West Coast Query

Derek, a friend from Vancouver, who has a great blog by the way, left me this comment on yesterday’s post:

“Someone else must have noticed this by now, but I just did: why do all of your post titles start with W?”

It all started with this post:

https://barmarbybroox.wordpress.com/2008/09/12/wtf/

Then I noticed that I accidentally had 3 consecutive titles that began with a W, which I mentioned as an aside in this post:

https://barmarbybroox.wordpress.com/2008/09/16/wacky-wal-mart-idea/

I then started doing it on purpose, and alluded to the fact in this piece:

https://barmarbybroox.wordpress.com/2008/10/14/whos-counting/

And then started keeping the running tally at the bottom of every post here:

https://barmarbybroox.wordpress.com/2008/10/16/were-all-connected/

It’s kind of like “Easter Eggs,” which I’ve spoken of before — little jokes or surprises that only the initiated or the in-crowd get.  I am proud that I “caught” Derek — that he reads my blog enough to have noticed and asked about it.

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What Should I Pay You?

I read a study by Neil Stewart about people making payments on their credit cards.  You can download it from this page – it’s the third one in the list, entitled, The cost of anchoring on credit card minimum payments.

It turns out that when minimum payments are indicated in credit card statements (like they usually are), things go pretty much as you’d expect:  very low balances have a higher proportionate minimum payment, so have a higher proportion of their debt paid; and higher balances, where the minimum payment becomes less and less of a fraction of the total debt, smaller and smaller payments get made.

I started my credit card days back in the 80s, believing the minimum payments were there to weed out total deadbeats, and then gradually wised up to the fact that the credit card companies would LOVE for you to just pay the minimum every month – by doing so, you’re just barely covering the interest and not putting much of a dent in the actual debt.  So that’s why I carry no balance on any credit card for more than a month when I can help it, and if I can’t pay the whole thing, I pay as much as I can afford, which is always more than the suggested minimum.  I think most people have this figured out.

Well this study shows that if you REMOVE the minimum payment requirement, and people are left to decide for themselves what to pay, the payments go UP in almost every case.  So people are getting themselves out of debt faster when the credit card company doesn’t suggest a minimum.  I’m no psychologist, but I would think the logic is something like this:  people naturally don’t like being in debt, so they do whatever they can (i.e. pay whatever they can afford) to get out of it.  But if your creditor says, “It’s OK, you can just send me this little amount – that’ll be cool.”  It makes you feel better about a smaller payment, because it’s still higher than the minimum.

I have no earth-shattering conclusion to draw from this, or any way that I can think of to tie it back to bar management.  I think it’s just one more proof that people are irrational, and that’s something marketers have to remember.

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Writing a Message vs. Telling a Story

An email service I subscribe to, which purports to tell me the single coolest thing on the Web at that moment, pointed me to this TV ad today:

They raved about it, calling it, “the sweetest, most satisfying TV spot we’ve seen in (advertising) ages.”  I don’t know if I agree with that, but I do find it interesting.  I do NOT, however, find it compelling or valuable marketing.  It’s a one-off gimmick of cool filmography that tells me something I already know – you’re allowed to write stuff on baked goods.  It’s just a message.

Then, during my daily visit to the Dilbert blog, Scott Adams writes about how feelings are more effective at inducing lasting memories than simple experiences.  I think the same is true of stories, because stories (at least good ones) induce feelings  in people.  As Jerry Bader puts it,

“There is more money wasted on bad advertising than on any other business function. The reason is we try to apply rational, factual, and statistical criteria to a fundamentally emotional and psychological hierarchy of needs. Determine the appropriate need your product or services fulfills, apply a suitable storyline to its presentation, and your audience will sit-up and take notice.”

So much talk in traditional marketing circles is about BRANDING and MESSAGING.  People aren’t going to respond emotionally to a logo or a few lines of text – but they will if you tell a (good) story.

No blogging Monday or Tuesday – I’m taking a long Remembrance Day weekend.

Lest we forget.

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Wresting Tradition Back from the Do-Gooders

This year, some well-meaning students at a local school decided they would do a noble and community-minded deed for Hallowe’en: they decided to eschew treats while going door-to-door, and instead request non-perishable food items for the food bank.  My wife and I find this a little silly on many levels.

1. There was very little publicity about it – Cindy only heard the day of Hallowe’en from another neighbourhood Mom.  So even if we had wanted to participate, we wouldn’t have had enough food in the house for more than a dozen or so kids.

2.  Even if we had known about it, how do you prepare?  The traffic in our neighbourhood varies wildly from year to year – from maybe a dozen to over a hundred.  Are we supposed to go to the grocery store and buy a hundred cans of soup, when we could be stuck with 90 of them on November 1?

3.  How do they expect to schlep all that stuff around?  A pillow-case can only support so many cans of Spam.

4.  Isn’t it all SUPPOSED to be about candy?  That’s the whole point.  What’s next – instead of getting your love a card and roses for Valentine’s, you make a donation to the Heart & Stroke Foundation?

Don’t get me wrong, I think the kids’ intentions are great.  And we certainly believe in giving to and volunteering for charitable organizations.  But c’mon – don’t take away a treasured childrens’ tradition in the process.  What they could have done is collect their candy like normal, but hand the homeowner a piece of paper explaining the whole thing, and say they’ll return the next day to pick up any donations offered.  Then the treat dispenser counts up all the pieces of paper, buys that many items the next day, and leaves them on the stoop for the kids (this time with a vehicle to store them in) to pick up the next evening. It would also be WAY more efficient to have one pick up crew do the neighbourhood than hundreds of individual agents operating independently.

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Witch at the Door

Notice the scariest thing I could think of on the left pumpkin.

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Whom Do You Trust?

A couple of years ago, I was asked to to a presentation to an international e-commerce symposium at the Sobey School of Business on the importance of analysts’ opinions when selecting online vendors.  Then, yesterday, I was doing a little research about Direct Buy for my post on asking customers to pay to be customers.  There’s a connection.

During the preparation for my Sobey talk, I got sidetracked from the main topic of, “Can you trust Analysts to be fair and impartial” (answer: not any more), and ended up exploring just who could  be trusted in the world of online commerce.  On ebay, the vendors are rated by past customers, but that could be easily rigged.  There are social recommendation tools like Digg, Reddit and many others that rate content, but those also are often rigged by clever hackers.  By the end of the presentation, I had swung around to Bloggers (in aggregate) as the most reliable source of influence-free information.  Sure some bloggers have been bought, and blogs that rely on advertising revenue have certain agendas, and some companies have even created “fake” blogs that they pretend not to be involved with; but the vast majority of us 120,000,000 bloggers aren’t trying to do anything other than voice our opinions.

When I went to do research about Direct Buy, the first term I googled was Direct Buy Complaints.  That search took me to this http://www.infomercialscams.com/scams/direct_buy_scams, which oddly enough has 23 people mostly rabidly happy with their experience.  Some people caution that you should really think it through, and one complains of a rude person, but the overall tone is very positive.  I think it may be a case of Direct Buy creating their own “complaints,” but I can’t know for sure.

Then I googled “direct buy” “consumer reports”  and was not directed to the magazine (as I was expecting), but rather to a blog called The Consumerist.  She did, in turn, link to the magazine, but it was her context that exactly adressed my curiosity, and the fact that it was a person, as opposed to some quasi-official complaint log that didn’t seem to log any complaints.

So, I’ll conclude the same way I did my presentation in Halifax: take the expertise of an analyst, and the trust of a friend, combine them, and you get the blogging community.

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Would You Pay to Be My Customer?

Last night, my wife and I laughed at the young woman in the Direct Buy TV spot who boasted that she “got this $1,400 rug for only $600!”  What they don’t tell you in the ad is that joining Direct Buy costs over $16,000 (over the course of 10 years).  Congratulations, sweetheart, you’re only $15,200 in the hole!

However, I’m not here to judge the Direct Buy model or its customers.  I’ll let Consumer Reports do that (they’re not big fans).  I’m more interested in the clever marketing strategy of locking in your customer with something more than just loyalty, or satisfaction or even delight.  Direct Buy virtually guarantees that every purchase their members make for the next 10 years will be through them.  And although they claim to have no “retail” mark-ups, you can bet there’s a little slice for them in every sale.

Same thing for Costco.  They only charge $50, and by all accounts I’ve heard it’s totally worth it.  Of course, there’s some psychology at work here: once you’ve paid for a membership, you are predisposed to think it was a good decision and pass that opinion on to your friends.  But regardless, everyone that I know that uses Costco is very happy with the service.  And when they go there for the things that are giant bargains, they also pick up stuff that’s only marginally cheaper than other places.  So Costco still makes full margin on most stuff, and guarantees that their paid membership keeps coming back.

On to bars.  In the 70s and 80s here in New Brunswick, the byzantine liquor laws in force at that time required any establishment that wanted to serve wine, beer AND spirits, without requiring people to dine, and stay open past midnight, to be a “club.”  And as a “club” you had to have “members” and “member” was defined as someone who paid dues.

I kind of like that idea, even now that it’s not required by law anymore.  If I could get people to buy memberships to my bar, they would be more likely to come to my place than somewhere else where they have no “special privileges.”  I’d have to give some thought to the privileges, but maybe lower drink prices, special “Members Only” parties for the Super Bowl, dedicated beer steins, their name on a plaque, whatever.

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