What A Mathematician Can Teach Us About Marketing

In his The Fractal Geometry of Nature Benoit Mandelbrot said: “Clouds are not spheres, mountains are not cones, coastlines are not circles, and bark is not smooth, nor does lightening travel in a straight line.” Applying Mandelbrot’s observations to marketing cautions us that markets are not uniform. They may appear so when viewed from afar; however, under increasing scrutiny and refinement, they reveal complex differences. Therefore, Mandelbrot applied to marketing suggests: Every marketing problem offers opportunity if viewed under sufficient magnification.

These differences are the marketer’s “mother’s milk”. They nurture our thinking and allow that even in down or highly competitive markets there are opportunities. In fact, it is precisely in these difficult environments where Mandelbrot can help the most. The tide may no longer be coming in to “raise all boats”, but some boats will sail just fine. You can bet those boats will be well made, maintained and commanded, and they will utilize bigger magnifying glasses than their competitors.

What do I mean by this? Let me tell you a story. In the 90’s, I consulted with Intrawest Resorts. Intrawest was the largest mountain resort company in North America, and was expanding into sun, surf and golf resorts as well. They were considering buying Stratton Mountain ski area in Vermont, and asked me to help. My client was the Real Estate & Development division, which was charged with acquiring properties and developing, as well as marketing the real estate. After the acquisition, I was interested in handling Stratton’s advertising account, which represented considerable annual revenue to my fledgling company. Advertising fell under Operations, Intrawest’s other giant division. The R/E guys provided an introduction to the Operations GM, who ran the ski area. He was a good ops manager, but didn’t know much about marketing. His plan was to buy 4-color ads in SKI Magazine, and put most of the budget into outdoor advertising billboards covering all the highways leading from Boston, Connecticut and New York into Vermont.

To my mind this was foolishness, because 1) that’s what every ski area in Vermont and neighboring New Hampshire was doing, and 2) Stratton was in southern Vermont, which made it the second easiest major ski area to drive to from the New York Metro Area, while this advantage disappeared for the Boston market and much of Connecticut. 3) the competitive ski area 40 minutes closer to New York had a “down-market” image.

This was the 1990’s, when ski areas had primitive customer data and little ability to correlate what little they had. In effect good magnifying glasses didn’t exist. Market observations were empirical.  I had lived in New York City when I started skiing and made weekly treks north to Vermont Friday evening during ski season, returning Sunday evening. I was fairly attuned to the demographics of most Vermont ski areas. And, Mandelbrot was one of the gods in my marketing pantheon. My recommendation was two-fold and unlike any the GM and his staff had ever heard of:

  1. Focus roughly 50% of the budget on two dozen small towns and zip codes in and around New York
  2. Allocate the remainder to heighten Stratton’s soft experience, and to staff training in hospitality.

Putting half the budget against a tiny fraction of their geographic marketing area; with little or no advertising, at that; and concentrating on building “advocates” among these select few high-income areas was a language they didn’t understand. Nor could they see the wisdom in putting the other half of the budget into up-grading the “soft experience” in the day lodges and eating places on the mountain, plus training the entire staff (even the lift operators and maintenance staff) to wildly exceed expectations whenever and wherever they encountered a customer. Needless to say, I didn’t get their business.

By the way, for those of you weaned on the terabytes of customer data available today, this example may not appear relevant to the marketing challenges you face. It is never the quantity of data available. It is always the quality of the thinking that goes into the viewing lens. The thinking in marketing requires a thorough understanding of basic principles.

In a later blog, I will provide the arguments supporting the “radical” recommendation made to Stratton. This will explain why Mandelbrot deserves a place in the Pantheon of Marketing. I’ll also introduce another deity, whose principle, if not name, you are more familiar with. Beforehand, perhaps some of you would like to venture your own arguments for or against the Stratton case? Or add a comment to this blog?

This entry was posted in Blog Entry. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

*