Purple Cow (7 page)

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Authors: Seth Godin

Tags: #Business & Economics, #Marketing, #General

BOOK: Purple Cow
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The insight here is
not
that the music industry ought to figure out a better way to solve this problem. They don’t need a better form of advertising. The insight might be that there
isn’t
a better way. The Naxos music label (they’re the guys who sell the $8 CDs) is doing great. Why? Because they organized the product-marketing in all its forms—around the idea that sneezers wanted good, cheap versions of the music they already knew. Naxos was right. The market stopped listening. Naxos won.
Sony’s classical label can’t compete because they’re not organized at the product level or the promotion level to win at that game. So they wither.
When faced with a market in which no one is listening, the smartest plan is usually to leave. Plan B is to have the insight and guts to go after a series of Purple Cows, to launch a product/service/promotional offering that somehow gets (the right) people to listen.
Not All Customers Are the Same
 
Michael Schrage writes about a large bank that discovered that 10 percent of their customers were using their online banking service
every day,
while the remainder were using it about once a month. At first glance, a consultant would argue that the bank should stop spending so much on the service, as it was appealing to only the innovators and some early adopters. Further digging, however, showed that this group also accounted for about 70 percent of the bank’s deposits.
It’s easy to look at the idea diffusion curve and decide that the juicy, profitable, wonderful place to be is right in the center, where all the people are. However, that’s rarely true. Often, the valuable slices are located to one side or the other. What this bank might realize is that by focusing on these innovative customers, the bank may be able to bring in even more highly profitable risk-seeking customers, leaving the slow and declining sector to seek other (less profitable) banks.
Differentiate your customers. Find the group that’s most profitable. Find the group that’s most likely to sneeze. Figure out how to develop /advertise/reward either group. Ignore the rest. Your ads (and your products!) shouldn’t cater to the masses. Your ads (and products) should cater to the customers you’d choose if you could choose your customers.
 
The Law of Large Numbers
 
The magic of mass media and the Web is all tied up in the large numbers: 20 million people watching
The Sopranos;
100 million watching the Super Bowl; a billion watching the Oscars; 3 million people using KaZaA at the same time, all the time; 120 million registered Yahoo! users. The numbers are compelling.
What if just one out of a thousand Oscar viewers tried your product? What if one member of every family in China sent you a nickel?
The problem with large numbers is that they’re almost always accompanied by fractions with huge denominators. If you reach 100 million people, but only .000001 percent of the audience buys your product, well, you’ve just sold exactly one unit.
Years ago, when I first predicted the demise of the banner ad as we know it, people laughed at me. At the time, banner ads were selling for a CPM of $100. (CPM is the cost per thousand ad impressions.) That means you’d pay $100 for a thousand banners.
What advertisers who measured (the vast minority) soon realized was that every time they bought a thousand banners, they got exactly zero clicks. The banners had a hit rate of less than .000001 percent. The law of large numbers was at work.
Today, you can buy banner ads for less than a dollar a thousand. A 99 percent drop. I did a deal with one site in which I bought 300 million banner ads for a total cost of $600. The funny thing is that I lost money on the deal. Those 300 million banner ads (that’s more than one banner impression for every single person in the United States) ended up selling less than $500 worth of merchandise.
As consumers get better and better at ignoring mass media, mass media stops working. Sure, there are always gimmicks that work (animated online pages or product tie-ins with reality TV shows come to mind), but the vast majority of ordinary advertising is victim to this unrepealable law.
SoundScan is a neat company with a fascinating product. Working with retailers and record companies, SoundScan knows exactly how many copies of every released album are sold, every week, in the entire country.
What’s surprising is how horribly so many records do. In 2002, the
New York Times
reported that of the more than 6,000 albums distributed by the major labels, only 112 albums sold more than 500,000 copies last year. Many, many titles don’t sell even
one
copy some weeks. What does it take to find a stranger, reach that stranger, teach that stranger, and then get that stranger to walk into a store and buy what you’re selling? It’s too hard.
In almost every market measured, the “leading brand” has a huge advantage over the others. Whether it’s word processors, fashion magazines, Web sites, or hairdressers, a lot of benefits go to the brands that win. Often a lesser brand has no chance at all. There may be a lot of consumers out there, but they’re busy consumers, and it’s just easier to go with the winner. (Of course, this is true only until the “winner” stops being interesting—and then, whether it’s cars, beer, or magazines, a new leader emerges.)
Case Study: Chip Conley
 
My friend and colleague Chip Conley runs more than a dozen hotels in San Francisco. His first hotel, the Phoenix, is in one of the worst neighborhoods downtown.
Chip got the hotel (it’s really a motel) for next to nothing. He knew that it wasn’t a hotel for everybody. In fact, no matter what he did to the Phoenix, hardly anyone would choose to stay there.
Which is fine. Because “hardly anyone” can be quite enough if you’ve got a hotel with just a few dozen rooms. Chip redesigned the place. He painted it funky colors. Put hip style magazines in all the rooms. Had a cutting-edge artist paint the inside of the pool, and invited up-and-coming rock-and-roll stars to stay at the place.
Within months, the plan worked. By intentionally ignoring the mass market, Chip created something remarkable: a rock-and-roll motel in the center of San Francisco. People looking for it found it.
Make a list of competitors who are not trying to be everything to everyone. Are they outperforming you? If you could pick one underserved niche to target (and to dominate), what would it be? Why not launch a product to compete with your own—a product that does nothing but appeal to this market
?
 
The Problem with the Cow
 
... is actually the problem with fear.
If being a Purple Cow is such an easy, effective way to break through the clutter, why doesn’t everyone do it? Why is it so hard to be Purple?
Some folks would like you to believe that there are too few great ideas or that their product or their industry or their company can’t support a great idea. This, of course, is nonsense.
The Cow is so rare because people are afraid.
If you’re remarkable, it’s likely that some people won’t like you. That’s part of the definition of remarkable. Nobody gets unanimous praise—ever. The best the timid can hope for is to be unnoticed. Criticism comes to those who stand out.
Where did you learn how to fail? If you’re like most Americans, you learned in first grade. That’s when you started figuring out that the safe thing to do was to fit in. The safe thing to do was to color inside the lines, don’t ask too many questions in class, and whatever you do, be sure your homework assignment fits on the supplied piece of card stock.
We run our schools like factories. We line kids up in straight rows, put them in batches (called grades), and work very hard to make sure there are no defective parts. Nobody standing out, falling behind, running ahead, making a ruckus.
Playing it safe. Following the rules. Those seem like the best ways to avoid failure. And in school, they may very well be. Alas, these rules set a pattern for most people (like your boss?), and that pattern is awfully dangerous. These are the rules that ultimately lead to failure.
In a crowded marketplace, fitting in is failing. In a busy marketplace, not standing out is the same as being invisible.
Jon Spoelstra, in
Marketing Outrageously,
points out the catch-22 of the Purple Cow. If times are tough, your peers and your boss may very well say that you can’t afford to be remarkable. After all, we have to conserve, to play it safe; we don’t have the money to make a mistake. In good times, however, those same people will tell you to relax, take it easy; we can afford to be conservative, to play it safe.
The good news is that the prevailing wisdom makes your job even easier. Since just about everyone else is petrified of the Cow, you can be remarkable with even less effort. If successful new products are the ones that stand out, and most people desire not to stand out, you’re set!
So it seems that we face two choices: to be invisible, anonymous, uncriticized, and safe, or to take a chance at greatness, uniqueness, and the Cow.
According to the
New York Times,
a fourteen-block stretch of Amsterdam Avenue in New York contains about seventy-four restaurants. What’s most noticeable about these restaurants is how boring they are. Sure, they offer cuisine from twenty or thirty cultures, and the food is occasionally quite good, but there are precious few remarkable places here. The restaurants are just plain dull compared to the few amazing restaurants in New York.
Why? Simple. After spending all that money and all that time opening a restaurant, the entrepreneur is in no mood to take yet another risk. A restaurant that’s boring won’t attract much criticism. If it’s just like the others, no one will go out of their way to bad-mouth it. Ray’s Pizza is just plain average. You won’t get sick, but you won’t grin with pleasure, either. It’s just another New York pizza place. As a result, the owner makes a living, rarely having to worry about a bad review or offending anyone.
We’ve been raised with a false belief: We mistakenly believe that criticism leads to failure. From the time we get to school, we’re taught that being noticed is almost always bad. It gets us sent to the principal’s office, not to Harvard.
Nobody says, “Yeah, I’d like to set myself up for some serious criticism!” And yet ... the only way to be remarkable is to do just that.
Several decades ago, when Andrew Weil went to Harvard Medical School, the curriculum was much the same as it is today. The focus was on being the best doctor you could be, not on challenging the medical establishment.
Weil took a different path than his peers did. Today, his books have sold millions of copies. He gets the satisfaction of knowing that his writing, speaking, and clinics have helped hundreds of thousands of people. And he’s really, really rich. All because he did something that most of his classmates would view as reckless and risky. The fascinating thing is that while the vast majority of those doctors are overworked, tired, and frustrated at the system they helped create and work every day to maintain, Andrew Weil is having a blast.
Being safe is risky.
We often respond to our aversion to criticism by hiding, avoiding the negative feedback, and thus (ironically) guaranteeing that we won’t succeed! If the only way to cut through is to be remarkable, and the only way to avoid criticism is to be boring and safe, well, that’s quite a choice, isn’t it?

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