or destroyed!