Sean,
I read your recent posts regarding sales = quality with great interest as this is something I have been thinking about a lot lately. I wholeheartedly agree with your opinion that consumers define quality, but I do think that sales on it’s own is not a good enough measure of something as complicated as human nature.
A good example of this is the Hollywood of recent years. From what I understand, this is an industry run by people who believe your assertion that “sales means better quality”, yet Hollywood is in decline. I think that there is a number of contributing factors for this but for starters one I would like to focus on is the emphasis on opening weekend box office.
I remember seeing a Q&A with Eli Roth at a film festival years ago (when Cabin Fever had just come out) and the discussion got onto the state of the horror genre in movies. He told the crowd that if they want Hollywood to make more horror movies they have to see any horror film released on the opening weekend. Seeing the film any other time made absolutely no difference, even seeing the movie just a week later. “How the hell can paying to see a movie make no difference to it success?” I thought at the time. Years later I could understand, but one week? However all the research I’ve done since then confirms he was right. It’s much, much harder to have a ‘sleeper hit’ now days than it used to be.
The problem with using opening weekend figures of course is it tells us absolutely nothing about how much people enjoyed a film. Rather, it’s just a measure of who successful the advertising campaign leading up to the films release was. So over the years, Hollywood has become all about hype attached to bad movies. And after getting burnt again and again, people are slowly learning not to believe the hype.
Another factor is sequels and franchises. One great example was after the second Tomb Raider film came out I read a very funny article where the author simply could not figure out why the second film had done so badly and the first so well, when the second was clearly a better film. The only conclusion: people must like crap. But it completely ignored the fact that there was a huge amount of goodwill among fans in the lead up to the release of the first movie, which was completely destroyed when people felt ripped off for having paid to see such a bad film. So the second was always going to struggle, regardless of the quality (in the customers eyes).
I could think of many more examples from various industries but before I ramble too long, my point in all this is that box office or sales or whatever isn’t always a true indicator of how the customers feel. Sure there are many examples where the market very clearly speaks one way or the other, but the rest of the time how can we be sure that sales reflects the markets tastes? I ask because I really want to know, I hope that this email prompts some enlightening discussion.
I know what you are saying. You are talking about advertising that hits the subconscious or other non-critical thinking attributes of the consumer to get them to buy the product. They may hate the product, but this is not known until after they bought it. You have your own answer when you talked about box office day sales. Once people use the product, they are repelled and tell other people which ends up being a chain effect. Hollywood movies, like hardcore video games, do much of their business in the first few weeks because the lousy product is sugarcoated with hype to make it easier to swallow.
Clearly, the bad reputation of the first Tomb Raider movie made sure the second one didn’t succeed. Also, people do tire of sequels. Matrix Reloaded was a ‘better’ Matrix movie (in terms of more special effects, more fight scenes, etc.) yet it was nowhere as fresh. Entertainment is dependent on surprise which is why sequels, even if very good, will do poorly. (BTW, I think Matrix Reloaded sucks compared to the original Matrix.)
It doesn’t matter how successful advertising is. All advertising does is bring attention to the product. If the product is bad, the greatest advertising in the world will be unable to save it. Why? People’s real life use with the product trumps everything else. If someone who excitedly bought a Xbox 360 because of Microsoft’s marketing ends up with a red ring of death, they become almost impossible to reach through Microsoft’s advertising.
All the advertising in the world will not continually sell a bad video game. Nintendo’s ‘long-tail’ selling video games is not because Nintendo created some super new marketing scheme but because the games are actually very good.. Mario Kart Wii, Wii Sports, Wii Fit, Mario 5- these are all some of the best video games made in a decade. They all have high value to consumers in some way.
Now, let me ask you a question. What if there was no product? All advertising fizzles away once the customer gets to the product. Either the product works or it doesn’t.
The great economist, Joseph Shumpeter, wondered about this issue:
”The ways in which issues and the popular will on any issue are being manufactured is exactly analogous to the ways of commercial advertising. We find the same attempts to contact the subconscious. We find the same technique of creating favorable and unfavorable associations which are the more effective the less rational they are. We find the same evasions and reticences and the same trick of producing opinion by reiterated assertion that is successful precisely to the extent to which it avoids rational argument and the danger of awakening the critical faculties of the people. And so on. Only, all these arts have infinitely more scope in the sphere of public affairs than they have in the sphere of private and professional life. The picture of the prettiest girl that ever lived will in the long run prove powerless to maintain the sales of a bad cigarette. There is no equally effective safeguard in the case of political decisions. Many decisions of fateful importance are of a nature that makes it impossible for the public to experiment with them at its leisure and at moderate cost. Even if that is possible, however, judgment is as a rule not so easy to arrive at as it is in the case of the cigarette, because effects are less easy to interpret.”
”Capitalism, Socialism, and Democracy,” by Joseph Shumpeter, Page 262
In other words, a politician can keep ‘advertising’ on and on again and there is no product.
How’s that stimulus working out for you? It only cost trillions of dollars which you’ll have to repay somewhere down the road. All the evidence around you points to the economy getting worse, of falling stocks, of more jobs being lost. Yet, what does the politician say? The politician repeats, over and over, that ‘the economy is recovering’ and ‘soon, the economy will rebound’. Since there is no product, there is nothing to break the illusion. It is why you keep seeing the politician keep talking in airy platitudes
I’ve gotten several emails saying, “Sales cannot determine quality since advertising can distort it.” Yes, it is true that someone can lie and say, “This is the best product ever made!” and when people go to try it, they find out it is not the best product ever made. The answer is that the product destroys the illusion. In the long run, sales determines the quality.
Any distortion will be temporary because the person will end up arriving at the product (as the exercise is to sell the product). There are other distortions like bad weather harming sales because people stay inside. But this isn’t getting to the heart of the matter that quality is defined by customers.
With a politician, you get nothing but distortions. And this is where the true danger lies.
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