Thinks 254

The Economist on open-source intelligence: “New sensors, from humdrum dashboard cameras to satellites that can see across the electromagnetic spectrum, are examining the planet and its people as never before. The information they collect is becoming cheaper. Satellite images cost several thousand dollars 20 years ago, today they are often provided free and are of incomparably higher quality. A photograph of any spot on Earth, of a stricken tanker or the routes taken by joggers in a city is available with a few clicks. And online communities and collaborative tools, like Slack, enable hobbyists and experts to use this cornucopia of information to solve riddles and unearth misdeeds with astonishing speed.” More: “Academics, activists and amateurs are making imaginative use of powerful tools.”

Amartya Lahiri: “State should do its duty towards citizens, not interfere in their economic lives…State’s response to its own failure to deliver public services on schooling or health is to mandate the private sector to provide them under threat of penalties and accept the resultant expense as the cost of doing business in India…It is time for the Indian voter to demand the Indian state and its babus retreat from their economic lives. Labour, land and financial sector reforms along with public sector divestment have to become essential demands. These are fiscally cheap and a much more promising wish list than the expectation of deliverance by a mythical superhero. The state is part of the problem, not the solution.”

Who Gets To Decide the Truth? by Jonathan Rauch. “Because all people have eyes and ears and minds, and because we must check and consult with each other to find truth, the many, not just the few, are entitled to assert their own beliefs and contest others’. Epistemic rights, like political rights, belong to all of us; empiricism is the duty of all of us. No exceptions for priests, princes, or partisans.”

Stop Loss: The Power of Attention Messaging (Part 4)

Marketing needs Fixing

Digital customers mean digital marketing. And digital marketing has been reduced to handing over money to Google and Facebook for acquiring new customers. And then re-acquiring them when they are lost. This creates a doom loop of spending which has meant that 90% of digital marketing budgets (which can be half of funds raised by startups and growing companies) is channelised to the tech giants. Marketers are getting locked into an arms race of spending for acquiring less valuable new customers and a growing pool of inactive customers, even as revenues and profits for the tech duopoly reach record highs. Even D2C marketers face a challenge – marketplaces like Amazon vacuum away budgets in hypercompetitive search placements.

Marketing – the art of getting attention – is broken. It has now become the act of getting new acquisitions. It is easy to spend money on Google and Facebook with their wonderful dashboards and magical targeting abilities, even as it is hard to get customers to pay attention to brand messages in overflowing inboxes. This pandemic of “attention recession” leads customers to ignore brand messages, and cuts the lifeline that marketers have to pull them back to the website or app for transactions. For want of attention, transactions are lost – and expensive acquisition takes its place where the attention is there – on and via Google and Facebook, and marketplaces.

Marketing needs to return to its roots. Customers have needs, time and money. Once upon a time, marketers captured attention through a combination of copy, imagery and creativity to grab attention, surface the need, and channel the money. As customers become digital, data and cohorts become the focus. So, while budgets have shifted from traditional to digital, marketers missed a step. Digital customers not only leave pheromones for tracking but also have an identity with inboxes. For the first time, real-time messaging was possible to a segment of one or few, a subset of the traditional “all”. The identity-inbox combo should have been utilised to ensure the cost of engagement becomes a fraction of that of acquisition.

Research has shown that a firm has a 60% to 70% chance of successfully repeat selling to an “active” customer, a 20% to 40% chance of successfully repeat selling to a lost customer, and only a 5% to 10% chance of successfully closing the sale on a brand new customer. In other words, a transaction via retention can be 3 times more cost effective than re-acquisition and 6-10 times more cost effective than a new acquisition. And retention means getting attention. By breaking (or not building) the hotline with existing customers, marketers are only left with one choice: push more and more money to Google and Facebook.

So: what can marketers do to get the attention of their existing customers? This is where Attention Messaging comes in.

Thinks 253

PC Mag: “Even though you have several new ways to connect with customers—particularly social media—the study found that the email channel still has a massive reach with 4.3 billion people using email and more than 361.6 billion emails flitting around every day. If you think that sounds like a firehose of bits in which your emails will probably get lost, you’d be wrong. The study showed that email-marketing ROI is currently calculated to be 4,400%, or about $44 return on every dollar you spend in your marketing campaign.”

The Economist brief: How DNA and proteins work: “Biological molecules are distinctive in various ways. One is that they can be very large indeed. The simple inorganic molecules that make up the air and the oceans typically contain only a few atoms, and often just two or three. Many biological molecules contain thousands. A few contain billions. These molecules are not just large, they are also precisely structured. Furthermore, those structures can be recreated with atom-by-atom accuracy. These distinctly lifelike qualities stem from the fact that biological molecules have purposes bestowed on them by evolution.”

Ashok Gulati: ” If India has been so successful in reducing poverty and improving food availability, why does it have to give almost free food (rice and wheat) to more than 800 million people under the National Food security Act (2013)?…In 2020-21, as per the provisional estimates of the Controller General of Accounts, food subsidy amounted to 31 per cent of the total revenue of the Union government. Giving free rice and wheat, instead of improving the quality of education and enhancing skills, is definitely not the right way to go forward.”

Stop Loss: The Power of Attention Messaging (Part 3)

Post-Pandemic

The pandemic has upended everyone’s world. A new world beckons on the other side. Brands we once loved (airlines, hotels, destinations, multiplexes, restaurants, malls) had to be forgotten as our habits were broken. Newer brands have made their way into our lives (ecommerce, food delivery apps, OTT, games, edutech). On the other side of the pandemic and we are almost there thanks to the vaccines, our lives will be different. The pandemic has changed each of us in different ways.

I was an avid traveller. In the 12 months before the start of the pandemic, I made six US trips on Air India. As a family we must have watched tens of movies at Inox and a few at PVR. Every alternate week, we ate out at one of our favourite restaurants. We roamed Phoenix on lazy Saturday afternoons. As I look ahead, how many of those brands will come back in my life with the same intensity? How many of them have made an effort to keep their hotline with me alive? How many of them even know that I existed prior to the pandemic? It is a question each of us can answer about some of our once-loved brands. And more importantly, brands should answer about their once-loyal customers.

Air India continues to send me monthly frequent flyer mileage updates as if the pandemic didn’t even happen. Inox and PVR don’t even know about me. Agreed, at times, I made the bookings via BookMyShow, but there were plenty of times I booked directly on their website. Could they have at least kept the relationship alive and regaled me with stories from our joint past about the movies and moments we experienced together? Phoenix also doesn’t know me, and they really should. Ten years and perhaps more together. And what of the restaurants…so many of them have lost me to Swiggy and Zomato. Quattro and SpiceKlub even have me as part of their loyalty programme – they know every meal I ate. Why would they forget me so easily and hand over the relationship, profits and value to someone else?

A decade ago, it didn’t matter because few of us had a digital identity. Today, each of us has two – an email address and a mobile number. It costs so little to reach out to us and keep the relationship going – a few emails and messages will cost less than a rupee a month. For Rs 10 a year, brands can keep us engaged and delighted. Most brands chose not to – and it’s a choice they have made consciously, because they are putting ten times more money to either acquire us via the tech and media platforms, or pay as commissions to the marketplaces. In doing so, they lose the connection with us and future profits. If a brand today does not use its first contact with us to ask us for an opt-in relationship, they are making a huge mistake – because they will spend many times more in reconnecting with us.

The post-pandemic world is even more digital; many years of growth have been compressed into months. The smartphone has become a lifeline for many – taking us to places where we physically cannot. It has expanded our world of possibilities as we discover new uses of the time created by working from home. In this always-competitive world, the fast eat the slow, the smart eat the ignorant. Brands who ignore their existing customers in search of the new, brands who fail to build relationships when they have the opportunity, brands who prioritise acquisition over retention, brands who allow attrition rather than enable attraction – these brands will fall by the wayside in the years to come. A new world is surely upon us – it is a world where attention matters because our choices and distractions have exploded. Brands must face up to this world of attention recession – and the answer lies in Attention Messaging.

Thinks 252

Balaji Srinivasan: “Technology is the driving force of history. Technology favored centralization in the US from arguably 1754-1947 (join or die in the French and Indian War, unified national government post-Civil War, railroads, telegraph, radio, television, movies, mass media in general, and mass production) and is now favoring decentralization from roughly 1947 to the present day (transistor, personal computer, internet, remote work, smartphone, cryptocurrency).”

The Invisible Hand Relies Upon Visible Prices: by Donald Boudreaux. “Just as the market order is essential to our survival, prices expressed in money are essential to the market order. Prices are among the visible results of the invisible hand’s successful operation, as well as the single most important source of this success. Each price objectively summarizes an inconceivably large number of details that must be taken account of if the economy is to perform even moderately well.”

Santosh Desai: “The liberalisation narrative today is vexed by paradoxes. Creativity thrives as does deep hate arrived at shallowly. Identities become multiple and fluid, even as the world shrinks around our most primal identities. The individual realises herself more fully, while losing herself in many new collectives. We are highly networked and deeply lonely. Getting what we want is much easier, knowing what we want is becoming a problem. Choices free us while crippling us with anxiety. We can escape everything but ourselves. We are at the centre of our own universe but it has been created for us by the market. We can act in ever diverse ways but are divided along increasingly narrower lines. The more liberal our markets get, the more illiberal our minds.”

Stop Loss: The Power of Attention Messaging (Part 2)

Broken Hearts

I came across The Information a year or so ago by following links from Techmeme. It was a subscription site with reporting and stories from the world of tech. I subscribed to the free trial, but then did not pay the $399 annual fee to continue the subscription. I thought the relationship was over – and for a time it was. A few weeks ago, “The Information” reactivated the relationship by sending me daily updates on the Creator Economy. And as I got used to reading those, it made me an interesting offer: to continue, would I like to subscribe for the first year at a 50% discount? I agreed, and The Information and I had started a new relationship. They probably don’t know anything more about me than an email ID. I hope they get to know me – the cost of losing me after a year will be almost $400 a year!

All The Information needed to do to maintain the relationship was a few well-crafted emails that would probably have cost them less than a few cents through the interim when I had not yet activated a paid subscription. This is true for every brand and yet so few do it. Most don’t even notice when we move on – and of course, by then it is too late.

My son switched his phone from Samsung to Apple recently. Samsung doesn’t even know. They never got to know him when he bought the phone a couple years ago, and they don’t know now that he has moved on. Why would they not work harder after making such great products to build a relationship with the very people for whom they are building? Yes, there are hundreds of millions of such customers, but surely, ignoring them and not even making an effort to create a digital relationship cannot be the standard operating procedure.

Vodafone hasn’t even noticed that I, a huge consumer of their data once upon a time, barely use their data service. If they check their records, they will find me a loyal customer for 20+ years – who duly postpaid for their highest data slab. Now, two years have gone by, and I hardly have any data consumption. No alarm bells? No calls, messages or emails to inquire? Obviously, I have switched data to a second SIM (Jio, in my case). Will it be long before I port my number also? It would probably cost Vodafone a rupee a month to create a beautiful relationship with me, but…

About two-and-a-half years ago, we moved on from our Honda Accord – and Honda probably doesn’t even know it. They never really got to know us. Their service centre had my wife’s mobile number, but that’s about it. They never knew me or my son – all of us who made a say in the decision about the next car. And Honda and we were together for so many years. Did they get to know us as a family? All they had to do was to ask. They could have built such a beautiful relationship – telling us about their cars and more. If they had asked, we would have told them how much the car was part of our lives, how much we loved their leg space in the rear seats, how much we wanted to get a new Accord. They don’t even know, but we had even visited one of their new tech centres in Tokyo during one of our vacations! But, they don’t even have my email address, because they did not ask. A few rupees invested in a relationship, and perhaps they could have persuaded us to stay with the brand.

The fields of broken relationships are full and getting fuller by the day – like landfills in the world. They don’t have to. The choice is with brands and marketers, and so far most of them are voting for the new rather than the ones who are with them. They are in a game they cannot win – as precious profits are handed on a platter to the tech giants in search of more, rather than as rewards to the ones who can actually give them more.

Thinks 251

The Economist: “Some rules have changed: universal access to digital technologies is now vital, as is an adequate social safety-net. But the principles of how to get rich remain the same today as they ever were. Stay open to trade, compete in global markets and invest in infrastructure and education. Before the liberal reforms of recent decades, economies were diverging. There is time yet to avoid a return to the needless hardship of old.”

Oliver Burkeman: “You almost certainly can’t consistently do the kind of work that demands serious mental focus for more than about three or four hours a day…The real lesson – or one of them – is that it pays to use whatever freedom you do have over your schedule not to “maximise your time” or “optimise your day”, in some vague way, but specifically to ringfence three or four hours of undisturbed focus (ideally when your energy levels are highest). Stop assuming that the way to make progress on your most important projects is to work for longer. And drop the perfectionistic notion that emails, meetings, digital distractions and other interruptions ought ideally to be whittled away to practically nothing. Just focus on protecting four hours – and don’t worry if the rest of the day is characterised by the usual scattered chaos…The other, arguably more important lesson isn’t so much a time management tactic as an internal psychological move: to give up demanding more of yourself than three or four hours of daily high-quality mental work. ”

Shane Parish: “Lack of courage sabotages more people than lack of ability.
Don’t beat yourself before you start.”

Stop Loss: The Power of Attention Messaging (Part 1)

Love and Loss

One of the most important commercial relationships is between a brand and its customers. Brands may not notice their customers, but many customers do notice the presence of brands in their lives. Therefore, there is an element of sadness when that relationship is broken. It is typically the customer who decides to end the relationship and move on. The sad part of this is that rarely does a brand notice, even though the signals were there much before.

A brand goes to great lengths to acquire a new customer. Plenty of ads, great offers, discounts, and very friendly messages. For the customer, it is like being caught in a whirlwind love affair. And then once the relationship is cemented, instead of getting to know the customer better, the brand moves on to the next conquest leaving the now ‘old’ customer feeling neglected. It seems like business as usual – nothing special. All those promises to spend a lifetime together – they all seem so hollow. And that’s where the separation starts. Because some other brand has started wooing the customer with ads, offers, discounts and messages. And so it goes on – the cycle of love and loss.

A few brands do manage to stop the loss and build an ever-increasing pool of customers. They become the leaders in their industry. They are the ones who are said to have erected moats. They have great customer relationships with every customer feeling they are special. Happy customers recommend others, creating a growth flywheel. These are the brands others try to copy, but with limited success.

*

We have experienced both kinds of brands, and the love-loss that goes with them. I may have exaggerated some of the emotions but that does not take away from the key point: most brands do a lot to start a relationship but not enough to sustain it over long periods of time. This, to me, is the mystery. It is so much easier and profitable to retain a customer than to keep moving on the treadmill of constant new acquisition. In the B2C world, a customer churn is just a statistic. (In the B2B mid-market and enterprise world, someone will at least get questioned and an inquiry will seek to establish what went wrong.)

In the pre-digital and pre-pandemic world where digital relationships constituted a small percentage of the overall base, it didn’t matter because most brands did not even know their customers. But all this has changed and will change even more in the years to come. Every relationship has the potential to become digital even for brands who sell through marketplaces and intermediaries – because every customer now has a digital identity and footprint. It is up to the brand to get to know the customer, or else newer direct-to-customer (D2C) brands will and in doing so, grab market share and customer value from laggard incumbents.

My contention is that by ignoring the power of Attention Messaging, brands are missing a key chapter in their playbook. By spending almost 10X more on the acquisition of new customers than on retention and growth of existing customers, they are simply feeding the profit machines of the tech giants (Google, Facebook, Amazon). By not building deep relationships, they are leaving their customers open to being targeted and acquired by competition, thus leaving their own future vulnerable. Attention Messaging holds the secret for brands to create the twin moats of profits and monopoly – are marketers paying attention?

Thinks 250

The Blockchain Is Starting to Live Up to Its Potential: from Bloomberg. “A blockchain is a digital database, or ledger, used to record information and transactions in a collaborative manner. While it’s more complex and expensive to run than a traditional database created and maintained by a central party, it has important advantages in security and public trust. Blockchains are more secure, because no individual or entity can change or view any data except with the appropriate cryptographic private key. No company or IT worker or hacker or court order or disgruntled ex-spouse or drug company has access to your data without your permission. Almost all successful cryptocurrencies are based on blockchains, but blockchains need not have any ties to crypto to function…[It] has moved beyond cryptocurrencies and is being used in everything from health care to elections.”

José Ortega y Gasset: “Liberalism – it is well to recall today – is the supreme form of generosity; it is the right which the majority concedes to minorities and hence is the noblest cry that has ever resounded on this planet. It announces the determination to share existence with the enemy; more than that, with an enemy which is weak. It was incredible that the human species should have arrived at so noble an attitude, so paradoxical, so refined, so anti-natural. Hence it is not to be wondered that this same humanity should soon appear anxious to get rid of it. It is a discipline too difficult and complex to take firm root on earth.” [via CafeHayek]

David Perell: “In this essay, I’ll outline a plan for saving the Liberal Arts. I’ll start with their history by going back to the origins of Western thinking. I’ll argue that we can only think about education clearly once we split it into two halves: civilized and professional. To explain why, I’ll outline the evolution of the Liberal Arts, from the ancients to where we are today. I’ll show why we’ve devalued their study by serving our wallets instead of our souls. Finally, I’ll propose a plan to create a modern Liberal Arts school with lower costs, expanded access, and students who graduate with a holistic view of the world and an appreciation for civilization’s greatest works.”

Changing Minds for Nayi Disha: Attention to Action (Part 10)

All Together

To bring Nayi Disha to life and give India a new direction with the next elections must be the single-minded goal of all Indians who seek a freer and richer future for themselves and their children. Once they realise that the present path we are on is no different from the preceding 250 years and the eventual endgame is ever-increasing extraction and exploitation, perhaps some will wake up to wanting to play a role in understanding the root of the problem (lack of freedom) and working to craft the solution (Nayi Disha).

The starting point is to change people’s minds. Only then can we hope to channel votes via United Voters of India to create an India freed from the clutches of the politicians and their parties. To change minds, we need to get their attention and then nudge them towards action. To get attention, we need to create a content factory which educates and persuades. This content needs to be then distributed via email and WhatsApp to tens of millions – a pipe that bypasses government controlled media properties and platforms. One person at a time, this all-digital movement needs to grow in strength – just like the Internet startups who have transformed our lives in the past decade.

Once the outreach is there, attention needs to be transformed into action. This is where the Nayi Disha app needs to play a starring role. By borrowing ideas from successful mobile games, it needs to encourage actions and teamwork to create winning coalitions in every part of India to fulfil the endgame of a Lok Sabha of Independents. The numbers are there – two-thirds of Indians are either non-aligned or non-voters. This is the audience that must be persuaded to unite against the politicians and their parties for a free and rich India.

This is a movement without a top-down commander; it is a people’s movement. In the digital world that is upon us, no small group of people can make this happen on their own. The revolution will need creators and influencers, each a mini-celebrity to some. They need to be persuaded to join and use their ingenuity, skills and networks to amplify the message across the country. A ladder of engagement will motivate many – after all, it is a fight for their own future.

Every action can be done digitally except the final act – of voting on election day. This is the only way Nayi Disha can do in months what the political parties have done in decades. Indians don’t have the luxury of time; we cannot lose another generation to mediocrity and capital drain. It is time to not just be customers of digital platforms but create one of our own for the highest cause of them all: freedom and prosperity for a billion Indians.