Marketing challenges


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The Enrollment Challenge

Retirement readiness decisions are a daunting task for most employees. According to a 2012 Participant Engagement Study conducted by Lincoln Financial:

  • 41 percent of employees are only somewhat engaged or fully disengaged from any retirement plan
  •  7 percent of employees only are fully engaged and interact with their retirement plan on a regular basis.

Plan communication and education can provide people with the financial knowledge needed to better understand their employee benefits and make better enrollment decisions to achieve better outcomes.

Communication Is Key

The U.S. Employee Benefits Security Administration’s ERISA Advisory Council published a key report in 2010 on how plan communication practices and design options impact participation and contribution rates. They researched strategies for tailoring communications to different subgroups of employees through direct communication, and their effectiveness in influencing participants of diverse demographic market segments, including segments categorized by income level, household status, generation, gender, and ethnicity.

The report then provided recommendations of best practices for enrollment that are statistically proven to be effective, including education to plan sponsors on specific proven techniques and communication practices. In evaluating what communication methods are most effective in encouraging participants to save for retirement, the following considerations were made:

  • Cost: an effort was made to balance the need for comprehensive plan communications against cost.
  • Delivery: A variety of methods were explored including the use of current and emerging social media.
  • Plan Design: The study reviewed how plan designs relate to increasing participant enrollment and savings. In particular, the Council studied the use of automatic features. Automatic enrollment plans automatically choose the employees’ contribution percentage and enroll the participant in an investment vehicle. This raises participation rates to close to 90 percent. However employees enrolled at low contribution rates of 3% or less tend not to deeply consider or increase their contributions.

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9 Recommendations and Best Practices

The Council found that effective plan communication and education can provide people with the financial knowledge needed to understand their employee benefits, make better financial decisions, and achieve better outcomes.

Given that the most successful plan communications make use of many channels from print to external websites, online tools, social media, and creative marketing, the Council highlighted best practices that balance personalized, targeted content to help employees evaluate benefit offerings with cost efficiency. They highlighted specific techniques and communication practices that have been statistically proven to be effective in increasing the involvement of employees in saving for retirement. The following are 9 recommendations:

  1. Communications tailored to particular segments drive results
  2. One-on-one or small group meetings increase participation
  3. Immediate “on the spot” communication is most effective
  4. Short, simple and focused communication drives participant response
  5. Multiple “touches” with various creative formats increase participation
  6. Increased technology use is effective and cost efficient
  7. Behavioral economics and “social norming” can increase participant involvement and savings
  8. Incentives given by sponsors and “gamification” help trigger participant involvement
  9. Responsive marketing principles may assist plan sponsors in improving communications

Here is a brief synopsis of these 9 practical recommendations and some best practices:

1. Communications Tailored to Particular Segments 

tailored-skill-development-imageThe Council found that communications that target participants based on their interests, background, and/or economic status were more successful than the “one size fits all” approach.

Understanding the culture and background of the workforce being targeted is key. For instance, since Hispanics will soon constitute one-third of the US population, Council member Donna MacFarland of Lincoln Financial Group stated that in her experience education materials typically are translated from English to Spanish, whereas she recommended that sponsors design the material using the reverse approach, developing  materials first in Spanish to address specific cultural needs and language differences.

Human Resource professionals also have found that allowing employees to map out an action plan rooted in realistic scenarios is an extremely effective tool. Some plan sponsors have successfully used a “three-pronged” approach to reach out to their participants by combining simple income replacement projections, behavioral finance strategies and a personalized message. For example, JP Morgan developed 36 different personas based on three age groups (younger than age 30, age 30-50 and older than 50). The firm also targeted participants based upon their regional median income (e.g., Kansas’ median income is $30,000 while in New York City it is $70,000). The basis for this approach was to enable these groups to compare themselves against their peers and take the appropriate action toward saving for retirement.

By narrowly tailoring their target audience on behalf of the plan sponsors that retained them, JP Morgan subsequently monitored whether employees opened their email communications and took action toward saving for retirement. If the individual took action, that person was considered “active,” while someone who opened the email but did not take action was considered “interested.” Based upon the action taken by the individual, the participant received specifically targeted information. This technique resulted in three to four times the response rate of participants who were not targeted.

However, some witnesses advised that there is a general concern regarding the use of targeted communications because complex data collection may provide gender or ethnic identification. Thus, there is concern over whether specific segments identified based upon race or gender could raise discrimination or deferential treatment issues. The Council heard testimony from Donna MacFarland of Lincoln Financial and Thomas Ryan of Fidelity that the use of particularly sensitive demographic information causes concern among plan sponsors. There are also practical concerns about housing information technology. Nevertheless, the overwhelming opinion received during testimony was that targeted communications work.

Branding helps targeting through the use of communications that include a unique positive image that is the group can relate to.

Here are some best practices of participant-centric communication methods:

  • Best Practice 1 – The Power of Example: Trustees of the Elevator Constructors 401(k) Plan used materials featuring the story of three employees who made different savings decisions during their careers. The narrative of the three employees was used throughout one-on-one sessions with printed materials to demonstrate how a 401(k) contribution would benefit participants in a variety of circumstances including temporary layoffs, hardships and early retirement. As a result, plan participation rates increased from 26.56 percent to 29.82 percent in 2011. The plan also experienced an 85 percent increase in plan activity from meeting attendees.
  • Best Practice 2 – Employer/Employee-Centric Content: M.A. Mortenson Company, an international construction firm, employed construction-related themes in its financial education to engage participants and foster pride in the company. Financial education was made mandatory and workshops were divided by career stage, age, and gender. The plan sponsor focused on participants’ preferences by surveying them after the workshop and making recommendations based on their feedback to yield desired results.
  • Best Practice 3 – Bilingual: Consolidated Citrus Limited Partners wanted to 1) increase attendance at plan educational meetings, 2) increase plan participation, 3) increase deferral rates and 4 encourage participants to maximize their match. Ninety percent of the workers spoke only Spanish, and the majority of their day was spent in the orange groves. An in-language campaign was initiated. The company’s Spanish speaking leaders met with small groups in the orange groves. Straightforward collateral in both Spanish and English Collateral were available on site, including announcement posters. By bringing the meetings to the employees, 95 percent of the targeted group attended the meetings. Plan participation increased from 40 percent to 75 percent and deferrals expanded from 4 percent to 8 percent.
  • Best Practice 4 – Branding: The Animation Guild 401(k) Plan was implemented for artists working at Southern California animation studios. The sponsors worked with the Guild’s representatives to obtain insights and develop a branded communication urging participants to remember to enroll. The response rate increased over eight percent from the previous year, with 135 new enrollees. Another employer cited in the research increased participation by 30 percent by keeping the message fun, simple and “cool” to target younger workers.
  • Best Practice 5 – Multicultural: The Four Seasons 401(k) Plan needed to convey an important plan change to an employer profit sharing employer matching contribution. The sponsor obtained feedback from bilingual meeting presenters in designing the campaign, and provided materials tailored to Hispanics and presentations also were created in Spanish designed to be culturally and linguistically accurate. As a result, the average deferral rate of the targeted group rose from 2.9 percent to 5 percent, and significantly increased beneficiary designations.

2. One-on-One or Small Group Meetings 

OneonOneAfter a study by Lincoln Financial found that 66% of participants prefer one-on-one guidance, Lincoln made it a component of its financial education model. They found that the need for individualized information is particularly acute for groups with low participation rates, including women and minorities.  Various studies have shown good enrollment and contribution results when employees request in-person group workshops facilitated by financial experts.

  • Best Practice for One-on-One Meetings:In 2012, MassMutual representatives spoke with 150,000 employees in face-to-face meetings. Forty-six percent of these individuals took action to improve their retirement readiness and, in one-on-one meetings, 75 percent of employees took action.
  • Best Practice for Small Group Meetings: Costs and timing may prevent plan sponsors from providing one-on-one meetings, but small group meetings and audience segmentation have also been successful. The FINRA funded Nurses Investor Education Project had small group meetings for well-educated nurses interested in taking action toward their retirement. They found that generally, the nurses’ lack of basic knowledge, or their perception that they did not know enough to attend these sessions, prevented them from attending their plan sponsor’s meetings. As a result of using small group meetings as a forum, the nurses perceptions changed and attendance at their employer’s retirement plan sessions improved.

3. Immediate “on the spot” Communication 

onthespotThe ability for participants to take action at the time they are thinking about retirement savings is more effective in increasing enrollment. For example, having computers in the room at the time employees are learning about the plan would allow them to sign up and take immediate action.

  • Best Practice: A US Army mandatory financial management course found that providing the enrollment forms for the Thrift Savings Plan during the financial management course resulted in a sizeable increase in participation, with soldiers signing up for the Plan before leaving the classroom.

4. Short, Simple, Focused Communication 

focusedBehavioral studies show that the most effective communications use simple, straightforward language specific to a participant’s personal situation.

  • Best Practice: Time constraints mean that any impediments to action should be identified and mitigated. For example, on a website, any extra step, such as the need to retrieve a PIN, may prevent employees from taking action. Solutions include sending the PIN directly to their email account or a mobile number, or mailing a postcard with the website’s uniform resource locator (URL).

5. Multiple Touches With Various Creative Formats 

profileConsistent, continuous and on-going meaningful communication can be achieved by repeatedly sending out simplified mailings. Social media can help alleviate the cost of additional touch points, and yet, few companies use social media channels for retirement information.

  • Best Practice: The Council’s Professor Madrian cites a company in which the third mailing of a simplified reply form requiring the checking of a box to enroll doubled enrollment from 22 percent to 45 percent of non-participating employees.

6. Cost Effective Technology 

advancement-of-technologyEvery demographic group is now using the Internet as a preferred source of information, via home computer or mobile devices. In addition, electronic media provides the ability to track responses, which is unavailable when the communication is sent through printed materials and regular mail. Another cost effective technological advance is Dynamic Page Publishing,  reviewed at the conclusion of this article.

A Deloitte study in 2012 that found:

  • 93 percent of Americans place Internet access as the most valued household subscription;
  • 54 percent of Americans own smartphones, and the rate is increasing 29 percent annually.
  • One of three Americans over age 50 has downloaded an application to a smartphone, and 28 percent access their bank accounts via smartphone.

Engaging Millennials: Electronic media is the most effective method of communication to engage younger generations in retirement planning, including Generation X (born between 1965 and 1979).  In order to combat inertia caused by competing financial priorities, such as student loan debt, it is important for this group to be engaged through “YouTube” videos, Facebook forums, Twitter, email and mobile delivery, including providing “one click” transactions and incorporating elements of “gamification.”   Millennials also demand simple, personalized, and action-oriented communications, and prefer human contact for complex tasks.

  • Best Practice – Email: Thomas Ryan of Fidelity Investments testified to the Council that Fidelity makes all channels of communication accessible, and finds that email communications have generated higher response rates than direct mail.
  • Best Practices for Engaging Millennials – Fidelity: Fidelity has studied the preferences of Generation Y, or “Millennials”  for using electronic communication, and found that this group tends to rely heavily on the Internet to interact with representatives from Fidelity, although they appear to be the least engaged when it comes to the frequency of contact. Millennials serviced by Fidelity have the lowest 401(k) participation rate, at 58 percent, compared to 67 percent for all other populations. Design changes made to simplify online interaction with Millennials resulted in a 40 percent increase in web utilization by this group.
  • Best Practices for Engaging Millennials – Putnam: Lori Lucas of Callan Associates discussed Putnam’s roll out of a plan primarily for Millennials that encouraged participants to bring their tablets to an nteractive meeting to log on to the benefits website. As a result, 40 percent of attendees increased their deferrals within 90 days after attending the meeting.
  • Best Practices for Engaging Millennials – MassMutual:: Offering enrollment and savings increases using iPod Touch devices in group meetings resulted in action rates of 85 – 90 percent among those attending. The use of targeted and tested mail and email campaigns resulted in $150 million in new deposits over three years and a 3.9 percent increase in action rates.

7. Behavioral Economics and “Social Norming” 

choiceThe way certain information is presented can have a resounding impact, including the way choices are presented to the participant, a method referred to as “anchoring”

Presenting options in a different order or with a higher default percentage has increased deferral rates. While communications traditionally list contribution percentages in ascending order from one to five percent, studies have shown that reversing this order so that the first option shown is five percent markedly increases enrollment in the five percent option. This method is referred to as “placement.”

 “Social Norming” reflects the fact that people tend to benchmark themselves against their peers. Statistics from the Bureau of Labor Statistics show that participants tacitly compete against peers in similar socioeconomic conditions.

8. Incentives and “Gamification” 

carrotThe use of games (gamification) is an effective tool in reaching  individuals who may not be easily engaged in retirement decisions (“non-savers”). Gamification can be used to reward people if they engage in the correct behaviors. Plan sponsors may also use incentives to provide rewards to participants with who exceed a certain benchmark contribution amount. Other techniques include raffles.

  • Best Practice 1: The NFL’s “Play 60” campaign  incorporates the use of the NFL brand to incentivize children to play a game for at least 60 minutes a day.
  • Best Practice 2: A rug manufacturer in northern Georgia had a series of meetings for people working multiple shifts, giving away lottery tickets to encourage attendance, and experienced standing room only for the meetings.

9. Six Marketing Principles Improve Communications

Communications that are uninspiring and difficult to undmarketing-300x200erstand leave employees confused, bored and unmotivated. The communicator’s “curse of knowledge” is a bias in which the communicator’s knowledgeability makes it difficult to demonstrate it from the perspective of lesser-informed people. The Council highlighted six principles of communication that plan sponsors should consider when drafting documents or presenting to their participants that will inspire action:

1. Show Empathy

empathyTo  determine the relevance of a message to an audience, it is necessary to engage them and ask questions that the content of the presentation or the communication should then be tailored to answer. For example, an energy company developed a program to help consumers understand and lower their energy bills, using this computerized question:

Can I help you with your bill?

  1. Yes, help me understand my bill.
  2. Help me save money.
  3. Both of the Above.
  4. I’m Here for Something Else.

By showing empathy to what the consumer cared about and giving information and tips to help them feel more in control, these questions presented helped raise consumer satisfaction.

2. Use Metaphors and Analogies

analogCommunications also reference a metaphor or visual picture to help the recipient relate to the message. For example, when Ridley Scott presented the screenplay for Alien to his producers he used the popular movie Jaws as a reference, and the metaphor “it’s like Jaws in space,” to frame a concept that the producers easily understood

3. Use Storytelling

icon-storytellingPeople tend to forget facts that are presented but usually remember a story. Stories are easy to absorb when people are overwhelmed with information. They also eliminate extraneous facts to capture the recipient’s interest and relate to him on an emotional level.

4. Use a Conversational Voice

conversationalUsing overly technical information, compliance or legal jargon can loose an audience. For example, it is difficult to convey the benefit of voluntary life insurance individual and spouse buy-up options in which election of coverage for a spouse can equal up to half an individual’s buy-up,  depending on the desired level of coverage. An effective way of communicating this is as follows:

“The company is going to buy life insurance for you. If you want, you can buy extra life insurance. Whatever extra life insurance you buy for yourself, you can also buy up to half that amount for your spouse. Now, depending on how much additional insurance you’d like, one or both of you may need to answer some questions about your health to see if you qualify for it.”

5. Surprise the Recipient

boxing-glove-surpriseUnexpected methods of engaging the recipient get the individual’s attention when a subject is ordinarily challenging and abstract. The use of humor, as shown below, can be considered an example.

6. Use Humor

humorUsing a little humor in the message will keep the audience engaged and make the message easier for audiences to relate to.

 

Plan Design Considerationsicon-design

Automatic Enrollment

A study by Brigitte Madrian and Dennis Shea shows that automatic enrollment increases average participation rates from 65 percent to 85 percent. It is particularly helpful for low-income workers with annual wages under $20,000, where participation increased from 27 percent to 82 percent. Average participation for employees under age 30 doubled from 41 percent to 82 percent, and the best improvements have been among the segments that had the lowest participation rates.  This was corroborated in as presented in the testimony of Lori Lucas.

Mandatory Contributions and Automatic Escalation

Defaults that are too low can  impact workers who would otherwise have contributed more. Since studies have shown higher default contribution rates have not increased opt-out rates, employers should consider recommending higher default contribution rates.

One solution is a stretch match (increasing the maximum amount of pay that can be matched and decreasing the percent matched, to keep the employer’s costs flat.

Another way to increase savings is automatic escalation in which sponsors automatically increase a worker’s contribution rate by one to two percent  of salary at each pay anniversary until a cap, such as 12 percent of pay.

Best Practice – TIAA-CREF: David Richardson of TIAA-CREF found that 403(b) plans typically have much higher contribution rates, ranging from 10 percent to 15 percent of pay compared to 5 percent to 7percent for all 401(k) plans, due to mandatory contributions from both employers and employees as a requirement of employment.  The 403(b) plans TIAA-CREF administers experience much higher annuitization rates — 40 percent compared to 4 percent for all 401(k) plans.

 Conclusions and Implications

red pencilThe Council found that continuous, simplified, personalized communication using multiple channels, connected with humor and empathy, are effective ways to communicate with plan participants to encourage participant engagement.

Benefit Program Marketers seeking to increase employee plan participation need to be more flexible, customizable and responsive than ever to introduce, present, promote and clarify the particular offerings and choices the employer has agreed to sponsor. Dynamic Publishing platforms are becoming a key tool in executing this strategy DPP is a way of designing publications in which layout templates are created which can contain different content in different publications. In cases where the same content is being used in multiple layouts, the same layout is being used for several different sets of content, or both, dynamic page publishing can offer significant advantages of efficiency over a traditional system of page-by-page design. Future articles will explore Dynamic Publishing in greater depth.

Related Blog Article:

“When Cultures Collide”

Thanks to Rod Rothwell – an Aussie doing business in Korea – for bringing this to our attention.

According to  “When Cultures Collide“ by British linguist Richard D. Lewis,who has mapped out leadership styles and cultural identities, cultures have different approaches to communication in business negotiations.

Lewis speaks ten languages, so he realistically warns of the danger of cultural comparisons and generalizations. However, he finds that there are also “national norms:”

By focusing on the cultural roots of national behavior, both in society and business, we can foresee and calculate with a surprising degree of accuracy how others will react to our plans for them, and we can make certain assumptions as to how they will approach us. A working knowledge of the basic traits of other cultures (as well as our own) will minimize unpleasant surprises (culture shock), give us insights in advance, and enable us to interact successfully with nationalities with whom we previously had difficulty.

Lewis’ communication diagrams follow these conventions:

  • Wider shapes show greater conversational range
  • Obstacles are marked in gray
  • Cultural traits are also noted.

Vive la Différence!

How do the different nationalities compare? Here’s how they tend to communicate:

  • Americans tend to launch straight into negotiations, respond to discord confrontationally, and resolve with one or both sides making concessions.
  • Canadians, while similarly direct, can be more low-key, and inclined to seek harmony.
  • English may avoid confrontation in an understated, mannered, and humorous style
  • French often engage vigorously in a logical debate.
  • Germans rely on logic, while amassing more evidence and laboring their points more than the British or French.
  • Spanish and Italians “regard their languages as instruments of eloquence and they will go up and down the scale at will, pulling out every stop if need be to achieve greater expressiveness.”
  • Scandinavians can have entrenched but often reasonable opinions formulated “in the long dark nights.”
  • Swiss tend to be straightforward and unaggressive negotiators, obtaining concessions by expressing confidence in the quality and value of their goods and services.
  • Hungarians value eloquence over logic and are unafraid to talk over each other.
  • Bulgarians may take a circuitous approach to negotiations before seeking a mutually beneficial resolution, which will often be screwed up by bureaucracy.
  • Poles often have a communication style that is “enigmatic, ranging from a matter-of-fact pragmatic style to a wordy, sentimental, romantic approach to any given subject.”
  • Dutch are focused on facts and figures but “are also great talkers and rarely make final decisions without a long ‘Dutch’ debate, sometimes approaching the danger zone of overanalysis.”
  • Chinese tend to be more direct than the Japanese and some other East Asians; however, meetings are principally for information gathering, with the real decisions made elsewhere.
  • Hong Kongers negotiate much more briskly to achieve quick results.
  • Indians speak English in a way that “excels in ambiguity, and such things as truth and appearances are often subject to negotiation.”
  • Australians tend to have a loose and frank conversational style.
  • Singaporeans generally take time to build a relationship, after which they can be shrewd negotiators.
  • Koreans tend to be energetic conversationalists who seek to close deals quickly, occasionally stretching the truth.
  • Indonesians tend to be very deferential conversationalists, sometimes to the point of ambiguity.
  • Israelis tend to proceed logically on most issues but emotionally on some.

 

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NewLink Consulting, Toronto found: 29% of U.S. life policyholders lost contact with the agent/financial planner who had sold them the policy, and 41% if the policy was purchased from an agent/broker.

Guest blogger Mark Weishaar

An orphan can be defined as “One who lacks support, supervision or care”.
How many do you have in your CRM database? How many customers have simply become dormant and shuffled into an inactive or unassigned category?

In a recent conversation with my client from a major life insurance carrier, I was appalled to learn that her company had well over 100,000 orphaned policyholders. In insurance-speak, these are folks who originally purchased a policy from an agent, but were never re-assigned after that agent left the company.

Many industries have a similar category in their database. Inactive bank accounts, infrequent flyers, one-time visitors… the list goes on. It gets me thinking: how many organizations could use a shot in the bottom-line? This category represents a huge untapped asset:

  1. Orphans are never contacted. You have forgotten about them, and they have forgotten about you. How likely are they to ever upgrade or buy another product or service from you? 
  2. If your competition is effectively marketing – and you know they are – how many competing offers can your orphans resist? Retention rates suffer when customers are ignored. 

The ROI of Marketing to Orphaned Policyholders

Let’s put some dollars and sense behind a simple illustration exercise: 

With the potential for this scope of increased revenue, it makes no sense to me that so many insurance companies do not devote any attention to their orphaned policyholders. Political turf issues over account re-assignment? Possibly. “Don’t rock the boat” and “Let sleeping clients lie” mentality? Maybe. Inertia? Most likely. 

Case Study: A short while back, I worked with a major hotel chain to develop a multi-pronged marketing campaign. Our objective was to revitalize their “dormant” clients: those who had not booked a room within the previous 24 months. Of the many successful initiatives we launched, the highlight was going back to the dormant customers.

After modeling their data against the frequent guests and re-soliciting a predictive-modeled group with an offer, we generated an ROI of 1,090%!

Unheard of? Yes. But true. And I could predict similar successes in your own organization.

So take a look at your entire customer file. Find those pockets of orphaned customers who have been ignored for whatever reason. Develop a strategy to solicit them with a product offering using a predictive model-driven approach. The incremental revenue generation and low acquisition costs are likely to amaze you, and will demonstrate once again the truism that:

Your Best Customer is Your Current Customer.

Mark Weishaar is a veteran financial services direct marketer and senior executive delivering broad range of leadership responsibility, experience and accomplishment across brand strategy, marketing, loyalty programs, customer data analytics, distribution, CRM, and social media on a worldwide basis.  He has directed the sales & marketing of a wide variety of financial services products and programs and held senior level roles in start-ups and  Fortune 100 companies in direct marketing environments, and  traditional agent/advisor companies. He has a unique ability to analyze and develop actionable marketing and sales programs with measurable ROI improvements.
Want to chat with Mark? Reply to him here or leave a comment on the blog.

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What Stands in the Way of Compelling Content?

Nasheen Liu, VP of marketing at The  IT Media Group,  discusses hindrances marketers face in creating compelling marketing content and and recommends three strategies to overcome them.  Two key problems she identifies are:

  1. Lack of control over the subject-matter.
  2. Feeling too removed from their audience.

She shares some approaches for overcoming those  challenges that allows markerters to more effectively create and repurpose compelling content.

Three Strategies

Strategy 1: Be an avid journalist to your internal  audience

In brief, there is no substitute for interaction with your field organization and customers.  Your notes from these interactions should include insights  from customers that can be summarized in a report and communicated to  your stakeholders.

Liu’s recommendation is to repurpose these valuable insights as “Industry Newsflashes,”  “Customer Insights,” and “Opportunity Analysis” for your internal audiences.  Why is this important?

Marketers often fail to realize that their most important audience is the  internal one. To market anything successfully, one must first and foremost  create as much visibility as possible internally. Every employee is your message  carrier. You will not become a rock star marketer if you don’t have the support  of your internal stakeholders.

Strategy 2: Insource your content, but control the  output

To get a good handle on your subject matter, it’s important to identify the domain experts  – at least one person in each cross-functional area who can serve as your go-to resource. This will give you a ready supply of content.

Getting subject experts to be responsive is a key challenge. You’ll need to schedule some time interviewing them in person. The conversation should be targeted to extracting content from them in 30 minutes or less.  One way to set this process in motion is to create an editiorial calendar.

If you promote your experts and give them visibility, you can gain you loyal sponsors and  support for your endeavors.

Strategy 3: Outsource your topics to industry  experts

One of the most common failures that I see marketers make in trying to promote themselves as thought leaders or impress audiences with their products and services is the mistake of “singing your own praises.”  To gain the attention and trust of the customer, it’s much better to get someone else to do the praising in an indirect way.

In the technology space, I engage industry experts, media personalities, and  well-known bloggers. The kind of perception you are trying to create is this:  “Wow, these guys are associated with her? Impressive.”

To build on this,  you can build  an onging campaign in which your expert can help you in various activities. Some ideas:

An initial article can turn into a moderated customer forum. The  findings from the forum become a whitepaper. The whitepaper can be used to  develop a video case study. And so on. Such linkages can continue to develop and  mature over the life of the catmpaign.

As Liu points out, “content is the bread and butter of what we do in the world of marketing.” Yet it often seems to get lost in the flurry of planning and execution, and becomes an afterthought. A successful marketing organization exists as part of a larger context of consistent messaging accross all touch points, internal and external. Nothing promotes an organization’s brand value more effectvely than shared messaging.

visualizing-seo

Economist  explained why you shouldn’t shop at Walmart on Friday (Black Friday.) A dumbed-down America wasn’t listening. He laid out the hard truths about American labor:

A half century ago America’s largest private-sector employer was General Motors, whose full-time workers earned an average hourly wage of around $50, in today’s dollars, including health and pension benefits. Today, America’s largest employer is Walmart, whose average employee earns $8.81 an hour. A third of Walmart’s employees work less than 28 hours per week and don’t qualify for benefits.

A Nation Sliding Backwards

One of the reasons for the decline of the middle class in America is the decline of labor unions. Membership is down from 33% of private sector workers in the 1950s to fewer than 7% today. Walmart’s employees have no union to represent them, and have been receiving a tiny portion of the corporate earnings compared to that the United Auto Workers members received in the 1950s.

Last year Walmart earned $16 billion, reporting a 9% increase in earnings ($3.6 billion) in the third quarter, but most of the profit went to Walmart’s shareholders, including the Walton family.

  • The Walton family earned more on their Walmart stock than the combined earnings of the bottom 40% of American workers.

The employee strike on Friday was a show of protest against wages as low at $8 an hour, unsafe and unsanitary working conditions, excessive hours, and sexual harassment.

A Company In Denial

Walmart fought back, filing a complaint with the National Labor Relations Board to ban the strikes. OUR Walmart, the worker organization that is coordinating the protests backed by the United Food and Commercial Workers Union, estimates that nationwide, there were more than 1,000 individual actions. But Walmart chose to put out dishonest talking points, saying that less than 500 workers absented themselves. Bill Simon, president and CEO of Walmart U.S. issued this lie:

Only 26 protests occurred at stores last night and many of them did not include any Walmart associates. We estimate that less than 50 associates participated in the protest nationwide. In fact, this year, roughly the same number of associates missed their scheduled shift as last year.”

On a conference call Friday, Dan Schlademan, director of the union’s Making Change at Walmart campaign, said that, while his organization does not yet have a precise count of the number of workers who walked off since the strikes are ongoing,  there were hundreds of workers and thousands of supporters. Many cities around the country had higher-than-expected turnouts. According to The Huffington Post’s  and 

At the Walmart in Paramount, where The Huffington Post counted 600 people at one point, organizers later said that a total of 1,500 people had shown up. Nine people were arrested for sitting in the street, which had been blocked off for the protesters. Those arrested included three Walmart employees, a father of a worker, a former worker, two clergy members and two other supporters, according to organizers.

In places where fewer strikers than expected joined the protests, one reason is that the company intimidates anyone who considers joining a labor group. Three workers who did not participate strike told The Huffington Post that they shared the concerns about low wages, lost benefits and retaliation for speaking up, but they were too afraid of losing their jobs to strike.  Jaime Durand, a Walmart human relations manager  said:

In Texas, we own our parking lots. We won’t ask them to stop what they’re doing, but we will be asking them to leave private property so we can maintain a safe area for our customers.

Why It Matters To All

What happens at Walmart has far-reaching economic consequences. Its pay scale and working conditions set the standard for competitors. Today, the median wage is 8% lower than it was in 2000.  Without a vibrant and growing middle class, the economy will continue to falter. This is especially true now that most new jobs in America are in personal services like retail, and have low pay and bad hours. According to the Bureau of Labor and Statistics:

  • The average full-time retail worker earns between $18,000 and $21,000 per year.

“But Walmart Labor Policies Keep Prices Low”

A new study by the think tank Demos reports that low salaries actually depress the economy. The report finds that even raising the salary of all full-time workers at large retailers to $25,000 per year would lift more than 700,000 people out of poverty. The cost: only a 1% price increase for customers.

But what would the wage increase cost retailers? According to the report:

  • the cost to major retailers of raising salaries would be 1% of the sector’s $2.17 trillion in total annual sales – $20.8 billion.
  • Yet the increased purchasing power of lower-wage workers would generate $4 billion to $5 billion in additional retail sales.

Whatever Happened to Smart Management Practices?

The real costs of Dickensian labor policies like those practiced at companies like Walmart and Hostess are more than our economy can afford. At Hostess, labor unions were unfairly blamed for a pending bankruptcy that was caused entirely by this kind of mismanagement. The end result is that the workers, company and consumers all lose.

The Real Story At Hostess Brands: Hostess Brands, Inc., maker of Twinkies, founded in 1930, is about to permanently shut its doors, putting 18,500 people out of work. While management has been placing the blame on the BCTGM (Bakery, Confectionery Tobacco and Grain Millars International Union), the union representing Hostess employees, the real cause was inexcusably poor management.

  • The company has had two bankruptcies since 2004 due to poor management, as witnessed by the fact that it has had no less than six CEOs since 2002.
  • A Wall Street private equity firm and two hedge funds made matters worse, burdening Hostess with $800 million of debt.

Yet, the company was never moved to employ sound business practices to improve it’s market position.

  • In the 1990s, Hostess overextended itself, doubling its production facilities and employees.
  • In the early 2000s, ignoring the advice of market analysts, it bought back numerous shares of its own stock, which caused enormous debt described as “balance sheet degradation.”
  • During the 2000s, Hostess shut down 21 production facilities and cut its total workforce from 35,000 to 18,000.

To make matters worse, rather than face the fact that they were a company in distress, and working to improve their market position and rationalize their management, the company chose to ignore its fundamentals:

  • Hostess failed to invest in upgrading technology that was growing obsolete.
  • It failed to address the fact that it continued to lose market share.
  • It continued accruing debt.
  • It generously rewarded its top executives, doubling and even tripling their annual salaries.

Hostess’ Union Pitches In To Rescue The Company

Even so, following In the wake of Hostess’ 2004 bankruptcy, the union (BCTGM) did what they could to help, giving back $110 million in concessions. They showed more business acumen than the highly paid executives. They provided the give backs in exchange for the company’s promise that it would invest in new machinery and new technology, and improve it’s market position.

Hostess Fails To Do Their Share

Hostess broke that promise, and failed to follow through on those long-term investments. Instead they continued to churn their assets and their CEOs, rewarding themselves bigger bonuses. Rather than address their failing business model, here’s how they hey attempted to keep the scheme going by doing the following:

  • Management approached the BCTGM with unrealistic demands for pay and benefit cuts of between 27-32 percent.
  • They began looking to “harvest” as much of the company’s assets as it could on the way out.

The union and workers by now understood what was going on.  Hostess management could not be counted on to run a business. By a 92% vote, the union rejected the massive cuts, knowing the company was no longer sustainable.

Lessons Learned: Labor Has A Stake

Labor has a huge stake in the operations of a company.  By excluding them from the table, American businesses have written their own epitaph. While the corporate propaganda machine would have you believe that mismanagement of the American economy is the fault of the government and regulations, this is not even close to the hard economic truth that large corporations are running their businesses as cash cows for their top executives without regard for the real long-term interests of the company, it’s employees, consumers or the economy at large.  sums it up well:

Hostess is a cautionary tale. It’s a company that was not only systematically picked clean by Wall Street vultures, it’s one whose executives lavishly compensated themselves during its death throes. For Hostess, it’s been one reckless, greedy move after another — one management fiasco after another — and yet they’ve been unwilling to blame themselves. They blame the union for this whole mess.

Given the increased power of these vulture capitalists, Americans increasingly feel powerless to do anything but express angst in unfocused displays of tea party revolt. Rather than learn the lessons of history, our anger is increasingly coopted by corporate populist fronts like the tea party. The very fact that incompetent heirs like corporate vulture Mitt Romney and George W. Bush were considered to be viable presidential candidates is indicative of the extent of the problem.

So what can we do? Stand with the workers of Walmart, as they express their grievances.

The Economist article, “Data, Data, Everywhere” discusses the fact that the digital universe is growing faster than the capability to store this information. In the graph below you can see a representation of this phenomenon measured in Exabytes. (5 Exabytes = all of the words ever spoken by mankind.)

To attempt to deal with all this data, Oracle, IBM, Microsoft and SAP have spent more than $15 billion in the past few years buying software firms specializing in data management and analytics – an industry  estimated to be worth more than $100 billion and growing at almost 10% a year, twice as fast as the software business as a whole.

This produces a significant problem for Marketers as well.

More Data Than Talent = Bad Marketing

 writes in New Media Media and Marketing that brands, like consumers are overwhelmed with too much data to know what to do with. And when it comes to Marketing, a new study shows that companies don’t have enough talent to know how to use it.  Rich sums up the problem:

With too much data, a lack of funding and resources and a scarcity of talented individuals and it’s not hard to understand why there is so much bad marketing out there.

The Problem: A Shortage of Marketing Talent

A study by MarketingSherpa conducted among small, medium and large businesses found that the most significant challenges facing marketers are:

  • Lack of funding or resources.
  • Lack of skilled individuals.

Here’s what the companies surveyed said were the major marketing problems they faced:

The Causes: Old Paradigms

Corporate politics:  A majority of respondents said that “there is at lest one wrong person in a critical position.”

Traditional Marketing Mindset:   Companies are still throwing money at traditional marketing tactics that are don’t engage today’s empowered consumers who don’t want to be interrupted with irrelevant ads.

No Clear ROI: Companies continue to do elaborate “branding” without demonstrating “a clear path to ROI.” In today’s cost-conscious environment, executives therefore see marketing as an expense rather than an investment in the brand.

The Solution: 5 Steps to Better Marketing

Companies need to find real marketing talent real fast. And Rich provides 5 steps to do so:

1: Hire Different:  If you want to “think different” then hire different. Instead of hiring people based on a close fit for a job description put together with the help of Human Resources, hire people for their passion and commitment to creative solutions.

2: Hire Outside the Boxers: Seek out those who question the status quo and adopt to them, rather than bring in those who fit in too well.

3: Hire Influencers: People who are creative and engaged and can influence others within your organization can get others excited about using data creatively to market to micro segments.

4: Hire Ego Challengers: As Rich puts it: “always hire someone smarter than you.”

5: Hire Non Technicians: Hire someone who knows how to use technology to maximize business objectives rather than someone who is just great at technology.

Do you want to read a 647 page report on data deluge?

Don’t be ridiculous. Rich Meyer’s last piece of advice is this:

Finally hire someone who can take a 60 slide Power Point deck and condense it down to one page of actionable recommendations against key brand objectives.   Either your organization is going to change or you’re going to become more and more irrelevant to consumers.

End of Story!

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