George Carlin - Visionary

"If you nail two things together that have never been nailed together before . . . some shmuck will buy it from you."

George Carlin uttered these words thirty years ago, and the only thing this visionary was missing from that statement, in itself an abbreviated marketing plan, was the question of distribution.

The cyber flea-market that is eBay, folks, I have now realized, is the answer to Carlin's distribution problem. Its the most effective method of distribution since Sam Walton sold his Ben Franklin franchises. It's toast with Elvis' image, its a box of rocks, its baby naming rights. Most recently, it is a cornflake in the shape of the great state of Illinois: http://news.yahoo.com/s/ap/odd_illinois_corn_flake.

There is no harm in listing the item for sale (although let's hope it was done during one of eBay's free listing promotions) but it is in the buying I find questionable. After all, I don't think there is a corn flake made that doesn't resemble one of the plains states. I mean, come on, people, its CORN. It's in the DNA of a flake!

Or is it Obama-mania?

Either way, add Carlin to legendary names like Ogilvy, Porter, and Godin. Pure genius.

When did the guys from Delta House start running Microsoft?

"Fat, dumb, and stupid is no way to go through life, son."

These immortal words, uttered by Dean Wormer in the classic Animal House, could be applied collectively to many companies today. Many come to mind, the most obvious is Microsoft, where last year in the rush to get a new product launched, it wasn't so much 'fat, dumb and stupid' so much as 'hubris, avarice, and... okay, stupidity'. It isn’t often easy to distinguish between those three. Too often, all are a part of a lousy decision, and the launch of Vista illustrates all three.

Twelve months following the launch of the Vista operating system there remains a significant reluctance among consumers and enterprises to ‘upgrade’ to the new operating system. Heads in the sand, Redmond executives are quick to suggest that price alone is a deterrent to sales. Yet anyone who knows anyone who has used the operating system likely knows one or more of the dozens of horror stories associated with Vista. In short, the stories caught fire and the Vista brand now precedes itself. No amount of new pricing strategies will change that.

In recent court documents stemming from a class action lawsuit, it is discovered that even Microsoft’s own executives were victims of Vista, either through a lack of drivers for peripherals, certification of underpowered hardware, or a host of other issues common to all Vista users… the executive types from Redmond voiced their frustrations in revealing internal emails obtained by the court.

The reason for the failure of Vista is, as stated above, actually three-fold: hubris, avarice, and stupidity. According to a recent article in the New York Times, all three were in play in Redmond at the time before, during and after the launch.
Hubris:
In the run-up to launch, Microsoft lowered the requirements for hardware, changing required wording on the ubiquitous sticker from “Vista Ready” to “Vista Capable”. (The latter is actually on the notebook on which this is being typed. I run XP, as after having deloused a neighbor’s Vista machine, I elected to stay with what I know).

Avarice:
Internal documents obtained through the legal action reveal that the decision to dumb-down the hardware specifications faces even internal protest in Redmond, including, according to the Times article, Anantha Kancherla, who as a Microsoft program manager was in a position to know that the configuration was so minimal that “even a piece of junk will qualify.”

Stupidity:
Anticipating customer revolt after the hardware requirements were compromised, Microsoft’s own staff prepared for the certain complaints in internal discussions, including a comment from a Microsoft sales manager who wisely – and obviously – wrote, “It would be a lot less costly to do the right thing for the customer now, than to spend dollars on the back end trying to fix the problem.”

It’s too late for Vista, and my humble prediction is that it will go away and undergo a retooling - perhaps a later integration of key features into a different OS release. (There is precedent for a failed OS... anyone running ‘Windows Me’? Didn’t think so.) As for Microsoft, to borrow another Animal House reference, they are now on "double secret probation" with the marketplace. Microsoft needs to be schooled in the threat posed by its competitors – not the least of which include Google, and of course, open source. The days when consumers would accept whatever Redmond dished out are past . Vista is just a symptom of the whole of the Microsoft brand.

To paraphrase Deam Wormer, “Hubris, avarice, and stupidity are no way to run a company, son.”

The British are clicking! The British are clicking!

According to a recent report by eMarketer, the British are embracing digital technology - notably e-commerce - at quite a clip. "Britain has one of the most experienced and active online populations in the world," says Karin von Abrams, eMarketer Senior Analyst, and “confidence in e-commerce is high.” Apparently in 2007 nearly 37 million Brits went online each month, or about 60% of the population, with estimates of 70% in four years.

Notably, the report indicates that 40% of 2008 online sales in Western Europe come from the UK. The UK is expected to represent the greatest share of the European market for years to come, even as the continent catches up. The report's author Von Abrams suggests that the island geography presents a long tradition of catalog shopping that "has contributed to the practice of online buying".

Important to marketers is the insight that the British are very confident of their shopping online, as sellers have established "excellent security for transactions and reliable delivery services ... and online prices are very competitive, particularly for books, travel tickets and items bought at auction sites."

Low price, buyer confidence, convenience. No surprises, really, just a different venue.

Sir Edmund Hillary, RIP

Sir Edmund Hillary, who in 1953 was the first Western man to summit Everest (his Nepalese Sherpa, Tenzing Norgay, should never go unrecognized) died today.

Many might suggest that he wasn’t the first person to summit Everest, that that honor arguably belongs to George Leigh Mallory, who died in the attempt in 1924. But as significant as Mallory’s attempt was, it is important to remember that the rule for summiting is that a successful effort is measured less by reaching the summit as by the safe return afterward. So it is in mountaineering as in business, the greatest leaders are trailblazers known as much for their own accomplishments as the opportunities they create for others, the imagination they spark in us, and the possibilities they inspire among us all.

It is hard to imagine that the tallest peak on earth was conquered only as recently as just 55 years ago. But almost as proof of the impact of Hillary's pioneering spirit on others, it is perhaps even more difficult to comprehend that the moon was conquered a mere 15 years after Hillary’s summit here on terra firma. I would suggest that the indomitable spirit of Edmund Hillary and Tenzing Norgay certainly fed the spirit of our space program as much - as if not more - than the competition we felt from the Russian launch of Sputnik.

Just as Hillary had his moment, business leaders today have an opportunity to leave their mark on history – but they should also learn from that humble New Zealand beekeeper that the larger impact they can make is through leading by example, taking risks and inspiring their team toward their own, as Jim Collins (Built To Last) would have it, “Big Hairy Audacious Goal”.

As George Mallory proved, driven men are remembered for the risks they take and the accomplishments the master. But it was Sir Edmund Hillary who proved that leadership is not only about reaching the peak, but about coming down off the mountain, and by doing so, showing others the way and encouraging them toward their own personal summits.

Know thyself

"The essence of leadership today is to make sure that the organization knows itself." -- Mort Meyerson

This statement by Perot confidant and former EDS Chief Executive Mort Meyerson is my advice for you in 2008. Not far from the platitudes “Know thyself” and “To thine own self be true”, Meyerson’s statement emphasizes the importance of a widely understood, and closely followed corporate Vision that drives a firm’s mission, principles, and strategic direction. An organization that knows itself knows how to spot opportunities, navigate troubled waters, and work together toward common goals. For individuals, it helps define roles and responsibilities, establishes their individual value to the organization, and builds the foundation for empowerment in decision-making.

To thine own company should each employee be true.

Brand In The Place That You Live

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A pie in the Facebook

Like so much in marketing communications, particularly events and public relations, it is often hard to see good efforts working. But you sure know bad efforts when you see them.

Specific to PR, with their widely publicized Beacon debacle, add the golden boys at Facebook to the legions of bad PR episodes, now along side the fake blogging shills for Wal-Mart, promotions for Cartoon Network, executives at Enron, and on-going messes for the Red Cross and FEMA.

Sayeth Josh Quittner at no less a source than Fortune: "What’s harming Facebook - perhaps to a terminal degree - is enormously bad PR. For a social media company, these folks don’t understand the first thing about communication; they have alienated the press by being arrogant, aloof and dishonest. " And still more from CNET: "The big question for users is whether there is anything Facebook can do to regain their trust."

I can't always define bad PR, but I know it when I see it.

The Trouble With ROMI

ROMI, or Return on Marketing Investment, is the stalwart of the accountability marketing movement, spurred on by the dozens of dashboard software products and services that promise not only to track the success of your marketing efforts, but change the very nature of the way marketing is viewed in the corporate environment.

Poppycock.

As I told an audience at a recent BMA luncheon at which I was the speaker, ROMI is a Red Herring. It provides a false sense of security to marketers who otherwise have abdicated their responsibility to learn the language and requirements of the finance team, and therefore, the organization generally. Here are the top three reasons that ROMI, while a good tool, is useless in creating real influence in the boardroom, and real impact on the bottomline:

1. ROMI is a metric, not an objective. Measuring click-thrus, phone calls, leads generated are all useful metrics that measure the effectiveness of tactics, not strategies. All too often marketers and professionals from other fields, for that matter, mistake their metrics as objectives. Objectives are far broader than a lead, and marketing needs to recognize the difference.
2. ROMI only measures one of the four Ps. We can debate the current relevance of the four Ps, but putting the debate aside for a moment; ROMI is targeted toward measuring Promotion only. What of Price (price cuts versus premium pricing strategies?), Placement (how to leverage distribution channels?), and Product (feeding customer and market research to effect product changes?). ROMI acknowledges none of that, yet if there was a single ‘P’ whose impact on sales was the most expendable, it would be Promotion… yet it retains the lion’s share of our attention as marketers.
3. ROMI metrics are created in a vacuum. They do not necessarily reflect the concerns of the executive team. The CFO is concerned with EBITDA, not PPC. He/she wants to know about your contribution to EPS, not the circulation of your industry’s leading trade publication. As compelling as some metrics are, finance types are often as guilty as engineers in the ‘not invented here’ mentality. They set the critical metrics, not you.

In the end, finance folks and executives are your customers, and like reaching customers, you need to speak to their needs, not your own.

80/20, myths, and choice

We often think of myths as ancient Greek folktales of Gods and warriors, or in a business seetting, platitudes like 'the customer is always right' (they aren't) and 'the check is in the mail (it isn't).

I built a personal philosophy in my early days using Pareto's Principle, otherwise known as 'the 80/20 rule', believing that it had a place in every fabric of the universe and would, one day, be a key part of the 'meaning of it all'.

Today however, that which was once seen and known is more and more a myth... technology has unwound Pareto, that which I once thought was the very fabric of being.

20% of buyers produce 80% of the profits
20% of staff produce 80% of the results
..and so forth.

Not so fast.

As much as the 80/20 rule has become a standard researchers at the MIT suggest that technology has diminished its influence. The book The Long Tail: Why the Future of Business is Selling Less of More by Chris Anderson suggests this as well. In fact, the book can be found on Amazon.com, where lesser-known titles are now producing 40% of Amazon.com’s revenue.

The long tail at Amazon has been described thusly: “Amazon sold more books today that didn’t sell at all yesterday than Amazon sold today of all the books that did sell yesterday.”

Read that twice. (The long tail refers to the infinite outlier in a standard bell curve.)

In a new MIT report, “Goodbye Pareto Principle, Hello Long Tail: The Effect of Search Costs on the Concentration of Product Sales”, researchers discovered that when comparing catalog to online sales in womens clothing, the 80/20 was only applying to mail order catalog sales. The 80/20 was moot online.

Of course, Pareto still has influence in the natural world: 20% of the trees will still grow 80% of the apples, and you'll still spend 80% of your time with 20% of your friends, but when it comes to the Laws of Choice, it’s changing the way we do business.

The Mouse That Roared

I was recently speaking with a friend who found himself in near panic as he looked around and saw his four employees hunkered down, planning the next great score, mastering the next great presentation, closing the next big deal.

He panicked because he had just received 'the call'. Megamega Company was moving into his market space. All was lost. Or was it? How could he compete when a larger firm was moving quickly into his territory, now finally seeing the opportunity in what they once dismissed as 'crumbs'? As we talked, five key themes emerged:

First, he needs to change his mind, and those of his team.

The competitor can talk big, but he can talk 'niche'. They can talk resources, he can talk service. Every negative a positive, every obstacle an opportunity.

Second, don't mistake the competition as the target.

As much as he needs to make his negatives into positives, it is more important to make certain he can deliver on the real needs of the customer. He mustn't focus on the competition, instead learn the sweet spot that will address the majority of the customer requirements, and then additionally convince them that they need something only he is selling. Don't sell against the competitor, sell the customer toward a solution.

Third, learn to love Inspector Gadget.

Technology is an area that levels the playing field, and in fact often tilts it in his favor because it is far easier for small companies to deploy new technologies than for larger established firms that are, like legacy telecommunications carriers, burdened with the sunk costs of legacy technologies or are required to resolve ROI in months - harder when deployment is made across thousands of employees. He needs to apply technology to create competitive advantage, lower response times, provide data faster and more accurately to his customers. He isn't small, he's nimble.

Fourth, sell. Simply fill that funnel. Do not let one opportunity define a quarter. I knew a salesperson who, with the blessing of his bosses, spent the better part of a year chasing a single Big Fish like some Ahab manaically pursuing Moby Dick. Ultimately, the story ended the same. He needs to be able to create his own luck, seek out new opportunities, so that he can choose the battles he is most likely to win.

Finally, he needs to remain singularly driven on the vision and mission of his company. Every business needs to follow a vision of what they will be in 1, 5, 10 years. This will help him keep his eye on the prize, choosing the right strategies and investing in the right tactics to get him there.

It's not the end. The entry of a big player into a nacsent market legitimizes the offering for all, and the small players, like my friend's company, still benefit from first-mover advantage.

And now for something completely different.

Unrelated to my usual marketing rants, here's a little something we may want to think about next time we reach for a bottle of water (credit Arthur Caplan, PhD):

1. Water bottles are of plastic or glass. Both are heavy and costs a bundle in oil to ship
2. About 2 million tons of plastic was used to make bottles for water last year (Plastic is a petroleum product)
3. In the U.S., billions of bottles a year get thrown out. Even if recycling, it costs bundles in gas to haul old bottles to recycling facilities
4. Bottled water is being promoted by global sugar water concerns and boutique outfits who are leveraging our thirst for purity to offset losses in soda
5. According to Beverage Marketing Corp., bottled water consumption has doubled in the US in the past decade. Americans now drink more water from bottles overall than any other nation. Note, however, that we are only tenth among the 'enlightened' nations of the world in drinking bottled water per capita, trailing Italy, Mexico, Spain, France, Germany and Switzerland

Okay, so you aren't a lefty enviromentalist and are far more pragmatic and rational than your left-coast Hollywood elite types who worship at Al Gore's pennyloafers. Then think of this: Why pay dollars per gallon for bottled water packaged with a cool logo when you can get pure tap water for pennies? This ain't Mexico City.

In other words, if you want to do something to really reduce global warming and cut down the earth’s pollution burden, or even lower our dependence on foreign oil, stop buying bottled water.

Apples from the tree of no knowledge

As if we needed further proof that today's communication tools make the idea that we, as the Corporation (capital 'c') control the information about our products and ourselves, take a look at this very recent spreading of a rumor, acceptance of it as fact, and rapid errata posting - all without the knowledge or involvement of the Corporation, in this case, Apple:

Monday afternoon Reuters ran with a story that quoted a report from a Taiwanese analyst for JP Morgan. In completing due diligence on the iPhone, the analyst discovered a patent application that (patent-happy) Apple filed in November 06 for a phone with a clickwheel. The analyst, faced with what he thought was a grand discovery, added information given him from 'unnamed sources' and issued a report to his clients and colleagues at JP Morgan. In it, he predicted that Apple would release a mini-iPhone by the end of 2007 and suggested strong sales numbers.

Trouble is, its all wrong. Completely unfounded. And it was picked up by Reuters, who ran with the story.

Day traders scored Apple shares and drove them higher, but by that afternoon, JP Morgan issued a second report by other analysts essentially discounting the first. "We believe a near-term launch would be unusual and highly risky."

So what to learn from all this? Once again, we marketers have little more than the appearance of control over market information and in many ways, even less over brand perception. We can dress it up, encourage it, steer it this way or that, but ultimately our brand belongs to the consumer, and they are prone to believe just about anything.

Expect to engage in brand stewardship, but to expect that you'll ever have brand ownership will just make you crazy.