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Zero Sum Marketing

Are you familiar with the concept of a zero sum game?  It is a very simple, usually economic, principle which says that one person’s gain results in another’s loss.  For example, if a consumer has a budget of $500 to spend on Xmas presents (and sticks to their budget), then buying a $200 ipod means there is only $300 left for other presents.  Zero Sum might strike you as a pessimistic way of looking at the world, and it usually is.  More often than not in business, you hear cliches like creating a "tide the rises all boats" … because thinking of things as zero sum is not popular anymore.  The only problem is, there are still real situations where it exists. 

I’m reminded of a story/joke I heard a long time ago of two guys in a forest who see a bear coming towards them.  Both are scared, but one guy sits down, takes sneakers out of his bag and laces them up.  The other guy looks at him like he’s crazy and says "what are you doing?  You can’t outrun that bear."  The first guy looks back at him and says "I don’t have to.  I just have to outrun you."  Zero sum is like that – come out first or get eaten.

Here’s a real example.  Last week I was trying to unlock a Nokia phone tethered to the AT&T network because some family would be travelling soon and needed to use the phone with a different SIM.  I spent nearly an hour going back and forth on the phone with a customer service rep, to finally extract a promise for someone to email me on Feb. 21st in the evening with the unlock code for my phone.*  Instead, I went online and found an unlocking calculator for free that let me unlock the phone.  For Nokia, there is an advantage to having tools like this in the market that make it relatively easy for a customer to unlock a phone.  For AT&T, there isn’t.  Of course, I don’t think that Nokia is encouraging sites like this to exist, but so what if they were?  If Nokia could foster a reputation for being less complex to unlock, wouldn’t that be a good thing for the brand in the eyes of consumers?

Travel is another example.  It helps hotels, restaurants and local tourism if people have to spend less to get to their destination.  If you found a roundtrip flight for $100 or less, wouldn’t you be more likely to spend more on where you stay and what you eat?  There are examples like this all around us, but businesses don’t tend to focus on them because they are not good at isolating them.  I’m not advocating a selfish approach where you don’t consider fair partnerships … all I’m saying is sometimes the best marketing strategy you can have is to hone in on what helps you, even if it’s not so good for the other guy.

* Note: I did get the unlock code by email – but only because I met their long list of requirements for contract length, activation time, etc.

4 thoughts on “Zero Sum Marketing”

  1. That’s why I love T-Mobile. They unlock the phone withing 24 hrs (spending 5 min with customer rep, including wait time). Only criteria is that you have been a T-mobile customer for more than 90 days

    Reply
  2. Cool post, and it made me think of this online campaign that Lufthansa made: https://www.rumortravels.com/

    I think it’s pretty cool and in a similar idea to what you were talking about, they take an unusual position in promoting European flights and traveling with a good concept rather than concentrating on Lufthansa in particular. I don’t know how well it works though. I originally read about it in a blog, but I can’t remember whose right now, sorry.

    Reply
  3. I agree, although we as consumers don’t like lock-in and exclusivity these are important things to implement when looking to improve your own business. Especially, new entrepreneurs need to be thinking about a)How do I create value? and b)How do I capture this value? – and someone who can creatively raise up “barriers to entry” can capture more value than someone else who creates a lot and captures a little…

    Reply

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