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.'