In 1994, the Japanese Dr. Masaru Emoto started to feel interested in taking pictures of the microscopic shapes of different kinds of water, once frozen. He detected with a huge amazement that the water crystals that formed after showing it positive words, play good music or praying to it, are much more beautiful than those formed when the same water is exposed to expletives and negative stimuli. It can be seen in his website.
Now, I propose you a less mysterious issue. Please think if you -as a consumer- spend more money during a working week or during a holidays one. Most of the people I’ve asked tell me that not only they spend more on vacation, but that even their price sensitivity during that period is lower.
The two previous examples are showing us something important: context matters a lot.
Context is a great variable in marketing. In the second example, if your company sells to people who are on vacation, not only will it increase your turnover, but also its Gross Margin can increase, because many customers -in a vacation tone- accept a slightly higher price. Therefore, context can also affect your P&L account.
Too “in vitro”
The usual way to approach marketing has been something like trying to understand the predictable behaviour of customers, as if they were “in vitro”.
The renowned method of marketing mix, or the “4 Ps”, is a paradigm of this approach. We have all used (and some of us have taught) it. It something like an equation: Put 4 drops of high-performance Product, plus 3 drops of Price-below-the-average, plus 2.5 drops of a creative Promotion, plus 3.25 drops of Commercialisation-Channels to capilarise the market; and then the result = Success.
This traditional approach has great advantages: it’s easy to understand, it provides self-assurance to those who initiate their careers, it facilitates having a budget, that can be adjusted without great effort the following year. Furthermore, it has been so spread that in all countries and sectors you can find people who understand this method.
However, this marketing and research model approach forgets that customers’ life happens in contexts that influence them, many times in a non-conscious way. You don’t go to the cinema as often before having a child than after the birth.
With this evidence, we have to face two challenges:
is context understandable?, is it manageable?
The “packaging” of life
First of all we need to understand what is the context. Let’s start with a couple of examples.
The famous architect Le Corbusier said: “Paris is a lab that tempts to experiment mysterious (architecture) instruments. Paris is a “packaging”, or what’s the same, a context.
According to Dr. Natalia Fernández Díaz, context is what wraps a message. But not only this, it’s also what wraps a process or an experience. For instance, a purchasing process.
A rather usual type of context is the combination of Time plus Space.
Tesco created in South Korea a renowned initiative in which people waiting for the metro can scan with their phones certain products reproduced on the walls, simulating a supermarket, so that they could purchase before getting on the train. This idea is successful because it takes place when people are bored on the platform waiting for the train. If those walls were on the walking aisles, barely anyone would buy. The “where” + the “when” make an action succeed or fail, without changing the assortment, the price, the aesthetics, customers’ money availability, etc.
Another good example. When the first iPad was launched, this tablet was very critisised because it didn’t have a lot of the features computers had as a default. Its success was based on understanding the context of the users. When someone is working for some hours with a desktop computer or laptop, the most appropriate is having a table and a chair to seat in an ergonomically correct way. On the contrary, when someone is seating on the sofa, a tablet is the most adequate to that context, even if it didn’t have as many features as the common computers. The body position shows a different context.
Image by artchandising
It’s called “relevance” when the message, brand or experience proposed by the company fits the context or contexts of the customers.
The relevance is equivalent to context management.
Regarding the computer and the iPad the relevance of the product is related to the postural context (table and chair in the office versus sofa at home) allow to predict the success of a product, regardless of its characteristics or features.
Main types of contexts
The model of contexts proposed here is based on Urie Bronfenbrenner’s Ecological framework for human development (Bronfenbrenner, 1994), that has been adapted to the approach we will use here.
(Clic image to enlarge)
The diagram above shows the contexts that might affect customers’ decisions. With it, we can identify those elements of our customers’ contexts that can be helpful to understand them and then devise an adequate solution.
In this model we can distinguish for levels of analysis:
At the centre we find the individual, with the personal characteristics that define him/her, such as age, gender, personality, intellectual oefficient or experiences. Most of these elements won’t be very useful if we want to orient our solution to a wide population segment. However, other elements such as age or gender, in some cases may help us understand our customers.
In a second level of analysis, we find all the elements that we can control as a business, that affect the decision making of the customer in the moment of purchase or later usage of our solution. Semiotics and the other stimuli we generate are part of this level: for example, the lighting in a store, the product layout, its framing, the packaging aesthetics, the functionality of the product when the customer uses it, or the sensations raised by the design of a store or website/app. Generating certain stimuli creates contexts that affect the decisions customers make.
In a third level we can find those contexts that are external to the person, that we don’t have control over, like:
- The macrosystem, in which we find the family or the peer group. For example, regarding the sale products for companies, this would be the corporate culture of these customers.
- The exosystem, in which we find local politics, networks, mass media or, in b2b, the patterns of the sector we belong to.
- The macosystem, which includes the beliefs system, the general available resources, the customs or the influence of the hyper-connected society.
This third level, even we have no influence on it, gives us the necessary information to understand customers better.
From picture to film
One of the biggest mistakes a lot of us have made (mea culpa) is seeing marketing or brand strategy as a static picture, instead of seeing it as a film, scene by scene. And here it’s when the fourth level of analysis comes into play, the chronosystem, that introduces the variable time in the understanding of the contexts that affect the customer.
The chronosystem has two sides. On the one hand, it refers to the changes through time of the context a person is immersed in, such as the changes in the family stage, in the economic status, or the place of residence, for example.
On the other hand, at a more micro level, the chronosystem includes two moments of great interest as an inspiration to devise a brand or a customer experience:
- The previous moment the customer has just lived
- The subsequent moment the customer visualises he/she will experiment
The customer doesn’t feel the same, or pays the same conscious attention in his/her first purchase from our company as when has become a regular customer. The elements of the “marketing mix” could be the same, but the customer’s own “dynamic context”, makes him/her perceive our brand in a different way.
With the permission of the supermarket chains, I’ll give you a tip to spend less when going shopping: go after having lunch, meaning not hungry.
Again, the “retail marketing mix” of the store is the same, but the different context of the customer leads to a lower purchase.
All this leads us to a dynamic vision of the contexts. What the customer has felt and will feel can inspire us to devise the “present scene”. For example, the moment of the purchase decision.
Feeling the empathy with the customer and looking for the relevance scene by scene we can create a memorable story in a customer process.
Abstract yes. Practical, a lot
Dr. Ralf Ebert, Marketing Director at Bayer Veterinary, said during a speech at Esade: “positioning can be expressed as a product in a context. Context gives meaning to that product”.
For example, a fork is for eating, -specially in western countries-. But this fork in Vevey (Switzerland) is a work of art.
On the same direction, Dr. Neale Martin says that context is more important than any other variable.
The variable Context has various applications, such as:
- Understanding a type of customers, detecting insights than can be activated lately.
- Devising new products and solutions that fit those contexts and that therefore are liked by the customers.
- Designing customer experiences, for example purchasing processes, omnichannel processes, post-sale attention processes, etc.
- Communicating in a relevant way, and such having more probabilities that the message doesn’t get lost.
Many contexts can be managed
Many times contexts can be managed, specially those at the second level of analysis, the controllable stimuli.
This management can be reactively (we react appropriately to a challenge or complain) or proactively, meaning taking the initiative. Both can be adequate. We can see it in some examples:
(Clic image to enlarge)
If we are aware of the contexts we can reinterpret many functional tools from a higher customer centricity.
For example, omnichannel, this important global trend, can be understood as the relevance -or the adjustment- of the selling company to the customers’ contexts.
The omni-context is a fundamental base of the omnichannel, because the same customer can be in different contexts during a period of time: when being in a hurry, when being relaxed, when being alone, etc.
Great managers are able to understand well the contexts of the customers, interpreting their life and social evolution, and then acting consequently shaping a “next practice”.
About Dr. Masaru Emoto
Bronfenbrenner, U. (1994). Ecological models of human development. International Encyclopedia of Education, Vol. 3. Oxford: Elsevier.
Image source: JM Martinez
On 9 September 2015 Tim Cook, Apple CEO, announced that their US clients will be able to change their model of iPhone every year, through a kind of leasing, paying $32 a month.
Image source: Apple web site
From the customers point of view, this option is really interesting. It means being able to enjoy the frequent change of cell phone, as it happens with clothes or shoes, forgetting about the problem of facing a considerable expense that may break this month personal budget.
Nowadays, life is lived differently. A few years ago, I used to buy many songs in iTunes, but now I don’t want to own them. I just want to listen to the ones I desire when I want to, via Spotify Premium.
From the Apple perspective, an initiative like this one is relevant:
It reinforces the idea that a smartphone is a product with fashion inside. So the number of transactions will increase significantly.
The customers loyalty would be practically total, and sustained over time.
It is a coherent practice with the business model of the majority of companies: “ to grow customers”, because its makes their economic value increase. The majority of firms don’t get profitable from “one shot deals”, but from customers loyalty.
To check it’s feasibility, you can use one of the best metrics: the Customer Lifetime Value. Sometimes, a lower gross margin is compensated with a higher amount of transactions, leading to a higher economic value of each customer. It’s easy to check if this is your case.
Another long-term proposal just appeared: Alain Afflelou Óptico (a French optician chain) launched an unusual initiative called “Win-Win”: they offer they clients a lifetime warranty of two glasses -two frames plus 4 graduated lenses- and the possibility of changing the lenses for free when the graduation changes, by paying € 10,90 monthly (€ 11,90 in France), for 24 months.
Image source: My current glasses
In 1991 I proposed to a client company, an optician chain, something similar, like a “glasses leasing”, to promote a more frequent change. The idea was dismissed as it was thought to be economically unfeasible.
The real marketing seeks a sustained customers loyalty -without getting them bored-, more than trying to survive from continuous short-term sales promotions.
The paradox is that the business model of most of the companies is based on their customers loyalty, and instead, many of the new technologies (for example, some based on the “Internet of Things”) are oriented to a promotional “e-push”. For example, I send you an e-voucher now that you are in front of my store.
Marketing is about “to share our lives”, instead of practicing “sporadic sex in some crazy summer nights”.
Other considerations apart, the first approach also makes the shareholders happy.
Lluís Martínez-Ribes, 2015