Friday, November 21, 2008

Fear Marketing

The marketing of fear can be a very profitable enterprise. Knowing the fears of another person/organization gives one an amazing upper-hand. If company A fears losing out on a deal, and competitor B finds out about it, B can easily out-maneuver A by taking advantage of A's fears. Fear marketing is sometimes used to boost sales but is ethically suspect. Forbes magazine published an article that talks about a pharmaceutical company trying to boost its sales of an anti-nerve gas drug. The drug, Atropen is an antidote for any nerve gas effects on the human body. Should the company start to tell the public to be prepared always for terrorist acts like nerve gas attacks? Should one start to stock up boxes of such atropine related medicine 'just in case' the enemy strikes?

I have worked in high technology companies before, and also with top executives of reputable firms. Actually, the reason why these executives are paid much more than the lower level staff is because they are charged with addressing the issue of risk in the marketplace. Hence, fear mongering techniques are one of the most popular ways to get such executives to give salespeople a listening ear.
- "What happens if the corporation's assets are threatened?"
- "What keeps you awake at 3am each night?"
- "What is keeping your biggest customer from embracing your biggest competitor?"
- "What if your organization's most precious information falls into the wrong hands?"

Even in churches, we get fear-filled situations. What if your biggest church financial contributors stop giving? What happens if half your congregation leaves for the church down the next block? What happens if the guest speaker does not turn up this Sunday?

I think fear mongering is a technique that hits below the belt. Just because the competition is doing it does not mean one has to copy the ugly cat! Why not be creative with one's offerings. Talk about what the competition cannot do. Emphasize the positives and the benefits that the customer can gain. Surround the product with excellent service that aims to provide true and honest value for the buck. Customers generally prefer to work with honest vendors and suppliers who have demonstrated integrity in the past. Those who compete on price alone may gain a little in the sprint race but will be humbled big-time in any marathon. Of course, some will argue that the world nowadays is too fast and too short for any long-term thinking or planning. I will reply by saying: "Easy come easy go." Which is better? A bean-sprouts quickie relationship or a solid tree built on a strong foundation of trust and goodwill?

Fear mongering methods are sometimes employed due to a lack of faith in one's offerings. Certainly, many companies will aim to do both. Highlight one's good points and at the same time, downplay the competition. My submission is that one's ability to stand on the basis of its own strengths (even weaknesses), is a mark of true leadership. Companies lead the way because of their overwhelming edge in their products and services. It is one thing to win on one's own merits. It is yet another to gain at another's expense.

I am very fascinated by companies that are first-movers. For example, Sony popularized the Walkman more than 20 years ago. Apple invented the iPod and a whole new industry. Google came up with a search technology that practically blew away the competition. All of them had that something special that is not easily copied. They do not need to engage fear mongering techniques. They simply became likable.

Another company that I find interesting is General Electric. Jack Welch, former CEO of GE talks about the 4E leader, one who
- who has tremendous levels of ENERGY;
- who ENERGIZES people around them;
- who constantly produces an EDGE;
- who produce measurable results as they EXECUTE.

I look at the way these 4Es are arranged, and the first three has to do with a sense of self-understanding of one's strengths and weaknesses. The 4Es are not dependent on what the competition does, though it helps one's ability to EXECUTE when one is more aware of what the next competitor is doing. I feel that if one spends less time worried about others, and spend more time developing one's core strategies and skills, the organization stands a better chance of building a unique culture of innovation and creativity. Otherwise, the organization is simply a carbon copy of the competition. Have faith in one's sense of identity, not in the fear of one's insecurity. Welch is a great proponent of EXECUTION. Part of his execution strategy is to keep high levels of leadership at all hierachies of the organization. This means doing all they can to develop key leaders and talents. In fact, one of the interesting things is when GE went on the offensive even when others are retrenching. In times like this, with news of job losses reported daily in the media, it is quite the acceptable thing for company to simply lay people off. This is an unhealthy environment richly fertilized with fear. Thus the key is not to use retrenchments as a general tool. Re-focus on core competencies. Spend where it is needed especially. Continue to invest in people. Those who retrenches simply because everyone is doing it are poor examples of leadership. Increase spending in selected areas. This is a mark of a leader who truly knows the core capabilities of the company. One of GE's core competencies is leadership development. (I met this project engineer from GE last year who graduated from the famous MIT, and learned that the organization actually allows employees to talk to their superiors SIX levels up. That is a lot of trust and openness.)

Keep fear marketing far away. Have faith in God who has made us unique. Believe in our uniqueness and may creativity be there to chart out new growth opportunities, even during this economic downturn.


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