Verizon wised up to the errors of their $2 fee even faster than I thought. Within hours of my last post on the topic, they changed their mind.
It makes me think they really were using The Real Housewives philosophy of marketing!
Good post from David Pogue on December 15th about what he learned while teaching a course at Columbia Business School. He was amazed at the complete lack of business understanding by the so-called best and brightest at Columbia’s B-school, one of the top schools in the nation.
After over twenty years in business, in private and public corporations and in non-profits and NGOs, I’m not surprised in the least. I’ve seen the customer and employees of public companies sacrificed at the altar of Wall Street to enrich a few top executives. I’ve seen private corporations take care of their employees while going through recessions. And I’ve seen NGOs and non-profits actually change the world for the better.
What are you (yes, you) going to do in 2012? How will you go beyond just maximizing profit for the next 90 days?
Maybe pure shareholder maximization isn’t the key. Will “for benefit” corporations add some sanity and a counterpoint to bottom-line, quarterly earnings driven management?
I was puzzled by Verizon’s attempt to sneak in a $2 “convenience fee” for customers who pay online or via phone. Sure, it’s the end of the year and folks are distracted by the holidays, vacations and getting ready for 2012. But did they forget about social media or Bank of America’s recent $5/month debit card fee debacle?
I happen to think that Verizon is correct about charging a fee to discourage phone payments. Even if the payment system is completely automated, a certain percentage of those calls will end up failing over to a human operator and, at that point, the real costs start.
But charging to pay online where the incremental costs are, for all practical purposes, zero? That doesn’t make a lot of sense to me. So why’d they do this?
The “real housewives” philosophy of marketing.
Say or do something as outrageous as possible to bring attention to oneself. Deal with the aftermath later. And, if nobody notices (much), the $2/month multiplied by the millions who pay by these methods every month drops to the bottom line. “Look at me” marketing works until it doesn’t and then you have to do something even more outrageous to get noticed.
Not a great strategy in a heavily regulated industry like telecommunications.
MBA math.
Let’s say that just 1% of Verizon’s 91 million customers pay by these methods every month. The $2 fee drops $1.8 million per month to the bottom line or $21.8 million annually. Add in some churn reduction (customers mad about the fee will move over to autopay, which will always reduce churn) and perhaps the impact is doubled, even accounting for some customer cancellations.
This one fee can put $42-$43 million annually on the bottom line if my assumptions are even in the ballpark. While not a lot for Verizon, it’s easy money if you run the billing group and have been told to make the department (more of) a profit center. The PR and customer care groups can deal with the backlash, right?
The problem with this MBA approach is that it generates “bad profits” as Fred Reichheld terms them. The result is customer backlash, employee disloyalty and future ethical lapses. Verizon may be headed for a Bank of America moment, as Erika Morphy refers to it in her Forbes blog.
Prediction? Verizon comes off the fee and next time spends more time thinking about the blowback.
Interesting argument to increase workplace flexibility to keep more mid-level government bureaucrats in the federal government.
That’s the wrong way around. The federal government should let the hide-bound mid-level retire and move along and go ROWE. We need the best and brightest working for us in Washington, not the ones who impose rules and “order” on the lowest-common-denominator employee.
What’s happening now and in 2012 that will impact marketers and communicators? Check out this blog post I wrote for Neustar.
Full disclosure: I work for Neustar and the post I link to above was written for Neustar’s corporate blog.
My career wouldn’t be what it is without my strength in Excel. I had the good fortune to work for a company that required strong Excel (originally Lotus 1-2-3) skills. You had to become very proficient in spreadsheets and analysis or fall behind.
The increasing use of digital channels means that marketers and communicators can–and should–be held accountable for marketing results. That means analysis and, in most organizations, that means Excel. It’s by far the most useful tool for analysis ever invented.
If you’re in marketing and aren’t at an intermediate or better level of Excel proficiency, you’re doing yourself an injustice.
I don’t normally plug things here, but thought I’d provide a resource for Excel training. I bumped into Chandoo’s blog when looking for some Excel tips and have been hooked ever since. Purna Duggirala is an absolute Excel genius who provides tons of free tips. If you want to take some courses–which I recommend–try his Excel School. For as little as $97, you can dramatically increase your Excel skills on your own time. (I have no relationship with Purna, other than admiring his devotion to his craft from afar.)
Start 2012 strong. Pick something to be better at and just do it!
Louis CK’s recent direct-to-Internet video success teaches us something that most companies don’t get, or don’t want to get.
It’s not about publicity anymore.
The press release or the advertising campaign shouldn’t be the first thing you think about. Sure, back in the days of three networks and average products for average people, you could yell loudly enough and everybody would eat your lousy Wonder bread. Major food factories were able to get us all to swill tasteless light beer and eat non-nutritive white “bread.”
All you needed to do was think up a theme, target it at a particular audience, dream up a few clever ad campaigns, and buy up air time. Boom, you had a restaurant chain like Ruby Tuesday, selling fake charm along with lousy industrial food. Good business, especially because you could just shout down the local–and better–competition.
That’s over. The Internet killed that strategy years ago and is now shoveling the dirt into the grave. Wanna see? Check out Ruby Tuesday on Yelp.
The better, and time-tested approach to building your business and your brand hasn’t changed for thousands of years–and that’s what Louis CK did:
Bob Lefsetz has a very similar take on Louis CK’s hard work, by the way.
Once you’ve done all the above, absolutely go out with those press releases and advertising campaigns. You won’t need to shout at people to get their attention. And many of them will say “I already know. And I’ve been telling my friends.” And then, you’ve won.
Oh, the Ruby Tuesday near Centreville? It was open for many years. Just closed. Thanks, Internet!
Nothing muddies communication more than gobbledygook and business jargon. Say what you mean and you are more likely to be understood.
There’s no excuse for using long words and complex sentence construction. If you seek to be understood, then write and speak simply.
In 2012 my goal will be to reduce the use of gobbledygook in everything I touch. Will you consider joining me in that effort?
For inspiration, consider this. For 26 tips to improve your writing dramatically, consider reading Write Right by Roger A. Shapiro. The book also makes a great holiday gift for the writer in your family!
Simon Sinek published a truly meaningful article on Steve Jobs today. What made us cry for a billionaire who was very unlike the rest of us? A worthwhile read.
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