The Best of All Ms
Paul Herbig
I often tell my classes that Marketing is the most important of all the business disciplines. Although I teach marketing and have lived and breathed (and if I am cut I bleed Marketing red) for twenty-five years, I am really not biased. So let me count the ways for you.
In business, if you look at an enterprise in its rawest form, there are only 3 things you can do: Manufacture a product, Market the product, or count the Money (3Ms). Before you invest in all the facilities necessary to make the product you had better determine if there is sufficient customers to make your operation profitable (marketing) and that the product you are indeed designing and plan to manufacture will meet those customers’ needs (marketing). Customers are needed to buy those products before you make them so they need be sold (marketed) before you can manufacture any products. Similarly, unless the products are sold (marketed) you will not have any money to count. Therefore of all the 3Ms, Marketing is primary and must take precedent over the other two if the company has any chance of surviving let alone thriving and making profits.
Still not convinced? What do you believe was the amount of world trade during 2002? In the U.S. alone, trade (imports and exports together)(products and/or services that crossed the border from or to the United States) is rapidly approaching $2 Trillion annually. That may sound (and is) large but many countries’ trade accounts for twice to three times the percentage of GDP that occurs in the U.S. It is safe to say the worldwide trade is trillions of Dollars. So what does this have to do with marketing. Before any product is traded across the border, a sale must have taken place between the two parties doing the trading. Once again, marketing. Without marketing taking place, trade would not occur and the world economic system would come to an abrupt halt (okay, perhaps I am exaggerating a slight bit here). By the same token, every dollar in the GDP (Gross Domestic Product) of the US (nearly $10 trillion) reflects an exchange that has taken place between a buyer and seller and a recognition that an act of marketing has occurred that hopefully betters both the buyer and seller.
Without marketing, new products would not be produced nor purchased by customers. Unless a customer knows about a new product and its features and benefits (Publicity), likelihood of purchase is small. A customer must then have his interest awoken for the product and understand how the product will satisfy needs and make life better (advertising). The product must be easily available to the customer wherever and whenever the customer wants the product (distribution). The product must be priced at a comparable point where it provides sufficient value for the dollar paid yet provides sufficient profit for the company to continue to manufacture the product. And finally, the customer must be assured the product will continue to work as promised (customer service), is aware of support activities to allow the customer to fully utilize the product, and has a migration path to upgrade or replace the product when it is obsolete or a newer product becomes available.
Experts estimate that marketing related jobs account for between one-quarter and one-third (25 to 33%) of all jobs in this country. Other estimates are that marketing costs as a percentage of every dollar in revenue received averages 50% (in some industry such as food processing this percentage can go as high as 70% while for most organizational pursuits it will be 30-35).
Truly, Marketing does make the world go round
Sunday, July 27, 2008
Thursday, July 24, 2008
Undercover marketing
Undercover Marketing
By Paul A. Herbig
Advertising has become advertising ad nauseum, and we are forever being pitched to, marketed to, and appealed to by someone trying to sell us something. If you find that troubling, the companies trying to sell you stuff aren't too thrilled either. They're finding it harder and harder in this assault of advertising to get your attention, and are coming up with inventive - even devious - ways of grabbing you. This is called "undercover marketing" -- marketing by masquerade, or stealth marketing. Somewhere in downtown New York, a secret plan is being hatched. A handpicked team of attractive, approachable guns-for-hire has been tapped to go undercover. They've been assembled by a company called Essential Reality, which has launched a new product called the "P-5 Glove," a cutting-edge device that video-gamers can use to fly planes and fire weapons on their computers, with the twitch of a finger.
“We're gonna go into coffee bars and crowded places,” says one marketer. “Your job is to go out there and have fun with it. And say, ‘Yeah sure, c'mon you wanna try it? Great, try it,’ and then all of the sudden you just involve them with the brand. And then feed them a few sound bites along the way: ‘Hey, you're in there. It's, like, look at this, it's like you're in the game. It's like you're in the game’ -- that's a good sound bite.”
Inside a nearby Starbucks, Theo and Kumani could be any of a million 20-somethings hanging out, obsessed with their new toy, not pitching anything, just waiting for someone to approach them. "How long have you had this," asks a curious bystander. " I've had it a few days. They had a whole lot, I got a lot of product information," says Theo. "It works really well. Try it on for a minute, you'll see this thing moves fluidly." "Okay, I'll try it," the man says, playing right into Theo’s hands. After the temptation, Theo offers to email him information about the product, making sure he never lets on that he’s on the job. No one is overtly trying to sell you anything, only trying to get you to want it, and then, of course, buy it and tell your friends about it. It’s not a soft sell or a hard sell. It’s a secret sell.
Malcolm Gladwell, who wrote about such things in his book, "The Tipping Point," thinks undercover marketing is a bit of a con game: “Well, there's an element, obviously, of deception involved that I don't think is the case in conventional advertising. Conventional advertising is about trying to charm us or trying to persuade us. But it's not usually about trying to trick us. And it's the trickery part I think, that makes this different.” But there is deception in all advertising. For example, the cars you see on television are slicker, faster, and shot in a particular way to make them look even better than they may look in a showroom. But there's a set of rules that govern a lot of advertising and we're aware of the rules,” says Gladwell. “We’re aware that the woman in the advertising for Ivory Soap is prettier than most women in our lives. A line is crossed, I think, when you go outside of those normal boundaries and start to deceive people in ways that they are, where they are totally unwitting to what's going on.”
"Cool new products" are the lifeblood of undercover marketing, and these are the kinds of people the marketers want to get them to not just buy, but get them talking about a product. But can buzz be manufactured?
“Part of what makes real word of mouth so powerful is the understanding we have from, that the person telling us about it is telling us about it for, for disinterested reasons,” says Gladwell. “They're not being paid by somebody. They have our interests at heart. That is worlds apart from a situation where the person telling us something is telling us that because they have some private agenda. They're getting paid, they're being planted.” “My problem with undercover marketing is not what happens in the moment. It's what happens a week, or two weeks, or a month down the road,” adds Gladwell. “When we discover we've been duped. And I think that the moment when we discover we've been duped causes a backlash. Companies who engage in this practice are courting that backlash. And that's a very, very dangerous thing to play with.”
The consumers in the examples above were unaware that they were being pitched to every time they were offered a drink. These painfully hip party animals do not seem a bit curious that the only alcohol being poured is a new brand called Turi Vodka -- nobody hyping anything, just pouring. David Elias, CEO of a marketing company called "Soulkool," ran the vodka operation. He's the man to go to if you want to influence the choices of that fickle, unpredictable 20-something demographic. He made a deal with the hottest club in town: to only push Turi Vodka at this party, hoping to start a vodka buzz..
“This is not the old theory. This is the new way of doing it. The clutter in the marketplace, people feeling like they're marketed to all the time, that kind of message for this demographic doesn't work,” says Elias. “It really, they're not interested. They want to know about it from a friend of theirs that's in the know, that keeps up with the trends. And that way it's very subtle.”
Subtle is Elias' weapon of choice. On the day 60 Minutes visited, Soulkool operatives were going undercover on the Internet, promoting the movie "Cowboy Bebop," an animated feature. Soulkool employees, all of them barely in their 20s, boost the promotion by flooding Internet chat rooms and message boards with rave reviews for the movie. Soulkool does not mention any professional affiliation, so the kids who read their messages have no idea they're talking to a paid marketer, hired to plug the movie. And it's not just Soulkool employees who are doing the plugging.
There's Lucas Schlager, a 13-year-old Cowboy Bebop fanatic, one of 350 volunteers across the country enlisted by Soulkool to hype the movie in exchange for T-shirts and posters. From the comfort of his Long Island bedroom, Lucas spends hours in chat rooms, typing and hyping away. “Thirteen different chats and four message boards, multiple postings. And I would just, you know, completely tell everything about this movie. And just get people to go see it,” says Schlager. Lucas sometimes mentions Soulkool in his chats, but often he doesn't. The other person has no idea he's dealing with a marketer. Undercover marketing hasn't eclipsed the old fashioned kind, but it's growing. And if you think you haven't run into an undercover marketer yet, well, that's the point.
Considerable risks do exist. If marketers fail to hide their vested interest in selling a product, they run condsiderable risk of backlash. Cases where consumers have found out they have been manipulated into liking the product, they generally become angry at the marketer (and by association that product) over being mislead. This indignation has lead some to apply more derogatory names to undercover marketing, such as roach baiting, likening the products marketed this way to poison. In some cases, the amount of buzz generated by a failed campaign can exceed that of a successful one, only with the opposite of the desired result.
When targeting consumers known to be consistent Internet users, undercover marketers have taken a significant interest in leveraging Internet chat rooms and forums. In these settings, people tend to perceive everyone as peers, the semi-anonymity reduces the risk of being found out, and one marketer can personally influence a large number of people. During the dot com boom at the turn of the century, stock promoters frequently used chat rooms to create a buzz and drive up the price of a stock.
Whatever the risks, undercover marketing only requires a small investment for a large potential pay off. It remains a cheap and effective way of generating buzz, especially in markets such as Tobacco and alcohol where media-savvy target consumers have become increasingly resistant or inaccessible to other forms of advertising.
Paul Herbig is the Managing Partner of Herbig Marketing Associates, (www.herbigandsons.com) a nationally renown marketing consulting company and former Professor Marketing and Dean, Ketner School of Business for Tri-State University. He can be contacted at mktgandme@aol.com.
By Paul A. Herbig
Advertising has become advertising ad nauseum, and we are forever being pitched to, marketed to, and appealed to by someone trying to sell us something. If you find that troubling, the companies trying to sell you stuff aren't too thrilled either. They're finding it harder and harder in this assault of advertising to get your attention, and are coming up with inventive - even devious - ways of grabbing you. This is called "undercover marketing" -- marketing by masquerade, or stealth marketing. Somewhere in downtown New York, a secret plan is being hatched. A handpicked team of attractive, approachable guns-for-hire has been tapped to go undercover. They've been assembled by a company called Essential Reality, which has launched a new product called the "P-5 Glove," a cutting-edge device that video-gamers can use to fly planes and fire weapons on their computers, with the twitch of a finger.
“We're gonna go into coffee bars and crowded places,” says one marketer. “Your job is to go out there and have fun with it. And say, ‘Yeah sure, c'mon you wanna try it? Great, try it,’ and then all of the sudden you just involve them with the brand. And then feed them a few sound bites along the way: ‘Hey, you're in there. It's, like, look at this, it's like you're in the game. It's like you're in the game’ -- that's a good sound bite.”
Inside a nearby Starbucks, Theo and Kumani could be any of a million 20-somethings hanging out, obsessed with their new toy, not pitching anything, just waiting for someone to approach them. "How long have you had this," asks a curious bystander. " I've had it a few days. They had a whole lot, I got a lot of product information," says Theo. "It works really well. Try it on for a minute, you'll see this thing moves fluidly." "Okay, I'll try it," the man says, playing right into Theo’s hands. After the temptation, Theo offers to email him information about the product, making sure he never lets on that he’s on the job. No one is overtly trying to sell you anything, only trying to get you to want it, and then, of course, buy it and tell your friends about it. It’s not a soft sell or a hard sell. It’s a secret sell.
Malcolm Gladwell, who wrote about such things in his book, "The Tipping Point," thinks undercover marketing is a bit of a con game: “Well, there's an element, obviously, of deception involved that I don't think is the case in conventional advertising. Conventional advertising is about trying to charm us or trying to persuade us. But it's not usually about trying to trick us. And it's the trickery part I think, that makes this different.” But there is deception in all advertising. For example, the cars you see on television are slicker, faster, and shot in a particular way to make them look even better than they may look in a showroom. But there's a set of rules that govern a lot of advertising and we're aware of the rules,” says Gladwell. “We’re aware that the woman in the advertising for Ivory Soap is prettier than most women in our lives. A line is crossed, I think, when you go outside of those normal boundaries and start to deceive people in ways that they are, where they are totally unwitting to what's going on.”
"Cool new products" are the lifeblood of undercover marketing, and these are the kinds of people the marketers want to get them to not just buy, but get them talking about a product. But can buzz be manufactured?
“Part of what makes real word of mouth so powerful is the understanding we have from, that the person telling us about it is telling us about it for, for disinterested reasons,” says Gladwell. “They're not being paid by somebody. They have our interests at heart. That is worlds apart from a situation where the person telling us something is telling us that because they have some private agenda. They're getting paid, they're being planted.” “My problem with undercover marketing is not what happens in the moment. It's what happens a week, or two weeks, or a month down the road,” adds Gladwell. “When we discover we've been duped. And I think that the moment when we discover we've been duped causes a backlash. Companies who engage in this practice are courting that backlash. And that's a very, very dangerous thing to play with.”
The consumers in the examples above were unaware that they were being pitched to every time they were offered a drink. These painfully hip party animals do not seem a bit curious that the only alcohol being poured is a new brand called Turi Vodka -- nobody hyping anything, just pouring. David Elias, CEO of a marketing company called "Soulkool," ran the vodka operation. He's the man to go to if you want to influence the choices of that fickle, unpredictable 20-something demographic. He made a deal with the hottest club in town: to only push Turi Vodka at this party, hoping to start a vodka buzz..
“This is not the old theory. This is the new way of doing it. The clutter in the marketplace, people feeling like they're marketed to all the time, that kind of message for this demographic doesn't work,” says Elias. “It really, they're not interested. They want to know about it from a friend of theirs that's in the know, that keeps up with the trends. And that way it's very subtle.”
Subtle is Elias' weapon of choice. On the day 60 Minutes visited, Soulkool operatives were going undercover on the Internet, promoting the movie "Cowboy Bebop," an animated feature. Soulkool employees, all of them barely in their 20s, boost the promotion by flooding Internet chat rooms and message boards with rave reviews for the movie. Soulkool does not mention any professional affiliation, so the kids who read their messages have no idea they're talking to a paid marketer, hired to plug the movie. And it's not just Soulkool employees who are doing the plugging.
There's Lucas Schlager, a 13-year-old Cowboy Bebop fanatic, one of 350 volunteers across the country enlisted by Soulkool to hype the movie in exchange for T-shirts and posters. From the comfort of his Long Island bedroom, Lucas spends hours in chat rooms, typing and hyping away. “Thirteen different chats and four message boards, multiple postings. And I would just, you know, completely tell everything about this movie. And just get people to go see it,” says Schlager. Lucas sometimes mentions Soulkool in his chats, but often he doesn't. The other person has no idea he's dealing with a marketer. Undercover marketing hasn't eclipsed the old fashioned kind, but it's growing. And if you think you haven't run into an undercover marketer yet, well, that's the point.
Considerable risks do exist. If marketers fail to hide their vested interest in selling a product, they run condsiderable risk of backlash. Cases where consumers have found out they have been manipulated into liking the product, they generally become angry at the marketer (and by association that product) over being mislead. This indignation has lead some to apply more derogatory names to undercover marketing, such as roach baiting, likening the products marketed this way to poison. In some cases, the amount of buzz generated by a failed campaign can exceed that of a successful one, only with the opposite of the desired result.
When targeting consumers known to be consistent Internet users, undercover marketers have taken a significant interest in leveraging Internet chat rooms and forums. In these settings, people tend to perceive everyone as peers, the semi-anonymity reduces the risk of being found out, and one marketer can personally influence a large number of people. During the dot com boom at the turn of the century, stock promoters frequently used chat rooms to create a buzz and drive up the price of a stock.
Whatever the risks, undercover marketing only requires a small investment for a large potential pay off. It remains a cheap and effective way of generating buzz, especially in markets such as Tobacco and alcohol where media-savvy target consumers have become increasingly resistant or inaccessible to other forms of advertising.
Paul Herbig is the Managing Partner of Herbig Marketing Associates, (www.herbigandsons.com) a nationally renown marketing consulting company and former Professor Marketing and Dean, Ketner School of Business for Tri-State University. He can be contacted at mktgandme@aol.com.
Echo boomers
Echo Boomers
By Paul Herbig
Echo boomers (sometimes called Generation Y) have a lot going for them. These children of the baby boomers were born from 1980 through 1994. These teens and young adults are as a whole an extremely confident group. They think they are smart. They know what they want out of life and are willing to work hard to get it.
Echo Boomers value authenticity and autonomy. Among 14- to 18-year-olds, 80% have a clear idea of objectives and goals in life; 76% of 18- to 24-year-olds know what they want and 71% said they know how to get it. And they're willing to work hard (81%) to come out on top. The vast majority believes they are really good at their jobs.
Echo Boomers also feel they are smarter than the average Joe. Some 62% of 12- to 17-year-olds think they are smarter than most kids their age. Sixty-three percent of the 18- to 24-year-old group think their IQ is higher than average (mimicking the Lake Wobegon effect where everyone was above average). When it came to critiquing the business world and media, Echo Boomers saw some credibility issues. Some 71% of the 18-to-24 group believe that most businesses would take advantage of the public. Another 82% are skeptical about what they see in the media.
Few Echo Boomers, a mere 2%, said they trust magazine ads or TV and radio commercials. None trusted the Internet. They are looking for integrity, for credibility, for truth in advertising and the media, for someone or something that they can trust. Always telling the truth was high on the list of things that are important to Echo Boomers. They want to be seen as people that tell the truth, that their integrity is beyond question. And they want to be seen as people that can see through the exaggeration and the hype.
These young people have been shaped by a wide range of influences, from TiVo to being able to select the color of an M&M for worldwide distribution, to their parents. They are the beneficiaries of a new focus on family thanks to their Boomer moms and dads. Some 78% of Echoes indicated that having a good relationship with their kids is a sign of success and accomplishment, compared to 66% in 2001. More Echoes (52%) say their parents tell them what they can and cannot watch on TV versus 43% in 1999.
They are remarkably accepting of differences and different choices. Some eight to 10 people between the ages of 18 and 24 said it was OK to do what you want. Other characteristics include:
*48% of Echoes are looking forward to the day when they can affect what happens in a TV program.
*68% will buy a different brand just to see what its like (17- to 24-year-olds).
*19% subscribe to fewer magazines than they did one year ago citing a busy schedule and the ability to get the information free online.
*53% said it is very important to make time to relax, compared to 41% in 1997.
*42% want to know more about stress.
These young consumers are influenced by friends more than ads. Trying to market a personal technology product to Gen Y? Getting their ear may take some doing. A new study from market research firm GMI shows this demographic is more receptive to word of mouth than advertising. Among respondents age 18 to 29, 44 percent said they
were influenced by advertising, while 67 percent cited recommendations from friends as an influence (respondents could choose more than one option). In contrast, 58.5 percent of boomers say that word of mouth or friends' opinions influence their decisions to buy.
Echo boomers are bombarded by advertising and do not know what they can and cannot trust; as a result, the only thing they can really trust is a friend. This phenomena can also be seen in the the growing popularity of online networking sites like Myspace , Facebook, and Friendster, which easily let consumers (mostly echoboomers) solicit opinions from a large group of people.
The next wave of consumers is upon us now and they are nothing like we have ever seen before. Get to know them and their needs and special ways of operating. The alternative is an early exit from the game.
Paul Herbig is the Managing Partner of Herbig Marketing Associates, (www.herbigandsons.com) a nationally renown marketing consulting company and former Professor Marketing and Dean, Ketner School of Business for Tri-State University. He can be contacted at mktgandme@aol.com.
By Paul Herbig
Echo boomers (sometimes called Generation Y) have a lot going for them. These children of the baby boomers were born from 1980 through 1994. These teens and young adults are as a whole an extremely confident group. They think they are smart. They know what they want out of life and are willing to work hard to get it.
Echo Boomers value authenticity and autonomy. Among 14- to 18-year-olds, 80% have a clear idea of objectives and goals in life; 76% of 18- to 24-year-olds know what they want and 71% said they know how to get it. And they're willing to work hard (81%) to come out on top. The vast majority believes they are really good at their jobs.
Echo Boomers also feel they are smarter than the average Joe. Some 62% of 12- to 17-year-olds think they are smarter than most kids their age. Sixty-three percent of the 18- to 24-year-old group think their IQ is higher than average (mimicking the Lake Wobegon effect where everyone was above average). When it came to critiquing the business world and media, Echo Boomers saw some credibility issues. Some 71% of the 18-to-24 group believe that most businesses would take advantage of the public. Another 82% are skeptical about what they see in the media.
Few Echo Boomers, a mere 2%, said they trust magazine ads or TV and radio commercials. None trusted the Internet. They are looking for integrity, for credibility, for truth in advertising and the media, for someone or something that they can trust. Always telling the truth was high on the list of things that are important to Echo Boomers. They want to be seen as people that tell the truth, that their integrity is beyond question. And they want to be seen as people that can see through the exaggeration and the hype.
These young people have been shaped by a wide range of influences, from TiVo to being able to select the color of an M&M for worldwide distribution, to their parents. They are the beneficiaries of a new focus on family thanks to their Boomer moms and dads. Some 78% of Echoes indicated that having a good relationship with their kids is a sign of success and accomplishment, compared to 66% in 2001. More Echoes (52%) say their parents tell them what they can and cannot watch on TV versus 43% in 1999.
They are remarkably accepting of differences and different choices. Some eight to 10 people between the ages of 18 and 24 said it was OK to do what you want. Other characteristics include:
*48% of Echoes are looking forward to the day when they can affect what happens in a TV program.
*68% will buy a different brand just to see what its like (17- to 24-year-olds).
*19% subscribe to fewer magazines than they did one year ago citing a busy schedule and the ability to get the information free online.
*53% said it is very important to make time to relax, compared to 41% in 1997.
*42% want to know more about stress.
These young consumers are influenced by friends more than ads. Trying to market a personal technology product to Gen Y? Getting their ear may take some doing. A new study from market research firm GMI shows this demographic is more receptive to word of mouth than advertising. Among respondents age 18 to 29, 44 percent said they
were influenced by advertising, while 67 percent cited recommendations from friends as an influence (respondents could choose more than one option). In contrast, 58.5 percent of boomers say that word of mouth or friends' opinions influence their decisions to buy.
Echo boomers are bombarded by advertising and do not know what they can and cannot trust; as a result, the only thing they can really trust is a friend. This phenomena can also be seen in the the growing popularity of online networking sites like Myspace , Facebook, and Friendster, which easily let consumers (mostly echoboomers) solicit opinions from a large group of people.
The next wave of consumers is upon us now and they are nothing like we have ever seen before. Get to know them and their needs and special ways of operating. The alternative is an early exit from the game.
Paul Herbig is the Managing Partner of Herbig Marketing Associates, (www.herbigandsons.com) a nationally renown marketing consulting company and former Professor Marketing and Dean, Ketner School of Business for Tri-State University. He can be contacted at mktgandme@aol.com.
Customer Experience
The Customer Experience—easier said than done
By Paul Herbig
The Customer Experience - it's the sum total of the FEELINGS evoked as a result of ANY interaction that takes place at ANY touch point in the
organization. It's based on the PERCEPTION of the value
delivered, both tangible and intangible. Most companies talk the good talk about customers, about customers being their number one priority, about being a customer centric organization. But when push comes to shove, the customer gets the short stick.
Once upon a time, quite recently, Delta Air Lines surveyed some of its customers, asking whether they'd be willing to pay a fee to talk to U.S.-based customer-service representatives rather than having their calls directed offshore. Frequent fliers were outraged, and before long a frank op-ed article by the company's chief customer-service officer appeared in The Atlanta Journal-Constitution . In it, she renounced the plan, quoted CEO Gerald Grinstein -- "That darn question should never have been on a survey" -- and noted that "creating a 'customer-focused culture' is a central element of a new plan to transform Delta and its business model."
True, the folks at Delta are in quite a pickle, and you can't blame them for brainstorming ways to save cash. But their example illustrates the issues at play for consumers today. Market forces such as offshoring are transforming service. Too many CEOs are removed from the customer. Coddling customers can seem like an expensive frill in tough times, a cost to be cut when it's time to make next quarter's number. And yet more and more companies are talking about creating a more customer-focused culture. "I think people are starting to understand that the customer experience is the next competitive battleground," says Tom Knighton, who heads the customer-experience practice at consulting firm Forum Corp. "It's where business is going to be won or lost."
But as Delta shows, talking about focusing on the customer and actually doing it are two completely different things. That's what makes truly customer-centric companies so worthy of our attention. They constantly try to innovate and manage based on what their customers want, not just on what they can sell to them. They do not delegate the customer experience to marketing or operations; it is a core function that has support at the highest levels of leadership. Companies that put customers first win their loyalty, and in our minds deserve to win even more.
The names that often float to the top were those that not only provide good service but a rich experience, too. The total customer experience -- the service, the quality, the design, the brand attributes -- connects on an emotional level, keeping customers satisfied and feeling well-served, as well as loyal. Chick-fil-A bonds with its customers through friendly, speedy service and by communicating its values of humility and compassion. Wegmans builds a marketplace-style atmosphere that's underpinned by its employees' deep knowledge. Mini USA engages its impatient customers with fun, customizable technology. Trader Joe's feeds customers with its authenticity and uniqueness. And Progressive reassures its insurance customers during a time of crisis through on-the-spot service.
Two categories also clearly emerged as more important than the rest. They are, not surprisingly, the ones that most depend on people. Without customer-centered leadership and without the right employees in place to deliver great service, other plans and programs won't amount to much. In fact, many customer-focused leaders talk about the value of putting employees first. Take care of your staff, this thinking goes, and they'll take care of your customers. Put your customer first and they will take care of you first.
A few extra bucks for customer service, a few extra bucks for trained staff, a few extra bucks for incentives to provide superior customer service, will pay off 100 to 1. With odds like that, it is surprising more companies do not gamble on a sure thing such as customer service.
Paul Herbig is the Managing Partner of Herbig Marketing Associates, (www.herbigandsons.com) a nationally renown marketing consulting company and former Professor Marketing and Dean, Ketner School of Business for Tri-State University. He can be contacted at mktgandme@aol.com.
By Paul Herbig
The Customer Experience - it's the sum total of the FEELINGS evoked as a result of ANY interaction that takes place at ANY touch point in the
organization. It's based on the PERCEPTION of the value
delivered, both tangible and intangible. Most companies talk the good talk about customers, about customers being their number one priority, about being a customer centric organization. But when push comes to shove, the customer gets the short stick.
Once upon a time, quite recently, Delta Air Lines surveyed some of its customers, asking whether they'd be willing to pay a fee to talk to U.S.-based customer-service representatives rather than having their calls directed offshore. Frequent fliers were outraged, and before long a frank op-ed article by the company's chief customer-service officer appeared in The Atlanta Journal-Constitution . In it, she renounced the plan, quoted CEO Gerald Grinstein -- "That darn question should never have been on a survey" -- and noted that "creating a 'customer-focused culture' is a central element of a new plan to transform Delta and its business model."
True, the folks at Delta are in quite a pickle, and you can't blame them for brainstorming ways to save cash. But their example illustrates the issues at play for consumers today. Market forces such as offshoring are transforming service. Too many CEOs are removed from the customer. Coddling customers can seem like an expensive frill in tough times, a cost to be cut when it's time to make next quarter's number. And yet more and more companies are talking about creating a more customer-focused culture. "I think people are starting to understand that the customer experience is the next competitive battleground," says Tom Knighton, who heads the customer-experience practice at consulting firm Forum Corp. "It's where business is going to be won or lost."
But as Delta shows, talking about focusing on the customer and actually doing it are two completely different things. That's what makes truly customer-centric companies so worthy of our attention. They constantly try to innovate and manage based on what their customers want, not just on what they can sell to them. They do not delegate the customer experience to marketing or operations; it is a core function that has support at the highest levels of leadership. Companies that put customers first win their loyalty, and in our minds deserve to win even more.
The names that often float to the top were those that not only provide good service but a rich experience, too. The total customer experience -- the service, the quality, the design, the brand attributes -- connects on an emotional level, keeping customers satisfied and feeling well-served, as well as loyal. Chick-fil-A bonds with its customers through friendly, speedy service and by communicating its values of humility and compassion. Wegmans builds a marketplace-style atmosphere that's underpinned by its employees' deep knowledge. Mini USA engages its impatient customers with fun, customizable technology. Trader Joe's feeds customers with its authenticity and uniqueness. And Progressive reassures its insurance customers during a time of crisis through on-the-spot service.
Two categories also clearly emerged as more important than the rest. They are, not surprisingly, the ones that most depend on people. Without customer-centered leadership and without the right employees in place to deliver great service, other plans and programs won't amount to much. In fact, many customer-focused leaders talk about the value of putting employees first. Take care of your staff, this thinking goes, and they'll take care of your customers. Put your customer first and they will take care of you first.
A few extra bucks for customer service, a few extra bucks for trained staff, a few extra bucks for incentives to provide superior customer service, will pay off 100 to 1. With odds like that, it is surprising more companies do not gamble on a sure thing such as customer service.
Paul Herbig is the Managing Partner of Herbig Marketing Associates, (www.herbigandsons.com) a nationally renown marketing consulting company and former Professor Marketing and Dean, Ketner School of Business for Tri-State University. He can be contacted at mktgandme@aol.com.
New brands over old
New Brands 7 Old Brands 3
By Paul Herbig
Consumers are embracing new brands at the expense of more established brands, researchers say. The difficulty brands face in differentiating themselves in ways that are meaningful to consumers is an outgrowth of this finding. That newer brands are showing up and replacing older brands must serve as a warning to established brands to consolidate their customer base or risk seeing newer, trendier brands appropriate their customers and markets. Some examples are Google superseding Microsoft and Verizon overwhelming ATT. Meanwhile Starbucks falls—it is yesterday’s brands, old news.
Your customer's conception of your brand is formed from his first
experience or "imprint" with your company, or more generally, with the
products you sell. But emotion is required to instill a strong memory. So one way to regroup and win the brand wars, to take back what newer brands have conquered from you, is to be fixated on the emotional aspect of your brand. Folgers Coffee, for instance, was able to make use of the first impression consumers had with coffee, which is its scent. People smell the product when they are children, long before they're old enough to drink it. The scent becomes linked in a person's mind with his mother making coffee in the kitchen as she prepares to feed him. Almost all coffee drinkers love the smell of it, while only considerably fewer drink it because they like the taste. So Folgers created an ad campaign centered on the smell rather than taste of its product. This is the reason that commercials for Folgers focus on the customer opening the package and
savoring the scent, rather than on the actual experience of drinking
it.
The main reason a scent linked with family and the consumer's mother is
so powerful is that the home is part of a category of subconscious motivations termed "reptilian," meaning they are prehistoric instincts geared towards survival and reproduction into the next generation. These are the most compelling motivations. The reptilian always wins when people are trying to figure
out what to do. The second class of motivation is "limbic," or governed by the limbic system in the brain that controls emotion. This is the category of motivations where the differences in how men and women react to products and advertising campaigns can be seen. While men are akin to a simple box with an on/off switch, women are more like a box that has multiple options to choose from.
Some reasons for brands being "revived" and a few examples:
1. Some products die because they lose novelty, and novelty is part of
why people buy. So they are revived after a period of time because
novelty can be present again. TV shows like Scooby Doo reflect this
(and some movies). Fashion products are the same... lots of fads
come and go. The rationale seems to be similar to the TV
rationale... a fad/fashion loses novelty after a while, but can come
back later.
2. Some products are deficient and the brand goes away but is revived
when the product gets fixed. Red M&Ms are not a brand, but
illustrates a product that was deficient. The original Red M&Ms had a
dye that the FDA said was unhealthy. So Red M&Ms were taken off the
market 30 years ago. But later a new dye was developed that was safe, so Red M&Ms came back. The new Maytag Neptune Washing machines are another example. The old front-load washers died out because they were technologically deficient... they sometimes leaked water and were replaced by top-load washers. But the leak problems were solved, and front-load washers require less water and have been revived a bit.
3. Some markets are stimulated with a new product, and that revives the
category and with the category some brands. An example is
coin collecting. Coin collecting in the US used to be more popular...
but almost died out. Then the country started to mint quarters from
each state, and coin collecting was revived somewhat, along with coin
collecting binders from companies that never quite died... so these
coin collecting tools were revived. The recent stimulation of diet
programs helped revive some brands that had lost steam, so that's
another example. A few poker chip brands are dominant and they have
been revived recently because of greater interest in poker, stoked by
the recent hold-um fad.
4. Some brands lose distribution and then are "revived" when
distribution muscle returns. An interesting example is Quisp cereal.
Quisp has been around for decades but distribution was scaled back
many years ago. The brand languishes but is still produced... you can
collect Quisp boxes online. Every now and then the
manufacturer needs a boost in cereal revenue and distributes the
product more heavily. So the brand is kept from death, and is revived
periodically for short gains.
Keep your brand fresh and it will keep your revenues fresher.
Paul Herbig is the Managing Partner of Herbig Marketing Associates, (www.herbigandsons.com) a nationally renown marketing consulting company and former Professor Marketing and Dean, Ketner School of Business for Tri-State University. He can be contacted at mktgandme@aol.com.
By Paul Herbig
Consumers are embracing new brands at the expense of more established brands, researchers say. The difficulty brands face in differentiating themselves in ways that are meaningful to consumers is an outgrowth of this finding. That newer brands are showing up and replacing older brands must serve as a warning to established brands to consolidate their customer base or risk seeing newer, trendier brands appropriate their customers and markets. Some examples are Google superseding Microsoft and Verizon overwhelming ATT. Meanwhile Starbucks falls—it is yesterday’s brands, old news.
Your customer's conception of your brand is formed from his first
experience or "imprint" with your company, or more generally, with the
products you sell. But emotion is required to instill a strong memory. So one way to regroup and win the brand wars, to take back what newer brands have conquered from you, is to be fixated on the emotional aspect of your brand. Folgers Coffee, for instance, was able to make use of the first impression consumers had with coffee, which is its scent. People smell the product when they are children, long before they're old enough to drink it. The scent becomes linked in a person's mind with his mother making coffee in the kitchen as she prepares to feed him. Almost all coffee drinkers love the smell of it, while only considerably fewer drink it because they like the taste. So Folgers created an ad campaign centered on the smell rather than taste of its product. This is the reason that commercials for Folgers focus on the customer opening the package and
savoring the scent, rather than on the actual experience of drinking
it.
The main reason a scent linked with family and the consumer's mother is
so powerful is that the home is part of a category of subconscious motivations termed "reptilian," meaning they are prehistoric instincts geared towards survival and reproduction into the next generation. These are the most compelling motivations. The reptilian always wins when people are trying to figure
out what to do. The second class of motivation is "limbic," or governed by the limbic system in the brain that controls emotion. This is the category of motivations where the differences in how men and women react to products and advertising campaigns can be seen. While men are akin to a simple box with an on/off switch, women are more like a box that has multiple options to choose from.
Some reasons for brands being "revived" and a few examples:
1. Some products die because they lose novelty, and novelty is part of
why people buy. So they are revived after a period of time because
novelty can be present again. TV shows like Scooby Doo reflect this
(and some movies). Fashion products are the same... lots of fads
come and go. The rationale seems to be similar to the TV
rationale... a fad/fashion loses novelty after a while, but can come
back later.
2. Some products are deficient and the brand goes away but is revived
when the product gets fixed. Red M&Ms are not a brand, but
illustrates a product that was deficient. The original Red M&Ms had a
dye that the FDA said was unhealthy. So Red M&Ms were taken off the
market 30 years ago. But later a new dye was developed that was safe, so Red M&Ms came back. The new Maytag Neptune Washing machines are another example. The old front-load washers died out because they were technologically deficient... they sometimes leaked water and were replaced by top-load washers. But the leak problems were solved, and front-load washers require less water and have been revived a bit.
3. Some markets are stimulated with a new product, and that revives the
category and with the category some brands. An example is
coin collecting. Coin collecting in the US used to be more popular...
but almost died out. Then the country started to mint quarters from
each state, and coin collecting was revived somewhat, along with coin
collecting binders from companies that never quite died... so these
coin collecting tools were revived. The recent stimulation of diet
programs helped revive some brands that had lost steam, so that's
another example. A few poker chip brands are dominant and they have
been revived recently because of greater interest in poker, stoked by
the recent hold-um fad.
4. Some brands lose distribution and then are "revived" when
distribution muscle returns. An interesting example is Quisp cereal.
Quisp has been around for decades but distribution was scaled back
many years ago. The brand languishes but is still produced... you can
collect Quisp boxes online. Every now and then the
manufacturer needs a boost in cereal revenue and distributes the
product more heavily. So the brand is kept from death, and is revived
periodically for short gains.
Keep your brand fresh and it will keep your revenues fresher.
Paul Herbig is the Managing Partner of Herbig Marketing Associates, (www.herbigandsons.com) a nationally renown marketing consulting company and former Professor Marketing and Dean, Ketner School of Business for Tri-State University. He can be contacted at mktgandme@aol.com.
Customer loyalty
Give me Loyalty or give me death!!
By Paul Herbig
Does loyalty in a business relationship actually exist? Loyalty is something you give to your country, your family, your friends. It is an absolute willingness to do something that could be against your own best interest. In its most intense form, you give your life for your country or to save a member of your family. It is a principle of profound faith. What it isn't is a marketing term denoting a customer's commitment to a business. As the old axiom spouted by my old mentor goes, “When prices goes up, loyalty goes out.”
Loyalty doesn't have a bi-directional requirement, but the relationship between customers and a business demands that two-way street. In its simplest form, a customer relationship with business is a value exchange. As the business provides a level of value satisfactory to a customer, so the customer provides value in return to the business. The customer retains that commitment as long as the business continues to provide the expected value. But when you stop meeting the customer's expectations of value, that customer goes elsewhere.
Is your business actually loyal to its customers? Then why would you need algorithms for customer lifetime value? Customer profitability shouldn't matter to a company that is loyal to the person, rather than to the long-term revenue potential of that possibly committed customer. Should it? Are your customers loyal to you? The expected churn rate for the telco industry is 77 million customers moving on to other telcos. Know how the telcos are going to deal with it? Not find out who have been the most committed customers with weakening ties, but who the most profitable customers with weakening ties are so they can try to manage the churn and keep those profitable customers.
But, you say, these things happen in business. Exactly. This is why there
is no such thing as customer loyalty. Business practice demands that customers be valued for their profitability and revenue possibilities, not for their emotional commitments to you or vice versa .So, CRM folks and aspiring English majors, get your language straight. Let's not denigrate loyalty with the needs of business. Call it customer commitment if you want, but business value exchanges don't equate with a deeply
held, deeply felt fundamental principle for country, friends, and family.
If you think they do, then I'd recommend a prenup. After all, "till death
do us part" is a business proposition, right?
The concept of loyalty, especially brand loyalty is misunderstood by many marketers. The love marketers have for specific demographics (particularly the young 18-30 group) is based upon the theory that once a person becomes brand loyal, that person is brand loyal for rest of their entire life. This is also why, marketers have taken to themselves to begin the marketing process with children, some even preschool age. They believe a form of indocrination: once smitten with my brand, no matter what my age, they will be forever brand loyal.
But that is not how life operates. A pre-teen girl could be in love with Barbie and American Girl. However, once she becomes a teenager, she overthrows her dolls for boys. As a pre-teen or tween, she might readily wear clothing that Hannah Montana or her other favorite shows might suggest. However, as an adolescent teen, she turns to Aeropostale or Hilfinger, whatever the current fad is by her social group. And when she goes to College, she changes again. After college with a career, she turns in her jeans and tees for more fashionable clothes. As she marries and has a family, she once again makes a change. And so forth until her apparel at the nursing home or retirement facility is a far cry what she started out decades ago.
Loyalty is not a one time affair. It must be constantly won and rewon. Never take a consumer for granted. Many have done so and have ended up on the scrapheap of history for doing so.
Paul Herbig is the Managing Partner of Herbig Marketing Associates, (www.herbigandsons.com) a nationally renown marketing consulting company and former Professor Marketing and Dean, Ketner School of Business for Tri-State University. He can be contacted at mktgandme@aol.com.
By Paul Herbig
Does loyalty in a business relationship actually exist? Loyalty is something you give to your country, your family, your friends. It is an absolute willingness to do something that could be against your own best interest. In its most intense form, you give your life for your country or to save a member of your family. It is a principle of profound faith. What it isn't is a marketing term denoting a customer's commitment to a business. As the old axiom spouted by my old mentor goes, “When prices goes up, loyalty goes out.”
Loyalty doesn't have a bi-directional requirement, but the relationship between customers and a business demands that two-way street. In its simplest form, a customer relationship with business is a value exchange. As the business provides a level of value satisfactory to a customer, so the customer provides value in return to the business. The customer retains that commitment as long as the business continues to provide the expected value. But when you stop meeting the customer's expectations of value, that customer goes elsewhere.
Is your business actually loyal to its customers? Then why would you need algorithms for customer lifetime value? Customer profitability shouldn't matter to a company that is loyal to the person, rather than to the long-term revenue potential of that possibly committed customer. Should it? Are your customers loyal to you? The expected churn rate for the telco industry is 77 million customers moving on to other telcos. Know how the telcos are going to deal with it? Not find out who have been the most committed customers with weakening ties, but who the most profitable customers with weakening ties are so they can try to manage the churn and keep those profitable customers.
But, you say, these things happen in business. Exactly. This is why there
is no such thing as customer loyalty. Business practice demands that customers be valued for their profitability and revenue possibilities, not for their emotional commitments to you or vice versa .So, CRM folks and aspiring English majors, get your language straight. Let's not denigrate loyalty with the needs of business. Call it customer commitment if you want, but business value exchanges don't equate with a deeply
held, deeply felt fundamental principle for country, friends, and family.
If you think they do, then I'd recommend a prenup. After all, "till death
do us part" is a business proposition, right?
The concept of loyalty, especially brand loyalty is misunderstood by many marketers. The love marketers have for specific demographics (particularly the young 18-30 group) is based upon the theory that once a person becomes brand loyal, that person is brand loyal for rest of their entire life. This is also why, marketers have taken to themselves to begin the marketing process with children, some even preschool age. They believe a form of indocrination: once smitten with my brand, no matter what my age, they will be forever brand loyal.
But that is not how life operates. A pre-teen girl could be in love with Barbie and American Girl. However, once she becomes a teenager, she overthrows her dolls for boys. As a pre-teen or tween, she might readily wear clothing that Hannah Montana or her other favorite shows might suggest. However, as an adolescent teen, she turns to Aeropostale or Hilfinger, whatever the current fad is by her social group. And when she goes to College, she changes again. After college with a career, she turns in her jeans and tees for more fashionable clothes. As she marries and has a family, she once again makes a change. And so forth until her apparel at the nursing home or retirement facility is a far cry what she started out decades ago.
Loyalty is not a one time affair. It must be constantly won and rewon. Never take a consumer for granted. Many have done so and have ended up on the scrapheap of history for doing so.
Paul Herbig is the Managing Partner of Herbig Marketing Associates, (www.herbigandsons.com) a nationally renown marketing consulting company and former Professor Marketing and Dean, Ketner School of Business for Tri-State University. He can be contacted at mktgandme@aol.com.
Pay me per view
Pay Me Per View
By Paul A. Herbig
In a world where consumers are empowered to choose the content (and advertising) they view, a number of entrepreneurs are developing environments that "force" consumers, through a variety of incentives, to watch and recall advertising. Many consumers are highly skeptical of such schemes, They don't allow consumers to absorb messages in an natural environment. But they seem to be getting both consideration and test budgets from many leading marketers.
Ads.com. existed a few years ago and was the first property to devote an entire Web destination to advertising (and to consumers who love it). Its mantra was "all ads, all the time." Its rapid fall from grace and dramatic business failure spoke volumes about consumers' lack of interest in viewing marketing messages. But at least they tried and are to be considered by many to be the pioneer of continuous ads (“All Ads, All the time” would be their slogan if they were a radio station.)
Then came alladvantage.com, billing itself as "the nation's #1 employer."
It paid millions of consumers to surf and click on ads. Another crash and
burn. Two down and countless many more to go. Undaunted, a few new efforts are underway to pay consumers to watch video ads online. If viewers answer a few questions correctly about the ads (to ensure they take away the salient points), they get paid.
One such effort, which rewards consumers with 50 cents in their PayPal
accounts for each correctly retained commercial, is BrandPort.
The company has supposedly received test money from leading marketers who are seeing "tremendous results." Other companies also pay consumers (either in cash or with credits) to watch and retain ads.
One place where paying to view ads has been in existence for decades is the movie theatre. Moviegoers do not like this practice but it is common and many purposedly arrive later than the scheduled time just to miss the requisite advertising. This may cause you to throw popcorn at the screen, but a new study finds that in-cinema ads are effective. The results clearly demonstrate that consumers bond with brands they see advertised in-cinema, driving consideration and purchase intent, leading to brand trial and loyalty. Testing commercials across various categories — packaged goods, automotive, consumer electronics, apparel and fast food restaurants — the study found that moviegoers who saw in-theater advertising were 44% more likely to remember an ad than consumers who saw it on TV.
Additional findings comparing in-cinema advertising to traditional media:
* Moviegoers who saw cinema advertising are 70% more likely to correctly identify the advertised brands
* Moviegoers are nearly 70% more likely to be motivated by in-cinema ads
* Up to one week after seeing commercial at the movies, nearly half of consumers could name the specific brands they saw advertised
* Moviegoers are also more likely to exhibit increased interest in the advertised brands, have a better opinion of the brands and talk to others about a point brought out in the ad.
Several companies are already excited by the study. A recent announcement by Sony Ericksson mobile phones that it would dedicate a significant portion of its media launch to a theater-buy shows that the category has broken out of the candy advertisers that traditionally dominated this category. Advertisers like the ability to target a captive audience that
doesn't have channel zappers and to hit them with all of the potential offered by the big-screen media.
It looks like moviegoers are going to have to get used to looking at ads, whether they like them or not. When something works, everyone wants to use it. Moviegoers do not start panicking quite yet. Loews Cineplex Entertainment has found a compromise to meet moviegoers' wishes to have the actual start times of feature films, opting to note in movie listings that the movie will start 10 to 15 minutes after the published show time.
As we say in the marketing business, Point-counterpoint: Advertisers make their move, consumers counterpunch. A long battle that will never end.
Paul Herbig is the Managing Partner of Herbig Marketing Associates, (www.herbigandsons.com) a nationally renown marketing consulting company and former Professor Marketing and Dean, Ketner School of Business for Tri-State University. He can be contacted at mktgandme@aol.com.
By Paul A. Herbig
In a world where consumers are empowered to choose the content (and advertising) they view, a number of entrepreneurs are developing environments that "force" consumers, through a variety of incentives, to watch and recall advertising. Many consumers are highly skeptical of such schemes, They don't allow consumers to absorb messages in an natural environment. But they seem to be getting both consideration and test budgets from many leading marketers.
Ads.com. existed a few years ago and was the first property to devote an entire Web destination to advertising (and to consumers who love it). Its mantra was "all ads, all the time." Its rapid fall from grace and dramatic business failure spoke volumes about consumers' lack of interest in viewing marketing messages. But at least they tried and are to be considered by many to be the pioneer of continuous ads (“All Ads, All the time” would be their slogan if they were a radio station.)
Then came alladvantage.com, billing itself as "the nation's #1 employer."
It paid millions of consumers to surf and click on ads. Another crash and
burn. Two down and countless many more to go. Undaunted, a few new efforts are underway to pay consumers to watch video ads online. If viewers answer a few questions correctly about the ads (to ensure they take away the salient points), they get paid.
One such effort, which rewards consumers with 50 cents in their PayPal
accounts for each correctly retained commercial, is BrandPort.
The company has supposedly received test money from leading marketers who are seeing "tremendous results." Other companies also pay consumers (either in cash or with credits) to watch and retain ads.
One place where paying to view ads has been in existence for decades is the movie theatre. Moviegoers do not like this practice but it is common and many purposedly arrive later than the scheduled time just to miss the requisite advertising. This may cause you to throw popcorn at the screen, but a new study finds that in-cinema ads are effective. The results clearly demonstrate that consumers bond with brands they see advertised in-cinema, driving consideration and purchase intent, leading to brand trial and loyalty. Testing commercials across various categories — packaged goods, automotive, consumer electronics, apparel and fast food restaurants — the study found that moviegoers who saw in-theater advertising were 44% more likely to remember an ad than consumers who saw it on TV.
Additional findings comparing in-cinema advertising to traditional media:
* Moviegoers who saw cinema advertising are 70% more likely to correctly identify the advertised brands
* Moviegoers are nearly 70% more likely to be motivated by in-cinema ads
* Up to one week after seeing commercial at the movies, nearly half of consumers could name the specific brands they saw advertised
* Moviegoers are also more likely to exhibit increased interest in the advertised brands, have a better opinion of the brands and talk to others about a point brought out in the ad.
Several companies are already excited by the study. A recent announcement by Sony Ericksson mobile phones that it would dedicate a significant portion of its media launch to a theater-buy shows that the category has broken out of the candy advertisers that traditionally dominated this category. Advertisers like the ability to target a captive audience that
doesn't have channel zappers and to hit them with all of the potential offered by the big-screen media.
It looks like moviegoers are going to have to get used to looking at ads, whether they like them or not. When something works, everyone wants to use it. Moviegoers do not start panicking quite yet. Loews Cineplex Entertainment has found a compromise to meet moviegoers' wishes to have the actual start times of feature films, opting to note in movie listings that the movie will start 10 to 15 minutes after the published show time.
As we say in the marketing business, Point-counterpoint: Advertisers make their move, consumers counterpunch. A long battle that will never end.
Paul Herbig is the Managing Partner of Herbig Marketing Associates, (www.herbigandsons.com) a nationally renown marketing consulting company and former Professor Marketing and Dean, Ketner School of Business for Tri-State University. He can be contacted at mktgandme@aol.com.
Trends in Advertising
Trends in Advertising
By Paul Herbig
Advertising has ventured into new areas, gray areas, in a similar obvious mood to capture the attention of a desired target audience.
1) First, they're spending more in odd places. Not just on traditional TV ads, but a wide range of interesting and obscure media. Campbell's Soup bought ads on parking meters. Macy's spends a fortune each year on its Thanksgiving parade. Kellogg's has spent millions building a presence on the World Wide Web-a fascinating way to sell cereal.
Companies have seen that a mass-market broadcast strategy isn't working as well as it used to, especially when targeting the hard-to-reach upper income demographic. As this lucrative audience spends less time watching TV, marketers are working overtime trying to find media with less clutter, where their interruption techniques can be more effective.
Marketers hire Catalina Corporation to print their coupons on the back of receipts at the grocery store. They buy ads on the floor of the cereal aisle. There are ads atop taxis in New York City and on the boards around the rink at the hockey game. Fox even figured out a way to sell the rights to the small area over the catcher's shoulder, so TV viewers would see the ad throughout an entire baseball game.
(2) The second technique is to make advertisements ever more controversial and entertaining. Coca-Cola hired talent agency CAA to enlist top-flight Hollywood directors to make commercials. Candies features a woman sitting on a toilet in its magazine ads (for shoes!). Spike Lee's ad agency did more than fifty million dollars in billings last year.
Of course, as the commercials try harder to get your attention, the clutter becomes even worse. An advertiser who manages to top a competitor for the moment has merely raised the bar. Their next ad will have to be even more outlandish in order to top the competition, not to mention their previous ad, to keep the consumer's attention. The cost of making a first-rate TV commercial is actually far more, per minute, than a major Hollywood motion picture. Talking frogs, computer graphics and intense editing now seem to be a requirement.
A side effect of the focus on entertainment is that it gives the marketer far less time to actually market. In a fifteen second commercial (increasingly attractive as a cost-cutting way to interrupt people even more often), ten or even twelve seconds are devoted to getting your attention, while just a few heartbeats are reserved for the logo, the benefit and the call to action.
Take the interruption challenge! Write down all the companies who ran commercials during your favorite TV show last night. Write down all the companies that paid good money to buy banners on the Web during your last surfing expedition. If you can list more than ten percent of them, you're certainly the exception.
(3) The third approach used to keep mass marketing alive is to change ad campaigns more often in order to keep them "interesting and fresh." Tony the Tiger and Charlie Tuna and the Marlboro man are each worth billions of dollars in brand equity to the companies that built them. The marketers behind them have invested a fortune over the last forty years, making them trusted spokesmen (or spokesanimals) for their brands.
Nike, on the other hand, just ran a series of ads without the ‘swoosh’, arguably one of the most effective logos of the last generation. Apple Computer changes its tagline annually. Wendy's and McDonald's and Burger King jump from one approach to the other, all hoping for a holy grail that captures attention.
In exchange for these brief bits of attention (remember the hoopla when they replaced Mikey on the Life box?) these marketers are trading in the benefits of a long-term brand recognition campaign. It's a trade they're willing to make, because Interruption Marketing requires it. Without attention, there is no ad.
(4) The fourth and last approach, which is as profound as the other three, is that many marketers are abandoning advertising and replacing it with direct mail and promotions. Marketers now allocate about 52% of their annual ad budgets for direct mail and promotions, a significant increase over past years.
Of the more than $200 billion spent on consumer advertising last year in the US, more than $100 billion was spent on direct mail campaigns, in-store promotions, coupons, free standing inserts and other non-traditional media. Recently Wunderman, Cato, Johnson, did more than $1.6 billion in billings for its clients.
The next time you get a glossy mailing for a Lexus, or enter an instant win sweepstakes at the liquor store, you're seeing the results of this trend toward increased direct marketing efforts. Advertisers are using them because they work. They are somewhat more effective at interrupting you than an ad. They're somewhat more measurable than a billboard. Best of all, they give the marketer another tool to use in their increasingly frustrating fight against clutter. After all, there are only five or ten pieces of junk mail in your mailbox every day-not 3,000. And another few feet of shelf space at the supermarket can lead to a dramatic upturn in sales
A Providence based company pays collegians up to $150 to wear temporary logo tattoos on their foreheads for one week. Called Headvertise, eight clients have signed up, all seeking recognition in the coveted 18 to 24 crowd. Over fifty students have worn the decals. What next: ads on the cheeks for beachwear?
By Paul Herbig
Advertising has ventured into new areas, gray areas, in a similar obvious mood to capture the attention of a desired target audience.
1) First, they're spending more in odd places. Not just on traditional TV ads, but a wide range of interesting and obscure media. Campbell's Soup bought ads on parking meters. Macy's spends a fortune each year on its Thanksgiving parade. Kellogg's has spent millions building a presence on the World Wide Web-a fascinating way to sell cereal.
Companies have seen that a mass-market broadcast strategy isn't working as well as it used to, especially when targeting the hard-to-reach upper income demographic. As this lucrative audience spends less time watching TV, marketers are working overtime trying to find media with less clutter, where their interruption techniques can be more effective.
Marketers hire Catalina Corporation to print their coupons on the back of receipts at the grocery store. They buy ads on the floor of the cereal aisle. There are ads atop taxis in New York City and on the boards around the rink at the hockey game. Fox even figured out a way to sell the rights to the small area over the catcher's shoulder, so TV viewers would see the ad throughout an entire baseball game.
(2) The second technique is to make advertisements ever more controversial and entertaining. Coca-Cola hired talent agency CAA to enlist top-flight Hollywood directors to make commercials. Candies features a woman sitting on a toilet in its magazine ads (for shoes!). Spike Lee's ad agency did more than fifty million dollars in billings last year.
Of course, as the commercials try harder to get your attention, the clutter becomes even worse. An advertiser who manages to top a competitor for the moment has merely raised the bar. Their next ad will have to be even more outlandish in order to top the competition, not to mention their previous ad, to keep the consumer's attention. The cost of making a first-rate TV commercial is actually far more, per minute, than a major Hollywood motion picture. Talking frogs, computer graphics and intense editing now seem to be a requirement.
A side effect of the focus on entertainment is that it gives the marketer far less time to actually market. In a fifteen second commercial (increasingly attractive as a cost-cutting way to interrupt people even more often), ten or even twelve seconds are devoted to getting your attention, while just a few heartbeats are reserved for the logo, the benefit and the call to action.
Take the interruption challenge! Write down all the companies who ran commercials during your favorite TV show last night. Write down all the companies that paid good money to buy banners on the Web during your last surfing expedition. If you can list more than ten percent of them, you're certainly the exception.
(3) The third approach used to keep mass marketing alive is to change ad campaigns more often in order to keep them "interesting and fresh." Tony the Tiger and Charlie Tuna and the Marlboro man are each worth billions of dollars in brand equity to the companies that built them. The marketers behind them have invested a fortune over the last forty years, making them trusted spokesmen (or spokesanimals) for their brands.
Nike, on the other hand, just ran a series of ads without the ‘swoosh’, arguably one of the most effective logos of the last generation. Apple Computer changes its tagline annually. Wendy's and McDonald's and Burger King jump from one approach to the other, all hoping for a holy grail that captures attention.
In exchange for these brief bits of attention (remember the hoopla when they replaced Mikey on the Life box?) these marketers are trading in the benefits of a long-term brand recognition campaign. It's a trade they're willing to make, because Interruption Marketing requires it. Without attention, there is no ad.
(4) The fourth and last approach, which is as profound as the other three, is that many marketers are abandoning advertising and replacing it with direct mail and promotions. Marketers now allocate about 52% of their annual ad budgets for direct mail and promotions, a significant increase over past years.
Of the more than $200 billion spent on consumer advertising last year in the US, more than $100 billion was spent on direct mail campaigns, in-store promotions, coupons, free standing inserts and other non-traditional media. Recently Wunderman, Cato, Johnson, did more than $1.6 billion in billings for its clients.
The next time you get a glossy mailing for a Lexus, or enter an instant win sweepstakes at the liquor store, you're seeing the results of this trend toward increased direct marketing efforts. Advertisers are using them because they work. They are somewhat more effective at interrupting you than an ad. They're somewhat more measurable than a billboard. Best of all, they give the marketer another tool to use in their increasingly frustrating fight against clutter. After all, there are only five or ten pieces of junk mail in your mailbox every day-not 3,000. And another few feet of shelf space at the supermarket can lead to a dramatic upturn in sales
A Providence based company pays collegians up to $150 to wear temporary logo tattoos on their foreheads for one week. Called Headvertise, eight clients have signed up, all seeking recognition in the coveted 18 to 24 crowd. Over fifty students have worn the decals. What next: ads on the cheeks for beachwear?
Portability
Portability. Now You can take it with you!!
By Paul Herbig
.
Cellphones highly competitive before have now become almost volatile.
Portability: switch vendors and still have same cell number. You may be able to buy the phone from one vendor, service from a second, and have the same cell number you obtained earlier from a third vendor. This presents a whole new twist to the world of cellular phones. Whereupon earlier vendors could use a lock-in strategy, this is not possible any more.
In an industry already plagued with a 25 percent annual customer attrition rate, one estimate is that out of the 145 million cell phone customers in the U.S., an additional 10 to 12 million customers will switch, increasing the expected attrition rate to as high as 35%. Even this number could be low.
Marketing strategy is to lock-in customer through some non-duplicable property of the product offered. For example, Sun computers operate on their own operating system. Many high level Enterprise software systems (that operate the overall business entity) are not compatible with others competitive systems, you must often reconfigure your computing system and ways of business around their software. Your people must be trained on their system. And a definite learning curve is evident; it may take a year or more before you become truly proficient on the system. From a vendor’s point-of-view, this is most preferable situation—a truly captive customer base. You can give considerable abuse to your customers once you have locked them in, raise prices as often as contractually permitted, provide poor to non-existent service, and the customers often have no choice but to stick with you (sounds sort of like the local cable company doesn’t it) because they are locked in. To change vendors or systems would incur considerable “switching costs” which most customers really do not want to pay. So they stay. And you can boast about your large customer base but rarely do you mention anything about customer satisfaction. And rarely do you provide references or give testimonials. But it can be quite profitable.
That is, for a while. Then it will catch up with you. Sooner or later the dam will break. Even with tremendous switching costs, at some point customer’s ire will overcome and take the plunge and costs necessary to switch vendors. Good luck on every getting them back. Or technology changes (as it did from word processing units to PCs) which make switching to the new technology a requirement and switching costs become mute in the vendor selection process (as you must pay them no matter which vendor you select). Even if your current vendor decides to upgrade and offer the new technology, you escape as fast as you can. So lock-in (get ‘em and string’ em) strategy is a short run success (short run being 5-8 years) but does not offer longer sustainable advantages. It works much like a crooked used car dealership: you must continually be looking for new customers. Even with proprietary software or patents or processes, lock-in without customer focused marketing is not viable in the long run.
Now that cellular companies cannot use the lock-in strategy and must compete for customers head=on, what will they do? History tells us there are only 3 viable strategies: low-cost, focused, or differentiated. Usually only one company can be the low-cost vendor. We are likely to see numerous companies during vie for that position but only one will survive to fulfill that niche (And become known as the ‘Walmart of cellphones’?). Price competition will be fierce but only one firm will become the price leaders.
Other companies will attempt to be the generalists, something for everybody. This too is not a winning strategy as if you stand for everything, you stand for nothing. The fall from grace of the generalist department stores show the end path for that strategy. If you build devices that everyone can use for all options for all, it will be either too bulky, too expensive, have too many functions most people will not want, or be just plain undesirable by many segments. Some generalists may survive but a few and not well.
Others could well zero in on specialty segments: teens, Gen Y’ers, parents, etc and work to become expert on that segment and offer phones keyed to that segment’s special needs. You are already seeing some of that in action as phones for teens and tweens are being marketed that are considerably different than those for businesspersons. This strategy has its down side: being a niche player does not make you a market leader and has limited upside potential but it can certainly be profitable. This is the route I believe most players in the cell market will take if they expect to be in for the long run.
Who says you can’t take it with you!!
Paul Herbig is managing Partner of Herbig Marketing Associates, (www.herbigandsons.com) a marketing consulting company and former Professor Marketing and Dean, Ketner School of Business for Tri-State University. He can be contacted at mktgandme@aol.com.
By Paul Herbig
.
Cellphones highly competitive before have now become almost volatile.
Portability: switch vendors and still have same cell number. You may be able to buy the phone from one vendor, service from a second, and have the same cell number you obtained earlier from a third vendor. This presents a whole new twist to the world of cellular phones. Whereupon earlier vendors could use a lock-in strategy, this is not possible any more.
In an industry already plagued with a 25 percent annual customer attrition rate, one estimate is that out of the 145 million cell phone customers in the U.S., an additional 10 to 12 million customers will switch, increasing the expected attrition rate to as high as 35%. Even this number could be low.
Marketing strategy is to lock-in customer through some non-duplicable property of the product offered. For example, Sun computers operate on their own operating system. Many high level Enterprise software systems (that operate the overall business entity) are not compatible with others competitive systems, you must often reconfigure your computing system and ways of business around their software. Your people must be trained on their system. And a definite learning curve is evident; it may take a year or more before you become truly proficient on the system. From a vendor’s point-of-view, this is most preferable situation—a truly captive customer base. You can give considerable abuse to your customers once you have locked them in, raise prices as often as contractually permitted, provide poor to non-existent service, and the customers often have no choice but to stick with you (sounds sort of like the local cable company doesn’t it) because they are locked in. To change vendors or systems would incur considerable “switching costs” which most customers really do not want to pay. So they stay. And you can boast about your large customer base but rarely do you mention anything about customer satisfaction. And rarely do you provide references or give testimonials. But it can be quite profitable.
That is, for a while. Then it will catch up with you. Sooner or later the dam will break. Even with tremendous switching costs, at some point customer’s ire will overcome and take the plunge and costs necessary to switch vendors. Good luck on every getting them back. Or technology changes (as it did from word processing units to PCs) which make switching to the new technology a requirement and switching costs become mute in the vendor selection process (as you must pay them no matter which vendor you select). Even if your current vendor decides to upgrade and offer the new technology, you escape as fast as you can. So lock-in (get ‘em and string’ em) strategy is a short run success (short run being 5-8 years) but does not offer longer sustainable advantages. It works much like a crooked used car dealership: you must continually be looking for new customers. Even with proprietary software or patents or processes, lock-in without customer focused marketing is not viable in the long run.
Now that cellular companies cannot use the lock-in strategy and must compete for customers head=on, what will they do? History tells us there are only 3 viable strategies: low-cost, focused, or differentiated. Usually only one company can be the low-cost vendor. We are likely to see numerous companies during vie for that position but only one will survive to fulfill that niche (And become known as the ‘Walmart of cellphones’?). Price competition will be fierce but only one firm will become the price leaders.
Other companies will attempt to be the generalists, something for everybody. This too is not a winning strategy as if you stand for everything, you stand for nothing. The fall from grace of the generalist department stores show the end path for that strategy. If you build devices that everyone can use for all options for all, it will be either too bulky, too expensive, have too many functions most people will not want, or be just plain undesirable by many segments. Some generalists may survive but a few and not well.
Others could well zero in on specialty segments: teens, Gen Y’ers, parents, etc and work to become expert on that segment and offer phones keyed to that segment’s special needs. You are already seeing some of that in action as phones for teens and tweens are being marketed that are considerably different than those for businesspersons. This strategy has its down side: being a niche player does not make you a market leader and has limited upside potential but it can certainly be profitable. This is the route I believe most players in the cell market will take if they expect to be in for the long run.
Who says you can’t take it with you!!
Paul Herbig is managing Partner of Herbig Marketing Associates, (www.herbigandsons.com) a marketing consulting company and former Professor Marketing and Dean, Ketner School of Business for Tri-State University. He can be contacted at mktgandme@aol.com.
Where the boys where
Where the Boys Are
By Paul Herbig
During a recent Fall , advertisers and networks were surprised to find one coveted segment, Males 18 to 34, were MIA to the tube, down 7% from the previous year for all TV sets and down a whopping 22% for the major networks. NBC’s flagship youth sitcom lost nearly 30% of its young adult viewers over the previous year; Fox’s “24’ fell an equally remarkable 37% among those youthful viewers. Other productions showed a similar type of falloff among the desired market. The usual suspects were called in and interrogated at length: Nielsen. The networks accused Nielsen of sloppy research and claimed the ancient devices used by Nielsen were defective and not registering the correct numbers. After considerable deliberation and rechecking of the numbers, the jury found Nielsen not guilty and the facts were left as before (to put this in perspective, over the same timeframe, cable showed a high percentage growth and videogames, a twenty percent increase in games played).
Which brings us to: Where did the boys go? With over 500 cable/satellite channels, with channels for every niche and taste, with Pay-for-View, downloadable films, plentiful video rental outlets, with TIVO and recorders that allow them to view now and watch commercial-free later, with PCs that are becoming another entertainment vehicle, the options for entertainment are unlimited. With Ipods, Iphones, YouTube, MySpace, a host of other social networking web sites (Facebook, etc), Downloadable Programs and Movies, and Peer produced media, their options are becoming virtually unlimited. On demand videos, clips, links, you name it exists out there in virtual space. And advertisers are flocking to the net in droves trying to take advantage of the demographics that exist (and to a limited but trendy extent are replacing network TV ads for those on the web—how else would Google become so power and valuable so quickly?) They may be viewing, but not at the hour (8-11 prime time) nor channel (network TV) desired. They watch what they want, when they want it, and how they want it. The networks better accept this and work with it; the youth are not going to change; the networks must if they want to stay around.
Where are the boys going? Far, far away from Network TV. To Cable. To Video Games. To DVD. To whomever will provide them with the content they demand. Network programmers can either take the chance to provide the more controversial, extreme, programming the younger males are demanding (at the risk of offending the older clientele) or lose them to other media. It is not an easy decision. But all signs indicate to the first choice being made—at the risk of losing the older, more traditional clientele.
The networks must worry about the Oldsmobile effect: that misguided effort by GM to go after the youth market at any cost without regards to its potential effect upon its current users with the end result being not only not gaining the youth market but losing the seniors as well (who then left in droves saying in effect if they do not care about me-- “It is not your father’s Oldsmobile”—then whose is it anyway?-- why should I care about them) and hence leading to the demise of one of the great historic brands of the automotive marketplace. Seeing what has been playing on the tube lately and the resulting numbers, makes me believe they too will be just as successful as Oldsmobile was.
Only time will tell whether it was the right decision.
Paul Herbig is managing Partner of Herbig Marketing Associates, (www.herbigandsons.com) a marketing consulting company and former Professor Marketing and Dean, Ketner School of Business for Tri-State University. He can be contacted at mktgandme@aol.com.
By Paul Herbig
During a recent Fall , advertisers and networks were surprised to find one coveted segment, Males 18 to 34, were MIA to the tube, down 7% from the previous year for all TV sets and down a whopping 22% for the major networks. NBC’s flagship youth sitcom lost nearly 30% of its young adult viewers over the previous year; Fox’s “24’ fell an equally remarkable 37% among those youthful viewers. Other productions showed a similar type of falloff among the desired market. The usual suspects were called in and interrogated at length: Nielsen. The networks accused Nielsen of sloppy research and claimed the ancient devices used by Nielsen were defective and not registering the correct numbers. After considerable deliberation and rechecking of the numbers, the jury found Nielsen not guilty and the facts were left as before (to put this in perspective, over the same timeframe, cable showed a high percentage growth and videogames, a twenty percent increase in games played).
Which brings us to: Where did the boys go? With over 500 cable/satellite channels, with channels for every niche and taste, with Pay-for-View, downloadable films, plentiful video rental outlets, with TIVO and recorders that allow them to view now and watch commercial-free later, with PCs that are becoming another entertainment vehicle, the options for entertainment are unlimited. With Ipods, Iphones, YouTube, MySpace, a host of other social networking web sites (Facebook, etc), Downloadable Programs and Movies, and Peer produced media, their options are becoming virtually unlimited. On demand videos, clips, links, you name it exists out there in virtual space. And advertisers are flocking to the net in droves trying to take advantage of the demographics that exist (and to a limited but trendy extent are replacing network TV ads for those on the web—how else would Google become so power and valuable so quickly?) They may be viewing, but not at the hour (8-11 prime time) nor channel (network TV) desired. They watch what they want, when they want it, and how they want it. The networks better accept this and work with it; the youth are not going to change; the networks must if they want to stay around.
Where are the boys going? Far, far away from Network TV. To Cable. To Video Games. To DVD. To whomever will provide them with the content they demand. Network programmers can either take the chance to provide the more controversial, extreme, programming the younger males are demanding (at the risk of offending the older clientele) or lose them to other media. It is not an easy decision. But all signs indicate to the first choice being made—at the risk of losing the older, more traditional clientele.
The networks must worry about the Oldsmobile effect: that misguided effort by GM to go after the youth market at any cost without regards to its potential effect upon its current users with the end result being not only not gaining the youth market but losing the seniors as well (who then left in droves saying in effect if they do not care about me-- “It is not your father’s Oldsmobile”—then whose is it anyway?-- why should I care about them) and hence leading to the demise of one of the great historic brands of the automotive marketplace. Seeing what has been playing on the tube lately and the resulting numbers, makes me believe they too will be just as successful as Oldsmobile was.
Only time will tell whether it was the right decision.
Paul Herbig is managing Partner of Herbig Marketing Associates, (www.herbigandsons.com) a marketing consulting company and former Professor Marketing and Dean, Ketner School of Business for Tri-State University. He can be contacted at mktgandme@aol.com.
Generations
Generations
By Paul A. Herbig
A century or more ago many of our forefathers lived in log cabins, houses made out of sod or clay , or a few hundred square feet of living area in a multi-family environment. Compare that to today’s lifestyles with thousands of square feet of living area and all the modern conveniences we have today. Try extrapolating that difference into the future? What will life be like a century hence? What will the next generation perceive as the necessities of life?
This is not just a rhetorical question. My grandparents moved to Indianapolis by 1920 and settled in a typical urban double—a two story house (and a basement) split down the middle (with each side having half of each floor). A high school education was the exception at that time and graduates were noteworthy. My aunt, now in her eighties, remembers when they paved Webb Street during the nineteen-twenties. It was a big deal when they finally added an indoor bathroom that same decade—one bathroom (with tub no shower) for a family of six (during the depression years there were times ten or more people lived in that house, camped out on the sofa and living room, all sharing that single overused bathroom!). They had 3 bedrooms upstairs (my grandparents in one room, my aunts shared a bed in one room and my father and his brother shared a bed in the third room). Hand-me downs were the norm and the baby of any family rarely had anything bought just for him. Necessities of life were simple: a roof overhead, clothes to wear, and enough food to keep from going hungry. The ice man cometh daily to provide coolant for the refrigerators of the time; coal was often shoveled into the basement for the furnace; washer boards for the housewife were typical.
During their entire childhood they had one wagon and perhaps one or two bicycles (for all the four kids to enjoy). No organized youth sports existed; the kids would call out to each other to play ball or some other game and the entire neighborhood would join in or march down two blocks to a city park and play, doing their own umpiring. Entertainment was either attending church socials, watching first run feature films at any of the many neighborhood cinemas, or sitting by the radio as a family listening to the great stars of the time come into your home. Neither of my grandparents ever learned to drive a car; the trolley and buses were quite sufficient for all their transportation needs. Family vacations meant a trip to the next county seat to visit relatives. Trains were the country’s primary transportation mode. Perhaps the family had one phone line that was a party line and you had to wait for the ring to determine if the call was for you or for another party on the line. And yes, they did have electricity but it hadn’t been for long.
They have been called the Great Generation (and few would disagree with that nomenclature), those that were born after WWI or in the twenties, lived through the depression, survived military combat during World War II and launched the great baby boom. The men married in their early twenties, most women married right out of high school. Most did not wait to start a family. Many went to school on the GI Bill, surviving on bare necessities while completing their studies. Prior to the Second War, a high school diploma was considered a superior degree and college education was basically reserved for the elite. These returning GI s found crowded conditions at colleges, housing at a premium, and barracks-like living conditions. But they never complained; they were exhuberant at the opportunity to get a college degree, to better themselves, and to provide all sort of things for their children they did not have themselves. They were determined not to deprive their children of any of the luxuries of life. This they did well. They found jobs in large companies and stayed there for life, thirty, forty years were not atypical; they were the first of the organizational men. They worked hard and long supporting a wife and many kids and nary said a word about their awesome responsibilities.
Their children, the baby boomers, of which I am one, were not, contrary to modern tales told by their parents to their grandchildren, spoiled by rich living. A multi-bedroom ranch home (perhaps 1200 square feet) is not a mansion. But each house had its own refrigerator, washer and dryer and central heating unit. Everyone typically knew everyone in the neighborhood and people stayed for decades. The kids probably had to share rooms like their aunts and uncles but they at least had their own beds. And not one bathroom but at least two. They had their own bicycles, old perhaps even purchased used but it was theirs and theirs alone. Clothing was mostly purchased for the individual. Christmas gifts were typically elaborate. Most families had one car which Dad usually drove (many Moms still did not drive during the fifties); station wagons ruled the roads. Airlines were in their infancy and to fly for many during the fifties and early sixties was an experience you would talk about for years. My allowance was $5 a week (A princely sum I thought) from which I had to spend lunch money (.35 to .50 daily).
Entertainment was watching the one TV in the house—black and white for most of their childhood (during the early years blurry pictures were the norm and we would take turns holding the antenna just so to get the right angle for the best picture)(during those early years few families possessed TVs and block parties around the TV set to watch the prime time shows were not atypical). Most families still had one phone line for the entire family (party lines were quickly phasing out). Little League was about as organized as youth teams got, no soccer; athletics were primarily found through the school system. And Sports for Girls were only a dream for most girls. Pre-School in the fifties meant Mom and perhaps grandma. Many but by no means all had cars—used cars, often very used cars--when they became sixteen (usually purchased by us with the fruits of our hard earned after school work)(Being a baby Boomer meant competing with thousands of other boomers for even the simplest of jobs—every McDs during that time had file cabinets full of applications from Boomers. You worked knowing that there were dozens of other kids just waiting for you to goof up or get fed up and quit—talk about incentive). Family vacations were to bundle up in the station wagon and spend a week or two in the summer traveling the highways to a distant relative or friend’s house, spending the nights in cheap motels all in one room. Not necessarily enjoyable but we didn’t know any better, complained very little, and enjoyed what we could when we could.
We Baby Boomers—both boys and girls now, not just mainly boys as were our fathers the GI s-- went to college during the sixties and seventies, some thrust on by parents who worked their entire lives so their children could live better than they had and some to escape the drama that was Vietnam and the draft. We were thrilled to go to college and appreciated schools would take us (during our interview trips we wore suits and our finest apparel to impress the admissions folks for like everything boomer, there were often many of us and comparatively few spots open; we took very little for granted) We lived in dorms with one large barracks style bath area per floor. No air conditioning; opening the window was the only cure for most of us. Working our way through school, even at state schools, was expected for many.
By the time the boomers grew up, a high school diploma was a necessity and a college degree was quickly on its way to becoming the expected and norm for up and comers. Once out of college, jobs were scarce (and competition tough) so we took what we could get and worked hard. Few of us believed we would work for the same company forever as our parents did. We did join the workforce believing in the American dream, work hard, work long and you will advance and go far up the ladder of success. The Myth of that Dream, for many of us, was by far our life’s worst experience. We found many a disconnect between ability, performance, and outcomes. Life Was (is0 Not Fair we discovered the hard way. But we also discovered life goes on, and so did we.
The Baby Boomers eventually married; often, however, 5-10 years later in life than had our parents. Like our parents before us, the Baby Boomers wanted only the best for our children and a better life for them then we had (and in retrospect, we remembered only what we didn’t have and forgot all we had). Our houses had to be bigger and better (2000 to 3000 or more square feet), two or three car enclosed garages, all the modern conveniences (I wouldn’t dream of buying a house without a dishwasher; to this day my mother still refuses to buy one—she says she already has one called my father) How can you live without Air conditioning (no room AC units, Central A/c and Heating only). Often both parents work (to afford their dream castle) and at-home moms are the exception not the norm. Child care and Mom’s Day outs have blossomed. Suburbia living is a must. We are a nomadic bunch—three years, four if your lucky, and it is off to a new assignment, a new city. You may or many not even know the names of your neighbors and then they move and you must meet the new people. Vacations. We Fly. Aspen for Skiing, the Caribbean over Spring break, Europe during Summer. Spare no expense, nothing is too good for my kids. Forget trains, air is the only way to go/
Our children (the so called Generation Y or baby boomlet) must have only the best. Each have their own room. With perhaps their own computer and cable modem internet hook-up (otherwise you won’t be a good parent and will be contributing to their falling behind their peers). Oh yes, their very own TV—color with cable no less. Their wardrobes are bulging with apparel, much of it last year’s in-clothes--they would die if they didn’t have them then and would die now if they wore them now. Bicycles—not just one per child but a new one every year or so. Organized sports—Soccer Moms in their SUVs require a datebook to keep track of all the events they have enrolled their children in—abound and all tightly organized with coaches, referees, and thick rule books (where has children just playing gone?) With passive entertainment and well organized sports leagues, few kids know what to do by themselves if left alone for any long periods of time (which purposedly many parents book solid to minimize such free time).
Individual phone lines for the kids has become routine (and often not just phones but cell phones for each child as well). Allowances can be twenty dollars or more a week, all too little for all the expenses a child has (movie tickets, make-up, jewelry). Oh , and cars for the little darlings when they turn 16. Not used cars but new cars and the more fashionable the better (can’t embarrass poor dear in front of his friends can we?) Work? During the nineties, every establishment was begging for bodies and if they didn’t like the way they were being treated (often times actually being asked to work!) or if the pay was lower than what they felt they should be earning, they would leave in an instant and go next door where they would be welcomed and working within the hour.
All boomlet kids are expected to go to college. You start thinking about college before you enter high school. The colleges start besieging you with materials your sophomore year (some even have tracking programs for kids in middle school!). SAT or ACT can be the most frightening three letters in your life, those that could well determine your fate for the rest of your life. As all colleges are recruiting heavily, the central question in the student’s mind is what are you going to do for me. Colleges beg you to visit and when the student does, be glad he/she is wearing clothes: Jeans, sneakers, T-shirts, baseball hats on backwards, often unwashed, all body jewelry on and plainly visible. What no lunch, what kind of place is this? What kind of trinkets do you have for me to take home—gee, you’re a cheapskate compared to all the stuff I got at the other schools I visited. If you bore them (any discussion past 3 minutes usually does), they either will tell you to your face or nod off. Take me as I am. If you don’t me like his, a dozen other schools are knocking on my door (and they are right). Who has the best financial aid package? Let’s negotiate some more. I. I. I. I. . . me. me . me. me. …
When they finally select a college, the modern dorms have a two bedroom suite with an adjoining bathroom Many Gen Yers are even demanding private rooms with private baths quickly becoming a necessity. Air Conditioning better be present or scratch this school off my list. Computer hookups in every room with fastest internet connections available so I can download thousands of my favorite songs. And the cafeteria food? No more meatball sandwiches or “guess the entrée” contests as their parents had to contend with. Many universities have decided to enunciate their food as a competitive advantage to recruit students. Perhaps not quite yet French cooks or trained sous-chefs but a menu most restaurants would be proud to have. Deli sections, salad bars, pizza, you don’t see it let us know and we will get it for you. If a student is having trouble in his classes, it becomes the responsibility of the instructor and institute to assist him and to provide instruction according to what learning style he may have. History? History is bunk. If it occurred before 1990, it is irrelevant (Several Yers have told me they will not watch a film if it is over a decade old as it could not possibly have any meaning for them!)
Not that Gen Yers have it totally easy. For most of today’s Gen Y students, an undergraduate degree is just the start of their academic preparations. Graduate degrees are quickly becoming the norm and expected for today’s entry-level employee (a statistic I heard is that there were more Masters degree being given today than undergraduate degrees!). After they graduate, no waiting for them. They want to have it all and want it now. House, car, furnishings, vacations, all the good parts of life they have become used to. It is all for the present. The model of many Yers is the past is irrelevant and the future is unpredictable so enjoy today for today is all there really is.
Within ten years, we will have a fourth generation, the children of the boomlet, our grandchildren. I am not certain what they will be called: Perhaps Generation Z (since X and Y have already been taken). I can only imagine their lifestyle and how they will raise their children. If the pattern continues (and I have no reason to doubt it will), they will spoil their children even more than we spoiled ours and our parents spoiled us. Their children, being like children everywhere, will accept what they can get and always push for more, attempting to find the limits to what they can have and what they will not get. What will their lives be like?
How much larger a home can one have? Do we need one plus cars for every person in the household? Does each child need to have his/her own bedroom and own bath and Jacuzzi? Should each child have his/her own guest house on the property? Should each have own phone/computer/fax/internet connection and fiber optics network? Are they going to demand private day cares with educational experiences guaranteed for their children? What type of demands will be made on public schools systems? Colleges? What will the boomlet as parents be expected to provide to Gen Z to indicate to their peers they are good parents? In attempting to make life better and easier for our kids , will they be expected to do likewise for our grandkids? When will enough be enough?
The United States, with only 5% of the world’s population, already consumes a far greater proportion of the world’s resources (25% of its energy and 33% of its resources). The gap between the world’s rich and poor continues to grow. If the fourth generation is like the previous three plus, it will demand far more resources and luxuries as a means of placating its youth. Can the U.S. or the world afford this drain or will the world even allow us to consume more? At some point will the gap becomes so large, it becomes unbearable to those on the bottom? At what cost will these youthful demands be on the economy and productivity? Already, obesity for the boomlet has reached almost epidemic proportions. Should we expect any less for the next generation? Can this trend continue or will it collapse on its own weight?
What does the future hold? Have we created a Frankenstein we cannot control and that inevitably will destroy us by trying to outdo each other and each previous generation? What will Generation Z be like? More of the same? Or a return to a more balanced lifestyle? The answer to this no doubt holds the answer to how the entire 21st century will develop.
By Paul A. Herbig
A century or more ago many of our forefathers lived in log cabins, houses made out of sod or clay , or a few hundred square feet of living area in a multi-family environment. Compare that to today’s lifestyles with thousands of square feet of living area and all the modern conveniences we have today. Try extrapolating that difference into the future? What will life be like a century hence? What will the next generation perceive as the necessities of life?
This is not just a rhetorical question. My grandparents moved to Indianapolis by 1920 and settled in a typical urban double—a two story house (and a basement) split down the middle (with each side having half of each floor). A high school education was the exception at that time and graduates were noteworthy. My aunt, now in her eighties, remembers when they paved Webb Street during the nineteen-twenties. It was a big deal when they finally added an indoor bathroom that same decade—one bathroom (with tub no shower) for a family of six (during the depression years there were times ten or more people lived in that house, camped out on the sofa and living room, all sharing that single overused bathroom!). They had 3 bedrooms upstairs (my grandparents in one room, my aunts shared a bed in one room and my father and his brother shared a bed in the third room). Hand-me downs were the norm and the baby of any family rarely had anything bought just for him. Necessities of life were simple: a roof overhead, clothes to wear, and enough food to keep from going hungry. The ice man cometh daily to provide coolant for the refrigerators of the time; coal was often shoveled into the basement for the furnace; washer boards for the housewife were typical.
During their entire childhood they had one wagon and perhaps one or two bicycles (for all the four kids to enjoy). No organized youth sports existed; the kids would call out to each other to play ball or some other game and the entire neighborhood would join in or march down two blocks to a city park and play, doing their own umpiring. Entertainment was either attending church socials, watching first run feature films at any of the many neighborhood cinemas, or sitting by the radio as a family listening to the great stars of the time come into your home. Neither of my grandparents ever learned to drive a car; the trolley and buses were quite sufficient for all their transportation needs. Family vacations meant a trip to the next county seat to visit relatives. Trains were the country’s primary transportation mode. Perhaps the family had one phone line that was a party line and you had to wait for the ring to determine if the call was for you or for another party on the line. And yes, they did have electricity but it hadn’t been for long.
They have been called the Great Generation (and few would disagree with that nomenclature), those that were born after WWI or in the twenties, lived through the depression, survived military combat during World War II and launched the great baby boom. The men married in their early twenties, most women married right out of high school. Most did not wait to start a family. Many went to school on the GI Bill, surviving on bare necessities while completing their studies. Prior to the Second War, a high school diploma was considered a superior degree and college education was basically reserved for the elite. These returning GI s found crowded conditions at colleges, housing at a premium, and barracks-like living conditions. But they never complained; they were exhuberant at the opportunity to get a college degree, to better themselves, and to provide all sort of things for their children they did not have themselves. They were determined not to deprive their children of any of the luxuries of life. This they did well. They found jobs in large companies and stayed there for life, thirty, forty years were not atypical; they were the first of the organizational men. They worked hard and long supporting a wife and many kids and nary said a word about their awesome responsibilities.
Their children, the baby boomers, of which I am one, were not, contrary to modern tales told by their parents to their grandchildren, spoiled by rich living. A multi-bedroom ranch home (perhaps 1200 square feet) is not a mansion. But each house had its own refrigerator, washer and dryer and central heating unit. Everyone typically knew everyone in the neighborhood and people stayed for decades. The kids probably had to share rooms like their aunts and uncles but they at least had their own beds. And not one bathroom but at least two. They had their own bicycles, old perhaps even purchased used but it was theirs and theirs alone. Clothing was mostly purchased for the individual. Christmas gifts were typically elaborate. Most families had one car which Dad usually drove (many Moms still did not drive during the fifties); station wagons ruled the roads. Airlines were in their infancy and to fly for many during the fifties and early sixties was an experience you would talk about for years. My allowance was $5 a week (A princely sum I thought) from which I had to spend lunch money (.35 to .50 daily).
Entertainment was watching the one TV in the house—black and white for most of their childhood (during the early years blurry pictures were the norm and we would take turns holding the antenna just so to get the right angle for the best picture)(during those early years few families possessed TVs and block parties around the TV set to watch the prime time shows were not atypical). Most families still had one phone line for the entire family (party lines were quickly phasing out). Little League was about as organized as youth teams got, no soccer; athletics were primarily found through the school system. And Sports for Girls were only a dream for most girls. Pre-School in the fifties meant Mom and perhaps grandma. Many but by no means all had cars—used cars, often very used cars--when they became sixteen (usually purchased by us with the fruits of our hard earned after school work)(Being a baby Boomer meant competing with thousands of other boomers for even the simplest of jobs—every McDs during that time had file cabinets full of applications from Boomers. You worked knowing that there were dozens of other kids just waiting for you to goof up or get fed up and quit—talk about incentive). Family vacations were to bundle up in the station wagon and spend a week or two in the summer traveling the highways to a distant relative or friend’s house, spending the nights in cheap motels all in one room. Not necessarily enjoyable but we didn’t know any better, complained very little, and enjoyed what we could when we could.
We Baby Boomers—both boys and girls now, not just mainly boys as were our fathers the GI s-- went to college during the sixties and seventies, some thrust on by parents who worked their entire lives so their children could live better than they had and some to escape the drama that was Vietnam and the draft. We were thrilled to go to college and appreciated schools would take us (during our interview trips we wore suits and our finest apparel to impress the admissions folks for like everything boomer, there were often many of us and comparatively few spots open; we took very little for granted) We lived in dorms with one large barracks style bath area per floor. No air conditioning; opening the window was the only cure for most of us. Working our way through school, even at state schools, was expected for many.
By the time the boomers grew up, a high school diploma was a necessity and a college degree was quickly on its way to becoming the expected and norm for up and comers. Once out of college, jobs were scarce (and competition tough) so we took what we could get and worked hard. Few of us believed we would work for the same company forever as our parents did. We did join the workforce believing in the American dream, work hard, work long and you will advance and go far up the ladder of success. The Myth of that Dream, for many of us, was by far our life’s worst experience. We found many a disconnect between ability, performance, and outcomes. Life Was (is0 Not Fair we discovered the hard way. But we also discovered life goes on, and so did we.
The Baby Boomers eventually married; often, however, 5-10 years later in life than had our parents. Like our parents before us, the Baby Boomers wanted only the best for our children and a better life for them then we had (and in retrospect, we remembered only what we didn’t have and forgot all we had). Our houses had to be bigger and better (2000 to 3000 or more square feet), two or three car enclosed garages, all the modern conveniences (I wouldn’t dream of buying a house without a dishwasher; to this day my mother still refuses to buy one—she says she already has one called my father) How can you live without Air conditioning (no room AC units, Central A/c and Heating only). Often both parents work (to afford their dream castle) and at-home moms are the exception not the norm. Child care and Mom’s Day outs have blossomed. Suburbia living is a must. We are a nomadic bunch—three years, four if your lucky, and it is off to a new assignment, a new city. You may or many not even know the names of your neighbors and then they move and you must meet the new people. Vacations. We Fly. Aspen for Skiing, the Caribbean over Spring break, Europe during Summer. Spare no expense, nothing is too good for my kids. Forget trains, air is the only way to go/
Our children (the so called Generation Y or baby boomlet) must have only the best. Each have their own room. With perhaps their own computer and cable modem internet hook-up (otherwise you won’t be a good parent and will be contributing to their falling behind their peers). Oh yes, their very own TV—color with cable no less. Their wardrobes are bulging with apparel, much of it last year’s in-clothes--they would die if they didn’t have them then and would die now if they wore them now. Bicycles—not just one per child but a new one every year or so. Organized sports—Soccer Moms in their SUVs require a datebook to keep track of all the events they have enrolled their children in—abound and all tightly organized with coaches, referees, and thick rule books (where has children just playing gone?) With passive entertainment and well organized sports leagues, few kids know what to do by themselves if left alone for any long periods of time (which purposedly many parents book solid to minimize such free time).
Individual phone lines for the kids has become routine (and often not just phones but cell phones for each child as well). Allowances can be twenty dollars or more a week, all too little for all the expenses a child has (movie tickets, make-up, jewelry). Oh , and cars for the little darlings when they turn 16. Not used cars but new cars and the more fashionable the better (can’t embarrass poor dear in front of his friends can we?) Work? During the nineties, every establishment was begging for bodies and if they didn’t like the way they were being treated (often times actually being asked to work!) or if the pay was lower than what they felt they should be earning, they would leave in an instant and go next door where they would be welcomed and working within the hour.
All boomlet kids are expected to go to college. You start thinking about college before you enter high school. The colleges start besieging you with materials your sophomore year (some even have tracking programs for kids in middle school!). SAT or ACT can be the most frightening three letters in your life, those that could well determine your fate for the rest of your life. As all colleges are recruiting heavily, the central question in the student’s mind is what are you going to do for me. Colleges beg you to visit and when the student does, be glad he/she is wearing clothes: Jeans, sneakers, T-shirts, baseball hats on backwards, often unwashed, all body jewelry on and plainly visible. What no lunch, what kind of place is this? What kind of trinkets do you have for me to take home—gee, you’re a cheapskate compared to all the stuff I got at the other schools I visited. If you bore them (any discussion past 3 minutes usually does), they either will tell you to your face or nod off. Take me as I am. If you don’t me like his, a dozen other schools are knocking on my door (and they are right). Who has the best financial aid package? Let’s negotiate some more. I. I. I. I. . . me. me . me. me. …
When they finally select a college, the modern dorms have a two bedroom suite with an adjoining bathroom Many Gen Yers are even demanding private rooms with private baths quickly becoming a necessity. Air Conditioning better be present or scratch this school off my list. Computer hookups in every room with fastest internet connections available so I can download thousands of my favorite songs. And the cafeteria food? No more meatball sandwiches or “guess the entrée” contests as their parents had to contend with. Many universities have decided to enunciate their food as a competitive advantage to recruit students. Perhaps not quite yet French cooks or trained sous-chefs but a menu most restaurants would be proud to have. Deli sections, salad bars, pizza, you don’t see it let us know and we will get it for you. If a student is having trouble in his classes, it becomes the responsibility of the instructor and institute to assist him and to provide instruction according to what learning style he may have. History? History is bunk. If it occurred before 1990, it is irrelevant (Several Yers have told me they will not watch a film if it is over a decade old as it could not possibly have any meaning for them!)
Not that Gen Yers have it totally easy. For most of today’s Gen Y students, an undergraduate degree is just the start of their academic preparations. Graduate degrees are quickly becoming the norm and expected for today’s entry-level employee (a statistic I heard is that there were more Masters degree being given today than undergraduate degrees!). After they graduate, no waiting for them. They want to have it all and want it now. House, car, furnishings, vacations, all the good parts of life they have become used to. It is all for the present. The model of many Yers is the past is irrelevant and the future is unpredictable so enjoy today for today is all there really is.
Within ten years, we will have a fourth generation, the children of the boomlet, our grandchildren. I am not certain what they will be called: Perhaps Generation Z (since X and Y have already been taken). I can only imagine their lifestyle and how they will raise their children. If the pattern continues (and I have no reason to doubt it will), they will spoil their children even more than we spoiled ours and our parents spoiled us. Their children, being like children everywhere, will accept what they can get and always push for more, attempting to find the limits to what they can have and what they will not get. What will their lives be like?
How much larger a home can one have? Do we need one plus cars for every person in the household? Does each child need to have his/her own bedroom and own bath and Jacuzzi? Should each child have his/her own guest house on the property? Should each have own phone/computer/fax/internet connection and fiber optics network? Are they going to demand private day cares with educational experiences guaranteed for their children? What type of demands will be made on public schools systems? Colleges? What will the boomlet as parents be expected to provide to Gen Z to indicate to their peers they are good parents? In attempting to make life better and easier for our kids , will they be expected to do likewise for our grandkids? When will enough be enough?
The United States, with only 5% of the world’s population, already consumes a far greater proportion of the world’s resources (25% of its energy and 33% of its resources). The gap between the world’s rich and poor continues to grow. If the fourth generation is like the previous three plus, it will demand far more resources and luxuries as a means of placating its youth. Can the U.S. or the world afford this drain or will the world even allow us to consume more? At some point will the gap becomes so large, it becomes unbearable to those on the bottom? At what cost will these youthful demands be on the economy and productivity? Already, obesity for the boomlet has reached almost epidemic proportions. Should we expect any less for the next generation? Can this trend continue or will it collapse on its own weight?
What does the future hold? Have we created a Frankenstein we cannot control and that inevitably will destroy us by trying to outdo each other and each previous generation? What will Generation Z be like? More of the same? Or a return to a more balanced lifestyle? The answer to this no doubt holds the answer to how the entire 21st century will develop.
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