Monthly Archives: November 2011

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To Protect, To Serve – Really!

Some things are not right.  Given the current economic turmoil around us, there seems to be an abundance of things that are not right.  It’s almost eerie how the public debate ebbs and flows as we near year-end from one troubling scenario to another.  A quick gaze through recent headlines gives even the most hardened cynic pause in light of the values so many people with different points of view might otherwise consider to be common ground.

Our government is teetering on the edge of being unable to govern.  It is almost impossible for the average American to believe that party divide has accelerated to such a level of dysfunction that we can no longer take for granted the day-to-day work of ensuring the well-functioning of basic social institutions.  We granted Congress the opportunity to redeem its inexcusable failure in not reaching agreement earlier this year on the debt ceiling through an extended negotiation through this week via an appointed Super Committee — and they failed again.  They literally gave up, threw up their hands and said sorry, we can’t find a way to do this, “we” cannot agree.  The “we” referenced is the “we in Congress, not the “we who elected them.”  It is not so much that they failed to make “a deal” as much as it is that they failed to prove the vitality of our democracy, that at its core our celebrated process of governing by, for, and of the people is dependable.  Government failed, and that is not OK.

Last week we learned that one former Speaker of the House does not see an issue with accepting a seven-figure payday from now bankrupt Freddie Mac for providing consulting services of an undefined value other than to say its business model was problematic.  Another former Speaker of the House does not think it necessary to respond to the question of whether being invited to participate in an IPO is a potential conflict of interest for an elected official entrusted with legislating financial policies.  Neither of those is OK.

We also recently got to hear the lavishly compensated CEOs of Fannie and Freddie tell a Congressional panel that they needed to have discretion to continue to pay taxpayer funded bonuses to prevent further brain drain in their organizations.  What talent is it that they need to protect?  They are bankrupt.  Can they be less bankrupt with better paid people to mop up the remains?  National unemployment is still above 9%, many of those people with accounting degrees and MBAs who really want to work.  Bonuses paid from tax dollars are not OK.

Police at UC Davis assaulted non-violent demonstrators with pepper spray.  We have seen the video; there was no threat to the police, the demonstrators were exercising their Constitutional right to free speech and assembly.  For that, they were attacked by armed authorities.  That is not OK.

MF Global “can’t find” over a billion dollars of client money.  Their recent bankruptcy filing reveals sloppy and incomplete accounting throughout a period of aggressive and speculative bets on European debt.  The firm’s CEO was a former Governor, Senator, and CEO of one of the most substantial financial firms in the world.  That is not OK.

Students at a university rioted because their head football coach was terminated in light of a child abuse investigation where he did not report allegations to legal authorities.  They rioted — destroyed public property — because they were angry their football team might not have the leadership to continue winning.  That is not OK.

We also were asked to believe that pizza is a vegetable and should be classified as such for children in our schools.  Even Kermit the Frog found this appalling (for those who missed it, last weekend the Muppets dropped by SNL).   As Seth and Kermit expertly teed it up: Really, the food lobby actually thinks this is acceptable marketing?  No, that is not OK.

These are just a sample of the kind of news we hear daily, as if none of it is out of the ordinary, and all of it will somehow correct itself.  We are numb to hearing of crisis and scandal, and as angry as we become, we turn the page knowing that the next story will break soon enough, and we have to keep our wits about us.  Many of us wonder if these are extraordinary times, or just another chapter in our nation over which we will triumph.

I do think we will triumph, that the bad news can’t go on forever, but I see a very definite trend that will have to become primary before we get from here to there.  What is missing is leadership — true leadership, a sense that management is not good enough, that trust is a higher virtue and brings with it a burden of selfless decision-making.  We won’t get from here to there with party politics, blame, opportunism, poorly constructed argument, well-crafted media bites, or even anger.  We will get there when we chose courageous, well-versed leaders — government, business, and social — who have chosen the path of leadership for the right reasons, where integrity in articulating a vision and administering an agenda far outweighs the perks and power of the office.  The rewards of leadership for those who have enjoyed it as intended are more intrinsic that extrinsic, much less tangible than we imagine from headlines of cynical manipulation, but until we elevate leadership that embraces a giving ethos into high level authority, we aren’t going to get from here to there.  We have to be involved in the selection process by the act of choosing to follow, and we have to demand better.  If we don’t, we’ll continue to be assaulted with more of the same — just like the pepper spray.

As I have written before, it is an honor and a privilege to lead.  If someone chooses to lead, they consistently must accept their responsibilities de facto with the interests of others put before their own gain.  When they do not, they compromise our trust and the fabric of social interaction suffers injury.  Let it happen too often and the very institutions we most cherish can lose all their meaning and authority.  This is not lofty, it is everyday behavior.  Leadership means accepting trust and being willing to be held to the standard of evaluation for that trust.  All leaders can benefit from a remedial lesson in why they have their jobs; if they fail to remind themselves, we need to help jog their memories.

This week we celebrate Thanksgiving.  We express appreciation for the blessings in our lives, for all we have that is good, for the good fortune we enjoy.  That does not mean we offer reprieve to the status quo or give a pass to those who have forgotten what they owe as a result of asking for our trust.  If someone has chosen as a life commitment to protect and to serve, he or she needs to be held accountable for that commitment.  They are responsible for the portfolio they have accepted to oversee or lead.  We are responsible to ensure that they act in the public interest where humility outweighs dissonance as most befits this gracious holiday.  Yes, really.

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Are We Thankful Enough?

The following is an edited version of a note I sent to my staff a few years ago.  I started to draft a new version, but then remembered how similar this was in theme:

Each year about this time I like to take a few minutes to share some of my gratitude with colleagues. Given the industry in which we work, it is sometimes hard to separate our business interests in the holiday season from our own more personal sense of human enrichment, but let me try. True enough, the holidays can be seen through the eyes of materialism, and indeed given our dependence and expectations on retail behavior this time of year, it is too easy to allow oneself to “Get Scrooged” without seeing some of the more enlightened generosity that is all around us. Forgive me, Shelley and I attended the annual tour of Trans-Siberian Orchestra this week, so I am in a highly festive and particularly reflective frame of mind. The work we do for our customers and each other is much more than a feeding of the virtual cash register for tabulation by the National Retail Federation. The work we do has meaning because we have chosen to share this time together and infuse it with meaning. It is there if you want to see it, and it is always there for me in each of your own creative contributions and team celebrations.

Let me start with the basics, I am thankful for all of the wonderful people around me each day. As I always say, I have good days and bad days but I never have boring days. The work we do is interesting because the people we share it with are universally interesting. Each day I see your passion expand, your thinking blossom, your communication flourish, and your expectations of yourselves and each other rise to new heights. This isn’t just invigorating for me, it is sustenance. There is reason to come to work each day as long as there is purpose in the day’s activity, and sometimes that purpose is simply rooted in the ability to learn something new. I can honestly share with you that I learn something new from the imagination that surrounds us each day, and I have no sense that has likelihood of disappointing me anytime soon.

I am thankful for the good fortune of being alive at this precise moment in history. To truly appreciate and understand the power of the Internet is to have lived without it for so many years before. I used to say this about the personal computer, that to discover it as an artist’s palette was for me not a continuation of history, but a reinvention of history. Just as many of our parents were born into a world without television, the advancement in democracy of being able to see news from around the world each day was almost a miracle, as was radio before that, and widely available print before that. To be alive today at the inception of the digital age is to me a gift as well as an invitation to have a profound impact on establishing a set of norms that are as evolutionary as they are unknown. Our younger kids see texting and mobile communications and even social networking as quite ordinary, if you were here before them, my sense is you share my awe in the privilege of codifying the extraordinary.

This takes me to my third thank you for the year, appreciation for being able to have even the smallest impact on reaching out to change our world. Our technology has impact, our creativity is unbounded, and our business relationships are honest and crafted around the principle of win-win-win: a win for us is a win for our partners and a win for our customers. You may not always get to work in a culture that embraces notions of empowerment, I certainly have had my own ups and downs over the years in various places I have worked. Yet more than that, we get do fun things like embrace Make-A-Wish kids, give thousands of prize dollars away to families who need it, offer great discounts to families who might not get by without them, help people make the world slightly greener by encouraging them not to drive somewhere if they can shop at home. We also save moms time, lots of time, time that can be better spent with their families enjoying more moments than they might otherwise spend away from home on errands and chores. No, it’s not the work of Mother Theresa, but it is very positive and uplifting, especially when you read all those comments each day from people saying they “love” what we do for them. That’s a powerful word, and each morning I read it in our customer comments, I know we are doing something right.

So I wonder, are we thankful enough? Can we make Thanksgiving something more than a time to power-eat and start charging up our credit cards on the big sales days that follow?  As we enjoy two days away from the office, what is it that we can reflect on that keeps us coming to the office? Thanks for our incomes – I am sure there are varying levels of satisfaction there, but to have a regular income is still unfortunately rare in world of six billion people. Thanks for the people who sit next to us, or in front of us, or in the next room over – again, I am sure there are some around us whom you like more than others, but then again, I am confident that every one of us is within talking distance of at least one or two people we really appreciate, and as I said, don’t take that as a given, it will not always be the case. Encouragement to pursue excellence – OK, I know there are cynics out there who say this is just work-speak, but I promise you it is not, we have created an environment where we expect you to do your best and create work that makes you immensely proud, you’d be missing an important moment if you didn’t embrace and enjoy that, a lot of places it really is just work-speak. And finally, memories and future foundations – the accomplishments we enjoy, the education we give and receive from each other, the stories we are creating to enjoy at a later date, all of that is worth a moment of meditation; time escapes us in precious illusion, and though you are likely to forget this project or that deadline in the years out, if you look around you and thank your colleagues from time to time for even the smallest favor, you just might be making history, as that could become a moment you will share for years to come.

Freedom is such a difficult concept to appreciate because most of us have always known it, it is in the fabric of our society. Yet again, look around, is it the norm or a gift we can cherish? As we keep the women and men who serve us in uniform at the top of our thoughts this time of year, perhaps we can also reflect on just what it means to have the lives that we do, where we can pursue career aspirations and friendships and family and creative contributions to our world all at the same time. As I type these words, it all seems like a pretty big deal to me. I wouldn’t take it for granted. To be thankful is to truly enjoy all that we have, and as I look around our company, I see that we all have so much. I am never sure that I can personally be thankful enough.

I hope you are all enjoying this special time of year, it comes with a lot of work stress and family stress and Scrooge-Stress! Yet the journey is the reward, so let’s do our best to enjoy it and share it and where it makes sense, be thankful. You’d be surprised, it really can be a magical world when you look for the magic in each of the people around you. I see it, so very clearly!

Happy Thanksgiving!

Originally published: 11/22/07

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Say It Loud

I like that people are speaking out.  I like that customers are letting corporations know what they think.  It’s good for democracy and free enterprise.  It’s great for business.

Bank Transfer DayLast week one individual, 27-year-old art gallery owner Kristen Christian, kicked off a true grass-roots movement that came to be known as Bank Transfer Day.  No one told her to do it, no giant entity or association formally backed her cause, she just did it and thousands of people got on board.  Since September 29, 2011 when Bank of America announced its $5.00 debit card fee, as many as 650,000 new credit union accounts have been opened.  This past week, Bank of America changed its mind about charging that fee.  You think they aren’t listening?  Maybe not as carefully as they should be, but it is clear some message got through.  This is how it should be.

Companies must never forget why they exist — to serve customers.  When they forget that, they are on a slippery slope.  Corporations can have a tendency to be inward thinking, they can focus with intense obsession on their internal issues, efficiencies, operations, politics, succession plans, and tactics for improved profitability.  Internal company struggles can become engrossing to the exclusion of more important matters, like creativity and customer focused quality.  When companies forget about customers, the other stuff ceases to matter.  They need to be reminded of that often and with passion.  Don’t feel bad when you complain or move your business, you are helping them.  They need to hear from us.  Our voice is vital to their survival.  If they don’t believe that and embrace it as a core value, creative destruction will do its job.

As I have written before, we are customers, we cannot allow ourselves to be reduced to the notion of being treated as consumers.  Customer service in a company needs to be both reactive and proactive:

Reactive customer service is when you call them to identify an issue or concern, the person on the phone or chat or responding to your email should do everything possible to solve your problem.  Great companies love these inbound calls, because each contact point is an opportunity to bond a customer for life.  If something goes wrong and a customer service person “makes the save,” your loyalty and lifetime value to that company can increase exponentially.  Conversely, if the customer service person manhandles the “win-back” moment, not only are you likely to be gone, you are likely to take a few dozen of your friends or the company’s future prospects from them, maybe more with the power of social media.  Again, you are doing the company a favor.  If you give them a chance to be helpful and they succeed, you have invested in their brand.  If they let you down, you teach them a lesson they need to learn quickly before their brand is permanently damaged.

Proactive customer service is the job of listening to customers before an action occurs, reading the trends and common themes that flow through the data bases of feedback systems.  Did banks know of the anger of the 650,000 customers who opened credit union accounts last month?  Some did and some didn’t.  Did they act in advance?  Did yours?  Why not?  If they are taking your business for granted, they deserve to lose it.  We all have options.  Proactive customer service focuses on retention activity in advance of crisis.  After crisis, it’s a public relations campaign, the spin doctors join the fray.  That may have worked a generation ago, but not so much today.  When we go, we are gone.

The Bank Transfer Day effort was careful to acknowledge that although it shared some inspiration from the activities of Occupy Wall Street, it was not part of that movement, it was its own thing.  Here again, the idea of customer voice is the key takeaway — what is being said, what is being heard, how can this help make systems function better?  Last week in the Wall Street Journal, Jeff Greene suggested the same basic idea, that “We Should Listen to the 99%” because they “are giving us a chance to address our problems before they grow worse.”  Neither Greene nor I are suggesting that every idea being articulated by OWS is necessarily actionable, but there is most certainly upside in listening and nothing but downside in ignoring the voices of passion.  If people have something to say, business is always well advised to listen.

And how about Congress, where the public approval rating dropped to 9%, are these elected officials not in need of working much harder at hearing?  Never has the need for the public’s voice been in more demand, and yet, as so many of us keep asking, is anyone listening?  The debt ceiling follow-up deadline for the Super Committee is November 23, just weeks away.  I don’t sense a consensus plan on the horizon or an amicable resolution, seems like business as usual in Washington to me.  Maybe we aren’t making enough phone calls or sending enough emails, we are much too polite.

It takes courage to speak out, to draw attention to oneself in a public forum and ask to be heard.  Likewise it takes courage in a corporation to align with the customer and advocate for improvements in the enterprise that cause customers to embrace goods and services along the lines of brand.  How much do banks spend on advertising to drive people through their doors?  What is the lifetime value of your business to a bank, to any company for that matter?  Can the banks not offer us valuable services over the course of a lifetime that produce reasonable profits?  Of course they can, or there would be no such sector.  While corporations worry about driving the value of their share prices, is there any better way to create value than to address customer needs and build lifelong customer relationships?  These are the backbone of profits, not much else that isn’t short-term financial engineering.  When innovation is applied to addressing real customer needs, good things happen for buyers and sellers.

It is so easy to give up and think that one individual cannot make a difference, but then someone like Kristen Christian comes along, fires up a Facebook page and shows us that there is power in the fabric of our nation.  That power of responsiveness is at the core of what can make a business great.  Our economic system can serve us well if we demand that it be responsive.  Don’t be quiet.  If you have something to say, say it and share it and drive the companies who need to earn your respect to work harder for the privilege to serve you.  When businesses listen they can only get better, help them to hear you by being brave and bold and honest.  A robust feedback loop makes good business sense, and everyone can have a say in that.  This is a business proposal with unlimited potential.

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Brand vs. Direct: Must We Choose?

My distinguished colleague Gene Del Vecchio sent me some insightful follow-up thoughts to my post last week on advertising. Gene’s credentials in this area are much deeper than my own, with more than thirty years of advertising experiencing rising to the level of SVP at the renowned agency Ogilvy & Mather. He is an award-winning expert on advertising research, and also a successful author of non-fiction and fiction books, including the data-driven breakthrough Creating Blockbusters!

Gene’s point was that the distinction between brand and direct response advertising is a label, sometimes artificial and not necessarily useful except by executives managing ad budgets, often on the agency side. As simply stated as possible as handed down by legends like David Ogilvy and Leo Burnett—the individuals, not the agencies—all advertising has a single purpose: to sell products. Image is nice, awards are nice, clever memories are nice—but if the shirt doesn’t sell, it’s a cruddy shirt ad.

Gene summarized his point of view as follows:

The distinction between “branded” and “direct” is a red herring. If I advertise a movie on Thursday, I expect people in seats on Friday. Isn’t that direct? Sure it is. Simply because the time delay was 24 hours instead of 12 seconds, people are likely to say otherwise. These two disciplines need desperately to merge into ONE that both brands and sells. They are kept apart because many clients view them as silos. Adding to this is that agencies often hold these disciplines in two different groups with separate profit & loss responsibilities. Brand account managers at agencies don’t want to give up money to their counterparts in direct, and vice versa. Agencies also tend to have their highest profit margins in television ads, more than direct response campaigns, thus the agency business model with its higher overhead tends to favor the bucket called brand advertising. This is a battle on three fronts: 1) a philosophical battle of what is brand vs. direct; 2) a mechanical tracking battle regarding how to measure the effect of each; and 3) a business model battle regarding how agencies make their money.

Creating BlockbustersGene is a wise and honest fellow. I admire his candor which is firmly grounded in extensive experience. Surely an account executive would argue his or her job is always to do what is in the client’s best interest, but if they are doing what they believe is in the client’s best interest and it happens to be on the more profitable side of the agency’s business, one would have a hard time criticizing that as anything but a win-win. Rather than argue the potential conflict in an agency’s interest vs. that of the client, I find it more interesting to consider whether Gene’s suggestion that the distinction between brand and direct marketing has become anachronistic, and that this is yet another topic where we ought best to Think Different.

Few who have survived long careers in media would argue that brand advertising is meant to do anything other than sell products, and in that respect it has the same intention as direct response advertising. Long before the internet or digital platforms were available, long before the 1000 television channel universe, marketing budgets were allocated by clients as an acceptable percentage of total sales volume, invested in multi-platform campaigns that included TV, Print, Radio, and Outdoor. Sales expectations were set to evaluate Return on Ad Spend (ROAS). The concept of buying a carefully constructed and flexible campaign was investment driven, leading some forward-thinking corporate heads of marketing like Sergio Zyman at Coca-Cola to begin thinking of themselves as CMOs, or Chief Marketing Officers. If funds were invested and returns did not appear, they were accountable, and yes, these jobs have always been volatile. When CMOs turn over, ad agency accounts often come up for review, also a very volatile affair. While some agencies like Ogilvy and Burnett were well-known for keeping clients for ten, twenty, even thirty years, it was not because of Clio Awards, it was because of sales results. Anything less than accountability and ad business would be in jeopardy.

As more technologies became more available to CMOs and award-winning TV commercial directors found paths to becoming movie directors, a notion of image advertising entered the equation—as if to suggest that some advertising was meant to sell and some advertising was meant to make you feel good about a brand. Gene’s argument, with which I concur, is that makes no sense at all. If the advertising does not result in sales growth relatively soon—the car ad putting a perspective buyer in the showroom, a movie ad putting weekend butts in seats— it really doesn’t much matter how people feel about the Chevy brand or the Indiana Jones brand.

The job of an ad is to create action. A nice step in that direction might be a feel-good moment, but without action, no one paying for an ad cares a hoot about ” feel good.” Clients pay for an ad for a reason, and they don’t much care about trophies or “best-of round ups.” If the stuff they advertise is stuck in the warehouse, they are out of business. There are no more ads to buy next year, just burned creditors seeking liquidation crumbs.

At the same time advertising options became more creatively interesting and diverse, direct response mail and television infomercials touted their accountability. You mailed this many pieces, it cost you this much, you got this many orders, your cost per acquisition was at your target, live long and prosper. All of that may have been true, but with response rates worth celebrating at well under 5%, it was hard to argue the same kind of waste identified in TV epic brand spots wasn’t to be found in direct marketing initiatives—if you can get a 5% response rate, why can’t you get 10%, or 50%, or 100%? Why do we have to accept the old adage that in any campaign 50% of your ad dollars are always wasted, you just don’t know which 50% went up in smoke? And why can’t your direct response campaign have a residual brand effect, so that even if you don’t buy now, you might buy later, and if you do buy now, you might remember to buy again later? How do these urban legends become generally accepted principles, simply because they produce positive return on investment, however marginal?

Along comes perhaps the most important advancement in advertising since the thirty-second TV spot—the internet keyword ad generated by search engine marketing—and suddenly we begin touting 100% accountability in advertising. You pick the words you want to buy, you set your parameters for the auction, you pay your bill, and you get your orders. Perfect, right? Well, not exactly. You still pay for a lot of clicks that produce no value, factoring these as negative offsets to the profitable transactions of the campaign, and you feel a little better because you only pay for the clicks, not the impressions. The question is, can you or should you be getting residual brand or feel-good value for these unprofitable clicks, and if you aren’t, can you at least get some residual or byproduct brand value from the impressions that people are seeing even though the are costing you nothing? If you can, you have discovered advertising nirvana, which is precisely Gene’s point on bridging the applied and artificial distinction between brand and direct response marketing. Gene calls this finding the Golden Goose:

The key for both brand and direct response marketing has always been this: SELL IN A BRANDED WAY. TV, radio, print, and outdoor should create an image that sells. Internet clicks should create an image as they sell. That has been a rallying cry at agencies for years. Have they attained it? Sometimes yes and most times no. These two tools should also work in concert, together, as part of an overall strategy, and not thought of as mutually exclusive. The trick is to find the right balance of each, given each brand’s strategic objectives and its consumer’s decision-making process. The blend creates a consumer driven contact strategy, where you cannot tell where brand leaves off and direct begins, because they are part of the same whole.

I like the way Gene is thinking here. I find his approach to be liberating and aspirational. Will it be easy? No, but why should anyone in media get paid for what is easy? Can we get better at what we do and make our tools and platforms work harder for the people paying the bills? We better, or we ought not expect our invoices to continue getting paid. As the world becomes more flat, the notion of separate creative buckets becomes harder to defend. It’s time to be less defensive and get on offense, applying higher level creativity to more difficult problems of client advocacy, focused communication, and customer call to action.