Madoff, Dreier and Marketing

With the Dreier scheme, Stein Bagger and the IT Denmark scandal and the uncovering of what appears to be the biggest Ponzi scheme in history in New York (Madoff), does it get any worse? One thing is clear – that many of the “recognized authorities” were solely convinced with apparent success and greed, rather than sound business review. How could Ernst & Young name Bagger “Entrepreneur of the Year”? How could so many influential investors invest with Madoff?

If we asked 100 people on the street if they believed in guaranteed permanent profits in their investments or guaranteed rises for no work, most would recognize this as impossible. However apart from the human suffering inflicted, this false belief, coupled with ever increasing greed, has led to wanton spending not just in bonuses but also in departments such as marketing.

Recently Casey Jones wrote about this in an interesting article in AdAge (12.18.08). If I were to put a practical spin on it, I would ask questions like this? If a non-profit can achieve national media response with one billboard after just a few days, what do so many companies spend millions blanketing cities with billboards that no-one notices? This true example shows how organizations, that have to take care in spending, can find ways to more success in advertising than the established big spenders.

Perhaps value for money in operations should be a more important issue when considering investment.

Customer Service, Customer Service

It’s certainly not new to emphasize customer service. Marketers have pushed that for decades (although it could be said that the last 10 years has seen a move away from this emphasis for short term gain). Here’s something to make those think who are perhaps succumbing to panic and throwing out the idea of customer service in favor of short term economics.

At the weekend a family member dropped my digital camera, pushing the zoom lens out of its track. I began to call stores to find out who had onsite repair, and what the charge would be. Most companies do not have onsite repair. However, I called a family business in the process of my search and the gentleman at the other end offered to look at the camera for free, and if possible fix it!! For free!! Needless to say, I went down to the store an hour or so later. While I was waiting to see if he could fix the camera, I began to look at potential replacements, with the idea that I’d find out the info and then probably buy it at a cheaper price online.

The man could not fix my camera onsite, but I was so impressed by his service I began asking questions about the cameras they had. I was then impressed by his knowledge and his honesty in telling me which models were “not really worth” it for me. To cut a long story short, as I had already done some research about price before I went, I was offered a very good deal with an exceptional make of camera.

I left extremely happy, determined to buy a second camera there for my wife and to recommend this store over all the megastores (who have lousy customer service and generally seem to just want to get your money out of you). The price was more than comparable because camera firms are competing in all marketplaces. All I can say is I hope this company takes over from one organization I could mention where I bought my computer. That well known national chain, has arguably the worst and nastiest customer service out there (including a corporate customer “service” person who told me “When you leave the store it’s no longer our business” – and that despite the fact I bought an extended warranty). Not only do I never buy anything there anymore, even if it’s a little cheaper. I always advise others to avoid this store.

Where will these two organizations be in 2 years time? My guess is that the family business will have survived the recession nicely, while the national chain will have downsized and worsened its reputation. We’ll see.

Whopper virgins – genius or madness?

Is Burger King on the right track? Does it promote or hinder the global village? Does it prove Burger King’s burgers are better than…?

Firstly, I think we should congratulate Burger King’s marketers for coming up with an original idea that emphasizes the growing connectedness people are feeling across the world. Secondly, the Whopper Virgins have definitely created more of a stir than normal – something that in its own right proves some sort of success.

However, will the campaign increase sales? While I’m still in suspense as to the response, I suspect it will show Burger King’s burgers in a good light! How many people are as cynical as me? Years ago my brother was stopped on the street to try the “Pepsi Taste Test”. He immediately told them his preference for Coke, which made him the “ideal candidate”.
However, when he flawlessly showed which was Coke (he liked that one) and which was Pepsi (he didn’t), his statistic did not see the light of day. Decades later Pepsi is still number two to Coke.

Lastly, how does Burger King’s ad work in minority communities in the US? Do Chinese viewers like the “ignorant backwoodsy” Chinese people portrayed in the ad? And what about the ads around the world? Do viewers in Singapore see rednecks from Arkansas trying a Rendang Burger? Hmm….

Inbound or Outbound Marketing?

I just heard a very impressive and convincing presentation from a web-marketing expert.  His premise was that traditional outbound marketing is on the way out as an increasing number of people have filters in place to prevent it.  Simultaneously these same people are becoming increasingly annoyed by intrusions into their space, time and consciousness.  An increasingly popular method of marketing nowadays is “Inbound Marketing” – that which offers free valuable service, encouraging connection, interaction and enquiry.  The theory is that those who connect due to their own volition will become much more loyal customers at much less a cost.  Consequently much time is spent on blogs, websites and various other internet forums.  Webinars are posted for education, questions are answered for free and items of interest forwarded.

Is it true though that these forms of marketing are rendering traditional media marketing redundant?  I don’t think we can say that, as it relies on a certain degree of web access and web familiarity.  For example,  while this trend may be true for English-speaking people in the US, it is not true on the same scale with those who only speak Spanish in the US.  Those Spanish-speakers who are regular web-users tend to post more than English-speakers, but represent a lesser proportion of the US Latino community.  This means that a web-based approach, while looking to the future, does not effectively deal with the present.

The same is true of many countries and cultures around the world.  Urban China is very web-savvy, yet there are still sizeable communities in China who are more or less cut off from the rest of the world, who do not speak Mandarin Chinese, and who are unable to use a computer.  China is in fact an interesting case because it is at the forefront of blogging, yet this very approach does not reach a significant portion of its own immediate market.  Therefore other strategies are necessary.

Inbound marketing is very important, and I believe its principles can be applied with great success to areas such as person to person grass-roots marketing as well.  It is clear the web will have an increasingly important role to play worldwide.  Yet, if we abandon other forms of marketing at this point, we will take ourselves out of very significant present markets and also become unable to develop a majority of brand new markets internationally.

Keep jobs in America or not?

This is a touchy subject right now.  Recently I was in communication with a CEO from another part of the world about partnerships with the US.  Conducting some initial research with companies here in the US, I was struck with a dilemma.  Even if I thought it was a good partnership with the foreign company, would there be fallout in the loss of local jobs.  If this happened would it hurt the economy and would it worsen the potential prospects of the US workforce?

Many complain about the drain of US jobs to other parts of the world.  However the truth is that high quality work is being carried out there more cheaply than in the US.  As economics drive companies, they follow the line of most profit.  In my view a reactionary isolationism is not going to help anyone.  Instead a short-term economic and/or political gain will give way to massive loss in the world marketplace.

Rather, I suggest the US consider models based on those of the Japanese after the 2nd World War.  Faced with a country with very little in the way of raw materials, Japan assessed its potential strengths – concentrating on developing industries demanding great skill and brainpower and few raw materials.  The US is losing place and influence in the world economy, and while it is still the world’s richest and most influential nation, it must recognize times are changing.

The answer is not going to come in putting up a trade wall, but in identifying and seizing new market opportunities in an increasingly unified world market.

What was the biggest mistake of the “Big 3 in Detroit”?

There has been a lot of talk about the various bailouts.  Particular negative attention was given to the recent request by GM, Ford and Chrysler for a bailout as the CEOs arrived in three private planes.  Obviously the costs of these flights – approx $20,000 per flight – was not much in light of the multi-million bailout deals they were pleading for.  However, this one action has not only jeopardized their requests, but garnered an awful lot of ill will towards their companies as the time they can least afford it.

I wonder how much these CEOs brought in their marketing/public relations experts to help them with their overall strategy.  It’s hard to imagine that any of these CEOs was really thinking when they made their decisions to fly separately in private planes.  Why didn’t they think?  Was it tradition, arrogance, short-sightedness?  These discussions with Congress could have turned into a wonderful opportunity to gain funding, increased the number of Americans determined to “buy American” and positioned them at the head of the growing drive to be green.

We don’t know what the result of this big marketing/public relations faux pas is going to be, but we should all beware we lead from the front in the public messages we send out about our companies, if we want to come of this meltdown healthy and growing.

Can branding hurt you?

This week McDonalds hit the headlines again!  McDonalds has an unmistakable brand image.  That could be said to be a massive advantage.  McDonalds has certainly been able to expand internationally but how is it perceived in other countries?  I was intrigued by the experiment they’re making in Japan by NOT using their brand.  Their publicity machine says it’s so that customers can taste the taste without the image of McDonalds in their minds.  The question is, “What makes McDonalds concerned that their image would have a negative impact on the taste buds of the Japanese?”

I remember the first McDonalds in the UK (bad quality), Geneva (better), Moscow (very ironic it was considered a luxury restaurant when Russian restaurants were so much better), outskirts of Jerusalem (really hate seeing those arches before the rest of the city).  What image does McDonalds bring to your mind? 

Comparing McDonalds to Coke, I realize that Coke has a very neutral to positive image in my mind, no matter what language or culture.  When I think of McDonalds I remember how hard it was for me to initially even associate the word “Restaurant” with the type of food on offer.  I also remember the negative publicity in the UK (the longest court case on record) for the debatable ethics of their targeted ads to kids.  The movie “Supersize Me” hasn’t much helped either.  Perhaps this image has prompted McDonalds to try their Japanese experiment.  Will it be the precursor to a brand change?  Is this McDonald’s first attempt to associate their brand with quality?

Whatever the upshot of this experiment, it certainly reinforces the need to be aware of the development of the brand image.  Too little attention can have an impact decades in the future.

Trends through the recession

Ad Age recently published an interesting interview with Samsung CMO Steven Cook.    He related some of his observations, which I believe can help many, as we seek ways through the tough times ahead.

Firstly, he mentioned the long-term success of companies that do not restrict marketing in tough times.  Of course, inept marketing is not worth the money it takes, but effective marketing in tough times will actually help your company come out ahead of the competion – and faster!  Procter & Gamble’s commitment to marketing helps explain its longevity.  I recently went to a presentation paralleling the situation in 1929 and today.  Companies such as P&G and General Motors actually did very well employing the strategy of consistent and innovative marketing.

Secondly, Mr. Cook shows the “upside” of the tough times for marketing.  E.g. if people can afford less to go out to movies, they are more likely to invest in home movie options – including flat screen TVs, the new film downloading technologies and servers etc.  This should emphasize the need for all of us to see the markets that will in fact be created by the recession.

Thirdly, Mr. Cook mentions the growing influence of “Green concerns”.  He mentions how important it is to remain humble, not promise what you can’t deliver, and then deliver or over-deliver.  I also liked his creative thinking when he gave out cellphone recycle envelopes at a recent conference when he was keynote speaker.

All of these examples should encourage us as we look at the ways strong companies are finding to negotiate a challenging time and come out ahead.

Countries to watch?

Jennifer Alsever wrote a thought provoking article on BNET.com suggesting the best countries for small, medium and large companies to look at when it comes to expansion.  She agrees that it makes a lot of sense for US companies to look at international expansion, given the state of the US economy right now.  I believe it will not only help companies survive the current crisis, but will position them well ahead of the competition when things pick up.

Here is her list of countries:

For large companies she suggests the more obvious choices – India, China and Russia (For me Russia poses some weightier and less obvious challenges than the others but there are obvious benefits to all three).

For medium-size companies she suggests Chile, Singapore and UAE.  (I find this an ecclectic and interesting set of choices).

For small companies she suggests Vietnam, Rwanda, Peru and Kazakhstan.  (I find this the most interesting set of choices).

I found this article well-written and researched, with a helpful risk index.  The entire article is available at http://www.bnet.com/2436-13239_23-198453.html.  What do you think?

Public Relations – how not to do it!

I was watching the US Presidential elections, switching between channels to see different perspectives and I came across BBC America (which I watch quite frequently, as it’s the only news station in the US that tells you anything about the rest of the world).  BBC America had an MC and four panellists, who switched at various intervals.  I happened to tune in at the end of an interview as discussion switched back to the studio.  There were two Americans and two Brits on the panel.

The first American to speak gave a classic example of everything not to do while trying to communicate effectively (much I think to the embarassment of the other American present).  He started off by telling the MC the reporter should be sacked, and then launched into an unbelievably arrogant dressing down of the BBC and the rest of the world, as if he was the parent and the rest were disobedient children without his insight and knowledge.  If ever someone wanted a negative example of a stereotypical American, this was it.  Key phrases that really jarred were such as, “You (BBC) are a guest in this country”.  He was seemingly oblivious of the fact he was a guest on the BBC!!  It is even more ironic that this person was previously an Ambassador!  (One does not have to wonder too much to see why there are international public relations issues!)

Am I saying it’s impossible to have very different positions in effective international public relations?  Of course not.  In fact, I very strongly disagree with some of the BBC’s political reporting.  The problem is not having different values, perspectives and positions – the problem occurs when we communicate those in a fashion which bring our character to the fore and not the problem.  Some tips to consider when trying to communicate a vastly different position are these:

1. How does the receiving audience receive such information in their own country and culture in a way that they interact with it?
2. Have I focused down to my main point?  It’s very hard to deal with differences all at once.
3. How can I communicate in such a way that I appear approachable, teachable and humble.
4. Will it help to use “third party questions”?  (E.g. “How do most people in___ see this issue?”)

These are just a few suggestions.  Obviously coming to constructive resolution or a way forward requires some more experience and skill.