Farewell Qwikster, we hardly knew ye. Netflix in reverse.

Perhaps it's a new kind of market research? You float an idea out there and see how customers and the punditry react. If, as in the case of the announcement of the breaking up of Netflix into two parts, the reaction is almost universally negative, you simply announce that you've changed your mind.

I thought that the idea of breaking Netflix up into separate dvd and streaming services was unnecessary and unfriendly to its customers. So, I'm glad to see that Netflix has reversed course (apart from the pricing aspect). It would have been much better, of course, if the company had managed to anticipate customer reaction and not make the break-up announcement in the first place. Maybe Netflix needs to recruit a devil's advocate?

Hey, marketing managers. Are you spending too much time on the toilet?

Photo by buckofive on Flickr

Are your once innovative products becoming commoditized? Are you getting pulled down into a cesspool of cost cutting as you try and stay price competitive?

HBS Professor Ranjay Gulati says, if that's happening to you, you may be spending too much time on the toilet and not enough time figuring out what your customers really want. In this HBR podcast, he explains his toilet analogy. When you go to a restaurant, he asks, will you go back again if, at the end of an otherwise good meal, you go to the restroom and it's a disgusting mess? No, probably not. How about if you go to a restaurant and the meal's horrible but the toilet is sparkling clean and has all the latest bells and whistles? It won't make any difference. You won't go back.

Restaurant toilets are what Gulati calls "hygiene factors" and what others call cost-of-entry attributes. These are must-have factors that will hurt you if you don't have them but have no upside potential once they pass inspection and are good enough.

In any competitive market, more and more things become hygiene factors over time. What was once breakthrough quality, performance or service becomes something that everyone else offers too and which customers take for granted.

The tough challenge is to recognize and accept that what once made you stand out from the crowd may have become a figurative restaurant toilet. The natural tendency is to stick to what you know and keep on trying to improve on what you're already good at. But that strategy won't work if what you are good at is already good enough.

When a once-signature feature becomes hygienic/cost-of-entry, more effort and investment to improve it will add cost but won't add customer value. Over investment in hygiene factors is what eventually opens the door to the Vizios of this world--they are able to produce stripped-down, good enough products at lower costs, then price aggressively to take market share.

How to avoid falling into this trap? Think about how to better recognize what value-add features customers are prepared to pay for, don't assume that your once strong differentiating factors will work for you indefinitely and watch out for factors that have started to decline in customer importance and value. 

As key differentiators approach the "good enough" zone, slow down further investment in them and seek new sources of differentiation, even if these are outside your comfort zone. That's the best way to make sure your efforts, yes I'm going to say it, aren't flushed down the toilet.

We have ways of making you...buy

Where the famous line "We have ways of making you talk" actually came from (This Day in Quotes)

This week's hoo-hah about the Apple's iPhone's file that logs your historical whereabouts shows the fine line between our love and hate of what our smartphones can do for us and with us. We love applications that tell us how to get to where we want to go or find what we want from our current location. But we hate the idea that our whereabouts can be tracked and used by anyone else (even if we are only too happy to volunteer that same information, often with photographs, via Facebook).

Something else we like, nay demand, is that these smartphone services like maps or Facebook should be free. Yet we don't like the ads that generate the revenues that help keep these things free, nor the idea that they could be made more effective by using the data they collect.

For those already sensitive to data and location privacy, this article from Wired about persuasion profiling is not going to be a happy read. Persuasion profiling goes a big step beyond targeted ads. As Wired says: "It doesn’t just find content you might enjoy. It figures out how you think." Research has shown that people are typically more receptive to some types of persuasion than others. Some people are persuaded by expert reviews, others by time-sensitive deals, others by a simple sales message, and they are responsive to the same type of approach across multiple domains. By tracking what worked and didn't work with individual people in the past and then focusing on the best approach, researchers were able to increase ad effectiveness by up to 40%.

As marketers, the idea of being able to target the right ads to the right people in the right way sounds attractive. How great would it be to be able to nuance our brand messages based on our understanding of the consumer's needs and preferences? And, to some extent, it's not much different from principles already applied in direct mail. But our enthusiasm for such an opportunity has to be balanced by an understanding of people's concerns about their privacy. Starting with the name itself, it doesn't take much effort to make "persuasion profiling" sound scary. The Wired article takes that route, concluding: "Persuasion profiling potentially offers quick, easily transferable, targeted access to your personal psychological weak spots." That just sounds awful. All expeditions into this new territory must proceed with due caution.

Why, ebay, why?

There may be a good reason for this. But I don't know what it is:

eBay account update: Action needed

Dear Martin Bishop,

We noticed that you haven't signed in to your eBay account for quite some time, and we'd like to invite you back to buy and sell again. eBay's a great place to buy what you want, and sell what you have.

Unfortunately, since you haven't used your eBay account for a while, it will be deleted if you don't sign in within 30 days from the day this email was sent.

......

We appreciate your business and hope to have you back as part of the eBay community.

Thanks,
eBay

"We appreciate your business" so much that we've decided to launch punitive action against you. Does it cost eBay any money to maintain these accounts? I doubt it. Is it beyond their imagination to come up with a "carrot" approach? Apparently.

Why not something like: "We've noticed that you haven't signed into your account for a while. We'd love to have you come back and visit so here's an xyz incentive to encourage you to try us out"?

I just don't get it.

Photo credit

Owning Obamacare

Obamacare started its life out as a pejorative term used by those critical of the new Health Care Law. But, as these things go, it's not so bad--nothing like as bad as "death panels," for example.

So the administration isn't fighting or ignoring the use of this term. It's embracing it and recognizing it as an opportunity to promote its point of view. A Google search for Obamacare now produces a sponsored search result connecting to healthcare.gov which lays out the case for the new legislation. Opponents are up in arms complaining about the use of taxpayer money to buy these ads but what they're probably most upset about is the fact that their name has been hijacked.

Meanwhile, over at Yahoo!, a sponsored results battle is on. As well as the Healthcare.gov ad, there's also a link to Demand Obamacare Repeal. A new front has opened in the never-ending political battle.

Brand loyalty earned or paid for

By most measures, I'm extremely loyal to United Airlines. I fly United most of the time. I'll even pick less convenient schedules, including one-stop over non-stop options. But there's nothing I particularly like about flying United, nothing enjoyable really. To be honest, I would rather Jet Blue or Virgin America--but I never do.

Why the loyalty? Because it's been paid for by Mileage Plus, United's frequent flyer program. Mine is a loveless loyalty created by paid-for attachment to that program. If that program was to go away tomorrow, my loyalty would disappear as well*.

In the last couple of posts, I introduced the concept of brand value (see here and here), which says that value is the difference between the revenue earned from your sources of differentiation vs. their costs. United and the other major airline carriers build value through their awards programs but it costs them a lot of money. Airline frequent flyer reward liability is estimated in the billions of dollars.

It could be that our flying experience would be a lot better if airlines had never come up with loyalty programs. Perhaps they would have used all of those billions of dollars to try to earn our loyalty in other ways. But, at this point, the airlines are just as trapped as we are. They can't abandon their programs. That would be suicide. But, given the awards program expense and effectiveness, airlines can neither afford nor justify the cost of significantly improving our experience either.

This gives smaller carriers or new carriers an opportunity. Without the same level of commitment to frequent flyer programs of their own, they can use the money not spent to try and build brand attachment in other ways. That won't change the flying habits of the hard core, award addicted travelers like me but they can target people for whom there's still hope.

Meanwhile, I'll be heading back to the United terminal next Monday buying my sandwich beforehand so I don't have to resort to buying one of those dreaded snackboxes in flight. Wish me luck!

* Actually my loyalty wouldn't disappear completely because there's a second reason I fly United--that's the Premium Executive status I've earned as a frequent traveler. Status means better service, access to upgrades, better seats (no 'back of the bus' seating for me) and, the all-important, early-seating-so-you-get-onboard-before-the-overhead-bins-are-full privilege. This range of benefits would mean I'd still fly United vs. any of the other major carriers even without frequent flyer points. On the other hand, I'd be much more likely to switch between airlines and try the new carriers out to see if the experience was really all that much better.

Photo: In-Flight Drink Cart by davitydave (Flickr)

Deals worth waiting for. When to shop.

When's the best time of year to buy a lawn mower? I bet most of you will guess somewhere close to the right date. Which is October. When's the best time to buy exercise equipment? Shouldn't it be March or April after everyone has given up on their New Year's Resolutions? Apparently not. You actually get the best prices for exercise equipment in January, exactly when people are most enthusiastic about getting back into shape.

My new, best source of information, USA Weekend, right after its "Whatever happened to..." section, lists out the best times to get a deal on a bunch of categories. Cars: August and September as dealers clear their inventories. Gas Grills: September though December, post season. Camcorders: November. It doesn't say why but I assume it's because demand is high heading into the holiday season. Meanwhile, the magazine is full of Back to School articles and special offer ads (curiously all featuring underwear) suggesting that the best time to shop for school supplies is right now, some weeks before school starts.

It's my impression that, over the years, the use of price discounting for non-staple products has been shifting from supply management to demand generation. It used to be more about clearing inventories, post season. Now it's more about getting a bigger share of sales, especially in the peak season. Manufacturers and distributors are better at managing inventories than they used to be so they don't need to use clearance sales so much. But competition is as fierce as ever so discounting in the peaks season is often a necessity.

In product categories where the season is short and the competition intense, the battles for market share can be brutal and, sometimes, quite absurd. Back in my Nestlé days, the annual bloodbath played out between Nestlé Hot Cocoa Mix and Swiss Miss, its hated rival, was quite something to watch. The goal of both contestants was to get out there before the other one and ship boat loads of hot cocoa to retailers and lock up the shelf space for the season. Each year the shipments got earlier and earlier and the deals to get the increasingly reluctant retailers to sign up got higher and higher. Neither side ever delivered the knock-out punch and, as far as I know, the war continues.

From a brand perspective, all forms of price discounting run some risk of brand dilution. Clearance sale tags suggest failure--sad remnants of products that no one wanted. Price discounts mid season suggest that your brand's price premiums are just too high. Perhaps the worst of all is when you start seeing clearance sales for products that are still in season as retailers start getting ready for the next season which isn't even here yet. Fashion retailers seem to specialize in that particular game.

It's tough though. You can't afford to take your eye off the competition or they'll get a jump on you. But if all you do is follow them, you may end up falling off the cliff right behind them. Of course, it'd be great to have products so unique and differentiated that you are completely removed from these messy considerations. But, typically, the best your brand will give you is a little protection and some less unattractive options.

Photo: Is there a sale on? by timparkinson on Flickr

Got Broccoli?

Photo: Broccoli by La Grande Farmers' Market (Flickr)

Apparently there's no official Broccoli Day. It's one of the most unloved of vegetables. But yesterday, broccoli had a little moment in the sun after Matt Yglesias asked: "Where are the broccoli ads?" Why aren't producers trying to sell more? His questions triggered lots of comments on the site and a slew of other posts. To summarize the collective wisdom:

1) No branding: The most obvious reason for the lack of marketing is that broccoli is unbranded and, therefore, undifferentiated. So, if one grower was to promote his/her product, everyone would benefit. Whereas, when McDonalds promotes its Big Macs, it's the one that benefits. Once a product is branded, it can be lifted out of commodity status allowing for premium prices and advertising support.

2) Lack of collective action: A number of other agricultural products have solved this not-branded problem by taking collective action. Examples include the California Milk Processor Board's Got Milk? campaign and campaigns for avocados, apples, beef, pork and many more. No-one had a particularly convincing argument for why some agricultural products are successfully organized and others are not. It may be a question of the size of the industry plus the determination of the growers. (Note: There is collective broccoli action in Canada.)

3)Lack of imagination: Another way that potentially commodity products have managed to differentiate themselves is via packaging and product innovation. Pom Wonderful has transformed the pomegranate industry, Diamond Foods has done the same for nuts. Other examples: Packaged salads and let's not forget bottled water.

4) Promotion via/by third parties: Maybe there aren't any broccoli Super Bowl ads but that doesn't mean that there's no marketing/promotion. Everyone knows that broccoli is good for them. We've heard it in the media, our kids are taught it at school, we see broccoli piled high at Farmer's Markets and Whole Foods and it's always on the menu at restaurants. How much of this promotion is organized by the growers and how much is organic I don't know, but the message is getting out.

5)Tastes horrible: What's to like? Several people attributed the lack of marketing to the general awefulness of the product itself--the taste, the texture, the stalks But marketing has the power to change perceptions, even for kids, notorious veggie-haters. A few years ago, The Atkins Foundation sponsored some research which showed that kids preference for broccoli vs. chocolate could be radically changed just by the addition of an Elmo sticker on the broccoli. In a control group, 78% of kids chose a chocolate bar over broccoli (as someone asked, what's up with the 22% who chose broccoli?). But when an Elmo sticker was added, 50% selected the broccoli.

Despite the perceived lack of marketing and some people's dislike of the taste, it appears that U.S. broccoli producers aren't doing that badly. According to the Agricultural Council of America, we are eating 9x more broccoli than we were 20 years ago--4 1/2 lbs a year. That's a whole lot of broccoli! Pass the cheese sauce.

Sources:
1) Where're the Broccoli Ads? Matt Yglesias
2) Advertising Fruits and Vegetables: The Incidental Economist
3) Two posts (1, 2) on Marginal Revolution
4) "IF ELMO EATS BROCCOLI, WILL KIDS EAT IT TOO?” sesameworkshop

Taster's Choice samplers trying to stick it to Starbucks

Screenshot: www.tasterschoice.com

Who would have thought a year ago that Nestlé would launch a national "taste for yourself" sampling campaign comparing Taster's Choice to Starbucks? The idea would have seemed absurd. Incredible. Ridiculous. But when Starbucks launched VIA, its own instant coffee brand, the doors of opportunity flew open and Nestlé sampling teams are indeed on the march.

From my biased perspective, as a former Taster's Choice brand manager, here are a few observations about this peculiar turn of events:

1) What an opportunity: Typically, a new competitor coming into your market with a bigger brand and a superior product would lead to lots of weeping and gnashing of teeth. But this is a case where such weeping would be misplaced. The VIA launch creates news in a category that never makes the news. It gives the category credibility it sorely lacks. It establishes a price point that makes Taster's Choice seem cheap by comparison (68 cents for VIA vs 17 cents a cup for TC). And it may bring new, younger consumers into the category who would never otherwise have been interested. If VIA is successful, the entire instant coffee category will be revitalized. It's not just an opportunity, it's a once-in-a-lifetime opportunity.

2) The response: To their credit, the Nestlé team has been quick to respond to the opportunity with its sampling campaign. But the approach is defensive, intended to protect and repel rather than leverage. The fact is that Taster's Choice will be better off if VIA succeeds than if it fails. So instead of comparing prices, talking about how the VIA launch is a "lot of hype" and otherwise trying to stick it to VIA, the better approach would be to work out how to live and thrive in a VIA-successful world.

That said, I know that creating/selling a crisis is one of the best ways to get a bigger marketing budget. If more money was obtained by using a sky-is-falling argument (such as: "OMG, Starbucks is launching an instant coffee. We need more money or we'll be ruined") then it's not surprising that the campaign funded by those dollars has gone negative.

3) The problem of taste: The current campaign focuses on the one clear cut advantage that Taster's Choice has over VIA. That it's cheaper. Which is undeniably true. What the campaign doesn't talk about is the fact that VIA tastes a lot better. As I posted earlier, the VIA claim that it tastes as good as a Roast & Ground coffee actually stands up. I have no doubt that the Nestlé product developers could come up with something of similar quality if they were allowed to increase the cost of goods somewhere in the VIA ballpark. Hopefully they are working on that.

4) The media: A while back I criticized Nescafé's Twitter presence (@nescafeusa) as a "rather bland, occasionally ill-fitting, half effort where the toe has barely touched the water." While the new sampling campaign hasn't exactly exploded the number of followers (762 as of Nov. 3oth vs. 558,217 for Starbucks(!)), it has provided some relevant material. The tweets now feature up-to-the-minute reports of where the Taster's Choice samplers are handing out samples. Same for the Nescafé Facebook page. It's a small example of the evolution of marketing and media. Sampling programs help create the content for social media which, in turn, makes the sampling programs a more valuable part of the marketing mix.

By the way, if you want to taste Taster's Choice for yourself and haven't come across a sampling team, you can order from here.

The Five Elements of Coconut Water's Success

Photo: Rin-Tin-Tin (Flickr CC)

As Al Ries pointed out recently, pioneering a new product or service category can cost a fortune. Think Webvan. Or, if you don't have a fortune to spend, and you have to build a category from scratch, it can take forever. So, when a category as distinctive as coconut water emerges from the primordial new product soup, quickly and without a huge investment spend, it's worth taking a look at the elements of its success.

Coconut water certainly seems to be headed in the right direction. In just five years, it's become a $35 million category (according to Merrill Lynch) attracting both consumer and manufacturer attention. And it's succeeding even though it has had to fight consumer perceptions that coconut products are unhealthy (specifically that coconut milk is very high in saturated fat) and that the product is apparently an acquired taste So, how?

NPR interviewed two of the entrepreneurs who have been building this new category and here are five of the elements that they talk about:

1) Existing market: Coconut water may be a new product to the States but it has been around for a long time in other countries, specifically those in the tropics. When Mike Kirban, co-founder of Vita Coco, was considering market entry, one of the reasons he settled on New York was because of its high concentration of immigrants from countries where coconut water is already popular. These consumers represented an opportunity to get some early sales while figuring out how to get those unfamiliar with the product on board.

2) Distribution: Another advantage of NYC is that the retail market still has a large number of independent food markets/delis that provide the opportunity for a store by store sales approach. Slow developing and potentially frustrating as this approach might be, it gives new products the time to gather some momentum. Gerry Khermouch of Beverage Business Insights describes the relationships between entrepreneurs, distributors and store owners in this kind of market as: "the yeast that allows new drinks to develop before they hit hard to crack chains like 7-Eleven."

3) Competition: Perhaps the most unexpected element of success is the fact that several companies entered the market more or less at the same time. As Mark Rampolla, founder of Zico points out, this helped them all gain credibility with retailers, distributors, investors and sales people as they figured: "Hey, if there are multiple brands that are being successful in a category, it must be legitimate."

4) Focus/positioning: The main competitors in the marker, Vita Coco, Zico and O.N.E. beverages, all incorporate expected tropical elements (There's a lot of sky blue, and palm green.) And each, to some extent, talk about the relevant functional benefit of the product (tons of electrolytes) but each has picked its own target and refined the positioning to tell a more specific story. As a Forbes article notes: Zico has focused on sports enthusiasts (and yoga lovers in particular), Vita Coco on young, urban hipsters as likely to use coconut water in a cocktail as drink it straight and O.N.E. is targeting moms and babies.

5) Category protection: Al Ries, posting on Brand Strategy Insider, talks about category killers, category leaders who launch line extensions to absorb or kill potentially new categories rather than let them thrive independently. (An example he uses is Diet Pepsi and Diet Coke absorbing the diet cola category established by Diet Rite.) But coconut water is too distinct and far enough away from the reach of big players to be killed off like that. Its challenge was proving relevance not differentiation.

I'm sure that these are not the only important elements. Entrepreneurial zeal, luck and hitting the right consumer trend at the right time are important too. What else?

Botted water falling

Photo: Multnomah Falls, Oregon (me)

My very first post on this blog was about how bottled water was coming under attack on issues ranging from environmental to health concerns. At the time, those attacks had not had much impact on sales but I wondered if: "perhaps the thin end of the edge has been successfully applied."

Now, two years later, and helped along by the recession, U.S. sales of bottled water have indeed started to fall. It's a small decline (just over 1% according to Beverage Marketing) but, considering the fact that sales had increased by over 50% in the last five years, it's significant.

Inevitably, the falling demand has triggered a price war. The Wall Street Journal reports that a 24-pack of Pepsi's Aquafina was being sold on promotion at $2.99, about half its normal price. Coca-Cola has been trying to avoid discounting Dasani and has paid the price--its sales are down 26%.

As the price war intensifies, and marketing resources get diverted to support the fight, the risks of commoditization go up. And the more commoditized the category becomes, the less chance there is that sales will pick up again when the economy recovers. The tide may have irrevocably turned.

Can you love the Shack? RadioShack tries a makeover.

Photo: Landor

I'm rooting for RadioShack if for no other reason that it sports an identity that Landor developed back in the 90s. It's also encouraging to see that, after years of cost-cutting and in spite of the tough economic environment, RadioShack is tweaking its business model and investing in a new marketing campaign to reinvent itself. Unfortunately, it seems to me that the new approach has some serious flaws:

1) Business model/customer experience: RadioShacks are not big stores. That's part of the business challenge. Where Best Buy can make money selling big TVs with big margins, RadioShack has to find something else, something smaller. Mobile phones fit the bill and are already driving 1/3 of sales and that's before a new deal with T-Mobile. The challenge I see with this expanded role for phones is that it will crowd out the rest of the business, especially the traditional business of accessories and replacement parts. It's already hit-and-miss whether you actually find the part you are looking for when you go to a store and, with less space, there'll be less chance. And who, going into a store to find a cable stupidly left in a hotel room or some part for something that you should really be getting rid of anyway, wants to be power-sold a new and unwanted phone? Perhaps the plan is to get out of this traditional business or, move that business completely online?

2) Call us "The Shack": The part of the brand reinvention that has generated the most interest and comment is the plan by RadioShack to refer to itself as "The Shack" in marketing promotions. The logic behind the idea is that Radio sounds old-fashioned and that "The Shack' is more friendly. But brands need to be careful going down this path. There's a contrived familiarity about The Shack that is similar and just as bad as "The Hut" (a shortened version of Pizza Hut). It's we the customer that get to decide whether we want to give a brand a nickname. Can you imagine sending an email to all your contacts on Facebook and LinkedIn saying: "Hi there! Just wanted to let you know that, from now on, I'd like you to know me as (insert over-friendly nickname here)?"

3) That doesn't matter. Call us "The Shack" anyway: There's another problem with using "The Shack." "The Shack" already has meaning to people and none of these various meanings are particularly helpful to the cause or consistent with the message. What does it mean to you? Shaquille O'Neal? The Love Shack (B52s)? An actual wooden shack? The Shack is just not a particularly classy, quality kind of word. Focusing on it just reminds people of that.

So, overall, I'd say I'm not particularly optimistic that the new campaign is going to work. What do you think or are you all-Shacked-out already? I think I've said all I can on this issue what with this and, last week, two press interviews on the subject. Thanks to both journalists for calling me and selecting quotes that made some sort of sense:

1) RadioShack Plans Reinvention: Douglas MacMillan, Businessweek
2) RadioShack would like you to call it 'The Shack': Theresa Howard, USA Today

SunChips green hotness: what it really takes to earn eco-credentials

Earth Day is just around the corner, a can't-miss opportunity for more and more companies to talk about their green credentials. But if everyone is doing it, as Landor's Allen Adamson points out in the WSJ and USA Today, how can anyone stand out from the crowd?

If there's one brand that does deserve to be in the limelight, it must be SunChips which has gone way beyond a single day tie-in. It has made a commitment to the environment the core idea for its brand. Here are some of the things that it has done:

1) Its name: Perhaps someone from the brand can confirm this for me but I believe that the brand name SunChips pre-dates any specific commitment to the environment. So call this a lucky break but the name provides a connection between the brand and its eco-friendly activities that others don't have. It makes its green activities make sense.

2) Its products: Are all (relatively) healthy. So there's no inconsistency between what you're eating and what they are saying about the environment. Healthy inside and out.

2) Its manufacturing process: Back in 2007, I posted that Frito-Lay was planning to create an eco-friendly chip by taking its Casa Grande plant in Arizona off the power grid, running it on renewable fuels and recycled water. And, yes, this is the plant where SunChips are made. SunChips are made by solar energy. It can't get much better than that.

3) Compostable packaging: But now, with the name, product and manufacturing process all in place, the brand team is off to the races. What to green light next? So, for this Earth Day, SunChips has announced that it will rollout compostable packaging. This ad below shows a time lapse of how the 100% biodegradable bag decomposes in 14 weeks. It's a first for the industry:

4) Marketing: They've not forgotten about marketing either. This new ad links to the greeneffect.com which talk about a competition launched in partnership with National Geographic to support the best green ideas.

It's the whole package from manufacturing all the way through to sales and marketing that gives SunChips eco-credentials almost impossible for competitors to match. As a branding guy, I just have to root for SunChips to be successful (even though I don't actually like the chips all that much myself). I sure hope that lots of people buy the new packages. Otherwise, it's going to be one hell of a mess in the stores.

The truthiness and silliness of green-guising

Photo: shikeroku (Flickr)

"Your American Express Corporate cards are turning “greener.” Effective June 4, 2009, American Express is moving to online statement delivery for Corporate cards." Company announcement.

"With about 8,000 guests that visit the hotel each year, hotel managers said, that’s a lot of dirty sheets and towels and a lot of plastic water bottles. Now guests can find a message in their bathroom that gives them the opportunity to reuse their bath towels if they so choose to help the environment. Individual plastic water bottles have been eliminated and guests both in their guest room and in all meeting rooms are provided with filtered water in renewable bottles." Hotel announcement

OK. We know that green is good but we also know that companies are always looking for ways to cut costs. So companies should be careful when they launch initiatives that are definitely in their interest but take away a customer service or add an inconvenience under green-guise.

Even I, as an already paperless and stingy-towel-using guy, get irked by these true but incomplete announcements. What they should do is go on to say is something like: "In launching this initiative, we also estimate that we will save $xx/year which we will use to do something good for you, the customer, like reduce costs, upgrade service etc.

On a related front, with a story you simply wouldn't believe if had been first published today, California is now backpedaling on a plan to ban black cars to reduce emissions. Like California needs this kind of publicity. Apparently, The California Air Resources Board was seriously considering effectively banning black cars on the basis that they take more energy to cool but backed off "after facing global ridicule." Wouldn't they be better to try and find ways to harness the solar power being absorbed by cars rather than prescribing which colors people can buy?

I think that most people have a reasonably high level of goodwill towards green initiatives but that goodwill is not unlimited. Better to work with them than try and beat them into submission.

Facebook Friends II: Quantity and Quality

Yesterday, I was talking about Facebook friend types. Today it's about the numbers.

The Economist has an interesting story about the size of social networks. It takes a look at whether the fact that it's so easy to add Facebook friends and stay in touch with them has impacted what's known in Anthropology as the Dunbar number. That number (around 150) is the limit on effective and stable social networks based on our brain's cognitive processing power. Any more than 150 and we start to lose our ability to "remember who is allied with, hostile to, or lusts after whom, and act accordingly."

Well the Economist asked Facebook to run the numbers and it reported back that the average number of Facebook friends/person is around 120, supporting the Dunbar number. However, some people (those that would fall into the addict category from yesterday's post) had 500 or more.

But, digging a little deeper, Facebook also found that: "the average man—one with 120 friends—generally responds to the postings of only seven of those friends by leaving comments on the posting individual’s photos, status messages or “wall." An average woman is slightly more sociable, responding to ten." What this shows is that there's friends and then there's FRIENDS, the small, core network of people where there's real interaction.

As the article concludes, outside of the core, people are: "not so much “networking” as they are “broadcasting their lives to an outer tier of acquaintances who aren’t necessarily inside the Dunbar circle,” says Lee Rainie, the director of the Pew Internet & American Life Project, a polling organisation. Humans may be advertising themselves more efficiently. But they still have the same small circles of intimacy as ever."

How annoying are you, Facebook friend?

Photo: Jason Tester (Flickr)

Peter Hartlaub, the San Francisco Chronicle's Pop Culture Critic, just joined Facebook. He's a little late to the party but he's made up for it by coming out with a list of nine friend stereotypes and given each an "Annoyance Factor" score. His original list has now been supplemented by reader suggestions. Some of the friend types that resonated with me (but which, of course, don't apply to me or any of my friends) are:

The TMI: The friend who wants to share every piece of information about "his seemingly pointless life: John Doe is tired of working ... John Doe is going to the grocery store to get some kiwis ... John Doe just cleaned the bathroom. On to the kitchen!" Annoyance Factor : 100

The Friend Addict: "This is the Facebook equivalent of one of those crazy ladies who gets declared a public nuisance because she has too many cats in her home. Even though this Facebooker only knows 47 people, he/she managed to accumulate 786 friends - mostly by going through other people's profiles and friending perfect strangers." Annoyance Factor: 28

The Compulsive Gifter: "Every day, they find yet a new way to send cyber-tchotchkes to all their friends. Look on the bright side, though - at least you don't have to dust the Grateful Dead Bears or Hatching Eggs."

The Tweeter: "who has her twitter updates tied to her Facebook status. Her friends face an incessant barrage of cryptic microblogs. The 140-character tweet limit is the only thing that keeps her annoyance factor below 50."

The I Work Out More Than You: ""Stephie just got back from yoga" "Stephie just got back from running" "Stephie just got back from salsa" "Stephie just got back from salsa and yoga and is tired" "Stephie just got back doing salsa, yoga and running." Annoyance factor 100, unfriend."

The Always Tired and Busy: "According to their constant status updates, this friend is constantly tired and/or busy. But so is pretty much everyone. Annoyance factor: 100"

As marketers, is there anything else can we do with this insight over and above reading it for entertainment?

Six of the Best Supplemental: One more thing about Sneakers

I shouldn't let the reference to Martin Bishop's starring role in the movie, Sneakers pass by without mentioning what, for a few seconds, I thought was the best piece of marketing I had ever seen. In that movie, Robert Redford played a computer hacker who used Martin Bishop as an alias. (It's always surprised me, since then, how many people remember that.)

Anyway, I went to the movies just before Sneakers came out and was watching the previews. Then, to my amazement, I saw this screen-filling close-up of a credit card with the name "Martin Bishop" in gigantic size written on it. "Wow," I thought. "That's incredible." "How do they do that?" I was imagining (once again, just for a few seconds) that everyone in the audience was seeing their own name.

Tah-Dah! The IKEA effect

A couple of weeks ago I called IKEA's BESTÅ BURS TV unit the Baskin Robbins Large Chocolate Oreo Shake of build-your-own furniture given its 27 pages of instructions and 44 steps. "I'm hoping," I said "that there's some pride of accomplishment if I ever get it finished." Well I'm pleased to report that it is finished (see above for proof) and I do, indeed, feel a certain degree of satisfaction.

Now I read in the Harvard Business Review that researchers are actually calling the labor-leads-to-love phenomenon the IKEA effect. Michael Norton, Daniel Morchon and Dan Ariely of Duke University have shown that when people construct products themselves from TV units to build-a-bears that they: "come to overvalue their (often poorly made) creations." Hey, wait a minute - my TV unit is perfect!

In the article, Norton points out that this phenomenon is a marketable one. Back in the 50s, instant cake mixes didn't do very well when they first came out because they were too easy to make. There was a reformulation that required the addition of an egg and, presto, sales rocketed.

The challenge is calibrating the IKEA effect to the right level. The researchers found out that if the task is too difficult and people fail to complete the project, the IKEA effect is washed out. But, as long as the task is doable, they concluded that consumers may actually be willing to pay a premium for do-it-yourself projects.

The last point that Norton makes is interesting. This same phenomenon may have implications for organizational dynamics and explain why managers are so reluctant to give up on projects when they've put a lot of effort into them and, at the same time, discount ideas developed elsewhere (the not-invented-here syndrome). Logically, all prior investment should be sunk cost. Emotionally, that would be loved labor lost.

Chinese democracy stunt backfires. Rose vs. Pepper headed to court?

This is not what the doctor ordered. What started out as a bit of a joke has become a PR and now, potentially, a legal nightmare.

Axl Rose's new album Chinese Democracy had been so long in the making (15 years) that people thought it might never be released. As I posted earlier, sometime earlier this year Dr. Pepper in an "if that happens, I'll eat my hat" moment promised to give away free soda to everyone if the album was released this year.

Well, in this year of unexpected events, it has been released and Dr. Pepper then faced the challenge of honoring their promise. Which turns out to have been a logistical challenge that it botched. The idea was to let people sign up online in a 24-hour period for a free coupon but, as I can personally verify, the site was not able to handle the traffic and was out of action for most of the day. The offer period was extended but, apparently, many free-coupon seekers still couldn't get through.

So now Axl Rose himself has got involved. According to this story from E! Online, his lawyer Alan Gutman has called the Pepper stunt an: "unmitigated disaster which defrauded customers." Wait there's more. He goes on to say that the "mocking undertones" in the Dr Pepper promotion made for a "raw and damaging commercial exploitation of our clients' rights," which was then made even worse by the "shoddy execution of your disingenuous giveaway offer." He wants full page apologies in major newspapers, an extension of the offer and payment for the unauthorized use and abuse of their publicity and intellectual property rights.

Ugh. Sometimes these bright ideas can go horribly wrong. Very similar to Taco Bell's idea about trying to get 50 Cent to change his name for a day to a Taco price point of his choice (see here) which has already headed down the legal road.

Chinese democracy brings free soda to all Americans!

Some said it would never happen. Dr Pepper said that, if it actually did happen this year, it would give away a free soda to everyone in America.

Well, now it has happened. Guns N' Roses' "Chinese Democracy" has been released (recording began in 1994) and Dr Pepper is going to make good on its promise of free soda

"We never thought this day would come," Tony Jacobs, Dr Pepper's vice president of marketing, is quoted as saying. "But now that it's here, all we can say is: The Dr Pepper's on us."

Update: "Due to consumer demand", coupons for a free 20-ounce soda will be available for an extended time! As of time of screen capture you have 2 hours, 14 minutes and 16 seconds left to claim you coupon in return for some data on Dr Pepper's Web site.