Archive for the B2B Category

Analyzing Consumer’s Buying Behaviour

Posted in B2B, Consumer Behavior, CRM, eMarketing, Management, Search Engine Optimization on December 4, 2011 by Consultant
The core function of the marketing department is to understand and satisfy consumer need, wants and desire. Consumer behaviour captures all the aspect of purchase, utility and disposal of products and services. In groups and organization are considered within the framework of consumer. Failing to understand consumer behaviour is the recipe for disaster as some companies have found it the hard way. For example, Wal-Mart launched operations in Latin-America with store design replicating that of US markets. However, Latin America consumer differs to US consumer in every aspect. Wal-Mart suffered consequences and failed to create impact.

Social, cultural, individual and emotional forces play a big part in defining consumer buying behaviour. Cultural, sub-culture and social class play an important is finalizing consumer behaviour. For example, consumer growing up in US is exposed to individualism, freedom, achievement, choice, etc. On sub-culture level influence of religion, race, geographic location and ethnicity define consumer behaviour. Social class consists of consumer with the same level of income, education, taste, feeling of superiority and inferiority. Over time consumer can move from one social level to another.

Culture alone cannot define consumer behaviour; social forces also play an important role. Social forces consist of family, friends, peer groups, status and role in society. Groups which have direct or indirect influence on consumer are referred to as reference groups. Primary groups consist of friends, family and peers with whom consumer has direct contact for considerable time. Secondary groups are association where interaction is at formal level and time devoted is less.

Consumer buying behaviour is influenced by individual’s own personality traits. These personality traits do not remain the same but change with the life cycle. The choice of occupation and corresponding income level also play part in determining consumer behaviour. A doctor and software engineer both would have different buying pattern in apparel, food automobile etc. Consumers from similar background, occupation and income levels may show a different lifestyle pattern.

An individual buying behaviour is influenced by motivation, perception, learning, beliefs and attitude. These factors affect consumer at a psychological level and determine her overall buying behaviour. Maslow’s hierarchy, Herzberg Theory and Freud Theory try and explain people different motivational level in undertaking a buying decision. Perception is what consumer understands about a product through their senses. Marketers have to pay attention to consumer’s perception about a brand rather than true offering of the product. Learning comes from experience; consumer may respond to stimuli and purchase a product. A favorable purchase will generate positive experience resulting in pleasant learning. Belief is the pre-conceived notion a consumer has towards a brand. It is kind of influence a brand exerts on consumer. For example, there is a strong belief product coming through German engineering are quality products. Companies may take advantage of this belief and route their production through Germany.

Companies need to think beyond buying behaviour and analyze the actual buying process. Complex buying behaviour requires high involvement of buyers, as it is infrequent in nature, expensive, and they are significant differences among the available choice e.g. automobile. Grocery buying is referred to as habitual buying, which requires less involvement as few differences among brands, frequent and inexpensive. Buying process involves purchase need, decision makers, information search, alternatives evaluation, purchase decision and post purchase behaviour. Companies try hard to understand consumer experience and expectation at every stage of buying process. Marketers need to figure the right combinations which will initiate purchase need e.g. marketing programs. Companies should ensure consumer have readily available information to take the decision e.g. internet, friends. Consumers evaluate alternatives based on their brand perception and belief. Companies need to work hard to develop products, which match this perception and belief every time. Final purchase decision is taken looking other’s perception of the brand. Post purchase if expectations meet actual performance consumer is satisfied and more likely to repurchase or recommend the brand to others.

Consumer markets are defined by various geographical, social and cultural factors. Furthermore, consumer behaviour is influenced by psychological, personality, reference groups and demographic reasons. Finally actual buying process involves complex process and cycle. Companies have to keep a tab on all three factors in formulating strategy.

What to Do When E-Books and Round-Up Posts Just Won’t Cut It

Posted in B2B, Brand Managment, Consumer Behavior, CRM, eMarketing with tags , , , on December 4, 2011 by Consultant

Some strategies are tested and true. They’ve been used successfully by so many people in so many situations that we’ve learned to expect that they work, and will work for us. Period.

Round-up posts and e-books are both examples of that phenomenon. They’ve become ubiquitous, and for good reason. They seem to work, without fail. Or, do they?

Actually, no, they don’t—and certainly not without fail. More and more, ubiquitous online marketing strategies, such as e-books and round-up posts, are working less and less.

Here’s why those strategies are failing—and what you can do about it!

Why do round-up posts and e-books work, anyway?

Round-up posts are blog posts that “round up” the experts and stars in your industry, showcasing them on your blog. For example, you might ask contributors to provide their best tip about your subject area, to answer a relevant question, or to allow you to feature your favorite work from them in your post.

In all cases, the strategy behind that sort of post is the same, and it’ll always work for the same two reasons:

  1. Experts will be flattered that you chose to feature them, which will make them like you and want to help you (e.g., by spreading the word about the round-up post).
  2. Round-up posts use the celebrity appeal of experts, as well as their insight and experience, to create compelling content for your audience.

E-books are just documents in PDF (or similar) format. A fancy cover and a graphic of the e-book as an actual, three-dimensional book might make it appear more than merely a digital document, but in the end it’s merely that, and it’s usually given away as an “ethical bribe” in exchange for the names and email addresses of your site’s visitors.

The strategy behind e-books is familiar and simple:

  1. Create something valuable that people want and would be willing to provide their contact information to receive.
  2. Use the e-book as a lead-in to build trust and set the stage for the offers that you will subsequently make via email. It’s simple, and it works.

So… what’s the problem?

When a strategy is overused, it stops working

The first problem is ubiquity; when everyone is doing the same thing, the strategy isn’t nearly as special.

Instead of being impressed with your round-up of 30 industry leaders, your audience will yawn because it just got through reading three other round-ups almost identical to yours. And rather than being impressed with your free e-book offer, your audience will think twice about signing up because of the commitment needed to read yet another fluffy and useless 30-page document.

Success can’t be copy-and-pasted; it just can’t be done. Those strategies were first conceived with a real understanding of what would be valuable to the audience. They weren’t just tactics used because “well, everybody does it, and it works.”

The result of the unabashed copying and pasting that afflicts the marketing world is e-books full of unhelpful, recycled material followed by a string of pestering emails and round-up posts—full of bland questions and uninteresting answers—that clearly intend to curry favor with bloggers rather than showcase their good work.

So does that mean that round-up posts and e-books are doomed strategies? No, of course not—but they work only if you make them special.

Special is in the eye of the beholder

What makes content special, of course, depends on the intended audience. Some audiences prefer short, one-line answers from experts in round-up posts and e-books, and some prefer paragraphs filled with detail and insight. Some audiences prefer high-level theory, and others prefer practical how-to information.

Do you know your audience? Do you know what it wants and needs? If you don’t, find out. And if you do, get to work and create it. Avoid copying other tactics and strategies, and create something that will be valuable to your audience.

Just to get your creativity going, here are six ways you could try to make your content different and unique:

1. Ask great questions

Instead of the usual “What’s your No. 1 tip about X?” why not ask something that will make contributors think a bit more? Something such as “What’s the most important question that X should ask, but doesn’t?” Or “What’s the biggest misconception that X has about the industry?” Asking great questions will lead to great answers, and great answers make for great content.

2. Feature unusual content

Rather than pointing to your contributors’ best work or asking them questions about best-practices; ask them to share their biggest failure, most dramatic mistake, or most inaccurate assumption.

3. Feature resources instead

Don’t feature contributors’ content at all. Instead, compile a huge list of valuable resources. So, ask your contributing experts to recommend items for the list, or even ask your audience… you might be surprised with the resulting suggestions.

4. Change the round-up into a contest

Ask contributors to submit entries, and have your audience vote to choose a winner—the entry that provides the best answer, or the one that offers the most useful information. A contest would spark some competitive interaction among the contributors, put you “on the map” as a center for discussion and debate, and draw your readers in.

5. Try a different format or medium

Instead of offering a free e-book, offer a free video course, or a set of interactive worksheets or infographics. You can even change your format to a webinar, or a series of webinars. A different format could be more useful than the tired old e-book, and it may just do a better job of grabbing your audience’s attention.

6. Make the project bigger

Don’t spend a weekend creating a post or e-book. Make the scope of your project dramatically larger and turn it into a pillar of your marketing strategy. That’s what I did with my new book Engagement from Scratch!, and it’s worked wonders for me.

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The ideas in this article are meant to be a starting point, not meant to be copied outright (that would just create the same problem all over again), Use these ideas to start thinking about how you can innovate with your own content to create something special and unique.

Five Proven Ways to Improve ROI Using Marketing Automation

Posted in B2B, Brand Managment, Consumer Behavior, CRM, eMarketing, Management, Marketing Mix (New Concepts) with tags , , , , on December 4, 2011 by Consultant

Earlier this year, I participated in a 14-city roadshow on revenue marketing with my buddy Jim Lenskold of the Lenskold Group. An expert on marketing return on investment (ROI), Jim has authored a book on the topic, published research, and worked with large, enterprise customers to improve their marketing ROI.

The showstopper for me was one of Jim’s presentation slides titled “Five Main Opportunities to Improve ROI”:

Source: Lenskold Group

What I like about that slide is how strongly it validates the impact of marketing automation on the sales cycle. Furthermore, it details five scenarios for how marketing automation tools help drive revenue.

 

Curious about the five ways marketing automation generates ROI? Here they are, listed in order, from highest to lowest impact.

1. Target high-value, high-potential leads

Sounds so simple, doesn’t it? Yet, many marketers brush over that key element of segmentation. Yet it is one of the most powerful features of marketing automation in that it allows you to segment at any stage of the client buy cycle, and do so automatically.

Lead scoring, personalization, and automatic segmentation based on behavior can be a huge ROI winner. Interestingly, the more mature the revenue marketer is in her overall competency, the more focused she is on No. 1: targeting high-value, high-potential leads.

2. Improve conversion late in the funnel

Think you can’t do that? With marketing automation, you can—and should—because the math is crazy. For most clients, improving conversions late in the funnel is an area of low-hanging fruit and has a huge impact.

For example, a client of my firm converts only 2% of all trials. A trial occurs very late in the cycle, and a 1% uptick in conversion rates has an immediate and incredible impact on revenue and marketing ROI. So the plan is to use the client’s marketing automation system to more effectively nurture the experience, and to do it dynamically based on the response to and use (or nonuse) of the program during the trial.

3. Reduce leakage with better integration

We call this approach “No Good Lead Left Behind,” and with marketing automation the upside is big. Take the time to map out the life of a lead, from cold lead to close, and look at those key areas where leads are leaking or pouring out of the process. Once you understand where and why leads are leaking, you can plug those leaks with automatic nurturing via your marketing automation system, especially when it is integrated with your customer relationship management (CRM) tool.

The example given in No. 2 also serves as an excellent example here. Another example would be a lead that is passed to Sales when the lead is not ready. Typically, that lead will be lost or rebought at a later date. With marketing automation, the sales rep can place that lead back into a nurturing program with two clicks, or Marketing can set up an automatic sweep of aged leads that’ll put them back into the nurture program. Easy.

4. Accelerate leakage of low-potential prospects

In other words, take out the trash frequently. Removing that noise and distraction from the system can have huge benefits for both ROI and Marketing-Sales relations. By working on data quality and instituting a highly effective lead-scoring program to take out the trash early, you can diminish that noise and the revenue drainers.

5. Gain efficiency and eliminate low-impact media

Efficiency and spending money on high-return marketing programs are the hallmarks of an effective marketing automation program. The top reason marketers buy marketing automation software is to attain proof of results and to help them make decisions.

Ever fought with Sales about the effectiveness of going to a tradeshow or on running an ad? Marketing automation, and the reporting that comes with it, will enable you to have a business discussion with proof points.

* * *

The ROI discussion for marketing will not go away or die down. That is the new reality for today’s marketing organization. Using tools, people, and processes to effectively contribute to revenue and demonstrate ROI is job one for all revenue marketers.

Why and How Email Feedback Loops Increase Customer Satisfaction and Reduce Complaints

Posted in B2B, Brand Managment, Consumer Behavior, CRM with tags , , , , on December 4, 2011 by Consultant

Why and How Email Feedback Loops Increase Customer Satisfaction and Reduce Complaints

If you are a large-volume sender of email, you should be signed up for all the feedback loops that are available. Why? Because feedback loops are a great way to report spam, increase customer satisfaction, and reduce sender questions and end-user complaints.

Feedback loops enable your subscribers, who are the customers of Internet service providers (ISPs) or mailbox providers, to report spam via their Web-based mail service (e.g., Gmail) or custom email client (e.g., Outlook)—and funnel those spam complaints back to the email sender.

Originally conceived as a tool for ISPs to use to identify abuse coming from their servers and networks, feedback loops are now available (via ISPs) for email marketers, publishers, and other senders to enroll in. In fact, traditional bulk senders have even made it standard practice to do so.

You’re not a spammer, so why are your subscribers marking your mail as spam?

Subscribers may report mail they signed up for as spam because they feel the messages aren’t relevant to them anymore, they find it too difficult to unsubscribe, or they receive too many messages. Subscribers also complain if they didn’t give explicit permission for you to email them, or if your messages turn out to be different from what they thought they were signing up for.

 

In addition to helping the global anti-spam fight, feedback loops will help reduce your complaint rate per IP address and improve your reputation as a marketer, helping to ensure that your emails reach your customer’s inbox.

By removing subscribers who don’t want to receive your emails, you’ll reduce your complaint rate because chances are they won’t complain again. And if you have low complaint rates, ISPs are much more inclined to allow your messages to reach the inboxes of those subscribers who really do want to receive them.

A 2009 study by Return Path found that 20% of legitimate email never makes it to the inbox. Why? Because of email delivery problems based on sender reputation. Your sender reputation is critical to inbox deliverability, and subscriber complaint rates could be keeping you out.

Here are some specific considerations marketers need to keep in mind regarding feedback loops… and some steps to take to get in—and stay in—the inbox.

1.  Place subscriber-identifiable data in your email headers or in your URLs

When sending back feedback loop complaints, ISPs are often required to redact the email addresses of subscribers who mark email as spam because of privacy issues. Therefore, to identify subscribers and exclude them from future mailings, you’ll need to include the subscriber ID in the email header or the URL of links.

2. Flag subscribers

Properly flag subscribers who were removed via the feedback-loop system in your database. That will help you accurately report those who were removed because of spam complaints, as opposed to bounces and unsubscribes.

3. Automate the removal of your feedback-loop complainers

Removing those who complain about your messages manually not only takes a lot of time but also may result in sending multiple emails to subscribers who complained, which can result in further complaints.

4. Analyze your complaints

Perform analysis on your complaints to gather insight into why your subscribers complain. That analysis can help determine where in the subscriber lifecycle you’re having issues, and predict future subscriber behavior.

5. Calculate your complaint rate

Use your inbox placement rates—the total number of email messages that reached the inbox as opposed to the spam folder—in the calculation of your complaint rate. Most senders measure total volume, which gives them an artificially low—and inaccurate —complaint rate. Your subscribers can’t mark mail as spam if it’s in the spam folder, so that’s why it’s not used to calculate complaint rates by ISPs.

6. Incorporate feedback-loop data into your testing plan

When conducting A/B testing on content, incorporating your complaint rate into the mix can help reduce the chance of reputation issues.

* * *

By signing up for feedback loops, marketers can maintain low complaint rates by receiving explicit permission to email subscribers, honoring subscribers’ preferences on email frequency and type, and making it easy for subscribers to unsubscribe or change their preferences. Giving subscribers control of what type of messages they receive, and when they receive them, can go a long way toward maintaining low complaint rates.

If you haven’t enrolled in feedback loops, don’t delay. The benefits are measurable. To sign up to these feedback-loop services, including two new feedback loops from Synacor and Fastmail, fill out the forms listed at the end of this article. You will need your email address set up so complaints can be forwarded to you, and you’ll also need to be able to access that mailbox to receive the confirmation email that completes the set up. You’ll receive a confirmation from the postmasters when they have completed the feedback-loop set up.

AOL
Hotmail
BlueTie
Comcast
Cox
MailTrust (Rackspace)
TWC/Road Runner
USA.net
Yahoo!
Open SRS
Synacor
Fastmail
Rackspace

Posted in B2B, Brand Managment, CRM, eMarketing, Management, Marketing Mix (New Concepts), Search Engine Optimization with tags , , , , , , , , on December 1, 2011 by Consultant

Modern Theories of Motivation

We all are familiar with the classical theories of motivation, but they all are not empirically supported. As far as contemporary theories of motivation are concerned, all are well supported with evidences. Some of the contemporary / modern theories of motivation are explained below:

  • ERG Theory

ERG Theory of Motivation

To bring Maslow’s need hierarchy theory of motivation in synchronization with empirical research, Clayton Alderfer redefined it in his own terms. His rework is called as ERG theory of motivation. He recategorized Maslow’s hierarchy of needs into three simpler and broader classes of needs:

  • Existence needs- These include need for basic material necessities. In short, it includes an individual’s physiological and physical safety needs.
  • Relatedness needs- These include the aspiration individual’s have for maintaining significant interpersonal relationships (be it with family, peers or superiors), getting public fame and recognition. Maslow’s social needs and external component of esteem needs fall under this class of need.
  • Growth needs- These include need for self-development and personal growth and advancement. Maslow’s self-actualization needs and intrinsic component of esteem needs fall under this category of need.

ERG Theory of MotivationThe significance of the three classes of needs may vary for each individual.

Difference between Maslow Need Hierarchy Theory and Alderfer’s ERG Theory
ERG Theory states that at a given point of time, more than one need may be operational.
ERG Theory also shows that if the fulfillment of a higher-level need is subdued, there is an increase in desire for satisfying a lower-level need.
According to Maslow, an individual remains at a particular need level until that need is satisfied. While according to ERG theory, if a higher- level need aggravates, an individual may revert to increase the satisfaction of a lower- level need. This is called frustration- regression aspect of ERG theory. For instance- when growth need aggravates, then an individual might be motivated to accomplish the relatedness need and if there are issues in accomplishing relatedness needs, then he might be motivated by the existence needs. Thus, frustration/aggravation can result in regression to a lower-level need.
While Maslow’s need hierarchy theory is rigid as it assumes that the needs follow a specific and orderly hierarchy and unless a lower-level need is satisfied, an individual cannot proceed to the higher-level need; ERG Theory of motivation is very flexible as he perceived the needs as a range/variety rather than perceiving them as a hierarchy. According to Alderfer, an individual can work on growth needs even if his existence or relatedness needs remain unsatisfied. Thus, he gives explanation to the issue of “starving artist” who can struggle for growth even if he is hungry.
Implications of the ERG Theory

Managers must understand that an employee has various needs that must be satisfied at the same time. According to the ERG theory, if the manager concentrates solely on one need at a time, this will not effectively motivate the employee. Also, the frustration- regression aspect of ERG Theory has an added effect on workplace motivation. For instance- if an employee is not provided with growth and advancement opportunities in an organization, he might revert to the relatedness need such as socializing needs and to meet those socializing needs, if the environment or circumstances do not permit, he might revert to the need for money to fulfill those socializing needs. The sooner the manager realizes and discovers this, the more immediate steps they will take to fulfill those needs which are frustrated until such time that the employee can again pursue growth.

  • McClelland’s Theory of Needs
David McClelland and his associates proposed McClelland’s theory of Needs / Achievement Motivation Theory. This theory states that human behaviour is affected by three needs – Need for Power, Achievement and Affiliation. Need for achievement is the urge to excel, to accomplish in relation to a set of standards, to struggle to achieve success. Need for power is the desire to influence other individual’s behaviour as per your wish. In other words, it is the desire to have control over others and to be influential. Need for affiliationis a need for open and sociable interpersonal relationships. In other words, it is a desire for relationship based on co-operation and mutual understanding.

The individuals with high achievement needs are highly motivated by competing and challenging work. They look for promotional opportunities in job. They have a strong urge for feedback on their achievement. Such individuals try to get satisfaction in performing things better. High achievement is directly related to high performance. Individuals who are better and above average performers are highly motivated. They assume responsibility for solving the problems at work. McClelland called such individuals as gamblers as they set challenging targets

for themselves and they take deliberate risk to achieve those set targets. Such individuals look for innovative ways of performing job. They perceive achievement of goals as a reward, and value it more than a financial reward.

The individuals who are motivated by power have a strong urge to be influential and controlling. They want that their views and ideas should dominate and thus, they want to lead. Such individuals are motivated by the need for reputation and self-esteem. Individuals with greater power and authority will perform better than those possessing less power. Generally, managers with high need for power turn out to be more efficient and successful managers. They are more determined and loyal to the organization they work for. Need for power should not always be taken negatively. It can be viewed as the need to have a positive effect on the organization and to support the organization in achieving it’s goals.

The individuals who are motivated by affiliation have an urge for a friendly and supportive environment. Such individuals are effective performers in a team. These people want to be liked by others. The manager’s ability to make decisions is hampered if they have a high affiliation need as they prefer to be accepted and liked by others, and this weakens their objectivity. Individuals having high affiliation needs prefer working in an environment providing greater personal interaction. Such people have a need to be on the good books of all. They generally cannot be good leaders.

  • Goal Setting Theory

In 1960’s, Edwin Locke put forward the Goal-setting theory of motivation. This theory states that goal setting is essentially linked to task performance. It states that specific and challenging goals along with appropriate feedback contribute to higher and better task performance. In simple words, goals indicate and give direction to an employee about what needs to be done and how much efforts are required to be put in. The important features of goal-setting theory are as follows:

The willingness to work towards attainment of goal is main source of job motivation. Clear, particular and difficult goals are greater motivating factors than easy, general and vague goals.
Specific and clear goals lead to greater output and better performance. Unambiguous, measurable and clear goals accompanied by a deadline for completion avoids misunderstanding.
Goals should be realistic and challenging. This gives an individual a feeling of pride and triumph when he attains them, and sets him up for attainment of next goal. The more challenging the goal, the greater is the reward generally and the more is the passion for achieving it.
Better and appropriate feedback of results directs the employee behaviour and contributes to higher performance than absence of feedback. Feedback is a means of gaining reputation, making clarifications and regulating goal difficulties. It helps employees to work with more involvement and leads to greater job satisfaction.
Employees’ participation in goal is not always desirable.
Participation of setting goal, however, makes goal more acceptable and leads to more involvement.
Goal setting theory has certain eventualities such as:

  1. Self-efficiency- Self-efficiency is the individual’s self-confidence and faith that he has potential of performing the task. Higher the level of self-efficiency, greater will be the efforts put in by the individual when they face challenging tasks. While, lower the level of self-efficiency, less will be the efforts put in by the individual or he might even quit while meeting challenges.
  2. Goal commitment- Goal setting theory assumes that the individual is committed to the goal and will not leave the goal. The goal commitment is dependent on the following factors:
    1. Goals are made open, known and broadcasted.
    2. Goals should be set-self by individual rather than designated.
    3. Individual’s set goals should be consistent with the organizational goals and vision.
Advantages of Goal Setting Theory
  • Goal setting theory is a technique used to raise incentives for employees to complete work quickly and effectively.
  • Goal setting leads to better performance by increasing motivation and efforts, but also through increasing and improving the feedback quality.
Limitations of Goal Setting Theory
  • At times, the organizational goals are in conflict with the managerial goals. Goal conflict has a detrimental effect on the performance if it motivates incompatible action drift.
  • Very difficult and complex goals stimulate riskier behaviour.
  • If the employee lacks skills and competencies to perform actions essential for goal, then the goal-setting can fail and lead to undermining of performance.
  • There is no evidence to prove that goal-setting improves job satisfaction.

  • Reinforcement Theory

Reinforcement theory of motivation was proposed by BF Skinner and his associates. It states that individual’s behaviour is a function of its consequences. It is based on “law of effect”, i.e, individual’s behaviour with positive consequences tends to be repeated, but individual’s behaviour with negative consequences tends not to be repeated.

Reinforcement theory of motivation overlooks the internal state of individual, i.e., the inner feelings and drives of individuals are ignored by Skinner. This theory focuses totally on what happens to an individual when he takes some action. Thus, according to Skinner, the external environment of the organization must be designed effectively and positively so as to motivate the employee. This theory is a strong tool for analyzing controlling mechanism for individual’s behaviour. However, it does not focus on the causes of individual’s behaviour.

The managers use the following methods for controlling the behaviour of the employees:

Positive Reinforcement- This implies giving a positive response when an individual shows positive and required behaviour. For example – Immediately praising an employee for coming early for job. This will increase probability of outstanding behaviour occurring again. Reward is a positive reinforce, but not necessarily. If and only if the employees’ behaviour improves, reward can said to be a positive reinforcer. Positive reinforcement stimulates occurrence of a behaviour. It must be noted that more spontaneous is the giving of reward, the greater reinforcement value it has.
Negative Reinforcement- This implies rewarding an employee by removing negative / undesirable consequences. Both positive and negative reinforcement can be used for increasing desirable / required behaviour.
Punishment- It implies removing positive consequences so as to lower the probability of repeating undesirable behaviour in future. In other words, punishment means applying undesirable consequence for showing undesirable behaviour. For instance – Suspending an employee for breaking the organizational rules. Punishment can be equalized by positive reinforcement from alternative source.
Extinction- It implies absence of reinforcements. In other words, extinction implies lowering the probability of undesired behaviour by removing reward for that kind of behaviour. For instance – if an employee no longer receives praise and admiration for his good work, he may feel that his behaviour is generating no fruitful consequence. Extinction may unintentionally lower desirable behaviour.
Implications of Reinforcement Theory

Reinforcement theory explains in detail how an individual learns behaviour. Managers who are making attempt to motivate the employees must ensure that they do not reward all employees simultaneously. They must tell the employees what they are not doing correct. They must tell the employees how they can achieve positive reinforcement.

  • Equity Theory of Motivation

The core of the equity theory is the principle of balance or equity. As per this motivation theory, an individual’s motivation level is correlated to his perception of equity, fairness and justice practiced by the management. Higher is individual’s perception of fairness, greater is the motivation level and vice versa. While evaluating fairness, employee compares the job input (in terms of contribution) to outcome (in terms of compensation) and also compares the same with that of another peer of equal cadre/category. D/I ratio (output-input ratio) is used to make such a comparison.

EQUITY THEORY
Ratio Comparison Perception
O/I a < O/I b Under-rewarded (Equity Tension)
O/I a = O/I b Equity
O/I a > O/I b Over-rewarded (Equity Tension)

Negative Tension state: Equity is perceived when this ratio is equal. While if this ratio is unequal, it leads to “equity tension”. J.Stacy Adams called this a negative tension state which motivates him to do something right to relieve this tension. A comparison has been made between 2 workers A and B to understand this point.

Referents: The four comparisons an employee can make have been termed as “referents” according to Goodman. The referent chosen is a significant variable in equity theory. These referents are as follows:

Self-inside: An employee’s experience in a different position inside his present organization.
Self-outside: An employee’s experience in a situation outside the present organization.
Other-inside: Another employee or group of employees inside the employee’s present organization.
Other-outside: Another employee or employees outside the employee’s present organization.

An employee might compare himself with his peer within the present job in the current organization or with his friend/peer working in some other organization or with the past jobs held by him with others. An employee’s choice of the referent will be influenced by the appeal of the referent and the employee’s knowledge about the referent.

Moderating Variables: The gender, salary, education and the experience level are moderating variables. Individuals with greater and higher education are more informed. Thus, they are likely to compare themselves with the outsiders. Males and females prefer same sex comparison. It has been observed that females are paid typically less than males in comparable jobs and have less salary expectations than male for the same work. Thus, a women employee that uses another women employee as a referent tends to lead to a lower comparative standard. Employees with greater experience know their organization very well and compare themselves with their own colleagues, while employees with less experience rely on their personal experiences and knowledge for making comparisons.

Choices: The employees who perceive inequity and are under negative tension can make the following choices:

Change in input (e.g. Don’t overexert)
Change their outcome (Produce quantity output and increasing earning by sacrificing quality when piece rate incentive system exist)
Choose a different referent
Quit the job
Change self perception (For instance – I know that I’ve performed better and harder than everyone else.)
Change perception of others (For instance – Jack’s job is not as desirable as I earlier thought it was.)
Assumptions of the Equity Theory
  • The theory demonstrates that the individuals are concerned both with their own rewards and also with what others get in their comparison.
  • Employees expect a fair and equitable return for their contribution to their jobs.
  • Employees decide what their equitable return should be after comparing their inputs and outcomes with those of their colleagues.
  • Employees who perceive themselves as being in an inequitable scenario will attempt to reduce the inequity either by distorting inputs and/or outcomes psychologically, by directly altering inputs and/or outputs, or by quitting the organization.

  • Expectancy Theory of Motivation

    he expectancy theory was proposed by Victor Vroom of Yale School of Management in 1964. Vroom stresses and focuses on outcomes, and not on needs unlike Maslow and Herzberg. The theory states that the intensity of a tendency to perform in a particular manner is dependent on the intensity of an expectation that the performance will be followed by a definite outcome and on the appeal of the outcome to the individual.

    The Expectancy theory states that employee’s motivation is an outcome of how much an individual wants a reward (Valence), the assessment that the likelihood that the effort will lead to expected performance (Expectancy) and the belief that the performance will lead to reward (Instrumentality). In short,Valence is the significance associated by an individual about the expected outcome. It is an expected and not the actual satisfaction that an employee expects to receive after achieving the goals. Expectancy is the faith that better efforts will result in better performance. Expectancy is influenced by factors such as possession of appropriate skills for performing the job, availability of right resources, availability of crucial information and getting the required support for completing the job.

    Instrumentality is the faith that if you perform well, then a valid outcome will be there. Instrumentality is affected by factors such as believe in the people who decide who receives what outcome, the simplicity of the process deciding who gets what outcome, and clarity of relationship between performance and outcomes. Thus, the expectancy theory concentrates on the following three relationships:
    • Effort-performance relationship: What is the likelihood that the individual’s effort be recognized in his performance appraisal?
    • Performance-reward relationship: It talks about the extent to which the employee believes that getting a good performance appraisal leads to organizational rewards.
    • Rewards-personal goals relationship: It is all about the attractiveness or appeal of the potential reward to the individual.

    Vroom was of view that employees consciously decide whether to perform or not at the job. This decision solely depended on the employee’s motivation level which in turn depends on three factors of expectancy, valence and instrumentality.

    Advantages of the Expectancy Theory
    • It is based on self-interest individual who want to achieve maximum satisfaction and who wants to minimize dissatisfaction.
    • This theory stresses upon the expectations and perception; what is real and actual is immaterial.
    • It emphasizes on rewards or pay-offs.
    • It focuses on psychological extravagance where final objective of individual is to attain maximum pleasure and least pain.
    Limitations of the Expectancy Theory
    • The expectancy theory seems to be idealistic because quite a few individuals perceive high degree correlation between performance and rewards.
    • The application of this theory is limited as reward is not directly correlated with performance in many organizations. It is related to other parameters also such as position, effort, responsibility, education, etc.
    Implications of the Expectancy Theory
    The managers can correlate the preferred outcomes to the aimed performance levels.
    The managers must ensure that the employees can achieve the aimed performance levels.
    The deserving employees must be rewarded for their exceptional performance.
    The reward system must be fair and just in an organization.
    Organizations must design interesting, dynamic and challenging jobs.
    The employee’s motivation level should be continually assessed through various techniques such as questionnaire, personal interviews, etc.

Posted in B2B, Brand Managment, Consumer Behavior, CRM, eMarketing, Management, Marketing Mix (New Concepts) with tags , , , , , , , , , on December 1, 2011 by Consultant

Classical Theories of Motivation

The motivation concepts were mainly developed around 1950’s. Three main theories were made during this period. These three classical theories are-

  • Maslow’s hierarchy of needs theory

Abraham Maslow is well renowned for proposing the Hierarchy of Needs Theory in 1943. This theory is a classical depiction of human motivation. This theory is based on the assumption that there is a hierarchy of five needs within each individual. The urgency of these needs varies. These five needs are as follows-

  1. Physiological needs- These are the basic needs of air, water, food, clothing and shelter. In other words, physiological needs are the needs for basic amenities of life.
  2. Safety needs- Safety needs include physical, environmental and emotional safety and protection. For instance- Job security, financial security, protection from animals, family security, health security, etc.
  3. Social needs- Social needs include the need for love, affection, care, belongingness, and friendship.
  4. Esteem needs- Esteem needs are of two types: internal esteem needs (self- respect, confidence, competence, achievement and freedom) and external esteem needs (recognition, power, status, attention and admiration).
  5. Self-actualization need- This include the urge to become what you are capable of becoming / what you have the potential to become. It includes the need for growth and self-contentment. It also includes desire for gaining more knowledge, social- service, creativity and being aesthetic. The self- actualization needs are never fully satiable. As an individual grows psychologically, opportunities keep cropping up to continue growing.

According to Maslow, individuals are motivated by unsatisfied needs. As each of these needs is significantly satisfied, it drives and forces the next need to emerge. Maslow grouped the five needs into two categories –Higher-order needs and Lower-order needs. The physiological and the safety needs constituted the lower-order needs. These lower-order needs are mainly satisfied externally. The social, esteem, and self-actualization needs constituted the higher-order needs. These higher-order needs are generally satisfied internally, i.e., within an individual. Thus, we can conclude that during boom period, the employees lower-order needs are significantly met.

Maslows Need Hierarchy ModelFIGURE: Maslow’s Need Hierarchy Model
Implications of Maslow’s Hierarchy of Needs Theory for Managers
As far as the physiological needs are concerned, the managers should give employees appropriate salaries to purchase the basic necessities of life. Breaks and eating opportunities should be given to employees.
As far as the safety needs are concerned, the managers should provide the employees job security, safe and hygienic work environment, and retirement benefits so as to retain them.
As far as social needs are concerned, the management should encourage teamwork and organize social events.
As far as esteem needs are concerned, the managers can appreciate and reward employees on accomplishing and exceeding their targets. The management can give the deserved employee higher job rank / position in the organization.
As far as self-actualization needs are concerned, the managers can give the employees challenging jobs in which the employees’ skills and competencies are fully utilized. Moreover, growth opportunities can be given to them so that they can reach the peak.

The managers must identify the need level at which the employee is existing and then those needs can be utilized as push for motivation.

Limitations of Maslow’s Theory
  • It is essential to note that not all employees are governed by same set of needs. Different individuals may be driven by different needs at same point of time. It is always the most powerful unsatisfied need that motivates an individual.
  • The theory is not empirically supported.
  • The theory is not applicable in case of starving artist as even if the artist’s basic needs are not satisfied, he will still strive for recognition and achievement.
  • Herzberg’s Two factor theory

Herzberg’s Two-Factor Theory of Motivation

In 1959, Frederick Herzberg, a behavioural scientist proposed a two-factor theory or the motivator-hygiene theory. According to Herzberg, there are some job factors that result in satisfaction while there are other job factors that prevent dissatisfaction. According to Herzberg, the opposite of “Satisfaction” is “No satisfaction” and the opposite of “Dissatisfaction” is “No Dissatisfaction”.

Herzbergs view of satisfaction and dissatisfaction
FIGURE: Herzberg’s view of satisfaction and dissatisfaction

Herzberg classified these job factors into two categories-

  1. Hygiene factors- Hygiene factors are those job factors which are essential for existence of motivation at workplace. These do not lead to positive satisfaction for long-term. But if these factors are absent / if these factors are non-existant at workplace, then they lead to dissatisfaction. In other words, hygiene factors are those factors which when adequate / reasonable in a job, pacify the employees and do not make them dissatisfied. These factors are extrinsic to work. Hygiene factors are also called asdissatisfiers or maintenance factors as they are required to avoid dissatisfaction. These factors describe the job environment / scenario. The hygiene factors symbolized the physiological needs which the individuals wanted and expected to be fulfilled. Hygiene factors include:
    • Pay- The pay or salary structure should be appropriate and reasonable. It must be equal and competitive to those in the same industry in the same domain.
    • Company Policies and administrative policies- The company policies should not be too rigid. They should be fair and clear. It should include flexible working hours, dress code, breaks, vacation, etc.
    • Fringe benefits- The employees should be offered health care plans (mediclaim), benefits for the family members, employee help programmes, etc.
    • Physical Working conditions- The working conditions should be safe, clean and hygienic. The work equipments should be updated and well-maintained.
    • Status- The employees’ status within the organization should be familiar and retained.
    • Interpersonal relations-The relationship of the employees with his peers, superiors and subordinates should be appropriate and acceptable. There should be no conflict or humiliation element present.
    • Job Security- The organization must provide job security to the employees.

     

  2. Motivational factors- According to Herzberg, the hygiene factors cannot be regarded as motivators. The motivational factors yield positive satisfaction. These factors are inherent to work. These factors motivate the employees for a superior performance. These factors are called satisfiers. These are factors involved in performing the job. Employees find these factors intrinsically rewarding. The motivators symbolized the psychological needs that were perceived as an additional benefit. Motivational factors include:
    • Recognition- The employees should be praised and recognized for their accomplishments by the managers.
    • Sense of achievement- The employees must have a sense of achievement. This depends on the job. There must be a fruit of some sort in the job.
    • Growth and promotional opportunities- There must be growth and advancement opportunities in an organization to motivate the employees to perform well.
    • Responsibility- The employees must hold themselves responsible for the work. The managers should give them ownership of the work. They should minimize control but retain accountability.
    • Meaningfulness of the work- The work itself should be meaningful, interesting and challenging for the employee to perform and to get motivated.
Limitations of Two-Factor Theory

The two factor theory is not free from limitations:

  1. The two-factor theory overlooks situational variables.
  2. Herzberg assumed a correlation between satisfaction and productivity. But the research conducted by Herzberg stressed upon satisfaction and ignored productivity.
  3. The theory’s reliability is uncertain. Analysis has to be made by the raters. The raters may spoil the findings by analyzing same response in different manner.
  4. No comprehensive measure of satisfaction was used. An employee may find his job acceptable despite the fact that he may hate/object part of his job.
  5. The two factor theory is not free from bias as it is based on the natural reaction of employees when they are enquired the sources of satisfaction and dissatisfaction at work. They will blame dissatisfaction on the external factors such as salary structure, company policies and peer relationship. Also, the employees will give credit to themselves for the satisfaction factor at work.
  6. The theory ignores blue-collar workers. Despite these limitations, Herzberg’s Two-Factor theory is acceptable broadly.
Implications of Two-Factor Theory
The Two-Factor theory implies that the managers must stress upon guaranteeing the adequacy of the hygiene factors to avoid employee dissatisfaction. Also, the managers must make sure that the work is stimulating and rewarding so that the employees are motivated to work and perform harder and better. This theory emphasize upon job-enrichment so as to motivate the employees. The job must utilize the employee’s skills and competencies to the maximum. Focusing on the motivational factors can improve work-quality.
  • Theory X and Theory Y

In 1960, Douglas McGregor formulated Theory X and Theory Y suggesting two aspects of human behaviour at work, or in other words, two different views of individuals (employees): one of which is negative, called as Theory X and the other is positive, so called as Theory Y. According to McGregor, the perception of managers on the nature of individuals is based on various assumptions.

Assumptions of Theory X
  • An average employee intrinsically does not like work and tries to escape it whenever possible.
  • Since the employee does not want to work, he must be persuaded, compelled, or warned with punishment so as to achieve organizational goals. A close supervision is required on part of managers. The managers adopt a more dictatorial style.
  • Many employees rank job security on top, and they have little or no aspiration/ ambition.
  • Employees generally dislike responsibilities.
  • Employees resist change.
  • An average employee needs formal direction.
Assumptions of Theory Y
  • Employees can perceive their job as relaxing and normal. They exercise their physical and mental efforts in an inherent manner in their jobs.
  • Employees may not require only threat, external control and coercion to work, but they can use self-direction and self-control if they are dedicated and sincere to achieve the organizational objectives.
  • If the job is rewarding and satisfying, then it will result in employees’ loyalty and commitment to organization.
  • An average employee can learn to admit and recognize the responsibility. In fact, he can even learn to obtain responsibility.
  • The employees have skills and capabilities. Their logical capabilities should be fully utilized. In other words, the creativity, resourcefulness and innovative potentiality of the employees can be utilized to solve organizational problems.

Thus, we can say that Theory X presents a pessimistic view of employees’ nature and behaviour at work, while Theory Y presents an optimistic view of the employees’ nature and behaviour at work. If correlate it with Maslow’s theory, we can say that Theory X is based on the assumption that the employees emphasize on the physiological needs and the safety needs; while Theory X is based on the assumption that the social needs, esteem needs and the self-actualization needs dominate the employees.

McGregor views Theory Y to be more valid and reasonable than Theory X. Thus, he encouraged cordial team relations, responsible and stimulating jobs, and participation of all in decision-making process.

Implications of Theory X and Theory Y
Quite a few organizations use Theory X today. Theory X encourages use of tight control and supervision. It implies that employees are reluctant to organizational changes. Thus, it does not encourage innovation.
Many organizations are using Theory Y techniques. Theory Y implies that the managers should create and encourage a work environment which provides opportunities to employees to take initiative and self-direction. Employees should be given opportunities to contribute to organizational well-being. Theory Y encourages decentralization of authority, teamwork and participative decision making in an organization. Theory Y searches and discovers the ways in which an employee can make significant contributions in an organization. It harmonizes and matches employees’ needs and aspirations with organizational needs and aspirations.

These theories are building blocks of the contemporary theories developed later. The working mangers and learned professionals till date use these classical theories to explain the concept of employee motivation.

 

Posted in B2B, CRM with tags , , on December 1, 2011 by Consultant

Motivational Challenges

Motivation seems to be a simple function of management in books, but in practice it is more challenging. The reasons for motivation being challenging job are as follows:

 

  • One of the main reasons of motivation being a challenging job is due to the changing workforce. The employees become a part of their organization with various needs and expectations. Different employees have different beliefs, attitudes, values, backgrounds and thinking. But all the organizations are not aware of the diversity in their workforce and thus are not aware and clear about different ways of motivating their diverse workforce. 
  • Employees motives cannot be seen, they can only be presumed. Suppose, there are two employees in a team showing varying performance despite being of same age group, having same educational qualifications and same work experience. The reason being what motivates one employee may not seem motivating to other. 
  • Motivation of employees becomes challenging especially when the organizations have considerably changed the job role of the employees, or have lessened the hierarchy levels of hierarchy, or have chucked out a significant number of employees in the name of down-sizing or right-sizing. Certain firms have chosen to hire and fire and paying for performance strategies nearly giving up motivational efforts. These strategies are unsuccessful in making an individual overreach himself. 

     

  • The vigorous nature of needs also pose challenge to a manager in motivating his subordinates. This is because an employee at a certain point of time has diverse needs and expectations. Also, these needs and expectations keep on changing and might also clash with each other. For instance-the employees who spend extra time at work for meeting their needs for accomplishment might discover that the extra time spent by them clash with their social neds and with the need for affiliation.