The Big Change

Subscribe by email

Subscribe by rss

The Big Change Feed What is a RSS feed?

The only tool a sales force needs

by Clive Webster

It used to be thought that there were four, or five, “Ps” in marketing (and selling). We now know there is only one, ‘Perceptions’.

When we take a closer look at the traditional “Ps” we find the following:

Product: it is the perceptions held regarding the product that matter, they will happen or they can be created;

Price: price is a matter of perceived value and can be used in itself to create, or destroy, a perception of the product (or service);

Place: is actually a perception of availability;

Promotion: means communication – the way in which perceptions are created or destroyed;

Profit: is the final result of your ability to manage perceptions.

In view of this, the only tool a sales team needs is a picture of the perceptions their customers hold regarding the sales team, their company and their product. The team’s job then is to close the gaps, the deficiencies in the perceptions held by their customers. When they are successful and the gaps are closed, sales will result because there is no further resistance.

Of course they might not be able to close all the gaps or shift all the perceptions necessary to bring all the sales required. Because some of the gaps might relate to the product, or the price and thus be beyond their authority to change. Such deficiencies need the attention of the marketing personnel, whose job it must be to rectify the perceptions held regarding the product.

Some marketers add “processes/procedures” as another “P” in marketing. These, however, are merely the resultant mutations of someone’s perceptions somewhere back in time.

When sales people understand that their job is to rectify a certain set of specific perception deficiencies, their task becomes clear and measurable. They can proceed with confidence. Their results become quantifiable and their incentive scheme becomes simple and meaningful.

Thus, apart from product and procedure training, the only other training given to sales people should be in the art of effective communication. Training in how to communicate effectively to rectify specific perception deficiencies. Objectivity’s experience indicates that any other form of behavioural, motivation or ‘change’ training usually results in a drop in sales!

There are a great many sales tools available to add impact to your team’s efforts – some work and some don’t. In the final analysis however, without the benefit of an accurate picture of the perceptions their customers hold about them, their company and their product, your sales team will never be completely effective.

Clive Webster is Senior Partner at perception measurement and monitoring firm Objectivity. He can be contacted on tel. +27 11 465-7160 or by e-mail on perceptions@objectivity.co.za

No discussion yet

Posted in the category: Strategy

Book review: Getting into Google

by Arthur Goldstuck

Everyone loves Google, and it’s the first place many people turn to locate information on the Internet.

Google Hacks: 100 Industrial-Strength Tips & Tools, by Tara Calishain and Rael Dornfest (O’Reilly & Associates, 2003)

Paperback, 325 pages

List Price: $24.95. Amazon Price: $17.47

There’s a big gap, though, between knowing that you can use Google to get advance information on your blind date and having a handle on the considerable roster of fact-finding tools that the site makes available.

Google Hacks reveals – and documents in considerable detail – a large collection of Google capabilities that many readers won’t have even been aware of. Want to find the best price on a pair of leg warmers? Try the Froogle price-searcher that’s hidden within the Google site.

Interested in finding weblog commentary about a particular subject? Tara Calishain, a veteran of search engine strategy (including a 1997 book, “Official Netscape Guide to Internet Research”) and Rael Dornfest call your attention to the special Google syntaxes for that purpose. This book makes it clear that there’s lots more to the Google site than typing in a few keywords and trusting the search engine to yield useful results.

If you’re a programmer–or even just familiar with a HTML or a scripting language–Google opens up even further. A large part of Google Hacks concerns itself with the Google API (the collection of capabilities that Google exposes for use by software) and other programmers’ resources. For example, the authors include a simple Perl application that queries the Google engine with terms specified by the user.

They also document XooMLe, which delivers Google results in XML form. In brief, this is the best compendium of Google’s lesser-known capabilities available anywhere, including the Google site itself. –David Wall

Topics covered: How to get the most from the Google search engine by using its Web-accessible features (including product searches, image searches, news searches, and newsgroup searches) and the large collection of desktop-resident toolbars available, as well as its advanced search syntax.

Other sections have to do with programming with the Google API and simple “scrapes” of results pages, while further coverage addresses how to get your Web page to feature prominently in Google keyword searches.

Book description

The Internet puts a wealth of information at your fingertips, and all you have to know is how to find it. Google is your ultimate research tool – a search engine that indexes more than 2.4 billion web pages, in more than 30 languages, conducting more than 150 million searches a day.

The more you know about Google, the better you are at pulling data off the Web. You’ve got a cadre of techniques up your sleeve–tricks you’ve learned from practice, from exchanging ideas with others, and from plain old trial and error–but you’re always looking for better ways to search. It’s the “hacker” in you: not the troublemaking kind, but the kind who really drives innovation by trying new ways to get things done. If this is you, then you’ll find new inspiration (and valuable tools, too) in Google Hacks from O’Reilly’s new Hacks Series.

Google Hacks is a collection of industrial-strength, real-world, tested solutions to practical problems. The book offers a variety of interesting ways for power users to mine the enormous amount of information that Google has access to, and helps you have fun while doing it.

You’ll learn clever and powerful methods for using the advanced search interface and the new Google API, including how to build and modify scripts that can become custom business applications based on Google. Google Hacks contains 100 tips, tricks and scripts that you can use to become instantly more effective in your research. Each hack can be read in just a few minutes, but can save hours of searching for the right answers.

Written by experts for intelligent, advanced users, O’Reilly’s new Hacks Series have begun to reclaim the term “hacking” for the good guys. In recent years the term “hacker” has come to be associated with those nefarious black hats who break into other people’s computers to snoop, steal information, or disrupt Internet traffic. But the term originally had a much more benign meaning, and you’ll still hear it used this way whenever developers get together. The new Hacks Series is written in the spirit of true hackers – the people who drive innovation.

If you’re a Google power user, you’ll find the technical edge you’re looking for in Google Hacks.

Buy Google Hacks from Amazon.com now or Buy Google Hacks from Kalahari.net in South Africa

No discussion yet

Posted in the category: Insight

Personality gives power to the page

by Grant Shippey

If you think back about the times in your life that really stand out, the moments you remember are the extremes of funny and sad. You don’t remember the bland moments. Yet most Web sites tend to be bland, almost to the point of insignificance.

You’ve probably come across them a thousand times – the What-Was-That-All-About sites scattered around the web. And more often than not you leave a site like that wondering why it was built in the first place. Perhaps the target audience seemed unclear, or the content didn’t really appear to make sense.

Strategically, setting up a web site seems like a good place to start when you want to promote your brand on the Internet. The problem is, those who issue the directive to build a web site often fail to consider the nature of their business objectives, who they are targeting, and what their communication goals should be via the web. Basically, they forget what their brand is all about.

In today’s market, if you are to succeed online, brand consistency is critical. The most marginal inconsistency can result in a complete breakdown of brand trust. This is especially important at points of customer touch and through all manner of customer contact and communication, including – and especially – the Web.

Smart companies recognise this, and thus create a brand that is all about uniform, unmistakable recognition. But it’s not just about having a consistent brand image – it’s also about having a unique online brand personality.

People you like or admire are people you believe have unique personalities. You like them for their humour, their temperament, their actions, or even opinions – the qualities that show who they are. It’s these personality traits that make them distinct from others.

In this regard, brands are very much like people. They reflect opinions, have their individual and distinctive appearances, and express a unique point of view. Strong and confident brands have strong personalities, and this should always be reflected, because brands that are distinctive or consistently reflect the same values remain prominent in our minds.

One way to establish a unique brand personality is through humour, which makes up an especially important aspect of one’s personality, and adds another dimension to brands. If you are smart, you will recognize this – and use it to your advantage. Humour can be used effectively in attending to error messages, for example. If a visitor clicks on a broken link, offer a branded message and use humour to defuse the situation.

Like humour, you could also consider irony as a personality branding technique. Why not take good-natured shots at established values, you might be surprised at how much goodwill and respect can be engendered with a nudge and a wink? For example, I’ve heard that Virgin Airlines has its own way of telling customers the rules – it’s luggage-size stands explain in a friendly font, “The size of your bag has a limit . but the size of your ego can’t be too large!”

Just remember, as your brand grows, you will need to consider how you want to nurture your brand’s personality and make sure it retains its uniqueness.

Ultimately, building your brand on the web is about so much more than controlling colours, fonts, the design of your site, and the language of your press releases. Although creating – and sticking to – a consistent image is of grave importance, online brand building also encompasses everything that affects the emotional tie between your brand and your customers. The more emotional the ties attached to products, the stronger the brand loyalty you can generate.

After all, personal and emotional ties with your brand are the foundation of loyal relationships between you and your customers. And isn’t that what effective branding is all about?

Regular columnist Grant Shippey heads up Amorphous New Media, a digital communications group focused on the provision of new media services and traditional marketing. He can be contacted on Tel. (011) 380-6500

No discussion yet

Posted in the category: Strategy

Investment Strategy: More head, less heart

by Craig B Pheiffer

Behavioural finance is a field of study that combines elements of cognitive psychology and economics and aims to explain why investors behave the way they do in the markets. The decision-making processes of the individual are at the heart of the matter and behavioural finance recognises that individuals often do not behave rationally when investing in the markets and are slaves to emotions such as fear and greed.

These emotions, together with the actions that they generate, are often blamed for the poor investment results achieved by both individual investors and fund managers. This behavioural finance view of the investor is different from the traditional view of the investor as a rational and utility-maximising individual. A number of psychological biases or cognitive illusions that impact investor behaviour and cause investors to behave irrationally have been identified.

Brabazon (2000) classifies these illusions as stemming either from heuristic decision processes (rules of thumb) or from the adoption of mental frames (placing the decision in different contexts). Included in the first category of investor illusions are overconfidence, representativeness and the gambler’s fallacy, while the second category includes mental accounting, loss aversion and regret aversion.Over-confidence

Just as some individuals are over-confident in their knowledge or abilities, investors are often too confident in their own ability to select stocks and pick market highs and lows. If you had to put a group of investors into a room and asked them who would be able to outperform the average of the group over the next year, you would most likely find that most of the group would express the view that they were better than average. Just as some individuals are over-confident in their knowledge or abilities, investors are often too confident in their own ability to select stocks and pick market highs and lows. If you had to put a group of investors into a room and asked them who would be able to outperform the average of the group over the next year, you would most likely find that most of the group would express the view that they were better than average. Of course not everybody can be better than the average. Well-documented reasons for over-confidence include the “illusion of control”, biased expectations of the future (i.e. irrational expectations) and the “illusion of knowledge”. In the first case, investors believe that they have some influence over share prices, for example, if they are more closely placed to the action (such as trading online). In the latter case, investors believe that the more they know about a particular situation or investment opportunity then the more likely it is that their desired outcome will come to pass.

Frequently, over-confidence stems from incorrectly ascribing past investment success to one’s own ability rather than to other exogenous factors or an improvement in the market or sector as a whole. In other words, the investor may consider his 10% portfolio gain to be all his own making, but may ignore the fact that the overall market is up 20% for the same period. One of the downsides of over-confidence, and there are many, is that investors take fewer but bigger bets on their investments.
Frequently, over-confidence stems from incorrectly ascribing past investment success to one’s own ability rather than to other exogenous factors or an improvement in the market or sector as a whole. In other words, the investor may consider his 10% portfolio gain to be all his own making, but may ignore the fact that the overall market is up 20% for the same period. One of the downsides of over-confidence, and there are many, is that investors take fewer but bigger bets on their investments.Barber and Odean (2001) found in the investment stakes that men tended to be more over-confident than women. In their analysis of people’s trading patterns they found that the more people traded, the worse they did, on average. They also found that men traded more than women and hence fared worse than women investors. RepresentativenessInvestors under the illusion of representativeness base their investment decisions on perceived patterns in the market and often extrapolate past experience into the future. In so doing, they place far too much emphasis on the recent past. Ritter (2003) points out that this “law of small numbers” is one reason why, after a number of years of high equity returns (such as 1982-2000 in the US and Western Europe), investors start to believe that these returns are normal. This is also the reason why investors chase the market-darling stocks (remember Didata?) and ignore the recent poor performers.

Another representativeness illusion is that good companies make good investments and this is frequently not the case as the market has already priced the good company at a premium, limiting the upside price potential. It is very often the case that the struggling company with the poor results has the most potential to outperform.
Another representativeness illusion is that good companies make good investments and this is frequently not the case as the market has already priced the good company at a premium, limiting the upside price potential. It is very often the case that the struggling company with the poor results has the most potential to outperform.The gambler’s fallacy

The gambler’s fallacy relates to the erroneous belief that a trend must always reverse itself. A roulette punter, for example, who witnesses a string of red numbers and believes that the next number must be black, is under the illusion of the gambler’s fallacy.
The gambler’s fallacy relates to the erroneous belief that a trend must always reverse itself. A roulette punter, for example, who witnesses a string of red numbers and believes that the next number must be black, is under the illusion of the gambler’s fallacy.The gambler’s fallacy has two versions and this can best be illustrated by considering ten random flips of a coin that all turn out to be heads. The punter who thinks that the next flip of the coin has to be tails (i.e. the long run of heads just has to be broken), is suffering from one form of the illusion, while another punter who thinks that the trend is well established and the next flip will also be heads is suffering under the other version.

Both versions of the gambler’s fallacy are evident in the markets in that some investors who see a share price constantly rising expect the trend to reverse as a matter of course, while others will see no end to the share price extravaganza (no examples needed!). The result is that some investors never take profits when they should because they are always expecting more and end up losing out when the share price does turn. Conversely, some investors never find themselves in a winning share because they believe that they have “missed the boat” after a small price gain and keep waiting for that inevitable price reversal to get into the counter. When it doesn’t come they truly have “missed the boat”.
Both versions of the gambler’s fallacy are evident in the markets in that some investors who see a share price constantly rising expect the trend to reverse as a matter of course, while others will see no end to the share price extravaganza (no examples needed!). The result is that some investors never take profits when they should because they are always expecting more and end up losing out when the share price does turn. Conversely, some investors never find themselves in a winning share because they believe that they have “missed the boat” after a small price gain and keep waiting for that inevitable price reversal to get into the counter. When it doesn’t come they truly have “missed the boat”.Mental accounting

This is the tendency that investors have to pigeonhole their investments, or put them into separate categories (“mental accounts”) based on differing investment objectives, and then to not combine the overall result of all of the mental accounts.
This is the tendency that investors have to pigeonhole their investments, or put them into separate categories (“mental accounts”) based on differing investment objectives, and then to not combine the overall result of all of the mental accounts.Having a trading account and a longer-term retirement portfolio account is an example of mental accounting. The investor considers that losses on the trading account aren’t that bad because they don’t affect the retirement portfolio where in reality the investor’s overall wealth has decreased. In this instance, the investor is accounting for the two portfolios separately instead of considering his wealth in totality.

Another example of mental accounting is where an investor opens up a savings account and earns 8% p.a. but has an Access mortgage bond that costs 12% p.a. to finance. Mental accounting is also the reason why some investors take a different view of dividends versus capital gains (income requirements aside) instead of looking at the total return on their investments.
Another example of mental accounting is where an investor opens up a savings account and earns 8% p.a. but has an Access mortgage bond that costs 12% p.a. to finance. Mental accounting is also the reason why some investors take a different view of dividends versus capital gains (income requirements aside) instead of looking at the total return on their investments.Loss aversion

Brabazon (2000) explains loss aversion as being based on the idea that the mental penalty associated with a given loss is greater than the mental reward from a gain of the same size. This often means that investors play it safe when they are in a profit situation but are more willing to take chances to recoup losses from underwater positions.
Brabazon (2000) explains loss aversion as being based on the idea that the mental penalty associated with a given loss is greater than the mental reward from a gain of the same size. This often means that investors play it safe when they are in a profit situation but are more willing to take chances to recoup losses from underwater positions.Reference dependence is a behavioural finance bias exhibited by investors where, for example, an investor with a loss-making purchase is keen to sell the share only once it has regained its original purchase price (the reference point). Instead of considering the share on its merits and future profit potential, the investor is simply looking to get his money back and all other considerations become secondary. More astute investors forget the original purchase price of their shares and continuously value their holdings on current prospects. The pattern where investors avoid realising paper losses and seek to realise paper gains is what Ritter (2003) describes as the disposition effect.

Most investors who buy Anglo American at R140 per share, for example, and watch it fall to R130 per share are loathe to sell it until it gets back to R140. Ritter notes that the disposition effect manifests itself in investors realising a lot of small gains but few small losses, a behaviour that is akin to tax-maximisation!
Most investors who buy Anglo American at R140 per share, for example, and watch it fall to R130 per share are loathe to sell it until it gets back to R140. Ritter notes that the disposition effect manifests itself in investors realising a lot of small gains but few small losses, a behaviour that is akin to tax-maximisation!Regret aversion

This is a desire by investors to avoid feeling regret over any of their investment decisions. Investors could regret, for example, not having sold Dimension Data at R70 or not having bought it at R2. Sometimes investors even regret selling shares and making a profit when the prices of those shares continues going up after the sale.
This is a desire by investors to avoid feeling regret over any of their investment decisions. Investors could regret, for example, not having sold Dimension Data at R70 or not having bought it at R2. Sometimes investors even regret selling shares and making a profit when the prices of those shares continues going up after the sale.The problem with regret aversion is that it often encourages investor herding behaviour and, as Brabazon notes, investors are led to investing in “respected stocks” because they carry implicit insurance against regret. This may also explain why fund managers sell losing stocks so that they don’t have to answer difficult questions from their investors at reporting time.

Unfortunately it is very difficult to divorce one’s emotions from investment decision-making, especially when it is hard-earned, after-tax money that you’re putting into the market.
Unfortunately it is very difficult to divorce one’s emotions from investment decision-making, especially when it is hard-earned, after-tax money that you’re putting into the market.Avoiding some of the pitfalls and anxieties described above is much easier, however, if you do your homework on each company’s fundamentals before entering the market. Adequate diversification of your investment portfolio with similarly well-researched counters will help reduce the unsystematic risk of that portfolio and will help you sleep better at night. All that will remain is for you to wait for your good work to pay off. And don’t forget to take the profit!!

References:

Barber, B. and Odean, T. (2001). “Boys will be boys: Gender, overconfidence, and common stock investment”, Quarterly Journal of Economics 116, 261-292.
Brabazon T. (2000) “Behavioural Finance: A new sunrise or a false dawn?”, Proceedings, CoIL/EvoNet Summer School, University of Limerick, September 2000.
Ritter, J.R. (2003). “Behavioural Finance”, Pacific-Basin Finance Journal Vol. 11, No 4 (September 2003), 429-437.

Craig B Pheiffer is Chief Investment Strategist of Sasfin Frankel Pollak Securities. He can be contacted on (011) 883 2337 or by e-mail on cpheiffer@sasfin.com

No discussion yet

Posted in the category: Strategy

More Posts

About

The Big Change is a business strategy blog and newsletter published by Arthur Goldstuck, managing director of World Wide Worx, a leading technology research organisation based in Johannesburg, South Africa.

Read more ...