Some readers will find themselves somewhat confused by the title of today’s post. Many others will have recognized instantly the significance of it. Others yet might be intrigued and eager to learn more. Some will quickly leave my blog – I expect abandonment and drop-off to be a bit higher for this entry, but I also expect deeper engagement with those readers who are in the know. Even here knowledge of context makes all the difference.

If you’re still with me then you probably know the significance of the number 42. If you don’t, you’re probably wishing I would just go ahead and explain it. Either way, you’re probably wondering what the hell this has to do with digital marketing or interactive technology.Whatever you do, don't panic!

Well, continuing my musings on metrics and analytics that started with this post over the weekend and, subsequently, with my thoughts on effective analysis this past Wednesday, today’s entry takes a deeper look at the importance of contextual understanding

So, to clear the air and level the playing field, 42 is, as many know, the Answer to the Ultimate Question of Life, The Universe, and Everything, as unveiled in Douglas Adams’ now classic book, The Hitchhikers Guide to the Galaxy.

I chose 42 as the title of today’s post for a number of reasons. First, I like that Adams chose such a simple, yet obscure answer to one of the most profound questions ever asked. It reminds me of many of today’s marketers, who similarly seek simple answers to often immensely complex problems. How else to explain their fixation on things like Klout scores, PageRank, Facebook friends, Twitter followers and similar metrics that, while neat, fail to capture true value? We see this phenomenon offline, in other parts of our lives, as well. Consider FICO scores, BMI numbers and GDP data, which, while providing a valid single data point, cannot possibly encapsulate the complexity of our lives, our creditworthiness, health or wellbeing as a nation.

Second, I like that while Deep Thought returns an answer so seemingly simple, it took 7½ million years to compute and check it, by which time nobody remembers the actual question or understands the significance of the answer. Sound familiar? Marketers, senior executives, board members, “the market”, and countless others are forever looking for a simple metric to capture all aspects of complex issues, so let’s give them what they ask for. Even if we may not really understand the questions, nor grok the answers.

Finally, in a nod to SEO, I figured using the Hitchhikers Guide and 42 as a side topic would boost my blog’s search performance and drive traffic to my site. Sure, it’s poorly targeted and mostly irrelevant traffic, but hey, it’s traffic nonetheless and it’s something that’s measurable.

42, right? 😉

Posted in Branding, Engagement, SEO, Uncategorized, Web Analytics, Web Metrics | Leave a comment

Effective Analytics Requires Actual Analysis, not Just Tools or Data

In a previous post we examined business’ new-found love of metrics & analytics data in their quest to prove the efficacy of marketing programs, specifically initiatives around social media and other popular initiatives long on buzz but short on proven ROI.

And the market, forever on the lookout for the next rich vein of hype to mine, is quick to respond. Google “big data” and you are presented with the usual suspects – including IBM, Accenture, Oracle, SAS, even McKinsey – offering to help you with this latest new new-thing, that promises to help business find new customers and sell more to the ones they already have.

But dig a bit deeper and you will quickly discover that, while the volume of data has indeed grown, the problems business leaders face in dealing with them haven’t really changed. For lack of data was never really the problem. Interpreting what it means, extracting true insight and knowledge, and acting on it was. And this challenge remains and, in fact, grows larger in lockstep with the growth in data volumes.

But the countless tools being pushed by vendors are unlikely to solve this quandary, at least not in the short-term, and certainly not without significant investment in process and people. Most tools on offer today focus primarily on data capture, storage and visualization. What’s missing is something that no tool will be able to provide, at least not off the shelf and without the help of actual people: true analysis.

And this is where business continues to struggle. As Shvetank Shah, Andrew Horne, and Jaime Capellá summarize in their excellent Harvard Business Review article, one of the big challenges is that “Analytic skills are concentrated in too few employees.” If they truly exist at all to the degree needed in many organizations, I would add.

Data and charts are no substitute for insight

Long on data, charts and tools, short on effective analysis and insight.

For most analysts, even those working at large, relatively sophisticated companies, while familiar with business intelligence tools and platforms, lack the contextual knowledge and business insight to provide truly valuable analysis. So they are left to create their weekly reports, regularly feed the dashboards with data, create monthly presentations and charts, but often lack the fundamental understanding of what drives what and how it affects the bottom line. As the HBR article summarizes succinctly, “Managers need to wake up to the fact that their data investments are providing limited returns because their organization is underinvested in understanding the information.”

And one pivotal reason for this deficit of understanding is the absence of qualified and trained analysts equipped with the needed business knowledge, an innate grasp of what is truly significant, and the analytical rigor to add the contextual insight required. For without this, all trends will seem meaningful and it is difficult to discern correlation from causality, and identify relevant, but perhaps small shifts in patterns.

At the root of this lies, I believe, our slavish obsession with quantitative data. A focus on reports, and tools, at the expense of critical thinking and sound judgment. This is reflected in the profiles of most analysts working to gather, collate, organize and interpret business data, in particular in marketing. Most came to their position because they were familiar with certain BI tools or analytics platforms and not necessarily because of their critical thinking or analytical talent. Many have a background in engineering, math or statistics (reflecting our obsession with so-called “quants”), which works well in highly-structured applications such as finance, automated trading, and risk management, but less so in more fluid, complex areas as marketing and the Web. Here, these “hard skills”, while no doubt valuable and needed, need to be augmented by a deep contextual understanding of the business, the technology, application and scenario that generated the data being analyzed. To be truly effective, the analyst will also require a certain degree of sound judgment that can only come from real-world business experience.

Previously, in simpler times, analysts would prepare standard reports and feed data to executives via dashboards and other means under the assumption that these more senior business leaders would then provide the contextual business knowledge to interpret the data. The problem we face now is that data is far more voluminous and permeates nearly every aspect of business, along each step. So, while the job of the analyst used to be to simply to gather sales data from POS or ERP systems and compile them into a report for executives to interpret, they are now called upon to judge which data are relevant and how they are to be structured and presented.

Basically, as data availability and volume has exploded and much of it is now generated well before a purchase decision is reached, the level at which important decisions are made has also moved down the reporting hierarchy. Unfortunately, the knowledge, skills and experience needed to effectively make these pivotal decisions still resides mostly at the senior management level, creating a disconnect.

As the HBR article summarizes in closing, “To overcome the insight deficit, Big Data—no matter how comprehensive or well analyzed—needs to be complemented by Big Judgment.” Many organizations still have a long way to go in this regard, I believe.

Posted in BI, Big Data, Business Analysis, Business Intelligence, Interactive Marketing, SEO, Social Media, Uncategorized, Web Analytics, Web Metrics | Tagged , , , , | 1 Comment

Analytics Today – a Flood of Tools and Data, a Dearth of Insight

Digital marketing practitioners seem to have rediscovered their love of metrics & analytics of late. As a result, witness the current flurry of activity in this space. One suspects this is partly a result of business beginning to question the efficacy and business value of social media and demanding that marketers prove its true value in terms of real, and measurable, ROI. How novel.

Those who have seen this movie before, most notably during the dot-com bubble, but really with every new-new thing to emerge since, can’t help but scratch their heads over this. And, truth be told, I have heard many a seasoned practitioner comment that they see a repeat of the hype we saw more than a decade ago, and they expect an inevitable collapse when business realizes that the snake oil they have been sold is just that. And, clearly, it was only a matter of time until social media entered what Gartner calls the Trough of Disillusionment and business leaders with P&L responsibility (or their C-level management and investors) woke up from their hype-induced delirium and demanded to know if their investment was actually moving the needle.

As a result, there is now a mad rush among business and digital practitioners to prove their worth, show evidence of the value of social media, and provide data to back up their claims. Suddenly, everyone seems to want data, the more the better. And tools, of course. Oh, don’t forget dashboards and reports, clearly, we want those too. But the problem was never really a lack of data, tools or dashboards but, rather, a lack of insight. Which gets to the crux of the matter: business today is awash in data, but true insight and understanding of what drives what and delivers true incremental value seems as elusive as ever.Getting from raw data to actionable knowledge

But, worry not, for here comes the latest over-hyped buzzword: Big Data. And, again, the focus is on volume rather than understanding, quantity over quality. A figure commonly cited is that 90% of all data has been created in the past two years. With the emergence of the Web, suddenly every online interaction became a data point. With the rise of social media, these interactions – and the resulting data – grew exponentially. With addition of the anyplace/anytime mobile Web and integration of POS systems and loyalty programs (both of which make offline behavior more trackable) and data volumes exploded.

We are now at the point where we are literally drowning in data, but even the best marketers will admit that true knowledge – actionable insight – remains as elusive as ever.

Of course, you’ll probably have to get them away from their boss and maybe get a few drinks into them before they admit this candidly. I spoke with one senior marketing exec at a recent conference I helped organize and he admitted as much: “Are we ready for Big Data? Hell, no. We still suck at “little data” and struggle to get basic Website metrics right. Sure, we have every analytics  and BI platform available and track just about everything that happens on our dozen or so sites. We just don’t understand what most of it really means.”

And that just about sums it up.

Posted in Big Data, Interactive Marketing, Mobile Internet, Social Media, Uncategorized, Web Analytics, Web Metrics | Tagged , , , | 9 Comments


Exploring What Content Curation Is and Isn’t, What it Can and Cannot Do

In my last entry, I discussed the pivotal role that compelling, current and relevant content plays in SEO performance. And, while being discovered and getting traffic is an important part of online success, it’s only the first step. Actually engaging site visitors once they arrive at your site, getting them to consume the content that brought them there – and ideally more – is an equally important step in the conversion process.

The rook. After the King, arguably the most valuable and versatile piece on the board.

Beyond engagement, getting users to share, link back to and reference your content is a further important hurdle. And lastly, establishing your site as a subject matter authority, a thought leader, and a helpful, valuable resource, is the final step in becoming a regular destination, one that users will bookmark and refer others to.

Content Quality over Quantity

So, while the SEO aspect is impacted at least to some degree by content quantity – though this is quickly changing with the evolution of search engine algorithms, most notably Google’s Panda and Penguin releases – the more downstream aspects of engagement and conversion (however you define this for your site or business), are driven purely by content quality. And this is where many content curation strategies all too often fall down.

The same things that make the creation of compelling original content challenging – the investment of time, effort, talent, and money it requires – also apply to curation, albeit to a lesser degree. And, similar to content creation, the approaches to curation vary greatly. As one might expect, the same is true of the results. We all know sites that use content-mills and armies of loosely-affiliated, poorly paid and minimally vetted freelance writers to churn out volumes of low quality content a mile-wide and an inch (or often less) deep, but how many of us bother to read their blabber, much less forward it or share it online? Poorly “curated” content suffers from many of the same ills.

Simply locating and sharing of content is aggregation, not curation. I have seen brands do this using automated systems with minimal human involvement. And it shows. Effective curation involves locating online content, categorizing it properly, and reviewing it to assess its editorial quality, the salience of the views or insights expressed, and their originality. This simply cannot be automated. Next, a good curator will then add to and improve the curated content piece further, perhaps by explaining how and why it relates to the point of interest, thereby establishing relevance. Finally, a good curator will add their own point of view (or that of the company or brand employing them), which may either be aligned with the original piece, or in opposition to it. Such contrarian curation can be particularly effective in crisis management situations, or where an organization would like to clearly differentiate themselves from others, or distance themselves from certain issues. Doing this well requires experience, editorial skill and original thinking.

Content Curation Increases Efficiency and Reach

If done well, content curation can be an effective force multiplier for brands and sites. For one, even a solid, well-conceived and executed curation program will allow brands to generate relevant content entries more quickly and with less effort than creating them from scratch. Secondly, it allows brands to leverage and tap into emerging trends quickly and properly curated content will be innately aligned with popular keyword trends and thus able to capture long-tail search traffic around them. Curating and linking to outside content may also invite reciprocal back-linking by the original content source. Finally, by curating and linking to content from others, your message may be perceived as more objective, given that the original source is unrelated to the brand doing the curation.

So, returning to our original chess reference in the title of this entry, while original content may be king, it is also expensive, unwieldy and often slow. Curation, similar to the rook on the chessboard, is more nimble and an effective multiplier, but not a substitute. Together, the two approaches make for an effective content strategy.

Posted in Content Marketing, Engagement, Interactive Marketing, SEO | Leave a comment

The Abdominizer, the Hollywood Diet, Black Hat SEO and Other Myths

Why There Are No Shortcuts to Online Success

As Americans, we’re conditioned to expect instant gratification. It seems at every turn we are offered quick and easy solutions to tough problems and are promised rapid results with little or no effort – as long as we’re willing to ante up and pay for the latest gadget or surefire approach.

If you’re as old as I am, you’ve seen a lot of gimmicks, gadgets and just plain nonsense come and go. Remember the Abdominizer? Or the Ab Energizer? Both promised rock-hard six-pack abs with little or no effort. In fact, the latter used “powerful technology” to “send just the right amount of electronic stimulation to your abdominal muscles”, thus toning them without the need for exercise. Get a rock-hard washboard stomach, while watching TV and enjoying a dozen chicken wings…imagine that. Or how about the Hollywood Diet, which promises that you will magically shed pounds in mere days. What could possibly go wrong, especially with a name like that? Turns out plenty, since none of these actually work and quite a few may send you to the emergency room.

LikewiseIt's on TV!, our penchant for easy solutions and quick fixes extends online as well. Brands want to rank in the top-3 results for a given search terms on Google but all too often don’t understand and appreciate what it takes to get and, perhaps more importantly, stay there. And, of course, they would like to get there fast. Ideally this week, but if not, certainly by the end of the month. And, if at all possible, without making any of the hard changes, like developing a better website, investing in compelling, relevant content or implementing an effective social media strategy. This desire for real results without hard work is the online marketing equivalent the Abdominizer. And, just like its offline cousin, it promises a lot and delivers very little. But, hope springs eternal and, fueled by heady promises from “search experts” who bandy about mysterious terms like black hat SEO, link building and cloaking, there seems to be no shortage of companies willing to spend money on a quick-fix boost to their search ranking.

Now, don’t get me wrong, there are legitimate and effective techniques that make a site more SEO-friendly and thus easier to index, and these should certainly be employed. SEO-friendly URLs, consistent terminology and keywords, proper redirects and an up-to-date sitemap are indispensible and no site should be launched without. And, even some of the more frowned-upon practices may indeed deliver a short-term boost to your ranking. Another option, one I am not fond of but certainly effective, is to employ paid search (AdWords) and simply buy your way to the top of the results page. Of course, paid results are often viewed with skepticism by users, the traffic they generate may differ in terms of quality and conversion, and there is the risk of click-fraud. So, while this approach may circumvent natural PageRank and lift traffic, it does so at an ongoing cost and thus hardly presents a long-term advantage.

At the end of the day – and certainly with the recent Penguin release of Google’s algorithm – there is only one surefire way to improve your PageRank and that is to regularly create compelling, valuable and relevant content that people want to consume, reference, share and link to. Anything short of that is not just short-sighted, but also bad business.

Posted in Branding, Content Marketing, Interactive Marketing, SEO | 3 Comments

True Sustainability Can Compete

Protecting the environment – or at least purporting or appearing to do so – seems all the rage these days. Recent events, such as BP’s Deepwater Horizon oil spill in the gulf, countless food scares, and reports on natural gas “fracking”, climate change, hypoxic dead-zones and huge fields of plastic floating in our oceans have created a level of awareness and concern not seen in decades among average citizens.

This new-found focus on sustainability has not been lost on business. One is hard pressed to find any organization not currently espousing their commitment to preserving our natural resources and protecting our environment. Nearly every Fortune-500 company has a sustainability department these days and many tout their “green” credentials in slick TV commercials, print ads and glossy sustainability reports.

And then there are the many initiatives undertaken across all levels of government as well as by non-profits and various non-governmental organizations (NGOs), many with global reach and sizable budgets. It seems from the White House down to the smallest city council, everyone has a sustainability plan and touts “going green” as a core part of their agenda. Communities are investing in renewable energy, embracing alternative fuels, fighting food deserts, and supporting local agriculture, with politicians proudly appearing at ribbon cuttings, conferences or grand openings. Provided the press is there as well to capture and cover the moment, of course.

Unfortunately, posturing, proclamations and press releases will not help us meet the environmental challenges we face, which are very real. Instead, we need original thinking, bold leadership, competence, and a commitment to innovation and effective, workable solutions. As far as publicly funded initiatives are concerned, all options must be understood, objectively analyzed and assessed based on effectiveness, not hype. Projects and solution proposals should be evaluated based on their overall impact and long-term cost-benefit ratio, not their PR value. And we must recognize that we will not tackle the problems of today with solutions of the past, or the romantic notion that if we could just return to doing things the way we did in the “good old days”, all would be well.

A growing population and strong economy will increasingly require more, not less, of just about everything. The challenge is to meet these additional needs using the same or, ideally, less resources and inputs. This will in some cases require a fundamental change in mindset and openness to radical innovation and change.

Luckily, we have a proven, effective framework and ecosystem for bringing about innovation and change: the open market place. This is not to say that government and NGOs do not have a role to play, for clearly they do. Both, however, should limit their primary focus to educating the public, fostering popular awareness and engagement, and supporting promising emerging technologies through their normal procurement activities and the inherent power-of-the-purse they wield given their unique ability to make long-term investments with time horizons that would not be feasible in the private sector. In selective – and very rare – cases it may make sense to provide early financial or in-kind support to foster an emerging sector that provides a real and tangible social benefit. The role should be that of a midwife, however, and not a parent or patron. Governments, NGOs and foundations should refrain from providing market-distorting long-term financial support, since this will do more harm than good. Sustainable, lasting change can only come from truly sustainable businesses and these must offer a desirable product and be able to compete in the open marketplace. Businesses that generate profits that can be reinvested in growth and provide an economic incentive for the principals and early-stage investors. This is true regardless of whether the focus is on solar, rainwater capture, natural foods, or urban farming.

The best support that government or anyone else can provide in fostering a viable “green” economy is to provide a truly level playing field free of market distortions while also fostering transparency, awareness and education around the relevant issues and their importance. If these two preconditions are met and the product or service is truly competitive – a necessary precondition for true sustainability – then market forces will take over and bring about lasting change and success. Examples include the Toyota Prius, Patagonia, Whole Foods, TOMS Shoes and, just recently, Annie’s Natural Foods, who had one of the most successful IPOs of this year. Without these preconditions, the effort will be a dependent on handouts indefinitely. In the best case it merely acts as a drag on the economy by mis-allocating scarce resources away from other, worthier ventures. At worst it can cause market distortions that keep other, truly sustainable players from entering the market, cause them to fail, or even discredit the entire sector. And surely no one would have an interest in that, would they?

Posted in Branding, Greenwashing, Sustainability | Leave a comment

What’s Ailing Our Food System?

(This article first appeared as a guest column in the Saporta Report on May 13th, 2012)

When it comes to food in America, we face a Dickensian dichotomy. Parts of our population enjoy abundance and an unprecedented variety of food choices, while others live in so-called food deserts with no easy access to fresh, wholesome food at all.

Similarly, obesity and related diseases like Type-2 Diabetes have reached epidemic proportions, while a large percentage of our population regularly faces food insecurity or outright hunger. How is it that a society as advanced and rich as ours is forced to deal with such seemingly contradictory challenges?

Well, it’s not due to a lack of food; not yet, at least. Our country continues to set new records in food production, while also importing a record amount from abroad. So, clearly, the problem lies not with the overall amount of food we produce but, instead, with the type of food produced and how and where we produce and distribute it.

Take fresh produce as an example. Consumers have become accustomed to having access to just about any type of fresh produce at any time of year, regardless of season, weather or where they live. As a result, the global produce industry now boasts one of the most advanced logistics and distribution networks in the world.

Walk into any Whole Foods and you will find cucumbers from Holland, peppers from Peru and lettuce from Arizona, Mexico and Honduras. Of course, while many of these products might look impeccable, they often disappoint in terms of taste, texture and nutritional value.

Growing food in these faraway places and then transporting it by air or refrigerated truck for thousands of miles is not only hard on the food, it also causes pollution, traffic congestion and host of other problems, including lack of access in many parts of our society, such as our inner cities.

Unfortunately, our current food system is geared for centralized production in places far from our urban population centers, making long, complex and energy-intensive supply chains necessary. With the cost of oil rising, however, there is increasing interest in local food production in or near cities.

Urban gardens are becoming increasingly popular and they play a crucial role in building awareness of food issues and helping to educate our young citizens – and those not so young – to make good food choices.

They are also spurring renewed interest in food production and gardening. It is estimated, for example, that up to 10 million people began growing food in their garden when First Lady Michelle Obama planted vegetables in the White House garden.

This sort of involvement by high profile, influential people – and the publicity and attention that comes with it – creates awareness, drives education and fosters engagement. It will not, however, fix our food system or solve the problems that result from its current dysfunction.

Instead, radical innovation – the kind we have seen transform other sectors, including information technology, communications and medicine – is needed to meet the challenges we face. The fact of the matter is that our current approach, with its heavy dependence on increasingly scarce resources such as oil, water, and arable land, has inherent limits; and we are quickly bumping up against them.

Previously, we were able to increase production by simply adding more inputs, primarily in the form of more land by converting more and more acreage (usually in faraway places) into farmland.

Unfortunately, land suitable for farming has become scarce and we are now forced to resort to less-suited options. These tend to be further away from the point of consumption, often involve converting them from other uses such as forestry or wildlife habitats, or have less suitable climate, lack access to water or poor soil quality.

While we can overcome nearly all of these limitations, doing so usually requires a lot of energy — energy for transport, to create synthetic fertilizers and pesticides, pumping water, plowing and tilling soil, seeding and harvesting crops.

Agriculture is one of the few sectors that has not fundamentally changed in over 50 years. Nearly all innovation during this time has taken place in ancillary fields, including logistics and supply chain management, seed technology, and fertilizer and pesticide development.

One side effect of this is that less and less of what we spend on food – our so-called “food dollars” – ends up with the folks actually growing the crops, the farmers and their workers.

Instead, the vast majority is spent on energy, processing, distribution, retail and marketing. And, for all the money spent on today’s well-travelled and heavily processed food, it’s not any better than what our parents ate.

Quite the opposite, in fact. Studies have shown that the average nutritional value of common produce has declined steadily and anyone who has had a tomato grown in Florida in December can attest that the same is true of flavor and texture.

But it is possible to grow food at or near the point of consumption; and there are quite a few innovative companies showing us how. New York-based BrightFarms, for instance, is company that builds and operates rooftop greenhouses right on top of supermarkets and old warehouses in our country’s largest city. Gotham Greens, also a New York company, grows fresh produce in rooftop greenhouses in Brooklyn.

Another example is Atlanta-based PodPonics, which recycles shipping containers into controlled-environment “GrowPods” used to cultivate lettuce, micro-greens, and other produce. PodPonics grows their crops without any pesticides, uses 80 percent less water and vastly less fertilizer, none of which runs off to pollute streams and waterways. Plus they supply some of the city’s best restaurants with produce delivered within mere hours of harvest.

While we face significant challenges in re-engineering our food system, they are not intractable.

But, more importantly, great rewards exist for those innovators willing to disregard convention, think outside the box and re-imagine a food system that works for everyone in a crowded world where oil and energy are scarce.

Posted in Local Food, Sustainability, Uncategorized | Leave a comment

JP Morgan Chase Still Owes me $177.76 – and another $33 Billion to the US Taxpayer

Back in December 2010 I received a letter from Chase Home Finance, the servicer of my mortgage, informing me of an overage in my escrow account. This was not entirely unexpected, given that my escrow account had been running a surplus for some time, as a result of the reduced property tax rate, in turn a result of the drop in assessed value. While this had been anticipated, I still looked forward to receiving the check for $177.76, which, according to my account had been mailed out on January 26th, a full six weeks after the initial notification.

Why it would take them this long to cut and mail a check was beyond me, but at this point I was only slightly irritated by this. Why they would issue and mail me a physical check through the US Postal Service was even more beyond me, given that for years my payments were regularly and reliably made electronically via bank transfer. Wouldn’t is be easier – and not to mention faster, cheaper and less taxing on the environment – if they just returned to overage in my account the same way they received it, via near-instant electronic ACH transfer? One would think, but then one would not be attuned to how large Too-Big-To-Fail banks think and operate.
I patiently waited another full month for my check – in vain. Finally, on March 1st, my mortgage escrow balance – which, of course, bears no interest – was credited with $ 177.76. Confused, I called Chase Home Finance and, after a mere 5-6 minutes navigating their automated “customer service system” (“customer avoidance system” would be a more apt description), I was connected to “Stacy”. And, if the tell-tale lag and poor quality of the call were not clear proof that this call was being routed via VOIP telephony to an overseas call center, “Stacy’s” thick accent and poor diction was a dead giveaway.

After I established my identity by sharing various personal information – which I had already done with the automated system that connected me, mind you – “Stacy” informed me that my check had been returned by the US Postal Service because it was – so sorry – “undeliverable”. Never mind that I had been receiving all sorts of mail, including my statements from Chase, reliably all along, thanks to a USPS order forwarding my mail. Undeterred, I provided an alternate mailing address and was assured that my escrow refund check would be forthcoming.

And, sure enough, on March 3rd, my account was debited for $177.76 and two days later I received a letter in the mail confirming my new address and thanking me, signed by one Mr. Larry Thode, apparently the “Vice President of Customer Care”. Interestingly enough, the letter had a return address of Columbus, OH, where Chase Home Finance is apparently headquartered, even though my payments are processed in Phoenix, AZ. Even more interesting is that Larry Thode managed to “sign” my letter – in an attempt to provide “Customer Care” no doubt – even though, according to LinkedIn.com, ole Larry lives and works in Monroe, LA. In his LinkedIn profile, Larry describes himself as quite the go-getter and his “Responsibilities have included developing operational disciplines and strategies to improve both top and botton line results. I am able to inspire, and keep things simiple, and create winning teams.” While a grasp of proper spelling and diction seem to elude Larry, he should obviously be encouraged to enumerate once more to add “and robo-signing bullshit letters to customers” to his skill set. But, I digress.

On March 22nd, I realized I STILL had not received my refund check and, figuring three weeks is a long time even for the USPS – all the more so given that Larry’s delightful letter and my new account statement had gotten here since then – I decided to brave Chase’s IVR system once again. After the inevitable goat-rodeo that they call their “automated customer service system”, I am speaking with “Cheryl”. Again, the noticeable lag, poor voice quality and a THICK accent that makes it nigh impossible to understand what is being said and makes it equally clear that I am speaking to someone in Chennai or Bangalore. “Cheryl” explains that it takes 21-28 days for them to “process” my check and then another 8-10 “work days” to mail it out. When I question why it would take this long to simply mail a check, she explained that Chase had to “calculate” and “process” my payment, even though this was the second time this payment was being attempted. Undeterred, I asked “Cheryl” why, since I made all my payments electronically, why couldn’t Chase simply return the favor and process the refund the same way, via ACH transfer, instead of a physical check? Or, even better, why not just apply the money (MY MONEY, after all) directly to my mortgage payment or credit card account? “Cheryl” responded that they had to “follow their policies and procedures”, which seem to be slightly slanted in favor of Chase and to the detriment of their actual customers. I wonder if Larry Thode knows about this since this seems like an opportunity for some serious “Customer Care”, no? I would write him about it but I’m not sure if I should send the letter to Columbus, OH or Monroe, Louisiana…

Why does this matter you ask? And when can we get past your measly $177, Dan, and on to the $33 billion you teased us up with in the headline? Good questions indeed. Well, one should consider that Chase is the third largest mortgage servicer in the US, with more than 9 million accounts. So, while holding onto my $177 for an extra three months may seem like a small issue, once you multiply it by 9,000,000, things start to make sense. Especially when you consider that my mortgage is rather small and at a fairly decent rate of 5.5%. But, even using my relatively low interest rate and applying it to outstanding amount of $177.76 for the three-month period in question, we get $2.44 of interest charges. Chump change, you say, and I would agree. But, once we multiply it by the 9 million mortgage accounts (many at much higher rates) that Chase services, we are talking about $21,997,800.00! To most people, myself included, this is a huge amount of money. Even for Chase, getting $22 million (for nothing!), is real money. After all, it easily covers their CEO Jamie Dimon’s well-deserved bonus of $17 million for 2010, with $ 5 million left over to throw a party and pay the little guys, including Larry Thode and his “customer care” team.

But, of course, Chase not only services mortgages, but also revolving consumer debt, including credit cards. And, obviously, it stands to reason that they would apply this windfall of free money – withheld from consumers like you and me – to the most profitable use available. The current (March 2011) average credit card interest charged is 16.82 percent. Three months of interest on my $177.76 at this rate comes to $7.47. Assuming I am not the only person being stiffed here this comes to $67,273,272.00 when applied to all 9 million Chase Home Finance Mortgage holders. Now, this is the sort of mind-boggling “financial innovation” often touted by Mr. Dimon and other bankers when they are pressed to justify their outlandish pay packages. A cool $67 million in “free” money out of nowhere, what’s not to like? Well, perhaps the small detail that it’s not “free” (consumers are paying for it) and it’s not “out of nowehere”, it’s the result of fraud, or, excuse me, the result of Chase’s “policies and procedures”.

So, now you’re thinking: “Nice rant, Dan”, but “what about the $33 billion Chase owes the taxpayer? Where is that number from and what’s up with that?” Great question. Chase, who like their fellow Wall Street bankers at Bank of America, Goldman, GE and others, like to brag about their cleverness and their ability to “innovate” (by which they mean such genius concepts as overdraft fees, hi-lo sequencing (Google it!), securitization and credit default swaps, all swell ideas..). They will also throatily insist that they paid their TARP bailout money back, though generally forget to mention another government program that has kept them alive and well-paid, even as main street continues to struggle through a tight credit market. This program, known as the Temporary Liquidity Guarantee Program, or TLGP is perhaps less well-known than it’s cousin TARP, but a sop to Wall Street nonetheless. TLGP allows big banks to borrow money under a federal guarantee, giving them access to funds at the same rate the US government enjoys. Oh, and guess who pays these loans back should one of these banks default? You guessed it: the taxpayer. Chase has yet to repay $33 billion loan we guaranteed for them, but insists now they are healthy and profitable enough to boost their shareholder dividend, a move that will net their chief executive, Mr. Dimon, an estimated $5.7 million additional windfall.

‘Cause, y’know how hard it is to make ends meet with a measly $1.3 million base salary and $17 million bonus.

Posted in Financial Crisis, Moral Hazard | 1 Comment

They Steal More than Money

I had been thinking about this article for some time, mulling it over in my mind repeatedly. Each time I thought of the sad examples of humanity that exemplify so much of what is wrong with our country and society – people like Bernie Madoff, Angelo Mozillo, Richard Scrushy,  R. Allen Stanford, Lloyd Blankfein, etc. – I found myself perversely enjoying the warm feeling of bile and anger rising up in me, much like one can strangely find off-putting pleasure in the taste of blood in ones mouth after a fall or being struck.

But, these billionaire mega-crooks – some convicted, some able to avoid justice through technicalities, payoffs or legal maneuvering, but guilty all the same – are just the tip of the iceberg. For if these perps could commit such enormous frauds and steal so much from so many for so long, it’s a safe bet that there are many more out there, working on a much smaller scale, undetected. And, while the scale of deception, narcissism, arrogance and plain old theft committed by these men is mind-boggling, the money stolen is sure to be just a small part of the damage they have caused.

Much larger looms the irreparable injury to the very fabric of our society, to the foundation of trust that forms the bedrock of our daily lives. For once people in positions of power and trust can show such a blatant disregard for fiduciary duty, honesty and just plain human decency, all bets are off. Moreover, while the acts of deception in and of itself are bad enough, the cynical ploys, feigned indignation and hypocrisy displayed in their defense are even worse.

Who can one trust these days when it seems that everyone is on the take and bought and paid for? Did your doctor prescribe a certain medication because he thought it would help your condition, or is he just trying to get that all-expense junket to Hawaii from some pharmaceutical company? Did your investment adviser recommend a mutual fund based on merit or to earn a fat commission? The list goes on.

But even in this cesspool of lies, deception, hypocrisy and double-dealing, every now and then one finds a particularly noteworthy nugget. One such treat comes from the Mortgage Bankers Association of America, the professional trade organization of the industry that brought us our current economic malaise and the financial crisis. It turns out these masters of finance, the same folks that insist that much the mortgage mess is to blame on consumers too careless to read their mortgage documents, have decided to back out of a real estate purchase they committed to at the height of the market. They would now much prefer to return their shiny new headquarters building bought for around $79 million back in 2007. At the time they astutely financed the purchase with a variable rate loan with an LTV (loan-to-value) ratio of about 95%. Hmmm…how novel. Of course, 2007 was the peak of the bubble, when money was cheap, mortgages easy to come by and lenders eager. Now the MBA is using a process known as “strategic default” to get out from paying the inflated price agreed to at the time. Basically, this is little more than breach of contract. And, while a new buyer has been found for the property, the agreed upon price is now only around $45 mil, reflecting the current state of the market and the “true” value of the property.

Interestingly enough, John Courson, chief executive of the Mortgage Bankers Association is on record in the Wall Street Journal on Dec 7th, 2009, berating and lecturing consumers that living up to their loan obligations in spite of being underwater “isn’t just a matter of the borrower’s personal interest.” He goes on to insist haughtily that “defaults hurt neighborhoods by lowering property values. What about the message they will send to their family and their kids and their friends?” Indeed, John, indeed.

It’s sad that ole John doesn’t see the same moral hazard when it comes to his once high-flying industry group reneging on their commitment to community, kids and friends. What’s even sadder is that this outrageous tale of corporate malfeasance is being committed by the very same trade organization intended to guide and regulate the mortgage industry. And what’s outright pathetic about this issue is that the only people that appear to take note are Jon Stewart and a handful of bloggers. Et tu, professional press? I hope you at least got a good price for your soul and, given the MBA’s track record, insisted on payment in cash. Upfront.

And as to the bank holding the note on the MBA’s headquarters building – PNC Financial Group – who is being stuck with a loss of about $25 million, we offer a heartfelt “chin up”! After all, $25 million – an amount inconceivable to most Americans – is mere peanuts compared to the $7.6 billion – yeah, like with a “b” – in TARP money your Uncle Sam spotted you when things got rough. And while we acknowledge that you did repay this rather generous loan earlier this year, that kinda helping hand in times of need is a hell of a lot more than most consumers got.

But, after all, it’s just money. Granted, in this case, it’s a whole lot of money. A shitload in fact. But, compared to what the guys mentioned at the beginning of this article took from us, the $25 million – or even $7.6 billion – ain’t nothing to cry over. No, it’s safe to say, those guys took far more from us.

Posted in Financial Crisis, Moral Hazard, Strategic Default | Tagged , , , , , , , , , | Leave a comment

Real Issues Drive Real Engagement

Yesterday I wrote about the recent rush by companies to vehemently and vocally trumpet their sustainability and corporate social responsibility efforts in an attempt to either plug into the current Zeitgeist of consumers or, in cases like BP and many large banks, attempt to counteract the negative publicity resulting from some fairly egregious lapses. I also implied (ever so subtly, of course…) that many of these efforts were falling flat and failing to resonate with the intended audience. The reasons for this are numerous, but prominent among them is the failure by brands to overcome justified consumer skepticism due to a perceived dissonance between a brand’s actions and their messaging.

In a nutshell, many of these attempts to engage consumers around issues important to them fail because they are perceived as dishonest, hypocritical, or disingenuous attempts to pull the wool over their eyes. And if your message isn’t perceived as genuine and sincere, then no amount of repetition (aka frequency in ad terms) will help. In fact, it will do further harm. Hence, BP’s spending hundreds of millions of dollars to carpet-bomb network television viewers  insisting they are doing all they can to clean up the oil spill – instead of investing the money in actually cleaning things up or ensuring catastrophes like this never happen again – will backfire with many people, including this writer. Sure, some less-engaged, less-discerning viewers will be placated by the slick commercials but, unfortunate for BP, this passive audience group does not blog, influence or drive opinion.

Now, clearly, the situation with BP and the Gulf oil spill is an extreme example and they were forced into crisis mode by the events, leaving them flailing in an attempt at damage control. But, attempts at trying to squelch – or better yet take control and reverse – a negative message are not all that different from trying to seed, nurture and promote a positive story. In both cases it helps to be forthright, humble, and honest, traits many perceive as missing in BP’s efforts.

For a recent example where efforts to promote positive actions backfired badly, readers can turn to this story on the Hershey Company, who just issued their first ever Corporate Social Responsibility Report, timed to coincide with the occasion of founder Milton Hershey’s 153rd birthday. The verdict by John Robbins, writing in the Huffington Post is damning: “Long on platitudes and promises, it was classic example of the practice of greenwashing – a PR effort to mislead the public into thinking a company’s policies and products are socially responsible, when in fact they are not.”  Yikes!

Enough of the bad examples though. What can brands do to project a positive image and get consumers to not only like them but love them? Well, one approach is to find a real problem in the world – if you’re considering this approach, your timing couldn’t be better as we currently seem to have plenty – and then work to solve or at least lessen its impact. Ideally, find something that relates to your core business and allows you to bring your resources and core competencies to bear in a way that others could not.

A good example of this is the World Bicycle Program, an initiative to distribute bicycles in Africa and Asia sponsored by SRAM and Trek. Here is an idea that is simple, effective and perfectly aligned with the mission and business of the sponsoring brands. Efforts like this not only make a real impact in our world but also bear fruit, as made evident by the great coverage in the NY Times recently. And, since these efforts resonate and connect with consumers, they lead to real engagement and can generate a groundswell of goodwill and viral promotion, borne out by the 92 comments posted on the NYTimes site and countless re-posts to FaceBook, Twitter and blogs, including the one you’re reading now. What makes this story resonate is that people get it: we can all relate to Abel having to walk barefoot for three hours to get to school and we grasp how something as simple as a bike would reduce this significantly, freeing up more time to study, work or take care of his siblings. We also get the connection to SRAM and Trek and how these companies have the means to easily do something as simple as provide cheap, sturdy bikes that will dramatically change the lives of thousands of African children. In short, the story makes sense and it feels real.

Another good example is New Belgium’s support of the Save the Colorado project, an initiative to protect the Colorado River. Cynics may claim that it’s a bit self-serving for a brewery based in Fort Collins to advocate for water conservation, given that they rely on a supply of clean water to produce their beer. And, in fact, they would be correct to do so. New Belgium is even quick to point out that they are not entirely altruistic in their support of the initiative, and they openly admit water makes up over 90% of their product. Moreover, it’s clear to most that the brewery likely gets back just as much as they give through promotional exposure for their Skinny Dip beer, which they concede has also become their mascot for water advocacy. But who cares? By being forthright and honest, New Belgium is able to serve the greater good while also protecting their self-interest and making a few bucks. What could be more American than that?

My next post will look at other opportunities for advocacy-based exposure and will include some challenges for brands to step up and help solve problems here and abroad. For doing well while doing good makes for a great story. And having a great story, ultimately, is what great marketing is about.

Posted in Branding, Interactive Marketing, Uncategorized | Tagged , | Leave a comment