In marketing the first thing we learn is that everything has a value and that value can be calculated in money. So the increasingly outdated concept of “man hours” is used not because we value people or time or even labor (all of which should actually be valued) but because it is a device that handily allows the transformation of real world values into something which is abstract, like monetary value.
To understand why money is an abstract concept consider that we trust it for reasons that have nothing to do with the number of monetary tokens we have in our wallet and everything with our understanding of reality, social structures and institutional values and what they all signify.
So its is always a kind of shock to realize that the abstract thing that allows the value of everything else to be calculated (or almost everything else) has zero value when it comes to valuing itself. To say that a one dollar bill, for example is worth one dollar is about as meaningful as saying that one equals one. The tautology does not convey more meaning than the initial form does and is therefore both redundant and meaningless.
The reason we consider this is because unless we can exactly understand the value of something we are unable to effectively market its worth. I have written on the way value is calculated and how the calculation of its cost is changing before, and each time there is some discussion as well as a little bit of a pushback on the notion that what we have doesn’t work well enough.
To explain some of my reasoning we will have to look at classical economics and Jean-Baptiste Say’s law on supply and demand that can be summarized to the patently false statement that “supply creates its own demand”. You will need to follow the link for an in-depth explanation of Say’s law but for it to be proven false we only have to consider the fact that in our lifetime we have all experienced a recession in the economy.
Recessions happen despite the fact that supply does not falter (if anything the opposite is true) and demand does not go away but is, for a time at least, deferred.
Because the value we place on money i.e. the ill-defined notion of the inherent worth of something abstract, changes.
Because money requires trust to function at all, what truly changes in a recession is our trust in the reality we perceive. In this scenario hoarding money (the very thing we use to calculate the value of supply and demand) becomes the only way we have of putting off applying our trust in the future until we feel ready to do so again. Simplified in this fashion the solution to a recession becomes easy: increase trust.
But trust is an abstract in itself. It is a response to a mental and psychological calculation in the probability of a future outcome.
In assessing that probability we use our perception of the reality we see and take into account the way we feel about it all (which means the unarticulated fear we experience over the uncertainty we sense is key). No amount of legislation, edicts, commands, entreaties or supplications are likely to have any impact at all on how willing we become to trust again.
Trust, during times of recession, goes by names such as “consumer confidence” (the Organization for Economic Cooperation and Development actually has an index for that), “market stability”, “debt risk” (and there is an Investor Index that measures that too) “market volatility”, “financial insecurity” and my own favorite “trade friction”.
Every recession, including the last one, has its own special blend of tangible socioeconomic factors that trigger it and then fuel it but those are the technicalities. Ultimately it comes down to that one all-consuming quality: trust.
How Does This Affect Marketing?
The reason we are looking at all this in such granular, link-laden, terminology-dense manner is because marketing runs on trust. Branding is an exercise in trust. Marketers who succeed in conveying the value of what they promote continue to thrive even in tough markets and difficult economies.
Success in conveying the value of something implies that there is a real value to begin with and that it is:
- Internalized successfully
- Consistent across all brand platforms
- Clearly articulated in all communication
- Consistent across all forms of marketing
- Resonant with the target audience needs
These five things are integral to all marketing of course and we have been talking about them seemingly forever. We are still getting it spectacularly wrong, which is why it is important to understand that everything that happens in a modern economy is a distraction. All the modern bells and whistles of digital marketing are window dressing. The fundamentals are immutable. We need to focus on them first, play with everything else later. Incidentally (and so we finish with a memorable catchphrase) that’s exactly what we mean in marketing when we say we need to “Be Real”.