Trick or treat - an early lesson in business strategy

This week it was reported that spending on Halloween and its related ephemera in the UK has increased 23 times since 2001, and is now worth approximately 280 million pounds to UK retailers (BBC, 2010).  Huge halloween sections in the major supermarkets and special edition products like lemon and lime 'Halloween Jaffa Cakes' (right) have increasingly commercialised the festival in the UK.

However, Halloween traditions such as 'trick or treating' have always been a firm feature on the calendar for kids in the UK.  I remember terrorising the neighbours in my home village by swaping their garden gates if they opted for a trick (sorry), and thoroughly enjoying the sense of achievement in divvying up the sweets, cakes and cash at the end of the evening.

Although I know there are many who do not like trick or treaters pestering them for money, it occurs to me that the practice does have a strong educational value for children.  Reflecting on my own experiences I know that we were unknowingly developing a range of business skills while we were having fun.  As a group of children we would decide which houses to go to based on how likely the inhabitants were to give us a treat.  In a small village it's easy to do a bit of background research - you know who the kind and generous people are - they are the ones who help out at village events, bake good cakes for the village fete and know your parents.  You also plan based on the time you have and the geographical locations of the houses.  Is it worth going all the way out to the big houses on the outskirts?  Depends how likely they are to give you a good treat.  Sometimes we'd split up into smaller groups to cover more ground (having agreed in advance to pool the treats and split them equally afterwards).

When doing the tick or treating itself (and with confidence boosted by our costumes), we would be cheeky, persuasive, cute, charming, or mildly threatening; whatever we thought the 'customer' would respond to best.

Strategy, segmentation, targeting, customer relationship management, sales, teamwork, negotiation, contracts - we were developing skills in all these areas, skills which we honed year on year until by the time we were too old to trick or treat we could have written the book on it.

So, if you're a parent wondering whether or not to let your kids go out trick or treating this Halloween, why not consider it an educational outing? Just make sure you negotiate a share of the spoils!

Has 'i' spied a gap in the market?

The team behind The Independent has today launched the first new national newspaper for almost 25 years.  'i' is tabloid sized and priced (just 20p), but is aiming at the younger, disaffected, belt-tightening broadsheet defectors, describing itself as 'Colourful and accessible, concise and intelligent...your essential daily briefing'. With national newspaper circulation figures continuing to decline across the board (ABCs, 2010), this is a bold move.

So, have the Independent's Russian owner Alexander Lebedev and his team identified a gap in the market - those who no longer have the time or inclination to wade through a 'quality' paper?  This, for me is a process which began when the Independent itself moved over to tabloid format and then introduced its own 'opinion' magazine inside.  The Indy has been trying new things for a while now, but will this gamble pay off?

Well, let's look at it from a business perspective.  The cover price of 20p is one fifth that of The Independent, but that's still 20p more than the free paper 'Metro' and its ilk.  Is this a slightly higher brow version of 'Metro'?  Where is the added value that your 20p buys?  I'm guessing that much of the content will be edits and re-hashes of the content that goes into the Independent, so the cost of the content is likely to be fairly low. However, based on the visuals I have seen this morning, the design and layout will require a very different approach.  So, can it make money?  Most newspapers depend on volume to make money - volume sales reduces cost per item and increases the appeal to advertisers.  Is there a large enough market for this paper?  I can only assume the team behind it have done some careful research.

My second issue is convenience. Is it going to be convenient to buy?  Metro etc are picked up en-route by commuters; an even if they aren't expecting fantastic journalism and in-depth analysis, it's something to read on the train that you don't have to pay for or stop for a minute to buy.  In my view, this matter of convenience will be one of the keys to whether 'i' is a success.  How will it be distributed and sold?  In paper shops alongside all the other newspapers or on the streets and in the tunnels?

In aesthetic terms, however, I like what I see.  The design and layout are closer to web principles than those of a newspaper.  They have clearly noted that the way we take in information has changed.  Fewer people read lengthy editorial pieces; our addiction to bite-sized information on the web has made us browsers.  We like to scan an pick out small nuggets of information.  Whether this is good for us is another question, but that is how the younger generation prefers to take in information; and reading a newspaper should be a pleasure not a chore, right?

However, the nagging doubt at the back of my mind is that this is a dead medium - or a medium with a few years left at the maximum.  The development of electronic devices which make reading on them as comfortable and convenient as a newspaper is rapid.  How long before newsprint is overtaken by iPad, Kindle and the like? 

The tipping point is coming, and I can't help but feel that launching a newspaper like 'i' is simply swimming against the tide...

People don't like change...especially Gap people...

Gap's unveiling of its new logo has caused a media furore and countless complaints from customers protesting this change to an iconic American brand.

The result?  Gap retract the new visual identity and (after flirting with the idea of crowd-sourcing an alternative), revert to the old logo.

What can we learn from this?  Well, the good news for Gap is that they are loved!  Their customers feel so passionately about the brand that they are prepared to take the time and make the effort to protest.  As a company trading on brand values this is exactly what you want, and (as Gap seem to have lost sight of) the thing that you go all out to protect.

The new logo was, undoubtedly, quite different to the classic blue box with serif font. Clean and simple, it was more contemporary, perhaps more like emerging successful brands aimed at a young audience such as Bench and Superdry.  Was this also an attempt at repositioning Gap?  Was this necessary?  Clearly existing customers did not appreciate the change.  Customer loyalty is one of the things Gap has been consistently good at, so what happened?

Well, whatever the thinking behind the move, Gap's response has been swift and (excluding the crowd-sourcing blip) decisive.  The decision to retain the existing brand, despite the wasted expenditure and loss of face is, in my view, the right one.  Some have suggested that this was a PR stunt, and perhaps it was, but the positive message that Gap should take from this is that they have a hugely strong and valuable brand that is tied closely to their existing visual identity.  The cost of re-branding materials, stores etc would have been enormous anyway; far better to take the hit on the development costs for the new ID than to waste a fortune on fixing something that isn't broken...

Betfair's Birdies - Ambush Advertising at its best

As the Ryder Cup tees off here in Wales, the scramble amongst bookmakers to make the most of the media coverage is on.  Paddy Power's attempts to erect a giant Hollywood-style sign on a nearby hillside were scuppered by the local council, but the prize for the most enterprising piece of ambush marketing so far has to go to Betfair.

The company has drafted in a group of trained birds of prey to fly around the site trailing banners with promotional messages. 

Events like the Ryder Cup gain significant amounts of revenue from official sponsors (in this case Mastercard and HP), who expect to receive exclusive rights to promote themselves in connection with the event. So, stunts like this can be seen as damaging to that revenue stream. 

I'll be watching with interest to see what the Ryder Cup organisers do about this one - after all, birds are free to fly wherever they like...aren't they? From Betfair's perspective, even if they are stopped - the national media coverage gained is worth a fortune to them.

Well played.

Is Facebook a human right?

It's big news these days when one of the major social networks is hacked or experiences technical difficulties.  When Facebook had to shut down for a short time on 23rd September there were thousands of complaints on blogs, Twitter and other social media sites - but do we have a right to complain?  Facebook is, after all, a free service for us the consumer.

So, does that mean we are 'customers' or not?  If we consider this in business terms it brings us back to the fundamental idea that business is about exchange.  For the majority of organisations, the exchange process is based on the customer paying money in exchange for goods and services - but in Facebook's case the model is more complex.  Are we, the users, still customers even though we are not paying for the service?  Are Facebook's advertisers their real customers?

For advertisers the exchange process and customer relationship is clear; advertisers pay Facebook to show their advertisements on its network. However, we the users also pay a price in exchange for the service we get from Facebook.

We pay in two ways:


1. The first price is time.  Any time that we spend on Facebook is time when we are potentially viewing and responding to advertisements.  This 'face time' has a value to the advertiser and so it can be sold.  As customers, the time we spend on Facebook has an opportunity cost - what else could we be doing instead of browsing Facebook?  Working? By spending time on Facebook we are missing the opportunity to do other things that might have a value to us.

2. The second, and increasingly more important price we pay is data.  We provide Facebook with huge amounts of information about ourselves.  Our willingness to share detailed information about who we are, where we are, and what we like is one of the cornerstones of the Facebook model.  This data is hugely valuable to marketers who are always striving to know their customers better.  The data we provide enables Facebook to make its advertising network more effective and more attractive to their customers.

So, looking at it in this light, do we have the right to complain when Facebook fails?  Perhaps we do.  However, it concerns me that our society is being conditioned to expect services to be free in money terms.  Although this encourages new and innovative business models, some of these models (as we've seen recently within the banking system) are not built on sound financial principles.  There is an inherent risk that they will collapse and fail - and what then for those who have come to rely on free at the point of use information sources?  Will social media services be propped up by government funds?  Will there be a Facebook tax?

Is Facebook a human right?  Of course it's not; but we need to think carefully about how heavily we rely on such sites, and manage our own expectations of the services they  provide us.

Has the Commonwealth Games controversy really damaged 'Brand India'?

With the start of the Commonwealth Games just days away, the International media have been focusing heavily on the problems faced in Delhi.  The organisers are racing against time to complete the facilities and make them safe and comfortable before the start of the games, and with pictures of dirty athletes' accommodation and building work still going on appearing every day in the press, many both in India and around the world have been saying that this is bringing shame to India.

I have to say I disagree.  Some of the most interesting and exciting characteristics of India are summed up in these events.  The unpredictability, the colour, the danger, the laid back, last-minute approach are all things that I have found most appealing about the country.  The fact that India is so different to the west; the creativity and innovation that come out of necessity, these are things we, and India should embrace.  Yes it's important that the country puts on a good show, but I don't think the games would represent India if they didn't come together at the last minute.    India should embrace the reputation it has and build on its national brand, and we westerners should accept the positive aspects of this difference in culture.
 
I for one have every confidence that India will pull out all the stops and make it happen. Even if it doesn't quite run to schedule and it's a bit 'Heath Robinson', I'm looking forward to truly Indian Commonwealth Games.

Why change is no longer optional...

Fantastic video that brings home the pace and complexity of social, economic and technological change in our world...