The Business Prevention Department

The "Yeah, But's" Of The Corporate Bureaucracy

By David Miranda

You won't find it on any organizational chart, but it's there - the business prevention department.

It's prime objective is to champion attitudes that discourage the new and the innovative within the organization. They are "you can't get there from here" people. Chances are you have attended meetings with some members of this department. They are easily identified. They are most likely your boss or boss' boss or members of your peer group. They are the ones shaking their heads on your new idea after just seeing only the title slide. They normally begin their comments with "Yeah, but", as in, "Yeah, but, we tried that before"; or "Yeah, but, you don't understand".

The business preventionists come in all shapes and sizes, genders, ethnic groups, religious and political affiliation. They are good at what they do - resisting change.

Examples are many.

Take the IBM business preventionist who, after hearing a suggestion that "since we would be manufacturing millions of personal computers, we should also market our own operating system for it" replied, "Yeah, but, we don't do operating systems. We make computers. Let's get this guy, Gates, to do it."

Or how about the major television network executive who, after hearing a pitch for a 24 hour news channel replied "Yeah, but, who is going to watch news for 24 hours, Mr. Turner? I think this CNN idea is pie-in-the-sky."

Or the Barnes & Noble executive who, after hearing a pitch for selling books on the Internet said, "Yeah, but, I don't think you get it Mr. Bezos. People prefer to buy books in a real store. I am also not too crazy about the name, Amazon."

There's more. Newspapers could not see the threat of the likes of eBay and Craig's List. The music labels could not see the potential impact of Napster or the iPod. Microsoft missed the opportunity to be a Google, Yahoo!, MySpace, or YouTube. Blockbuster should have foreseen Netflix.

How about your organization? Is the business prevention department active? Here's a quiz:

• Are new ideas encouraged in your organization?


• Are they really? If so, what part of your marketing plan represents encouraging the new vs. reinforcing the status quo?


• Do new ideas come from the bottom up, top down, or as the result of competitor's initiatives?


• Is your company spending more time analyzing than doing?


• Does your company pride itself more in doing things right or doing the right things?

In summary, today's currency is ideas. The suppression of ideas and innovation is terminal. Don't let the business prevention department succeed.

Defeat the "Yeah, but's".

Key Marketing Metric - Understanding The Difference Between Displacement And Dilution

Unwise Discounting Can Reduce Profits And Market Share

By David Miranda

Revenue optimization, once known as yield management, is relatively new to marketing. It was developed first in the travel industry. The premise is that perishable inventory (airline seats, hotel rooms, rental cars, cruises) is directly and dynamically correlated to key factors such as time, supply, and demand. It is the primary reason that the price of an airline ticket varies so dramatically among passengers on the same flight. Some passengers booked well in advance to get the best fare, while others who had to book at the last minute paid the highest price.

Of course, this is not an exact science, but a sophisticated "guessing game" by the airline, hotel, car rental firm, or cruise line. The process requires huge amounts of data to be "crunched" to determine the number of seats, rooms, etc. to be offered at any given price. When demand is low, more inventory is offered at lower prices and vice versa.

Revenue optimization has now made its way into other sectors, but caution should prevail. Many times business utilizing the practice displace or dilute revenues, so it's important to know the distinction.

Displacement refers to selling at a low price during periods of high demand. This unwisely "displaces" higher revenue to competitors after the company, who sold out its inventory at the low price, cannot meet additional demand. The result is that the competitor benefits from higher margins. Example: A company decides to offer a product at a highly discounted price and sells out. Unfulfilled demand is forced to competitors who charge more for the same product realizing higher profits.

Dilution refers to unnecessarily discounting prices to customers who either have already or would pay a higher price. Example: A company has already sold products at a higher price, but the product is moving slowly, so the company decides to sell remaining inventory at a lower price. Dilution occurs when the customers who already paid the higher price now demands the discount afforded others. The result - dilution.

The lesson is clear. A company must first analyze the potential effects of discounting - will it dilute revenue already realized or will it displace higher margin business to competitors?

Before considering discounting, do the math!

The Feds Could Use A CMO Of The United States

Why The Electorate Is Confused On What's Happening In Financial Markets

By David Miranda

Over the past few weeks, the headlines have been filled with stories on the severe financial crisis in the United States (and global markets). Regardless of one's political persuasion, all reasonable people seem to agree that the situation has been exacerbated by campaign rhetoric and partisan politics in a Presidential election year. It doesn't help that we have a radioactive President and dysfunctional Congress with understandably dismal approval ratings.

On Monday, the House of Representatives voted on legislation that would, according to the Bush Administration and bi-partisan Congressional leaders, help stabilize the financial markets. The bill failed to pass with one third of Democrats and two thirds of Republicans voting Nay.

A post mortem of those voting Nay had many Representatives saying they have received overwhelming feedback from angry constituents that they were against taxpayers "bailing out Wall Street". To paraphrase some comments from the electorate, "Why should we bail out these fat cats? We didn't cause this mess." or "It's all about Wall Street greed and reckless decisions."

There is a marketing lesson here.

From the beginning, the Adminstration's solution was framed to Main Street as a "bailout of Wall Street". This is a Main Street that has suffered from high energy prices, increased foreclosures, rising health care costs and unemployment to list a few of the maladies affecting the middle class.

They, needless to say, have justifiable anger when their tax dollars are perceived to be "bailing out" the "greedy and reckless executives" who have multi-million dollar pay and severance packages. Is there any wonder why Monday's legislation failed? It was doomed from the beginning.

If the Feds had a competent CMO, things might have been different. The CMO would have understood the need to empathize with the electorate and frame the story in a more palatable way to garner support.

"Bail out" and "Wall Street" should never be put in the same sentence. This is a volatile combination. "Bail out" is synonymous with "hand out" and "Wall Street" during these perilous times is synonymous with unmitigated greed and self-interest of executives in today's new Enrons and Worldcoms, i.e. the Lehman Brothers, Bear Stearns, AIG, Fannie Mae and Freddie Mac, Wachovia, Washington Mutual etc.

A smart CMO would have suggested that the message to the average American be communicated as a stabilization of the credit markets that allows people to get a mortgage, buy a car, send kids to college or small businesses to have access to credit to buy inventory, make payroll, etc. In other words, the story is less about Wall Street and more about Main Street. The Feds did not and have not made the case for the average American - the person who is the real victim (and should be the real beneficiary) of any legislation.

The Adminstration tried to sell this to Congress. They should have put their efforts in getting the Electorate on board first. It's what great leaders do in a crisis - FDR was a great CMO. During dark times for the country, he created his famous Fireside Chats with the American public. They instilled confidence and hope that inspired a nation.

A smart Fed CMO would have known that. Perhaps Senators McCain or Obama should create the first cabinet post of CMO of the United States.

Competitive Advantage - Reduce The Gap Between Thinking & Doing

Employing Marketing's Version Of the "No-Huddle" Offense

By David Miranda

Enabled by technology, the pace of the marketplace has increased at warp speed and there is no "slo mo" or "pause" button on life's "remote". If the classic tale of the hare and the tortoise were written today, the technology-enabled "hare" would win. All things being equal, in today's marketplace, the advantage goes to the smarter and the quicker.

Competitive advantage, therefore, lies in reducing the gaps between thinking and doing - between planning and execution; between wanting and getting; between feedback and response.

Today's marketplace is a 24 X 7 global competition with no time outs. Competitors are pursuing your customers as we speak with new products and services employing new marketing channels and campaigns. In a world where preference is perishable, competitive challenges must be immediately countered and re-countered as necessary.

The best position to be in is the smartest and the fastest keeping your competitors off kilter. It's marketing version of the "no huddle" offense, i.e not giving your competition time to appropriately respond, as well as, impressing your client and customers on your responsiveness.

This approach demands reducing the gap between the thinking (what do we need to do to succeed considering the circumstances at hand) and the doing (flawlessly executing the plan).

Reducing "gaps" creates competitive advantage, so get on with it.

"The Future Ain't What It Used To Be" - Yogi Berra

Marketing Insights Inspired By the Baseball Hall-of-Famer

By David Miranda

Known for his famous "Yogi-isms", Yogi Berra, Hall Of Fame catcher for the New York Yankees should be teaching marketing at Northwestern. Even experienced marketers could learn a thing from "The Yog". Take, for example, the Yogi-isms "You can observe a lot by just watching" and "Nobody goes to that place anymore. They're too busy."

Today marketers are sometimes confused and befuddled by the state of marketing today - the traditional methods are not working as well as they used to and the new stuff is coming at them from all angles. What is a marketer to do? Well, as Yogi puts it, "How 'bout just watching?" Take a moment to have a good look around. Consumers are TIVOing, spam and ad blocking, do-not-call list enrolling, podcasting, downloading, MySpacing, YouTubing and are addicted to mobile whether it be their cell phone, Blackberry, or PDA. This should tell you something.

Now take a good look at your marketing plan. Does it reflect what you are observing or does it reflect the old status quo? Has your brand extended to new channels such as cellphones, social networking sites, blogs, or user-generated content sites such as YouTube?

And what about customer service at the retail level, web site, email, or over the telephone? Yogi said, "Nobody goes to that place anymore. They're too busy." Are customers being serviced in a prompt, courteous, and efficient manner or are they forced to wait in line, navigate a challenging web site, wait unduly for email responses, or put on hold when they call. In today's customer ADD environment, it would be smart business to recognize that impatient customers are vulnerable to competitive offerings.

Yogi puts it this way. "The future is not what is used to be."

Neuromarketing - Marketing Science Or Snake Oil?

The Lure Of The "Persuasion Rosetta Stone"

By David Miranda

For those of you that missed it, I highly recommend viewing the PBS Frontline documentary, The Persuaders, originally broadcast in 2004. The compelling and comprehensive report takes us behind the curtain of the relentless pursuit of persuasion - of consumers and citizens alike.

From market research gurus, to advertising agencies, to the brands themselves, the documentary explores the quest to discover and exploit the "code" that persuades us to buy a specific brand or vote for (or against) a specific candidate or issue. It introduces us to something called "neuomarketing" - part psychology, part anthropology, part multiple regression. part etymology.

As the marketing landscape continues to dramatically morph, marketers are desperate to find the secret formula that enables their brand to "cut through the clutter" of hyper-choice. Consumers have become desensitized to marketing "er" claims as in, "brighter", "better", "cheaper", "faster", since these are quickly "me-tooed" by competitors.

Successful brands have created a "cult-like" emotional connection with their consumers as with Starbucks, Apple, Volkswagen, and Nike, for example. The question is why.

Those proponents of neuromarketing suggests that it is the result of some "reptilian response" meaning these brands have been successful in understanding and satisfying some basic Maslow-type needs in their lives. In other words, people prefer Starbucks for more than the coffee or prefer Nike more than the just the sportswear.

Is this snake oil promoted by marketing consultants or is it marketing science? I suggest that it is some of both.

Make up your own mind.

Small Business - Do-It-Yourself Marketing Doesn't Mean "Do-It-By-Yourself" Marketing

Busting Common Myths, Mistakes, and Misunderstandings On DIY Marketing

By David Miranda

About 9 of every 10 small businesses I encounter seeking marketing advice do so because they are not achieving the business results they anticipated. Typical quandries include:

• "We're not generating enough leads."


• "Our competitors are eating us for lunch."


• "We can't afford to do the marketing we need to do to get our name out there."


• "We need to change our marketing strategy, maybe reposition ourselves."

In every case, I ask the same question - "Do you have a business plan?" Believe it or not, few small businesses do. It's like embarking on a trip deciding where you are going and the means of transportation along the way. It's no wonder small businesses "get lost" along the way.

Why does this happen, even to very smart people? Here are some common myths, mistakes, and misunderstandings and the implications of each on the business:

• "Business plans are a great thing to have, but there are more important things I have to invest my time in." Business implications: "Seat-of-your-pants" decisions, unfocused resources, constant second-guessing. and no way of strategically exploiting new opportunities.


• "We don't need marketing, we need sales." Business implications: Commoditized offers based on price which reduces margins. No way to distinguish offerings from those of competitors. Always being on the defensive.


• "We don't need to explore new methods and channels right now. We will look at these down the road." Business implications: Terminal thinking - the future is now. Businesses that don't explore the new are vulnerable to those that do and often with dire consequences.


• "We don't need professional marketing help. It is a luxury. Because we have little or no marketing budget, we do everything ourselves - branding, brochures, advertising, etc." Business implications: Not having professional marketing advice is like not having an architect involved in building your new home. Just like a new home, a business is a major investment. Bring the pros in and bring them in early in the process.

Do-It-Yourself marketing does not mean Do-It-By-Yourself marketing. Sure you can go into a Home Depot for a do-it-yourself project, but even Home Depot provides expertise to the do-it-yourselfer.

Get professional marketing advice early. It's the least expensive way to go with the greatest return on investment for your business. You can then take it from there.