Archive for the ‘Business’ Category

Who’s really behind Steven Slater’s spectacular resignation from Jet Blue?

Tuesday, August 17th, 2010

Once you get past the viral thrill of rehashing Steven Slater’s “bailout” from a career as a flight attendant that he could no longer stand to hold, the debate – to the degree that any debate is required at all – quickly gets to the question of who was more wrong?

Was it Slater, who cursed at his passengers, deployed the emergency slide on the Jet Blue plane to which he was assigned, and (worst) stole two cans of beer before escaping?

Or was it a still-unnamed woman passenger, whom he accuses of berating him and hitting him in the head with either the door of an overhead compartment or one of the bags in that compartment?

How about this third option: It’s the airlines.

They have to accept responsibility for helping to turn passengers into snarling beasts with overbooked flights, endlessly punitive fees, optimized fares that make no sense to consumers, and a practice of setting flight schedules that they can’t possibly maintain. Then they exacerbate the effect of all these insults by bombarding us with irreconcilable advertising campaigns to convince us how much we’re going to love the experience.

Further, they have to accept responsibility for their role turning flight attendants and other customer-facing personnel into recalcitrant and uncaring bureaucrats. The tools? Serial layoffs, confrontational union negotiations, low pay and a general disregard for their value. (When stranded near Chicago O’Hare during the 9/11 crisis, I met a dozen flight attendants from a handful of airlines – all of whom told me the hotel and meals were on their own dime during the unscheduled grounding.)

I’ve flown enough to know the truth of the matter. Some passengers, maybe even many, are simply boors who shouldn’t be out in public. And some flight attendants should probably find another line of work before they give their next safety briefing.

But for the rest of us, the airlines need to shape up. I can only imagine how complex and difficult it is to operate in this industry. Executives throughout the industry make incremental decisions that help the bottom line, and they are skilled at justifying why these decisions are in the long-term best interest of the customers.

But it’s simply not the case; there is no justification for selling a ticket and then notifying the passenger a day later that the flight is overbooked and an extra $25 will guarantee he isn’t bumped (this has happened to me a handful of times).

It’s simple really: Each airline needs to figure out a way to make money while treating passengers and employees like something other than refugees and wardens, respectively.

Identity theft pitch of the week

Tuesday, April 27th, 2010

This effort to scare me into giving up the goods got caught in the spam filter this week. Except for removal of the phishing link, it’s published here exactly as it appeared:

Hello Visa Card Client ,
Your Bank Card is suspended, becaus we have noted a problem on your Card.

We have determine that someone has maybe using your card without your permission. For your protection, we have  suspended your credit card. To exercise this suspention, Click Here follow the procedure, and specify for Update your  Credit Card.

Note: If this isn’t complete 15 May 2010, we will be forced to suspend your indfiniment card, because it can be used for fraudulent

Thank you for your cooperation in this folder.

Thank You,
Customer service support.

Sailing and business: #2

Saturday, March 27th, 2010

sailing-cross-tacksWin your side.

On days when the wind is shifty, the winner of a race usually comes from one side of the course our the other; rarely from the middle.

That means you have to choose which side you’re going to sail. No remorse allowed. Eventually, you may realize you’ve picked the wrong side; the winner is going to come from the other side.

What do you do? Experience teaches you not to cross the course and get to the other side. In doing so, you’ll probably end up as the last-place boat on the right side of the course.

Instead, focus on winning your side. If you do, the worst you’ll end up is in the middle of the fleet. And often, the winners on the wrong side still finish better than the losers of the right side. So there’s plenty of upside potential in just winning your side.

How does it translate to business? Back in the ’80s, IBM and Apple took opposite sides of the race course – IBM choosing a common platform (MS-DOS) on which to build its computers, and Apple choosing its own proprietary operating system.

IBM chose what turned out to be the right side, allowing it to build computers for the largest share of the desktop/portable computer market.

Since that decisive moment, dozens of companies on both sides of the platform debate have fallen away; even IBM has exited the PC businesss. Apple, meanwhile, won its side; it became the best among proprietary operating platforms.

As a result of its earliest decision, Apply may never become the largest producer of computers. But because it concentrated at winning its side, Apple today has one of the most admired brands – and P&L statements – in the business.

Sailing and business: #1

Saturday, March 27th, 2010

nice-start-reducedNever chase the wind.

In many racing conditions the wind is always changing – in both velocity and speed. The boats that are winning are probably those that find themselves in the best patches of wind.

When things aren’t going so well, it’s usually because you’re not in the good air. But if you see another part of the course where the wind looks better, it will invariably be gone by the time you get there.

The lesson is to find your way to the part of the course where the wind is going to be – not where it is now.

It’s the same in business. When your toughest competitors leap ahead of you, you can’t catch up by simply doing what they’re doing.

Instead you need to figure out the next thing a good company should be doing. When you figure it out, you don’t need to set your course for where your competitors already are; you can set it for where you want to be.

The great search engine standoff

Tuesday, November 24th, 2009

Seth Godin is one of my favorite bloggers, and I quote him regularly. He’s been a source of clear thinking and wisdom for me since long before blogs existed.

But in today’s blog, he writes about News Corp. Chairman Rupert Murdoch’s idea to control how news content is indexed on web sites. He got it wrong. He writes, in entirety (and you’ve got to admire Godin’s brevity):

Rupert Murdoch has it backwards

You don’t charge the search engines to send people to articles on your site, you pay them.

If you can’t make money from attention, you should do something else for a living. Charging money for attention gets you neither money nor attention.

If Murdoch were just another blogger, or just another guy with another product to shill, I would agree with Godin. But Murdoch owns one of the largest news-gathering organizations in the world. And here’s the point that Godin misses:

When search engines index vast troves of original content, such as Murdoch’s News Corp., the impact is synergistic:

  • It drives traffic to News Corp.;
  • It provides the kind of top-of-the-charts, original content that makes a search engine valuable;
  • It provides a large class of users with the kind of content they’re seeking.

Here’s the nuance; there is less and less original content of the kind that News Corp. produces. Anyone who has ever used the Web has had the experience of following one good link after another to find they’re all connected to the same piece of mediocre content. The money dedicated to generating high-quality content has evaporated; it’s down by more than $1.5 billion in the U.S. newspaper business alone – not to mention all the other businesses that pay content providers to create information that people want and need.

So anyone who wants this kind of content to continue, must make some kind of investment in it.

When search engines index to content like that provided by Murdoch’s company, they profit by selling sponsored search results in the space around it.

But the news organizations’ only means of profit from this activity is to sell advertising around the content. But advertising isn’t selling – nor is it expected to significantly recover. Further, a portion of the money that marketers no longer spend to advertise in newspapers and magazines has been reallocated to the paid search function of search engines.

So why shouldn’t they pay for the right to index high-end content?

The attention that search engines generate is doing less and less good for newspapers and other free-content websites. If News Corp. can’t sell ads around its content, it has no reason to care if search engines promote the content.

So Godin has it wrong. He supposes that news media get the larger share of value in their relationship with search engines. In fact, to the consternation of anyone in the news business, it’s the other way around.

Further, the search engines may be able to extract even more value. Right now, one search engine is much like another. But if one could brag that it’s the only search engine to index the world’s largest news generators, that might make a difference to consumers. I know it would to me.

I don’t know if even Rupert Murdoch has the juice to take on Google. But he may be able to set the big search engines against each other. I don’t know if he’ll succeed in getting paid by one search engine and in locking out the rest. But to me, like it or not, it sounds like the kind of clash that isn’t likely to go away without creating some kind of change that affects everyone.

Here is more background on the issue:

Murdoch no longer alone in desire to block Google

Murdoch wants a Google rebellion

Bing not likely to outbid Google for news

Murdoch could block Google searches entirely

What is the world’s smallest deck chair?

Tuesday, November 24th, 2009

aol-logo-4It’s the period in Aol. As in, America Online’s new branding effort, which changes the company from AOL to Aol. – but doesn’t make it any more relevant in a post-internet-service-provider world.

Seriously, this isn’t like rearranging deck chairs on the Titanic; as AOL and Time Warner complete their de-merger, it’s like replacing the rubber pad on a leg of a deck chair so it doesn’t scuff the deck.

I don’t understand why Aol. even exists anymore, except that it’s too big to go away quietly. The services it provided in the early days of the Internet – everything under one roof like a well-lit mall in an otherwise under-developed part of town – have all been superseded by a wider variety of offerings on the well-developed ‘Net.

Its search engine has dropped out of the top tier and offers no unique user value that would separate it from any others.

And I’m always startled when I find myself exchanging e-mails with someone who still has an address at the aol.com domain. Actually, it’s not an exchange; any e-mail I’ve sent in the last few months to the few Aol.-users I know has bounced back to me. Just this morning, I printed out a document and put it in an envelope with a stamp, because the Aol. user’s address rejected the attachment.

aol-logo-3Yes, Aol. has a brand problem. If you’re an investor who bet your retirement on AOL-Time Warner, the brand represents broken promises and unfulfilled dreams. For pretty much everyone else it represents obsolescence.

aol-logo-2That’s obviously not what the folks at Aol. and its branding agency, Wolff Olins (of the Omnicom Group) are thinking.

In its coverage (linked above), The New York Times quotes Sam Wilson, managing director in the New York of Wolff Olins, the branding agency Aol. has hired. The Times writes:

The period in the logo was added to suggest “confidence, completeness,” Ms. Wilson said, by declaring that “AOL is the place to go for the best content online, period.”

aol-logo-1The article also quotes Aol.’s CEO (or is that Ceo.?) Tim Armstrong:

Mr. Armstrong said he liked to describe the period as “the AOL dot” because “the dot is the pivot point for what comes after AOL,” whether it is e-mail, Web sites or coming offerings that will “surprise people.”

What will surprise me is if Aol. can provide the Internet community with a reason to exist other than its legacy – something about which the online world is notoriously indifferent. To me, the dot looks a lot like the head of a nail, a coffin nail maybe – which might be enough to keep the deck chairs from sliding around as the ship continues to list.

Even low-cost social media campaigns need to be measured

Monday, September 21st, 2009

There is an entire industry of consultants that didn’t exist three years ago, telling people how to collect thousands of followers on Twitter; how to gain friends and fans on Facebook; and how to leverage large networks on LinkedIn. These consultants are writing books, conducting web-seminars and selling services.

The thing that gets too little attention is what all this is worth? Sure, you can grab a small nation’s worth of Twitter followers, but will it make you any money if they aren’t paying attention to your Tweets?

So it was refreshing to stumble across a new series or articles in Computerworld on How to measure the ROI of social media.

It would be nice if there were a few key metrics and some nice neat formulas you could follow, but social media is evolving too quickly and the measurements aren’t that simple.

In the end, if you want to know whether your time with social media is well spent, you need to do the following:

Set a meaningful goal. Is the purpose of your social media outreach simply to gain followers? Then you’ll have an easy time measuring, and a hard time proving that the effort was worthwhile. Instead, set a more specific goal, like this: To generate sales of $XXX (or X number of sales transactions) from members of our social media network.

That way, you’ll not only have a pass/fail measurement, you’ll learn something important along the way: i.e., how many new connections it takes to achieve a sale.

Assign specific tasks. If more than one person is going to be involved in the social media effort, make sure that each person knows his or her specific role. For instance, one person might conduct the outbound communications while another works to convert inbound communications into leads, and still another works to close sales.

This way, the entire job will get done — not just the fun part of blogging and tweeting. Further, when things don’t go perfectly (they won’t), you’ll have a team of experts who can figure out what adjustments to make.

Track everything. Time is money. So while social media programs are astonishingly inexpensive in terms of hard cost, you’ll want to know how much of each day your team members are spending on social media vs. their other responsibilities.

If you do these three things, then measuring gets easy. If you have goals, an organized work effort and good data, determining whether your resources are well-spent will be easy.  Just like the example of Reality Digital, also from Computerworld.

Wal-Mart redesign cuts magazine aisle in half

Wednesday, September 16th, 2009

walmart1Last week I wrote about Wal-Mart’s next-generation store design (Magazines: kick ‘em when they’re down), which moves the magazine rack to the back of the store near music, electronic games, DVD’s and books.

Wal-Mart’s pretty good at figuring out how to maximize the sales of every square foot of space, so while the move is a symbolic kick in the pants to an industry that is suffering from all sorts of afflictions — not the least of which is a big drop in newsstand sales — it was hard to know if the move would really have an impact on the media business.

Well, apparently it does. According to AudienceDevelopment.com, the new store layout will also reduce the length of the magazine rack by 20 feet — approximately 50 percent. That means something on the order of half the magazines you can buy at Wal-Mart today will be unavailable there after each store is remodeled.

Wal-Mart isn’t saying which magazines will get the boot, and according to AudienceDevelopment.com, that decision hasn’t yet been addressed. But, consistent with all of its in-store activities, Wal-Mart officials (not a talkative bunch in the first place) are blunt in saying they’ll keep only the magazines that sell the fastest. Because that’s what Wal-Mart is all about.

It’s good for earnings and it’s good for the publishers that make the cut. But shoppers looking for titles with slightly narrower focus will simply have to go elsewhere.

Because that’s the downside of Wal-Mart and the Big Boxification of retail: Only the most mainstream items in any category – from lumber to breakfast cereal to music to magazines – get shelf space. Wal-Mart is bad for variety.

And in this case, it’s bad for the magazine business. The likely in-store survivors — usual suspects like Cosmo, Maxim, Better Homes & Garden and, (going out on a limb) Guns & Ammo — may see an increase in sales due to the new location, improved merchandising and reduced category competition. But I can’t imagine that the bump will be enough to offset the 20 feet of shelf-space that’s being given to some other retail category.

Face the fact: At the world’s largest store, magazines have just been put within site of the back door.

Magazines: Kick ‘em when they’re down

Thursday, September 10th, 2009

newsstandA report at the end of August indicated that newsstand sales of magazines were down more than 12% in the first six months of 2009 compared to 2008.

I can only guess why that might be:

  • A sudden lack of spending money by the nearly 10 percent of people who are now unemployed;
  • A general feeling that, with so much news about magazines shutting down and facing financial ruin, they aren’t the attractive impulse buy they once were;
  • Have you seen the cover prices on magazines these days? With ad revenues down, many top-tier magazines now cost $7 or $8 at the newsstand.
  • I don’t have the foggiest idea what percentage of magazines are purchased at airports. It’s probably not that significant. But if air travel was down in the first half (it was) I suppose fewer people were buying magazines at airports.

With all that said, I’m not reading any more into this than it being one more bad metric for publishers in a year filled with bad metrics. I’m sure newsstand sales will rebound when the time is right.

But in the spirit of kicking them when they’re down, Wal-Mart has just announced that it’s implementing a new floor-plan that will put magazines in the back of the store, alongside music, video games and electronics.

At a level, it makes sense; consumer electronics aren’t near the back of the store because they don’t sell well. That department is usually one of the most crowded; it’s where all the wish-list shoppers loiter while the serious shoppers are boring us to tears in the throw-pillows and laundry-detergent aisles.

walmartFurther, the current newsstand location at Wal-Mart, wherever it is, can’t possibly be a great position, sandwiched in there somewhere between diet remedies and pet toys.

And finally, say what you will about the people who run Wal-Mart; they aren’t stupid when it comes to maximizing sales-per-square-foot. If they’ve done their research and they think magazines are going to sell better in the vicinity of music CDs and other entertainment goods, I can’t argue.

But I can say that, symbolically, for magazine publishers, it feels like just one more kick in the front of the pants.

Why the URL is less important every day

Tuesday, September 8th, 2009

I remember reading, in the early days of the Web, how large companies were paying hundreds of thousands of dollars to purchase meaningful URLs. For instance, McDonald’s wasn’t the first owner of www.mcdonalds.com.

About 9 years, ago, I tried to sell a URL that I was abandoning. I found a broker who promised to auction it off, estimating that it might be worth $15-20 thousand. The bubble burst, the auction never happened, and the URL simply expired — sitting unused until sometime in the past year when another company started using it.

The URL remains a most important locator for online information. But the importance of branding a URL — or of obtaining a URL that perfectly matches your brand — is declining.

Jonathan Richman at iMedia Connection offers 4 technologies that are responsible for its declining importance.

They are:

Search engines: The power of search is well-known. More people find websites through search than by typing in the URL;

Browsers: New-generation browsers like Google Chrome and Firefox skip the need for going to a search engine; just type a search term in the address box and they deliver search results;

URL shortening: Sites like Twitter, with strict limitations on size, force URLs to be shortened dramatically. Tools like TinyURL and Bit.ly exist to do this. Which means the URL for this page, as an example goes from http://www.themarketfarm.com/wordpress/2009/09/08/why-the-url-is-less-important-every-day/ to http://tinyurl.com/nq6d2y — which is pretty efficient, except any unique branding disappears.

The QR code: Popular in Asia and Europe, you take a picture of the QR code on your smart phone, and it will take you directly to the related website.

Overlooked in Richman’s blog, which is more detailed and well worth reading, is a fifth technology of social networking. More and more businesses are using Facebook, Twitter and other sites to attract audience; these work based on the names of companies and communities — not web addresses. So the brand of the company once again becomes more important than the brand of its URL.

The ultimate point, though, is that if you have a URL you like, don’t spend too much to brand it. And if you have a URL you don’t like, you can work around it.