Wednesday, April 1, 2015

The Pepsi Challenge and "Sticky" Consumers

I'm a digital forensics expert, and currently I do electronic discovery (e-discovery) for Qualcomm.  E-discovery is the collection, culling, review, and production of data in the course of litigation.  Just as physical evidence is passed between parties in civil and criminal matters for review, data is exchanged as well.

I was initially skeptical that lessons revealed in Cola Wars Continue would be relevant to my professional life.  However I found the success of the "Pepsi Challenge" as particularly brilliant, and loosely relevant to a hurdle faced by e-discovery consulting companies several years ago.

Most people seem to prefer either Coke or Pepsi, and generally stick to that choice when available.  And it seems likely that preferences of individuals don't usually change after deciding on a favorite.  They become "sticky."  This presents a challenge for both companies in terms of winning over consumers of the opposing brand.

While the article doesn't cover the challenge in depth, one would guess that prior to launching, Pepsi tested the idea and confirmed that many Coke devotees actually found they preferred Pepsi.  Drinkers of one soda aren't likely to taste the other brand without cause.  The challenge gave them a reason by engaging them in a game.  I can actually recall taking the challenge with my family while on vacation in Toronto as a child.  My mother has consumed 6-8 glasses of Coke daily for as long as I can remember, and she surprised everyone when she failed the test and chose Pepsi.  The challenge was a clever way to ploy Coke drinkers into trying Pepsi, and it seems to have worked.

In the course of electronic discovery, after all data has been collected, it must be reviewed by attorneys for content.  To facilitate this review process vendors have developed software platforms that have robust search capabilities, redaction tools, and other features.  But their primary purpose is to make it easy and fast for attorneys to separate relevant files from irrelevant files.  For years, nearly every review platform looked alike.  The user would conduct a search with basic criteria (keyword, date, email sender, etc.) and the platform would display every file with a hit, one after another, for review.  Attorneys would review each item one-by-one, and check a box if the file was relevant.  This was an effective manner of conducting review, but it was tedious.  Because the files were displayed in a random order, every file reviewed required a complete shift of focus by the attorney.  A file discussing patent infringement was as likely to be followed by an email about lunch as it was an additional email about patent infringement.        

As electronic storage became more and more inexpensive, the volumes of data relevant to legal cases grew exponentially.  One vendor, my former employer, saw this trend and acquired a company that developed an entirely novel review platform.  Rather than rendering every file one by one, it displayed what was referred to as a "petri dish."  Every file was represented by a dot in the dish, and files that were closely related were displayed together in a cluster.  Rather than reviewing files in random order, an attorney could review files clustered together by topic.  This proved much more efficient, and also accurate.  Tests showed that attorneys reviewed faster, and two reviewers were also less likely to made different decisions on the same file.  In addition, attorneys didn't have to review every single file.  If they reviewed a few that were clustered together and found them to be completely irrelevant, they could ignore the rest of the cluster.

But convincing attorneys to use the new platform proved extremely difficult.  I sat in sales pitch after pitch where we demonstrated the new product and were met with blank stares.  It simply didn't look like attorneys expected a review platform should.  Time after time, the conversation ended with the client deciding to review in our older platform.

Eventually, we began offering to load files for a few large clients into both platforms, while only charging for the older platform.  Gradually, attorneys discovered they preferred the petri dish.  We had particular success persuading young associates to try both platforms, as they were unfamiliar with both styles.  Ultimately, my employer decided to fold both platforms into one product offering.

When consumers are especially entrenched in one option over others, it seems particularly helpful to lower the barrier to trying an unfamiliar option, or even to provide an incentive.

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