State of the Brand from Ecra Creative Group :: by Jason Voiovich

Author:
Jason Voiovich
Ecra Creative Group

They were called Aquadots.

Last Holiday season, cable television networks with my kids’ ear started advertising a new product. The concept seemed pretty simple: The young “artist” used what amounted to an oversized syringe to squirt colored gel dots onto a special “canvas”. Think of a gooey “Light Bright” (remember those?).

Well, just like Light Bright, kiddos swallowed a fair number of the squishy blobs, confusing them with a delicious M&Ms treat.

For most incidents like this, unless there is a risk for bowel obstruction, the problem - uh - passes all on its own within a couple of days.

No permanent harm done.

But these little blobs were different. Apparently, no one at Aquadots HQ (a) thought little kids would eat bite-sized candy-mimicking morsels, or (b) bothered to test the product for toxicity. As it turns out, they did, and they were.

Scientists in Australia found that the chemical coating on the beads, when swallowed, metabolizes into gamma hydroxy butyrate - the “date rape” drug. Yikes.

The ensuing recall spooked parents already jittery over lead-based contamination from China. It took little time for moms to blacklist the product and ruin the product image forever.

I, like most dads only casually aware of the outrage, put it out of my mind. That is, until my wife saw an ad on the Cartoon Network for “Pixos”. Almost immediately, she yelled across to my home office: “Hey, they renamed Aquadots! They’re back! How could they do that? Don’t they think we’d remember?”

After hearing my wife’s comments and hitting the online bulletin boards, I quickly learned that the similarity was no accident: Aquadots were re-engineered (into non-toxic candy-mimicking blobs) and christened “Pixos” just ahead of the Holiday rush.

The marketer in me can see their point: Sales numbers told them people took to the idea, but a supply chain oversight sank their chances in ‘07. The hope was that people will (a) remember the product positively, and (b) not associate it with the negative occurrence (the name).

A classic case of “the idea is good, but the packaging was bad.”

This sentiment was echoed by the official company line (from the Pixos.com website). To paraphrase, the company is going to great lengths to assure customers that the “great play experience” will remain the same, and that the product has been rigorously tested by real-life scientists!

Before I humbly render a verdict, let me share a couple of scenarios in which the name change of a product is called for, and even beneficial; and conversely when it is not, or could be considered deceitful.

Scenario 1: The company (or product) has fundamentally changed. It is no longer what the original founder or invented created, and the name no longer represents the new reality in the eyes of its customers. In that case, a new name makes good business sense. From a branding perspective, the name is the focal point of all communication efforts - it must accurately reflect the true nature of the company or product.

Scenario 2: The company (or product) has changed hands or merged with another line - whether competitive or complementary. That makes sense as well; the new business relationship may not be in sync with the new (combined) brand, and a reintroduction is in order. It is a chance for the new entity to stake out a new, and more reflective, value proposition.

But the Aquadots to Pixos transition doesn’t pass the smell test.

As much as I can understand the want to put the past behind them, and launch (what they feel to be) a solid product that got caught in an unfortunate turn of events, it is hard to not feel as though the move is a bit deceptive.

Moms have a long collective memory. Do something that puts kids at risk, and you risk their collective pocketbook wrath.

A better choice? Do what the politicians do. It might seem an odd juxtaposition, but think about it for a second: When politicians really screws up - I mean really screws up - what choice do they have? They can’t change their name. They need to re-invent themselves.

And that’s exactly what Aquadots needed to do. They needed to come clean with American parents. To tell them they understood what happened and have taken specific steps to ensure it would not happen again.

Then you might have a chance. Albeit slim. But at least you won’t come off as trying to hoodwink parents.

Simply flashing a “safety tested” banner across your Pixos ad when word leaked is not good enough.

As it stands, the analytics are likely to paint a scattered picture. Retail sales across the board are trending much lower, and it will be hard for the folks at Pixos to know what effect (if any) their naming scheme had on sales, or if the whole thing backfired. In other words, they might look at bad numbers this year, and conclude this fiasco had nothing to do with it.

Maybe.

All I know is that seeding distrust - however unintentional - is not a welcome Holiday treat.

Author:
Jason Voiovich
Ecra Creative Group

Unless you have spotless credit (and even if you do), banks just don’t trust you right now.

One could say that is the very crux of the pickle we find ourselves in: Banks can’t trust you when they can’t trust each other (bank to bank lending has essentially frozen). And they can’t trust each other when they can’t trust the government to come to the rescue (tell me again, who is too big to fail?)

To make the situation worse, your neighborhood bank looks at the same jobless figures you do. They see 6 percent becoming 8 percent very quickly. They see 8 percent peaking perhaps as high as 10 percent by mid-2009. Let’s be blunt: The average “you” is risky business.

But you need a car. Or a student loan. Or a line of credit.

If the banks won’t give you the money, who will?

It turns out, everything old is new again.

At the University of Wisconsin - Eau Claire, when we teach entrepreneurship students about initial financing options, they learn the acronym “FFF”. It stands for “Friends, Family, and Fools”. It’s the good old-fashioned option to get a loan when no one in his right mind would give you one.

But for many of us with penniless friends and dysfunctional families, a new type of micro-lending uses technology to connect lenders and borrowers.

Perhaps you’ve heard of it: Peer-to-Peer lending, or P2P for short.

Essentially, individuals with small sums of money to lend (a few hundred up to many thousands of dollars) can search for needy individual borrowers. There is no bank in between; P2P lending organizations simply run the logistics of payment calculation and money transfers.

Sound risky? You bet. But is it riskier than a loan shark, a guy named “Tiny”, and a baseball bat?

For that increased risk, lenders earn a handsome return - somewhere between 7 to 30 percent.

Of course, there is a downside. Without a structure in place, default rates trend higher, especially over the medium term. To hedge that, the average lender needs to know something about risk profiling and underwriting - not unknowable, but tricky.

Given the significant risks, why is P2P lending successful at all?

The idea works on the concept of the social network: People who actually know the person lending them money are more likely to be personally bound to repay it.

All that said, the market is very new - and some would say - quite a mess. Prosper, Loanio, and LoanClub have stumbled in their early stages. All true, but the new industry will likely get a chance to stabilize itself. That open door comes courtesy of the diminishing brand image of the banking industry.

As banks become larger, they tend to become more and more isolated from their average person. TD Ameritrade’s “Ted” character and Charles Schwab’s “Talk to Chuck” campaign are two sad examples of financial institutions grasping at straws to make you feel as though you can personally connect to their company.

The larger banks get, the more services they can offer, but the less personal they become. Ted and Chuck are advertising hoopla, and little more.

There are also the trust issues. Why should we trust the bank as the sole source of financing? Two more of them failed over this past weekend: Franklin Bank in Houston and Security Pacific Bank in Los Angeles. That’s number 18 and 19, if you’re keeping count.

P2P lending, by contrast, is thoroughly authentic. It’s personal. It’s tangible. It’s one person helping one other person.

The technology has been in place for years to make this work, but the market opportunity blew wide open with tightening credit and the rise of powerful social networks. (Facebook and LinkedIn have yet to partner up with one of these providers, but I am sure that’s coming.)

The more successful P2P becomes - especially with younger buyers (Fynanz gives P2P student loans) - the harder banks will need to work to get them back later, even if credit does (and it will) loosen up.

Don’t believe me? Answer me this: How many of your 20-something friends still own a landline phone? How many, by contrast, use only a mobile phones?

Banking, for many people, isn’t much more complicated than that. P2P is unlikely to simply “go away” when credit loosens up.

So what’s the answer? The industry could flex its lobbyist muscle and put the regulatory squeeze on this business (as it is doing in some states), but I think that misses the point.

The banks are letting this industry take off right under their noses. In many ways, they have lost touch with the average borrower. It seems to me the prescription here is to get closer. Get personal. Give loan officers individual control, and look at unique circumstances.

But what do I know, I’m just a P2P lender …

Author:
Jason Voiovich
Ecra Creative Group

It was only a $25 rebate.

After months of relentless advertising and a shiny new iPhone 3G, AT&T Wireless finally lured me away from Verizon.

To console myself, I reasoned that most AT&T customer service horror stories were either apocryphal or exaggerated; my experience with the company in 1999 and 2000 seemed uneventful enough.

So there I sat in the AT&T lounge signing away the next two years of my life. And for the trouble, I was to get a $25 mail-in rebate. Fair enough.

Eight weeks later (no joke, I kept track), the rebate arrived - as a VISA debit card.

I was a bit confuddled, but I understood AT&T’s point. A debit card was not cash, but in many ways (for those who do not have access to “traditional” bank accounts - more people than we may want to admit) the VISA debit card is more useful than cash.

In addition, because it required activation, it was more secure than a check.

As a strategic partner, VISA has to like it. They get a sliver of every transaction.

Finally, because the debit card would record and store transaction records (it had to), AT&T would be able to glean customer buying habit information, link it to phone records, and boost the value of its database immensely.

So. Good for AT&T.

And as I came to find out, bad for me.

Because I ported my wireless number from Verizon to AT&T, the rebate activation code was tied to the temporary wireless number set up with the account. Do you think I knew what that was?

You guessed it. Unable to activate it, the un-activated card sat on my desk for the better part of three weeks.

Finally unwilling (in principal) to let even $25 go, I hunted through the automated activation hotline options to find a real person. Who transferred me to another real person. Who finally gave me the 4-digit code I needed.

After 22 minutes (I timed the call), the $25 VISA card was activated and ready to use.

Other than the 22 minutes I’ll never get back, and the time value of money for the 11 weeks of waiting, and the fact my every purchase with this card is being scoured and sold to the highest bidder, why else is this such a raw deal for the general consumer?

First, while estimates vary wildly, AT&T knows mail-in rebate redemption rates hover between 20 and 50 percent for amounts under $50. That means a majority of buyers will never mail in the form.

Second, of the percentage who do redeem, AT&T knows the activation rate for debit cards (while high) is not 100 percent. Another slice off the top.

Third, make it tough to activate the card (there lots of people like me, who port their numbers), and you whack another few percent off the overall redemption rate.

Finally, un-activated (and activated) cards expire unless states have laws passed against that. And not all do.

Even though GAAP (Generally Accepted Accounting Principals) forces AT&T to keep un-activated card values on the books as a liability, that doesn’t mean they the company can’t (and won’t) leverage the additional dollars for cash flow purposes versus hitting the commercial paper market.

Of course, all of this is designed to make the end price of the iPhone and related accessories appear lower.

But I think what AT&T risks - by making their process even more complicated than most - is continued erosion of its brand. In the cell phone market, most people are drawn in by the technology (the iPhone in my case), and that’s a good thing. Providers clearly are along for the ride, made evident by staggering churn figures despite early termination penalties bordering on usury.

Should that ever change (read: phones are decoupled from their providers on a large scale, and an iTunes-style phone service market emerges, or legal rulings stand forbidding exorbitant termination fees), providers are in serious trouble.

The good news, of course, is that a massive decoupling in the market would likely improve service for everyone.

Until then, they only have to worry about persistent penny-pinchers like me.

Author:
Jason Voiovich
Ecra Creative Group

Selling non-television video advertising is a lot like selling vitamins.

You have a sense they’re good for you, but it’s hard to quantify. In the vitamin market, this lack of connection between concrete results and dollars/effort expended limits the overall size of the market when compared to the commercial prescription and over-the-counter pharmaceutical markets (chiropractors, take it easy, I’m with you in spirit, but the numbers don’t lie).

The same can be said for video advertising in places such as hotels, health clubs, and gas stations. The demographics look good. The audience is captive. Your dollars should generate good results over time. But beyond those generalities, the details get sketchy.

Nielson On Location media is looking to fix that.

To put it simply, Nielson On Location media id s suite of measurement services designed to provide viewership data for video exposure not in front of your television, computer, or mobile device.

Make sense?

If not, let me give you a few examples.

On Location Media tracks viewer data from Gas Station TV (GSTV). In other words, when you’re filling up your tank, stations in 425 cities show short video advertisements at the pump. It’s still new, and GSTV’s reach is still limited, but it’s growing fast. This is essentially the same idea behind IdeaCast Airline TV (where you are even more captive for a much longer time) but the technology is expensive, and only really in place on longer-haul jets and routes.

In both above examples, a deeper dive of the information here could possibly link general demographic information (if you use a credit card to pay for gas, or simply merging your flight reservation data) to the ads you see. Creepy or clever? You decide.

But wait. There’s more.

Arena Media Network is similar, but only on a larger scale. Detailed profile data from high definition displays inside sports stadiums is hard to come by (without advanced AI and eye tracking software, it would be exceedingly tough to tailor ads to specific groups, or to even tell if anyone was watching). But you do get another captive audience and a pretty tight demographic. You could see the same idea at work in malls with OnSpot, or in your local health club with Health Club TV.

Buzztime does the same for restaurants. As I learned from Mike Anderson of Green Mill Eden Prairie last week, always-on televisions not only provide entertainment, but also create the impression of a lively atmosphere.

The Hotel Networks - mentioned in my (perhaps inappropriately) Orwellian headline - allows data crunching from hotel room viewership. Don’t think many people spend time watching the tube on vacation or business? Think again.

So here’s the point: Besides the somewhat raw assumption that “more data is better”, what does Nielson hope to gain with these additional services?

First is most obvious: Follow the money. On location media is a $1.3 billion market, and has not been even reasonably tracked to this point. By contrast, when an advertiser wants to place a television spot to reach a specific demographic, Nielson (and others) can provide (reasonably) tight data on viewership.

But non-television/internet/mobile device video media (as defined above) has no such corollary. That’s made advertisers skiddish, and it has prevented the industry from growing as fast as it could.

Second, the proliferation of Tivo and DVR devices makes television data tracking much tougher. Nielson has data package answers for this, but ad-skipping is a huge issue. (Why do you think last summer’s Transformers movie had a role dedicated solely to product placements?)

Third, and most importantly for people like my friend Mike, is the earnings potential for the “on location” venues themselves. If Mike can show he captures a specific, coveted demographic, he can earn additional revenue. Score!

Those are all good reasons, but they don’t touch the core issue.

Perhaps most importantly - and certainly important to a data cruncher like me - is the increased role the online analytics experience has played in shaping the expectations of advertisers.

Answer me this: If I can use Google Analytics to follow the viewer of my video banner ad though to my landing page, then into my website, then into my online store, then through checkout, and then through follow up survey, then why can’t you tell me who’s watching the television in the health club?

Oh, but it’s different, you say. That’s Google. No one is “clicking” at the health club. It just can’t be done.

The excuses are no longer good enough. Advertisers have a taste for data now, and they like it.

If you can’t provide data to justify an ad expenditure in today’s market, you’re done. And you answer had better be compelling.

Nielson lives in a new world. To remain the dominant information broker for off-line advertisers, this new service package is only the first step.

Author:
Jason Voiovich
Ecra Creative Group

It was a $2.39 Diet Coke (the price for which I could not find on the menu) that got me whipped up.

I was very close to an indignant diatribe on rapidly escalating (and cleverly mysterious) drink prices compensating for shrinking main entree margins. Ruby Tuesday was my intended target.

But then I thought better of it; wisely, I think.

If you consider the situation restaurants like Ruby Tuesday are in, you could forgive a bit of creative pricing.

Applebee’s has the “neighborhood bar and grill” image going for it. Their strategy is part celebrity chef, part cheap drinks, and part real estate saturation. It works for them.

TGI Friday’s is “fun”. Though not as ubiquitous as the apple, they are a bit more lively. Seems to be working.

Bennigan’s tried for a bit more upscale. It didn’t work. Houlihan’s is trying the same thing. It’s working. For now.

Red Robin does burgers. And free fries. Okay, I can see that (the parking lot in Shoreview, Minnesota is always full).

And I will bet you could name a half dozen other restaurants - just like these - that fill the “casual drinking/dining” segment.

Even as a schooled segmenting analyst, this market leaves me a bit confuddled. I think it would take a Ginsu knife to slice this tomato any thinner. And that’s precisely Ruby Tuesday’s issue. What segment can you possibly, realistically, believably, own in the hearts and minds of the dining-out public? Their answer to this point has proved pretty weak: Slightly upscale, yet still casual, American cuisine.

As their new ads profess, gone are the “flared” uniforms (remember “Office Space” and Jennifer Aniston? - very funny). In their place are simple black T’s. Gone are the fill-your-face, 10-for-a-dollar appetizer specials. In their place are better tasting selections, slightly smaller portions, and reasonable (but not rock-bottom) prices. They kept the salad bar. They ditched the gaudy Tiffany Lamps (in fact, the commercials feature what appears to be a drunken interior decorator unleashing pent up anti-1980s angst).

But in the end, do you believe it? Is it different enough to make you want to change your plans?

Perhaps the bigger question is: Does it have to?

Industry data shows this segment as the fastest growing dining-out category. That beats all categories of fast food, even as new sandwich shops spring up like weeds to dethrone Subway. This segment is an analyst’s dream: You get to tease apart race and ethnicity data, time of day analysis, menu combination testing (who orders what with what), taste trends, snacking patterns, and even facial recognition and real-time customer profiling - every piece of data becomes gold when branding at the macro level fails to produce tangible results. That’s why these chains tweak their menus as often as they do; throwing more money into broad-based advertising won’t cut it. Those days have passed. They bank on number crunchers.

All that said, I remember the proliferation of casual steak places in the 1990s and early 2000s. They did all that stuff too. Name three that remain today.

Needless to say, none of that helped me dissect this situation.

To get some perspective, I called Mike Anderson, the owner of Green Mill in Eden Prairie. I asked his advice for a pretty simple reason: He doesn’t have a staff of analysts, nor can he rely on an 8-figure advertising budget. Despite all that, Green Mill has a solid brand and a loyal, consistent clientele.

At first, he explained Green Mill’s differentiators: Solid food, a great bar, lots of activity in the restaurant (live television is key) - and unique to Green Mill - pizza delivery. To his customers, Green Mills is the better alternative to a cheap Pizza Hut/Papa Johns/Domino’s pizza. If you could get Green Mill pizza delivered right to your door, would you pay a bit more? Sure you would.

All well and good, but that was not the real secret.

Here it is: A great restaurant is only as good as the personal attention of its owner. An involved owner is the key to building the one-on-one relationships that keep people coming back week after week, and year after year. And the better your regular customer base, the less you rely on big-budget advertising.

Could it really be that simple?

Could it be that when branding delivers diminishing returns and the number crunchers are out of answers, that it comes down to good old-fashioned customer service?

I think Mike is right. And he didn’t have to defile a single lamp to do it.

Author:
Jason Voiovich
Ecra Creative Group

My friends in Seattle seem to have good foresight.

In February, I wrote a column entitled “The surprisingly costly $1 cup of Starbucks.” Among other things, it pointed out the apparent folly of the coffee giant as it lurched between store closings, menu shuffling, and remedial espresso training.

My most scathing criticism, however, was directed on the company’s decision to introduce $1.00 drinks. That it could be done was not the point; no company should leave money on the table. That McDonald’s was doing it also was not the point; competing with the Golden Arches is like beating your head against a wall. Simply put: Starbucks was not so much a coffee-focused restaurant, I argued, as a destination for people of all stripes.

For that privilege - the atmosphere and the camaraderie, more than the specialty coffee - people demonstrated a surprising willingness to part with more than $3.00 per cup for coffee. Keeping that “exclusive” pricing in place was key to maintaining that image.

But I believe events in the near future will prove Starbucks’ $1.00 coffee strategy right and prove my analysis wrong.

Like many in my field, I am guilty of forgetting that branding does not always trumps raw economics.

$3.00 coffee is somewhat rational in a growing (or at least stable) economy. It is also likely to survive brief recessions; perhaps even weather a grinding, tough downturn.

However, I think Starbucks is - perhaps rightly - preparing for much worse.

Here is the central fact: No one needs specialty coffee. No one needs Starbucks. And they know it.

Years ago, another local coffee company CEO remarked that he was vividly conscious of that underlying reality. To paraphrase, he said the product they sell is more expensive - pound for pound - than a filet mignon steak downtown Minneapolis. If his company could not produce a compelling reason (read: customer experience) for people to continue coming, the business was lost.

The thing is, I just don’t think the “experience” will be enough.

Over the coming years, I am afraid many people will begin to examine household budgets for “excess” to remove.

The first customers to depart will be those whose economic situation will demand no less. They were unlikely to be loyal Starbucks clientele to begin with, but their departure will stifle future growth. Next to leave will be those who bolt for cheaper competitive offerings - gas stations (with increasingly good offerings), at-work coffee bars (which have sprung up to keep office workers at the office), and at home machines (which aren’t as expensive as they once were). Again, painful losses, but not core business. Finally, economics will tug at the budgets of those forced to choose between a $100 per month coffee bill (trust me, do the math) and their kid’s sporting activities, or a family outing, or buying groceries.

That’s when it gets bad for Starbucks.

If they do not act now, and the economy dips into deep recession (or much worse), their entire business model could collapse.

So what is Starbucks to do?

In many ways, they are already doing it. In store sales of Starbucks products now compete (well) against old-line store staples Folgers and Maxwell House. And expansion into branded liquor sales looks smarter as the economy worsens (people drink when things get bad).

But the biggest change must happen in the restaurant itself.

This is where Starbucks could be so right, and I could be so wrong.

Think of it as the Starbucks equivalent of the dollar menu. Could Starbucks begin offering “mini-mochas” for $0.99? How about Coffee of the Day for $0.69? How about a scone for $1.29?

People like Starbucks. They like the atmosphere. They love to reconnect with other people in a casual - no rush - setting. But they won’t be able to justify the expense if things get really bad. Just like they can no longer justify $45,000 9-MPG SUVs and $650,000 2200 square foot homes.

I really hope I am wrong about this. I like Starbucks. If the day of reckoning does come, I’m glad they’re thinking ahead.

Author:
Jason Voiovich
Ecra Creative Group

“With public sentiment, nothing can fail; without it nothing can succeed.”
- Abraham Lincoln

bail-out: noun informal: an act of giving financial assistance to a failing business or economy to save it from collapse.
- Oxford English Dictionary

Where are the nation’s great wordsmiths when we need them?

Out of a political establishment usually quite adept a coining a phrase comes the most counterproductive word imaginable to describe the proposed solution to our current financial mess: Bailout.

Of course, the politicos didn’t come up with this one. The media did. But it’s hardly their fault. In an attempt to paint a dramatic picture of imminent economic apocalypse, and spur Congress to quick action, Paulson and Bernanke overdid it. In the absence of anything positive to report, the media simply said what was on everyone’s mind.

By the time Congress named their plan the “Emergency Economic Stabilization Act of 2008″, they already had lost the rhetorical high ground. This is a bailout. A bailout implies we’ve lost the ship. And Americans hate failure.

So let’s have some fun (if that’s possible given the current situation) and turn back the clock three weeks. Let’s imagine we’re doing some media-prep ahead of that first committee hearing. This is our chance to brainstorm on words - any words at all - that would be better than letting the media fill in the default choice.

It’s quite a simple question: How do we “brand” the bailout plan?

Let’s get to it, shall we.

Option 1: Rescue
Suggested by others in my field, this word has its merits. To “rescue” is noble, to “bailout” is shameful. Indeed, Americans come to the rescue as a matter of principal. I envision some heads nodding in the imaginary war room. But our economy is not really a proverbial kitten stuck in a tree. I think we might need bigger guns.

Option 2: Stabilization
Better. This is the word used in the final bill, of course, but I think we can pick a more appropriate metaphor than “getting us back to baseline”. Americans don’t like to be average. (Lake Wobegon, anyone?). We like to succeed.

Option 3: Recovery
Ooh. That’s getting there. I’m imagining a few smiles of agreement. Recovery is positive. The “Economic Recovery Act of 2008″ has a certain ring to it. It implies things will get batter if we only pitch in some time, energy, and money. Conditions are serious, but we’ll choke down some collective medicine, eat better, lose some weight, and we’ll get through this. Ah, but then are we giving the media the whole “medical” metaphor to play with? Smiles are turning into frowns. Are we recovering? So we need another “shot in the arm”? Are we in “remission”? Let’s keep going.

Option 4: Deliverance
Nice word. Sounds impressive. Literally, deliverance means to “rescue, emancipate, or provide salvation”. Perhaps a little too much “hand of the Almighty reaching down and picking us back up” for some people’s taste in the room, but it wouldn’t be the first time our leaders have used higher power rhetoric to motivate us. Then someone mentions hillbillies and Burt Reynolds. Deliverance won’t work.

Option 5: Safeguard
The Economic Safeguard Act of 2008. Nice … go on. Americans like to protect things, especially big important things. The word also implies we’ve let the fox in the henhouse (let Wall Street regulate itself), and its time to load the shotgun. That could work.

I think we’re on to something here, group. Let’s make it one better.

Option 6: Homeowner Safeguard
Much better. This not only “protects” the economy, it gets at the root of the problem - in fact, the home-mortgage-root-cause of the current financial crisis - all in one tight rhetorical package. Now, the actual bill better include actual help for homeowners (and not just a fat load of cash for those who should have known better), but this one drives at the heart of the very people who vote in large numbers and who will be critical as its base of support.

Lock and load. Time to face the Senate Banking Committee.

But alas, our fantasy is over. It’s October 6, not September 22, and the narrative is all but written. Any of the six possibilities we came up with here (and countless more you could come up with on your own) would have been better than “bailout”.

The act of failing to control the media narrative - not providing a rhetorical counter-argument to the words “crisis”, “economic collapse”, and “bailout” - represents the supreme failure of our leaders to communicate with us effectively. In other words, in order to communicate the seriousness of the situation, they allowed (and even initially encouraged) their economic plan to be defined in apocalyptic terms.

It is little surprise that Americans are mad as hell right now. Our leaders have made the cardinal rhetorical sin of allowing an important issue to frame itself. It is not to say we wouldn’t be upset otherwise, but carefully chosen words have a powerful way of channeling those emotions into “roll up our sleeves” action. Those words could have communicated the seriousness of our situation, and at the same time inspiring ordinary people to extraordinary results. Instead, we got unproductive anger and nowhere to vent it.

“A county divided against itself cannot stand.”
We fought to hold the Union together.

“All we have to fear is fear itself.”
We tightened our belts in the Great Depression.

“Ask not what your country can do for you, but what you can do for your country.”
We heeded the call to national service.

“Mr Gorbachev, tear down this wall!”
We stared down the Soviet Union.

Of course, these words alone could not have created these outcomes. But could you imagine the outcomes without them?

Lincoln, Roosevelt, Kennedy, Reagan - are you listening up there? We need your help.

Author:
Jason Voiovich
Ecra Creative Group

If a child acted this way, we might call it a cry for help.

But this is no little kid. And it is no little company. For Microsoft’s much-maligned Vista operating system, the company’s advertising seems to indicate an angry inner child bent on lashing out.

The latest series of television and internet spots from Microsoft feature “Project Mojave”. Using the hidden camera technique (yes, that old 1980s-era newsroom staple), unsuspecting people are shown what they believe to be Window’s “upcoming” operating system. And just like the can of Folgers Crystals in the classic coffee ad campaign, the duped subjects are shocked to discover this wonderful product already exists! It was really Windows Vista all along!

Absolutely cringe-inducing.

For the company who controls better than 90 percent of the desktop software market, it’s downright embarrassing. And for someone (like me) who is more familiar with the rugged SQL Server and MOSS (Microsoft Office SharePoint Services) business platforms, it’s downright befuddling.

But more on that in a moment. I can understand where the company is coming from. Let’s explore the recent past and our - rightly and wrongly accused - friends at Microsoft.

To say Microsoft has struggled with its public brand image over the last few years would be an understatement.

It is somewhat inevitable Microsoft bears the brunt of the working world’s frustration; that’s what you get when you dominate the market. The hated paperclip guy, the endless torrent of viruses, the complicated operating systems - to be fair, each of these examples are one part truth and one part perception. But whether Microsoft’s fault (or the fault of the user) is immaterial. Microsoft gets the rap.

Put simply, when you’re the king of the mountain, competitors attack from all sides. And attack they have.

Google is playing hardball with Microsoft online. Stymied in its efforts to acquire the also-ran Yahoo!, Microsoft does not seem to be able to crack Google’s stranglehold on the online search and (quickly-exploding) online application market. It’s hard to charge money for software (Microsoft’s core consumer business model) - any money at all - when Google gives it away for free.

And if that wasn’t enough, IBM and Linux have carved out a powerful niche for themselves as thorny-problem-solver-solution-providers at the mega-enterprise level, effectively thwarting Microsoft’s move “up-market” from the mid-level business solution market.

And if that wasn’t enough, Oracle remains a doggedly tough competitor in the enterprise database market.

And if that wasn’t enough, the (some would say superior) Zune music player has failed to gain traction.

And if that wasn’t enough, Nintendo’s runaway success with the Wii game console has forced Microsoft to drop the price of the Xbox 360 hardware ahead of this year’s holiday season.

Ugh.

But Microsoft seemed to be taking it all in stride - at least from a brand perspective. That is, until Apple crafted its ubiquitous “Mac and PC” ad campaign.

Long frustrated by what it feels as Microsoft’s undeserved numerical advantage in the desktop operating system market, Apple got aggressive.

The simple series of ads personify the “Mac” and the “PC” as stereotypical people - the “Mac” as a hip, young, smart trendsetter, and the “PC” as a stodgy, middle-aged, frustrated worker-bee.

While the ads are pretty gentle (by “political” standards), they repeatedly and cleverly jab their finger in Microsoft’s eye. The ads are so successful, they have run largely unchanged for the better part of two years. Combine that with the millions of people walking into Apple stores to buy iPods and iPhones, and Apple has begun to chink away at Microsoft’s market share armor.

It just seems like something inside Microsoft snapped.

They tried using an unfunny combination of Jerry Seinfeld and Bill Gates. The confusing ads were poorly received and quickly dropped.

We’ve already mentioned Project Mojave. I feel embarrassed just to write about it.

But their worst attempt yet seems to be the “I am a PC, and I have been made into a stereotype” campaign. In it, unique people from all walks of life talk about how they are also “a PC” - apparently in an effort to debunk the myth that all PC users have boring, mundane jobs and lead boring, mundane lives. Of course, PC users do lead varied and rich lives, but that’s not the point.

This is a classic example of an ad campaign “the client will love”; a campaign that makes your client pump his fist in righteous indignation and say, “Yeah! We’ll show those guys!.” The problem is, you’ve admitted weakness. You’ve admitted they got to you. And worst yet, by mentioning another company’s ad in your ad, you’ve given them free airtime.

Instead of giving viewers a clever way to remember Vista’s many clear benefits, Microsoft is spending time and money reminding them of Apple.

Microsoft is a big kid. They’ve played in the advertising sandbox a long time. They should know better.

Author:
Jason Voiovich
Ecra Creative Group

As someone who loves good corporate names, this is a sad day.

The folks at FedEx who purchased the ubiquitous Kinko’s chain in 2004 for $2.4 billion saw no further use for the “FedEx Kinko’s” combination. The new name, FedEx Office, officially wipes Kinko’s off the corporate landscape.

Founded in 1970 with one location in the college neighborhood of Isla Vista in Santa Barbara, California, “kinko” apparently was the nickname of curly haired founder Paul Orfalea. The catchy “Kinko’s Copies” literally invented the “mobile office” business concept; the funny name (in no small part) helping burn the idea into the minds of millions of office wonks.

From its humble roots (the first store sported a single copy machine on the sidewalk and a storefront stocked with extra notebooks and paper borrowed from friends), the Kinko’s chain pioneered several firsts:

Kinko’s was the first chain to popularize “rental” computers for college and business use away from the home or office. For many of us, it’s hard to remember a day without computers in every room of the home, but in the 1980s, that was hardly the case.

Kinko’s was the first chain to publicly encounter the wrath of the publishing industry. Similar to the pickle Napster found itself in years later, textbook companies went after Kinko’s (who made copying easy and cheap for millions of destitute college students) for enabling copyright infringement.

Kinko’s was the first chain to see the potential of the burgeoning mobile office culture in the 1990s, reworking its business model in the process (my own college Kinko’s in Eau Claire, Wisconsin moved its location off Water Street near campus to a location in the business district).

And that last business innovation is where it caught the eye of a hungry corporate FedEx.

Given the strong history and recognition (even an irrational love from many of us) for the Kinko’s brand, it might seem a bit silly at best, or egotistical at worst, to ditch the catchy name in favor of a dry corporate extension. But FedEx has a plan, and it is a good one. Exploring the strategy and rationale behind the change gives us an insight into a rapidly expanding mobile office market.

Step One involved giving FedEx a storefront presence. Although businesspeople certainly knew of FedEx, they saw the company as a shipping provider, and certainly not in the “retail” sense. Simply remaking all Kinko’s locations “FedEx” stores in the early takeover days of 2004 would have been disastrous. No one saw FedEx in that way, and the transition would have been rough.

Step Two involved making the retail brand transition. In other words, we’ve all seen “half and half” corporate name or logo transitions. For months (and sometimes years), old letterhead, old forms, and old signs prevail. Customers end up with a mixed message of who the company is (at best) or give customers a reason to lose faith in the brand (at worst).

FedEx was not about to flush $2.4 billion down the toilet.

Back in ‘04, in the early days of the transition to FedEx Kinko’s, I paid a visit to my local Kinko’s location on Robert Street in West St. Paul. The staff there certainly drank the “change” Kool-Aid. They spent those early days rooting out any sign of the old Kinko’s - the old funny typeface, the kitschy slogans, and the innumerable in-store signs. If the corporate folks saw evidence of the old Kinko’s, employees knew they were in deep trouble.

It wasn’t that FedEx wanted to be an overbearing corporate parent, but they knew the successful transition would help the company establish its new found entry into the mobile office market.

During the “FedEx Kinko’s” days, from a visual perspective, the company leveraged only the name. And that was the perfect transition requirement. The completely revised visual and in-store presentation (teamed with a renewed emphasis on office supply sales to compete with big box chains Office Max and Staples) used the name as the one lifeline from one brand to the next.

Step Three - the end game - involves purging Kinko’s altogether. Although employees at my local Kinko’s (I guess “FedEx Office” now) don’t have that same fear of the corporate god they did four years ago, the transition is well underway right now. The single brand, at this point, makes sense: It focuses attention solely on the FedEx name.

What’s the result?

In less than four years, FedEx completely transformed its brand. From a brand known best as a provider of overnight shipping, the company’s 2000 storefront locations transformed it into a retail business icon. FedEx recognized the growing need of the mobile workforce to have a “support base” to create, print, and deliver documents and presentations. Put simply, shipping alone just was not going to be enough.

And if imitation is the highest form of flattery, copycat strategies abound.

UPS tried buying Mailboxes Etc, but the chain was too small to impact brand perception (or real bottom line results) in any meaningful way. Office Max and Staples tried adding shipping, copy, and print functions to their big box retail locations, but they are having trouble creating the “service environment” (versus a “buy this” big box retail environment) that will draw in the new mobile professional.

FedEx Office is the business professional’s destination, perfectly positioned for the new mode of worklife.

A very, very smart move. Well planned. And well executed.

But, alas, I still miss Kinko’s.

Author:
Jason Voiovich
Ecra Creative Group

Why do real estate agents still exist?

Online Multiple Listing Service (MLS) searches, price/neighborhood comparisons, virtual tours, and a cacophony of similarly powerful web-enabled tools have made finding your next home faster and easier than ever before. In fact, ten years ago, more than a few very smart analysts predicted the end of the real estate agent as a career. There would be nowhere left to add meaningful value.

But that’s not the way it turned out, is it?

Yes, online tools could provide more and better information to the average homebuyer, but they could never substitute for human agents - and their expertise - to help navigate a complex financial transaction.

That anecdote should be of some comfort to the old-line, retail insurance industry, but it isn’t.

This time again, it is powerful online tools that are transforming the way many people buy auto insurance. The numbers make a strong case for concern: From 2004 to 2006, industry data showed buyers requested over 70 million online auto insurance quotes. To the average agent, that’s worrisome. What’s more, starting is 2007, consumers started actually buying those policies. Apparently, many of us got over our fear of buying what was traditionally a person-to-person sell over the internet. That’s the part that keeps agents up at night.

Like the real estate industry, this transition has been cost-driven, pushing the prices people are willing to pay for comparable insurance products (or “common knowledge” expertise) significantly lower.

It was Progressive who really started the trend. It’s ground-breaking website was among the first - and best - at providing “apples to apples” comparisons from different underwriters. It exposed price disparity the same way Orbitz does for airline travel. Price is a similar key value proposition for GEIKO (and its ubiquitous “15 minutes could save you 15 percent or more on auto insurance” ads). Add to that the new Esurance model, targeting twenty-somethings, bringing anime style to the insurance buying process.

It’s tough for your average insurance agent to be as cool as the caveman, as smooth as an accented gecko, or as hot as a black-leather-clad animated special agent gal.

But when I caught up with my agent - American Family’s Dan Flynn out of Eau Claire, Wisconsin - he was a bit more sanguine about the whole thing.

Yes, he said, the slick ads drain some business, but it’s the business he would prefer not to have anyway. They are the type who don’t really value insurance past the lowest price they can pay, and will jump ship after six months for a few dollars in savings.

Also, Dan reminded me that the newer underwriters are not offering broad coverage in several insurance product categories; these new companies focus only on the most profitable slices of the insurance pie (namely, auto). They can’t (or won’t) touch more complex policies, and if they do, they are not competitive.

That insight brought the market issue into focus: These upstart companies are content to gain market share quickly by focusing on the easiest (and most profitable) business - leaving old-line firms to clean up the rest. This is much akin to what discount airlines (Southwest and Jet Blue) and discount healthcare (Target/Wal-Mart in-store clinics and Minute Clinic) are doing to their industries.

I can see why: Industry estimates show 80 percent of all auto policies are spread between 25 different underwriters. Allstate and State Farm lead the list with about 30 percent between them, but they are by no means dominant. Because new auto registrations are holding steady, and therefore the market is not growing significantly, new growth must be cannibalistic. Therein lies the opportunity for heavy advertising.

But there’s a problem.

The money GEIKO, Progressive, and Esurance are spending on advertising (compared to their size) is not sustainable. Overall category growth in ad spending exceeded 33 percent for the last three years, making insurance ad spending a $1.7 billion expense. That just won’t fly long term. Insurer balance sheets are closely watched by their underwriters. It won’t be long before the pool of “easy market share” has been attained, and the big budgets begin to fail to bring the same results.

By the point of diminishing returns, these companies are hoping to be large enough to (a) compete, or (b) be bought. Or else. We’ll see what happens.

To prepare for that day (and smartly realizing that price alone will never sustain as a competitive wedge), insurers are driving creative policy writing. Allstate runs a cash-back program for safe drivers (my business partner loves this one). Progressive has started to offer pet injury coverage as part of its auto package. Esurance and Progressive feature carbon footprint reduction programs.

All well and good, but product innovation is a tangential differentiator.

Here’s the real buyer behavior insight, and what should give agents the key to their own survival: Buyers picking cheap insurance are far more likely to be those who view insurance is something the government makes you have (auto) or your employer just pays for and you never see (health). At that (usually) younger age, they haven’t had the life experience (statistically) to see the consequences of being underinsured. In other words, they don’t know better. They don’t understand insurance. So they don’t care. Yes, there is a risk in ignoring this cohort: That they will remain brand loyal as it ages, and that the new line companies will adapt to their needs. But I wouldn’t be too concerned.

It is the same reason real estate agents still exist. When it comes down to it, home buying (like insurance) is a complex financial transaction. The decision you make can mean the difference between financial security and financial ruin.

And when the worst happens (and it will), no secret agent will come to the rescue. No caveman will tow your car. And no gecko will pump out a flooded basement.

I think Dan Flynn is right. You’ll always need a real human being who understands how to help. If I were an agent, that’s what I would worry about.