In 2007, ‘music-to-slit-your-wrists-to’ exponents, Radiohead, carried out a massive marketing experiment. They released their latest album via Internet download – but with a twist… 

Buyers were invited to pay as much or as little as they liked for the album. They were asked to pay what they thought it was worth. 

There seems to be a fair amount of controversy over the results, but the best estimate I can come up with is that about 1.2 million people downloaded the album, 62% paid nothing at all, and the average price paid was around $6. 

Given that their product cost was virtually nothing (although there would have been administrative costs) and they didn’t have to share the money with distributors, record companies or retailers, that surely must go down as a big success…Even though only 38% of customers paid anything at all. 

Fast forward to last week, and I heard about another marketing experiment along similar lines – but with a very different outcome. 

A restaurant in London attempted pretty much the same thing. There were no prices on the menu, and diners were invited to pay what they thought the meal was worth. Customers hated the whole concept, and spent the entire meal worrying about how much they should pay. They were fearful of paying too little, and looking mean ~ or too much, and looking stupid. Nobody wanted to go back. 

This is a classic case of taking a marketing idea from one environment and dumping it in another, without thinking through how the new environment will impact on the effectiveness of the technique. It’s worth looking at the two factors that turned a winner into a loser here: 

1.  Proximity. With a music download, the transaction
     is remote. There’s no human interaction, and hence no
     embarrassment factor. If buyers had to hand over the
     money to a band member (as they do to a restaurant
     employee), the result would have been very different. 

2.  Costs. With the music download, there are no cost
     implications to attracting freeloaders and skinflint
     customers. In a restaurant, the implications are serious
     because there’s considerable product and service costs to
     cover. If Radiohead were committed to delivering a
     tangible product (rather than a virtual one) they’d have
     been in serious trouble.

I’ve made this sort of mistake on many occasions. A marketing idea has worked brilliantly, and so I’ve blindly used it with another product or market, without giving enough thought to why it actually worked in the original situation. And it’s bombed.

When I’ve looked at the situation retrospectively, it’s usually been obvious that the idea worked in the first situation because of factors that weren’t present in the second. This could easily have been foreseen by anyone humble enough to realise that they don’t know everything, and patient enough to sit down and think everything through carefully first. But it’s me we’re talking about here… 

Neither patient nor humble – but very good at making mistakes. It’s not a great skill. 

 John Harrison

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John Harrison 

I’ve been trying to figure out why I’ve lost all respect for politicians, and I think I’ve found the answer. Paradoxically, it’s because they’ve become more like me.  

Let me explain… 

I’ve always admired conviction politicians – people like Margaret Thatcher, Tony Benn and Dennis Skinner. I may not agree with what they have to say, but I know when they say it, that it comes from the heart. They truly believe what they’re saying – they truly believe that what they’re proposing is right for the country. 

But politicians like these are of a dying breed. In fact they may have died out already. You’ll note I haven’t given you any examples from the modern era. That’s because I can’t think of any. There’s not really a place in modern politics, for people like this. 

The new approach is characterised by people like Tony Blair and David Cameron – chameleon-like characters who, if truthful, would respond to the question “What do you stand for?” with: 

“What do you want me to stand for. I’m flexible.” 

To my mind, this is morally indefensible, and I don’t understand why anyone would want to forge a political career on that footing. The idea that you form policies on the basis of what people say they want, rather than what you believe to be right, just seems ridiculous. Surely the whole point of going into politics is to bring about changes and improvements in the precise direction you believe to be right – not to deliver some half-arsed compromise, ordered up by an electorate primarily motivated by self-interest, greed and envy… 

If I’m going to find out what people want, and then deliver it to them, I’ll do it in a business thank you very much. The money is better and you get to sleep at night. And that’s what I choose to do. 

In a business, it’s called marketing ~ and it’s ethical and deserving of respect. In politics, it’s called opportunism ~ and it’s unethical, and deserving of contempt. In business, you have to give people what they want, but as a politician you should be giving them what they need. There’s a massive difference. 

If you go into politics, please become a conviction politician. I’ll vote for you at least. But if you go into business, please don’t become a conviction marketer. There’s no surer way to the poor house. 

Let me explain what I mean… 

So many people launch a business or money-making enterprise on the back of a conviction. They have an idea for a product or service, and believe that it’s something people need and will pay for. They have no evidence for this, other than their own firmly-held belief. I speak to people like this all the time. 

They approach me with a product or service they’d like me to sell for them. They’ve often spent months (sometimes years) perfecting their offering, without ever going to the trouble of finding out whether people actually want what they’ve perfected. When I ask them about their market research, their test promotions, or their target market, there’s no response other than: “Well, we haven’t done that yet.” 

And what they’ve ended up with, is something perfectly crafted ~ but something there’s a strong possibility that nobody wants to buy. Such is their belief, their conviction, in the product, that they’re blinded to the realities of the market. That’s fine for a politician on a crusade to bring about change he believes in, and being paid to do it, but out-and-out disaster for any entrepreneur who stands or falls on sales and profit. 

Take a leaf out of the modern politicians book… 

Find out what people want and then set about delivering it to them. Don’t waste time and energy trying to sell what you think they need. Sell them what they want instead. And don’t fall in love with your product. Be prepared to adapt and change it into a form that will attract the maximum number of buyers. 

As a politician it’s what makes you a contemptible opportunist ~ but as a marketer it’s what makes you rich.   

 John Harrison