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.