More Trouble With Microfinance

in

I've been meaning to write about James Surowiecki for a while. He's an amazing writer.  I read his "Financial Page" each week in the New Yorker and without fail I learn something new each time. This week's column is about microfinance and he makes a simple but interesting point.

That is, one of the problems with microfinance is that it doesn't address the real problem in underdeveloped countries: job creation.  He notes that there's tons of cash for one-man businesses (microfinance) and tons of cash for large and mature businesses (institutional investors) but there isn't any money for small businesses which he argues is where most new jobs come from.  In the U.S., angels and venture capital firms often fund these businesses.

I think it's a great point that I hope people that are as smart and as passionate as the pioneers of microfinance start to address.  Microfinance firms could easily partner to create funds that could fund businesses that have real growth potential.  There's no reason there couldn't be a variation of venture capital financing in the developed world.

Women in the Workplace

in

Harvard Business School did a neat study recently. The topic was top performing employees moving from one company to another. The study found that very often these people had a very difficult time making the transition and many times they weren't successful in the new company. The exception? Women.

Why?

The theory is that men are really good at navigating the "old boys" network in an organization. Because women don't have access to this network they compensate by creating stronger relationships externally -- with their customers.

Which new employee would you rather have, one that has strong relationships with her customers or one that has strong relationships with his ex-colleagues?

B2B Citizens

in ,

Once again the great Seth Godin and friends are changing the language of marketers.  I love when this happens so I hope it takes hold.

He's recommending that we stop referring to potential buyers as prospects and targets; rather we should refer to them as "citizens".  See the post here. 

While I love this word and agree with his motivation, doesn't this seem a bit B2C driven?  That is, I'm not sure we should refer to potential B2B buyers as citizens. 

What's the difference?  When I think of a consumer in this context, I think of a person that doesn't need me, that has choices, that has power.  When I think of a business in this context, there's less power.  That is, while a business may not need me, they do need solutions to big problems to keep their business running.  Citizen is a great word because there's this sense that they're just standing around and might never need to do anything other than eat and sleep.  I have to make something that's great to get them to act. 

Businesses aren't just standing around, they need to act to survive; they (in many cases) need me more than the consumer.

I think there's a difference.  Thoughts?

Happiness

in ,

Last night 60 Minutes took a hard look at why, in nearly every survey, Denmark ranks as the happiest country in the world. The answer?  Expectations.  Danes simply don't expect too much from life so normal day to day ups and downs seem better than countries with higher expectations.  I think America ranked 23rd.

More proof of the importance for marketer's to spend as much time setting expectations as they do influencing perception.  More on this topic here.

Credit Cards

in , ,

Because of the credit crisis, I've been force-fed so much information about the credit industry over the past few months.  I'm starting to feel like an expert and I don't like what I'm learning. 

The most recent horror story was a cover story in Business Week about companies that are reselling forgiven debts owed by consumers that have successfully declared bankruptcy.  That's right, a consumer declares bankruptcy, a credit debt is erased and then a few months later that debt is sold to a debt collector who goes after the consumer for payment.  Often, these consumers pay because they're just trying to get their credit back on track or the debts are held over their head as they attempt to secure new loans.  This is allowed to happen because credit card companies don't report that the debt has been forgiven (not surprising, there's nothing in it for them) and there's nobody overseeing the process.

In some ways, these companies are doing what drug dealers do; they're exploiting a human weakness for their own gain.  That is, they know that people want fast cash. They also know that people don't manage money well and bite off more than they can chew when it comes to easy credit.  To them, this is their one and only market opportunity.  They hand out easy money and when someone misses a payment or can't pay the balance they swoop in and make their millions (outrageous late fees, service fees, finance charges, etc.)

I'll never say that what they're doing is illegal but I really don't like companies that make their money because people are irresponsible.  Should they be allowed to continue what they're doing?  Absolutely, it's a free country.  But they should also be viewed as just as bad (if not worse) then the cigarette companies in their worst days.

Radio Ads

in

I know this has been talked about a lot in marketing circles but I need to say it myself.

Is there anything more annoying on this planet that radio advertisements? Anything?

I was just down the street at the coffee shop and they were tuned into some hip hop station. They went to commercial and, WOW, did they start playing some annoying ads. I almost got up and left. Literally, one ad was nothing more than a man snoring really loud and a woman screaming at him. I don't know what they were selling -- mattresses I think -- but just on principal I would never buy anything from that company. They almost ruined my day.

It's not too hard to understand why they have to be so annoying; radio is an interruption-based marketing channel that, unlike TV and email, doesn't have access to your eyes. To compensate, they use intensity and volume which, when combined, can easily lead to bad things.

Think about your most profitable customers for a moment. Think back to before they knew who you were -- before they became loyal, before you loved and respected them. If you had 30 seconds to talk to them to them back then, what would you say? What would it sound like?

Candidate Marketing

in ,

The other night on 60 Minutes Hilary was asked how she stays healthy.

She said that she washes her hands as much as possible or uses a hand sanitizer like Purell and eats hot peppers. I wonder if Purell will see a spike in sales this week. I'm also curious if candidates deliberately try not to mention brand name products that they use; i.e. she might have lost votes from a lot of employees at Purell's competitors. Sounds silly but I'll bet they think about these things.

Super Bowl Advertisers' Stock Prices

in ,

Here a list of Friday's stock prices for the top Super Bowl advertisers as well as the S&P.  As I've written before, because these companies are still embracing broadcast marketing, I'm convinced that, on average, their prices will fall (though I'm not sure about the timing of this -- Super Bowl ads aren't a bad short term strategy.).  Let's start with one year from the game. Pepsi Co. - $69.81 E-Trade - $5.71 Anheuser Busch - $46.83 Coca Cola - $59.25 Bridgestone - 5108 (TYO) FedEx - $144.70 S&P 500 - 1,331.29

Note that these were the public companies responsible for the top 10 most popular advertisements.  See the list here.

Radiohead

in ,

I don't think there's a really great business model here but if I'm going to write about the economics of music, I have to write about Radiohead's democratic pricing model.  Basically, fans could pay whatever price they wanted for the album.  I hear that they got, on average, 8 bucks.  There aren't a lot of bands that could pull this off so I'm not sure this is an emerging trend.  Worth thinking about though.  Could this work for other industries?

12 Reasons Why I Like Mike

in

michael_bloomberg.jpg I'm sitting here watching Hilary and Barack on 60 Minutes.  For some reason they just don't get me excited.  I mean, I wouldn't move to Canada if one of them was elected but there's something missing from each.

Here are just a few reasons why I'd love to see Bloomberg run (and win!).

  1. He's a self-made man
  2. He has an MBA -- he's pro-business
  3. Amazing philanthropist
  4. He's from Massachusetts (so am I)
  5. He's a social liberal
  6. He's a fiscal conservative
  7. Supports government involvement in climate change and strongly in favor free trade
  8. He's short
  9. He got rid of smoking in bars in New York (this eventually spread throughout the U.S. and Europe)
  10. He has a 30 year plan for global warming -- what mayor has a 30 year plan for global warming?
  11. He's adapted his politics to the city he governs -- New York is a luxury city so people have to pay high taxes to live here
  12. He acknowledges that taxes are a necessary evil

In the end, I don't think he's going to run.  I wouldn't want him to be a spoiler and he wouldn't want be one either.  However, if there is a real opportunity -- even in 2012 -- I'd happily join his campaign.