Counter-intuitive in the counter business

Earlier this year, Wal-Mart did away with their people greeters, a hallmark of the stores for more than 30 years.  A Wal-Mart spokesperson said that the move was a way to rein in costs and prices.  While the company has said that the greeters have been reassigned to other roles, including serving people in high traffic areas within the stores, many analysts and former greeters seem skeptical that the jobs will remain for long. 

It is conventional wisdom that the key to success in retail is to work to keep your costs as low as possible and your revenues as high as possible.  The manifestation of that conventional wisdom is that many retail stores are populated with fewer and fewer poorly paid part time employees.  As Zeynep Ton states in her recent Harvard Business Review article, "The conventional wisdom is that many companies have no choice but to offer bad jobs—especially retailers whose business models entail competing on low prices. If retailers invest more in employees, customers will have to pay more, the assumption goes."

But in her research, Ton shows evidence that the truth is counter-intuitive.  In her study, she profiles four retailers that operate in the low-price arena.  Trader Joe's, QuikTrip, Costco, and Spanish supermarket chain Mercadona buck the trend.  All four companies pay their employees higher wages, provide them better training and have more of staff on the floor.  All four of these companies have higher labor costs than their competitors.  They also have higher employee loyalty.  That is to be expected.  What goes against the grain of conventional wisdom is that all four of these retail organizations is also more profitable than their competitors.  They enjoy more sales per employee and per equivalent store.

The advantage is pretty straight forward.  First, the profiled companies tended to keep employees longer.  So, in the long run, they spend less per employee hour on recruitment and training costs. 

On average, their employees were more knowledgeable and more experienced than the staff of competitors who focused on minimizing HR costs.  That means that there is more experienced help on the floor for customers.  The chances of a customer getting assistance that really helps answer their question or solve their problem goes way up.

Which leads to the second tangible benefit.  It is cheaper to get existing customers to make additional purchases than it is to attract new customers to make first time purchases.  By having experienced, knowledgeable staff on the floor, helping customers, Trader Joe's, QuikTrip, CostCo and Mercadona help customers find, and purchase, what they are looking for.  Customers actually end up purchasing more because the knowledgeable staff helps them find answers to their problems, helps them find what they are looking for, and makes recommendations for additional purchases.

Zeynep Ton's research seems to bear this out.  I am including a link to her recent blog about her research if you want to read more.    http://blog.zeynepton.com/

Ultimately, there are many ways to run a retail business, some of which are actually profitable.  It seems to me that striving to be the lowest cost provider is a tough position to sustain.  There is always a company around the corner that will figure out how to lower their costs a bit more so that they can lower their prices a bit more.  

Better, it seems to me, to be a lower cost, high value retailer.  Add a little value to the customer experience and you most likely see sales and customer loyalty increase.  Customer loyalty is harder for a competitor to beat you on, because all of the sudden you are not selling commodities but unique experiences.  In order to provide high value, you need a knowledgeable, experienced work force that can successfully and efficiently address customers' needs and concerns.  Experienced and knowledgeable staff do not tend to congregate to the low pay employer.

Imagine (with apologies to John Lennon)

The Presidential election is now a couple of days past, and regardless of what you feel about the results, I suspect you feel a sense of relief.  A brief respite from political ads and sound bites is very welcome!

By some accounts, this most costly of elections cost the participants in the Presidential race over $1 billion. Overall, in all races, approximately $2.5 billion was spent.  All for thirty second snippets to tell us how bad their opponent is.

Imagine what that $2.5 million could have done.  I have this fantasy of the candidates using their campaign war chests to actually solve problems on the ground in the areas they are campaigning in.

Imagine if a senatorial candidate bankrolled a road project or a job fair.  Think about someone running for representative paying the mortgage for an underfunded social service agency or hiring a couple of teachers for a struggling school district.

Imagine presidential candidates personnally investing in projects they believe in.  I think that we would all start to look forward to campaign season as a time when things really happened as opposed to a time filled with too much rhetoric and too little action.

Imagine how this election season would have changed if we had candidates who decided to show rather than say.

The only losers would be the television networks.  I'm OK with that.

Quality vs. Control

In today's marketplace, a communicator needs to focus on clarity of message and connecting with key audiences more than controlling the message.

Occassionally a communicator may have the illusion that she can control the message.  It is only an illusion.

Today's marketplace provides us with an opportunity to have a dialog WITH our key audiences (new media) versus a lecture AT our key audiences (old media).  Everyone knows that in a dialog, you can only realistically control no more than one half of the conversation.

So what are we professional communicators to do if we can no longer realistically claim the super-secret ability to control the message?

The answer is something we should have been focusing on all along.  We need to refocus on the clarity and the quality of our messages.  We need to sharpen our pencils (most likely metaphorically) and pay attention to creating carefully crafted, concise messages that clearly communicate one or two key messages.  (For the mathematically inclined reader, or those of you who are aspiring marketing consultants, you would state this as 6C=Q.)

When you can only control your half of the dialog, you need to make sure that is a high quality half!

We need to focus on making sure we are delivering messages that communicate our key message as clearly and engagingly as possible.  THEN, we need to listen for feedback that will tell us if our messages are as clear and engaging as we anticipated.  If they aren't, you adjust and start over again.

If your quality is good, I guess you don't need to worry about control.

It IS the Message that Counts

If you've worked in public relations, marketing or communications for any time, I am pretty sure you've had an experience similar to one I had recently.  A local reporter expressed interest in covering a project I was involved in.  I gave the reporter some background and a framework for the project and connected him to some of the principals of the project.  The reporter talked with some of those principals and wrote his story.

The story, upon reading it in the newspaper, was not what I had hoped it would be.  Some key facts were misstated or left out, pretty much everyone thought they were misquoted, and while generally positive in tone, the article did not portray the project in the way I would have preferred.  I was disappointed.

But then I started talking to people.  Several people told me that they had read the article.  What amazed me is that every single person I talked with recited back to me the key message we were trying to get out.  I thought the key message had been obscured in the article.  Others involved in the project had trouble seeing past the minor factual errors that were in the article. We couldn't see the forest for the trees.

The casual reader, however, got the key message.  Loud and clear.

I guess it was a pretty good article!

The Marketing Bible

Today's marketing musings are prompted by an atypical source, the Book of James from the Bible.  In the third chapter of James, is the following passage:

"From the same mouth come blessings and cursing.  ...[T]his ought not to be so.  Does a spring pour forth from the same opening both fresh and brackish water?  Can a fig tree...yield olives, or a grapevine figs?  No more can salt water yield fresh."  James 3: 10-12

I am not sure that religious leaders or Biblical scholars will agree with me, but when I read that, I get a very clear marketing message.

What James was saying was you have to speak with one consistent voice.  In theological terms, that means issue blessings or curses, but not both.  In marketing terms, that means you cannot be the low cost provider to one market segment but a value added provider to another.  In the 80's, Peters and Waterman referred to this phenomenon as "sticking to the knitting" in their book, In Search of Excellence.  A few hundred years earlier, Shakespeare indicated the same thing when he wrote "to thine own self be true."

Especially in today's marketplace where organizations and marketers can't control the message as much as manage it, it is important to have a consistency of message.  Furthermore, in this cynical age, if your consistent message isn't based on reality, consumers WILL see through the charade.  The challenge for the business communicator these days isn't to "spin" the message (a term that I think all reputable communicators should eschew) but to craft a truthful and sustainable message.

James continues his writings saying primarily the same thing.

"Who is a wise man and endued with knowledge among you?  Let him shew out of a good conversations his works with meekness of wisdom.  But if ye have bitter envying and strive in your hearts, glory not, and lie not against the truth."     James 3:13-14

Good marketing, it turns out, is common sense.  You can find marketing inspiration in many places, even a good book!

Helping Others

"We are here on Earth to help others.  What the others are here for I have no idea."   W. H. Auden

When I have the opportunity, I make time for students who are interested in pursuing my particular line of work.  I do the same with colleagues who are in-between jobs or looking for new marketing adventures.  When I talk with students and job seekers, I talk with them about their dreams, reveal some of the practical realities of the marketing world as I understand it, share what knowledge I might have in their hoped for specialty, and encourage their pursuits.

I also always get much more out of the conversation than they do.  Here are some of the reasons why:

• Enthusiasm is contagious.  Those of you who have been kicking around in your chosen field for 25+ years, as I have, understand how valuable a shot of enthusiasm can be to how you approach your day.  I am inspired by the excitement that many of the young people I talk with have at the prospect of actually working in marketing and communications.  The same is true for someone who is working hard to find an opportunity in the field.  There is often some ideal or dream that is driving them to seek this line of work.  I find that rejuvenating and renewing.
• I usually learn more from the conversation than the person I am talking with does.  If I am talking with someone who has recently been in college, I learn what issues are being emphasized in academia, what ideas are sparking the imagination of those coming into the marketplace, and which of my dusty, stodgy marketing concepts still have resonance in the emerging marketing landscape.
• When I talk with colleagues who are involved in a job search, I get a sense of what is happening in the marketing worlds of other industries.  How are they adapting to the pressures of social media?  What are they doing with marketing budgets, and staffs?  How has the influence and importance of marketing changed in those industries over the last few years.  While certainly I can get some sense of all of this by reading the literature, there is a nuance and a truth from personal experiences that don't often make it into formal interviews and articles.
• Mentoring someone who is on a job search, whether it is for their first job or their last, is the most elemental form of networking.  Like Blanche DuBois, when I have been looking for a job I have relied on the kindness of strangers.  I think it is only fair then to be receptive when someone finds their way to my doorstep looking for similar kindness.  
• Finally, and perhaps most importantly, there is an element of paying it forward in mentorship.  I have received career help from others, at the start and during mid-course corrections. As I tell those who I try to help, the best way to repay those kindnesses is to provide them yourself when the opportunity presents itself.  It feels right; it feels good; and its pretty good karma!  

As Auden states in the quote at the top of this page, we are here to help others.  I encourage you to be a mentor whenever you can.  Don't be one of the others!

Knowing Why

The other day, a colleague said something profound to me.  He said, "Those that know how work for those that know why."

It is a simple explanation of the difference between advertising and marketing, managers and leaders, doing and creating.

As Simon Sinek says in his inspiring  TED Talk on how great leaders inspire action, people don't buy what you do, they buy why you do it.  If you understand why, you hold the keys to what makes business, or really any organization, work.

Understanding why, is what makes someone a leader.  Communicating why is what makes someone an inspirational leader!  Great leaders inspire us because they talk about their beliefs.  Their why.  They inspire us through connecting with the beliefs that we share with them.  As Mr. Sinek points out, Martin Luther King, gave the "I have a dream" speech, not the "I have a plan" speech.

Figure out why.


Watch Simon Sinek's TED Talk here.
http://www.ted.com/talks/lang/en/simon_sinek_how_great_leaders_inspire_action.html