Tag Archives: business

Your Customers vs. Your Partners

Here is an interesting story from the folks at MediaBiz that just cuts to the core of almost every business issue.  It points out the Sophie’s Choice created by some older business models in a time when technology is forcing them to change.  First the facts:

DirecTV

DirecTV (Photo credit: Wikipedia)

A handful of DIRECTV subs stopped receiving HBO after the company started blocking the signal on older TV sets that don’t have the encryption standard High-bandwidth Digital Content Protection (HDCP). DIRECTV… recently added HDCP protection to all HBO-owned channels and “will continue rolling out to other premium services in the coming weeks.” The company said affected customers should replace their HDMI connection with a component video cable and a separate audio cable (emphasis added).

Most folks who do so for a living will tell you that HDMI is a better signal (and therefore picture) than component video.  DirecTV also markets itself accurately as providing a better picture to consumers.  Without content, however, there is no service – it’s a big, empty pipe.  It’s the content providers who are insisting on the use of HDCP.  They’re the ones whose business model is most impacted by what they presume is widespread piracy and are insisting on this protection layer.  DirecTV is placed in the untenable position of either losing the content by catering to their partners or telling customers to degrade their pictures and potentially losing customers who can get better video elsewhere using more current technology.

Ultimately, customers pay the bills.  I believe we win when we serve them and while that may, as in this case, cause problems with partners, suppliers, and others, that downside risk vs. that of angry and vocal consumers is minimal.  In this case, the customers who would most notice the downgrade to component video are probably the ones who would know how to cut the cord and get the content they seek elsewhere, hopefully through legitimate means rather than piracy.  As businesspeople, we encourage that illegal behavior by choosing any segment over our customers – witness what the music business did for a very long time.

That’s where I come out.  How do you see it?

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The Boss And Your Consumers Are Thinking Alike

Part of what my clients pay me to do is to make connections.  Sometimes that’s in the literal sense – an introduction.  Most of the time it’s in the sense of making connections among seemingly random things – putting pieces together to form a coherent picture.  This morning, I’m getting ready to go see another Bruce Springsteen show – anything worth doing is worth overdoing, right? – and I came upon two pieces that seemed to fit together so I wanted to share them with you.

Bruce Springsteen (with Max Weinberg in backgr...

Bruce Springsteen in concert (Photo credit: Wikipedia)

The first is an excellent article from The Nation about Bruce’s political voice – where it came from, how it’s grown, and what it’s saying now.  The second is a piece of research about socially conscious consumers.  Now as you know, we don’t do politics here so there is an important business point both pieces make and that’s what I want to share today.

The Nation piece says the following:

Springsteen began to ask questions of himself about what really determined the contours of the lives of the working-class characters whose tribune he had become. “A lot of the core of our songs is the American idea: What is it? What does it mean?

Speaking to reporters in Paris on the occasion of (Wrecking Ball’s) release, he made the album’s inspiration—and intention—explicit. “The genesis of the record was after 2008,” he told a group of reporters there earlier this year, “when we had the huge financial crisis in the States, and there was really no accountability for years and years. People lost their homes, and I had friends who were losing their homes, and nobody went to jail. Nobody was responsible. People lost enormous amounts of their net worth. Previous to Occupy Wall Street, there was no pushback: there was no movement, there was no voice that was saying just how outrageous—that a basic theft had occurred that struck at the heart of what the entire American idea was about. It was a complete disregard of history, of context, of community; it was all about ‘what can I get today.’ It was just an enormous fault line that cracked the American system wide open.”

In other words, Bruce has done what most great artists do:  reflects his times in a timeless way.  We could digress here and look to the Occupy movement, the current presidential campaign, etc. but you figured that out already.  As it turns out, many forward-thinking companies have as well.  The second article is about a Nielsen study about how companies and consumers are becoming much more socially conscious:

The survey confirmed that the majority of consumers express a general preference for companies making a positive difference in the world. 66% of consumers around the world say they prefer to buy products and services from companies that have implemented programs to give back to society. That preference extends to other matters as well. They prefer to work for or invest in these companies. A smaller share, but still nearly half, say they are willing to pay extra for products and services from these socially conscious companies.

So today’s point is this:  while doing well by doing good isn’t a mandate, consumers are paying attention, and if your business isn’t, you might be falling behind.  To paraphrase Dylan, the times are a-changin’ yet again.  I’ve pointed out before that marketing today isn’t about you but about us – your consumers and our connections to your business.  That outward focus needs to mirror the concerns and solve the problems of your customers, who clearly are more socially conscious than they’ve been.

Those are how these pieces connect in my mind – how about in yours?

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A Little Business Story About Managing In Difficult Times

Suppose you have a small but very popular business. You began as a handful of people, most of whom are still with you after you kicked out a couple of uneven performers. While you’ve added some staff as the business grew, every employee is a key employee since there really aren’t any overlapping roles.

Thirty five years go by, the business grows, and while there are good years and bad, the product mix is generally well-received by customers and reviewers. In an industry where products come and go very quickly, this one endures, even though it went through a period where everyone wondering if it had lost its way.  The product focus changes with each release cycle to match the times – no one has ever called your business stagnant even though its product sector has gone through some very rough times. In fact, there is an entire secondary business of add-ons and information providers that has grown up around your business. Not a bad place to be.

One day, you learn that a key employee is sick and several months later he dies. You adjust by hiring someone who can do what he did albeit without the strong emotional bond to the team as the late employee.  A few years later, another key member – your right hand – passes away suddenly.  The team is devastated and there are real questions about  the ability of the business to continue.  The emotional toll on you is palpable and the business community wonders if you’ll retire and shut it down.

Instead, you decide to replace the man who everyone thought was irreplaceable. You let customers know that it will be different, and while you will make best efforts to minimize the differences, you are up front about it being different and don’t try to pretend as if nothing had changed.  You bring on more employees to reinforce some of the differences, creating a transformed product in the process.  You release new product – one developed primarily with an outside team for a fresh perspective.  It’s very well received, and breathes life into the older products, and customers continue to buy it in droves.  The business remains true to its core values and it’s obvious that the old and new employees are on the same page thanks to excellent leadership.

It’s really a textbook case on managing business transformation in difficult times.  I was privileged to witness it myself last night.  Ladies and gentlemen, Bruce Springsteen and the E Street Band.

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