September, 2008

Others — 1 Comment
30
Sep 08

Bad Salesmanship Killed the $700B Rescue Package

capitolhill.jpg
Photo Credits: willpalmer

While both sides of the aisle keep coming up with their own reasons why the $700 billion financial industry rescue package failed, there is one angle that nobody’s talking about: that one of the reasons the proposal failed is because of poor salesmanship.

First, the package proponents didn’t pay a lot of attention to the name of their “product”. When the press started calling it “bailout”, they didn’t think it was important. The word “bailout”, however, has many negative connotations: it can be equated with expense, giveaway, enabling bad behavior, etc.

If they had framed their product as a “buying opportunity” instead of a “bailout”, they would have made it easier for congressmen to sell the package to their constituency. Names are important. That is why the auto industry didn’t call SUVs station wagons, why Apple calls their earplugs pods, or why Kentucky Fried Chicken prefers to be called KFC.

The second problem was the pitch. Imagine if they would have explained the package like this: “The government will take advantage of buying grossly undervalued securities for pennies on the dollar, hold them for a while, and then sell them at a profit, which it will then give back to the American people. In the meantime, banks will have money to lend, the stock market will hold up, and you’ll have a bigger chance to keep your job”.

Instead, what we got was pretty much this: give us $700 billion of your hard earned money right now so we can help the big, rich banks or else the sky is going to fall on you.

Bad Product Name + Bad Pitch = Bad Results

Another piece of bad salesmanship was the lousy choice of spokesperson: President Bush, with his 69% disapproval rating, hit the airwaves pushing for the package. Is he the best person to try to sell this proposal to the American people right now? Would you be glad to order an expensive dinner from the same waiter who has been messing up your orders lately? Doubtful. You may want a different waiter this time. President Bush should have stayed on the sidelines, since his direct involvement probably made matters worse.

And what about Nancy Pelosi? After a strenuous week of tough negotiations, she finally had a deal, but she couldn’t resist bashing the Republicans one more time, right before the vote. Imagine that after a long and extenuating negotiation, a salesman hands you a contract for you to sign. Then, just when you’ve taken out your pen, he says: “Wait a second Mr. Customer, before you sign, I just want to remind you how stupid you are for having bought the competition’s brand in the past.” Great salesmanship indeed…

Ahhh, our wonderful politicians… They sure know how to smile for the picture, but they need to learn a thing or two about marketing.

Customer Service — 2 Comments
20
Sep 08

Thou Shalt Not Have to Wait in Line to Pay

noline1.jpg
Photo Credits: edans

A few days ago, my wife came home with a story about bad customer service that unfortunately is becoming too common.

She was at an Office Depot store in Miami, picking up some office supplies. She was standing in line to pay, with four other customers in front of her, at the only cash register open in the store.

As the minutes passed bye, she got tired of waiting and asked the cashier why couldn’t they open another register. She answered that they were short on staff, without providing any further details.

My wife then walked to the copy center where two associates were chatting and asked to talk to the manager. One of the associates replied that she was the assistant manager, and that she could probably help.

My wife explained the situation and asked her if they could open another register. The assistant manager replied that they had received orders from corporate to have only one cashier, to reduce costs.

She paused for a second and, probably noticing the frustration in my wife’s face, offered this pearl: “but this is what you can do: if you want, I can give you the address of our corporate office so that you can write and…”.

She didn’t finish speaking. My wife, dropping the office supplies she had picked up on the counter, cut her off and said: “No, THIS is what I can do: I can walk to my car and drive a few blocks to your competition where I can get what I want without having to wait in line. Goodbye.”

Some companies spend millions of dollars in expensive ads, margin-eroding discount coupons, new and bigger stores, anything to lure prospective customers in. Then, when customers are in the store, with merchandise in their hands and ready to pay, they don’t want to take their money!

It just doesn’t make sense. How much does an extra cashier cost per hour? What is the gross margin on office supplies? 50%, 60%? If they don’t want to hire extra people, why can’t they cross-train associates so that they can be more flexible on the job and perform different tasks? Can’t they install self-service checkout machines?

Somehow I suspect that the executive who made the decision will be praised by his or her superiors and maybe get a fat bonus at the end of the year. At the same time, sales will probably plummet, but that doesn’t matter. They will chalk that one up to the “recession” and everybody, except the customer, will be happy.

Read Also:

Red Zone / Green Zone: The downwad spiral of companies that view customer service as a cost (by @missrogue )

Branding Basics — 2 Comments
5
Sep 08

Round Two of the Presidential Branding Wars Goes to McCain

With both the Democratic and Republican conventions now over, it’s time to reflect on how each of the two major parties are faring from a branding standpoint.

mccain.jpg

Let me start by saying that I’ve always been fascinated by political branding, and by how most people still don’t get it. One common complain you hear a lot is that candidates don’t talk specifics about “the issues”. What those people don’t understand is that a political campaign is just a marketing campaign, subject to the same immutable laws of branding.

Rather than talking about “the issues” (plural), successful candidates must talk about “The Issue” (singular and in caps). In other words, they must discover and hammer down on one major concept, one mantra that resonates with their target audience, clarifies their positioning and rallies voters around them (think Bill Clinton in 1992, who, after talking about “the issues” for months finally started getting some real traction when he focused on “The Issue” of the day: “It’s the economy, stupid.”)

From a branding standpoint, I would divide this campaign in three rounds, with the third one still to be fought.

Round one clearly went to Barack Obama, who coming out of nowhere was able to find his “Issue” (Change) early on, stuck to it and, through a brilliantly executed campaign that showed consistency, focus and the impeccable use of new media, was able to defeat the powerful Clinton political machine.

However, after the events of the last few days, I have to chalk up round two to John McCain. In my opinion, the tide started to turn to McCain’s side when Obama chose Joe Biden as his running mate. While this move may have been intended to bring some experience to the ticket, I think it undermines Obama’s brand message: if your mantra is “Change”, choosing a 65 year old Washington insider as your VP is not going to help.

McCain, in turn, was true to his “Maverick” brand and picked someone who nobody expected: Sarah Palin. This move went against conventional wisdom and is not without risks, but it is perfectly consistent with McCain’s brand, and he must be given enormous credit for having the clarity of mind and the guts to make this move.

By doing so, he has also energized a party that was going through an identity/positioning crisis. With Palin, McCain has returned the Republican party to its conservative roots and reinforced its core values (brand elements) of God, country, family and limited government. He has changed the game and in the process significantly increased his chances of success.

Round three should be interesting, since now it really comes down to just one thing: execution.