The Real Thing

The topic is syrup this Foodie Friday – maple syrup specifically.  You might know that I’m a fan of the work done by the Cook’s Illustrated folks.  Despite their incessant hawking of yet another Cook’s product, the work they do is always spot on and I’ve never made anything using one of their recipes that hasn’t been delicious.

Grades of Vermont maple syrup. From left to ri...

(Photo credit: Wikipedia)

They do product tests as well and one of them concerned maple syrup.  To me it also contained a business lesson.  I’ll let them describe the test:

Sold side by side, genuine maple syrup and so-called pancake syrup (made with high-fructose corn syrup) can range from more than $1 per ounce for the real deal to a mere 14 cents per ounce for an imitation. But, price and product names aside, which tastes best? To find out, we pitted four top-selling national brands of maple syrup against five popular pancake syrups, hoping to find the best one for pouring over pancakes or using in recipes.

As you might guess, there was no comparison.  Genuine syrup was easily distinguishable from imitation and was universally preferred in the taste test.  As the Coke people learned a long time ago, consumers can spot and usually prefer the “real thing.”  Fake brands taste “off” even if they are more friendly to the consumer’s pocketbook.  Not only does authentic taste better but it sells better too.

The concept of authenticity has been researched.  A recent paper in the Journal Of Business Research found that quality commitment, sincerity and heritage all contribute to consumers labeling a brand as authentic.  Many brands ranging from food products to vodka to shoes use this notion to market their products and it works.  As a story in the Times reported:

Several studies have shown that authenticity — real or perceived — can affect the bottom line. Brian Wansink, a marketing professor at Cornell University, found that when menu items had geographical or nostalgic labels (“traditional Cajun” red beans with rice, “Grandma’s” zucchini cookies), diners bought them more often and said they tasted better.

The real maple syrup just tasted better.  Isn’t that something we’d want for our businesses too?  We can get there by being real in all of our communications with consumers and holding our products to high standards, even if it means they cost a little more.

Make sense?

Leave a comment

Filed under food, Helpful Hints

It’s Not Just Big Brother

Another day, another horrible bit of news on the privacy front.  I’ll take it as a sign that another post on data collection and privacy is called for.  I think that by now we all know that everything we do in a digital world is collected and that nothing collected in a digital world is private.  Oh sure, maybe your Aunt Sally can’t see your phone records, but someone can, and it’s probably not someone who needs to know that you called a suicide prevention hotline 4 times last month.  As one writer put it:

Collection means access, period. Someone who wants information can always find a way to get it, and yet we’re only expanding methods of information collection: trackers, cameras, beacons, glass, drones. This puts all of us in a very public place, constantly.

Amen, and it’s a thought each of us needs to keep more forward in our minds.  The Pew Internet folks have been doing an ongoing survey with respect to privacy and the latest report (which you can read here) contains the following quote:

An executive at an Internet top-level domain name operator who preferred to remain anonymous replied, “Big data equals big business. Those special interests will continue to block any effective public policy work to ensure security, liberty, and privacy online.”

I’m not really aware of any recent business model that isn’t centered around data collection and monetization at least in part.  Retail, health care, entertainment and media, finance, and insurance are sliding their models to revolve more around robust data collection and usage.  We as consumers can say “fine, I will gladly give up data in return for convenience, better pricing, or an improved product”, but that’s a choice WE make, not the provider.  It implies informed consent.

The latest fiasco to which I referred earlier comes from Lenovo, which, as Ars Technica reported:

…found itself in hot water last week when researchers discovered that pre-installed adware from a company called Superfish was making users vulnerable to man-in-the-middle attacks. The adware installed self-signed root HTTPS certificates that made it easy for Superfish (as well as low-skilled hackers) to intercept users’ encrypted Web traffic.

In other words, by buying a Lenovo computer you made data which you thought was secure and private very much not so.  That’s the sort of corporate bad behavior which is intolerable.  But in order to respond, we have to be aware, and I suspect that this is only one example of this behavior.

OK.  Rant over.  The take away is this – if you’re a business, act responsibly and transparently.  If you’re a netizen, pay attention.  It’s not just Big Brother who is watching.

Thoughts?

Leave a comment

Filed under digital media, Helpful Hints, Huh?

Flying Blind

The latest edition of the CMO Survey from the Fuqua School at Duke is out and it’s baffling, at least to me.  You can read the data here if you care to but here are a few points that caught my eye.  Maybe which raised an eyebrow as well.  

The good news is that there seems to be an awareness that we live in a data-driven age.  The report shows that CMOs expect to nearly double the share of their budgets spent on marketing analytics over the next few years. That said, current levels of spending are actually down. Unlike computer chips, it hasn’t been my experience that you can buy more for less in the analytics field so that’s kind of baffling.  In addition, there may be more data around but it seems as if it’s getting used less.  Overall, CMOs reported that just 29% of projects used available or requested marketing analytics, down from 32.5% a year earlier and representing the lowest figure since August 2013.  Huh?

The strange news doesn’t stop there.  Despite the fact that we’ve been using social media in marketing for at least 5 years, social media remains poorly integrated with marketing strategy.  When asked “How well is social media integrated with marketing strategy?”  23%  reported a 1 or 2 on a 7 point scale.  That lack of integration isn’t restricted to social media either.  When asked “How effectively does your company integrate customer information across purchasing, communication, and social media channels” the average score was  3.7, down from 3.9.  In other words, flying blind.

That has an effect on how well CMO’s can track results.  They were asked about the impact of their social media spending, the same social media that isn’t properly integrated into their marketing strategy.  14% reported that they have proven the impact quantitatively.  41% said that they have a good qualitative sense of the impact, but not a quantitative impact.  Nearly half – 45% – said that they haven’t been able to show the impact yet.  Anyone wondering why?

One final rant.  Most marketers have low levels of concern about the use of online customer data.   When asked “How worried are you that the use of online customer data could raise questions about privacy?”40%  answered either a 1 or 2 on the 7 point scale.  Not very concerned, in other words.  Really?

I find much of the above indicative that many marketers are still flying blind.  What’s your take?

Leave a comment

Filed under digital media, Huh?

Self Delusion

An article caught my eye the other day. Big headline – Consumers Actually Like Airline Fees, Analyst Contends. You can imagine my skepticism but you also know I’m a staunch advocate for keeping an open mind until we learn all the facts.  Turns out my instincts were pretty good but let’s see what you think.

Stewardess, circa 1949-50, American Overseas, ...

(Photo credit: Wikipedia)

An analyst from Wolfe Research named Hunter Keay wrote a report called Every Time a New Fee is Announced, a Fairy is Born.  In it he states the following:

Inconvenient truth: customers like fees. Maybe that sentence would be better received if we had said “customers like paying only for what they use.” Well, guess what…that’s the same thing.

He goes on to chide the airlines for not being more like Spirit Air (on whose planes you couldn’t pay me to fly) which charges relatively low base fares and then proceeds to layer on fee after fee.  Mr. Keay believes it’s a huge missed opportunity for airlines to improve their bottom lines.  As one report about this notion said

There is certainly some logic to the idea of saving consumers money on base airfares by stripping away everything but the seat you are required to sit in (though some carriers have discussed making passengers stand), but the problem with this a la carte approach is that the fees rarely match the savings.

In other words, we have yet another example of someone advising businesses to focus solely on their bottom lines rather than on their customers.  I think we’re all aware that fuel prices have dropped.  Anyone heard about an airline revoking the “fuel surcharges” they put in place when prices were sky high?  That’s because they haven’t.  Imagine how you’ll feel when you’re charged a fee to offset the costs of the pilot and flight attendants, much as a restaurant might charge a fee to help cover the costs of service.  Of course in the latter case the need to tip usually goes away.  You won’t see lower fares.

I hope some airline follows this analyst’s advice so we can see how well it works (or doesn’t).  His shining star – Spirit – is consistently rated as the worst US airline and is one of only two airlines flying in the US – Cubana being the other – with a two-star rating.  Profits over people has turned this analyst self delusional.  Customers don’t like fees.  They like excellent service at a reasonable price.  Value, in other words.

That’s my take.  Yours?

Leave a comment

Filed under Consulting, Reality checks

Il Coperto

The Foodie Friday word of the day is “coperto.” For those of you unfamiliar with the term it’s an Italian word meaning “covered.” When you eat out in Italy and wish to dine sitting down, you pay the coperto – the cover charge. It’s usually a couple of euros and is meant to cover the costs of the table, tablecloth, napkin, dishes, washing and cleaning, heating and light – everything involved with a restaurant meal which is neither food nor work costs of the staff.

Spaghetti all' arrabbiata

(Photo credit: Wikipedia)

There is a corollary to the coperto – a “no tipping” policy. Since the coperto covers the non-staff items, the margins on food and beverage can be spent on staff. The US is one of the few countries where there is a two-tier pay system because we are one of the few that operates in a system in which someone is dependent upon tips for their income. The cooks and dishwashers often make far less than the better-compensated front-of-house servers and bartenders. Thanks to tips, service staff can take home as much as twice the pay of their kitchen counterparts.  This is beginning to change and I think it’s a good thing.  It’s also instructive thinking for all businesses.

Quite a few restaurants are starting to charge a nominal fee per head much like the coperto.  Others are inflating their food prices but forbidding tipping – in essence building in a 20% tip.  The final cost to a customer is the same assuming that they left a reasonable tip.  This allows them to pay a much higher wage and to provide benefits such as health care.  The transient nature of the business is changing as great servers and cooks can be compensated and induced to stay on.

What happens when there is a bad experience?  Think about it.  First, it’s rare that you withhold the entire tip.  That’s punishing an entire staff for one person’s incompetence.  The reality is that you’d probably complain to the manger.  It’s rarely a money issue.  Second, what happens quite a bit is that people are just too damn cheap.  $5 on a $125 bill is unfair but that is more the reality of the business than to person who overtips.

What does this have to do with your business?  First, ask yourself if there is a two-tier system that unfairly rewards one group over another.  Second, what have you done to make sure that your staff is incented to remain?  As with customers, I find it’s always more cost-effective to retain an existing competent person than to find, hire, and train a new one. Finally, how can you rethink how the money customers pay is positioned without seeming to nickel and dime them?

There are a lot of ways to change the US system.  At one place servers get paid either $10/hour OR 20% of their food sales, whichever is higher, and it’s almost always the over for servers.  Others charge a flat fee while others automatically add a 20 percent service charge to all bills or raise their food prices.  All forbid tipping.  Hopefully everyone wins.  Employees make more and consistent money, customers get better service due to a happy, motivated long-term staff, business owners continue to make reasonable profits.  Sounds like a plan to me.  You?

Leave a comment

Filed under food, Thinking Aloud

I’m Confused

One of the newsletters I receive linked to a couple of articles today which deal with the same issue from opposing points of view. I’ll lay out what they say and I’d love to hear what you think.

The issue is how to deal with social media posts made by employees on the employee’s personal pages. On one side we have an article from the AP called “How to handle an employee’s offensive social media post.” On the other we have The Atlantic with a piece called “A Social-Media Mistake Is No Reason to Be Fired.” The former calls for swift action (read that as termination); the latter urges leniency. Here is the reasoning behind each but I think you see why this is a confusing issue for many of us in business.

First the AP piece:

Whether it’s comments about news events, long-held beliefs or a bad joke, an employee’s offensive posts on Facebook, Twitter and other social media sites can damage a company’s image and profits. If the comments are racist, homophobic, sexist or against a religious group, tolerating discriminatory comments puts an employer at risk for lawsuits and losing customers.

Clearly, if posts of this sort are placed on the company’s pages, I’m in total agreement.  There is no middle ground – the person needs to be fired.  But what if, as is the case in some of the examples cited in the article, the employee is posting on their own page during non-work hours?  Are we as business people responsible for the political and religious beliefs of our staff?  What right do we have to regulate those beliefs and, moreover, what about the first amendment protections each of us enjoys?  The article says that many employers have taken to monitoring their employees’ personal pages to make sure that there’s nothing there that would be detrimental to the company.  Fair?

The Atlantic, on the other hand says:

Here’s what corporations should say in the future: “Sorry, we have a general policy against firing people based on social media campaigns. We’re against digital mobs.”

But note the one exception built into what I propose. Sometimes people do stupid things in the public eye that relate directly to their jobs… generally speaking, Americans ought to be averse to the notion of companies policing the speech and thoughts of employees when they’re not on the job. Instead, many are zealously demanding that companies police their workers more, as if failing to fire someone condones their bad behavior outside work.

The piece deals with the public shaming that bad actors often suffer.  The author believes this is punishment enough and is generally a short-term issue while a termination has long-lasting effects, well beyond the scope of the bad behavior.

So where do you come out?  Can you see why this is a confusing issue?

Leave a comment

Filed under digital media, Huh?

CX

Maybe this customer-centric thing is starting to sink in.  I’m encouraged by the results of a study put out by the eConsultancy folks in conjunction with SDL which explores how retailers are addressing customer experience, or CX for short.  From the results it seems that many retailers have figured out that price is just one factor in the purchase decision and that it is outweighed these days by how customers interact with the brand.  In fact, the report states that providing an exceptional customer experience is the single most important strategic choice that retailers can make now and in the years ahead. 89% of the retailers surveyed for this report agreed or strongly agreed to the statement “Our customer experience is our brand.”  It’s a good point for any business, retail-based or not.

Think about it.  A quick visit to a search engine can usually produce pricing comparisons but that same search engine tells you little or nothing about how the customer is treated.  If you’re researching a product, how complete and truthful are the product listings?  If there is a problem with your order or you have a question as you purchase, how helpful and responsive is the customer service?

Every business (even mine!) has customers of some sort.  Their experience with you begins with their first encounter: maybe your website, maybe some content you’ve issued, maybe the response to a form they filled out or maybe someone answering a telephone enquiry.  There is one thing I found surprising in the study which is that only 12% said “company culture” is a barrier to successful customer experience management.  If that’s true it’s incredibly encouraging and represents a big shift.  I’m not sure I believe it however.  Many companies still put way too much emphasis on pushing merchandise that provides the highest margins or which is aging over the needs and wants of the customer.

If your product has been commoditized (read that as “if your primary selling point is price”) than you are going to have a hard time competing from my perspective.  A great customer experience differentiates your brand.  I’m glad to see that way more folks are agreeing with that and investing in that differentiation.  Is that something you’re doing?

Leave a comment

Filed under Consulting