Tag Archives: Business and Economy

Flying Blind

I almost called this post “Nobody Knows Anything” but that might have been overkill. I’ll say what I have to say and let you be the judge. Let’s say that you buy a friend’s newborn a gift. You have it shipped to your house. The data says, correctly, that you bought an infant gift. That might also lead to an inferred piece of data that places your household into the “presence of infant” bin, leading to you seeing lots of ads for diapers. If you’re the one placing the ads for those diapers, you’re wasting money.

Lots of the data marketers routinely use is of that sort. It’s inferred. You can see that some thinking at work if you’re a Netflix user: the recommendation engine infers what you might like based on your past viewing. Of course, if your kids or someone else in the house watch something in which you have no interest, the accuracy of those recommendations is diminished (which is part of why there are separate profiles available when you log in). Inaccurate data is, sadly, more the norm than an aberration. Since this data is really what’s behind personalization and targeting, that inaccuracy is a big problem. Any business that buys data from third parties – and an awful lot do so – may be putting garbage into their system. Unfortunately, most don’t know that because there is little transparency in the data business and it’s impossible to verify what’s good and what’s not.

What should you do? Invest in collecting your own, first-person data. You can also demand transparency in any other data you use (good luck with that) with respect to how it was gathered and what it really represents. Is it inferred or does it come directly from consumers (did someone tell you they had a baby in the house or did you guess they did because they bought one infant item?). Who owns the data and was it gathered with the consumer’s permission?

When Facebook tells its customers (marketers) that they have data on 41 million adults aged 18-49 in the US and there are only 31 million of those adults living in the US, you know much of the data is inferred and also that we have a problem. A recent study that found that 70% of marketers believe that the customer data their organizations are using for marketing is low quality or inconsistent. Why bother to market at all when you’re just flying blind?

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Filed under Consulting, Huh?

A Slice Of Menu Advice

It’s Foodie Friday and our fun this week derives from some things I took away from an article on pizzeria menus. I know – what is a guy whose consulting practice focuses on strategy and media doing reading an article on how to write a best-selling pizza menu? Well, as I’ve often mentioned, one never knows from where a great insight will spring and so it’s incumbent upon us to look under every rock and (pizza) stone, don’t you think?

The article, from Pizza Today, talks about a number of things that can drive more sales from the same menu. I think a number of those things are applicable to most businesses, food-related or not. First, there is such a thing as TMI – too much information. If the menu details every bit of information about each ingredient in the pizza (local mushrooms grown in special caves, organic, non-GMO cheese from a particular type of cow, etc.) it’s likely that the customer‘s eyes will glaze over and they’ll stop reading. I don’t need to tell you about information overload – most of us suffer from it and despite the often-cited false information that our attention spans are now shorter than those of a goldfish, I do believe our tolerance for excessive information has vanished. We’re all too time-challenged, so respect your customer by providing enough detail so that they can make an informed decision (it’s pecorino cheese)  but know that too much and they turn off (it’s pecorino, a hard, salty sheep’s milk cheese from Lazio).

The piece also talks about changing the menu a few times a year. One owner mentions that he

changes 25 to 30 percent of the menu about four times a year, “which we need to do as a neighborhood restaurant. It gives us a story to tell customers — why we have changed it up. That keeps customers excited and chefs stimulated and allows us to serve seasonal food.”

That’s a good thought regardless of your business. It’s imperative that you keep in touch with your customers but to do so you really need to have something to say. A new product or service or the fact that something that customers are used to seeing in your offerings will be discontinued is news. Too many businesses post what amounts to spam and make their user bases less like to engage when they really do have something to say.

Finally, the article mentions how the menu should call out information that is important such as gluten-free and dairy-free items along with upcharges. Recognizing that some customers have special needs and that most customers aren’t happy when they get it with fees they weren’t expecting is just common sense for anyone in business. We’ve been over the mess the airlines have made of doing fare-comparisons because almost no airline sells you a ticket without some sort of extra fee. The same is true of concert tickets, hotel rooms (those resort fees!), rental cars, and many other businesses. Are you happy when they pop up on your bill? Neither are your customers.

That’s what I learned from a pizza menu. You?

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Filed under food, Helpful Hints, Thinking Aloud

Marketing To The Middle

I watch a fair amount of news programming. I guess maybe I need something to keep my blood pressure sky-high or something to justify my frequent yelling when there aren’t kids on my lawn. I don’t really think it matters which side of what issue you’re on these days. There’s always a panel “discussion” (since I guess yelling at one another now constitutes discussion) somewhere on the dial that hits all the talking (yelling?) points on each side.

There isn’t any doubt in my mind that we live in a highly-polarized place. Everything is either a 1 or a 10 when it comes to our feelings – there is very little middle ground. That said, I think that one lesson we can learn from the current environment can be exceptionally useful when it comes to how and to whom you market your products or services. No, I don’t think you should yell. I do think, however, you should focus on the middle. Let me explain.

As I was watching MSNBC, which is more liberal-leaning that some outlets, I saw an ad for a book about the so-called Deep State. I’m well aware that the term is often used by right-wing pundits to talk about opposition to the current administration. While the term actually has no political right or left leanings, the title of the book involved the “fight to save President Trump.” I’m not sure that many MSNBC viewers are ready to sign up for that fight. I’m also thinking that when the media buy was made, they looked at both news viewers and audience size as desirable targets. Hence the buy.

Look at the media you and your friends create on social media. I’m willing to bet that the folks who argue issues most vehemently are also unwilling to change their points of view. Has anyone ever won a social media fight? I haven’t seen it, but I have learned from it as well as from the example above and others. What I’ve learned is this.

Every product or service or issue has a core group of supporters. You often hear of a politician speaking to “the base.” That’s his or her core group and every product has one too (think about a brand you won’t change even if a competitive brand is half the price). You’re not going to change the base’s thinking. Every product or service or issue has people who are just as committed as the base but on the other side. This is the opposition. I won’t fly a certain airline no matter what, even if the fare is less and the schedule better. Marketing that brand to me is useless.

We need to market to the undecideds – to the middle. It’s easier to find those folks when the product isn’t a politician and that’s what we need to do. Basic demography won’t do it nor will broad assumptions about an audience. It involves digging and understanding a lot more than age/sex/geography. The undecided middle is where our marketing battles are won and lost. The question is how each of our businesses finds it. Any ideas?

 

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Taking The Temperature

Foodie Friday! As much as I’d like to write about Pimento Cheese on this Masters’ Friday, I have a business thought that comes from an article I read on whipped cream. The folks at Cook’s Illustrated, about which I’ve written before, have a science page as part of their website. On it, they present the results of their ongoing tests into food preparation and one of the things they investigated was the old saw that you have to start with cold cream if you’re whipping the cream to stiff peaks.

The short answer is that yes, temperature matters and the colder your cream (and bowl and beaters) the better. You get much better results that way – a higher volume and much less whipping time to get the results you want. In fact, cream at room temperature never really got to stiff peaks at all. As I read the piece it occurred to me that the kitchen isn’t the only place where the environment matters.

You don’t have to look very far into the business world to find companies that produce excellent results because the management creates optimal conditions for the team to do so. I’ve worked in places where I’ve seen two similar departments produce very different results based on how the managers treated the staff. I wouldn’t say that one department had very different levels of skill or intelligence but it did have some managers that created the best conditions possible for success. They outlined the group’s goals clearly. They were supportive and encouraging. They didn’t hesitate to praise great work (and publicly!) and they very quietly made sure that the underperformers knew they were not meeting the standards of the group. The people in the group weren’t impersonal names on a page. They had personal relationships with each person and communicated effectively with each person. They led by example and didn’t hold themselves above the group or to a different standard of behavior.

Creating the right conditions for success really is the only job a manager has. Much like making sure the cream, beaters, and bowl are cold, they make it easy for the team to produce the best possible outcomes with the least effort and drama. Doesn’t that sound like a plan?

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Filed under food, Consulting

An Expensive Trip To The Bar But A Much Better Picture

I had a what turned out to be a very expensive trip to a bar a few weeks ago. No, I wasn’t overserved nor did I need to cab it home from a remote location. It became expensive because I watched TV there. The picture was noticeably better than what I was used to and it turned out that I was watching a 4K TV with full High dynamic range, or HDR. Even though the program (a basketball game) wasn’t in native 4K, it was noticeably better. Once I figured out that DirecTV, my TV provider, has a few 4K channels and that some sports, including the upcoming Masters, are shown in 4K,  I was hooked. I did some research and found that one of the top-rated sets was on sale (almost half price!) and two days later, and hundreds of dollars for the TV and a new DirecTV box that handles 4K, my viewing experience was upgraded.

Photo by Tim Mossholder

One thing that I got along with the upgraded picture (even standard HD looks better) was a built-in Roku device. I’ve had a Chromecast for years and I also have my Xbox hooked into the TV. I have been using both for “over the top” viewing of streaming services like Netflix, Hulu, and Amazon. What has changed with the Roku is that all of these services and many others are available as channels on the TV. There’s no need to switch inputs or fire up another device as I have been doing. Which reminded me of a couple of things.

First, the lines between “TV” and “video” have vanished forever. One can argue that once consumers had remotes and DVR‘s they morphed into active programmers but with what is now the almost full integration of TV and OTT, making an unlimited amount of content available in high-quality video, it’s now all just TV.  The second point, one which might apply to your non-media business, is that consumers don’t care about the tools or the labels. They do care about control since they now have complete control in many areas of their consuming lives, or at least a lot more than they used to. You can fight this (broadcasters did for years) or you can facilitate this, but hanging on to an antiquated business model is the wrong choice.

Disney will launch an ESPN-branded streaming service in a couple of weeks. Since to me and many others there is no difference between traditional TV and streaming video, it will be just another channel on my TV (hopefully in 4K). For many cord-cutters, it will be a nice addition to their programming options. Disney has learned that the tools (or channels) are immaterial and the business model needs to continue to evolve as do consumers’ habits. Have you?

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Filed under Thinking Aloud, digital media, sports business

Going First Class

I’m going to be on an airplane later this week. I used to travel a lot for my job, often going over 100.000 miles a year. I never tallied up the time that took, but the air portion alone was probably the equivalent of 5 or 6 work weeks aloft. Add in getting to and from the airport plus time at the airport itself and travel was a significant part of my life.

JAL

(Photo credit: Wikipedia)

One great thing happened to my travel life when I made VP. Suddenly I was allowed to book travel in business or first class. Back in the 80’s and 90’s, it was a little bigger seat and some better food. Today, it’s the difference between leaving the plane with sore knees (from the person in front of you hitting your legs) and hungry vs. arriving relatively intact and ready to do business. Still, if you’re paying your own way or traveling on vacation, why fly first class instead of coach? After all, you get to the same place at the same time and the price difference is extremely significant. My answer is something that I think applies everywhere in business.

The airline business has a system now that packs people into planes in a way that maximizes profit. The seats are closer together and an in-flight meal consists of generally unhealthy snacks (stick to the peanuts, kids). You’re charged for everything from bags to blankets. Flying in first is, in short, a much better experience. You’re paying for better care, not for faster or better transportation. Once again, cost vs. value.

Here is the thing. In the course of maximizing profit, the airlines have relegated the comfort and happiness of the majority of their customers to secondary status. I suspect they’re not alone in this. One supermarket will have people walking throughout the store to help you while another will have you walk to the customer service desk if you need help finding something. Yes, the prices may be a bit lower at the latter but isn’t the former a better experience and worth a small premium? First class vs. coach in terms of the experience. Have you ever bought shoes from Zappo’s? They cost about the same as elsewhere but their customer service and support is legendary and a significant point of differentiation. It’s flying in first vs. coach once again.

Customers don’t forget. Think about the grievances you have with most businesses and I’m willing to bet they’re both relatively petty and related to the business choosing profit over customer happiness. Because I refuse to step foot on one of their planes ever again, I will pay a little more this week not to fly an airline that has treated me and many other customers like crap. I’ll also fork over a few bucks to sit in an exit row because it’s a better experience for my legs but I’m not happy about having to do so when there are open seats that in the old days I could have chosen for nothing but now cost more. The real question for your business is how can you provide that first class experience at a coach price even if the bottom line takes a tiny hit?

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Filed under Consulting, Helpful Hints, Thinking Aloud

Who Is Minding The Store?

I’ve been away on a little trip (which is why no posts so far this week) but I’ve managed to make my return in time for Foodie Friday. As it turns out, I was in one of the world’s great cities for food, New Orleans, and as I was departing I had an experience which prompted today’s screed.

English: Photographic portrait of Leah Chase t...

(Photo credit: Wikipedia)

One of the city’s oldest and finest restaurants is Dooky Chase. The proprietor is Leah Chase and she is the Queen of Creole Cuisine. She has fed presidents and celebrities by the bucketful and she has been honored in every way possible by the food world, rightfully so. The award of which I’m particularly impressed is the “Best Fried Chicken in New Orleans.” It didn’t look as if I’d have time to sample some this trip until I got to the airport with 90 minutes to my flight. As it turns out, there is a Dooky Chase at the airport – fried chicken, here I come!

The place wasn’t particularly crowded and I got seated right away. 5 minutes went by. Then 10. Then 15. No server appeared until about 20 minutes in, when I was asked for a drink order. I was also told they had no bartender so a mixed drink was out. Wine? After a few minutes, the server reappeared and informed me that no one knew where there was a corkscrew so I’d have to drink whatever was open. Whatever was open cost $18 a glass, by the way, something I wasn’t told until I got the bill (with no time to discuss it!).

I placed my order. Now I know that great food is cooked to order so I wasn’t expecting my plate to come out immediately. It’s not KFC, after all. However, as another half an hour went by I was starting to worry about making my flight. The hot, extremely tasty chicken arrived although I ate it so quickly I really couldn’t savor it very much. As it turns out my experience is far from unique. The reviews on Yelp and elsewhere universally praise the food and curse the lousy service. That leads us to today’s business point.

The restaurant is run by Delaware North, a company that runs restaurants at over 300 airports. They also have a division that services arenas. They know an awful lot about hospitality. Mrs. Chase knows an awful lot about food. Somehow, however, 1+1 equals zero here.

I suspect this was done as a licensing deal. The Chases provided the recipes and kitchen expertise and the Delaware Noth folks provided the rest. The real question is who is minding the store? I used to license out marks and content and always was careful to make sure that how “my stuff” was used put us in the best light. I used to buy actual products in stores and not rely on samples to assess quality. I’d view how our material was presented in context when we licensed out footage and/or marks as well. In this case, I wonder if anyone from the Chase organization has not just sampled the food but sat in the restaurant anonymously? There clearly wasn’t enough staff, and the staff that was there was seriously undertrained.

If you rely on others to present your product to the world, remember that it’s your name and your reputation on the door. I wasn’t aware that Delaware North was involved at all until the credit card receipt showed up with Delaware North, not Dooky Chase, on the top. Hopefully, most customers understand the distinction. You might not be so lucky.

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Filed under food, Huh?