Friday, December 24, 2010

Commercialism and Christmas

Let's face it. Ever since Santa Claus hired his very first elf at his castle in the North Pole, Christmas has been about presents. Yes, there is the religious connotation in the celebration of Christ's birth but there are few--Christian or not--who don't celebrate Christmas as a time of giving and receiving. With the exception of those who do not celebrate Christmas for religious reasons, the Christmas present is a universal gesture on December 25th. Nearly everyone at this time takes pleasure in sharing what they have with those who are closest to them.

Nevertheless, there is a backlash in contemporary culture against commercialism during Christmas time. Watch the Grinch become baffled as every resident of Whoville gathers in a circle and sings a song, ignoring the fact that everything they own has disappeared. Watch Charlie Brown lament over his sister's unending Christmas list and the fact that his friend Lucy is satisfied with no gift short of real estate. On one side of the coin, children and adults alike are prodded by marketers to indulge in the newest toys during the Christmas season. On the other hand, we as a culture seem to shame one another for making Christmas out to be a commerical Holiday.

But is commercialism so bad for Christmas? Think about all the Christmas gifts you've received throughout your life. There is probably something special that gave you some of your fondest memories. Think about all the Christmas gifts you've given. Chances are, there'll be something that truly expressed the depth of the love you had for the individual to whom the gift was given. Christmas is about giving and receiving. Even the wise men of the Bible gave Jesus gifts as a token of honor.

This Christmas, I challenge those who celebrate Christmas to embrace commercialism. I don't mean to turn into a selfish, miserly Ebenezer Scrooge. I mean the exact opposite. Give excessively. Receive excessively. A gift is a powerful thing. Christmas is the time to celebrate it.

Wednesday, December 22, 2010

Most Rewarding Education???

I recently read an article from CNBC on the top colleges of 2011 with respect to how much salary graduates earn in their first year of full employment. These colleges bring recent grads starting median incomes ranging from 48700 to 69900. My Alma mater didn't make the list and, in support of the statistics, my salary isn't quite up to par with the graduates of these colleges. Which colleges made the list? Well, there are no suprises.

Princeton, Dartmouth, Harvard, MIT, Stanford, just to name a few. So, although the acceptance rate is very low at these institutions, everyone should endeavor to get in to these schools, right? If you've made it into Princeton or Harvard, you're set for life! Not exactly. Although these schools bring in the biggest paychecks, they also have the highest tuitions. Darmouth's 2010-2011 tuition is 40437--more than I paid out in my entire undergraduate education!

So, let's say for the sake of argument that the cost of going to one of these schools is four times as much as a typical undergraduate education. To justify attending, non-monetary benefits aside, the median starting salary would have to be four times as much. 48700 is a lot, but I make well over one-fourth of that--12183 per year--from my run-of-the-mill education.

I'm not criticizing prestigious schools. (Maybe I'm just bitter because I didn't go to one). I'm merely saying that this is yet another example of how everything is a trade-off. If you spend more money for an education, it only stands to reason that your paycheck will be higher upon attaining your degree. If you spend less, your starting salary will be less. It's as simple as that.

Saturday, December 18, 2010

The Revolution in Renting

I recently read an article in Business Week about emerging markets online for consumer-t0-consumer rentals of everyday household items. Of course, there are people that rent out their automobiles, charging by the hour. But there are also people that rent out power tools, game systems, technology devices, and furniture. Websites such as RelayRides, SprideShare, Zilok, Airbnb, ZipCar, Share Some Sugar, and Snap-Goods are making a killing off of hosting such transactions. The questions is, "Why are so many people choosing to rent what they would have formerly opted to own?"

I think that, as the speed of technological change increases ever more rapidly, consumers are having a difficult time keeping up with experiencing the influx of good in the marketplace. Not everyone has the time or money to take ownership of every hot new item that comes to market. And the real reason I believe people buy things is not to own them but rather to use them--to experience them. It's the life experiences we have with products that make those products meaningful.

Why do people lease cars? True, there are some month-to-month cost savings, but a good car can last 10-15 years. Buying one car and using it for 10-15 years would cost signficantly less than leasing 4-8 cars within the same time frame. So why do people do it? Well, there are minor stylist redesigns in most cars every couple of years and there are always new comfort/convenience and digital technology items being added to the interior. Automobiles improve drastically every couple of years and people simply don't want to miss the experiences provided by those improvements. That is the benefit of leasing a car.

Will consumers in the future forsake the American dream of owning their own homes? Will renting even a place of residence become more attractive in order to experience new environments? Who knows if it will go this far? However, I will venture to say that renting is no longer a notion simply for those who can't afford to own. Renting is strategic. Renting allows you to get the most out of life for your money.

Tuesday, December 14, 2010

Tax Increases for the Wealthy: An Unintended Consequence

Political convictions aside, most of us average everyday Americans are repulsed by the idea of the rich getting tax breaks. Recently, I heard an angry pundit on the radio exclaim something along the lines of, "99% percent of the nation's wealth is owned by 1% of the population. How much more do they want? Do they want it all?" Most of us, I think, would echo this sentiment. The rich have plenty of money--more than they need. It makes sense for them to be taxed more heavily than the rest of us.

There are many directions this conversation could go, but I think one issue that often gets ignored is who is affected most by increasing taxes for the wealthy. Obviously, the 'middle class' (whatever that is) Americans are affected as they have to pay however much less in taxes that the wealthy are paying on their behalf. Also, the wealthy are affected because they are seeing less return for their labor. However, the biggest impact on increasing taxes for the wealthy will, ironically, fall upon the poor.

How is this possible? How can taxing the rich place a larger burden on those less fortunate? Because non-profit organizations that give aid to the poor rely heavily on the donations of the rich. If the rich have incrementally less money to give, those non-profit organizations set up for philanthropic purposes have less money to divvy out. The United Way, the Salvation Army, Food for the Poor--organizations such as these thrive on the wealthy benefactors and corporate donors who, incidentally, own 99% of the nations wealth. So, before we are so quick to tax the rich, we may want to stop a moment and ask ourselves who we are really taxing.

Friday, December 10, 2010

RFPs for Consumers

In the Business-to-Business world, companies will often issue a Request for Proposal (RFP) before starting a particular project. The RFP allows competing suppliers of the company to give their proposed solution to the problems needing resolution for the project. For example, if the company is building a facility, the RFP will go out to contractors with specific instructions on what dimensions the facilities needs to be and possibly what the facility will be used for. The contractor who offers the best solution will win the contract.

All too often, though, companies issuing RFPs focus solely on price. They view their projects as commodities that just about any supplier could handle, so they simply find the lowest price and go with that supplier. The problem is that, when price only is considered, the company often does not arrive at the solution it was looking for. The facility ends up not being conducive to the company's needs. You can always find someone who will do poorer work for a lower price. Price should be the last thing considered.

The same thing happens, though, with us as consumers. We see a similar product offered by two or three different companies and we immediately go with the lower price. We never stop to think whether or not the product bought at the lowest price really meets our needs. When I want a good cup of orange juice, not just any orange juice will do. I must have Simply Orange--which just happens to be the most expensive on the market. But you know what? I don't care. Because, to me, there is no other orange juice.

Is there anything more of a commodity than orange juice? How much more should we shop based on added value rather than price when it comes to products such as cars, TVs, or sofas? You can always find something cheaper that doesn't really do what you want it to. Remember, when we're sending out our RFPs as consumers--when we're shopping similar products or services--price is the last thing to be considered. We should always think first about whether or not the product or service truly solves our problems.

Wednesday, December 8, 2010

The Importance of Trust

Trust is typically an idea we associate with relationships. You are willing to share more information about yourself with a person if you trust them and less information if you do not. Trust is the expedient to forming closer relationships. Without it, no interaction can take place.

The same thing is true about trust in market interactions. Without trust, there can be no transaction--no purchase. Think about the last time you bought something from a salesperson. Did you find him trustworthy? If so, you probably made the purchase and the process was most likely very simple. On the other hand, were you supsicious of the salesman? In this case, you probably did not make the purchase and, if you did, you did so reluctantly. Think of the last time you bought any branded product. Did you trust the brand or did you question its integrity? The answer to this question probably determined whether or not you bought it or how much you were willing to pay for it.

Stephen MR Covey, son of Stephen Covey, talks in his book Speed of Trust about trust taxes and trust dividends. When companies, brands, or salesmen are not trusted, they pay a 'trust tax' in order to sell their products or services. They have to lower their prices significantly more to get customers to buy or perhaps, if the tax is too high, the customer won't buy anyway. On the other hand, trustworthy companies, brands, and salesmen create a 'trust dividend' in selling their products or services. They are able to resist lowering prices and bending over backwards to acquire customers because customers trust them.

How important is trust to you in making a purchase? If you don't think it is that important, think again. It's really no different than trust in a relationship. In one, you are trusting someone with your information and, in another, you are trusting someone with your money. Try making a purchasing decision without trusting the person or company you are buying from--it's a lot more difficult to justify giving up your hard-earned dollars.

Thursday, December 2, 2010

Marketing to Kids

I read an article in Business Week last week about German automakers designing toy cars for kids. BMW, Mercedes-Benz, and Audi have all jumped into competition in this market. The cars are small stock-car sleds meant for pre-teens and adolescents. The idea is to acquaint the children with the Brands early before they are of driving age. Therefore, when they are older, they will insist on getting the brand of the toy car they drove.

Marketing to children has been an ethical minefield for years. Children are very impressionable and we, as a society, have a certain revulsion to stuff being sold to them. They are easily persuaded, easily tricked, easily secured as customers. Marketers, of course, see it as bad business not to market to children. Children, after all, are simply future adults. What company shouldn't be concerned about its future? And what about companies that actually make products designed for children? Watch commericals on Nickelodeon or Cartoon Network for a bit. You'll see that marketers lay it on thick for kids.

But kids aren't really the customers, are they? It's the parents that spend the money. Marketers rely heavily, then, on the nag factor--the notion that children will pester their parents until they get what they want. Many people are disgusted by this tactic. They find it underhanded and manipulative of the children. Perhaps they are right. Kids would be better off without the surplus of toys and entertianment they have today. Or perhaps not.

I know that, on a personal level, my childhood would have been severely lacking were in not for the Teenage Mutant Ninja Turtles. I had toys, cartoons, movies, clothing, posters, books, costumes, everything. When I grew up, I wanted to be a Ninja Turtle. Were the marketers of the Ninja Turtles unethical in what they did to me? I would say no. I would say that they played a vital role in shaping my childhood experience.

I'm not going to pretend that all marketing to children is okay. However, I think it is grossly misunderstood. Marketing is a good thing by nature. It introduces us to new things. As a child, I think that I benefited greatly from marketing. I would have never become a crime-fighting superhero by night if it weren't for the Ninja Turles.

Monday, November 29, 2010

The Black Friday Post

Well, Black Friday has come and gone. I did not go shopping, but I did hear stories. People camping out for days to wait for door busters. Lines wrapped all the way around buildings. Two hour long waits just to check out with the cashier. Why go through the hassle? Well, most of us would say, to save money of course! One guy I spoke to said that he saved as much as he spent--an average of 50% off what he paid for. Not bad. But really? Is saving money the only reason why we indulge in this tradition.

I don't think so. I think the people who camp out overnight or wait in line for hours have more than a motivation to save. I think that they are participating in a cultural experience. They like the hassle. It's like waiting in line for a roller coaster or a premier of a blockbuster movie--it's just exciting when there are a lot of people. It's not so much that it's worth the wait but, rather, the fact that they have to wait makes it worth it. It increases the value--builds up expectation.

Perhaps there is also an element of scarcity involved. The doorbuster deals that people wait in line for are in extremely limited supply. It's not so much that they can save money as it is that they have to be among the first in line to save the money. Scarcity drives up demand. Sort of like tickets for a big concert. There are only so many seats in the venue and, if a lot of people want to see the concert, the price is going to go up for each ticket. The same thing causes people to wait in tediously long lines on Black Friday. If you don't get in line, someone else will!

There is a lot of disgust for Black Friday as it is seen by many as a mindlessly materialistic endeavor. Perhaps it is on the surface. But I think that it is more of an experience that people share. It is a cultural tradition. There are some people that will do anything to avoid such shopping mania, but there are some that are hopelessly drawn to it.

Friday, November 26, 2010

Of Ownership and Freedom

Freedom is something we all crave but few of us can define. It is one of those elusive concepts often talked about but seldom understood. What is freedom, really? What characteristic must be possessed by someone or something for us to agree that that entity is indeed free. I have a suggestion: freedom is the ability to have ownership. To be free, one must be able to have ownership of one's self, one's time and one's possessions.

To be free isn't simply to be alive. We can approach this from a multitude of levels. First, the plants and trees in nature are living organisms, but we own them. We cut down trees and dig up land, because we have ownership and mother nature does not. Furthermore, animals are living organisms but we own them as well. A dog or a cat (for the most part, there may be some strange cases) cannot own property. We own our pets. The utlimate level of this phenomenon is that fact that parents own their children. A child's self, time, and possessions are controlled by his or her parents.

There are, of course, rules that govern and restrict ownership of living things, but these concepts fundamentally serve to illustrate the fact that he who owns is he who is free. There are countless ethical issues involved in what should and should not be owned--what should and should not be given freedom. Perhaps freedom is not the ultimate goal that we should strive for as human beings, but I only wish to argue that point that we cannot be free unless we are free to own.

Wednesday, November 24, 2010

Is TV Really Bad for Us?

For years, television has been lambasted as the downfall of society. It makes us all a bunch of mindless, anti-social drones, sitting alone on a couch and eating potato chips. This image is what comes to mind when we think of those who watch too much TV. The other day, though, while I was eating out with my wife, I overheard a conversation that brought a different image to mind.

Across the room, I heard two women discussing what they had seen on TV while their children played in the play area. Throughout the conversation, it became apparent that they watched a lot of television. I heard detailed analyses of "Criminal Minds," "Dancing with the Stars," and "Jersey Shore," just to name a few. The conversation was incredibly lively as they went back and forth about the feelings they shared regarding the television shows. These to women were socializing over TV.

This observation made me think that perhaps TV, and other forms of mulitmedia as well, play a different role than distracting us as inviduals from reality. These outlets also play a social role for us. Is TV really bad for us? Perhaps sometimes, but it can also be a socail lubricant that enhances our lives. Stories have played a vital role in community for millenia. TV is just the latest form in which they are told. So, I encourage you to rot your brain you can have some lively conversation with someone else who has done the same!

Thursday, November 18, 2010

Judging a Book By Its Author: Why Ad Hominem Attacks Work

This past midterm election was touted as one of the worst throughout history as far as attack ads go. I find this argument unconvincing but it nevertheless brings up an interesting point. Many of us are digusted by attack ads. We wish that polticians would seek to get elected based on their own merit rather than devaluing their opposition. And it isn't only in the political realm that we see this. Who hasn't seen a laundry detergent commercial that shows that Brand A clearly works better than Brand B? Typically, we don't like to see competitors bashing one another. So, why do they continue to do so?

Because it works. Many people willingly admit that they voted for a candidate simply because they did not like who he was running against. Likewise, I would venture to say that people choose many of the things they buy because they heard bad things about the alternatives. Attacking competitors, as long as it works, is therefore beneficial to companies and politicians alike. Belittling the name of the opposition is a surefire way to make your name sound a lot more pleasant.

Why do we think this way? I think it really boils down to the concept of trust. We don't trust or distrust things. We trust or distrust people. We recognize that any given product is nothing apart from its producer and any given policy is nothing apart from the politician propogating it. This is why many of us will only buy a car if it's a European car, for example. We may have a perception that they make better cars. This is also why we care so deeply about a political candidate's background. We want to know who the person really is that will be leading us. People are dynamic. People change. Things are not so. We cannot trust laundry detergent, but we can trust Tide. Tide, in our minds, is a 'person' of sorts.

Ad hominem attacks will work as long as there are 'hominems.' As long as there are people, we will base our decisions on whether or not those people can be trusted. Reputation is all we have in this world. It doesn't matter how good our product or position is but only how good it is perceived to be--only how good we are perceived to be.

Monday, November 15, 2010

Facebook and Free Speech

Recently, I came across a story of a woman who was fired from her job for posting negative comments about her boss on Facebook. The woman, of course, was enraged--claiming that her termination was in violation of her freedom of speech. This isn't the first issue I've heard of with social media and free speech. Another woman was discharged from the military for uploading videos on Youtube that showed the woman tormenting captives of the opposition. What do we do with scenarios like these? Who is right--the employee or the employer?

Most of us would rush to the employee's defense because most of us are more likely to be employees than employers. We should be able to say whatever we want, whenever we want, about whoever we want. It's a free country and we are merely exercising our free speech in doing so.

I agree with this idea.....sort of. I agree that expressing our opinions should never have any legal ramifications, but I'm not convinced that it is possible for free speech to have no consequences whatsoever. Suppose you constantly criticize and belittle your spouse on Facebook. Can you say that you were just exercising your free speech when she files for divorce? Will you really have a case?

Employers have a reputation to uphold. A business is its reputation--just like a person is his or her reputation. If a person's repuation is constantly devalued by someone he or she is associated with, the relationship may need to be ended. It is the same way with an employer. The employee may indeed exercise his or her free speech, but not without consequences. Termination of the employee who is damaging the reputation of the business is a no brainer. It is simply good business.

Thursday, November 11, 2010

What Makes a Politician Corrupt?

None of us like a corrupt politician. As a matter of fact, if we want to stigmatize a politician, we can simply throw that adjective, corrupt, at them and suddenly everyone despises them. But what does corrupt really mean? What makes a politician crooked? What motives are to blame for the politican garnering such a bad reputation? I suggest there are two reasons a politician may be labeled as corrupt.....and they are actually polar opposites.

The first reason we may begin to perceive a politician as corrupt is if they try to appeal to everyone. Sure, we have the notion that a politician ought to seek the common good but, in reality, the politician who does that will be dubbed 'wishy-washy.' Why? Because there is no common good! There is only my good and your good. The politician who dilutes his message for the sake of mass appeal is perceived as a sell-out only interested in popularity. He breaks the promises made to those who got him into office for the sake of achieving mass appeal. Like a computer file is said to 'corrupted' if its original content is altered, that politician too is said to be corrupted when his beliefs change.

Business leaders often have this problem when they try to broaden the reaches of a particular brand. BMW begins adding cupholders to their sports cars, because the broader market wants cupholders. BMW driving enthusiasts become enraged! Starbucks introduces a line of instant coffee, because the market for instant coffee is a large untapped stream of revenue. Coffee snobs all over the world are revolting! These companies are perceived by their niche customers as sell-outs, perhaps even in some way.....corrupt.

The other reason a politician may be labeled as corrupt is if she does the complete opposite. If a politician neglects the masses for the sake of her own voters, she is considered corrupt. Politicians who 'earmark' certain funds in a budget for their constituents are frowned upon. Actually, many people will consider it more noble to help out those who did not get them into office rather than those who did. Returning a favor is underhanded bribery. A politican who sticks with her beliefs and continues to honor her core customer base is despised for not seeking after the 'common good.'

Business leaders, again, are critized in this same way. If BMW does not put cupholders in their sports cars, a huge segment of interested customers will lambaste the brand for making it difficult to drink coffee. On a similar note, a huge stream of coffeedrinkers may be saying that Starbucks should come out with a coffee product more accessible and less fancy that can fit into busy routines. The mass market makes demands that the niche market finds repulsive.

What is the right thing to do for the politician or businessman? What can keep them from being dubbed, corrupt? Well, nothing. There is but one question they need to answer: who is my customer? Those who a politician, a businessman, a religious leader, a blogger, a teacher, etc. need to honor first and foremost are their customers. Who is my voter? Who is my buyer? Who is my parishioner? Who is my subscriber? Who is my student? For a politician that gets voted into office, his customers are his constituents.....or are they?

Perhaps his customers change once he gets into office and his customer base is broader. Whatever the case may be, a politician's job is to make his message relevant to those who are either voters or potential voters.....and disregard everyone else. A person who complains and lambastes a politician as corrupt but has no intention of ever voting for him is simply a bad customer--a customer that the politician cannot profit from. They are simply PR problems.

Monday, November 8, 2010

What Am I Going to Do With All of This Money???

I recently came across a news article that called special attention to the response of a budding, young actress in finding out she is worth 30 million dollars. Up to that point, she had been given a couple hundred dollars a week as an allowance from her father. When she finds out she is a multi-millionaire, she is shocked. "What am I going to do with all of that money?" She asks.

This scenario brought to my mind a fear that some people (not me and probably not you) have in getting too rich. Some may worry that they'll be consumed by their wealth and live an exstravagant lifestyle that they never really wanted until they had money. Some worry that too much money will change them--turn them into something they are not. It is quite possible. Yet, there is an alternative to buying an eight-car garage and filling it with Rolls', Masserratis, and Ferraris. If you get too rich, if you make too much money, you can simply give it away!

Enter then invisible hand of the free-market. Non-profit organizations thrive on people who are too rich--people like the actress mentioned above who have everything they need and nothing desirable to spend their fortunes on. Wealthy people are their customers. If you come in to more money than you know what to do with, non-profits will be there to give you guidance. You don't have to worry about finding someone to give your money to--they will find you.

Ultimately, when you have an excessive amount of money designated for contributions to non-profit organizations, those organizations are bidding for your donations. They are all giving you their best pitches to convince you as to why you ought to donate to the their specific organizations. All you have to do is choose. You simply pick your favorite cause--the philanthropic endeavor that is most important to you. When you've given away your millions, you can still say you've spent it on what you wanted, because you contributed to causes that you perceived to be important. And, at the same time, you don't have to stare into your eight-car garage and wonder if you've lost your soul.

Thursday, November 4, 2010

The Internet Killed the Middle Man

Before I even bring in the Internet to this conversation, I want to discuss a little about the importance of middle men in the supply chain of an industry. Contrary to popular opinion, middle men--or distributors--do not necessarily raise the prices for consumers. 'Cutting out the middle man' is often the death sentence for a business that cannot handle the cost structure of distributing its products. Without the distributor, the costs for the manufacturer and ultimately to the consumer will skyrocket.

For example, Proctor and Gamble sells Tide through Target--not from the factory. It is true that the cost of the laundry detergent would be less if purchased directly from the factory, but what if you wanted to purchase Crest as well? Oops, that is produced at a different factory. What if you wanted to try Colgate? Now, you've got to find a Colgate-Palmolive factory somewhere. And can you actually imagine buying something from a factory? How would you know where to find it or where to pay for it? The fact is that production and marketing are two different functions of a business. The OEM (Original Equipment Manufacturer, like P&G is for Tide) is production-focused while the distributor (Target) is consumer-focused.

You can buy a car directly from BMW or you can go to a local dealer. You're shopping at a plant in Germany and you ask about SUVs. They tell you that the SUVs (SAVs in BMW terminology) are manufactured in South Carolina. Now, you have to travel across the Atlantic Ocean just to look at another model in the product-line. Is it really worth it? Or is it better to have a dealer?

Distributors make it possible for OEMs to do what they do best--which is producing quality products. Distributors make it easy for consumers to make purchases and, while the price may technically be higher, the overall cost to the consumer is significantly lower. Distribution is why we can find everything we need in one place. Despite the stigma that middle men have, they are of the utmost importance in our economy.

Enter the Internet. Distribution in many industries is much easier. Customers can do research and shop online. Contact with customers can be made and maintained via social media outlets. What consumer-oriented brand doesn't have a Facebook page? In the entertainment industry, music, movies, and books can all be delivered digitally. Will retail stores stop carrying hard copies? Will artists, directors, and authors soon sell directly to target consumers? What about service industries? Does anyone have a travel agent anymore? Car insurance can now be purchased online without ever dealing with an agent. The fact is, the less tangible a product or service is, the more likely the Internet is to eliminate the need for a distributor. The Internet, in many industries, is killing the middle man.

Is this reality good for consumers? Perhaps in some respects. If the distribution channel no longer adds value to the product or service, I don't see the point in keeping it alive just so those people keep their jobs. The distribution channel existed in the first place only because it was less costly for the OEM to use. If it becomes more costly, then it should be eliminated. Yet, in industries where distribution channels add value, it is important that they fight off the Internet to deliver the consumer better value. Maybe you can find a better insurance rate by shopping online but perhaps it will benefit you more to have a real person that is a professional in the field explain to you the particulars of the coverage. Or maybe not.

There is no right answer. The Internet is neither good nor bad, but it is a reality. Distributors, retailers, and middle men need to recognize this fact. Those that survive will be those that adapt--those that find ways to add value despite the superfluity of information and ease of access to products and services that consumers now have. As consumers, it is our responsiblity to seek out distributors that add value to the product or service they are delivering--and to pass over those that don't. In the end, it is all about value--how efficiently it can be produced and delivered to customers.

Monday, November 1, 2010

Branding in Sales: You, Your Company, Your Product

We all know how important branding is in marketing. Starbucks, Apple, BMW, etc. all rely heavily on the value of their brands to generate revenue. It is not so much what they produce as it is the repuation they have for producing high quality. It is their repuations that really make them successful.

Branding, however, is not only effective in major business-to-consumer coporations. It is also effective in the selling of any product or service by one person to another. It doesn't matter if you are selling to businesses or consumers--branding of your sales strategy will be the simplest way to acheive effective results. What is the reputation that you are offering? What does doing business with you entail? Ask yourself, what does it mean to buy from me? There are 3 stages to branding in sales: 1) branding yourself, 2) branding your company, and 3) branding your product.

  1. You: The first and most important aspect of your sales process to wrap a brand around is yourself! Who are you? What is your personality and how does it benefit your prospect? Doing business with you must be a pleasure...and a greater pleasure than doing business with your competitors! What do you offer as an individual? What are your greatest strengths and abilities? These are the questions you must ask yourself...and then you must answer them decisively! Establish a concrete vision of what embodies you as a salesman. That is your brand. Learn it and embrace it. The most important thing in sales is that people will buy YOU!
  2. Your Company: Unless you are an individual sales representative that is 100% self-employed and have no employees of your own, you represent a company when you are making a sale. It is important that you have a clear idea of what your company means to your prospect. What is your company's core competency? What is its competitive edge? Your company probably has more resources and capabilities than you do as an individual and you can leverage them to make your selling more effective. If you can create a clear and impressive image of your company and put it before your prospect, you are showing them that doing business with you is doing business with a trusted and well-established player in your industry.
  3. Your Product: No matter what you sell, you need to brand it. If is already branded, make every effort to understand what the brand means and what it offers. If your product doesn't have an existing brand, make one up. Give it a name. Give it an image. Give it meaning. How does buying your product benefit your customer? How does it benefit all customers? Never sell a commodity. Never sell something that can be replaced. Branding your product is a surefire way to make it indistinguishable. If branded effectively, your prospect will see your product stand out among those of your competitors.

Do you sell cars? What makes you different from other salesmen? What is the legacy of your dealership? What are the services that you offer that other dealerships cannot copy? Ask these questions whatever industry you are in. Do you sell insurance? Concrete? Hardware? Software? Membership? Whatever you sell, remember to focus on branding. Effectively brand yourself, your company, and your product, and you cannot go wrong. You are what you are perceived to be by your customer. Be something worth perceiving.

Thursday, October 28, 2010

The Business of Animal Shelters

My wife and I took a trip recently to a local animal shelter. We're both animal lovers and the facility we visited was probably the nicest we had ever seen. There was a research center, a gift shop, a hospital, and also a shelter housing the dogs and cats. It was pretty elaborate and, as I walked through the place, I couldn't help but think that I was in a retail store.

  1. The in store advertising: Each cat and dog in the entire shelter had an ID card posted on the wall that corresponded to the name on its collar. The ID card had the animal's name, picture, and even some quirky comments on the animal. It was ADVERTISING the animal. Also flooding the walls of the hallway were signs about spaying/neutering and statistics about homeless animals. There was even a gigantic artificial tree about thirty feet tall that had platforms for cats on the branches--an elaborate display for the shelter's products. The entire shelter was designed to 'sell' its cats and dogs to visitors.
  2. The supply chain: When I say 'retail store,' I'm not accusing the animal shelter of being a 'Pet Store' that breeds animals for sale or anything like that. I mean that the business operations of the animal shelter were like what we see shopping in retail stores. After all, the animal shelter doesn't breed animals but it does have a wholesaler--stray dogs and cats. An animal shelter is sort of like a Goodwill--its wholesaler is the unwanted products of some that it tries to sell to others.
  3. FIFO: One woman working in the shelter tried to steer us toward the older cats instead of the kittens. Obviously, the older cats were harder to adopt-out because their expiration dates were coming up sooner. Ever grab a gallon of milk from the back row because the expiration date was a week later than the gallon in the front row? Okay, so maybe the analogy doesn't fit exactly. Kittens are just cuter and that's why they are in demand. But shelters still push a 'First In, First Out' mentality in regards to the ages of its animals.
  4. Inventory turnover: Retailers want to minimize the time that their products are just sitting on the shelves. The more frequently an item sells and is replaced, the better the retailer is doing at its business. The same applies to the animal shelter my wife and I visited. The shelter's goal was to 'turn over its inventory.' Having a constant stream of inventory 'on order,' pressure is high for the shelter to crank out its animals. That's what keeps such a business alive--being able to adopt out at least as many animals as it is taking in.

I want to say also that I mean none of this in a derrogatory sense. I am a firm believer in business and see nothing sneaky or unethical about it. I wish merely to point out that even Non-Profits follow basic business principles in regards to production, distribution, and advertising of its offerings. True, the end-goals may be different but the proceses required to attain those goals are the same.

Monday, October 25, 2010

The Ubiquity of Knowledge and Its Loss of Exclusivity

A couple of years ago, Starbucks was called under fire for the rapid expansion of its coffee houses. Pictures of the iconic Starbucks Siren swallowing boats flooded magazine covers and many consumers started complaining about there being a Starbucks on every corner. Why the protest? McDonalds, Wal-Mart, and Walgreens were never met with such aggressive resistance to expansion. After all, consumers loved Starbucks. Why would they not want more locations to satisfy their caffeinated cravings. Well, the problem with expansion for Starbucks was that consumers recognized it as a premium brand. Its exclusivity was what gave it its competitive edge. Saying, "I'm going to Starbucks to get a cup of coffee," was the equivalent of saying, "I'm going to Tiffany's to pick up a necklace." Starbucks coffee, at one point, was considered high-end but now it seems that anyone anywhere at any time can be seen with a Starbucks cup in hand.

I'm actually not intending on talking about Starbucks for this article, as much as I left the topic. The scenario above about Starbucks expansion and susequent loss of exclusivity, however, highlights another industry in which the same thing is happening. I recently read a rant from one of my favorite bloggers bemoaning the fact that a great percentage of Americans who purchased less than one book per year had seen every episode of American Idol, the average Internet user spends less than 70 seconds per day on the Internet reading online news, and the people he often sees in airports are staring blankly into space instead of spending the waiting time reading magazines. This rant is not the first such article I've seen. Many people are disgusted with the deliberate resistance to acquiring knowledge--to learning new things--in our society. And yet, I would venture to say, many of those same people would prefer American Idol to CSPAN.

My guess that the problem with knowledge acquisition in our society is the same problem with expansion for Starbucks--information is so readily attainable that it is becoming ubiquitous. It's losing its exclusivity. It no longer comes at a premium. Knowledge is cheap. We don't want to miss the next episode of American Idol, but who cares about the news? There's always something to read on the environment, the economy, or the election. Newspapers, magazines, blogs, and books flood the marketplace, but there is only one American Idol. The Internet made knowledge too easy to acquire. Controlled content is easier to market at a premium whereas free content becomes nothing more than the pens and magnets you get from the county fair local business Expos. Sure, you'll take it and you might even use it, but you won't really care about it.

Thursday, October 21, 2010

Pick Your Pollution: Trade-Offs in 'Eco-Friendliness'

Recently, Frito-Lay has made the difficult decision of replacing its new biodegradable SunChips bags with the old ones. Obviously, the point of the biodegradable bags was to decrease pollution and therefore become more eco-friendly in efforts to appease the environmentally conscious consumer. However, the bags seemed to have a problem with a different kind of pollution--noise pollution! The bags were so loud that they elicited enough negative feedback from consumers for Frito Lay to reconsider the benefit of eco-friendly marketing in this case. The biodegradable bags just weren't worth all the noise they made.

This story really brought to my mind the notion of trade-offs in our values. We often view things as 'black-and-white.' We either vouch for something completely or not at all. In reality, though, we rarely make decisions in such a manner. The 'bag' will eventually get 'loud' enough for us to not care so much about its 'eco-friendly' nature. We may be vehemently opposed to littering, but there is invariably some amount of trash we will be willing to pass by without picking it up. We may be strict believers in raising emissions standards in motor vehicles, but most of us will still drive at some point in our lives. We may think it horrible that some people give up their pets to animal shelters, but there is some point at which we personally will stop taking those unwanted pets into our home.

Personally, I call myself a 'selective tree-hugger.' I consider myself to be environmentally-conscious to some extent. Sure, I want to live in a clean, sustainable world. Who doesn't? But that isn't going to stop me from living my life. We want to protect the environment but we also want to be able to live in it. I have no problem cutting down a tree to build a house. Some of us, however, think that we're more 'eco-friendly' than we really are. We are unaware of the trade-offs that we make. We sign petitions against deforestation on paper produced from trees cut down for profit. We'll drive miles in our SUV to a rally against pollution caused by motor vehicles.

We need to realize that everything is a trade-off. Especially when it comes to environmental concerns, we're dealing with a trade-off between the quality of the environment we live in and quality of our lives in such an environment. Sometimes, we want our trash to be eco-friendly, but there are times when it's just too 'loud' to accomodate our lifestyle.

Monday, October 18, 2010

Scripted: a Guide to Strategic Authenticity

In our society, we have contempt for things that we perceive as being 'scripted.' A political leader that makes a speech full of conviction is looked on favorably until we find out he's been reading from a teleprompter. The newest reality show on tv doesn't seem so real once we find out that each character has a script they must follow. And we can instantly recognize a salesman by the string of cliche phrases we've heard time and again upon answering our phones. We can regonize when something is phony about what people are saying and it makes us view that person as deceptive in some way.

What if I were to make the argument that we are all liars? What if I said that we all read from scripts when we communicate with one another? Would you believe me? Let's try a mental exercise. You are leaving Wal-Mart and someone is entering the doorway just as you are exiting. You almost run into the person and, as you step to the side, what will you invariable say? "Excuse me." You call a friend's house on the phone for the first time and someone else answers. What do you say? Maybe something like, "Hello, my I speak to 'Friend's Name' please?" Why do you say these same things over and over again? Because it is in your script.

But wait a second! That doesn't make us liars, does it? Even though we are using pre-formed responses, we are being genuine. Of course. But that doesn't mean that what we say in each situation isn't scripted, it just means that we've come to believe our script. When we communicate with one another, we all use some measure of pre-formed respones that we have found to work for us in similar scenarios. As a matter of fact, if what we were to say was not somehow 'scripted,' communication would be impossible! We would have to respond to people with something completely out of context. Someone asks, "How are you today?" We say, "Tacos."

So what of the politicians, actors, and telemarketers mentioned above? Are they insincere because they use scripts? Not necessarily. The politician that gives a speech without a teleprompter is using an internal script just as the actor who gives an impromptu performance and the salesman who wings it both have pre-formed responses based on their prior experiences. Good politicians, actors, and salesmen do not deny their scripts but rather are so comfortable with them that they come across as authentic. Indeed, they are reflex respones just like, 'Excuse me' and 'May I speak to...?' Authenticity oftentimes is in the eye of the beholder. The only way for us to appear more authentic with our scripts is to find words that work and integrate them into our vernacular. A good script is one that we've come to believe so well that others believe it too.

Thursday, October 14, 2010

The Meaning of Work

What is a job? Is it a means to an end or an end in itself? This questions is at the roots of a millenia-old debate intensified by the complexities of the modern workplace. I recently read an article titled, 'Signs you're in the wrong field.' This article was arguing essentially that, if you didn't like your job, you should leave and find some other work. Wait a second, are you supposed to like your job? Is work a matter of preference? A book I read recently, called 'Die Broke,' made quite the opposite argument--that work was just a means of income to fund your life after work. So, which is it? Should we find some kind of fulfillment in the work we do or should we only be in it for the paycheck?

Like anything else I will discuss on this blog, it all comes down to our values. As most of us will spend the majority of or waking hours in a job, that job has to be one of two things: 1) a job we find enough fulfillment in to justify a lower income or 2) a job we find enough income in to justify a lower fulfillment. Actually, it isn't so much 'either-or' as it is a range of 'low-fulfillment/high pay' to 'high-fulfillment/low pay.'

Remember, time is our most precious possession. How we spend our time matters more than anything, because it is finite and irretrievable. Therefore, we may be willing to work a job we enjoy and yet earn less money because our time during work is pleasant so our time after work doesn't have to compensate. On the other hand, we may be willing to work a job we hate for high pay so that we can have more freedom in our time after work. Like anything, it is a trade-off.

Of course--there are those of us who will work 'low-fulillment/low pay' jobs and those of us who will work 'high-fulfillment/high pay' jobs. The extent to which we are able to demand either higher fulfillment or higher pay is contingent upon our intellectual capital--how much relevant, productive knowledge we have to apply to our work. The ideal, of course, is to maximize fulfillment and income. For most of us, however, there isn't a profitable job for what we find most fulfilling, so we have to compromise on something. What is the meaning of work? It is different for each of us. It has precisely as much meaning as we attribute to it.

Monday, October 11, 2010

Facebook and Permission Marketing

'Permission Marketing' is a slogan coined by marketing guru Seth Godin, contrasting the conventional marketing methods that he calls 'Interrpution Marketing.' In short, 'Interruption Marketing' is mass advertising via tv, radio, magazines, or any other venue designed to reach as many people as possible. The problem with such marketing is that it vies for attention--a commodity that potential customers have increasingly less of. The ubiquitous problem of 'clutter' in the marketplace causes this conventional mass marketing to be more expensive and less effective than it ever was before.

'Permission Marketing' is the remedy. This form of marketing gets permission in one way or another from each of its customers to offer the sale of its products. Instead of throwing out advertisements to the masses and hoping it sticks with a few, 'Permission Marketing' cultivates individuals into loyal customers. More than anything, the internet has made such relationship marketing possible. Through email an blog subscriptions, social networking sites, and access to search engines, marketers have never had an easier time advertising to qualified customers.

As Godin's book was written in the infant years of the internet, Facebook was not yet instituted. Now, it seems, the controversial social networking site is ubiquitous. Unashamedly ad-supported, Facebook is the ultimate format for 'Permission Marketing.' Ads tailored specifically to each user's interest can be bought. And, I must confess, I notice them when I'm browsing my wall. Facebook is an advertiser's dream come true--it allows the marketer to send a relevant message to an individual blatantly interested in the offering.

Can 'Permission Marketing' go too far, though? What happens when 'Permission Marketing' becomes so ubiquitous that it is just another form of 'Interrpution Marketing?' In giving so many marketers simultaneous permission to advertise, each Facebook user is being overwhelmed with a more sophisticated level of clutter.

Perhaps nothing illustrates this point more than Facebook's recent policy on its 'Facebook Groups.' Instead of opting in to a group, users can now be added to any group by any of their friends--forcing them to opt out if they do not wish to be part of the group. In one respect, this policy gives marketers a wider array of customers to market to but, in another respect, it just creates more unqualified customers. It takes the 'Permission' out of 'Permission Marketing,' rendering it less effective.

Perhaps it's time for another book, Mr. Godin. 'Permission Marketing' is becoming cluttered. The internet is losing exclusivity and becoming just another venue for mass advertising. We have yet to see how marketers on Facebook and other social networking sites will navigate through this ever-increasingly sophisticated terrain of the internet.

Thursday, October 7, 2010

If I Made That Much Money, I Would Retire!

Ever hear in the headlines about a star quarterback renewing his contract for another $50 million? How about the rock band that opts to make another 3 records with their label to bring in millions more? And the CEO that gets let go after making $6 million a year for the last 5 years or so, only to take the reigns of another Fortune 500 company? What is our reaction? I know that mine typically is, 'Haven't you made enough money already? If I were you, I would retire!'

But, then again, would I? I recently heard an interview from a few of the 2010 MacArthur Foundation fellowship recipients. For those unfamiliar with the MacArthur Foundation, such recipients are recognized for their breakthrough work in a variety of fields and also awarded with a $500,000 cash prize to spend as they please. $500,000! That's enough money to live comforably on for several years without having to lift a finger! Yet, when asked what they planned to do with the $500,000, the response of the interviewed recipients intrigued me.

The marine biologist who was interviewed said that she would use the $500,000 to fund the more technical work that she was unable to do with a limited budget. She was going to use the reward from her research to fund further research. The historian who was interviewed said that she planned to use the $500,000 for travel expenses in doing research for her next book. She too was going to use the reward from her research to fund further research. Hello people! Weren't you doing all of this for the money in the first place? And now that you have the money, you're going to keep on doing what you've been doing? Well, maybe it's not about the money after all.

So is money an end in itself or merely a means to end? Do football players play football to get rich? Is that why musicians play music? Or, for that matter, why CEOs run companies? No, I don't think that is the case. What would you do if you had enough money to retire? Would you retire? Would you really? If you did retire, what activities would you fill your retirement with? If you were a marine biologist, you would probably want to study life underwater. If you were a historian, you would probably want to read books and talk to people in order to gain clues on what you are researching. The point is, you WILL do something! You will engage in activity and pursue a passion that interests you--probably what you are already pursuing now.

Monday, October 4, 2010

On Buying and Being Sold

Dale Carnegie is the author of one of my favorite quotes. "A customer likes to feel that he is buying," says Carnegie, "not being sold." It is a simple yet revolutionary idea that has been repeated by sales and marketing gurus in various forms. In Carnegie's 'How to Win Friends and Influence People,' the quote is within the context of how hard many salesmen work to convince customers to buy. What salesmen should be doing, Carnegie argues, is striving to 1) uncover a problem that the prospect has and 2) show how that problem can be solved by what the salesman is selling. Then and only then will the customer feel as if he or she is buying of her own accord and not being convinced to buy.

I read a blog article recently by one of my favorite sales experts, S. Anthony Iannarino. The blog entry was directed toward salesmen who, upon losing a sale, tend to say that they've lost the sale to such and such company. In reality, what has happened is that those salesman lost the sale to such and such salesman. Somewhere in the sales process, the salesman who won the sale was able to position the product or service more persuasively in the customer's mind than the salesman who lost the sale. Essentially, the successful salesman is always the most convincing salesman.

'But wait a minute?' You may ask, 'doesn't this strip away the autonomy of the consumer?' By attributing the outcome of the purchasing decision to the persuasive powers of the salesman, doesn't that eliminate the discerning power of the consumer? Well, the answer is both yes and no. Let me explain. Think of something you've purchased recently--whether it be your cup of coffee, your phone bill, or gas for your car. Yes, you probably showed discernment in choosing Starbucks over McDonalds, but was that really you or was it the sales and marketing of Starbucks convincing you of its better product? Were you showing discernment in setting up a contract with Verizon or did they simply convince you that their service was better? Did you stop at that gas station because it was convenient for you or because Speedway put its store in a location that was convenient for you?

It is really a 'chick-or-egg' type of questions. Do consumers buy because producers are convincing or are producers convincing because the consumers buy? In reality, the same thing is going on when a salesman is persuasive as when a customer is discerning. When a salesmen or marketer highlights to appropriate need and the appropriate solution to fulfilling it, it is the same exact thing as the customer making a wise purchasing decision. Customers may say that they don't care about the sales pitch or the marketing, but that is really all they care about. They may say they are only interested in the quality of the product or service, but there really is no quality except for 'perceived quality.'

I agree with Mr. Carnegie, of course. Customers don't want to feel as if they are being sold. They, want to feel as if they are buying. But, really, the same thing is going on in both scenarios. And there may be a word of caution for salesmen: don't resist attempting to 'sell' your product or service because you want the customer to feel as if he or she is 'buying' instead of 'being sold.' Sell with everything you've got, but make sure your pitch is geared toward solving the customer's problems. The customer doesn't want to 'feel like' he is being sold, but he certainly does want 'to be sold.' If you don't sell him on your solution, he will seek someone else to sell him on theirs. For all the sales-resistance engrained in customers today, I believe that deep down every customer is still saying, 'convince me.'

Thursday, September 30, 2010

Brand Loyalty in Sports

I was talking with a couple guys the other day who are die hard Pittsburgh Steelers fans. I asked one of them why he liked the Steelers. He responded that it was a hometown team and he grew up watching them, so it was just natural that they were his favorite. The other guy jumped in and said, "Because they're the best. They've won 6 superbowls!" To which I responded, "Are they the best right now?" "Well," the second guy said, "they're ranked number two in the Power Rankings."

This interchange got me thinking about brand loyalty in sports. There is perhaps no other context, with the exceptions of religion and politics, in which brands can instill such devotion in their consumers. Many companies in consumer product and service industries would kill for the fidelity of Pittsburgh Steelers fans. Win or lose, these fans are always there to buy the product because they believe in it. Many sports fans, like the first guy I spoke to above, are content admitting their loyalty as an emotional connection with the brand. Others, like the second guy above, feel a need to rationalize their devotion. Maybe they're not the best right now, but they will be again!

If sports fans truly wanted to root for the best, they would be shoppers--they would jump ship whenever a new team took the number one spot. No one likes a fan who jumps on the bandwagon, though. Sports fans who are loyal to a particular team are similar to other brand loyalists--like the guy who only buys BMWs regardless of how sophisticated Mercedes-Benz's technology becomes or the guy who only buys Starbucks regardless of how similar the quality is getting to Dunkin' Donuts. Why are customers loyal to certain brands? Why are fans loyal to certain sports teams?

In short, rooting for a favorite team is often a more satisfying way of watching the game. Sure, there will be losses, but the victories are that much sweeter. Just like the loyal Steelers fans can say that they stuck with the Steelers through their losing seasons in the late 90s, BMW fans can say they stuck with the company through its failed acquisition of Land Rover and Starbucks fans can say they stuck with the company through that awkward faze of selling instant coffee (wait, is that still going on?). Brand loyalists aren't stupid; they're just happier sticking to their guns than they are playing the field.

Monday, September 27, 2010

The Power of Social Brands

A recent case study brought to my attention the dual nature of the power within socially-oriented brands. Many brands are experienced by consumers more often in groups than they are individually. Of course, there is an obvious benefit to the marketers of the brand. When the brand is experienced in groups, more hype and buzz is created--which inevitably leads to greater profits. However, the consumers experiencing these social brands also benefit in that they find common ground with their fellow men. A social brand brings people together and creates lasting memories. Which is really the greater gain: the concrete profits received by the marketers or the intangible sense of belonging received by the consumers?

The brand that got me thinking in this direction was IKEA. While the Swedish large-scale furniture maker does do its share of advertising, I recently came to the realization that I had never seen any of it. I have never been to one but, yes, I have heard of IKEA. In the news? Maybe briefly. But where has my primary perception of the brand come from? Word of mouth. I've heard people at work and seen people on my social networks making plans for daytrips to got to IKEA together. Actually, come to think of it, I've never heard anyone say that they went to IKEA alone. Moreover, I've heard those same groups of people talking positively about their experience after the trip--like it was an outing to the beach or the park.

IKEA isn't the only brand that has brought people together--Starbucks, Apple, Harley-Davidson, BMW, Youtube, and--of course--Facebook, to name a few. Yes, Howard Schultz wallet is breaking at the seams, but his customers have irreplacably fond memories of gathering together with their friends for a latte. And Steve Jobs has no want of profits, but his customers are well-off socially as well. Harley Davidson and BMW are more than mediums of transportation--they each have their own loyal followers who share intimate social experiences. Youtube and Facebook--who hasn't watched a funny video together or exchanged comments on a friend's status.

As I think in my own experience, I realize that many of the brands I feel a connection to result from the fact that they were experienced with other people. And this idea goes far beyond the traditional business world. Which religious brands are most important? Likely the ones propogated by the youth group you attened. Which sports brands are most important? Likely those presented to you while you watched the game with your friends. Brands that are social are brands that are remembered. Check out Vitrue's list of the Top 100 Social Brands of 2009 and see if you've had social experiences with any of them.

Thursday, September 23, 2010

The Difference Between Sales and Marketing

Many people, on the producer side as well as on the consumer side, are confused about the functions of sales and marketing. When is a tactic a marketing tactic and when is it a sales tactic? When is a person a marketer and when is he a salesman? Are sales and marketing interchangeable?

Now, I will seek to answer these questions without splitting academic hairs. Of course, marketing is a lot more involved than sales in that it includes product development, pricing, distribution, and advertising as dimensions of getting the product into the consumers hand. In sales, these parameters are already in place. Although marketing and sales have the same end-goal--to get the customer to buy--there is something different about them regarding the context in which they operate.

In short, sales differs from marketing in that it requires direct person-to-person contact. Yes, it is possible for marketing to sell products without a sales force--if it is really good. If the marketing is executed well enough to convince the customer to buy upon hearing the advertisement, a separate sales division is no longer needed. Sales becomes customer service. But, many times, marketing is subject to high competition and must have a sales team to market the product directly to the customer.

Let's think about it in some other contexts. In the context of religion, let's say you are a Christian practicing what Christians call Evangelism. Carrying your Bible around is marketing. Actually talking to someone about Jesus is sales. In the context of social media, updating your Facebook status is marketing. Responding to someone's comment on your status--that is sales. Let's say that you are a member of your favorite band's street team. Posting flyers throughout the college campus is marketing. Inviting someone to the show is sales.

Oftentimes, both marketing and sales are essential to selling the product, service, or idea you are offering. Marketing provides a solid message about what you are offering and primes the customer for the salesman. Essentially, the salesman is nothing but a closer. It is the salesman's responsibility to execute what began in marketing, closing the sale by engaging the customer directly.

Monday, September 20, 2010

QR Codes: Information (literally) at Your Fingertips

The business to business world has been using QR (Quick Response) codes for a long time to track inventory and data more efficiently, but only recently have they entered the consumer world. QR Codes have been described as 'real-world hyperlinks' that can connect you instantaneously to virtually any content via your smartphone. Want to watch a video, read a blog, study a journal article, etc.? Just download a QR Code scanner onto your Blackberry or Iphone and scan the corresponding code. Instantaneous information. You can even follow the QR Code below to reach a site,, that enables you to create your own QR Codes and put them on merchandise!

What's the catch? Well, not only is information at your fingertips, but your information is also at fingertips of the marketers who creat these QR Codes. When your phone scans the QR Code, marketers are able to collect your information, compile it with that of others, and track consumer behavior more precisely. Is it worth sacrificing your information to access other information? Well, many marketers will offer coupons or various promotions in order to entice you, but the fact is: QR Codes are not the first tracking devices to entire consumer markets.

When you browse the Internet on your PC, many websites will leave cookies on your computer tracking your seach history--knowing where you've been and how long you've been there. RFID (Radio Frequency Identification) tags, tracking devices placed in items to monitor their geographic location, have been used for multiple purposes not the least of which is tracking a product after it is purchased--measuring post-purchase consumer behavior. Even Facial Recognition devices have been made available to track consumers with a camera that identifies them based on the uniqueness of their facial features from those within an extensive database.

Obviously, with such invasive technologies such as these, ethical questions are raised in marketing. Without permission, is it ethical--or even lawful--for companies to 'steal' information from customers? Ultimately, you could argue, it ends up benefitting the consumer. The marketer only wants to know more fully the needs of his customer so that he can meet them more efficiently. Who doesn't want their needs satisfied with more ease and less searching? Nevertheless, there is 'personal' information that consumers don't want to enter the 'public' realm. No one wants insurance companies to know of risky behavior or law enforcement to know of legally questionable behavior.

The debate will go on--as many do in marketing-hovering perpetually in a gray area. As for me, I'm an open book. Marketers can read me all they want and keep bringing me better choices. And, when I get a smartphone, I will be scanning every QR Code I see because I just think it's too cool!

Thursday, September 16, 2010

Regulatory Engagement Theory: Which Prices Will Get Lower?

I read an interesting article last month in Business Week. Apparently, consumers have changed their spending habits somewhat in light of the recession. Discount stores like Dollar General and Family Dollar are becoming suddenly more profitable, as consumers are more willing to buy cheaper household products. However, sales of high-end prodcuts like the Apple IPad, the Amazon Kindle, BMW, and Mercedes-Benz are also increasing. Interestingly enough, it would appear that consumers are spending more on luxury items but less on convenience items.

While the article seems to indicate that consumers are buying cheaper convenience items like toothpaste and shampoo in order to justify indulging in luxury expenses like cars and electronics, I think something different is going on. According the Regulatory Engagement Theory in marketing science, value is not only determined by the benefit the consumer gets from the product. Value is also heavily dependent on how involved the consumer is in the product. Value is subject to how much the consumer thinks and how strongly he feels about the product--how engaged he is, how much he cares.

In times of economic uncertainty, producers of high-involvement goods like luxury cars and electronics are going to be able to keep prices up because the engagement consumers have in such products drive interest. When it comes down to toothpaste, shampoo, trash bags, cereal, etc., many consumers don't really give a lot of thought to such commodities. Price competition becomes more likely in these items because consumers are more or less indifferent to the quality of the items. The only difference they see is the price, so they may just buy the cheaper one. Consumers are heavily involved in their BMWs, though. The price doesn't matter so much because they can see the difference between the Bimmer and other cars. They can justify paying the higher price.

In theory, then, the only prices that will get lower are those in commodity industries--or mock-commodity industries. Only in industries where consumers see little differences between products will producers be forced into price competition, giving the consumer a lower price. As long as there is product differentiation within an industry, as long as the Ipod stands out from the generic MP3 player at Walgreens, prices will continue to be high. If you want lower prices, then, just stop caring so much. The moment you lose interest, producers will be forced to lower prices to get that interest back.

Monday, September 13, 2010


What does overpriced really mean? I've heard people complaining that certain things are too expensive: gas, Starbucks coffee, movie theatre popcorn, bottled water, new cars, healthcare, the list goes on. Perhaps you've complained about these products and services. I know I have. But when we say they are overpriced, we are not just saying that we don't want to pay that much for them but rather that no one should want to! We are calling it absurd to pay the asking price and yet many of us do it anyway! So, why do these items cost so much and why do we continue to buy them if we don't like the prices?

First, there is a common misconception about what constitutes a price. The price isn't simply the cost of production. No one would ever make anything if it costs them the same amount to produce as what they were selling for. So, most of us realize there will be a little profit for the producer in the price. But how much profit is too much? If the mark-up in movie theatre popcorn is 1200%, is the the movie theatre industry ripping off the poor consumer? Most of us would be outraged to hear this statistic. Of course that's too much profit, right? Well, what is a reasonable profit? Who decides what that profit should be? The answer: the consumer does. That is the only true cap on a producer's profits--how much the consumer is willing to pay for his product. Prices can only be astronomical if people are willing to pay astronomical prices.

But we have to buy these things and the producer is taking advantage of it, we say. We need gas. We need healthcare. For goodness sake, we need our Starbucks' latte! But do we really need these things? Have we considered the alternatives? Working closer to home so that we can walk to work? Simply not going to the doctor? Drinking, heaven forbid, instant coffee? There are always alternatives. We pay the higher price because we don't want to settle for the alternatives. As a matter of fact, most of us don't even want to consider them.

Nothing is really overpriced. We call it overpriced, because we are angry that the alternatives have such high costs. We'll save money on gas walking to work but we may have to settle for a lower paying job. We'll save a lot of money on healthcare by not going to the doctor but we may just get sick and die. And I don't even really need to go into instant coffee. Next time we start to complain about the high prices of something, let's truly consider the alternatives. They can be sobering thoughts.

Thursday, September 9, 2010

What's in a Brand Name?

Would a product by any other name smell as sweet? What is the difference between a Q-Tip and a cotton swab? A Kleenex and a tissue? A Band-Aid and a bandage? We seem to have some notion of the distinction between 'Brand Name' and 'generic.' Some of us think that they are typically the same but with different labels. And yet some of us see extra value in the product that has a recognizable brand name. So what purpose does branding serve? Why would sellers want to offer Brand names? Why would buyers demand them?

You know that 'Boots n Barkley' chew toy you bought for Fluffy? Do you remember where you got it? I do. You got it from Target. What about that 'Private Selection' roast beef that you had in yesterday's lunch? You got that from Kroger. How do I know that? No, I wasn't digging through your trash. Those are store brands. Target's pet products are branded 'Boots n Barkley' and Kroger's premium line of food is branded 'Private Selection.' Why do Target and Kroger give their generic in-house products brand names? Because it sets them apart. It gives them idenity. It makes them more than commodities. Look in your medicine cabinet. You may think you're stocked up on generics but what you'll really see is the 'Equate' brand from Wal-Mart and perhaps the 'Up and Up' brand from Target. More and more, businesses are branding everything they sell. Branding helps products previously indistinguishable to rise above the clutter to actually have recognition in the consumer's mind.

So, how does branding benefit you--the consumer? Well, you may be the most ardent generic-shopper around, refusing to purchase anything with a proper noun on its label. Yet, I still say that you are attracted to brands. Let me prove it. Are you a Christian? Muslim? Buddhist? Well, those are religious brands. Are you a Democrat or Republican? Those are political brands. Football fan? Which team? Cleveland Browns? Pittsburgh Steelers? Merely football brands. In short, what I am saying is that brands are merely reputations. None of us can ever sort between every available option in a decision, so we often go with what we perceive to have a reputable name. Back to actual purchasing decisions, it may be better to go with Tylenol than with 'Equate' pain reliever, because Tylenol has an established reputation for working effectively. We purchase brand names instead of generics because we have come to rely on those particular brands.

So, back to the original question? Is there really any difference between a 'brand name' and a generic. Well, most of the time, probably not. But are you willing to take that risk? Maybe on cotton swabs and tissues, but on an MP3 player? How about your groceries? I know that I have come to trust certain brands. If I see a new flavor of chips put out by Tostitos, I will be more likely to try it than some generic corn chip brand. Ideally, we'd have all of the time and information necessary to decide between every consumption option presented to us. But, sometimes, we have to simply go with what experience has taught us to be true. Sometimes, we need brands.

Monday, September 6, 2010

Why Won't This Guy Leave Me Alone?: The Importance of Follow-Up

All of us, it seems, have a natural tendency to detest salesmen. We hate taking calls from people who are trying to sell us something. It should be obvious to them, after all, that we don't want what they are offering, right? 'If I'm interested, I'll call you,' we say--which generally translates as 'I'm not interested.' But what of that rare occasion when we actually do buy something from a salesman? We may or may not gain much benefit from the product, but at lease we got that salesman off of our back, right? Wrong! We'd better hope not!

Whether it be the guy that sold you your car, your dentist, Fluffy's Vet Clinic, or your insurance agent, the best thing for you as a consumer is to have a salesman that continues to bother you after the sale. Why is this so important? Because it shows that the salesman wasn't simply trying to make a quick buck. If he or she is interested in feedback, that is a good sign. The mark of a good salesman is whether or not he still cares about you after the sale.

Good follow-up from a salesman demonstrates that he views you as a long-term investment. He continually views you as a future source of income and therefore always treats you with the highest level of customer service. So, next time you buy a product and don't hear from the salesman again, don't be relieved that you got him off of your back. Instead, try wondering why he is no longer interested in you? Is his product not beneficial enough to sustain you as a customer in the long run? It's quite possible. On the other hand, next time you do hear back from a salesman, trying giving him some honest feedback--understanding that he is showing a great amount of faith in his product to be inquiring about its usefulness after he's already been paid. Good follow-up is good sales.

Thursday, September 2, 2010

The Revolution in Distribution of Artistic Content

Last week, marketing guru Seth Godin announced that he would be bypassing the traditional publisher for his next book and would instead be publishing himself online. This announcement no doubt came as a blow and perhaps an eerie foreshadowing to the traditional publishing industry. Godin, whose blog has more than enough followers to get his name out, simply found it less costly to self-publish. Of course, the benefit to an artist of surrendering the bulk of his earnings to his distribution channels is that more people are going to know about his work. But, with the advent of the Internet, the gap between the artist and those who admire his work is getting smaller and smaller.

Just look at Youtube. Many actors, actresses, filmmakers, and movie producers would love to make it big in Hollywood but the distribution costs are far too high for most. What are the odds of an aspiring actor of getting a role in the next box office hit? Very slim. But what are the odds of making a smash hit on Youtube? Probably still slim, but much less costly. Rather than tirelessly working through 'gigs' and bolstering a lacking resume, it's simple matter of clicking, 'upload.' Many movie makers today make six digits a year off of a Youtube channel that costs them nothing to have.

And what about iTunes? Probably the distribution channel that has been treated with the most scorn over the years is that of the music industry. When you buy a CD, are you supporting your favorite band? No, not really. You are supporting its record label--its distribution channel. Now, with avenues like iTunes available for self-promotion, musicians are able to 'stick it to the man' and scream 'I am rock and rock' directly to their fans. A friend of mine from high school went this route and, while there are no CDs from Alert New London on the shelf at Target, the digital inventory on iTunes is endless.

Of course, for any artist or entertainer wishing to distribute his or her content directly to fans who value such content, social networks like Facebook, Myspace, and Twitter make it even easier. Essentially, the much needed middle-man is losing his job to simpler self-publishing formats like Amazon Kindle, Youtube, and iTunes in additional the the promotion given by ad-supported social networks. Today, the only thing keeping artists from 'making it big' is the fact that there are only so many fans to go around and other aspiring artists have access to the same Internet technology. Those who will really be successful are those who take advantage of it most.

Monday, August 30, 2010

What is the 'best' school?

Recently, Forbes put out a report on America's best colleges (Ewalt) from a somewhat different perspective--from the students' points of view. Based on feedback from students, Forbes ranked the top 610 out of 6600 private and public universities. Along with give-aways like Princeton, MIT, and Stanford making the top 20, lesser known schools like Williams College (no. 1), Claremont Mckenna College (no. 7), and Ponoma College (no. 17) also made the scoreboard. Well, what do we make of this list? Perhaps academicians would have chosen a different list, as would corporate executives, government officials, and taxpayers in general. Would all these groups have chosen Williams College as the number one school? Probably not, but whose opinion really counts? It should be the student's, right? After all, the student is the one attending.

It all comes down to the simple question of, 'who is the customer?' Who is the school catering to? The 'best' school will be defined as the school that creates the most value for its intended audience. But who is the audience? This is where it gets tricky. Most educational institutions, both public and private, cater to the values of many groups simultaneously. They are all performing a balancing act that make it nearly impossible to tease out which school most effectively provides for the needs of all its constituents. Here are just a few different customers of post-secondary educational institutions and why client retention in these groups is a must:

Students: Colleges want to attract high-caliber students because the student is the customer in the most direct sense. The product is education and the students are the ones who consume it. The quality and satisfaction of the students contribute greatly the the school's reputation.

Professors: Colleges want to bring in the most notable professors in various fields because the professors are the skilled labor that make the product of higher learning what it is. They are the engineering behind the product. Without quality professors, the school has no competitive advantage.

Donors: Ever wonder why a particular building on campus is named after someone you've never heard of? It's because that person paid the school for the recognition. Many wealthy people donate to academic institutions for the prestige. If a college is serious about improving, it needs funding. Therefore, the better it caters to its donors, the more funding it will have to turn out a better product.

Parents: In most cases, parents will be the ones paying for students' education, so the school better be pretty darn convincing that the knowledge it is disseminating is worth the investment. Especially in private institutions but also to a degree in public institutions, parents are writing the checks. The best schools will be the ones who pay heed to the values of parents.

Academicians/Scholars: The opinions of intellectuals in various academic fields hold a lot of water when it comes to the reputations of schools. Academic institutions invest a lot of money in turning out research that appeals to these scholars and their organizations because it demonstrates their academic prestige.

Corporate executives/government leaders: After students graduate, where do they find jobs? Smart academic institutions will pay attention to future employers because parents will pay for students to go where they can build a foundation for a solid career. The best education is meaningless if it doesn't justify the fiscal investment. What do potential employers think of the school? Definitely worth a consideration.

These groups just name a few 'customers' that may play a role in how a college strives to be its 'best.' Sure, the popularity of the school amongst its students counts quite a bit, but it is by no means the only thing to consider. Just like any other business that must consider the values of a diverse customer base, academic institutions are in a constant struggle to maximize satisfaction amongst a diverse range of constituents.

Ewalt, David M. (2010, August 11). America's Best Colleges. Retrieved from

Saturday, August 28, 2010

The Consumer Psychology of the Mosque at Ground Zero

Recently, there has arisen a hotly contested issue with the Islamic faith in America. Before I tread on such sacred ground, I want to make clear that I am not taking a side but rather pointing out the consumer-oriented psychological implications behind the issue. And I believe it would help for those making the decision, as well as for those forming an opinion as to which decision should be made, to understand the psychological reasons behind either building a mosque a ground zero or not building a mosque at ground zero. The decision is really, like anything else, a consumption decision.

Those who are making the decision--as well as we who are forming an opinion--are choosing between alternatives to maximize their satisfaction. At the base level, deciding whether or not to build the mosque at ground zero is no different than choosing between the meaty, cheesy allure of a quarter pound burger and the health benefits of a light salad. Each choice reflects a set of values and the choice that will be made will reflect the values that are most important to the decision-maker. Is flavor more important or is health? In the same way, we might ask in regards to the mosque issue, 'Is freedom of religion more important or is patriotism?' Building a mosque at ground zero is a clear win for expressing freedom of religion but it is a smack in the face to those who understand 9/11 as an American tragedy. Similarly, not building the mosque at ground zero eases patriotic tensions but sends the message that some religions are allowed to be practiced more freely than others.

What complicates this matter is the fear of what economists call 'negative externalities.' Sometimes, when we make choices based on our values, the consequences of our choice ends up affecting people who weren't involved in the decision. That is an externality. When it effects them badly, it is a negative externality. Sure, if we decide in favor of religious freedom, we can see ourselves as more tolerant, but what if that provides a gateway to more violent, religiously motivated terrorist activities? On the other hand, the patriotic alternative could also produce negative externalities. In not building the mosque at ground zero, the Islamic faith may become viewed as increasingly more un-American--causing Muslims who are nowhere near ground zero to get the brunt of the hostility.

So, what is to be done? Like I said, I'm not taking a position on what should be done. But I will say what I believe will be done. When all the cards are played, decision-makers will make the choice that most closely alligns with their values based on all the information they have. Even considering possible externalities, those in charge of deciding whether or not to build at ground zero will be deciding based on their values. Similarly, we who are not involved in the decision but still indignant as to what decision should be made are asserting our own values by the opinion we form. It all comes down to what is more appealing to the decision-maker--the burger or the salad.

Thursday, August 26, 2010

The Consumer Psychology of Supporting Aging Inmates

I recently read an article on the expense involved in keeping aging inmates alive in prison. Though I'm sure this issue has been prevalent since the dawn of prison reform, I can say with confidence that it is probably even more pressing today with the average person living longer and the cost of health care skyrocketing. The prison system itself has its pros and cons. Some say prison is good for society because it provides a means of either reintegrating disadvantaged people who engage in criminal behavior back into society or protecting society from those who will not be reformed. On the other hand, some ask, 'Why should they get free ride while we slave away all day at work just because they killed someone and we didn't?' The issue is intensified when we are speaking of the elderly, however. They are older and maybe a bit more helpless but, at the same time, they are getting an even 'freer' ride because they cost more. The question, then, to be considered in what we should do with older prisoners is one of investment.

The consumer in this situation, the one who is making a decision based on his or her values, is the taxpayer. The individual taxpayer must ask himself, 'To what extent am I willing to give up my purchasing power so that elderly criminals can be taken care of?' or, more simply, 'when does it get too expensive?' At its core, the decision is no different than buying any other product. Take a house, for example. If you are shopping for a house, there are houses that will cost too little. You wouldn't think about buying a house that is falling apart. By the same token, there will at some point be a house that you decide has a cost that is beyond your means--and you will not buy that house. Similarly, many taxpayers may have some level of sympathy for elderly prisoners and would be willing to contribute to their well-being to a certain extent. Yet, at some point, the cost of health care for elderly prisoners will be too high for taxpayers to even consider.

Or perhaps we will never reach that point. Perhaps, we will prefer to complain about the rising costs of taxes than to tread upon such ethically unsettling ground. Regardless, I wish merely to point out that it is a question of values. The taxpayer--or consumer--will always be willing to pay as much as he or she sees as beneficial. Even if the only benefit becomes avoiding dystopian conflict, the taxpayer is always asserting his values when he opts for how his tax dollars are to be spent.

Monday, August 23, 2010

Consolidating Consumption

More and more it seems, consumers are trying to get as many diverse benefits out of any given product or service as is possible to provide. The amazing thing is that no matter how advanced we become as human beings, we'll always be subject to the constant of time. There will always be twenty-four hours in a day and, though we can become wealthier and wealthier in other respects, the amount of time we can accumulate will always be the same. So, what happens when we have the same amount of time but increasingly more stuff to cram into it? Consolidation. Consumers are looking for products and services that do everything.

I've noticed a few different examples of this as of late--and there are probably better, more insightful ones that I simply haven't thought of. The first is the increasingly high demand for well-equipped crossover vehicles. There are more and more automobiles on the market that people don't know what to call--cars or SUVs. The answer is that they are both. Consumers in this newly prevalent line of vehicles enjoy a dual convenience of the smooth, compact ride of a car and the powerful, off-road capabilities of an SUV. Even longtime performance-oriented car makers like BMW and Porsche are pushing crossovers. Most of the time, the crossover version of an auto maker's sedan will also have all of the entertainment and technology features that its smaller counterpart has as well. The auto market is increasingly cranking out vehicles that have something for everyone.....and everything for someone.

I've also noticed lately an onslaught of fitness centers opening up. Just in my everyday driving, from work to church to shopping, I've noticed probably seven or eight. Clearly, there must be some sort of demand for gyms in my neighborhood. Why is this market segment exploding so? I would suspect that it is for the very same reason as above: consolidation. Consumers are trying to get more for their time. Exercise can be down without the facilities provided in fitness centers. Yet, in a fitness center, a consumer has a wide range of diverse exercise equipment all in one place whereas they may just have a treadmill or a Billy Blanks DVD at home. Moreover, gyms provide another service to go along with exercise that is easy to neglect in a schedule stretched thinly: it fulfills the need to socialize. Just about everyone I've heard speak about 'going to the gym' has mentioned some other person that they went with or had a conversation with while they were there.

Lastly, and most obvious, is Apple. The IPad, IPhone, and IPod are striving for consolidation more and more. Consumers have a plethora of electronic applications that they use: music, reading, GPS, phone service, web surfing, watching videos, etc. Apple is seeking to do it all. Often the most persuasive draw to an electronic device is its versatility. I don't think there are cell phones in existence anymore that don't have cameras--and most will have email as well as some web browsing option. Amazon's new Kindle, sure, can store up to 3500 books but it also has a batter life of one month and is capable of surfing the Internet via Wifi. We need not even mention the 'Apps' of an IPad or Iphone, which have created an entire industry in and of themselves. In the market of electronic devices, consolidation is without a doubt where things are going.

How consolidated can products and services get? I'm willing to bet we're only on the tip of the iceberg. We already as part of our everyday lives take for granted products and services that provide multiple benefits to us--like those mentioned above. In the future, who knows, maybe there will be fitness centers inside buses with IPads connected to each treadmill for the daily commute to work. A stretch of the imagination? Perhaps, but as both demand and competition for consolidation of benefits becomes more intense, we'll definitely see more and more package deals in the marketplace.