Category: Value for Value

Categories
Branding CRM Marketing Misleadership Relationship Marketing Value for Value

The Unintended Consequences of Variable Pricing

It’s easy to imagine how a company moves to variable pricing. They follow the money. They test into it. They realize that the buying behavior of shoppers varies from day to day and hour to hour. Their analytics tells them that someone using Safari has higher average purchases than someone using Firefox. They know that visitors that come to their website after visiting certain websites are more or less price sensitive than if they come from other referring sites. And sometimes, they’ve even learned that it pays to increase prices based on repeat visits. In other words, on some sites, the best price you’ll ever get is the first one they show you. Shop around, come back, and you’ll pay more. (Sort of like a car salesman, who knows that if you come back, he’s got you, and he doesn’t have to lower his price to make the sale.)

Then a marketing manager or someone in the sales department makes the case that they can improve profits by harnessing all of this data into a variable pricing strategy. It’s hard to argue with the data.

So the company invests in a pricing engine or builds its own pricing algorithms and institutes variable pricing. And guess what? Profits go up. Sales go up because shoppers are getting deals created with their buying habits in mind. After all, it is an accepted rule of Internet marketing (and direct marketing before it) that the more relevant and personalized the offer, the better the response. And milking every extra dollar out of a sale (or, in some cases, many extra dollars) increases profits.

A slam dunk, right?

Anybody who remembers the relevance of that phrase knows where I’m going with this.

Pricing may seem like a commodity, but in fact, it is part of brand identity. As is the relationship a buyer has with a brand. And just to be clear, a retailer is a brand, too. Sure, Target sells brands, but it is also a brand. People shop at Target as opposed to Wal-Mart for many of the same reasons that they choose Land’s End over Old Navy.

If you found out that the person next to you in line paid less for the same sweater at Land’s End than you did, how satisfied with Land’s End would you be?

Some shoppers will be so upset they’ll never come back. And others will find out how to get the lower price, and then make sure they do that from now on.

Let’s call the first shopper a Brand Shopper. And the second a Price Shopper.

Price Shoppers are smart. They find coupon sites. They find discount codes. They follow blogs and Twitter feeds that promise to find and deliver the best prices. Some of them use bots or apps to notify them of the best prices on specific retailers and shopping aggregators.

And in many cases, price shoppers know that brand distinction isn’t as important as it used to be. As Seth Godin famously said, most products these days are “good enough.” In other words, the upcharge for a top brand isn’t always worth it, and price shoppers often know that.

If you are courting price shoppers, then you’re always in a pricing war where the shoppers are as well-armed as you are… sometimes better. And the competition can almost always undercut you… unless you’re the rock bottom price, in which case, you’re not varying your prices anyway. You’re Wal-Mart.

With variable pricing, price shoppers learn when to buy, and when not to buy. The profits you initially expected from this major segment wither away.

Now let’s look at Brand Shoppers, the core of your business. Your house list, so to speak. They love you. They swear by you. They only wear/drive/eat you. But it turns out, brand is about more than just quality, or value. Brand is emotional. Brand lets people willingly buy inferior products out of love, or a sense of belonging, or even habit. In other words, brand is like a relationship, the human kind.

And nobody likes to feel cheated on, or duped, or lied to, or made a fool of. When they do, they dump you like a bag of bread that’s gone moldy.

So what happens to your brand loyalists when they find out that you’re playing fast and loose with pricing and they get no benefit for being a loyal customer? Even worse, what happens when they find out that you’ll give a better discount to someone who’s never bought from you before, rather than they, who sing your praises, evangelize your brand to all who will listen, and buy whatever new product you throw at them?

So yeah, variable pricing looks great from inside the bubble. But can someone please explain to me the value of a brand in a world where we’re made to feel like chumps if we don’t outsource our shopping decisions to mindless shopping bots that always find us the best prices, regardless of source, regardless of emotion, regardless of loyalty?

Like I said. Slam dunk.

Categories
Life et al Social Media Value for Value

Was you ever bit by a dog?

Eddie:  Say, was you ever bit by a dead bee?… I bet I been bit a hundred times that way.
Slim: You have? Why don’t you bite them back?

In the light of recent events, I can’t help but thinking that this exchange between Eddie, played by Walter Brennan, and Slim, played by Lauren Bacall, in the classic film “To Have and Have Not”*, casts an interesting light on the litigious society in which we live. Permit me to explain…

You see, a couple of weeks ago, I was bitten by a dog.

Yes, me. Someone who had never met a dog that didn’t like me, and has had a couple of my own. Someone who has been referred to by my wife as big old shaggy dog as she has watched me happily roll around on the ground with slobbery newfound friends.

In this instance, my wife and I were walking in NYC and met a dog owner with a beautiful 2-year old female Newfoundland (my favorite breed). We did the standard NY thing, and asked if it was okay to pet the dog. The owner said, “Yes, she’s friendly and she loves being petted.” As I reached down to pet the dog, she lunged, tearing open my lip and my hand in an instant.

After much shock, blood, and a couple of cab rides we ended up at Beth Israel’s emergency room, where the staff and an on-call plastic surgeon did an amazing job of repair. (Even with 20 stitches, you can barely see the scar, although the shock of being bitten by a dog is still resonating through my soul, as I give dogs on the street a wide berth and contemplate a shift in my own personal alignment with the universe.)

Before we headed off to the emergency room, though, we reassured the owner, who was shocked at her dog’s unprecedented actions, and no doubt terrified that we would report the dog, that we would not in fact report the dog. My wife and I are both animal lovers, as well as vegetarians (okay, pescatarians), and wouldn’t want our actions to cause a dog to be put to sleep. And yes, if the dog ends up attacking someone else, we know we bear some responsibility for that.

But in my mind, had we not stopped to pet the dog, the attack would never have happened. Who knows why it decided to attack me when it had never attacked anyone else? Maybe it thought it was protecting her. The owner is covering all medical expenses, bought a muzzle for her dog the next morning, and is getting the dog behavioral training. There was no chance of rabies or other complications, as the dog had had its shots literally less than 2 weeks earlier, which she proved by emailing us copies of the records that weekend.

Other than the attack itself, what surprised me most was the response from my friends and business associates, who overwhelmingly thought we should not only have reported the dog, but sued the owner. And while only a few of them brought up the notion of future victims, most felt it was a lost financial opportunity.

I’m not knocking them, by the way. We hear it all the time, that we live in a litigious society. People have the right to use a system the way it advertises it should be used.

In an interesting, coincidental confluence of legal events, I also recently had the chance to opt out of signing a contract which might have cost me the ownership of a book I’ve written. Thanks to the advice of a close friend, combined with the opinion of an Intellectual Property attorney, I chose not to sign the contract.

But what stuck with me most was something the IP attorney said. He said that many contracts are just as bad, and that frequently the creator has no leg to stand on in negotiating a better contract, because the people on the other side of the equation have the power. As he said, if you have another option, take it.

Thankfully, these days, the little guy has many other options.

First of all, self-publishing is a much more valid solution than ever before. From Radiohead’s self-released, pay-what-you-want album In Rainbows, which changed the music paradigm and still made money, to self-published authors like Amanda Hocking, who made over two million dollars on her own before eventually being picked up by a major publishing house, the keys to the kingdom are no longer exclusively held in the hands of the self-proclaimed kings.

Second of all, social media is coming into its own in a big way in terms of raising public awareness. And if you don’t think so, look at the impact of social media from Twitter to YouTube to Facebook in three stories currently in the news:

  • The 85 million plus views of KONY 2012, the YouTube video about indicted Ugandan war criminal Joseph Kony, where according to CNN journalist Anderson Cooper, mainstream media’s coverage of Kony over the years was unable to gain any traction at all.
  • The shooting death of Trayvon Martin, whose family, along with their supporters, used social media to fan the otherwise dying flames of attention into a Federal Justice Department investigation and nationwide coverage.
  • The “Etch-a-Sketch comment by Mitt Romney’s campaign staffer, which only really became an issue for the mainstream media after rising as a trending topic on Twitter, according to CNN’s Howard Kurtz, host of the CNN program Reliable Sources, which focuses on the news media.

But back to the issue at hand.

The current personal crisis of faith I’m going through as a result of both being bitten in the face by a dog that loved people and narrowly missing being bitten in the ass by people I thought had my best interests at heart is more about my own complacency than anything else.

My favorite quote from Thomas Jefferson is, “Our own reason is the only oracle given you by heaven, and you are answerable for, not the rightness, but the uprightness of the decision.”

We are the only ones responsible for our own lives and our own actions. The day we entrust that responsibility only to contracts and laws and those who manipulate them, the day we decide to play along and get what we can rather than what we should, is the day we cede control of our lives, our Fortunes and our sacred honor to systems that not only have no honor, but shouldn’t be expected to.

I know why those systems want to obscure that fact and encourage us to play along. But can somebody please explain to me why we silence our inner voices when they try to remind us of the truth we know in our hearts?

* If you’ve never seen To Have and Have Not, you’re really missing a great movie. It’s based on a novel by Ernest Hemingway, with a script by William Faulkner, directed by Howard Hawks and starring Humphrey Bogart, Lauren Bacall and Walter Brennan, and the dialogue is some of the best ever. Here’s the full exchange:

Eddie: Say, was you ever bit by a dead bee?

Beauclerc: I have no memory of ever being bit by any kind of bee.

Slim: (interjecting) Were you?

Eddie: You’re alright, lady. You and Harry’s the only one that ever…

Morgan: Don’t forget Frenchie.

Eddie: That’s right. You and Harry and Frenchie. You know, you got to be careful of dead bees if you’re goin’ around barefooted, ’cause if you step on them they can sting you just as bad as if they was alive, especially if they was kind of mad when they got killed. I bet I been bit a hundred times that way.

Slim: You have? Why don’t you bite them back?

Eddie: That’s what Harry always says. But I ain’t got no stinger.

Categories
Branding Life et al Value for Value

The Lego Epiphany

I’ve heard old timers talk about how when they were kids they didn’t have TV to deaden their imaginations. They had radio, and their minds needed to fill in the spaces between the words with a world of their own imagining.

I could never really understand their objections. After all, I had TV, but I also had books, shelves upon shelves of books, and I was used to filling in the spaces.

But I finally have my own “when I was knee high to a grasshopper, things were different” speech. Which is good, because I was worried I wasn’t going to turn out to be a grumpy old curmudgeon, but now I can rest easy.

When I was young, we had this toy called Lego. Now before you rush in to say, “We’ve got that now” I’m gonna stop you right there. The Lego you’ve got isn’t the same Lego we had. You’ve got prefabricated, pre-digested, specially formulated snap together reusable plastic model kits.

Now I’m not knocking plastic kits. I built more than my share. When I wanted to build a Boeing B-17G or a ’57 Chevy Bel Air, I bought a model of it. But when I wanted to let my imagination soar, I reached for my Legos and built whatever I could dream up. My “men” were the little single peg pieces, and we didn’t get that many of them. In terms of purpose-built pieces, my Lego had ‘em, too: wheels, with removable tires so the wheels could be pulleys. And none of that stopped me from building space ships and airplanes and bridges and buildings.

Please don’t get me wrong: I would have sold my sister or my dog to get one of the Death Star or Millennium Falcon Lego sets they make now, or the Lego people with arms that move and hands that can hold things. But I couldn’t possibly have realized then what I’ve long since come to understand: give a kid a set of instructions and he learns to assemble, but force a kid to imagine and he learns to create.

And the thing I am most passionately proud of about myself is my ability to create.

Can someone please explain to me what we are teaching our children when all their toys are branded, with back stories and personalities, when we’ve replaced their imaginary landscapes with realistic fantasies played out in pixels on ever-present screens, and when even their Lego comes with instructions and pieces that can only ever fit in one, rather limited, way?

Categories
Business Education Misleadership Value for Value

The Revolution In Education Part 2: Let them eat virtual cake

A financial crisis brought about by foreign wars and financial mismanagement and malfeasance. An administration, desperate to meet the demands of the people and stay solvent, forces through legislation that is opposed by many in the government and by the people. The first lady, when told that the people had no bread, replies, “Then let them eat cake.” (Well, technically Brioche, though it turns out the quote itself was probably just made up by a tabloid journalist, in this case, some hack named Rousseau.)

I’ll bet you thought I was talking about the current United States, until the bit about the cake, right?

The point, continuing from my last post, The four R’s: Reading, ‘riting, ‘rithmatic and Revolution!, is that revolutions, be they French, American, or educational, share similar characteristics and causes. And the French Revolution provides the recipe for this week’s post.

How many of you have read the article, “In Florida, Virtual Classrooms With No Teachers” in The New York Times? You’d remember it if you had: it’s the one about the high school students in North Miami Beach who walk into their first day of precalculus class in their senior year to find that their teachers had been replaced by… computers.

No, this is not a scene from my cyberpunk science fiction novel Spirit in Realtime. (Shameless plug — I’m still looking for a publisher! Tweet me: @jlsimons) It’s the sad reality for over 7,000 students in the Miami-Dade County Public School system.

You see, in 2002 Florida passed the Florida’s Class Size Reduction Amendment, which limits the number of high school students  to 25 students per classroom for core classes like math and English. It also limits 4th-8th grade classes to 22 students and pre-K-3rd grade to 18.

In order to meet these legally mandated limits, Florida has instituted what it calls e-learning labs, which are not legally restricted. In these virtual classrooms, students have no teachers, merely a “facilitator” who takes care of any technical issues that may arise. Supposedly, the facilitator is also present to make sure students “progress,” but I’m betting their primary raison d’etre is to keep the kids from going Office Space on the computers… and each other.

Now I’m not against virtual classrooms. Quite the opposite. I think they satisfy a growing need and, when approached properly, can outperform the real ones.

For instance, Mashable cites a US Department of Education report from 2009 based on 50 independent studies: “the agency found that students who studied in online learning environments performed modestly better than peers who were receiving face-to-face instruction.”

The world of online and virtual education is blossoming. I can watch a free lecture on the Special Theory of Relativity by Yale Professor Ramamurti Shankar on Academicearth.org along with dozens of other lectures and full courses in philosophy, biology, chemistry, literature, physics and more filmed right in the classrooms at MIT, UC Berkeley, Harvard, Yale, Stanford, Princeton, NYU, Columbia, and other leading colleges and universities.

I can learn anything from basic math to differential calculus, with the French Revolution and “The Role of Phagocytes in Innate or Nonspecific Immunity” thrown in for fun, from Salman Khan of The Khan Academy, a non-profit dedicated to their “mission of providing a world-class education to anyone, anywhere.” They’ve delivered 37,295,405 lessons (according to their website) and count Bill Gates as one of their most vociferous supporters. You can watch Salman and Bill talking about The Khan Academy below, and I promise, I didn’t tell Bill what to say at all. (Thanks for the support, Bill. The check is in the mail.)

The point I’m making here is that I can choose to watch those lectures and lessons, not that I am forced to watch them. (Which is good news, because I can’t tell a phagocyte from a Lymphocyte, and, in all honesty, the entire subject makes my brain hurt.) When students have the liberty to choose online education, and the motivation, there are no limits to what they can learn.

The students in Miami had no choice. Their parents had no choice. Some of them didn’t even know about the virtual classrooms until the day they walked in and saw the computers.

To quote the Times article,

Alix Braun, 15, a sophomore at Miami Beach High, takes Advanced Placement macroeconomics in an e-learning lab with 35 to 40 other students. There are 445 students enrolled in the online courses at her school, and while Alix chose to be placed in the lab, she said most of her lab mates did not.

“None of them want to be there,” Alix said, “and for virtual education you have to be really self-motivated. This was not something they chose to do, and it’s a really bad situation to be put in because it is not your choice.”

At 15, Alix already knows something that school administrators do not. Or worse, they know, but they don’t care. Or even worse, they know, they care, but they have no choice based on the new law.

Bingo! Again, quoting the Times article:

School administrators said that they had to find a way to meet class-size limits. Jodi Robins, the assistant principal of curriculum at Miami Beach High, said that even if students struggled in certain subjects, the virtual labs were necessary because “there’s no way to beat the class-size mandate without it.”

So, to sum up, an overwhelmed bureaucracy struggling to do its job comes up with a solution that seems to solve the problem, at the expense of the very people they were supposed to be helping. And the students are forced to eat virtual cake.

And not all of them, just some of them. Where is the equality in that? The fraternity? Will a college looking at these students give special consideration to the differing quality in instruction they received compared to students, some in the same school, who had an actual teacher to explain a difficult concept to them? Will their grades be asterisked? And what will the long term impact be on a student who repeatedly ends up in virtual classes in, lets say, English, starting in 7th Grade in one of the six middle schools using e-learning labs in Miami and continuing through senior year? Will the “facilitator” be able to awaken within that student a love for the rhythm and rhyme of good writing, the heart and soul of a poem, the nuances of meaning in serious prose? Or will we leave it to HAL9000, the computer in 2001: A Space Odyssey:

“I know I’ve made some very poor decisions recently, but I can give you my complete assurance that my work will be back to normal. I’ve still got the greatest enthusiasm and confidence in the mission. And I want to help you.”

Then again, maybe not.

Can someone please explain to me why an education system that can exile students to virtual classrooms during the time they are most in need of nurturing, guidance and, for want of a better word, teaching, shouldn’t be overthrown?  To the barricades, citizens. (More to come…)

Full Disclosure: My client, StraighterLine, is one of the disruptive and revolutionary forces actively engaged in changing education by offering self-paced, online college courses at ridiculously low costs. My relationship with StraighterLine is the reason I have been following developments in the field of education. While I am otherwise compensated for my marketing efforts on behalf of StraighterLine, this series of posts is not one of those efforts. The post is mine and I am in no way being compensated for writing it.

Categories
Business Education Misleadership Value for Value

The four R’s: Reading, ‘riting, ‘rithmatic and Revolution!

What does the start of a revolution look like from the inside?

Revolutions don’t have a precise starting point. It is easy to say that the American Revolution officially began on July 4, 1776 with the signing of the Declaration of Independence. But was that really the start of the revolution, or merely the official notification of a movement that had been brewing for years?  We know now that the Boston Tea Party was a clear step on the road to revolution, perhaps even one of the opening shots, but at the time, for the participants, as there was not yet a revolution to lead up to, it was “merely” a principled protest in defense of their rights (or, I guess, just a rowdy Thursday night in Boston.)

But I think we can agree on a few of the basic characteristics of the period leading up to a revolution:

  1. The pervasive, powerful and dominating institution about to be revolted against has become unresponsive to the needs of the people whom it supposedly exists to serve.
  2. Forces within the institution who recognize its failure and wish to change find themselves in conflict with forces against that change.
  3. Voices, both inside and outside of the institution, begin to address shortcomings and suggest solutions to the institution itself and to the public at large.
  4. The people most at the mercy of the institution begin to cry out for their needs to be addressed by the institution.
  5. The institutional bureaucrats and apologists fight back against their accusers, both internal and external, and frequently crack down on dissent, especially by their constituents.

Now here’s where it gets interesting. If we’re talking about governments or religions, then historically, what happens next is invariably violent, bloody, and disruptive (with one or two notable exceptions that prove the rule, such as Gandhi’s India).

But if we’re talking about economics, what happens next may be disruptive, but it’s not necessarily bloody or violent. Certainly, people will be displaced, livelihoods will be lost and fortunes will vanish. There may be riots. But any bloodshed connected to the Industrial Revolution pales in comparison to the French Revolution, the American Revolution, the Russian Revolution, the Protestant Reformation, etc. etc. etc.

We live in an era of change and disruption across multiple industries: publishing, journalism, marketing and advertising, media and entertainment, manufacturing, health, finance… well, you get the point, right? Any of these sectors may be on the verge of revolution (and nearly all are impacted by even bigger global revolution of virtually simultaneous, planet-wide shared awareness, perception and discussion about which I blogged in October.)

But if we want to find a flawed, failing institution that meets the five aforementioned characteristics, there’s one that really stands out:  education.

Here’s a nice juicy statistic to get us started:

45% of the 2300 undergraduates at 24 institutions analyzed for “Academically Adrift: Limited Learning On College Campuses,” (University of Chicago Press) demonstrated “no significant improvement in a range of skills—including critical thinking, complex reasoning, and writing—during their first two years of college.” Even worse, 36% didn’t “demonstrate any significant improvement in learning”  over four years of college!

According to the publisher, “As troubling as their findings are, Arum and Roksa argue that for many faculty and administrators they will come as no surprise—instead, they are the expected result of a student body distracted by socializing or working and an institutional culture that puts undergraduate learning close to the bottom of the priority list…Higher education faces crises on a number of fronts, but Arum and Roksa’s report that colleges are failing at their most basic mission will demand the attention of us all.”

Reporting yesterday on the book for Inside Higher Ed, Scott Jaschik wrote, “the book acknowledges that many college educators and students don’t yet see a crisis… The culture of college needs to evolve, particularly with regard to “perverse institutional incentives” that reward colleges for enrolling and retaining students rather than for educating them. “It’s a problem when higher education is driven by a student client model and institutions are chasing after bodies,” he (Arun) said.”

Now in case you haven’t noticed, dear reader, my posts tend to run long to begin with, and even I can see that this isn’t a bone I can finish gnawing in a single meal. I’m going to continue to address this issue in upcoming posts.

So for now, I’m going to leave you with a simple question, to which I humbly ask for your answers and opinions: can someone please explain to me how we can, in good conscience, counsel our children to mortgage their futures under a mountain of student loan debt when 45% of them won’t get much out of their first two years, and 36% won’t get much out of their entire four years of college?

Full Disclosure: My client, StraighterLine, is one of the disruptive and revolutionary forces actively engaged in changing education by offering self-paced, online college courses at ridiculously low costs. My relationship with StraighterLine is the reason I have been following developments in the field of education. While I am otherwise compensated for my marketing efforts on behalf of StraighterLine, this post is not one of those efforts. The post is mine and I am in no way being compensated for writing it.

Categories
Business Value for Value

Looking for Mr. Right on my cell phone

Don’t you hate it when people rant about the good old days? I know I do.

“You young whippersnappers may not remember this, but in the good old days, Ma Bell ran the phones and you could hear a pin drop on the other end of the line. At least, that’s what the teleeevision commercials said.”

Well, I was talking with a friend yesterday and he pulled out his Droid and fumbled with the touch screen, trying to find the phone, and the vitriol that dripped from his voice as he said how much he hated that phone was the kind usually reserved for villains who stole your bible and shot your dog.

It got me thinking about cell phones. I use a Voyager, an aging pre-smart phone that browses the internet and gets emails, but not all that well. Its best feature is the real keypad, which for me is critical. But the fact is, the sound quality sucks.

It’s not the network. I’m on Verizon, and after using MCI, Sprint and AT&T, I can tell you that at least in my experience, Verizon delivers the best quality in the tri-state area.

No, the fact is that the sound quality on most mobile phones sucks these days. 5 years ago, on a basic LG flip phone, the sound quality was fine.

But today?

Think about how many calls you get from people on cell phones where you can barely make out what they’re saying, even if they’re not on the streets of NY but in their own home.

And what if you’re receiving the call on your own cell phone? The problems are magnified beyond measure.

We all make excuses for our phones. We overlook the problems: the abysmal quality, the crashes, the dropped calls, the lost contacts, the notepad messages that can’t be transferred, the calendars and text inboxes that seem to have smaller capacities for storing data than a 5 1/2″ floppy and the battery life that runs out quicker than you can say “Honey, where’d I leave my charger?”

We move from phone relationship to phone relationship, hoping upon hope that the next one will be “the one.”

In other words, we are serial enablers.

I’m in the process of looking for my own “Mr. Right.” (Yes, my phone is a he. It’s not a ship, or a car, or an airplane. It’s a phone, and to me it’s a he. Lucky for me. If it were a she, she would have dumped my sorry, abusive self years ago.)

I’m probably going to get a Droid 2, because I need the keypad, and it’s better than the Droid’s, and I want a bigger screen and I want a tricked-out phone that runs Flash  and has apps and synchs with my Google Calendar. Plus, I want to stay with Verizon, which means the Samsung Epic 4G is out.

So I’ll suffer through unfathomable interfaces and lousy call quality because I want all the technological bells and whistles. I want to be able to run Tweetdeck on my phone and connect to Facebook with a click and visit sites that use Flash and type with real keys instead of pounding my non-conductive fingertips against the touch screen until I’m red in the face and ready to stroke out.

But can someone please explain to me when it not only became acceptable to tolerate lower quality in return for “better” technology, but required?

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to Yahoo BuzzAdd to Newsvine

Categories
Branding Business Cause Related Marketing Marketing Misleadership PR and News Value for Value

Charitable Gift or Missed Opportunity?

Did you see the bit on HLN about bedbugs infesting firehouses in Albuquerque, New Mexico the other day?

What caught my attention wasn’t the bugs, which are popping up all over the place like Tea Party candidates.

Nor was it the fact that the Firefighter Wives Auxillary Association went to a national high end mattress company and asked them donate 170 mattresses to the firestations, which they did. (You can read the whole story here.)

What hooked me was that the mattress company has requested to remain anonymous.

That’s right — anonymous!

As some of you might know, I co-authored a book with Dr. Richard Steckel about cause related marketing titled “Making Money While Making a Difference: How to Profit with a Nonprofit Partner.”

The entire book is about the positive bottom line benefits of cause-related marketing, an absolute win-win when done right, and while I wrote it over a decade ago, I’m pretty sure I didn’t put in anything about the benefits of anonymous donations.

BECAUSE THERE ARE NONE! At least not to marketing or sales. There are the tax benefits, of course, which must be monumental for 170 mattresses. And as my wife suggested, there may be a religious angle, which I guess would be good for your soul and future accommodations in whichever afterlife you may believe in.

But you have to agree that it’s an unusual move, in this day and age when organizations from NASA to Oakley were falling all over themselves to milk the publicity from helping out the Chilean miners. (Can you say $450 sunglasses, or $41 Million in media exposure?)

I’m still dumbfounded by it. Companies are constantly on the lookout for opportunities to, well, make money while making a difference. Opportunities like this one.

Which leads me to wonder, can someone please explain whether I’m right, or whether I’ve become so jaded that I can’t see an act of charity as anything other than a missed marketing opportunity?

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to Yahoo BuzzAdd to Newsvine

Categories
Business direct marketing Media PR and News Value for Value

Tough love from Google and the US Post Office

Two seemingly unrelated news items about the US Post Office and Google caught my attention today.

The first was an article in DM News that said that the US Post Office is intending to penalize mailers who don’t

“meet US Postal Service standards for updating mailing lists, according to Jeff Platt, director of solutions marketing for US mailing at Pitney. Those updates must be applied 95 days before the mailing. As of January 4, 2010, mailers that do not do so will be subject to additional postage of 7 cents per assessed piece.”

Previously, the USPS gave discounts to people who made their mail more efficient. Now they’re getting out the big stick and making people pay for their inefficiency rather than rewarding their efficiency.

And the second was the news that Google is changing their policy about free news content and their “First Click Free” policy. That policy says that if you find content on Google News and click on it, say, an article from the Wall St. Journal, you get to read that article for free. Click on the next article on the site and the Journal lets you know that any additional articles is only available for subscribers, and they’re happy to let you subscribe.

Google is amending their policy to allow publishers who charge for their content to “limit the number of accesses under the First Click Free policy to five free accesses per user each day.”

According to Google, “While we’re happy to see that a number of publishers are already using First Click Free, we’ve found that some who might try it are worried about people abusing the spirit of First Click Free to access almost all of their content.”

I say bravo USPS and Google.

Let’s start with the Post Office. When it comes to the USPS, like most other direct mailers I know I’ve railed against the ever-increasing fees and the amazingly complex discount and fee structure for business mailers. (If you want to wade through the 44 page PDF of the Jan 4, 2010 rates, here it is.)

As the director of integrated marketing at a channel-neutral direct marketing agency, I’m an equal opportunity employer of whatever works: direct mail, email, FedEx, twitter, text, search… you get the point. But if the post office went away, my job would get infinitely tougher.

This time, though, when the USPS institutes a fee that penalizes mailers who don’t engage in smart practices in order to help defray costs and stay afloat, I’m all for it.

Running your mailing list against NCOA won’t catch every piece of undeliverable mail, but it does catch many of them. It saves the mailer the cost of wasted printing and postage, and turns missed opportunity into the chance of a sale. Undeliverable mail that could be avoided is a terrible waste that increases the cost of mail by adding extra work for the mail carrier and the post office, all to no good end.

Now let’s talk about Google and free news. Don’t get me wrong… I get most of my news from Google, for free. I love the WSJ, and I’ll miss getting their content.

But free sample content from the WSJ, or any other publisher for that matter, has never enticed me to subscribe to that publisher, if there were a fee attached. If I encounter a fee, I just move on to the next one for free.

I admit it. I’m a freeloader. And I’ve pretty sure I’ve read more than 5 articles from the Journal over the course of a day by accessing them via Google News.

The discussion about the death of journalism has morphed into a discussion about what news organizations are doing to stay alive, and in some cases, they’re exploring pulling back their free content into models that provide better value for their value. They’re fighting for their survival, and like the USPS, my world will be worse off without them.

There are many models that can be applied to online news that don’t involve the reader paying for their content. I proposed a few here in my blog back in June. From crowdfunding (read this great piece in the Columbia Journalism  Review about the NY Times’ first crowdfunded article) to advertising-supported mega blog news sites like the Huffington Post, most  “alternatives” to traditional news still involve some form of cost defrayal.

In this ever changing world in which we live, one thing is becoming fairly obvious:  if we don’t start paying for what we use, we’re going to lose it.

We’re in the midst of one of the most challenging business cycles of our lives. We’ve seen business after business shut their doors forever. Costs are rising, credit is harder to find, competition is global and the rate of change threatens to swamp old business models that can’t evolve.

And yet there are people who complain about UPS and USPS raising their prices to reflect increased costs, or , god-forbid, a news organization like the Wall St. Journal wanting to get compensated for reporting the news.

Can someone please explain to me how you can be expected to run a business without getting fairly paid for your products or your services?

While I wait for your answer, I’m going to go out and buy a copy of the Journal. Heck, I may even decide to pay for a subscription so I can read it online — the way it should be read.

Categories
Branding Business Marketing Media Misleadership Social Media Value for Value

Are you my baby’s daddy? Oops… just kidding!

Have you heard the one about the beautiful blonde Danish woman named Karen who went on YouTube in search of her baby’s father, a tourist with whom she had a one night stand a year and a half ago? Turns out it was all a hoax, courtesy of the Danish government tourism bureau, VisitDenmark.

I found out about this on Mashable, perhaps the greatest blog covering all things Web 2.0 and Social Media. According to Mashable, the video got over 800,000 views on YouTube before it was taken down. If you hurry, you can still see it here on this Australian 9 News site.

More from Mashable, “…by her own admission, the woman in the video is an actress named Ditte Arnth Jorgensen and the baby is not hers. According to Danish newspaper Ekstra Bladet, it’s a hoax created by the Danish government’s tourism agency… It seems that the Danish government opted for quite a radical approach in luring tourist to the country; as they say, any publicity is good publicity.”

Now, it’s easy to get outraged by the hoax, as comments on the YouTube video proved. There were people who felt sorry for Karen, and then felt abused when they found out it was a hoax.

Setting aside the moral issue, I’d like to look at it from purely a marketing point of view.

I’m not against hoax marketing, if it’s done right and delivers a high degree of value to the people being hoaxed. Sega’s Beta-7 is a classic of the genre. FastCompany did a great post-mortem article about the campaign and Campfire, the viral agency that created Beta-7, and before that, the Blair Witch Project, reporting that:

“Beta-7” ultimately clocked some 2.2 million followers and, for $300,000 (excluding TV spots), helped Sega top sales projections by 25% in a category overwhelmingly dominated by Madden. Along the way, however, Campfire had done something else: It proved that a young, cynical, media-saturated audience just might be willing to listen to marketers as long as they showed some respect. “The virtue of their work,” says ESPN’s Daly, “is that if you’re on the side of the equation that believes [the hoax], then it’s fascinating, and if you’re on the side that gets that it’s not real, then it’s just great entertainment.”

I think the key to successful hoax marketing is best summed up by Harry Anderson, the actor/magician who played lovable con artist Harry the Hat on Cheers and Judge Harry T. Stone on Night Court. Back in the 80’s I saw his live act at Caroline’s, basically a celebration of misdirection and the con. In bit after bit, as he tricked us while blatantly telling us he was tricking us and still got away with it, he made the point that you can take a victim’s money as long as you entertain him for it.

The Danish video certainly delivered entertainment value. It was compelling and engaging. It might deliver a great ROI and boost Danish tourism. (It even had a bit of mischief of which Harry the Hat might have approved: the word “Ad” is in the background as part of an innocuous piece of art.)

But the message it delivered was that the Danish Board of Tourism is willing to dupe you into visiting their country. If they’re willing to do that, what other practices may they condone? Bait and switch hotel packages? Cab drivers who overcharge tourists for trips to the airport? “Official” currency exchanges with rip-off rates?

And how’s this for a mixed message? In the video, Karen says that it was a discussion of “hygge” — the Danish word for a warm, fuzzy, cozy, comfortable feeling of well being (according to Wikipedia) — that led to the one night stand. (Don’t you feel warm and fuzzy knowing that the Danish government is willing to lie to you to get you into bed with them?)

What kind of tourist do you think an advertising message like this will attract to Denmark? If I were a Danish woman (or the father of one) I’d be appalled at my government right about now.

In the end, just because you can use an advertising tactic doesn’t mean you should.

So can someone please explain to me why VisitDenmark chose to advertise the warm and fuzzy nature of their culture with a hoax that is exactly the opposite of the brand character they were hoping to portray?

Categories
Branding CRM Misleadership Value for Value

What if Land’s End were an insurance company?

“Guaranteed. Period.” (R)

Land’s End built their direct response business — and helped the industry grow — with their “Money Back, No Questions Asked” guarantee. They engendered trust in an inherently risky proposition, that of buying products you couldn’t pick up and touch. And perhaps, because they needed to live up to that guarantee, they also pursued a higher level of quality.

Compare Land’s End to the insurance industry.

Hard on the heals of Sully’s heroic Hudson landing of US Airways Flight #1549 comes the insurer AIG’s decision not to pay insurance claims for the passengers. They claim the pilots did everything right, there was no equipment failure, and the geese were an “unusual incident.”  Apparently, if there’s no negligence, there’s no liability.

It’s like the insurance companies not paying some homeowners after Katrina because the insurers claimed that the damage wasn’t from the flood, it was from wind-driven storm surge. To a normal person, four feet of water in your house is a flood.

Even worse, there is recision, the practice of canceling the insurance policies of sick policyholders, frequently to avoid having to honor them, and often on technicalities unrelated to their illness.

According to this article in the LA Times, Blue Cross actually praised and promoted employees who saved them millions. One employee alone was praised for “dropping thousands of policyholders and avoiding nearly $10 million worth of medical care.”

How have we allowed a system to thrive where reality is trumped by legal fiction, or more accurately, legal stamina?  These insurance companies outwit, outlast and overwhelm us in the courts. Every day that they avoid paying out makes money for them at our expense.

Could you imagine another industry operating this way?

Imagine if Land’s End had acted this way? “Guaranteed. Until it’s not.” Who would have ever sent them a check? How long do you think they’d have lasted?

Land’s End became a powerful, popular and trusted brand because it lived up to its brand promises:  its quality, its customer service, and its guaranty.

How can the insurance industry ever hope to be loved and trusted by consumers when it continues to weasel its way out of its promises.

More importantly, can someone please explain to me how long we’re going to go on enabling these companies who are addicted to gambling with our money and then using legal obfuscation to avoid the consequences when they lose?