For almosta quarter of a century, we’ve advocated the wisdom of David B. Wolfe, author of Serving the Ageless Market, Ageless Marketing, Firms of Endearment and Brave New Worldview. We practice his teachings (known as Developmental Relationship Marketing or Ageless Marketing) to help clients secure and keep customers more than 50 years of age (Baby Boomer and older customers). The foundation of much of our success, and the success of our clients, clearly is a result of David’s lessons and is worth sharing. This is the first of several annotated articles reflecting David’s thinking that will be published periodically.
The Foundations of a New Marketing Paradigm
By David B. Wolfe
By many accounts, marketing is facing its greatest crisis ever. Many attribute this to the Internet. Certainly the Internet has played a major role in marketing’s current travails. However, like a beautiful lake whose waters have receded to reveal an ugly bottom filled with detritus of a thousand types, the Internet has revealed a host of problems that have long existed below the placid surface.
No category of business expense contains as much waste as consumer research and marketing. The amounts are astonishing. Raj Sisodia, my co-author of Firms of Endearment figured that companies spend about $11,000 each year trying to get sales from his family of five. In all, marketing related activities cost companies about $500 billion annually. Just on intuition, I'd speculate that figure is double what it should be. That claim is not as outlandish as it might seem. Starbucks became an international brand without advertising expenditures, the single biggest expense in many companies' marketing budgets.
Marketing is economically inefficient because it operates more as a game of chance than as a scientifically well-grounded discipline. Few would submit to a surgeon’s knife, cross a bridge or get on an airplane if medical, engineering and flying professionals who approached their roles as though playing games of chance. Think of the children’s game, Pin the Tail on the Donkey, and you have a good idea how blindly the profession of marketing is acted out.
The biggest, and to me the most obvious, flaw in marketing is the pervasive impoverishment of knowledge of the fundamentals of human behavior. As I’ve said before, an MBA candidate can get an MBA in marketing without taking a single course in human behavior. The currency of marketing is expressed in numbers, not tenets of behavior. That flabbergasts friends who are not in marketing. They cannot imagine marketing being anything other than the applied application of behavior science in a business context.
To the degree that students delve into behavioral science in business schools, their efforts are directed more to social psychology than to other, potentially more fruitful branches of mind science. Social psychology, as presented to business school students, deals primarily with the interactive influences of people on each other. Other things get stirred into the broth, but academics look at consumer behavior through the lens of social interaction.
On its face, social psychology seems like it is a worthy platform offering in depth understanding of consumers’ behavior. However, two factors seriously limit its value in marketing. First, social psychology heavily relies on self-reports by research subjects. The dubiousness of this is reflected in high failure rates among marketing campaigns that rely on consumers’ self-reports. New product failure rates reach 90 percent according to some studies. The cost of failed product introductions is staggering. One study revealed that each year, retail grocery stores spend an average $956,800 per store to introduce new products that will fail.
Recent brain research supports what cognitive scientists have been telling us all along: people don’t know their own minds very well. Brain scans indicate that as much as 95 percent of the mental activity underlying our perceptions, thoughts and decisions takes place outside the cognitive reach of our conscious minds. But because we tend to get uncomfortable if we don’t have a picture in our conscious mind that makes sense and seems real, we often construct images in our minds of a faux reality just to feel better.
The Most Influential Force on Consumer Behavior
People vary enormously in how much congruence they achieve between images of apparent reality in the conscious mind and images of true reality in the deeper reaches of the brain. The degree of congruence depends on many factors bringing us to the second shortcoming of social psychology as applied to consumer research and marketing activities.
Social psychology as applied in consumer research and marketing is contextually deficient. Its primary context is social – hence its name. However, human behavior at its core is not social. It’s personal – primitively personal. All behavior begins with conatus – the natural tendency of a body to seek persistence of its life and to develop itself to its maximum potential expression of self.
I’ve described conatus as the "most influential force in consumer behavior." If that is true, then it should be the most influential tenet of behavior in consumer research and marketing. Conatus is the driving force of self-preservation behavior. It is not an expression of social forces, but like the sex drive, is an expression of our genes activated by proteins formation on behalf of individual and species survival. Lest that sound too reductionist, I should quickly add that social forces do influence how we respond to the self-preservation imperatives that lie at the roots of all our behavior. So, indeed, the romance is real and the love that others have for us does influence how we express the imperatives of conatus in our lives.
Marketers tend to be distracted by undue focus on social influences on consumer behavior. By tradition, marketing excludes attention to the primitive and more powerful forces of conatus. However, it is not possible to fully understand even the nature of social influences on consumer behavior without grasping the basics of conatus.