Monthly Archives: March 2012


There’s a relatively recent phenomenon called “Showrooming” that’s becoming a concern for retailers.  In a nutshell, this is the practice of some consumers of going into a physical store to do research and then making the purchase elsewhere, generally online.  Given today’s technology, those purchases can even happen in the store via a mobile device.  A piece from eMarketer quoted a couple of studies that found this is not a hypothetical problem for retailers:

Several researchers have surveyed the number of US mobile phone users who have comparison-shopped via phone while in-store. Their research has found a comparison-shopping rate ranging from 59% of US smartphone owners (InsightExpress, 2011) to 25% of US mobile phone owners (Pew Internet and American Life Project, January 2012).

ForeSee Results findings from between 2009 and 2011 are consistent with this trend toward using mobile phones for in-store research; however, in 2011, the shoppers surveyed were more likely to access the website or app of the store they were actually in than a competitor’s website or app. This means that retailers need to not only be concerned about how their pricing stacks up against others’, but also about pricing consistency across their own channels.

This is sort of the same issue faced by music companies who are trying to sell physical media like CD‘s while enabling the purchase of the same product through digital channels.  The retailers need to differentiate themselves in ways that make doing business with them valuable beyond price.  Customer service, ease of returns, unique merchandise or unique offers are all areas that can be differentiators.  Target has reached out to vendors to do just that, and others are as well.

So the question to you today is this:  what are you doing to make sure that your business is different?  We can go back to the old advertising saw of the  Unique Selling Proposition – as we find in this space a lot, everything old really is new again or at least wrapped in new tools.

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The Dylan Test

Yesterday marked an anniversary that I could not let pass without comment.  On March 19, 1962, 50 years ago yesterday, Bob Dylan released his first album, or LP (to signify a long-playing record rather than a single) as they were called at the time.

Bob Dylan performing in Rotterdam, June 23 1978

Bob Dylan performing in Rotterdam, June 23 1978 (Photo credit: Wikipedia)

This piece from Rolling Stone does a nice job of summing up the album and how it got made.  I’m a long-time fan of the man and his music and while I can’t say I love everything he’s ever done, it’s all really interesting and in many cases his music went beyond popular culture to become transformative (start with “Blowin’ In The Wind“) for an entire generation and country.  I’ve heard so many people dismiss his music and yet when I give them the Dylan Test, they can’t deny his impact.  What, you ask, is the Dylan Test?  Something I think we should apply to way more stuff than Bob’s music – any business could benefit.  Let me explain.

The Dylan test is simple:  I know my grandchildren will hear the music of Bob Dylan.  They may not like it, they might not ever buy it, but they’ll hear it and they’ll know who the guy was that recorded it.  Not because I’m going to ram it down their throats:  I’d make the same statement about my great-grandchildren.  It’s because Dylan’s music is that important, just like Bach, Mozart, Beethoven, Springsteen and The Beatles.  And that’s the test.  Can you make that same statement about whatever music you believe to be “great?”  That ought to be our business objective.  To pass the Dylan Test.

I wrote in this piece a while back that we ought to be creating things that are built to last.  While the tools are temporary – Dylan’s first disc was pressed in vinyl – the content and the core of the business endures, or we should hope it will.  So ask yourself the Dylan Test question as you’re contemplating investing your time, effort, and money on a project.  While very few things pass, it’s not a bad standard to keep in mind.

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I Need To Call Dunbar – What’s His Number?

How many people do have in your Rolodex? Actually, do you even have a Rolodex or is the contact list on your phone your go-to list? How many friends on Facebook? How many LinkedIn connections? How many Twitter followers? How many folks do you know from the golf club or the gym or the playground where you take your kids who don’t fall into any of the above categories?

English: present model of Rolodex card file, c...

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For me, the answer is a lot, as in thousands, and I don’t even consider myself to be as socially connected as many folks I know. I also do have a Rolodex – actually four of them – that’s filled with business cards of people who, for the most part are not in the other databases.  Obviously, I am not trying to maintain on-going social relationships with each and every one of them.  That’s where my buddy Dunbar comes in.

Dunbar’s number is an estimation of the number of people with whom one can maintain a stable social relationship.  This theorem was developed way back in the digital dark age of 1992, before interacting with hundreds of your high school friends, and chatting to another hundred college buddies was something you did every five or ten years, not daily.  Dunbar set the number around 150.  Other studies have set comparable numbers at 231 and 290, a fraction of what any college kid has as Facebook friends alone.

Since this is a business blog, I’ll throw out the obvious question.  If we’re trying to engage our customers in conversation as we would friends, are we limited to the Dunbar number with respect to having those sorts of relationships?  Are we kidding ourselves if we believe that an individual will use one of their 150 or even 300 relationship slots for a business entity instead of a cousin?  Or maybe there needs to be another study on how businesses fit into the social ecosystem.

I think Dunbar was right.  When I think about it, the folks to whom I’m truly connected is a small fraction of those connections I have.  I know a network like Path is trying to create that subset by limiting your connections to 150.  What’s your take on that?  Is there an opportunity for a business to create a 150 person VIP network?

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Blind Tasting

Friday at last and while you might be expecting a lengthy piece on the history of corned beef for our Foodie Friday Fun approaching St. Patrick’s Day, I couldn’t really find any great business points buried in there.  Oh sure, we could have a chat about multiculturalism since corned beef is a food staple in many cultures (and strangely it came late to the Irish culture and it’s really more American Irish than it is native to the Old Sod) but that seems a bit forced.

LOS ANGELES, CA - JANUARY 24:  Wine made by Dr...

Image by Getty Images via @daylife

So for today’s Foodie Fun I want to think about blind tastings, specifically wine tastings.  There have been many examples of unexpected results when all the trappings of a wine are taken away (big name, fancy bottle, vintage year, even what grape).  The most famous of these if the Judgement of Paris which one could claim was the birth of the modern California wine industry and was commemorated in the movie Bottle Shock.  In 1976, California wines were rated higher than many top French wines in a blind tasting held in Paris and judged by mostly French wine experts.  Of course, these same judges believed it would be easy to spot the “inferior” California wines and had any one of them conducted the tasting and written the results on their own, they might have been laughed out of their profession.  Which is, of course, the business point.

There is an old saying that no one ever got fired for buying (pick one – IBM, AT&T, Microsoft, etc.).  It means no one gets fired for making the safe pick and choosing an industry leader. While there are other companies out there with better products or offer similar quality as the market leaders at lower prices, they come with the risk of ridicule should there be a problem.  Speaking as an independent consultant I can tell you that bigger companies, where decision-making is often a group matter, seem to feel most comfortable hiring other big companies – you all know the top consulting firms.  It’s an easy decision to justify.  Too bad – if they were to taste us blind – have a telephone conversation with the people doing their work as well as to look at our fees – the might get the same or better outcomes at better rates.  That’s not just in my field of consulting – many businesses overspend and get inferior results because they don’t do a blind taste test.

If you’ve got concerns about using companies other than the big guys in any field, raise those concerns directly with the firm that rated more highly even thought they’re not the brand name.  Build the answers – service levels, delivery dates, etc. – into the contract.  Ignoring your business palate when it’s telling you something is better – even if it’s a brand with which you’re unfamiliar – is silly.  Who knows – you just might find a $10 bottle that puts the $50 swill to shame.

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Planning For Perfect

Anyone who has ever dealt with large numbers knows that near perfection still gives a few exceptions to a standard. If you deal with 100,000 customers in a year and 99.999% of them are happy, there’s still one guy who is dissatisfied. The problem is this: we don’t think about that one guy often enough – we plan for perfect. In an extreme case, some folks won’t even acknowledge that imperfect is possible. That sort of thinking precipitates crises like the oil rig problem in the Gulf.  Workers didn’t raise safety issues out of fear.  The Italian cruise ship didn’t take the safety drills seriously.
What got me thinking about this is the discussion over the Keystone Pipeline as well as some of the reporting on the Japanese nuclear problem.  Putting aside politics (maybe an impossible request, but let’s try), it seems to me that the people involved had been (or are) planning for perfect.  Emergency plans were paid lip-service but not much more and the true impact of a problem is exacerbated by the lack of preparation.

We don’t ask what can go wrong often enough, and when we do we sometimes fall into the “but that will never happen” trap.  If something can go wrong, we should assume it will.  Servers fail.  So does power, including back-up units.  Things get lost in the mail, inclusive of private shippers with full package tracking.  We arrive on business trips without luggage.  No one plans to screw things up and yet things very often end up that way.People don’t always behave honorably even though we might always try to do so ourselves.

If we always plan for perfect, we’re not optimists.  We’re idiots.

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Learning The Language

A fascinating report came out at the end of last month from The Pew Internet and American Life folks. This one has to do with the impact of an “always on” connection on young people and whether that impact will be positive or negative. You can read the release and the report itself here and there was a good summary of the study done here.

These are really the key points:

…many of the young people growing up hyperconnected to each other and the mobile Web and counting on the internet as their external brain will be nimble, quick-acting multitaskers who will do well in key respects.

At the same time, these experts predicted that the impact of networked living on today’s young will drive them to thirst for instant gratification, settle for quick choices, and lack patience. A number of the survey respondents argued that it is vital to reform education and emphasize digital literacy. A notable number expressed concerns that trends are leading to a future in which most people are shallow consumers of information, and some mentioned George Orwell’s 1984 or expressed their fears of control by powerful interests in an age of entertaining distractions.

I don’t know about you, but I spend a lot of time each day online and have for years.  There is no question it has an effect on one’s brain.  I notice how my thinking has changed – at times I feel more distracted because there are always a few other things I’m doing concurrently but I also notice that when I read offline I read the “above the fold” portion of articles (usually the lede and a few paragraphs) and then scan the rest – the mind gets restless.

My thought today is this.  Digital literacy has become something that young people learn as they do their native language.  Anyone under 21 has grown up using digital devices and their brains are wired to operate a connected environment.  Ever seen a three year old play with an iPad?  Kids are digital before they can read.  They also don’t seem to focus as well (coincidence that there is an epidemic of ADD?) and can grow impatient quickly.

That statement about the digital language is several implications.  First, we don’t think about where our native language comes from (other than those of us who study philology).  We just speak it. People know how to use the digital tools but have no clue how they operate (unless they’re engineers).  Sometimes I think we confuse speaking a language with studying one and treat people who do the former as if they’ve done the latter.  Second, when one reads articles about companies enhancing broadband wand WiFi availability in one area while others are abandoning those efforts in poorer areas, it makes me think about immigrants who can’t speak the language of a new country.  If you’re not speaking digital, pretty soon you’ll be treated as a different class.

Have a look at the study and tell me what you think (if you can focus long enough!).

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Trust Me

You might have read the book “Trust Agents” by Chris Brogan.  It deals with the need to become a resource to your customers.  The book was relevant when it was written (2009) and is even more so now, as the results of a recent study show.  According to the research, conducted by and reported here:

  • Approximately 72% of consumers surveyed said that they trust online reviews as much as personal recommendations, while 52% said that positive online reviews make them more likely to use a local business.
  • Only 15% of consumers said that they had not used the Internet to find a local business (vs. 21% in 2010)
  • 16% of consumers said they used the Internet every week to find local businesses (vs. 9% in 2010)
  • More consumers are reading online reviews now than 15 months ago, with 27% regularly reading online reviews when looking for a local business to use.
  • Just 28% of consumers cite location &/or price as main decision-making factor

The takeaway is that local search is being used to research your business and positive online reviews are a bigger factor in your success than location or price.  That’s amazing but not surprising to me.  After all, the behavior of asking friends, family, or others about impending purchases isn’t a new phenomenon.  The technology and ease of finding that information is a relatively recent thing, and becoming easier every day.

There has been something in accounting called “goodwill” which is that value of a business above and beyond its assets.  Call it reputation, call it trust, but it’s definitely something that has value even if it’s intangible.  This piece called ‘Why Trust Matters More Than Ever For Brands” lays it out beautifully and this is the key quote:

We’ve all been taught that trust and reputation are important elements of branding. Today, though, trust is not simply a nice thing to have, but a critical strategic asset.

So what are you doing to make sure everyone in your organization conveys that your firm can be trusted with a customer’s business?  How actively are you watching your company’s reputation?  Maybe something for today’s (and every day’s) “to do” list?

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