Marketing

OtherWise Home Page

Everybody and everything has a home page these days.

Otherwise Home Page.001

My new book, due out in June but available now for preorder on Amazon and Barnes & Noble is no exception.

Thanks to my friend Michael Kwan, OtherWise has a home page. You can reach it at www.Othrws.com.

Once there, you'll find an overview of the book, some excerpts, a discussion guide, and a couple of surprises.

Many thanks to Michael and to another friend, Jonathan Struthers, who introduced me to him. Comments and suggestions, as always, are welcome.Signature




Wrecking a category

Partisanship (1)The biggest divide in American politics is not between people who lean left or right, but between those who are engaged and those who are not.

For example, according to the Census Bureau, about 60% of Americans are registered to vote, but only 42% cast ballots in the last national election.

Presidential elections draw more people -- about half of eligible voters typically turn out when the White House is up for grabs. On that score, the 2008 election had the biggest turnout in 40 years -- 56.8% of eligible voters cast ballots.  

We'll soon see if that was the start of a new trend or an aberration.

Meanwhile, social scientists argue that our political divisions are actually a sign of health. We have become better at sorting ourselves by ideology rather than simply going with our family, social or ethnic flow.

Only about 10% of voters don't lean towards one party or the other. That has made partisan voting blocks more disciplined. But it has also made bipartisan cooperation much more difficult. That's undoubtedly reflected in the lowest levels of trust in the federal government since Gallup has been keeping score.

Hyper-partisanship has also contributed to any marketer's nightmare -- a general poisoning of the category. 

I saw this first-hand when I was at AT&T during the long distance wars.  AT&T, MCI, and Sprint got into a price war that led to billions of dollars of advertising in which we essentially accused each other of lying.

In time, all we accomplished was to convince the public we were all liers. 

As hyper-partisanship foments a general decline in public trust, it's taking the rest of civic life with it.

The percentage of Americans who participate in a community group of any sort is even lower than the proportion who vote.

Only 35% of American adults belong to a religious, civic, school, social, or even recreational group. And barely a third (32%) perform some form of community service such as volunteering, attending public meetings, or working with neighbors to address local issues.

There have been many theories to explain this, ranging from the effects of increasing diversity and two-income families to the proliferation of cable channels and new digital media. 

To that list, let me add this -- hyper-partisanship is destroying public life as a category of honorable activity. 

 



To be OtherWise

OtherWiseI'm ending 2011 with a few thoughts on what we might do about the issues discussed in some of my previous posts. 

The traditional approach to difference in most pluralistic societies is the cultivation of tolerance.

But tolerance is the cheapest virtue, if it’s a virtue at all.  At best, it’s a cease-fire that allows each side to retain, and even cement, its hostile attitudes. 

One party can agree to put up with the Other and still look down on him or her. Keeping one party at a distance nearly always fosters misunderstanding and suspicion.

Tolerance may promise non-interference and facilitate peaceful co-existence, but it doesn’t lead to understanding. And certainly not to joint action. On the contrary, it’s built on a willful ignorance that leaves the other party unknown.

Productive societies need more than what one philosopher called a “benign indifference to difference.” Tolerance is only the first – and arguably lowest – step in becoming wise in the ways and why of others – to be OtherWise.  Sometimes, it may be all that is attainable; but it should never be a satisfactory goal.           

The opposite of “intolerance” is not “tolerance” but “hospitality.” Hospitality requires us to welcome and to make room for the Other, without any judgment beyond recognizing our common humanity. 

It’s seeing the Other as a person and not simply as a totem of difference. It’s engaging that person in conversation, fueled not only by curiosity, but also by the conviction that he or she can teach us something of value. It’s sharing that person’s experience emotionally as well as intellectually.

That doesn’t mean we have to set aside our own beliefs in favor of cultural and political relativism. But such an encounter forces us to surface and examine our own preconceptions and biases.

We are each embedded in the particular history and culture that shaped us. Being OtherWise means treating others as individuals, with their own unique story. 

Paradoxically that requires keen self-awareness.  Only then can we be free of our preconceptions and unspoken fears. Thus unencumbered, we can discover all the ways we are the same – in our interests and our destiny, if not in our experience and our ancestry.

Why bother to acquire the wisdom of relating to the Other?  Not because it’s the nice – or even right – thing to do, but in order to be more effective in our increasingly diverse and global society. 

Becoming OtherWise is a critical management requirement of the 21st century. It entails intellectual, as well as emotional, development:

  • Expanding our worldview to include news of other countries,
  • Increasing our cultural literacy of other people,
  • Increasing our religious literacy of other faiths,
  • Challenging our biases and assumptions about the “Others” in our lives,
  • Educating our emotions and developing our sense of empathy,
  • Engaging with people outside our immediate circle in meaningful ways.

To be OtherWise is to be open to others and to see them as fellow human beings of dignity and worth. It is to hear their story and to share our own with them.  It is appreciating their differences while finding in them common interests and values. 

The OtherWise are not naïve and gullible.  They realize that some people would take advantage of them, even do them harm.  But they try not to make such judgments based on stereotypes; they evaluate people as individuals. And they don’t paper over real disagreements; they confront differences of opinion honestly without thinking less of the person who holds them. They try to find a way to respect the perspective of other people, even if they can’t share it.

To be OtherWise is to see ourselves as others see us and to see ourselves in others. It is to understand the hidden forces that shape others’ behavior, as well as our own. Only then will we see the others, not as something apart, but as someone who is part of our world and our life.  Only then, will we be OtherWise. 

That's my wish for you in 2012.  See you next year.


The world on our mind

ThinkGlobally In Rebuilding Brand America, I used the low number of Americans with passports to illustrate our relative disinterest in and indifference to the rest of the world.  

At that time, only about a third of U.S. citizens had a passport. The number of applications popped up significantly in 2007 and 2008 when the State Department started requiring a passport for re-entry from Canada, Mexico and the Caribbean, but it returned to prior levels in 2010.  

Something like 37% of Americans now have a passport or passport card. (The 3.5 million who have cards can only use them for travel to Canada, Mexico, and the Caribbean.) By contrast, seven out of ten Brits have a passport.

Mansour Javidan, a professor at Thunderbird University, has a theory that explains Americans' relative indifference to the rest of the world. Javidan thinks that the attention any society pays to other countries is a function of their historical need to do so. 

“Canadians pay attention to what is going on in the U.S. every minute of the day,” he says. “Because what happens in the U.S. has a huge impact on what happens in Canada.  But most Americans don’t know anything about what’s going on in Canada, except that the people are friendly and it’s cold up there.  Because what happens in Canada doesn’t have much of an impact on what happens in the U.S.”  

The Brits, who used to have an empire that spanned the globe, are brought up with a global mindset.  Americans, who have historically been pretty self-sufficient, didn't need one. But that may be changing.

Javidan developed an online tool that enables managers to measure their "global mindset."  About 10,000 managers at dozens of companies around the world have taken the self-assessment.  It helped them decide if they were suited for an internationbal assignment and what they could do to better prepare.  

It also gave Javidan a valuable database of information. Javidan says that when he compared the Global Mindset scores of managers from ten different countries, American managers were firmly in the middle of the pack. 

Of course the managers who used the Global Mindset instrument represent a self-selected group of people who are almost by definition interested in global markets. And Javidan doesn't have data on the general public. But his findings may portend big changes.  

As everyone knows, American business is becoming increasingly global, and the salience of what is happening in other countries has grown for many U.S. managers.  Three-quarters of Fortune 100 CEOs have spent at least two years working in a senior position overseas. The percentage of other senior executives with overseas experience has jumped to 71 percent from 48 percent 10 years ago.

If the days of global indifference are fading for American business people,the general public may not be far behind.  That can be positive if people see the rest of the world as a source of economic and cultural enrichment.  Or it can be negative if they see it as a threat. Right now, the latter looks more likely. 

 

 


Watch that metaphor

Crime Scene Cleanup_full One of the chapters in my new book features the work of Lera Boroditsky, a psychology professor at Stanford University who has done some interesting work on the relationship between language and thinking.  

So I was pleased to see her interviewed by Brooke Gladstone on NPR's "On the Media."

Boroditsky has been looking into the way metaphors influence our thinking.  It seems that portraying a problem like crime as a "beast" or a "virus" causes people to come up with very different solutions.  

People tend to take punitive measures against "beasts" and curative measures against "viruses." I suspect politicians figured that out years ago.

A transcript of the full interview is here and the original paper is here.

 

 



Uprooting myths

Uprooting.001 Uprooting.001Nothing is harder to dislodge than a myth that has taken root. 

It would make Sisyphus appreciate his rock. 

A good friend reminded me of that by sending me to website of the NPR program "On the Media," which dedicated last weekend's edition to that very subject. 

Host Brooke Gladstone interviewed political scientist Brendan Nyhan on the persistence of certain stories even after they have been proven to be false.  

It was a little disheartening to hear someone who has studied the nature of these misperceptions confess that it's virtually impossible to correct misinformation that people want to believe. 

"People were so successful at bringing to mind reasons that the correction was wrong that they actually ended up being more convinced in the misperception than the people who didn't receive the correction," he said. "So the correction, in other words, was making things worse." 

For example, Nyhan said you get nowhere simply saying "Obama is not a Muslim" because people tend to forget the "not" and the original statement in all its glorious wrongness is merely reinforced. 

Instead, Nyhan's team tested the approach of saying, "I'm not a Muslim" against an alternative, "I'm a Christian." In fact, that would have been my advice, but Nyhan admitted that it only worked some of the time. 

"When non-white students were interviewing respondents to the study, the message seemed to work, and, in particular, with Republicans, the group that was most likely to hold the misperception," he said. "But when it was only white students administering the experiment was precisely the opposite, the correction appeared to actually make things worse." 

It seems that, when the non-white students were present, people were giving responses that didn't line up with their unconscious associations of Obama, i.e., he's black. As Nyhan politely put it, using non-white interviewers "may have created an environment that people weren't comfortable saying what they really thought." 

Clearly frustrated herself, Gladstone asked Nyhan if there is any way to correct misperceptions. His advice was to take the battle to the source of these myths. 

"I think the most effective approach is to go after elites, to shame the people who are promoting these things, who are putting them out there," he said. "At some point, people have to be cast out of polite society. You have to simply say, that is irresponsible and we're not going to give you our air time, our print to make that sort of a claim. Politicians and talk radio hosts, they're going to push these things when it’s in their interest to do so. It’s a simple cost-benefit calculation. What I want to do is increase the cost." 

People like Ann Coulter and Michael Moore are hard to shame, but it's worth trying. 

Sisyphus move over.




It's the culture, stupid!

It's the culture.001When Bill Clinton was running for president in 1992, one of his advisers famously put a sign in the Little Rock campaign headquarters to keep the candidate on message.  

"It's the economy, stupid" became something of a slogan for the campaign.

Smart marketers would be wise to do business under a similar banner:  It's the culture, stupid. 

And one of the defining characteristics of American culture in the 21st century is that it is becoming increasingly diverse. 

In 2010, for the first time, more than half of all births in the U.S. will be to Hispanic, Black, and Asian moms. The Census Bureau estimates that minorities will constitute a majority of Americans under age 18 in only one decade. By 2050, non-Hispanic whites will be in the minority across all age groups within the U.S.  

Multicultural markets are the new mainstream. But effective multi-cultural marketing requires more than a good bi-lingual dictionary.  

Multicultural audiences consume media differently. African Americans are heavier radio listeners than average, and Hispanic consumers spend more time online. At the same time, ethnic media is exploding across the country. In some major markets, including Los Angeles, Miami, and New York – Spanish-language TV stations have higher ratings among the young adults advertisers covet than the mainstream networks. 

Multi-cultural audiences have different cultural values and consumption patterns.  For example, P&G research shows that African-American women spend at least three times as much on beauty products as the general female population. P&G also found that 71 percent of black women feel they are portrayed worse in the media than any other racial group. 

The result was a nationwide “My Black Is Beautiful” campaign, underwritten by Pantene, Cover Girl, Crest and Always, to share beauty and lifestyle tips within the context of a discussion about issues of concern to African-American women.  

Finally, the “multi” in multi-cultural applies within groups that speak the same language as well as between them and others.  There are social and cultural differences between Hispanics of Puerto Rican, Mexican, and Cuban descent, not to mention between people in the nearly two-dozen other Spanish-speaking countries. 

Similarly, besides speaking different languages, the U.S. Asian population includes people who trace their ancestry to countries as diverse as India and Vietnam or Nepal and Japan. 

Multi-cultural marketing is not only about language, it’s about identifying with people’s values and traditions. 

Like all good marketing, it’s about culture.  


Willfulness & willingness

Change ahead Can people change? 

Twenty-five pounds ago, I had my doubts. But then I stumbled onto a principle of change that seems counter-intuitive. 

Willfulness -- as in "I will do this" -- is less important than willingness -- as in "I'm willing to consider it." 

I ended a cruise through Asia at an all-time high, weight-wise. Luckily a new friend I met on the cruise was in the same shape, and we got to talking about it over dinner and, later, over drinks.  In fact, for a while, we found ourselves talking about it during every meal.  (Could that have been the source of our problem? Different topic.) 

The point is that by talking about our weight gain, we opened our minds to the possibility of shedding a few pounds. 

I realized all this when I read a recent paper by three researchers who devised an ingenious way to test the relative effectiveness of willfulness and willingness. 

In one experiment, they recruited people for handwriting research.  Half were asked to write "I will" over and over; the others, wrote "will I" the same number of times. All the participants were then asked to predict the level of physical exercise they planned to undertake during the coming week.  

Those who wrote "will I" expressed a much higher commitment to exercise than those who wrote "I will" over and over.  

What's more, when asked why they planned to exercise, the "will I" group said it was because they wanted to take responsibility for their health. The "I will" group said it was because they would otherwise feel guilty. 

The researchers say the results from this and three similar experiments demonstrate that "interrogative self-talk is an important motivator of goal-directed behavior." 

In other words, an open, questioning mind can foster self-directed motivation, while simply asserting a determination to meet a goal can actually close off possibilities. 

As to my friend and I, we lost more than fifty pounds between us. 


Looking back

Change  When I joined the work force in 1970, straight out of graduate school, the world was a lot simpler. (Of course, you could also pick up a week's groceries for $20, but that's another story.)  


Back then, there were no cell phones, pagers, personal computers, email, and not even many fax machines. Cable TV was just starting. Outside the big cities, few families could receive more than three stations.


Of course, dinosaurs also roamed the canyons of Manhattan in those days.  But you don't have to go back that far to demonstrate how much our world has changed. 


When I retired from AT&T in 2003, YouTube, Facebook, Twitter and the like didn’t even exist. Now, social media networks are bigger than some countries.  Facebook alone would rank among the three most populous, right after China and India. Everyone has a Facebook page (though some of us don't know exactly what to do with it.)  


But with all this media fragmentation, according to Forrester Research, no single medium has a stranglehold on our attention.  More than half the people watching TV are also readingFour out of ten are on the Internet. And more than a third of people on the Internet are also listening to radio or watching television. 


About one third of households have become their own TV programmers, using digital video recorders to build their own viewing schedules.  Many skip TV sets entirely, watching programs on the web through YouTube, Hulu, and other sites. 


Change has never happened faster. It took 38 years for radio to reach 50 million people; 13 years, for TV to reach that many;  6 years, for the Internet; and only 3 years for the iPhone.    


Marketers obviously need to rethink all their old formulas. As Ogilvy Chair Shelly Lazarus told me, "New technologies have unleashed changes in people’s behavior. They have different habits, whether they’re shopping, working, or just hanging out at home."  


But the larger question, to me, is how all these changes have affected the way we relate to each other.  One effect is increasingly obvious: our political and social polarization have never been greater.  






Dating Tip

Dating I'm the wrong guy to offer dating tips. 

I've been with the same woman for nearly 40 years and I've never really understood exactly how I managed it. 

(I suspect our friends are just as mystified by my good luck.) 

But dating is not that far removed from marketing, and some recent research may help both undertakings. 

Some French researchers (who else?) recently demonstrated the aphrodisiacal properties of music.  They recruited a bunch of 18 to 20 year-old single females to participate in some research.  While waiting for the experiment to start, they pumped recorded music into the room where they were waiting. 

Five minutes later, a young male confederate came into the room, clipboard in hand and gave them a marketing survey. Later, during a break, he asked each woman for her phone number. 

The women who had been listening to "romantic" music were almost twice as likely to give him their phone number as those who heard some "neutral" music.  The full study is here

The marketing implications are obvious. And those of you who are still dating should reexamine their iTunes playlist.





Small talk

Speech-bubble-quote-backgroundWords matter.  Just ask BP''s Swedish chairman, Carl-Henric Svanberg. 


No one seemed willing to cut him any slack for trying to be colloquial in responding to criticism that large oil companies are "greedy" and "don't care" how their operations impact people.   "That is not the case in BP," he said.  "We do care about the small people." 


Okay, English is not Svanberg's first language, and I'd like to see how well the chattering commentariat would do in Swedish. What he probably meant was "little" people.  But his remarks still kicked up a storm and were broadly cited as yet another example that BP was so deeply out-of-touch it might never be able to resurface in the land of the sentient.  


"Little people," of course, is short-hand for the powerless and the disenfranchised. In BP's case, it included thousands of small businesses and families across the Gulf Region who bridled at the reminder that they were at the oil giant's mercy. Unfairly or not, Svanberg's ill-chosen language reinforced their victimhood. 


But the reason it got so much pick-up goes deeper -- it unwittingly reinforced the perception that the company doesn't identify with the Gulf Coast communities and, in fact, considers all those good people along the coast a necessary nuisance to be dealt with.  


BP may be the worst latest example, but many companies are clueless when it comes to dealing with anyone but the money managers whose daily trading determines their stock price.  Very few companies know how to deal with "the other" and, sadly, people no longer  have to be terribly exotic to count as
"aliens" to some companies
.


Words matter because they are sometimes the clearest window into what's really going on.




Entrainment

051  Facebook, Twitter and YouTube didn't even exist when I retired from public relations in 2003, so I hesitate to offer advice on how institutions should use social media.  But I know a good idea when I hear one, and I heard one last night.  

It happened during a panel discussion of a new book by two friends of mine, Michael Goodman and Peter Hirsch.  The book is Corporate Communication: Strategic Adaptation for Global Practice.  

The idea is Peter's, and he admits that he lifted it from the medical profession, specifically pediatrics, though it's also used in music and meterology.  

Peter's insight is that companies should treat social media as an opportunity for "entrainment," i.e., the natural process by which new parents bond with their infant. Companies shouldn't try to use social media to push a product or an idea, he says, but rather to get in synch with their customers. 

I later learned that Peter blogged more extensively on the idea back in October 2009. Here's the link.

Makes sense to me.  Plus, it gives me an opportunity to post a photo of my new grandson, Beck Martin Coakley, born on April 19.  See above.




Real Beauty for men?

Blog dove girls In Secrets of the Marketing Masters, I wrote approvingly of Dove's Campaign for Real Beauty.

Launched in 2005, the campaign celebrated the curves and natural beauty of real women, going so far as to show them in their skivvies complete with love handles and wrinkles.  

The ads tried to help women regain some of the self-esteem that the media and the beauty industry was sucking out of them. They struck a responsive chord with women around the world and, in the process, repositioned the brand as an attitude rather than as a 50 year-old moisturizing soap. 

The campaign gave Dove the breadth to encompass a range of products from shampoo to firming cream, boosting sales and launching a host of business school case histories. (Not to mention a chapter in my book.)

But now one has to wonder if the Dove brand managers really understood what they had created.  During the 2010 Superbowl, they launched Dove Men + Care, a new line of products designed for the average Joe, not Jane. Dove for men

My problem with this move is that it is sacrificing the Dove brand's meaning by trying to stretch it across a market that shares none of its core values or concerns.

Few men share the same insecurities about their appearance as most women do. 

It's as if Dove's parent company, Unilever, tried to stretch another of its brands -- Axe -- to include women's products.  It doesn't compute. The Axe brand has an adolescent male personality.  It lives in a frat house, not in a split-level with hair curlers on the breakfast table.

Dove Men  Dove is corrupting its most valuable, hard-won asset -- its very meaning.

Furthermore, the notion of billboards depicting "real men" in their skivvies might have some of us reaching for another Unilever product -- Slimfast -- but it won't sell much shampoo
 


News consumption

News%20Icon.jpg-600x450 The Pew Research Center has just issued a report entitled "Understanding the Participatory News Consumer." 

It quantifies what many of us already suspected -- whereas Americans used to get their news primarily from television, they now use multiple platforms to get their daily news.  In fact, on a typical day, six in ten Americans (59%) get their news from a combination of online and offline sources. 

The internet is now the third most-popular news platform, behind local and national television news and ahead of national print newspapers, local print newspapers and radio. 

More than a third of internet users have actually contributed to the creation of news, either commenting about it or disseminating it on social media sites like Twitter and Facebook. 

As a result, 75% of people who get their news online receive it in the form of messages forwarded from someone else. 





Our thinking bodies

Popup Embodied cognition is a hot new field that considers how abstract concepts like "power," "time," and "goodness" are processed not just in our brains, but also by our bodies.

The findings have broad implications for all forms of communications and marketing. For example, a study at Gettysburg College in Pennsylvania, showed that whether someone's photo is positioned at the top of a screen or at the bottom affects how powerful and attractive he or she is perceived to be by the opposite sex.

When people think of power differences, they literally think of spatial differences too. Powerful people are thought to be those who stay "at the top," while the less powerful are "below."

In the Gettysburg study, men were 1.8 times more likely to find the same woman attractive if her photo appeared at the bottom of the screen rather than at the top. Women were 1.5 times more likely to find men attractive if their photo appeared at the top. This may help explain why CEOs ten to be tall and why wives are taller than their husbands in only one out of 750 married couples.

The New York Times reports on a study in the journal Psychological Science that shows that people actually lean forward when thinking of the future and lean back when pondering the past.

Others have discovered that the smell of Windex can prompt people to donate more to charity.  (No, Windex didn't sponsor the study.  You can read it here.)  Books we are told are "important" seem to weigh more than other books of the same size.

It seems that our figurative language (e.g., "the stain of sin") has roots in the way our body actually processes information.


Burger King Brew

Burger king beer Burger King has started serving beer at a new restaurant in Miami's South Beach.

Customers can get a brew, Whopper and fries for $7.99. But I don't think the main idea is to offer higher-priced beverages.  While McDonald's built its franchise on appealing to children and Arby's, on serving adults, Burger King has tried to appeal to the out-sized appetites of male adolescents.  

Of course, the King doesn't define "adolescence" in chronological terms. It's more of an attitude and a set of behaviors, typical of males from 18 to 24 years old.  And Burger King does not want to repeat the missteps of The Gap by failing to grow with its core audience.  Enter the beer taps.


Priced to sell

Priceless Priceless: The Myth Of Fair Value (And How To Take Advantage Of It) is William Poundstone's eleventh nonfiction book and a prime example of two trends we will hear and read a lot more about in business circles -- evolutionary psychology and neurobiology. 

We may all think that we're rational beings, but the truth is that we are the products of evolutionary forces that prepared us for a very different environment.  In fact, many of our daily decisions are made at levels below our conscious awareness but in full view of a functional magnetic resonance machine.  

I've been gathering material for a new book on these subjects and will report examples in this space over the coming months. Many of the latest findings have significant implications for (and applications in) marketing, finance, human resources and every other business function.  Not to mention day-to-day life, as Poundstone demonstrates even on his book jacket, which is cleverly designed to incorporate a price tag.  The book's original price is listed there as $599.99.  In fact, it really sells for about $27, which seems like a steal thanks to the "anchoring effect" Poundstone describes so effectively in the book itself.



Domino's Mea Culpa


I've often pointed out that perception is not reality, even though it sometimes feels as if it is.  Perceptions can't be changed solely with the tools of persuasion. Advertising and PR campaigns seldom cure perception problems. The only way to fix perception problems is to fix the underlying reality.  

Case in point: Domino Pizza.  Rather than commissioning better TV commercials to change perceptions that its pizza tastes like ketchup spread on cardboard, the company decided to change its pizza. (They also changed the CEO, but that's another story.)

The company's new ad campaign is built around TV spots designed to attract viewers to a web site -- www.pizzaturnaround.com -- where they can view a four-minute documentary that shows customers trashing the old recipe and staffers reacting. Talk about transparency.  The strategy attracted attention from the likes of The Colbert Report and CBS's The Early Show.  

Domino's new CEO isn't worried about repeating the New Coke fiasco.  The big difference here, he points out, is that when Coca-Cola introduced New Coke, it was the number one soft drink.  In the world of pizza, alas, Domino's, ranks first in delivery but dead last in taste.




Tuning a Tin Ear

GoldmanSachs Someone is finally giving Goldman Sachs good advice. The Wall Street firm with a tin ear for public relations may be taking the first baby steps toward restoring its reputation.  (That may overstate things -- it's reputation on Main Street has never been very good. If it stood for anything, it was mindless devotion to the "greed is good" school of economics.) 

Ironically, the company has always required its senior executives to donate a portion of their  huge bonuses to charity, but to many of us, that smacked of John D. Rockefeller handing out dimes to street urchins.  

Now, Goldman appears to be re-tuning its tin ear. First, the company's CEO, Lloyd Blankfein, actually apologized for his firm's role in the financial crisis. "We participated in things that were clearly wrong and have reason to regret," he said. "We apologize."  That's orders of magnitude better than his last word on the subject, that "we're doing God's work." 

Even better, someone convinced Goldman to back up its apology by giving something back to the people it wronged. But instead of throwing money off the roof of their Manhattan headquarters, Goldman is focusing its reputation-building efforts at the intersection of society's needs and its own core competencies.  

Yesterday, Goldman launched a $500 million dollar program to provide training, mentoring and loans for small businesses.  Skeptics are already pointing out that $500 million is a drop in the bucket when compared to the $16 billion Goldman has set aside for bonuses. And today's Wall Street Journal already has a story expressing mild dismay that a small manufacturer in Tennessee hasn't been able to get any help (or information on the program) yet. 

But it's a step in the right direction. We should all stay tuned.  


  

   


Macho PR

T vs V Every now and then, senior executives let their testosterone get the better of them. (Both men and women secrete testosterone by the way. Women are actually even more sensitive to it than men.)  

Anyway, when the testosterone flows, people do dumb things. Exhibit A is AT&T's suit against Verizon over the latter's claim that it has broader high-speed cellular coverage.  See the map to the left appears in the company's commercials, which one observer termed "a bitch slap" at AT&T

As a senior executive at the old, "new AT&T," I have been in many meetings where one business unit head or another got so exasperated with a competitor's actions (or advertising claims) that he or she pounded the table, fixed the General Counsel with an icy stare and shouted "let's sue the bastards!"  

In almost every case, the General Counsel let the senior team vent and then quietly did nothing.  In fact, at the height of the long distance wars, we set up a private arbitration process supervised by the Federal Trade Commission to resolve complaints about our respective advertising campaigns without going to court.  

One big lesson we learned in the telecom wars is that, when competitors throw mud at each other, customers give up on both of them.  We also learned that it seldom pays to draw attention to a competitor's claims (as AT&T's suit managed to do). They might as well have made million dollar deposits in Verizon's ad budget. 

Now Verizon has added a new lesson in its response to AT&T's suit -- match your competitor's phony outrage with a big dose of sarcasm and ridicule.  

Verizon's 53-page response to AT&T's suit begins "AT&T did not file this lawsuit because Verizon's 'There's A Map For That' advertisements are untrue; AT&T sued because Verizon's ads are true and the truth hurts." 

The rest of the filing is just as brutal and written in eminently quotable language. The jury may still be out on the comparable breadth of the two companies' networks, but Verizon is the clear winner in the PR battle. 

As Saul Alinsky noted in Rules for Radicals, more than thirty years ago, ridicule is one of the most potent weapons in responding to an attack. It's almost impossible to contradict and it infuriates your opponent, which gets that testosterone flowing all over again.  


Brand Lobes

Mindfield Here's a book that will definitely be on my wishlist for Christmas: Mindfield by science writer Lone Frank.  It purports to explain "how brain science is changing our world."  I don't know about that, but based on the excerpt in the Scientific American Mind blog, she certainly does a good job of explaining how brain science should influence marketing. 

Frank (what's the story behind her first name "Lone"?) retells the now familiar story of Baylor University's "Pepsi Challenge" fMRI studies, but her background as a neuroscientist allows her to explain its full significance.  Something I wish I had done better in my last two books.  "The medial prefrontal cortex," she explains, "is not just any old brain region."  It's where our very sense of identity resides.  If strong brands light it up, it's only because we identify with them, they fit into the picture we have of ourself. 

She didn't use the term, but I will -- what those fMRI scanners have discovered is our brand lobe.


 


CEOs Beware Failing Business Media

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Portfolio
magazine is history.  The Wall Street Journal is turning into a general interest newspaper. The New York Times business section shares space with the sports columns on most days (and is almost always less insightful). CNBC is business reporting with a roller derby attitude.  BusinessWeek, Fortune and Forbes could show up on ebay any day.

Should CEOs care?  Bill Holstein thinks so.

Holstein is a business writer who has covered the waterfront. His book, Managing the Media (Don't Let the Media Manage You), should be on every CEO's bedside table.  It's small enough to fit next to the clock radio and short enough for most titans of industry to read before Letterman gets to his musical guest.  

Holstein's astute observations on how the decline in business journalism will impact CEOs are not in the book.  For that, turn to the latest issue of Strategy + Business, published by Booz & Company.

According to Holstein, cost-cutting in business media means most CEOs will be dealing with younger, less knowledgeable reporters. Believe it or not, that's bad news -- very bad news. Inexperienced reporters are more easily manipulated by a company's competitors and third-party opponents.  (What large company doesn't have third-party opponents?)  

Furthermore, it means there are fewer credible platforms for telling a company's story.  And therefore, fewer places a CEO can find stories from which he or she can learn something. And finally, the decline in the quality of business media makes it less likely that the really serious policy questions will get much coverage -- like whether globalization is a net positive force in the world, what government constraints on business are legitimate, etc. 

Holstein also gives some generally solid advice on what a CEO can do differently in this environment.  I say "generally" because one piece of advice he quotes -- "seek out the smartest and most experiences journalists ... to do serious and in-depth reporting about (the) company" -- may be on the naive side. 

But who can argue with one of his central recommendations?  "It falls to PR professionals to spend more time explaining how a company fits into a broader social or economic trend -- articulating their company's stories in a way that the reporters can understand and appreciate."  

Ironically, Holstein himself would have argued with that advice three years ago when he was editor of Chief Executive magazine. In those days, he didn't think too much of PR people.  "PR people don't understand your business," he warned his readers in an unusual editorial rant.  "If they did, they wouldn't be PR people."

We all learn.  Must have been the lunch we shared at the Overseas Press Club when he was researching his book.  (He paid.)


Real Service Is Personal

NJPAC If I were rewriting Secrets of the Marketing Masters, I would definitely include the chief marketing officers of nonprofits.  And at the top of my list would be Catrina Boisson who does marketing for the New Jersey Performing Arts Center.  (Full disclosure: I used to be on NJPAC's board.)   

All nonprofits face unusual challenges these days, including the weak economy, slim resources, and stiff competition from equally compelling good causes. In NJPAC's case, add proximity to the cultural offerings of Manhattan, which is a short train ride away, and the less-than-inviting-if-largely-undeserved reputation of its location in downtown Newark. 

Nevertheless, NJPAC recently completed one of its most successful seasons. One of the reasons -- unusually sophisticated Customer Relationship Management.  CRM is one of those acronyms that consultants like to throw around, but Boisson and her colleagues have turned it into the way they do business.

Thanks to a ticketing system that captures information such as the number of events a household attends, the number of tickets they buy, and how much they pay, Boisson's team was able to score all NJPAC patrons by their lifetime value.  That led to a unique customer loyalty program for the 4000 households that were most critical to the center's success.  Interestingly, not all of the most valuable households bought subscription tickets and not all were "members" or donors.  Some, in fact, had not been to the center for two seasons.

Boisson's team assigned a personal representative to each of the 4,000 households. The idea was to give them personalized end-to-end service for everything from ticket purchases, to parking, restaurant reservations, and gift-buying from the center shop. Armed with information such as the last performance their client attended, how long it had been since their last visit and their entertainment preferences, their personal representative could even call to let them know of upcoming shows.

The results?  Customer churn is down.  Attendance has stabilized. Ticket sales are up. And a whopping 97 percent of the households with personal representatives say they would recommend NJPAC to others?

Here's the kicker -- serving all 4,000 households took a total of four personal representatives. You can read more about NJPAC's customer loyalty program here


Logo_general_mills Jon Fine, who writes about the media for BusinessWeek, has discovered one of the Marketing Masters' secrets:  "intensive research that aims at wreathing a kind of grandiosity of purpose around everyday products to a degree that may seem somewhat silly to outsiders."  


Forgive me for assuming that Fine is one of the outsiders, but he has enough common sense to recognize a strategy that works.  He quotes the chief marketing officer of General Mills who poses the key question: "What is the bigger job this brand does in a consumer's life?"  But then he reduces it to the brand's "story line." 

"Marketing," he tells us, "is a business in which the best story that's most aggressively  deployed wins."   But that's only part of the secret.  The real trick is designing products that serve a higher purpose and then making sure that everything that follows is aligned with it.  That's something General Mills has mastered across its product line, from its iconic cereal brands to its yogurt and baked goods.  Maybe that's why its revenue is up 8 percent and its operating profit rose 4 percent.

Demon to Darling

Happy Today’s Wall Street Journal (subscription required) marvels at Wal-Mart’s recent transformation “from Demon to Darling.”  It credits the company’s transformation to communications czar Leslie Dach, a former Democratic operative and executive at Edelman PR.  Dach deserves a lot of credit, but the roots of the company’s makeover is more than skin deep and it’s not the product of wordsmithing or sharp elbowed “truth squads.” 

Wal-Mart tried that early in Dach’s tenure when it began punching back at critics out of a political campaign-like “war room” and built its own front groups.  Nothing seemed to work.  In fact, some of the stealth campaigns backfired when the media tumbled to them. 

Ironically, it took a hurricane to help the company realize that actions spoke louder than words. When Wal-Mart was quicker than the government and many charitable organizations to get relief supplies to Hurricane Katrina’s victims along the Gulf Coast, CEO Lee Scott realized that it had the power to positively influence communities. 

He decided to rebuild the company’s reputation by taking credible action on two burning issues – sustainability and health care.  The retailer offered lower cost health insurance to its own employees, started selling generic drugs for $4, and opened in-store health clinics, which offer low-priced services from vaccinations to cholesterol screening.  It set aggressive targets for energy conservation and reduced waste, became the world’s largest buyer of organic cotton, sold more organic milk and produce than any other retailer, sold more green-friendly products like energy-saving fluorescent bulbs, and made selling local produce a priority. 

Jim Prevor, a long-time Wal-Mart observer, who publishes a newsletter called The Perishable Pundit, found the secret behind the company’s greening.  "Helping the environment is an area where Wal-Mart felt culturally comfortable,” he said. “It could maintain its core values of eliminating waste and driving costs down while reducing packaging and creating energy-efficient stores."  Plus, he might have added, it was good for the bottom line. 

Wal-Mart’s actions were not a cynical attempt to distract its critics.  They were the product of a new understanding of a company’s place in society.  The company isn’t perfect, but it deserves credit for its efforts.