Saturday, November 26, 2011

That's too much man.

My first car, a second hand Beetle came in 3 colours, black, white and I can't remember the third colour. The colour wasn't important as a choice factor but how many sand dunes it could traverse or how many people it could carry home from the pub and never having to worry about putting water in the radiator were important but never mentioned in the brochure. Choosing a car was easy when the parameters of choice were limited in colour and aimed at a market not mature in advertising and accepting of offerings.

So I'm in the US, where "you better have this product or I'm going somewhere else" attitude extends to over 350 models of cars, more than 6000 banks and so many breakfast cereals and that the first 3 letters of the alphabet cover more than 140 packets in the supermarket aisle. Companies have made no secret of their desire "to own the customer" and have ramped up choices because this is what they believe will keep them at the forefront of customer advocacy, choice.

It is also why confusion and abundance of choice are turning ordinary shoppers into "paralysed avoiders". Throw in regret, panic and anxiety about choices made and not made and you have a consumer base looking for a way out of the choice maze. Do you really need hundreds of breakfast cereals to choose from? How many cars are you really going to look at? Don't even get me started on how much money I'd need to have, to contemplate more than a couple of banks, let alone 6000.

One of the issues psychologists are concerned about, are children growing up with abundant choice and never really choosing anything. The so called digital generation is bombarded with so much choice, they end up continually picking, not choosing and end up hoping for the best. As opposed to making a choice and managing the outcomes of that choice, which prepares them to cope with an adult world.

Having said that, a 2010 study by researchers at the University of Bristol found that 47% of adult respondents, thought life was more confusing than it was ten years ago, and 42% reported lying awake at night trying to resolve problems. So no one is finding it as easy as it used to be with retailers fighting for attention at every chance.

Some though, are getting the message and have worked out that selling fewer products at a higher quality can gain significant market share. One of the best examples is Apple, whose entire product range fits on a coffee table. Using only continued design enhancement on those few products it has become the most valuable company in the world. The less is more mentality is slowly becoming a movement within US retail and companies such as Proctor and Gamble experiment with products such as shampoos, taking their Head and Shoulders range from 26 to 15 and improving sales by 10%. This is further emphasised by a 2006 Bain study suggesting that reducing complexity and narrowing choice can boost revenues by 5-40% and cut costs by 10-35%.

So in the end, the most important thing, isn't what we choose but that we make a choice and have the capacity and coping ability to manage and live with that choice. Now, coco crisps, crispy chocs, coco roos, coco pops, coco puffs, cocoa hoots, chocos, chocolate flakes, chocopic, chocolate crunchfuls, chocolate checs, chocolate cherrios, count chocula, chocolate oat crunch, chocolate peanut butter, chocolately peanut butter crunch?????

Tuesday, November 22, 2011

$ervice.

I have been coming to the land of the shopping mall,since the late 70s and always enjoy my time, especially when it comes to purchasing with a great exchange rate but more importantly with great service. My first trips were not about malls but about drinking and sporting events, travelling with friends and marvelling at the cheery faces greeting me from behind the bar. Cheery faces wrapped around home spun greetings of "have a nice day", "glad you could join us" and "I'll be your waiter tonight". All for $4.50 an hour and all seemingly plastic at the time.

I say at the time, because at home we hadn't bothered to go past G'day in the service industry and anything beyond seemed slightly sycophantic behaviour. As far as we were concerned, the product was the desired result and we weren't interested in wrapping it in any extra layers of service. Things change and decades later many of us find ourselves in service industries, competing for the same market and having long ago agreed the US is a bench mark. A bench mark created out of competitive necessity and a long instilled cultural norms surrounding service.

The $4.50 hourly rate still exists in the US and the jokes around working for that extra tip continue but nothing has changed regarding service and that's a good thing because all those years ago it wasn't plastic, we just hadn't caught up. The service mentality, especially in the retail sector, is an ingrained culture within the US and has become second nature. The fact that it exists at the lowest end of the pay scale extrapolates out to superb service at the top, that is only found in niche markets at the high end back home.

For many years, the jokes aimed at American tourists, coming to Australia demanding better service from restaurants and shops, showed our lack of intuition in matters surrounding a full product offering. No wonder they ended up building brand hotels where ever they travelled, at least they could take the service mentality they were used to, with them. As a callow youth travelling around the world, it never occurred to me, to listen and learn and take back lessons from the most competitive retail society on the planet and try and integrate them into my own businesses. It was more fun having a laugh at someone in a loud shirt wanting that extra bit of service because we were afraid to look into ourselves and know this was the future.

Service in the US is no longer attributed to that end of day, tip jar mentality, it is part and parcel of the offering of daily life and continues to be a bench mark. Travel around Europe for a while, you'll see service slide as you head south towards the Med, walk through one of our department stores over Christmas looking for some help or try and get a tradesman to show up on time. All indications there are still things to be learnt from the land of the dollar bill.

Thursday, November 17, 2011

Newman's Own.

I've always been a fan of Paul Newman's pasta sauces. Firstly because he was a great actor and it was cool for a celebrity to muck about in the kitchen, way back in 1982, many years before the celebrity huckster movement. Secondly and most importantly because all the money went to charity. Could I make a better sauce, of course, but time restrictions and laziness often conspire and of all the sauces on the supermarket shelves I grab Paul's because it makes me feel good. With over $300 million given to such projects as the "hole in the wall camps" for kids, arts and education and breast cancer research, Newman's Own gives back and makes a difference.

I'd like to do more of the above and whenever a product associated with a social cause or conscience I agree with becomes available, I look into the viability of that product fitting into my lifestyle. Global surveys have found that just over half (51%) of all consumers would like to reward responsible companies by buying their product or shopping in their premises, with 53% saying they would pay a 10% premium for products from a responsible company. We all want to do better, give back and feel like we have done some good, often life gets in the way so we are happy for someone else to provide the avenue, even if it is only pasta sauce.

Surveys go onto to show that 85% of consumers want companies to do the right thing and be engaged in social issues but not many (22%) consumers think they are doing or getting enough. A recent list of the most "positive" global brands still finds most lacking in the "social graces" and more interested in output. Ikea, Google, Nestlé, Danone, Leroy Merlin, Samsung, Microsoft, Sony, Unilever and Bimbo make the top ten list but the question of whether they impact people's lives for the better remains generally unanswered.

The future will see people more informed about the social conscience of companies and products they sell and it is not too far fetched to think consumers will reward the "good" guys and either avoid or negatively feedback on the"bad" guys. How you are seen in the future as far as your social conscience and the good work associated with that, could directly impact your bottom line.

It's not all about the big boys with so called disposable profit, paying out to make themselves look good in the eyes of the consumer. Without a heart companies are easily identified as buying a social conscience for bottom line results and consumers are savvy enough to see through the dollars splashed about. Size is not as important as good will and altruistic tendencies and even the little guys have opportunities to make a difference.

A good friend, running a successful travel agency in Melbourne, has supported causes for years and recently set up a micro financing project in Malawi, working with locals to make a difference in their daily lives. Loans available through "reHope" will give people opportunities to improve their lives significantly and it all became a reality because Karsten Horne, owner of Reho Travel cared more about making a difference than the next dollar. Now wouldn't you want to book your travel through someone that truly cared?

So next time you are shopping for anything, contemplate making a difference, even if it's only with a jar of pasta sauce.

Tuesday, November 15, 2011

Emotional Quotient.

A Qantas friend asked for my opinion on the latest disruptions, mud slinging and emotional turmoil encountered over the last month with the national carrier. I thought about what it meant to be Qantas staff, disrupted travellers and the general public accosted by a media frenzy. In the end I ended up with one opinion. You cannot run a global business, along normal business lines, including hard line decisions, if your business segment is in travel and tourism. It is without a doubt the most emotionally charged and angst ridden sector within the business community. When was the last time you heard a squeak out of the CPAs, the RTA or the Real Estate Institute? Okay, lame examples but if you did, would it amount to the last month of Qantas woes?

No matter what decisions are made by airlines within travel and tourism, the global consequences are far beyond the scope, of business objectives and this brings decision makers into confrontation with the biggest disadvantage the industry has, emotion. No pragmatic decision to cut staff, introduce new procedures and processes, buy equipment, change direction or even tamper with the lunch menu can be made without encountering an emotional wave tossing the decision makers to the beach.

While emotion is often seen as a disadvantage from a decision making process, travel and tourism have always been about passion and emotion, a lifestyle built on service driven by emotion to succeed. So the struggle between getting you from A to B safely, making your holiday memorable and accomplishing corporate travel objectives, all the while working with big entities needing advantages over each other, sees the industry balancing on an emotional fulcrum.

General Motors Holden deciding to cut a line of unprofitable models, Coles not providing the cheapest muesli bar alternative and the local pub not serving your favourite beer are business decisions made by management to increase bottom line and stay in business. None of them cause the consternation and emotional outbursts an airline creates via cuts, changes or challenges to the states quo. Everything about travel, from making initial decisions on a holiday, saving up the required money, to lists of shopping and tours along with who you travel on, are emotionally based decisions that don't have a plan B because that would be too practical and unemotional.

Some see the airlines as emotional cripples, not able to see or care about the people they compromise, disadvantage and generally disrupt. I see airlines trapped in an industry not always ready to make hard decisions because the bottom line is people and lifestyle, not dollars. Perhaps the airlines need to get in touch with their EQ before making decisions? Perhaps airlines should consult more with the industry they service? Or maybe they just need to not change anything and we'd all be happy?

None of that works if you run a business. You being the operative word, not them, not others but you. Welcome to The airline CEO's world. I'm sure sometimes they wished they worked for a widget company, only responsible for a simple product, or providing a service without emotional turmoil attached?

Thursday, November 10, 2011

Don't shoot me .......

“They laughed when I sat down at the piano. But when I started to play.”

The famous line, written by John Caples in 1926, considered by many the most important line in advertising has spawned countless copies in one form or another for the past ninety years. Fifteen words tell a story so powerful and emotional, that the reader cannot help but be swept into the pitch. A pitch that has been turned into movies and stories for fifty years. Look at any motion picture with the under dog succeeding in the end, think Sylvester Stallone or any ugly duckling romance and you come back to the same message that Caples was trying to convey in the shortest possible story with only fifteen words. Fifteen words that contained emotional and technical hooks advertising has been using ever since.

The emotional hook relies on your sympathy and empathy towards the person sitting down at the piano. No one wants him to fail and you want him to succeed with all your might because everyone has been in a similar situation, where they wished they had whatever skill or product was being sold. We all want to believe in the silver lining of Caples' copyright and advertising has used his principles of get attention, hold attention, create desire, make it believable and finally give you a reason to buy, ever since.

From a technical aspect Caples gave his story both negative and positive effects, that create the scene in your mind, as you see yourself being laughed at by the crowded bar, maybe even some booing, the look of embarrassment on the face of your new girlfriend. The silence as you hit that first note becomes the beginning of your triumph, as the audience sits spellbound and amazed. That ending is the analogy for life's triumph over adversity we all seek and the advertising industry has built itself a platform from which to preach to the converted.

The issue was then taking that powerful story and diluting its effectiveness by over use and creating credibility gaps. How often have you seen the back pages of magazines with copy hawking a product along the lines of "I didn't believe this face cream could make me look younger in 30 days but look at me now" and the before and after pictures testament to the so called effectiveness of the product. How many weight loss stories, how many financial successes, how many dreams fulfilled within a single line of copy have we bought into because we want to believe the story for ourselves?

So remember Caples' line and ask and challenge and step back emotionally when looking to buy, to enhance or even to fulfill your dreams via products and services that seem too good to be true. Thankfully the web has thrown up challenges to the advertising industry with its ability to crowd source, work with peer credibility and forums testing what used to be a given, a great copy line on the back of a magazine.

....... I'm only the piano player.

Tuesday, November 8, 2011

6 Million people can't be wrong.

Just like Elvis from my previous article, Bill Gates should have an album of greatest hits, only his would include the number of people his foundation has saved globally. In this time of "Jobs" and how the world is being "Applefied" it's worthwhile going back a few years, to when thousands of people lined up at midnight for the latest Microsoft release before racing home and downloading it onto their PC. Seems Bill and Seattle are no longer relevant compared to Steve and the innovations coming out of Cupertino. The world is more interested in what cloud we put our information on and how we carry that information in our pocket.

Like many people who hit global heights of success, Gates suffered under the "Tall Poppy" syndrome and we couldn't wait to cut him down to size and look to the next coming of greatness. Steve Jobs gave Bill Gates a less than friendly summation in his biography, which Gates replied to in a most magnanimous manner allowing many an insight into a man whose direction in life has changed.

Stories abound about the sums of money that Gates is using to save the world's poor via his medical foundation. $6 billion is the latest number Gates has spent on just the vaccine side of his foundation's work, fighting hep- B, measles, AIDS, polio and rotovirus. Part of the largest single philanthropic enterprise in history, Gates is suitably humble and points to his money being able to focus the global pharmaceuticals into developing drugs that had no chance of being profitable but are effective in lowering death tolls. The measles drug has now been lowered to 23 cents and with one vaccine you never get measles again.

“The metric of success is lives saved, kids who aren’t crippled,” says Gates. “Which is slightly different than units sold, profits achieved. But it’s all very measurable, and you can set ambitious goals and see how you do.” “I’d be deeply disappointed,” says Gates, if in the next 25 years he can’t lower the death toll by 80%. Otherwise, “we’re just not doing our job very well."

Those 6 million from his "Greatest Hits" so far, add up to 3.4 million lives saved from hepatitis B, which causes liver cancer, 1.2 million lives from measles, 560,000 from the Hib bacteria, 474,000 from whooping cough, 140,000 from yellow fever and 30,000 from polio. In the past year the new initiatives have prevented another 8,000 deaths from pneumonia and 1,000 from diarrhea.

Makes you want to go out and buy a Microsoft product, doesn't it? Our attention span and our memory seems to get shorter and shorter, the more innovation and channels we have to work with today. With everything we say, cut down and shortened to the smallest possible throw away line and stories lasting less time, before being made redundant on the web, Bill Gates just doesn't have the same pull anymore when compared with the Kardashians of the world.

So what has Kim Kardashian done lately?

Thursday, November 3, 2011

The Numbers Game.

As a child I was fascinated by an Elvis album cover. It showed him resplendent in a gold lama suit with the title "50,000,000 Elvis fans can't be wrong". So before you channel your inner Elvis and give us your best rendition of "hunka hunka burnin love", it wasn't the lama suit that caught my eye but the staggering number on a cover from 1959. I say staggering because in those days to be a fan you actually had to go to the record store and buy the album, you actually had to turn on the TV to watch Elvis on the Ed Sullivan show and you actually had to post a fan letter at the post office. So those 50 million were die hard fans willing to go out of their way to be involved with their idol.

Today it's a lot easier to get fans and a click or two can have your content transferred across the world. With 2 billion Internet users, at least 1 billion of those using Google, 133 million blogs, 800 million Facebook users, 500 million monthly You Tube users, 400,000 android devices activated daily and 100 million dot com domain names registered, 50 million fans seems like an afternoon's work for some like Han Han a Chinese blogger with 340 million readers.

The most influential on the net now have the capacity to change ideas, change culture and bring about change, all from the confines of their lounge room. Without having to attend large rally's, without doing a country tour and without spending time on planes, trains and automobiles people from all walks of life have the opportunity to make a difference if their story is engaging and credible. The ability to find large audiences no longer requires booking agents, writing a hit book or song or even being famous.

People will search you out if they are looking for your story and the ease via multiple search engines, to find what people are looking for with a couple of clicks makes a true fan almost irrelevant. Now those 50 million Elvis fans would only have to download the music, check out the concert on You Tube and give the king a quick tweet about what they thought of his latest hit, all while sitting in a cafe sipping a latte to get the free wifi.

So the numbers today come too easy and the effort behind them doesn't even require getting off the lounge. The places people used to gather like book stores, cinemas, even shopping malls have all noticed the lounge effect but the smart ones like Amazon, Apple, eBay and the like have taken advantage of the numbers game easy access. Even influential writers like Seth Godin who now writes one of the world's most read blogs never needs to leave home to hawk his latest book or even attend conferences. I know because I read his blog and order his e books online while listening to him via TED, You Tube and any other online conference facility available.

All of this makes those Elvis fans, real fans and not just mouse manipulators. Not all the numbers count. Sometimes small numbers with real effort and engagement count for more.

Tuesday, November 1, 2011

Yesterme, Yesteryou, Yesterday.

Falling asleep at a friends Birthday late Friday night, not because I was bored but because I had attended a couple of late night concerts and I don't bounce back like I used to, got me thinking about why I spend large sums on the past? Steve Winwood, Steely Dan and Stevie Wonder filled up my nostalgia quota, along with denting my bank balance for the month and they got me thinking what this generation will be nostalgic about in a couple of decades? Surely not the Kardashians or Paris Hilton? Maybe Maroon 5 but then their biggest hit at the moment is about a guy from the 60s, still doing his thing today. Will there be a boomer generation harking back to a simpler time?

Nostalgia still sells out concerts and entertainment venues and for those that lived through the cocaine days of the 70s and 80s they celebrate a time of simple joys. Nostalgia sells to many remembering a simpler time, where airlines didn't just stop flying unless the pilots decided not to fly, where you carefully scripted your thoughts before putting them on paper, where you picked up the phone and where change happened over years not minutes. "It's about trying to go back to a time when things were different," says David Sprott, an associate professor of marketing at Washington State University and the author of several studies on the topic. "When things are uncertain in the present time, looking backward is a comforting thing for people to do."

So with change being the only constant today, albeit at rapid speed, what will people remember about the 2000s that they would be willing to pay a premium for? For nostalgia to sell, it has to have an emotional hook, and with today's convenience, instant media generation looking to the next best thing, what will fill their memory bank and empty their online bank? Will we be nostalgic about technology and the men who pioneered it? With technology the mainstay of our society, Steve Jobs will certainly have a slice of that memory bank and perhaps retro versions of the iPod and iPhone for sale in 20409 will remind people of the fun they had with the first tweet, the first time they filmed and down loaded their friend with underpants on his head or even the rush of having something published on the net.

By then the iPhone will have been implanted into your earlobe and you no longer have to type anything into systems and all you will hear around you will be chatter as people communicate with their equipment, which in turn communicates with everyone else. Maybe there will be nostalgic seminars on talking with people, television and radio along with anything we had to pay for, before the net went free. There will be giants of technology Jobs, Gates, Bezos, Page and Brin, Ellison and Zuckerberg, enshrined for the foresight and the legacy they left but will they engender nostalgia for a simpler time when everything seemed simple, even a phone call.

So as Stevie sings Yesterme, Yesteryou, Yesterday, the question remains, what are we building today that will stand the test of time, to be celebrated in decades to come?
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