Posts Tagged ‘Business’

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.

As Internet marketers, we learn all about reducing stress and anxiety in the user experience. We put “VeriSign Trusted” certificates on our websites. We us HTTPS and put tiny lock icons all over the place to assure our visitors that their information is safe.

This isn’t a new concept. Businesses have always known that reassuring their customers and earning their trust is a critical component of the sales process.

Trust is why we our parents felt reassured when they saw the “Good Housekeeping Seal of Approval” on products from spray starch and dishwasher detergent to cake mixes and cereal. And trust is why we all feel a little more comfortable when we see that a company has been accredited by the Better Business Bureau.

But are we right to trust The Better Business Bureau? What exactly do their ratings mean, and how does a company get rated?

According to their own website…

BBB Accreditation

BBB has determined that COMPANY NAME meets BBB accreditation standards, which include a commitment to make a good faith effort to resolve any consumer complaints. BBB Accredited Businesses pay a fee for accreditation review/monitoring and for support of BBB services to the public.

BBB accreditation does not mean that the business’ products or services have been evaluated or endorsed by BBB, or that BBB has made a determination as to the business’ product quality or competency in performing services.

And from their explanation about grading:

BBB letter grades represent the BBB’s opinion of the business. The BBB grade is based on BBB file information about the business. In some cases, a business’ grade may be lowered if the BBB does not have sufficient information about the business despite BBB requests for that information from the business.

BBB assigns letter grades from A+ (highest) to F (lowest). In some cases, BBB will not grade the business (indicated by an NR, or “No Rating”) for reasons that include insufficient information about a business or ongoing review/update of the business’ file.

BBB Business Reviews generally explain the most significant factors that raised or lowered a business’ grade.

BBB grades are not a guarantee of a business’ reliability or performance, and BBB recommends that consumers consider a business’ grade in addition to all other available information about the business.

So, according to the Better Business Bureau itself, “BBB grades are not a guarantee of a business’ reliability or performance” and BBB accreditation “does not mean that the business’ products or services have been evaluated or endorsed by BBB.”

So why should we care about a BBB rating? What is the actual value of being accredited by the Better Business Bureau?

Back in November 2010, ABC news reported on a scandal at the Los Angeles BBB, where a group of business owners accused the BBB of “running a “pay for play” scheme in which A+ ratings are awarded to those who pay membership fees, and F ratings used to punish those who don’t.” To prove the point, they paid $425 to the LA BBB and obtained an A- rating for a fictitious company they created called Hamas, named after the Middle Eastern terror group. The ABC News investigators even went to the organization with 2 small business owners and were told their grades of C could be raised to A+ if they paid $395 membership fees.

Picture of the Better Business Bureau A- rating for Hamas, a known terrorist organization

Photo courtesy of http://www.bbbroundup.com

Of course, you can’t find the BBB rating of Hamas anymore. And the BBB investigated the LA BBB for violations and actions they claimed did not follow their policies. On Dec. 22, ABC News reported that William Mitchell, the CEO of the LA Chapter of the BBB resigned amid that ongoing investigation by the national headquarters.

But if you think that the questionable ratings ended there, you would be sorely mistaken. Here are some other companies and their ratings as of 2/18/12:

  • Monsanto A+ (2 complaints closed within the last 3 years)
  • BP America, Inc. A+ (16 complaints closed in last 3 years, BBB knows of no significant government actions involving BP America, Inc.)
  • Charter Communications Inc. A+ (5527 complaints closed in last 3 years, 1488 closed in last 12 months)
  • Citi A- (6383 complaints closed in last 3 years, 2,539 in last 12 months, multiple government actions)

In case you don’t know who Charter Communications is, they were Business Insider’s Worst Company in America 2010. Monsanto is widely considered to be one of the worst environmental criminals in the US, and was the company upon which George Clooney’s movie, Michael Clayton, was based. Citigroup is, well, Citigroup, and just agreed to pay the U.S. $158 Million to settle mortgage fraud claims, which is in addition to the $1.8 Billion Citigroup has to pay the Justice Dept. as part of the $25 Billion mortgage loan settlement from the nations top lenders.

But for me, the real kicker is BP America’s A+ rating, with only 16 complaints in the last 3 years. 16 complaints? No significant government actions? For those of us with short memories, the Deepwater Horizon exploded and sank on April 20, 2010, triggering the worst oil spill in history. Since then, the Justice Dept. has investigated the spill, as has the U.S. House Committee on Energy and Commerce, and President Obama issued an Executive Order establishing a bipartisan National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling. No significant government action indeed.

Just to summarize: you can claim to be an organization that blows up buses full of innocent women and children and get an A+ rating from the BBB. You can engage in fraudulent business practices to the point that the U.S. government fines you nearly $2 Billion dollars and you can get an A- rating from the BBB. And you can poison the Gulf of Mexico, destroying the ecosystem and eviscerating the fishing and tourism industries of Louisiana, Mississippi, Alabama and Florida and get an A+ rating from the BBB.

Can someone please explain to me why anybody should ever trust a BBB rating?

Let’s do a little roleplaying. Pretend you’re a kid. Say, 5 or 6. And you’ve been playing, and you’re thirsty, and mommy has just come back from shopping, so you ask mommy if you can have some grape juice, and she says yes.

So you go to the bag of groceries and find this bottle of Fabuloso. Looks like grape juice. Different brand than Welch’s, but mommy always buys different things depending on what’s on sale that week. You’re pretty sure you’ve heard the word on the label. You think it means really cool.

So you twist open the top… it’s hard, like some caps are, but you get it. And you pour some into your favorite sippy cup. And you only spill a little on the counter and a little more on the floor. And then you drink it… and it burns going down, and you cough, and your tummy feels like it’s going to explode… and then you pass out, vomit, and choke to death on your own vomit, all before mommy finishes unloading the car.

Well, that was fun. Luckily, it was just roleplaying. No 5 year old would ever drink cleaning fluid, right? Especially not when it looks like this…

Fabuloso multipurpose cleaner: brightly colored, fruity smelling, and packaged in bottles that look like soda or sports drinks

Pretty bottles all in a row. Delicioso? No, Fabuloso!

Oops. Yes, my friends, that is a picture I took today of a supermarket shelf full of Fabuloso in all its glory. What beautiful packaging! What clever branding! What a great idea! Let’s make our multi-purpose cleaner look like a sports drink or juice and smell like one too. Cleaning is yucky, but everybody likes Gatorade.

What the heck were they thinking? And by the way, if you don’t think anybody would actually mistake Fabuloso for a sports drink or juice, check out this article in The Roanoke Times from 2006 that cites research by a physicians group that documented 94 cases of accidental ingestion in the first 6 months of that year in Texas alone. According to the article, many of the cases were children under 6 years old.

Perhaps that’s the most amazing thing to me: Fabuloso, which is made in Mexico, has been on the market in the US looking pretty much just like this since 1997, and according to Colgate, meets the standards of the U.S Consumer Product Safety Commission. (To be fair, they added a child-safety cap in September of 2006. And everyone knows how foolproof those are.)

Somebody at Colgate Palmolive made the choice to color bottles of Fabuloso like sodas or juice drinks. Somebody made the choice to package them in plastic bottles that look just like a sports drink. Somebody made the choice to make them smell fruity. And somebody made the choice to name them Fabuloso, which sounds absolutely… delicious.

So can someone please explain to me why didn’t someone else with half a brain and an ounce of common sense try and stop them?

Do you use artificial sweeteners? I don’t, but I’ve been around enough people who do to know that they don’t say, “Pass the Equal.” Right? People say, “Pass me a pink.” or “Are there any yellows in there? No, then I’ll take a blue.”

Until recently, if you asked for a pink, you got a Sweet’N Low. Request a blue and you got Equal. And tell someone to pass you a yellow and you got Splenda. But just the other day I was in a restaurant with my family and when my mom asked me for a blue, which I dutifully handed her. As I did so, though, I noticed that all three packets – blue, pink and yellow – said NutraSweet on them.

That seemed wrong to me. And to my mom. And so I did a little research. The yellow packets, normally Splenda, are expected to contain Sucralose (sucrose combined with chlorine – yummy!) and not aspartame or sugar. The pink packets, normally Sweet’N Low, are supposed to be made of saccharine. And the blue packets, normally Equal, are usually made of Aspartame (derived from aspartic acid and phenylalanine.)

But in that restaurant, the yellow was a blend of cane sugar, ace-k (acesulfame-K), aspartame and neotame. The pink was actually saccharine free and contained ace0k and neotame. And the blue was a blend of Aspartame and ace-k.

Many people who use artificial sweeteners do so for health reasons. They may be diabetic, and need to avoid sugar. Or they may be on a low-carb diet, and have read that aspartame can damage the brains of people on low-carb diets. And they may not be paying very much attention as they reach for that little yellow packet that is now full of things they are trying to avoid by choosing a “yellow.”

Now who would go ahead and play fast and loose with the colors on artificial sweetener packets, and why?

Turns out it’s a partnership between Domino Sugar and NutraSweet, who have developed a brand of sweeteners intended to steal market share from their competition. Who cares if some innocent old lady who forgot her reading glasses grabs a couple of yellows and ends up in a diabetic coma?

The packets began showing up in restaurants and other food service locations first, long before normal consumers could buy them, which meant that the average consumer was unaware the new products even existed. And if you don’t think Domino and NutraSweet were counting on that, think again. According to NutraSweet CEO Craig Petray (as quoted in “A Bitter Sweet Battle Stirs Up Confusion: The Sugar Caddy Wars” on allbusiness.com), “We decided to go into each category — each color — and develop a product that was unique and better…Our goal is to shake everything up a little bit and see what consumers prefer…There are just four colors out there. How many colors are there in a rainbow?”

So is this good business or bad branding? Brilliant packaging or deceptive misrepresentation? Can “Let the buyer beware” absolve a company of deliberately camouflaging a product to look like a different product when the consequences to consumer health can be serious? And more importantly, can someone please explain to me where the FDA or the Consumer Protection Agency are in all of this?

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?

We had to buy a microwave oven the other day, so I did what I always do before making a purchase: I went online to Consumer Reports.org to do some research. I’m not alone: according to the Pew Internet and American Life Project, of the 79% of adult Americans who use the Internet, 81% “look for information online about a service or product (they) are thinking of buying.”

Not all of those pre-purchase researchers go to Consumer Reports, but my wife and I do, just like my parents have always done. This time, though, I was shocked by the results. (I apologize that I can’t link to the results, or that I won’t be mentioning them in this article, but CR is a subscription service, and I don’t wish to violate the terms of use.)

In their Microwave section, Consumer Reports rated various countertop microwaves from multiple manufacturers as Best Buys, and I read the rankings on all of them. Then I noticed Customer Reviews for each model — and that the Average Ratings for the top models were glaringly bad. In fact, the average reviews for all the models rated were bad. As I read the reviews, one common thread emerged:  the customers, all of whom are Consumer Reports subscribers, not only disagreed with the CR ratings and reported reliability, but were genuinely upset that CR had given them information that led to an unsatisfying, and in many cases disastrous or even explosive results. I lost track of the number of “Shame on you, Consumer Reports” type comments I read.

I read all of the reviews, desperately searching for a Microwave that had a positive result. One review mentioned that they eventually found a good microwave by reading the customer reviews on Best Buy, even though the units rated well on BestBuy were not rated well on CR.

So I went to BestBuy.com, read the reviews and found three microwaves that didn’t sound like they’d blow up or die inexplicably whether within or outside of the warranty period. Then I did what Pew says most Americans who research products online do: I went to an actual brick and mortar store to make my purchase. (One side note: while in the store, I heard a Best Buy employee interacting with a shopper. When asked about the GE models, he said something like, “I’d recommend anything we sell except for the GE’s. They’ve been having quality problems for the past few years.” Now I’m not saying that CR rated GE products highly, or even at all, or that there were customer reviews on the CR website that singled out GE for quality problems; I’m simply saying what I heard in Best Buy.)

I left the store, happy and secure in the knowledge that my choice was backed up by the real experiences of real people — a feeling that I used to get from basing my choices on reviews in Consumer Reports.

Before you dismiss online customer reviews as the exclusive domain of malcontents, consider this survey by Bazaarvoice and Keller Fay, user review and WOM experts, reported here on Search Engine Watch:  “…79 percent of reviewers write reviews to reward a company for the quality of the product or service they bought, with 87 percent of the reviews being positive in tone… 97 percent of review readers find the reviews they read to be accurate.”

Customer Reviews are one of the most utilized forms of consumer generated content. When it comes to buying cars, JD Power’s 2008 New Autoshopper.com Study reports that 70% of autmotive Internet users utilize consumer generated content when shopping for a car, with 63% using customer ratings and reviews. (You can download the study here.) Search Engine Watch blogs here that customer reviews are one of the most important sources of product information, second only to word of mouth from a friend.

And before you dismiss the value of Consumer Reports, please consider that they were honest enough to print customer reviews that not only disagreed with them, but openly questioned the validity of their ratings. Those reviews sent me in a direction that led to my satisfied product purchase.

Will I ever use Consumer Reports to research a product before purchase again? You betcha! CR is still a great resource for product and category information, and their testing facilities still provide data that can’t be gotten anywhere else.

Will I ever skip the customer reviews and just read the ratings? What do you think?

But this whole experience leaves me with one unanswered question: Can someone please explain to me why there is such a consistent, category-wide disagreement between the ratings of the professional researchers at Consumer Reports and of the consumers reporting their own experiences with the same products?

“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?

News outlets make news. But to make money, they wrap that news in advertising.

Anybody else see a disconnect?

As we all know, advertising revenues are down as advertisers shift their dollars to more attractive media channels. And not every newspaper, least of all the NY Times, will be saved by the influx in erotic advertising that is resulting from Craig’s List’s ban described in this article on Adotas.

So I have a suggestion. Newspapers should climb out onto the leading edge of the micro-payments industry in this country and charge us for the news we so desperately need the same way they used to pay their reporters:  by the word.

I wonder what would happen if the NY Times wrote an open letter to all its readers in all formats (print, online, Facebook, Twitter, etc.) explaining that the old advertising model no longer supports the costs of news gathering, and asking us to opt-in to a micro-payments structure that has users pay for content by the word or article.

After all, we pay for our music by the song or album at iTunes and Amazon. Users pay for their apps, too, at the iPhone store.

Maybe our news will cost us 100th of a penny per word — I don’t pretend to know — but there’s a number that would be worth paying to get accurate, valuable journalism, fed into our brains by whatever method we choose.

Faced with the alternative — disappearing like The Rocky Mountain News, turning into an online blog like The Tucson Citizen, or going Chapter 11 like the Chicago Tribune — would the stakeholders of the Times keep the “Old Gray Lady” afloat?

Advertisers could play along too. They could buy prepaid content credits that they would give to their target consumers  — as premiums, promotions, free-downloads, usage credits, rewards points, membership discounts or rewards. When a reader used credits, if they were sponsored, they would see their sponsor’s message.

From a reader’s perspective, it would look like this: Whenever I logged onto the Times website (or followed a Twitter link (A Twink?) etc.) I’d get a screen with that day’s advertisers’ offers. I’d pick a sponsor, they’d pay, I’d get my news, and they’d get my eyeballs. Maybe by the article, maybe by the day, maybe by bandwidth, whatever. (Hey, if Bank of America brought me my NY Times content for free, I’d gladly sit through their pre-rolls.)

These prepaid blocks would represent reliable chunks of income that could be sold through a digital auction model or on an upfront basis, or a combination of both (digital auction for the any inventory left over after the up front sales). A major advertiser could work out a promotion with Amazon that every large format Kindle would come with a sponsored year-long subscription to the Times.

Forwards to a friend could represent extra eyeballs for the advertiser, or extra charges, depending on the media buy.

It is frequently said that people don’t value what they get for free. While that may not always be true, it is true that the Internet has changed people’s cost/value perceptions as it pertains to news.

I am a news junkie. I stopped reading printed newspapers long ago, mostly because they’re outdated the minute they’re printed. And I’m ingesting more of my news online or on my phone rather than be continuously disappointed by cable and network news (which I am watching less frequently). Online, I can get better news faster. And much of that news comes from the NY Times. But I usually only notice the publisher after I’ve read the article, if at all. I frequently don’t even notice whose article it is I’m reading on Google News. Or Digg. Or a tweet.

So, in my desperate search for news, would I be willing to pay for that NY Times article? I would if, like E-ZPass, it was effortless to do. Would I sometimes choose an article from the competition if it were cheaper? Depends on the organization. (After all, I have always had the option to buy a Post or Daily News rather than a Times, and yet rarely did so.) More importantly, would I sit through ads for the sponsored version if it were free? I would.

Format-wise, news gathering and dissemination is wonderfully adaptable to large-format Kindles, Twitter, Facebook, SMS, and more.

But what will happen to the dead trees, and all the personnel associated with their destruction, rebirth, and delivery as newsprint?

Since we’re attempting to reinsert value into the equation, let’s look at it in those terms. Would people find enough value in the printed version to pay more for it? Might the printed version of the Times became such a status symbol that some people would happily pay more to make a conspicuously consumptive statement?

Where is the tipping point? Could the Times sustain a print edition at $10 per copy? Remember, under this model they’re already paying for news-gathering and editing with micro-payments. The printed version just needs to carry its own weight. And if it can’t, then I’m sorry for all those workers along the non-value chain, but it’s time for retraining.

So what do you think? Am I crazy, or could this work? And if so, can someone please explain to me why the NY Times isn’t already doing it?

Hi there, everybody. My name is Jeffrey Lee Simons, and I don’t have an iPhone. You see, my fingers are the wrong temperature or something and touch screens only work for me about 20% of the time. You’ve probably seen me at an ATM, stabbing my useless digits at the screen and cursing a blue streak until I remember to use the keypads.

(What uber-phone do I use? LG Voyager… it’s got a touch screen, but flip it open and you’ve got a full keypad.)

So I’ve missed out on the whole iPhone App feeding frenzy. Although I’m not sure exactly what I’ve been missing. After all, the average iPhone app only gets used about 19.9 times in its lifetime according to this article on marketingcharts.com.  “The study also found that 46% of users play their games/apps five times or more, while 10.2% play 25 times or more.”

I just read a detailed discussion about the economics of iPhone game apps in Gamasutra, the gaming business enewsletter, written by iPhone-appmaker Ian Bogost.  Game apps are among the most popular of all iPhone apps. (12 of the top 25 apps in Feb 2009 were games according to a recent Comscore report.)

Bogost tells a woeful tale of plunging sales (down 8% in April alone) and a race to the bottom for both pricing ($0.99 seems to be the target)and quality. The average net profit on an iPhone app is $1771, and for a game app that figure is closer to $900. That’s average. The difference between the hits and the not-hits is so wide that the median may be much lower, though Bogost admits this is hard to determine.

$900 or less. (Apple doesn’t even distribute royalties until you hit $250 in each region, so for many game developers, there’s no profit at all.)

Now while I haven’t ever produced an Apple iPhone Game App, I have produced a variety of games in my life, from advergames that took a minimum amount of time to historical simulations that took a tremendous amount of time. But at no time would I have looked at $900 or less profit as a sustainable business model.

Hoping and praying to be the breakout game among the multitudes is fun, to be sure, but makes for a harsh, ridiculously competitive and ultimately indefensible business strategy. (Although it sounds a bit like blogging. Or publishing. Or the music industry. Or…)

But the most insightful aspect of Bogost’s article concerned perceived value and customer satisfaction. People who are willing to shrug off a bad cup of $0.99 coffee hold a $0.99 game app to much higher standards. One is clearly disposable, and for $0.99 who really cares enough to complain. The other is not, and is far more likely to garner complaints (especially now that Apple lets people “comment after deleting” an app).

All this really comes down to value.

How much value can an app developer deliver for $999 or less? How much value does a customer deserve for $0.99 these days? Does using a product 19 times make it disposable or not? After all, you probably use a razor blade that many times before throwing it away.

And the answers, it seems, comes from where they always do. The customer. If a customer feels a product isn’t worth the money, they buy the lower priced versions. More people buy Toyotas than Rolls Royces, although to be sure, there is a market for both.

It looks like, in Apple-land, $0.99 is the acceptable price for everything from games to songs. Regardless of their cost to produce, you’re expected to make it up in volume.

But can someone please explain to me how consumers can ever expect to get value out of a system that refuses to return value to the producers?

To a direct marketer, testing is vital. But it’s important to know exactly what you’re testing. If you’re not careful, what you think your test is telling you may not be what it’s saying at all.

It’s not just in direct marketing and business that testing matters, as you’ll see in a minute.

Evan Jones, my good friend and ex-Partner-in-Crime at our old game company, QED Games, Inc., is beginning to make a name for himself in an entirely new field, Climate Change. He’s about to be the “et al” in two scientific papers and was a key researcher in a current report to Congress.

Evan is part of a group led by meteorologist Anthony Watts (who writes a very popular blog, Watts Up With That, aTechnorati Top 5K blog with a ranking of 2083!) that is focused on a major aspect of Global Warming:  not whether it’s happening, but whether we know whether it is or not.

Evan and his colleagues have been examining the over 1200 U.S Historical Climate Network (USHCN) surface stations in the US that measure temperature. And what they’ve found is surprising. Nearly 89% of these stations are located in situations that render their data suspect or flawed according to the government’s own standards. Most of these stations were once fine, but encroaching urbanization has frequently turned an isolated station into one surrounded by heat sources. Add to this the fact that temperatures are recorded by citizen volunteers and are roughly 30% incomplete.

There’s more, of course. You can read about it here in this article from WBZ TV in Boston.  Better yet, WBZ did an interview with Evan while he was up in Boston assessing some of the surface stations there. You can watch the report here. And be sure to check out Anthony’s blog for even more examples of questionable data.

In the end it all adds up to one thing: the data doesn’t add up. It is, for the most part, not telling us what we think it’s telling us. For instance, when a station formerly situated in the middle of a field registers a temperature increase over the last decade but that station is now situated in a blacktop parking lot with an air conditioning exhaust unit nearby, is the planet getting warmer, or just the station’s readings?

Whether you’re building an online research survey, setting up a 16-cell direct mail testing matrix, optimizing a paid search campaign or collecting temperature data to prove or disprove global warming, you need to check your inputs, check your confidence in the amount and clarity of the data, and structure the test to actually answer the questions you’re asking.

It’s critical that your testing framework not be flawed or all of your results could be useless. It’s equally important that you analyze the testing results accurately. And if you go ahead and act on bad information, whether it’s a new product launch or an attempt to save the planet, you could be doomed to failure before you start.

And speaking of global warming and saving the planet, can someone please explain to me how anyone can be so certain of the truth when the tests themselves are flawed?