About Stochastic Dominance and Kylo Ren
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About Stochastic Dominance and Kylo Ren

Fri, Jan 3, 2020

Read in 2 minutes

What is the real value of customer insight? More importantly, why the right focus is relevant - at work, in our everyday lives and even on the screen.

Adam Diver was recently interviewed for the GQ magazine about his role in Star Wars.

He was asked whether he thinks Kylo Ren, who aspires to be the next lord Darth Vader, was truly evil.

Adam said he rather thinks of Kylo Ren as a radicalised extremist.

The issue is, Adam continued, that there are ‘people with one-sided education who think in absolutes’.

In other words – Kylo doesn’t think he’s evil.

He thinks he’s right.

The trouble is, there are many people in the world who think they are right.

But not everyone is actually right.

Even more importantly, not everyone has the luxury to be right.

There is only so much space in the world for the ‘rightness’.

As long as someone has to win, someone has to lose.

If we extend this line of thinking to non-binary observations, we could also say some things are simply more important than others.

Some factors are more relevant in predicting cluster membership.

Some brands have stronger brand equity.

And not every choice has the same weight.

The fact that one random variable is ‘bigger’ than another is called Stochastic Dominance.

But other than in decision theory, this concept is applicable in every field.

For example, some customers are far more valuable than other.

The trick is of course, in deciding which ones and why.

Consequently, the worst option for a company is to blindly target just anyone or even groups that are ‘approximately’ right.

This is why the key of a successful business is the right focus.

Focus that is not too wide or too narrow, focus on the people that are just right.

The sooner we realise this, the easier it is to start making the right business choices, in terms of marketing strategy, distribution and even mission and vision.

For me, this is the core of customer insight and the reason why we even do segmentation – profiling customers to decide which unique set of customer characteristics determines the highest chance of being profitable.

Customers have never been so sophisticated in their choice and they only want what’s best for them.

This is why we don’t have the luxury not to stand out and align with someone’s preferences.

Because not every brand can be one’s choice, just as not everyone can be right.

When everything is bold, nothing is bold.

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Photo by MaggieLovesOrbit On Insta on Unsplash

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