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« November 2005 | Main | January 2006 »

Squid soup, part I: The Myth of the Product Adoption Lifecycle

One of the most important ideas in business writing is certainly Geoff Moore’s Crossing the Chasm. In it, he talks about the bell curve that indicates how any population will respond to a new technology.(Espen Andersen points out that the real source is the Diffusion of Innovations, by Rogers. My apologies to Everett).

Bellcurve2The little green tail on the left represent the few, the brave, the innovators. These are the geeks and the nerds that love new stuff. The black segment next to it are the early adopters (not adapters, that means something else) that embrace new ideas that help them do the rest of their lives more productively. The next group picks up new ideas a little more slowly (these are the folks who bought an iPod last year) and the next group completes the mass market (these are the ones that will buy an iPod next year). The last group are the laggards and they still have a record player.

One of the giant insights of the new marketing is that the only way to introduce a new idea is to move across the curve. Sell to the little tail, they tell the next group, which passes the word on to the mass market. That’s why the little tiny green tail is so valuable... these are the people who are listening, these are the people who will become your marketing force.

So, where’s the myth?

The myth is that marketers think these people actually care.

People don’t care, certainly not about marketers.

The vast majority of new products never show up anywhere on this curve. A new restaurant opens in Manhattan and the foodies don’t materialize. A new consulting practice, based on a challenging and proven idea, opens up but leading edge companies never become clients. A fresh new face decides to run for city council but the political junkies don’t sign her petition.

The truth is that for most ideas, for most markets, nothing happens at all.

Squid soup, part II: Inertia and White food

Whitefood2The secret to true understanding of marketing has very little to do with permission or positioning or product development. It’s not about loyalty or conversations or blogging, either. Those are all essential ideas and tactics, but what really matters is brown rice and squid soup.

Imagine a hotel buffet. Dozens and dozens of items (this is an Amercian buffet, where excess is the key). You can have whatever you want, as much as you want.

The cost of making a mistake at the buffet is precisely zero. There is no time cost, no opportunity cost, no social cost. Put some on your plate, if you like it, you can have more.

So, it turns out at this buffet, the two best items (where best is obviously a loaded word, and in this case best to me means best tasting and simultaneously healthiest) were the brown rice and the squid soup. The brown rice was soft, just a little bit chewy. It was like very good white rice, but with flavor and texture that went beyond white rice. It was nutty and had both texture and flavor. And the squid soup had depth. The squid (yes, the name attracted me to the soup) was as soft as an egg noodle and the broth had tomatoes but didn’t taste like Campbell’s.

You’ve already guessed the punchline. Of the hundreds of people at the buffet, very few even tried either one.

Why?

Inertia.

There is a cost of trying the rice and the soup. The cost is the effort necessary to consider switching. Beyond that, there’s the (tiny) fear of tasting something you won’t like or the effort involved in realigning your worldview if you do like it.

“But I don’t like squid soup,” they say. Well, how exactly do you know that? What chance is there that they’ve previously tasted squid soup and rejected it? Close to zero. But this audience, this market, has a worldview, and it includes the rule: if it’s a weird food and it’s in a soup, I don’t like it. Getting rid of that rule requires effort.

I read a survey three years ago (beware surveys like this one) that said only a third of all Americans had ever tasted a bagel. Now, the bagels that are available in most places are horrible and not bagel-like at all, but the point is that in most areas, most endeavors, most markets, most people, when given the choice, try nothing.

The problem with the bell curve is that most people, in most situations, will ignore your idea.

Football is huge on television in the US, soccer is not: inertia. The fact that General Motors sells any cars at all is related to inertia. It’s not just the middle-America mass market at work here. This explains why an entire race of people on Easter Island became extinct—once they embraced a cultural system that involved cutting down trees, it was too hard to stop, even after they could see the coming danger.

It’s always easier to do nothing (new).

Humans embrace change far more than any animal on the planet. But we’re bad at it.

Of course, you’re not bad at it. You’re always buying new stuff, reading new blogs, trying new ideas. You’re the cutting edge... (which leads to my next post).

Squid soup, part III: The Cutting Edge?

In my last post, I riffed about how little people liked change... and referred to you, my loyal readers, as the self-elected early adopters, the radical new, the folks who embrace big new ideas.

You use Firefox, read a hundred blogs with an open-source RSS reader, have a blog, post your bookmarks with delicious, have a flickr account, you’re a digger and you have built a dozen squidoo lenses. After all, they’re all free, they teach you about valuable new ideas and they’re fun.

Except, if my numbers are accurate, that last paragraph probably isn’t true.

Delicious is a sensation, but far less than 1% of the people online (who are already in the cutting edge of the population when it comes to embracing new tech ideas) have posted their bookmarks. Firefox is demonstrably better than the built-in alternative, and they have market share of less than 20%. Too much inertia. “I’ll just use what’s built in...”

AOL users, were, by definition, the cutting edge for years. They were among the first to go online. But then millions got stuck inside AOL’s walled community, not even realizing that AOL ≠ the internet. Inertia became a critical asset for AOL. That satisfied users by giving them what they liked, not by selling them squid soup.

Web 2.0 is off to a rocket-fast start. Little companies growing superfast. But most of the readers of this blog haven’t built a lens or shared their bookmarks or uploaded their photos yet. How come? It’s fast and free and perhaps fun. The answer is pretty obvious—you’ve got other things to do. The cost of deciding to try is too high, because you can always decide later.

All the innovations that pundits like to talk about—from Jetblue to the Prius to Apple—have tiny market share compared to the attention they get or the benefits that people rave about. Because even the cutting edge isn’t in that much of a hurry.

Watch out for the 5% rule
Most new marketing ideas that are any good feel like they might be able to convert 5% of those in the market for what’s being sold.

And of course, only 5% of the population is in the market for what’s being sold.

And only 5% of those in the market are choosing to pay attention.

So it’s really 5% of 5% of 5%. Take 10,000 people. That’s 500, which gets you 25 which gets you one.

1 new customer.

5% isn’t enough. Not if you’re in a hurry!

The punchline
Marketing used to be expensive. Buy a few million dollars worth of ads and you could have a shot at success.

Marketing is now (potentially) much, much cheaper. But that doesn’t mean it’s easy. The challenge now isn’t to raise a whole bunch of money. The challenge is to invent a product or service or idea or meme that’s so compelling that the tiny green portion of the curve, the geeks in whatever market you live in, can’t ignore what you have to offer. That, and once they adopt what you’ve got, they can’t help but spread it.

That’s not easy. No one ever said it was. But that’s the challenge anyone with a business to grow or an idea to spread has to overcome.

Quick question

Is marketing the art of tricking people into buying stuff they don’t need?

Or is it about spreading ideas that people fall in love with?

Zero

Nojuice2

Boy am I in trouble.

(actually, this is the second time I've posted with that title... I guess I get in trouble a lot.)

Firemen have good reasons to keep their trucks clean.
Firemen don't sit around all day doing nothing.

I know this.

I was trying to tell a story with a vivid picture. If my house burns down, yes, please, come put it out. And yes, I support the volunteers in all the towns near my house.

And yes, Crossfit may very well be an excellent way to work out.

Of course, your mileage may vary. I frequently contradict myself. As Zig Ziglar told me, "I'm like a cross-eyed discus thrower. I don't set any records, but I keep the crowd alert."

Clean firetrucks

We live in a neighborhood where all the firehouses are run by volunteers. I don’t know how we’d get by without them... they do brave work, with little credit.

One thing you’ll notice is how clean the trucks are. “Why are the trucks so clean,” a friend asked? After all, a clean firetruck isn’t a lot better at putting out fires than a smudged one.

The answer: Because when there isn’t a fire, the firemen wait for the siren to ring. And while they’re waiting, they clean the truck.

Sounds a lot like where you work. Most organizations are staffed with people waiting for the alarm to ring. Instead of going out to the community and working to prevent new fires, the mindset is that firemen are working to put out the fires that have started. Hotel desk clerks don’t write letters or make calls to generate new business—they stand at the desk waiting for business to arrive. Software engineers are often overwhelmed with an endless list of programming fires—and rarely get a chance to think about what they ought to build next.

The structure of most organizations (and every single school I've ever encountered!) supports this. It’s about cleaning your plate, finishing your assignments and following instructions. Initiative is hard to measure and direct and reward. Task completion, on the hand, is a factory orientation that is predictable and feels safe.

In fast-changing markets, clean firetrucks show attention to detail but rarely lead to growth and success.

What a great way to describe a stuck but busy organization. "They sure have clean firetrucks."

Judging a book by its cover

84orwell Pity George Orwell. His classic never got a decent cover.

You can always tell the jacket designer is in trouble when the cover uses irrelevant type design to get the project over with.

But wait. Orwell sells at least a million copies a year.

It's not the cover. It's the book.

Sometimes a great cover can help a lousy book (for a little while).

And sometimes a lousy cover can kill a great book (like Turn of the Century by Kurt Andersen).

But for books, like most things, the stuff inside matters.

The two obvious secrets of every service business

every one...

1. Take responsibility
2. Pay attention to detail

The thing that's so surprising is how little attention is paid to these two, how often we run into people (business to business or b2c) who are totally clueless about them.

You'd be stunned to see a hotel clerk stealing money from the till or a bartender smashing bottles or a management consultant drawing on the client's wall with a magic marker. But every single day, I encounter "that's not my job" or "our internet service is outsourced, it's their fault." More subtle but more important are all the little details left untended.

All the magazine ads in the world can't undo one lousy desk clerk.

All businesses are service business and experience is the product...

Search is hard

Do a Google image search on 1964. It'll find more than 700,000 images for you. If you had to guess, which ones would come up first? The Beatles? Jackie Kennedy?

Actually, on the very first page of the results, you'll find a flyer for a pinball machine from carobinson.com and an issue of Soaring magazine. You'll also find similar results if you type in other years.

Google isn't doing a bad job necessarily. It's just that this is an impossible promise to keep. We've taught ourselves that search engines are magical and clairvoyant, and that 1964 is all we have to type in to find, say, the best possible image for a collage for a birthday party. But my collage is very different in intent than your collage, and of course Google can't make us both happy.

If you've got a website and you offer search, you need to be wary of overpromising. Just like putting an index in a reference book that isn't totally complete. If you appear to be making the promise, your prospect is going to expect that you're going to keep it.

Soaring magazine, anyone?

I think it's inevitable that many users are going to become cynical about the power of search as this problem gets worse (and I think it will) before it gets better.

« November 2005 | Main | January 2006 »