On the mark

Just a few quick notes on various topics:

• I was delighted to see noted graphics designer Milton Glaser design a poster to promote humanitarian aid in Darfur. It is my opinion that Darfur is one of the great humanitarian crises of our decade, and his poster is an exceptional piece of work in terms of capturing the horror of what is transpiring. The poster is part of a project to raise funds for an organization hoping to assist (although personally I fear that at this point, no NGO alone will be able to provide meaningful help).
• The One Laptop Per Child project, which I disagree with from an economic standpoint, has released a LiveCD which you can use to experience the innovative new UI, designed in collaboration between the OLPC project, Red Hat (whose Fedora Linux distribution the OLPC OS is built on), and Pentagram. Downloading the Live CD allows you to explore the UI and the operating system without installing anything on your computer. I hope to write a detailed review of it, comparing OLPC with Edubuntu, another open source Linux-based operating system created for the educational market.
• Integral Identity, since January, has been making a major push into open source software. As part of this, I personally have been contributing artwork to the PC-BSD Project, which is a very promising project seeking to create a user friendly operating system atop the rock solid FreeBSD platform (upon which a fair chunk of Apple’s OS X is based). This artwork will start to seep into the development test versions as of Friday, and hopefully will appear starting with 1.4.  I will post images of the new system on this blog when appropriate.

Thanks for reading.

A concept which seems lost on a number of contemporary marketers is the idea of treating customers well. Marketers make much ado about positioning, value propositions, leveraging new media, and employing brand activation strategies, yet at the same time we see the proliferation of such consumer hostile practices as restrictive DRM, service contracts designed to lock customers in to a particular provider, and of course, continuation of wave after wave of brand experience damaging cost cutting.

I am of the opinion that, rather than embarking in one promotional* campaign after another, in many cases, marketing dollars would be better spent on improving product quality. However, the concept I’m advocating in this thread, that of simply Being Nice to customers, is an idea that extends across the four Ps of marketing.

I’d like to propose concept of the “Nice Company” as a conceptual framework for the rest of this post. The Nice Company is a company that makes a concerted effort to treat all of its stakeholders with some degree of common courtesy, or as AT&T’s Ed Whittacre somewhat brilliantly rephrased the Golden Rule, “You treat people the way you’d want to be treated.”

A Nice Company:

•    Does not bombard prospective customers with messages that are annoying, obnoxious, or excessive in number.
•    Provides clear, concise and accurate information about pricing, and does not attempt to bury potentially expensive details in the “Fine Print.
•    Makes every effort to ensure that the qualities and benefits of its products are accurately, and without exaggeration, presented in its communications.
•    Charges fair, reasonable and non-discriminatory prices for its products, and does not gouge customers on items such as peripherals and replacement parts.
•    Provides products which are well designed, reliable, and do not contain built-in limitations to deliberately reduce their functionality.
•    Provides a high level of post-sale service, in the manner appropriate to its industry. Its employees are trained to be polite and helpful to customers.

I think that, unfortunately, to some extent, there have been relatively few companies that have managed to live up to the above standards consistently over an extended period of time. This has inevitably fueled the fires of anti-business extremists, and indeed, in the long run, if the institution of the private corporation is to flourish, the principles I have just outlined must be followed.

Unfortunately though, a number of managers out there are concerned only with the short term, and care naught about the agony they stand to inflict on their stakeholders.

I’ve had an unusually good week this week (with the notable exception of being attacked by a spider, but I suspect I’ll live). To the extent that my week was great, Vonage’s week has been terrible. An injunction was issued against them today by a federal judge barring them from taking on any new subscribers as a result of their infringement of Verizon’s IP. Just as my good week was slightly harmed by evil spiders, Vonage’s position was slightly benefitted by a temporary stay issued by an appeallate judge, however, it remains to be seen whether the injunction will ultimately hold up on appeal, and ultimately, how badly Vonage will be damaged by all of this.

Which of course brings us to the subject of Vonag’es marketing. I am of the opinion that Vonage is unlikely to elicit much sympathy from its customers. The firm has had a number of PR problems: the CEO’s insalubrious track record with the SEC, the spectacular flop of an IPO (that cost Vonage customers who bought into it quite a bit) , and now, this patent lawsuit.  Another factor that I see influencing this situation is the generally annoying way in which Vonage has historically branded itself. Most Vonage commercials have been in the “Watch people do stupid things that symbolize use of a competing product” category, complete with obnoxious music. Vonage is known to have made use of Direct Revenue, a New York-based online advertising firm with a history of installing adware without users’ consent.  The Vonage experience gets worse for existing customers, with customers who attempt to cancel experiencing bureaucracy and general difficulty.

I am of the opinion that had Vonage made a better stab at creating a good image for themselves, they would be in a much better position in the face of this patent lawsuit. Perhaps Vonage could have:

• Providing first rate customer service, even to people attempting to discontinue their service
• Having a CEO that isn’t barred by the SEC from running certain types of financial companies
• Not annoying television viewers with unusually bad commercials
• Not advertising with a company that installs malware

Ultimately, however, Vonage did none of the above. Unless the case takes a dramatic turn in the next few weeks, I see Vonage going out of business, shunned by consumers who have received only inconvenience and agitation from the company over the past few years.

Well, to be fair, it has been over for several weeks now, I just haven’t had time until this evening to comment on it.

For the time being, it looks as though none of the major US airline brands is in immediate danger. The US Airways hostile takeover attempt on Delta failed miserably, and consequently, the proposed United-Continental merger also seems to have evaporated. These developments have effectively forestalled major consolidation in the industry for the time being, and I personally feel this is beneficial for all parties (though many would disagree with me on that point).

One common statement about the airline industry is that consolidation is somehow neccessitated by the overcapacity that is supposedly present in the industry. However, capacity among all US airlines declined significantly post-9/11, and is now on the rise in response to growing demand. A number of industries operate extremely well in spite of chronic overcapacity: retail, for example. One might ponder how those who so actively advocate mergers between airlines might feel about a Wal-Mart/Target combination.

In any event, talk of consolidation will inevitably continue. It is entirely likely that Midwest, an airline with a premium brand and a highly differentiated product, will be acquired by AirTran, an airline with a much lower end, undifferentiated product, and I am not personally thrilled by that prospect. At least, however, from the branding perspective, none of the surviving “great names” of US aviation is on the chopping block…

In my first post in nearly two months (due to the aforementioned time crunch I remain under), I thought I’d comment on a recent move by a major US retailer to reduce its labor costs. The retailer in question decided to terminate 3,400 of its higher-paid retail employees and replace them with new hirees hired at a much lower rate. This move has caused somewhat of a publicity backlash for the retailer, and will no doubt fuel the fires of labor unions and other reactionary groups that stand to benefit politically from this kind of incident.

In addition to being retarded from a branding perspective, from a managerial perspective, the move is also questionable. Without knowing the particulars of the case, I would think that there would be at least a few potentially less incendiary courses of action. By far the most prudent, in my opinion, would have been to merely lower the wages paid to new hirees. Given the high employee turnover rates that characterize the retail industry, it would not have been that long before most of the high-cost employees were gone, and there would have been much less of a backlash in the press. Another, somewhat more disruptive move would be to lower the salaries of existing employees, which would probably have been demoralizing and resulted in departures, but still certainly less disruptive than firing the employees in question. Moving beyond that, assuming that all of the employees in question had to be laid off for whatever reason, in order to force the wages down (I can’t imagine why, as as far as I am aware no state laws, and certainly no nation-wide laws, would require such a move), why make them wait ten weeks before allowing them to reapply? Why not let them reapply for their jobs immediately?

Any way you attempt to look at it, from an ethical, managerial, or marketing standpoint, this was a deeply flawed move on the part of the retailer. The short term reduction in costs will not be enough to offset the lasting brand damage this will cause, nor any potential disruptions in productivity as a result of having a host of trained workers be replaced overnight by new hires.  All things considered, this kind of management malpractice is a genuine embarrassment to the American free enterprise system.

I’ve been extremely busy of late, and I’d like to offer my apologies (to all three of you who I estimate actually care) to anyone annoyed by the lack of activity on this blog. In addition to running my business, two very time consuming activities have emerged in my life, which have made it increasingly difficult for me to find the time to blog as actively as I would prefer.

At the december board meeting of the Southern California American Marketing Association, I was appointed President Elect of the chapter, replacing someone who had resigned midway through the fiscal year. Being President of an American Marketing Association chapter is normally a three-year commitment, consisting of one year as President Elect, one year as President, and one as Immediate Past President. In my case, it will be a two and a half year commitment, but the result of this is that several activities I would ordinarily have a full eight months to perform have been compressed into less than two…

The other time constraint affecting me is my increasing interest in Free and Open Source Software. This is an exciting field at the moment, and I intend to get Integral Identity closely involved in branding and design activities in this area. I started using Linux on one of my desktops in October of last year, and have since fallen in love with it (and also have been enjoying another open source operating system, BSD). I had been involved, back in late 1999-early 2000, with an experimental open source content venture, which sadly was proven to be ahead of its time.  Now, however, I feel like the market is beginning to accept the concept of open source, and it seems like an increasing number of my friends and colleagues have either made the switch to Linux, or are planning on making it, within the next few months.

In spite of the formidable time constraints the above pose, I am hoping to continue to blog, as I enjoy it, and feel that it provides a really useful forum for stimulating discussions. So, hopefully within the next week or so I’ll find the time to post again. Exciting times, indeed…

With United and Continental actively discussing a merger, and US Airways engaged in a hostile bid for bankrupt Delta Air Lines, it is almost a certainty that at least one of the Big Six US airline brands will disappear in 2007. The only at-risk US airline brand weak enough to warrant deletion is US Airways, although it has quite a nice name and is certainly an identity I would prefer to see stay around. However, Continental is probably the brand most likely to vanish, for the simple reason that in spite of Continental having one of the most stellar reputations for service of any US airline following Gordon Bethune’s turnaround efforts, is not quite as well known globally as United. Thus, if a United-Continental merger does materialize, the Continental brand will likely vanish, ironically enough, on its 70th anniversary.

Personally, if I was in charge of managing the brand portfolio of a combined United-Continental, rather than killing it off, I would preserve the Continental brand, and at the minimum use it to replace one of United’s subsidiary brands. Rebranding United’s high-end P.S. service as Continental would make sense given Continental’s premium positioning, although the flipside is that P.S. operates out of JFK and Continental is known for its Newark hub (although perhaps a United-Continental merger would make relocating PS to Newark a logical decision).

One slight difficulty that arises in airline brand portfolio management has to do with FAA certificates being assigned to the name of the airline that originally applied, with the result being that the remnants of acquired airlines, even when rebranded, must declare the identity the operating certificate is registered under. For example, the former TWA portions of American Airlines were, for several years after the retirement of the TWA brand in late 2001, declared to be “Operated by TWA, LLC.” This is a cosmetic problem, but as far as I can tell, most airline passengers don’t pay attention to it.

By far the biggest challenge faced by airlines attempting to deploy multiple brands has to do with fleet allocation. If you have 20 aircraft painted in the livery of Brand 1, and another 40 painted in the livery of Brand 2, the interchangeable use of the aircraft is not possible without confusing passengers. Different interior configurations can further complicate matters. These challenges are not insurmountable, and airlines using multi-brand strategies typically have such different target markets in mind with their different brands that the need for aircraft interchangeability is minimized.

What I would really love to see, therefore, would be both the United and the Continental brand surviving their probable merger in some form or another. The airline industry is littered with the wreckage of once-great airline brands which ceased to exist as a result of the brutal competitiveness of the industry, arguably the most loved collection of dead brands in any industry. Brands like Pan Am, TWA, Braniff and Sabena were powerful in their day, and continue to fascinate the public in spite of having, in some cases, not been used in commerce for decades. I sincerely hope that more great brands are not added to this pile.