Why should you tell part of the story?

Early 2016, I had an opportunity to introduce web analytics to a group of business executives in the company. I just took my new role as digitisation evangelist and was eager to build up my credits. The meeting room was filled with suited up Korean managers in their late 50s. Everything was still, without a single sound, move, or even facial expression. I smiled mildly, desperate to break the ice. While the lack of feedback only made the situation more awkward.

Despite the embarrassing atmosphere, I was well prepared. I started with a humorous story featuring the challenge of digital marketers, followed by a brief introduction about web analytics. Then I explained in detail different problems that web analytics can solve, accompanied by report samples which I’ve collected from the real data. After comparing different techniques and tools, I completed the presentation with an adoption plan and monthly roadmap. The presentation which took me one month to prepare was, to my standard, perfect. But guess what?

The room was silent, but not in a good way. All the managers stared at me as if I was some alien monkey, and finally one said “So we can know how many customers click on those banners, right?”. I took twenty minutes to explained that although we can do that, the purpose of the web analytics is much more than tracking banners. Then the room fell into complete silence again. It was such a traumatising moment, but what happened later was even worse.

Months passed since my presentation. In every meeting that I assisted, I was still introduced as “The girl who tracks banner ads”, despite my endless effort correcting everyone that web analytics is not banner tracking. The concept -“banner tracking” unintentionally invited by this person was so strong that it defeated my one hour presentation with detailed explanation and rich demos. Why?

Because people want simplicity before they commit to complexity. For a business manager, who is new to web analytics, he doesn’t want to know a list of problems that can be solved, he doesn’t care how the reports look like, and he certainly doesn’t mind which tool to choose. What he needs is a single answer telling web analytics is. Unfortunately, I focused on providing a complicated answer that is true, instead of a simple answer that is useful. The poor audience who got completely lost caught the last straw – a misinterpreted concept proposed during the Q&A session.

As engineers, we have a tendency to make things complicated. Because when we see one part, we see the system. Especially we can imagine how this single part functions, or more frequently breaks down and crashes the whole system into pieces. We feel urges to warn people about the risks, to show them every possible way that a part can go wrong. Without realising it, we get carried away by this self-indulgent imagination, make people confuse, or worse, stagnate the execution.

It’s good that you can see the whole picture, but sometimes it’s better to keep the whole picture for yourself and only tell part of the story. Whenever you want to add more to an idea, think first.

Is it really relevant to what you want to do now?

What will happen if we tell this story another time?

Are people ready to listen to and understand it?

Does the information add enough value comparing to the harm that it will do to people’s comprehension of the idea, or people’s commitment to the execution?

July 12, 2016

Lessons learnt from our first business: stay open to serendipity

My husband and I have been working on a side project recently. At first we wanted to generate some revenue so we could afford the Leica camera which he had been longing for years. Then one thing led to another, and we decided to put his engineering knowledge and my internet skill into use so we could create a small personal business. The preparation for our first product was both daunting and hilarious, and it taught us so much more than we had expected.

Stay open to serendipity

One thing that I’ve learnt from life in cooperations is that we hate unplanned event: it interrupts the agenda, it excesses the budget, it messes up the annual plan and it stresses everyone up. To avoid accidents, we plan daily, weekly, monthly and annually to make sure that things will follow a designed path and nothing is out of control.

While this have its positive aspect in organisations, in personal life, tendency to plan for everything beforehand prevents serendipity coming to us. We might stay in our comfort zone, keep doing the same thing that we are good at, follow a life path that we or our families have planned for us. The several times that I loosed my guard and let uncertainties happen to my life always brought me good surprises.

My husband and I are both engineers, we are good at many things, but one thing that we both aren’t good at is dealing with money, which we thought is the expertise of financial guys. Since we decided to earn money instead of save money for the Leica camera, we suddenly became more creative about doing things. We attended courses about business; we started to do investment; we learned selling skills that we never thought would be useful for engineers. One small step led to another, and we started to try out business ideas. Our original goal, the Leica camera, was not that important comparing to the new hobbies that we both found on the way.

If we never decided that it was OK to try things that we were unfamiliar with, we would have been putting aside a small amount of money each month. We might have already bought the camera by now, but we would miss all the fun about learning new things and challenging ourselves.

Stop worry about “what ifs” , and focus on “what is”

One reason that serendipities won’t come to our lives is that we’ve killed them in our minds. When we have an idea and won’t do something on the spot, then our logical sense gets in the way bringing all kinds of doubts, eventually we decide that the idea is stupid. More than often, we spend too much time worrying about things that will never happen that we don’t have enough energy to deal with matters before our eyes. I’ve learnt this from my own experience.

Before my husband and I started to work on our first product, we spent almost 6 months doing(worrying) the(for) research(nothing):

What if we chose the wrong topic?

What if we don’t have enough engineering knowledge and people find the course too easy?

What if people hate the course and start sharing bad comments about our course?

What if people steal our content and share it on the internet?

What if we price it too expensive and nobody will buy?

What if we price it too cheap and people would associate it with poor quality?

What if the system broke and we can’t provide constant service?

What if nobody buys and it will traumatise us so much that we will never try it again?

…

We wanted to make sure that we have solutions for all these potential dangers before getting our hands dirty. To answer these questions, we were reading books, running surveys, talking to friends. The truth is as we answered some questions, there were more coming out. The more we understand about this topic, the more risks we can foresee, and the less courage we have to take any action.

Finally we were tired of the endless research and decided to start doing something even though we were not fully prepared. As we started to take the action, things were lots easier. We met many problems and we are still dealing with some, but none of them was in the prepared list. By stop guessing and worrying about the future, we were able to concentrate on solving problems that actually happened. The six months spent on “what ifs” were not that worthy after all.

You can spend months preparing for “what ifs” but if you don’t start deal with “what is”, all these “what ifs” will never have a chance to happen. On the contrary, if you focus on dealing with “What is”, you will learn to be creative and improvise. Life is not that short, we always have some chances to try.

July 8, 2016

Why we need mental models in life

I was reading the book Doing Data Science this morning. There was a small section about probability distribution where I came across the picture in the banner. The purpose of the picture, the author wrote “to remind that they only have names because someone observed them enough times to think they deserved names.” Then she briefly explained how people observed data generated from natural processes, noticed the recurring patterns and built mathematical model to represent the data.

My article had nothing to do with data science or statistics. What I wanted to say was the author reminded me something that I never thought about models. Models are not golden laws that come out of thin air. They are there because of our attempts to understand the nature of reality. They act as lens of visions and skeletons of thinkings. Without models we can’t connect the dots in the chaos.

Learning the models is important when you start to study a new field

Before I started my digital marketing career in 2012, I was a product manager. The sudden change was a strike to me. Things that I had learnt about building product didn’t help me to sell the products. I felt disoriented and were easily carried away by the chaos of online information. I literally read a blogpost of top 50 online marketing tactics and tried out them one by one: SEO, PPC, social network, viral video, user community, newsletter, etc. Months passed, but nothing happened, except that I was mentally and physically drained out by all the activities.

A few more months passed, I started to get good at some tactics, but I still didn’t know why I was doing them, especially I couldn’t connect them together to achieve my goal. This condition didn’t get any better until one day I came across this picture: the marketing funnel model, and suddenly everything became clear. I realised how I could align my activities with different stages of the model, and what I could do to make the funnel wider. Later I learnt that there were many digital marketing models out there and the funnel model had its limitation. But the way that this simple model helped me demonstrated the importance of having a model. No model is absolutely right. A model, even though it’s limited, can help us to see patterns in chaos, and when we see patterns, we know where to put the effort.

Companies can also use models to help people align their visions and make decisions

A company’s value statement pays this role. A successful value statement should be able to help employees make decisions, and help clients understand why certain decisions were made. I used to work in a company, whose value was “Simple and reliable”, which I found very practical in guiding my everyday work. Because it told us that the company cherishes simplicity against complexity, and encourages us to trust each other. We worked on making the product, the process and the relationship simple and reliable. It did a great job to help us cut abundant features and useless meetings.

I took this easiness for granted until I joined another company, whose value was “Happiness, sharing and rewarding”. I could say without hesitation the statement is right, but I didn’t know what I could do with it. I could’t get things done by saying “that makes me happy”, or decided to cancel a campaign by saying “that’s against sharing”. The value statement was great but completely useless to guide everyday work.

I’m not judging the right or wrong of these values . I meant a successful value statement should work as a model: telling how things work in the company so people can align visions and make decisions more easily.

Another thing to remember is that a model is just one way to interpret facts, a facade of the reality

You need to have lots of them from multiple disciplines to understand the world better. As Charlie Munger’s warning about having only one or two models: the nature of human psychology is such that you’ll torture reality so that it fits your model, or at least you’ll think it does. To the man with only a hammer, every problem looks like a nail.

This happens all the time to me, usually when I meet a new theory from a book. After reading Lean Start Up, I found the idea of MVP is genius. I started to spot MVPs everywhere, and many things that I could test on. I tested the lean way on lots of things: marketing, analysis, relationships, even cooking. The enthusiasm went out control until I realised the MVP model has its limitation and it isn’t always applicable to the other fields. Although testing the boundary of a model has its positive aspect, it can be dangerous if you don’t know many other models, in which case you are just holding a hammer and looking for nails.

No model is absolutely right. Each model can be genius solution in certain context, but completely useless in another context. To make models useful you need to know them well and practice using them a lot. My advice? Have a curious heart. Learn different models from multiple disciplines. Practice them and test their boundaries. Keep an open mind and accept that odds can happen.

July 6, 2016

Criteria that help you to choose the right web analytics tool without headache

There are endless debates on choosing the right tool for web analytics. Some argue that a free Google Analytics account is more than capable of taking care of the daily jobs, while others are worried about its accuracy and the privacy issues.

I definitely don’t want to add more fuels to these debates. Both sides have their reasons, but tools should be chosen based on your own business purpose and situation: What do you want to measure? What data quality do you need? How much do you want to pay for it? What compromise can you make? Nobody can tell you what is best for your business. You have to do the research.

But I want to share my experience of searching for analytics tools, which was a pure torture to my mind. The first time I type “web analytical tool” into Google, I got a list of results: “30 best web analytics tools”, “top 50 tools to monitor your online business”, “10 analytics tools that you must have”. After enthusiastically going through some top lists, I only got more and more confused. Although each tool has some cool and “unique” features, I still didn’t know which one to choose, but I was pretty sure that I didn’t want 10 tools on my website.

After the initial hype, I understood this blind surfing was leading me nowhere. I needed some decision criteria that can eliminate the candidates. Here I share some of them:

Javascript tag based or Web log based?

It’s another sensitive topic, to which people have many different opinions. I will just make a short summary here, you can find lots of details with Google.

Web log method get data directly from your web server’s log file. The log file contains a huge quantity of data of not only users visits and clicks, but also technical data which you don’t need. To make this raw data meaningful, you need a web engineer to clean up and pre-process the data for you. It’s effort taking, but the advantage is it can capture some information that javascript method can’t, such as search engine spider behaviour. You can find a few commercial and open-source systems for web log analysis, but you definitely need help from professional developers.

Javascript method get data from a short javascript snippet that you’ve inserted on each page of your website. It captures page views as well as actions such as clicking, downloading and scrolling. Installing the tracking code is very easy, which takes no more than 30 minutes . Most tools in the market use this method. It has some shortcomings, such as no spider or bot data is captured and it can’t capture data when javascript or cookie is not supported.

For short, Javascript based method is suitable for most of the cases, unless you have very specific need. Unfortunately this criterion didn’t help me eliminate many options out there since most tools are using javascript. I was ressured that there was no huge difference in the tracking technologies between different tools though.

Aggregated data or Individual data?

Aggregated / individual data type is one of the most important criteria, because it separates analytics tools into two large categories, and one cannot fulfil the purpose of another.

Aggregated data measures overall health and trend of your web visitors. It answers questions such as the traffic of the website, the popularity of the content, conversion rate and funnels, campaign efficiency, comparison of A/B test, etc.

Individual data tracks the behaviour of each individual user. There is usually individual page for each visitor. On the page you can find demographical information collected from web forms and all his interactions with your website presented in a chronological manner. Some tools provide filtering function that help you to retrieve visitors who fit certain conditions. Some tools even let you send emails and push messages to visitors.

To summarise, with aggregated data you know 30% of visitors watched your marketing video yesterday, and half of them were converted. You concluded it was a satisfactory campaign. With individual data, you know Jake watched the video but was not converted. You decided to send him a follow up email.

As I said, one tool rarely does well the two jobs. Google Analytics, for example, does great job collecting aggregated data, but it’s strictly forbidden to send personally identifiable information there. There are hacks that you can do to bypass this problem and identify users, but its capacity will be much more limited than any dedicated tool such as Kissmetrics. On the other hand, individual tracking tools provide some basic functions to aggregate the data and draw charts too. But the ways to analyse the data are much more limited.

Pageview or Event?

Pageview tracking tracks the loading of a webpage. The information you can get include the action of page visit, the previous page, the time that you spend on a page, cookie information.

Event tracking tracks user’s on-page actions such as clicking on a button, adding a item to shopping cart, filling a web form, interacting with embedded multimedia and downloading documents.

Traditional tools track pageviews, but event tracking is gaining its popularity. First people wanted to track outbound links and documents downloads. Then web applications became popular. Some applications use technologies such as Ajax, with which users can do everything without reloading the page. Some people even started to doubt about the necessity to track each pageview.

Although most tools support some level of event tracking now, the setup convenience and trackable event types are very different. The same thing as tracking individuals, tracking event with Google Analytics is possible, but it can be tricky and troublesome if you have high demand for event tracking. Choosing a dedicated alternative is more suitable.

Developer oriented or Marketer oriented?

If you are a marketer and your development team is always busy, then this is an important criterion to consider. After all, the best tool is still a tool, without being correctly implemented, it can do nothing.

Developer oriented tools need lots of effort from web developers. Mix panel is a great tool for event tracking, but you need to decide in advance everything that you want to track and implement them one by one together with your developer. It’s a piece of cake if you work in a small company or your organisation already breath the data-driven culture. In case you work in a larger organisation in which the communication is less fluent, you’d expect difficulties to merely set up the tool.

Marketer oriented tools make the setup process much easier. The typical setup is one single tracking code which captures everything. The tradeoff is that the returned data is much messier. Marketers need more time to clean up the data and decide which report to look at.

Free or Paid?

The price of web analytics tools can be very different. There is the free one: Google Analytics, a large selection of tools at reasonable prices (50$~100$/month), and more expensive ones(>2000$/month).

Paid tools do have their advantages in aspects of data security, data volume, user-friendliness and special features. Don’t hesitate to pay if the tool suits exactly the need of your business. You’ll be paid back but the huge amount of time that you can save, and people’s willingness to use the tool. But don’t pay for a tool if you think the expensive one will surely be better.

Your Specific Needs

Although I’ve covered lots of criteria above, the most important one is not mentioned: your specific needs. More web analytics packages are specialised to deal with your dedicated problems:

If you have a commercial website, then you need to track how people purchase different products, then you need a tool that can track user’s interaction with shopping cart.

If you have a subscription based business, then you are more interested in users’ long term engagement with your product. Cohort analysis and churning behaviour are something necessary to measure.

If you conduct web analytics for usability design, then you might need a tool of eye tracking, heat map, A/B test technologies.

If you want to integrate the web analytics data with other business systems such as CRM, marketing automation and ERP. You need a analytics tool that provide stronger API capabilities.

That’s it. Here are the criteria that you can use to select a web analytics tool to suit your business. But don’t waste too much time doing it; power is the analysis not the tool.

July 5, 2016

The true value of web analytics to digital marketers

In the management world, there is an old adage “If you can’t measure it, you can’t improve it.” For digital marketers a slight switch to this might be more accurate “If you can’t measure it, you won’t get budget for it.”

Since I started my career in digital marketing, I constantly heard marketing fellows complaining about how frustrating it is to get upper managers to support online marketing efforts.

“I don’t think it’s necessary to hire a consultant for ‘social strategy’, won’t an intern do the Facebook job?”

“I understand the website is really important, but let’s focus on contacting clients directly for the moment; the inbound thing might come later.”

All these doubts attribute to one single question “How does digital marketing contribute to the business bottom line?” If you can’t answer this question in a few sentences with quantitative proofs, I’m sure you’d have a hard time getting the budget.

Web analytics is used, or sometimes misused, by online marketers to defend their marketing endeavours. With all the tables, colourful charts and fancy terms, the marketing report instantly looks ten times more convincing. To my great regret, that’s how the first time I get my marketing budget and recruit a few allies on my side.

Evaluating results of digital marketing is one of the important things that web analytics can do for you. But the true value of web analytics is not explaining the past, but guiding the future decisions. Any small thing changed, wether it’s related to marketing, custom services, usability or sales procedure, will lead to some reactions in customer’s online behaviour: visits, new visitors, time spent, bounce, conversion, etc. These small changes accumulate and contribute to bigger change in business results.

Leaving these metrics unchecked, you might still get the final result. But you will never understand what are the factors behind it, and how to make the same miracle again.

By paying close attention to these metrics, we can break down the bigger result into smaller actions; understand how each action moves the metrics up and down.

Let’s suppose your new campaign was a big success. Without web analytics, you might still see more deals were made, but it would be difficult to understand the reason:

Did we get larger audience in the potential market?

Did we improve the conversion rate?

Were the copies or the price make the clients clicked?

Which channel brought us the most effective audience?

Can we improve something to make the results better?

With web analytics, you can measure separately where people came, what they did, how long they stayed and when they left. It would be possible to deduce the recipe of your success.

The true value of web analytics lies on how it helps us to understand better our decisions and make the success replicable.

July 4, 2016

A life lesson that an art student taught me today

Today I was invited by my sister-in-law to a graduation exhibition of her design school at Lille. It was a simple setup: each graduate took an empty class, and introduced his or her project to the visitors.

To my great surprise, the exhibited projects were not, by common standard, good art works. They were intriguing, but not technically good. I mean my sister-in-law is on her second year of the school, and I’ve seen how she showed great drawing techniques and art sense. I couldn’t understand why, with three extra years of study, the graduates would do such a lousy job.

This question haunted my mind during the whole exhibition, but I didn’t bring it out, until I saw this project. The project, comparing to others which were intriguing or at least interestingly weird, seemed extraordinarily banal. There were a dozen of Facebook type selfies on the wall, with the number of “likes” and a list of hashtags written at the bottoms. Below each photo there is a small black box containing a smaller photo of this person’s normal day. The idea was not bad but not very special either, especially there seemed very little work done considering the 6 months time. “That’s convenient” I couldn’t bear this anymore and complained with a low voice. The student looked at me with an embarrassed smile and explained that his idea was to illustrate the contrast between what people show on Facebook and who they really are. Then he told how stressful and anxious he felt when he put his selfies out there and wait for strangers to “like”, how he intentionally posed himself similar to people who he thought to be narcissistic and feminine, and how he chose those stupid hashtags to get his selfies wider spread.

At the end of the exhibition, I met a teacher of the school and he expressed his astonishment that this student had chosen such a project, because the student was technically talented but had an extremely introverted character.

Suddenly I got the answer to my question. Instead of doing something easy to them such as drawing aesthetically appealing pictures, the students had chosen the difficult thing to do, even though the difficult thing for them was as easy as posting a selfie on Facebook.

It takes great courage for us to confront and overcome our fears. It takes even more courage to make the decision in the first place: abandoning what we are good at and giving the future to the unknown.

I felt so sorry for my ignorance. Today an art student taught me a very important lesson about living a wholehearted life. Daring greatly, experiencing the process rather than focusing on the result.

July 1, 2016

A reflection on democratisation of expertise, collective wisdom and problem solving

Yesterday I was helping a friend to set up an online teaching system with WordPress. Just as each time I used WordPress, at first, I was amazed by how I could set up almost anything without touching a single line of code. After the earlier sweet moment of setting up the skeleton, the bitter part came – the system and plugins never work in the exact way that you want. There were tons of hacks to do and even more ways of doing it. Guides and tricks that I could find on the internet were countless. But the real difficulty was I didn’t know what problem I had and which solution would work for my situation. After a long day tweaking the system, I finally achieved a suboptimal work. With a disgruntled heart, I swore, as I did the last time and the time before the last time, that I would never ever use WordPress again.

It’s amazing how the internet has inflated people’s abilities and blurred the boundary between experts and common people. Secret recipes used to be reserved for chefs or grandmas. Home appliance repair used to be reserved for mechanical technicians. Trip planning used to be reserved for travel agencies. Selling used to be reserved for merchants. Accountancy used to be reserved for accountants. Website development used to be reserved for developers.

But today, with the help of the internet, we can somehow take over part of these jobs by ourselves. We don’t even need to keep the knowledge in our own head. As long as the knowledge is somewhere on the internet, we can always retrieve it anytime with a search engine.

The third type of people emerges – amateurs. Amateurs are self-taught “expert” on a specific subject. They often can’t completely understand or handle the subject from zero. But they can somehow produce a suboptimal solution by hacks and tweaks, as I did for my friend’s website. You find more and more self-taught designers, developers, marketers, accountant, nutritionist, stylist, travel adviser, body trainer, copywriter, etc.

Many application products target amateurs too. WordPress, for example, helps amateur bloggers and webmasters to build up a website by themselves. Email service such as Mailchimp helps you to build up you own campaigns without a whole marketing force. Web analytic systems such as Google Analytics helps you to understand your web visitors’ behaviour without an expert analyst. Accounting applications such as Freshbooks helps to manage financial resources of a small business without a professional accountant.

These products usually provide a quick fix to the target problem, but it never works in the exact way that you want. They also tend to become over complex to comply with users in different situations. To tune the product to fit your specific situation, you’d spent days tweaking the product. User communities, open forums, and blogs are made for amateurs to share the experience and help out each other.

Although there is rich information out there. Everyone who has tried to tune a system will agree with me that finding your solution in there is almost impossible.

First, the information out there is pure chaos

By nature, user generated information is heterogeneous. Authors have different levels of knowledge and writing abilities. You never know to whom you should trust.

The information is highly fragmented. It usually starts with a question from a user in the forum. Then the question is discussed among several users. With a little luck, the problem is solved. Most of the time the discussion finishes with no solution. Sometimes the thread is linked to another discussion in another forum. And sometimes the discussion is interrupted by another asker and get completely off the subject.

The information is without context. We are good at describing the problem itself, but we rarely give enough attention to its context. Partly because we are lazy, and partly because we don’t know which context is relevant. Take WordPress for example, if a plugin doesn’t work out, the reason might lie in configurations of WordPress system, default settings of your host, compatibility problems with the theme or other plugins that you have installed, etc. But as we don’t know what our problem is, or what potential problems there could be, all we can ask is “This plugin doesn’t work for me”. Solutions to questions without context are rarely helpful for another person.

The information lacks feedback. People have little commitment to forum discussions. They may ask a question and never come back for the solution; they may find the advice helpful but never mind to express their gratitude; they may figure out the solution by themselves but forget to share it with the community.

Second, amateurs don’t always understand where the problem is

Unlike experts, amateurs, without a ground understanding of how the system works, usually can’t identify the problem by themselves. When they search for information online, they are actually searching for potential problems and solutions at the same time.

The information chaos doesn’t do them any favor. They’d browse through a large quantity of information, take the time to try and rule out different possibilities.

Third, search engines aren’t the best tool to do the job

Solving problem is not about relevance. It’s about helping users to understand their situations and make a choice. Search engines do a great job retrieving relevant articles based on user queries. But in a situation that people don’t understand what the problem is and can’t make up an effective query, search engines are just retrieving all the possibilities in pure mess.

Linear structure is not an efficient way to solve ambiguous problems either. Search results are mostly organised in a linear order, with the most “relevant” result on the top. Again, when the problem is not clearly defined and hundreds of results out there are just in pure mess. Going through one result to another down the list is the least effective way to find the solution. It’s frustrating to read a long article only to discover it is talking about a situation which I’ve ruled out earlier. A tree structure or case-based result page, which provide a certain way to group results into clusters and rule out irrelevant results in mass, might be more helpful.

With the democratisation of expertise, people will rely more on the collective wisdom for problem-solving. There is definitely some progress to do about how we share and make use of the collective knowledge in online communities. Systems are needed to help people process and represent the huge amount information in a more interpretable way.

June 28, 2016

Marketing lessons that I’ve learnt in Korea

Experience in a foreign country will always leave something to us, whether we like it or not. It gives us another way to look at, think about and do things.

Since I’m leaving South Korea, it’s a good time to reflect on things that I’ve experienced and learnt here.

In the first article, I want to talk about some marketing techniques that Korean companies do extremely well, that we can consider in our own business.

Lesson 1: Appearance is important

At childhood, We got lectured by parents that the inner beauty is more important than outside appearance. At school, we were told the function of a product should be emphasised over its form.

But in Korea, things are ironically different. Everything is judged by its appearance – whether it’s people, fashion, product or food. The look plays an extremely important role for someone or something to be accepted.

Packages for cosmetic products

I was quite annoyed by this appearance obsession at first. Slowly I started to see the value in this culture, especially the vital energy it brings to the market.

The appearance of your product gives you unfair advantages in competitions. You might argue that the function and quality are more important, but in many cases, the functionality of a product is very difficult to quantify:
– all the products have acceptable quality but have slightly different functions. ex: cosmetics
– the function of a product is too complicated for a single customer to understand. ex: CRM system

In these cases, customers cannot rely on pure quality comparison to decide. They have to consider more illusory aspects of the product, such as branding, experience, trustfulness. For any of these aspects, the appearance plays a vital role. Design of the package, quality of the catalog, posters, flyers, looks of your website influence how customers would perceive the value of your product, attribute your brand to high-end or lower-end of the market.

Lesson 2: Sell a dream, not a product

Korean drama suddenly stormed the international entertainment market in few years. One of the reasons that people like it is Korean drama is very dream-like. Handsome young man and kind-hearted young lady overcome all the obstacles and emotional moments to come to the happy ending. Everything – settings, lights, fashions and flawless makeups, contributes to the dream.

After I came to Korea, I discovered that the Korean’s dream-making ability is not limited to its dramas.

Entering a cosmetic shop, you instantly feel that you are in the center of beauty palace. It only makes sense to care for beauty. All the colorful boxes and shining bottles call for your attention.

A cosmetic store featured with pink decoration in South Korea

During weekends, some downtown areas are transformed to paradise for young couples. Hundreds of small coffee shops and western restaurants feature the theme of romance. You’d feel forbade to go there alone.

Korean beef created its image of prestige through great marketing campaigns in grocery stores, restaurants, and TV programs about how local foods are fresh, nutritious and healthy. It only makes sense to feel Korean beef taste better than imported ones.

A typical promotional poster about Korean beef made by Korean beef association

Sell a dream, not a product. By selling a product, you are selling functionalities. by selling a dream, perceived value of your product is beyond the imagination. People are not buying a bottle of lotion, they are buying the expectation of beauty. Young couples don’t go to restaurant for food, they go there for creating a memory.

June 27, 2016

Why should you take discount seriously… and what to consider?

Piled up requests in the mailbox reminded me that it’s the end of the fiscal year. Every marketer in the team knows what this means: sleepless nights to prepare for special promotions.

The promotional leaflet always looks fresh, carefully designed following the latest color trend and layout pattern. It will then go through several feedback sessions to change fonts, shades and copies. However, the red percentage number, discount price, seems to be neglected by everyone. “Shouldn’t it be 30% as usual?” Here we send out the year-end promotion, with every detail polished, expect for the discount price, which was decided within 20 seconds based on the “as usual” norm.

The upper part describes how NOT to design the promotional leaflet. You might laugh, but it will astonish you how often promotions are carried out in this manner.

Price is the most powerful and neglected weapon of marketers. We use it every day but rarely give it enough thought that it deserves. Discussing price is difficult. Everyone has some sense of design aesthetics. Most marketers can generate ideas to drive sales volume. A great part of us has the intuition to reduce cost and increase efficiency. However, very little can say what will happen if the price is increased even by 2%.

Although it’s difficult, the discount price by no means should be taken lightly. Done wrong, it can dangerously sabotage your business. To decide the discount price, we need to consider the following 4 questions.

1. Is your product sensitive to discount?

In other words, if you reduce the price by 10%, how many more sales do you think you can make? What about 30% or 50%? Not every product is sensitive to discount. The high price is often regarded as prestige and high quality. If your product is new to the market, and quality is considered very important by your clients, discounting the price might suggest poor quality and attribute your product to the lower end of the market.

2. Are you getting new customers or borrowing customers from yesterday/tomorrow?

When you discount, there are two unhealthy states you want to avoid: borrowing customers from yesterday and borrowing customers from tomorrow.

By borrowing customer from yesterday, I mean when customers get used to your seasonal discount, they will stop purchasing normally and only buy during promotional seasons.

I live close to a subway station near Seoul, South Korea. Since many young Koreans take the subway to go to downtown, cosmetic shops find their potential clients. As more and more shops opened the competition between fierce. Each time I went down the street, I saw big posters featuring 50% discount or 1+1 events. At first, I would take the chance to visit the shop and purchase one or two products that I didn’t plan to buy. Soon, I figured out the shop was having sales half of the time and It made no sense for me to rush. My behavior changed, I would stop buying things when there is no discount, and only visit a cosmetic shop during its promotions.

By borrowing customer from tomorrow, I mean you make discounts to customers who are going to purchase your products anyway. And since they purchase the product today, they will not purchase them for a long time in the future.

Many companies are measuring the efficiency of promotions wrong. I often see people say “During this promotion, we increased our sales by 40%”. While the number looks good, the reality can be different. It’s not uncommon that after promotions, sales fall because customers use up their inventories. To measure the real efficiency, we need to put the promotion in a larger context and longer period.

I worked with a team that sells civil engineering software to Vietnam market. As the economic status of Vietnam was considered lower in South Korea, our strategy was to enter the market with huge discounts. At first, the outcome was great, we quickly attracted attentions from the construction industry and sold many copies. Just before we were about to put more efforts into it and open a branch office in Hanoi, the sales suddenly stopped. The customers who wanted the software already bought it during promotions, we’ve exhausted the market before even entering it.

When you make discount, the best practice is creating new customers or new sales opportunities. If your promotion is borrowing customers from yesterday or tomorrow, then you might need to reconsider about it.

3. Does discount brings you more profit or more revenue?

One of the most important lessons that I’ve learned in my work is that profit is different from revenue.

Let’s suppose your promotion campaign increased sales revenue by 20%. Should you feel happy? relieved? safe? Absolutely not, you should think “What about the profit?” While revenue is important, the profitability of a campaign shouldn’t be neglected. At last, the ultimate purpose of most companies is making money.

Although promotions can easily increase the revenue, making a profitable discount is harder than you thought.

Let’s break it up in a simplified example. Imagine we are selling a 100$ product, the normal sales volume is 100 pieces. Suppose now we make a discount of 20% and sell 50% more instead. Do we earn more money?

You’d be fooled to give a conclusion quickly because the profitability depends on cost too. If the variable cost is 70$/piece, we are actually losing half of the money.

It is, therefore, important to understand your bottom line to make discount that doesn’t harm your profits.

June 25, 2016

Don’t forget that we are human

Recently my friend, a sales manager of a product line, told me furiously that he was leaving his company because the executives decided to cut off the business of his software.

I was surprised because we had just run together some successful campaigns for the software, and the results seemed promising. I saw no logic behind this decision. Out of curiosity, I dug deeper into the issue and discovered a whole drama.

My friend has this quirky personality and loves to criticize things. He made some “innocent” jokes about micro-management during a workshop and thought his jokes might inspire some ideas. Unfortunately, the jokes weren’t taken well by one manager. The manager felt so offended by these jokes and went quite far to take the revenge.

To cut a long story short, a stupid joke led to an office war and was finished with a lose-lose outcome.

So why would someone sacrifice a business just to revenge on such an absurd thing? This made me reflect my ways dealing with colleagues.

Office politics, an ugly word that makes corporate life sound so dull, and a situation that I always seek to avoid.

“No matter what, I will just be professional: work hard, play fair, judge based on good sense and don’t take things personally.” My corporate doctrine indeed kept me out of trouble. The bad thing is, it also kept many opportunities out of reach.

The problem with my theory was that I was idealizing human’s mind as perfectly logical, which is far from the truth. As human-beings, we don’t play fair; we are prone to prejudge and bias; we take things personally and we are unforgiving. My false mental model prevented me from developing deeper relationships with people, and thus prevented me from getting enough support for personal growth.

To develop a better mental model we need to first see people as human

1) Humans have emotions. This makes us prone to irrational thinking, even though we see ourselves as perfectly logical. More often, our logic is used to justify a decision already made, rather than used to make the decision.

During a meeting, a project team is reviewing Laura’s proposal. The idea looks good, but something feels wrong and I can’t quite locate it. “I don’t know… The interaction looks a little complex”, says Jake. Tiiiiin! I suddenly get it. Of course, nobody will “heart” the news to get personal recommendations, what a crappy interaction! What’s the point of bookmarking old news articles anyway? Other members seem to “get it” too. Suddenly the proposal has the manpower, technical, budget and a dozen of other issues. It only makes perfect sense to deny the proposal.

The decision-making process seems logical, expect that all the critiques were triggered by Jake’s first exclamation. In short, Jake made the decision, and the whole team searched for evidence to justify it.

Jake’s critique could be true, but Jake could have said that because of many reasons: He could be undergoing a hard time in his own project; he could be worried about his baby’s health; he could dislike Laura and made a bad comment; he could just be in bad mood. If the proposal was presented in another day, Jake could have liked the idea, and the meeting would have turned out very differently.

2) Humans are social animals. They love the people that they are close to and worship those in higher positions. Their behavior and believing are guided by their positions in the social hierarchy.

In my last story, Jake’s comment got social support because we love Jake. Jake is a charming one: he makes funny jokes, he cares about people and he is smart. Comparing to Jake, Laura is new to the team. She looks an agreeable person, but her trustworthiness needs to be tested.

Although personal charisma has nothing to do with one’s ability to make product decisions, our fondness to Jake made us immediately judge him as more trustworthy on any situation.

We need to observe and understand the organization

One thing that one can practice when entering a new working place is to observe the ecosystem of the organization.

1) Identifying decision influencers
Decision influencers are those who lead discussions to final conclusions at the turning point, such as what Jake did in my last story. They don’t have to be decision makers, but they contribute greatly to the outcome of any decision in an organization.

It might sound astonishing, but they tend to be the same group of people in a working place. Observing the turning points of meetings and discussions in your team, and you will soon find them. They are the most important people that you want to deal with if you need to get decisions made.

2) Understanding people’s perspectives
People are unpredictable, but paradoxically their perspectives are predictable on a certain level. That’s because the mental models of one are stable and these models decide how he views things.

To a man with a hammer, everything looks like a nail. You will find one who takes great care of details will always be picky about the font you use, and the one who sees large picture will always want to talk about the future plan.

Understanding people’s different perspective will help you to predict their reaction to your ideas, thus help you to prepare properly. You can also make use of it to get good suggestions of a specific aspect of your project.

Shared experience is important

To develop a deeper relationship, we need to respect people as human. The beauty of human mind is that it can sort out the ambiguities and vagaries in the circumstance, and react based on the context.

Jake can be too busy to talk with you, but be enthusiastic to chat with Laura. A bad joke can make a good laugh among friends, but can be totally inappropriate with your colleagues. Everything depends on context.

Shared experience helps us to develop empathy and lay down mental barrier during communication. That’s why after a coffee break and corridor talks, team members tend to achieve agreement more easily.

Try to create some shared experience with your colleagues outside the office. Whether grabbing a coffee together, volunteering for a fundraising event or just asking for suggestion about your travel destination, it will bring you more than what you expected.