Could the Connecticut shootings have happened in 1790’s? The technology factor

The Connecticut shootings have been heartbreaking.
The question on everyone's minds is why and how to avoid
recurrences. Having recently visited Philadelphia, one wonders about the Second Amendment  times of Thomas Jefferson in 1791.
Could the Connecticut shootings have happened in the 1790's? Probably not, if you consider the technology factor:

  • While schools existed, schools particularly for small
    children might not have been common. It appears that the oldest
    Connecticut School might have been  Hopkins founded in 1660 and that took
    students from grade 7. It was unlikely that 20 small children sat in a
    classroom in the 1790's. We have progressed in elementary education a
    great deal since 1791.
  • The discrimination associated with mental disorders was
    much higher in the 1790's and would have probably isolated the killer
    socially. Today we have progressed a great deal in trying to integrate psychiatric
    patients into society.
  • Video games, movies and entertainment exists today that
    did not in 1790's. The NRA suggests that
    these have an influence in promoting violent behavior. Here technology has
    made progress and helps entertain folks and large numbers of people do
    feel that they encourage violent thinking – if not actual action.
  • The technology clincher is really in gun technology
    from the 1790's to today and what a gun owner can afford and access at a Walmart.
    That civilians can afford and buy machine guns legally has been made
    possible with the leaps that technology has taken in every industry in the
    last few decades. This includes the gun and arms industry which is able to
    produce quick firing machine guns. So instead of the Western movie cowboy
    being fast on the "draw" the speed can come from the weapon
    itself today.

Between 1790 and today lots of
social change has occurred and significantly the technology of guns has
substantially improved. The latter is one of the major reasons that resulted in
the large number of casualties in Virginia Tech, Arizona, Colorado and now
Sandy Hook, Connecticut. Among the many steps needed to curb gun violence
restrictions on automatic weapons would be an important step to reconcile the
spirit of the second amendment with advances in gun technology. Contact StratoServe.

Sustainable Employment needs a re-think on how we value services

Consider that the world population
reached 1 Billion not so long ago
in 1804 and is currently over 7 Billion and is expected to rise and stabilize
at 10 billion by 2050. Sustainable employment for all these people needs a
re-think of how we value services.

The problem is acute in Asia with  about 60% of the world's population and  China and India accounting for 26% of the world population.

From a goods and manufacturing type
of thinking there are just too many people in China and India who are willing
to work for less i.e. provide services for less wages which erodes earlier high
paying jobs of the developed world. Not that anyone wants to work for less, it’s
just that there is a huge surplus of desperate labor with no recourse to social
security.

Globalization and the Internet has
made manufacturing and digitized services easy to transfer out of the expensive
countries to those that are cheaper. Jobs that are not outsourceble require a
physical presence of the service provider. Hence the barber, nurse and
plumber's job is hard to outsource. Consider:

  • That every strip mall in the US has new nail spas and
    hair salons since the recession. There were 5 such businesses on a main
    street in one small but relatively affluent US town  at one recent
    count. Not making booming profits these businesses were eking out a living
    for the owners. A low-cost haircut in the US costs about $15 while the
    cost for a haircut in India is about a dollar.
  • A plumber costs $90 an hour in the US and cost of parts
    pale in comparison. In contrast, an Indian plumber talks about material
    costs first and offers labor at about $ 2 /hour.

Because of these huge differences in
labor costs you will find that Americans do tend to do their own minor plumbing
repairs and there is a market for personal hair dressing
equipment going by the gifts on display for the holiday season.

Things get more complicated when you
talk of firms that are trying to maximize shareholder return and try to reduce
cost by sourcing from the cheapest viable location.

 "Free trade"
thinking was designed for a world that had not reckoned with globalization
and the Internet. If labor movement was free and with no immigration
controls even barbers and plumbers would not be "outsourcing proof."

Perhaps it is time to re-think how
services and work is valued and the role Government should play for sustaining
employment. Contact StratoServe.

 

London Eye has an innovative business model

The London Eye has an innovative
business model. It is the giant Ferris wheel that every London tourist must
have heard about and you might remember from the 2012 Olympics closing. You will very likely hear of it , if you are a transit passenger with limited time for a London tour.
The Ferris wheel was originally invented and designed by the American George Ferris for
the 1893 Chicago Exposition. George Ferris would be impressed with the business
model that London Eye has developed. Here is how the model works:

  • You get a ticket at the location which is on the South Bank of the
    Thames.
  • There are a wide variety of ticket options and the
    4-D experience primes the visitor for the real views from the London Eye
    itself.
  • Now you are at the line to get on to the Ferris wheel.
    If you think about it the Ferris wheel does make a service experience look
    fair and transparent.
  • The passenger capsules can stand up to 25 tourists
    and they can walk around and check out the interactive Samsung tablets to
    figure out the various London attractions. The passenger capsules are
    transparent, so those waiting in line know what is going on with getting
    on and off the passenger capsule.
  • As you get off, there are automatic pictures taken and
    tourists can pose on the audio alert. The pictures may be bought as you
    leave the attraction.

So what is so innovative about the
London Eye, given that Ferris Wheels have been around for about 120 years since
American George Ferris came up with the concept?  Here are some thoughts:

  • London Eye has been able to do brilliant marketing. So
    when you ask at the airport about how to quickly "do" London
    touring, the London Eye is almost always a suggestion. You visit some
    spots and the rest you do on the London Eye which is warm and enclosed in
    contrast to the chilly open top red London buses in December.
  • The EDF Energy London Eye partnership emphasizes its sustainability
    and low carbon goals and visitors seem to get a "doing good"
    feeling as they buy the fairly expensive tickets.
  • As the Ferris wheel turns people hop in and out at a
    regular frequency and although the ride is 30 minutes for a tourist, the
    operator is able to get passengers into the capsule every few minutes.

There are whole bunch of Ferris Wheels across the world in cities that
have great tourist attractions and are perhaps popular locally. And then there
are many more cities in the world that have wonderful tourist spots that could
be viewed through a Ferris wheel that is effectively developed and marketed.
Tourism entrepreneurs should check out hoe the London Eye has been able to
dovetail itself just as literal integrated one stop London Tour. Contact StratoServe.

US Economy grows 2 % while online sales grows ten times at 20% Thanksgiving weekend

The US Economy growth rate at 1.6% -2% is
in marked contrast to the average 20% growth rate of online sales since
Thanksgiving, Black Friday and Cyber Monday today according to IBM. Black
Friday when US retailers turn from the red (negative or losses) to positive
(black or profits) was remarkable this year for online sales that crossed 1 Billion $ for the
first time. And today Cyber Monday which is supposed to be for online sales,
sales are up 26% with iPhones and iPads
taking the lead in driving traffic.

Surprisingly “Social Sales"  (see last point in IBM report summary)
including  Facebook, YouTube ,Twitter and LinkedIn accounted for 
only 0.34% sales and was down 35% from 2011. In other words, folks would be
getting influenced by social media for brand awareness but when it comes to the
online buying decision – social is just one of the touch points along with
organic search, paid search and any other brand building exercises you might be
doing in the offline world. Just for comparison, Black Friday offline sales were
expected to be up 3.1%, more in line with US Economic Growth of 2%.

Why is this major difference between offline and online sales growth figures?
Consider that since Thanksgiving the numbers indicate that online sales
are at least six times offline sales. Here are
some reasons:

  • Younger folks comfortable with buying online are now in
    the market.
  • These younger people are at ease with buying through an
    App on their iPhone.
  • The tight economy calls for comparison shopping made
    easier with easy search through Google,Yahoo,Bing and search engines.

Given that offline sales was
expected to grow by about 3.1 % ,
more in line with the US economic growth at 2% it is remarkable to see that
online sales grew by at least six times this
Thanksgiving weekend compared to last year. This is a radical shift in consumer
buying behavior and how Internet is affecting business. Contact StratoServe.

Twinkies consumer interest zooms:Hostess Brands and Bakery Union ready for mediation

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Just looking at this graph for Twinkies from Google search trends, would make any marketer envious and ask- why not my brand? The 82 year old bakery company Hostess Brands had filed for bankruptcy and with failure of negotiations with the Union had decided to close and sell its assets and brands including Wonder Bread and Twinkies. This would put 18,000 employees out of work and disappoint potentially millions of fans.

Twinkies bring back the joy of childhood just as you feel guilty for all the  high calories and not so healthy ingredients in the bakery product. Consumers and loyalists are hoarding Twinkies and the Internet is awash with all kinds of tweets,blog posts and comments around the almost blasphemous (from the point of view of Twinkie loyalists) move to close down the Twinkie brand through the Bankruptcy of Hostess Brands.

The mediation is tomorrow and both the Union and Management know by now that some of their brands like "Twinkie" have enormous goodwill and brand power, despite the negative nutritional image as the New York Post Video suggests. Hopefully good sense will prevail and this American icon will survive. Surprisingly though, the brand owners probably did not know about the intensity of feelings of its loyalists. The Internet made the outcry possible and should get a great deal of credit if there if the management and union can work out a deal and keep Twinkies on the shelves.  Contact StratoServe.

Update: Nov 26, 2012: Twinkies brand should survive but Hostess Brands is under liquidation.

Dealing with your Big Data: start by framing your problem as a question for the data

Organizations large and small are deluged with data and there is this search
for "Turning Data
into Dollars"as Peter Guber puts it. There is data from your existing
customer transactions and CRM, there is a lot of data from you manufacturing
and supply chain, your share price and financial data and you have not even
thought about all your website data from digital marketing and website
visitors.

Even with the most sophisticated data mining tools it's hard to get the data
to guess your questions and speak out answers to your organizations problems. Unless
you frame your problem as a question for your data. For data by
itself has no mind of its own.

What is exactly this "framing of your problem as a question?" A
nice example is from the Moneyball
problem where Billy Beane's  at Oakland Athletics could not afford to pay
a great deal to recruit traditionally great players and an alternative method
beyond the traditional "gut" feel method of player selection was
needed. Enter Peter Brand and his Sabermetric method
largely relying on the on-base
percentage. And then: the success of Oakland Athletics.

For data (big or small) to work for you it must be able to predict better
than pure chance and if you are able to frame the right question (can’t afford
to pay expensive players, but want to win- so what next?).

Once the question is framed well your existing data can provide huge
insights and good predictions that are better than chance and sometimes far
better than chance. Contact StratoServe.

Papa John $250 million lawsuit for mobile text ads: how search advertising is different

Papa John is facing a $250 million lawsuit for sending half a million text messages to customers in early 2010 – search marketing would have eliminated this problem. But first, more about the Papa John matter.

Text message  recipients maintain that they got 16-17 text messages a day, including in the middle of  the night for pizza deals – just because they had ordered a pizza from Papa John. In traditional marketing, once you buy something, the marketer has a "relationship" with you and can approach you with deals. It's not clear if the mobile text agency that Papa John used asked permission and more details should emerge. Meanwhile the Papa John stock is down. Consider the following:

  • With manual  "push marketing" like live  telephone calling, direct mailing, door knocking the physical difficulties of actually calling on someone is enormous. Imagine how difficult and expensive it would be to send 16-17 pieces of junk mail a day to an individual customer.
  • With digital "push marketing" like robot telephone calling, email blasts or mobile phone text blasts there is really no difficulty or significant cost to sending 16-17 messages to a customer. If you own the software or are on an "unlimited" plan, it's tempting to bombard the customer. And customers' don't like it particularly if it is not a once in 4 years election but a product like pizza that you might eat more than once a week. Customers might get so annoyed with digital push marketing that they might just search on the web for "pizza."
  • With Internet search marketing  there is no permission involved. When you search on Google for "pizza" anything you click on (organic search results or Google AdWords) you are virtually entering the store. Just as entering a brick store is your choice- so is the choice of clicking on search results. And just as an annoying salesperson might make you leave a brick store- so too with websites. The difference is that with web analytics you know exactly where the visitor decided to leave and you get the chance of improving things. 

In summary, push marketing in the digital age is fraught with risk. The risk of  putting off customers. In contrast, Internet search marketing is far less intrusive and far more respectful of the customer. Contact StratoServe. 

Obama win: big data plus local insight about how people and technology actually work

The Obama win is being hailed as a
victory for Big Data by Time magazine
while Marc Thiessen at Washington Post
wonders why the highly competent Romney team with equal if not more
high quality analytics resources had 30,000 Republican volunteers in Colorado
confused because of glitches in forwarding the https directions to an http
address which is what mobile phones do by default. The Obama team was on the
ground and had local insights about how people and technology actually work.
And here is what businesses can learn:

  1. People first:
    This is the old qualitative research, get a ground feel for the problem first. Don't assume that you know the big
    data questions before you start lining up databases undertake factor
    analysis or come up with sophisticated regression models. An example is missing a
    qualitative understanding of customer behavior around stopping JCPenney Coupons.
  2. Technology and Big Data second: Technology and Big Data is easily and simply available.
    And it should be second on your marketing list. How is data so available?
    One might ask. Just take your website and your Google AdWords
    campaign where you have set up Google Analytics. You know exactly how your
    web traffic arrives on your website, how long visitors stay, where they
    navigate and what seems to drive them away from your "buy" page.
    Looking at your "buy page" data you will also know exactly the previous
    steps each buyer took, where exactly they came from and on. All this
    sounds pretty cool provided the rest of your people processes are in place
    and work. So people are last too!
  3. People last:
    Sounds like a cliché but people both first and last if technology and big
    data is to work. For example, you have an effective i.e. low cost high
    clicks Google AdWords local campaign that brings visitors to your contact
    page and a phone number. If someone calls, you must have people to take
    that call, convert it into a lead and populate your CRM/Sales Force
    Automation (SFA) database. Amazingly, businesses including some very big
    ones seem to just miss this simple people process. You call and you might
    get into a long "press 1, press 2" routine, at which point- you
    just call someone else. After all, it's just a few seconds of Internet
    search that gives you other options.

Just as the Moneyball analyst Peter Brand understood baseball
before analyzing data and brought victory to Billy Beane's Oakland Athletics,
campaigns need to understand the game first. In political campaigns you have
voters to convince and staffers including large numbers of volunteer folks who
must be mobilized for the ground game. The same with
business that involves understanding your own people, processes and
understanding your customers and those who might be your advocates in social
media, the equivalent of political campaign volunteers. Contact StratoServe.

Obama re-election not status quo: Dow plunges and why America will avoid the fiscal cliff

Most folks in America did not expect
that the Presidential election results would be called yesterday, November 6 by
the news channels just after 11 pm US Eastern time. As more results came in,
President Obama seems to have won by a landslide, going by electoral votes. The
re-election of President Obama, a Republican majority in Congress and a
Democratic majority in the Senate is not
a status quo as Alan Greenspan says.
Here are some thoughts why:

  • The Dow plunged today
    given that the stock market was expecting Governer Romney to win and the
    real concern over the fiscal cliff of $600 Billion of tax increases and
    spending cuts that the Republican Party majority Congress and the
    Democratic Party  President and Senate must decide on before January
    1.In addition coal related stocks are down amidst fears that an Obama
    administration will be tough on coal seen as polluting the environment by
    the Obama administration. In addition the election of Elizabeth Warren as
    a Senator from Massachusetts is seen as Wall Street's worst nightmare.
    It was  Elizabeth Warren a  Harvard
    Law Professor     who criticized Wall Street and helped set up the US Consumer Financial Protection
    Bureau     (USCFPB) after the financial collapse of  2007.
  • Just as Wall Street is re-grouping, politicians on both
    sides realize that the American people have spoken. They do not want time
    wasted and confusion on things like rolling back Obamacare ( Healthcare shares were up
    today)  and Americans clearly want both Republicans and Democrats to
    work together and find solutions. Accordingly the hardline stance of House
    Speaker John Boehner (Republican) and Senate Democratic Leader Harry Reid
    on the issue of the fiscal cliff is softening. 
  • Although President Obama has won, politicians on both
    sides are taken aback by the clarity of purpose of the American
    electorate. Candidates that were perceived to understand and
    empathize with the plight of the average American seems to have got their
    vote. For example, in Connecticut after spending  about $100 million for the Senate seat, 
    the very competent Linda McMahon lost by a wide margin to Chris Murphy.

Economics Nobel Prize winner Amartya Sen concluded from studying
the 1943 Bengal Famine and other world famines, that people died of starvation
not because of lack of food but due to non-democratic regimes that had no incentive
to distribute food to the needy. Thus, no famines occur in democratic societies
as politicians might bicker a lot, but do pull together that deliver results to
the people, lest the next elections result in payback from the electorate.
Although Americans do not face food famines common in the 20th
Century, they do face a famine of economic opportunity. Overcoming the fiscal
cliff is just a minor roadblock  that both Republicans and Democrats will surely
overcome. Contact StratoServe.

Perfecting your “ground game” in marketing- learning from US Elections

As
the US Presidential elections arrive tomorrow (finally) political
pundits are unwilling to say which candidate will win as the polls of likely
voters are so close. Nevertheless, it does seem that both Democrats and
Republicans are going all out tomorrow for what is called the "ground game" or
"get out the vote" effort. Whatever way the US Presidential election
goes the "ground game” on election day will continue to be talked about
and should give some great clues to marketers. But after all what is the "ground
game" in politics and elections? 

The
"ground game" is the effort of political parties to get voters out to
actually vote on Election Day. Candidates generally exhort everyone to vote in
a sort of "create the market" strategy in their campaign speeches.
However, the door knocking on days immediately before the election or on
election day is like getting the sales force to call on both loyalists as well
as those that might lean your way after a billion dollar Ad campaign
that have bombarded the electorate with differing messages. 

Here
are some take-a-ways for marketers from the unfolding ground game of the
US Elections:

  • TV Ads can create only
    awareness and hopefully positive feelings about your brand – they cannot
    persuade the customer to buy (the act of voting in elections)
  • Unforeseen natural events like
    Hurricane Sandy can demotivate voters who are in the affected areas even
    when they had  every intention to vote and would have done so if
    there was no disruption of life due to the hurricane
  • Coupled with TV think of more
    central routes to persuading     un-committed voters before the voting
    days 
  • Although in marketing you do
    not have only one day of reckoning (Election Day) there are promotions
    that can last for only a few days. These include Groupon and Living Social
    type of promotions that are priced to close in a few days. Since you
    have calculated your margins, volumes and customer acquisition costs when
    you run a promotion, get your ground game in order
  • Ground game in marketing can be
    door-to-door only when you have a large value product or some kind of a
    recurring sale (like an electricity supplier or cell phone company) for
    ground games involve sales folks that tend to be very expensive.
    Augmenting the ground game sales force with digital marketing that offers
    a short term immediate benefit like a coupon or discount can work for
    certain segments of your customers

More
on ground games and marketing lessons as the US Presidential elections play out
tomorrow. Contact StratoServe.