Category Archives: Business

Business

Image is Everything

The Boston Red Sox celebrating their clinching...
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Today I read Bob Hohler’s article published in the Boston Globe called “Inside the Collapse”.  Hohler refers to “team sources” when stating how he learned of the intimate and disturbing details associated with the 2011 Boston Red Sox.  These indiscretions include:

  • Top Red Sox players (Beckett, Lester, Lackey) drinking booze, eating and playing video games while their teammates were actually playing a game.
  • Disgruntled players who openly objected to trivial requests of management.
  • Selfish players only concerned about their own accomplishments.
  • Constant undermining of the manager and coaches.

The article goes on to then malign the job of former manager Terry Francona citing highly personal issues that include:

  • A failing marriage
  • A potential prescription drug addiction
  • A real concern about children/relatives deployed as soilders in Afghanistan

There is no doubt that the 2011 Red Sox are/were a disgraceful bunch of underperformers who casually dismissed management and their adoring fans.  That said, for Red Sox owners Larry Lucchino, John Henry and Tom Werner to float unsubstantiated rumors about their former manager is downright unseemly.  Larry, John and Tom endorse the philosophy that firing a person is not enough agony to inflict on another human.  They must use the puppet media to deflect criticism, and burry any and all viable scapegoats.  I don’t know Terry Francona but he seems like a decent person who helped generate a lot of money for management/ownership over his 8 year tenure as Red Sox manager.  During interviews conducted post his dismissal, Francona was openly remorseful when taking responsibility for the failure of his team.  He had plenty of opportunities to lash out, but remained professional and composed as he exited Fenway Park for the last time. 

Red Sox General Manager, Theo Epstein is heading to Chicago to become the Cubs Director of Baseball Operations.  In the coming days, I am certain Hohler will publish another article that cites unnamed “team sources” who besmirch Theo’s 10 year run in Boston. 

Firing someone for lack of performance is certainly the right of management in every business setting.  The 2011 collapse of the Boston Red Sox should have meant the end of Francona and Epstein.  That said, trying to destroy someone’s reputation in order to preserve one’s own image is reprehensible.   

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Business, Prepaid

Stop Discounting Premium Products

Premium product discounting usually occurs when a lift in sales is needed during a specific period of time. Companies sacrifice margin in order to appeal to a larger audience with the hope of a sudden and predictable surge in revenue.  These discounts vary from a percentage off the list price to a flat dollar amount reduction.

Generally speaking, discounting a high-end product can result in an immediate increase in demand.  That said, marketing professionals continue to profess that the more people pay, the more value they credit to their purchase. However, when premium products are discounted, consumers question the value of the product.  In addition, the value of a powerful brand is the ability to demand, and consistently obtain higher prices than competitors in the marketplace.  Discounting also conditions the consumer to delay their purchase and wait for the impending sale. 

A viable alternative to price discounting continues to be the utilization of a prepaid card (plastic or virtual) to create the motivation for the targeted consumer to purchase immediately.

The benefits of prepaid are as follows:

• Immediate program revenue lift – prepaid stimulates demand and improves margin

• Predictable program financials with an ability to maximize revenue recognition

• Return of incremental customer monies – prepaid allows for a unique opportunity for seamless cross-selling and up-selling ancillary products

• Continuous engagement of end customer through card messaging (IVR, Text, Email and Web)

• Ability to gain consent from the consumer in order to continue to interact with them moving into the future

• Reinforcement of brand with ability to customize the card and corresponding collateral

• Detailed spend data that helps create a more accurate profile of the end customer

Historically, rebates were utilized to stimulate revenue, with the underlying hope that the consumer would avoid the involved process of submitting their rebate and the rebate dollars would return to the sponsor company.  That is not the objective any longer.  The real value the rebate provides is in the ability to immediately engage the consumer with the end goal of creating a loyal, persistent relationship.  In the case of a consumer rebate, prepaid becomes a valuable financial instrument that provides an organization the ability to ensure their buyer becomes a viable, long-term asset.

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Business

Karma

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I read that karma is the law of cause and effect in the world of ethics and morals.  “Buddhism links karma directly to the motives behind an action.  Motivation usually makes the difference between “good” and “bad” actions, but included in the motivation is also the aspect of ignorance such that a well-intended action from an ignorant mind can subsequently be interpreted as a “bad” action in the sense that it creates unpleasant results for the “actor”.”

I admit that I explicitly root against certain bad people who thrive in the public landscape.  These are people who have done something so duplicitous and unseemly, that hearing their very name makes me cringe.  They include:

  • Michael Vick: Yes, I am a dog-lover (but I am also a hunter).  Yes, I believe Vick has paid a penalty for the crimes he committed.  Yes, I believe that Vick has the right to earn a wage.  That said, from 2001 to 2007 Michael Vick and his cohorts fought and killed pit bull terriers.  Independent from any other action, fighting dogs is a deplorable “sport” initiated by scumbags who offer little to society.  When you add that Vick hung, drowned, electrocuted, shot and beat his nonperforming dogs to death, it adds a sadistic component that is incomprehensible to civilized humans (http://www.thesmokinggun.com/file/michael-vick-indicted?page=16).  How perverse must your mind be to torture a living creature to death?  Infamous serial killer Jeffrey Dahmer started his reign of terror tormenting neighborhood pets.  ESPN and every other media source tells me Michael Vick is now “rehabilitated”, and has moved away from his criminal past.  Like he was describing an athlete coming back from a horrific injury, Tony Kornheiser of ESPN tells us that he openly cheers for Vick to succeed.  Not me. 

 

  • Ben Roethlisberger: This past summer, Ben Roethlisberger was accused raping a girl in a bathroom of a Georgia nightclub (http://www.thesmokinggun.com/documents/sports/roethlisberger-evidence-photos).  While there was not enough evidence to charge Roethlisberger in the rape of the 20 year old, he did admit to the sexual encounter.  This was not the first time Big Ben has been accused of inappropriate sexual behavior.  Months before the alleged rape, Ben allegedly forced himself on a 22 year old in his house on Lake Oconee.  The woman told her father of the encounter, but he decided not to pursue the matter because he feared the repercussions.  Ben was suspended by the NFL for 4 games – it would have been longer if Roethlisberger had been arrested.  Too bad – another sexual predator moves forward in his life unpunished and without regret. 

 

  • Kobe Bryant: In the summer of 2003, Kobe Bryant was accused of raping Katelyn Faber.  Eventually the case was dropped when Ms. Faber refused to testify in court because Bryant provided her a fat check.  Bryant’s lawyers challenged Faber’s moral character and reputation, accusing her of multiple sexual encounters on the day of interaction with Bryant (http://www.thesmokinggun.com/documents/crime/kobe-police-file-released).  No one can be certain of what actually transpired in a hotel room in Eagle, Colorado, but Kobe made the decision to pay big money to keep the woman silent.  If Kobe was innocent why did he succumb to a payoff?  I am mortified when Stuart Scott of ESPN genuflects to Bryant’s basketball genius; never mentioning his questionable past.  He (and his other SportCenter lackeys) opines about Kobe’s deft skills and his physical talents.  The network continuously flashes pictures of his wife and daughters, portraying him as a wonderful husband and father.  At best Kobe’s a philandering fraud, at worst he is a sexual deviant who got away with a horrific crime. 

 

  • Rick Pitino and John Calipari:  These guys are just plain smarmy.  Calipari leaves schools (UMASS and Memphis), right before the NCAA penalizes the institution for multiple violations during his tenure.  Pitino (a married man) writes self-help books, preaches about virtue and discipline, then has sex with a woman in the bathroom of a restaurant.  Calipari and Pitino have not committed crimes, but they are hippocrates with no moral compass.   I am amazed that heads of fine academic institutions hire these guys, pay them big money, and then allow them to mentor young men.

 

If karma works, perhaps the unseemly actions taken by the men mentioned above will result in them enduring some degree of unpleasantness in their lives.

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Business

Optimizing Channel Partner Performance

A thriving channel partner program strikes a balance between sharing margin and lowering the cost of sales for the Original Equipment Manufacturer (OEM).  An indirect channel provides the OEM an aggregation point that ideally facilitates the acquisition of a substantially larger amount of deals.  The most successful value added resellers offer their clients a service or a product that is complementary to the OEM’s core offering.  Their solutions become part of the whole offering for customers that have shared interests/objectives.  Partners also provide the OEM an ability to cost effectively penetrate new, untapped markets while driving incremental revenue.   

Significant challenges can arise when your channel partners offer multiple solutions from competing original equipment manufacturers.  Attractive incentives must be put in place to ensure indirect sales people commit to your products and services.  Cooperative marketing efforts that produce tangible, qualified leads is another way to establish a commitment between organizations. 

Conflict between competing channel partners (as well as the OEM’s direct sales force) is another issue that regularly crops up, and needs to be preempted with regular communication and established engagement policies.

The Original Equipment Manufacturer must support a distribution channel by:

  • Co-creating a mutually agreed to business plan with quarterly reviews and scoring
  • Establishing defined goals and service/reporting requirements
  • Delivering the appropriate sales/support materials
  • Ensuring any and all technical needs are addressed
  • Training the partner to position, sell and service clients
  • Running promotions and programs to support the partner
  • Servicing the partner as if they were the end user

Value Added resellers typically sell several companies’ products.  The goal of the OEM is to become the channel partners preferred vendor.  Therefore they must help the partner become enthusiastic experts at selling their solutions.  In order to accomplish this there needs to be a deep understand of the partner’s business model specifically:

  • How their business internally operates
  • How they make decisions
  • How they sell and support their clients
  • How the OEM’s decisions impact their business

This overt commitment to understanding how their partners make money will impart real loyalty from them, and ultimately provide the OEM a sustainable advantage from worthy competitors.

If constructed correctly, a channel partner selling model can be levered by an OEM to reduce the overall costs of sales while increasing top-line performance.

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Business, Prepaid

Create Behavior Changing Impact

Through innovative and targeted campaigns, professional marketers create immediate demand from their intended audience.    Appropriate and timely messaging, in conjunction with some type motivator (rebate), can turn apathetic prospects into energetic buyers. 

Many times however, there is an unavoidable lag between the demand creation and the actionable next step….the purchase.  Through the utilization of a defined online strategy, marketers are able to minimize the time between consumer interest and execution.  

Marketers who employ an effective eCurrency (a virtual prepaid Visa or MasterCard) strategy are able to:

  • Immediately and seamlessly reward the consumer for following the indented buying behavior. 
  • Steer the audience to a predefined purchase. 
  • Strengthen brand equity at the consumer and product level.
  • Manage costs by moving to an electronic form of payment (eliminating paper and plastic).

In addition to these business benefits, the consumer experience has evolved at the transaction level.  The recipient is now able to add dollars (via a credit card) to their virtual Visa/MasterCard so they can perform online purchases with ease.  The economics and empirical data suggest that professional marketers should consider adding an eCurrency option to their available toolkit.

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