Is GM Finally Making the Right Moves?

CEO Fritz Henderson is taking on the world of social media in an effort to win back customers after GM’s epic financial meltdown. According to the WSJ, he recently started a “Tell Fritz” suggestion box, where customers can send in comments or suggestions in 255 or less characters (ala Twitter). Similarly, GM has also started blogs in an effort to make the company’s direction more transparent.

Although starting a suggestion box and using social media are not new concepts, they make sense for GM to implement for a couple of reasons. First off, blogging is a great medium to personalize GM’s message, (better than their awful “we screwed up” tv spots anyway) and shows they are willing/able to adapt as a company. GM also has the added benefit of not having to worry about social media negatively exposing their brand because the media and public has already had a field day on their greed and stupidity. More importantly though, social media helps GM tap into a younger target audience, which will be critical for the long term growth of the company.

I actually like this move better than previous campaigns because it’s more genuine. When Buick had Tiger Woods for example, it was disingenuous. Believe me, no one is a bigger Tiger fan than myself, but he obviously doesn’t drive around Orlando in his $25,000 Buick. My hope is that GM isn’t using social media as a facade for change because if the changes inside the company don’t rival how they are reaching out to their consumers, we might be looking at a second bailout…

Apple drew first blood…

I actually started laughing when I read this article from the WSJ regarding Apple asking Microsoft to stop running ads implying that Apple computers as “expensive” because Apple had lowered their prices. Two thoughts immediately come to mind: One, Apple should hardly be complaining since they drew first blood with the numerous unflattering mac vs. pc ads (true as they may have been). Second, Apple has always been “expensive” compared to a PC because customers perceive the product attributes and brand image to be worth the extra money. Quite honestly, I’m having a difficult time believing Apple would tip off their competitor at how well their ad campaign is working…

Watch out for Wal Mart

Looking to increase and hold a more diverse customer base (particularly the affluent “smart shopper”), Wal Mart is changing its merchandising strategy to “Win, Play, Show”. As anyone in the grocery industry has known for years, it’s difficult to compete with Wal Mart on price due to their meticulous supply chain and huge volume. While competitors have been able to differentiate themselves by having significant quality differences in fresh departments, better SKU selection and a much a more enjoyable shopping experience, Wal Mart is changing the equation for retailers across the grocery industry.

The “Win, Play, Show” strategy is a bold approach designed to dictate the number of SKU’s, resources, and in-store support certain categories receive. For instance, a Win category is one that has high growth potential and one Wal Mart can create economies of scale in. These categories will have a full range of SKU’s as well as industry low price points. Examples are pet food, yogurt and salty snacks. Play is broken up into Play-Sustain and Play-Grow, the former focusing on balancing growth and profit and the later capturing growth opportunities. The differences in these categories compared to Win categories are interesting because the SKU selection begins to be drastically reduced. Play-Growth will likely see a 15% reduction, with Play-Sustain sporting a 30% cut. Similarly, the reductions come even heavier in the Show category, with SKU cuts of up to 80%! Show categories are something like hardware, which Wal Mart needs to be considered a one-stop shopping destination, but isn’t necessarily expected to carry high end products or a wide selection (how many real handymen buy their tools at Wal Mart?).

In an effort to retain affluent customers, Wal Mart is also improving its shopping experience by adding natural lighting, wider aisles and more efficient in-store layouts in new stores, and remodeling existing stores with similar additions. Furthermore, there has been a noticeable increase in the number of television spots over the past couple months (at least in the Portland market) with the new tag line “Save Money. Live Better.”, which adds an emotional connection to a broad range of customers (as opposed to the price sensitive customers primarily affected by the “Always Low Prices. Always” slogan).

Looking at the grocery industry, what are competitors to do to combat these changes? To me, it signifies a perfect opportunity to push variety, quality and value messaging. Although Wal Mart is strong with national brands in center store (the aisles) due to high volume, their fresh departments still have a long way to go if they are to surpass traditional grocery retailers. A few months ago, many of Wal Mart’s tv spots emphasized the quality of their fresh departments. As a marketer, I couldn’t help but wince to see the focal point of their advertisements supporting one of their weakest areas of the business. Consequently, I think they probably rethought it, as none of the ads I’ve recently seen have put any sort of emphasis on fresh.

One of the areas I believe Wal Mart loses big time  in is the ability to customize product selection by market. While consumers who shop at traditional retailers such as Whole Foods, Hannaford, Albertson’s and Trader Joe’s are probably willing to pay slightly higher prices for a more customized selection, the same isn’t necessarily true for Wal Mart. Although they have made strides in merchandising by region with global expansion, it’s much more difficult for their domestic cost structure to absorb the loss of economies of scale and keep the low price positioning they are currently known for.

The recent SKU reduction is also troubling for customers looking for a wide selection of products, particularly the affluent customer whom Wal Mart is looking to retain. Other areas of issue I’ve personally experienced with Wal Mart are long lines, no employee assistance and sub-par quality in private label products. While Wal Mart’s new strategy is indeed troubling to many of its competitors, there are certainly areas of opportunity retailers can drive home to differentiate themselves with, particularly as the economy stabilizes and price sensitivity loses some of its relevance.

I’ll work for Boston Consulting Group!

I’ve spent a considerable amount of time looking at how companies arrange the career sections of their websites, and I must say that for the most part it’s been an underwhelming experience. Many companies don’t seem to understand or aren’t willing to find the resources to sell their company to prospective applicants through their website. Although one might bring up the point that this isn’t a hiring market, I would respond by saying that it will be soon enough and companies who aren’t ready to actively recruit the available talent will miss out on the top candidates.

That being said, perhaps the best example I’ve seen is Boston Consulting Group, a global consulting firm which covers areas from branding to operations for industries ranging from energy to insurance. What I find unique about their site is how explicitly and deliberately everything is laid out. BCG realizes that careers are a partnership, and it’s not simply about what you can do for the company. For example, the”Why BCG?” section of their website is broken down into six parts; Grow Further, Chart Your Own Course, Challenge Your Mind, Team to Lead, Make A Difference and Win With BCG. They also have a specific section describing what they are looking for called “Is BCG For Me?”. What a novel concept to not waste time screening applicants who aren’t a good fit for their company, when the website can do some of it for them. They also have many current employees at every level of the company describing their job responsibilities and experiences with the company, which I found fascinating. The  main point of this was to show prospective employees that there are many ways to get where you want to go, and BCG has the flexibility to help you get there.

Perhaps the most intriguing part of their website though is the interactive case study that is part of the interview preparation. As an account manager for BCG, you are tasked with providing a recommendation for Trevor’s Toys, a regional toy retailer which mainly focuses on high technology toys. Trevor’s Toys is trying to decide whether to expand into the low tech toy market, as they have seen slowed growth over the past few years. As their consultant, you research different areas such as consumer research, competitors, market size and implementation to make as informed a recommendation as possible. The tough part is the limited time frame you have to make your recommendation, so it quickly becomes evident that one must discern the most important areas to focus on.

What is so great about this interactive case is that it really gets you thinking about what it would be like to work at BCG, how important reaction time is in consulting and the importance of being able to figure out what the most critical areas to focus on are.

One of the things I found interesting about BCG is that the careers portion of their website is 1/3 of their entire site! If a company is willing to put that much effort into prospective employees, especially since they are the number three company to work for, signifies to me that they should probably be towards the top of my list. By covering the relevant information succinctly while still emphasizing the important details,  it was easy to understand what type of people succeed at BCG and the potential career opportunities. I applaud the tremendous effort BCG has put into the careers portion of their website, and hope companies outside the consulting industry will piggyback off of its effectiveness.

Customize your New Media Plan

Seth Godin wrote what I considered to be a very relevant blog post last week regarding how companies should make sure their new media strategies really reflect their brand. Although this may sound obvious, it’s so easy to be reactive and copy what your competitors are doing. One of the great things about new media as a medium is how flexible it is in allowing companies to devise and execute action plans. The following are a few interesting examples of companies using social media.

Kraft Philadelphia Cream Cheese with 1/3 less fat- In January 2008, Kraft launched a marketing campaign that spanned both tradtional and new media elements. With a blog, videos, online message boards, chat rooms and online profiles with Facebook and MySpace, Kraft covered their bases fairly well and saw a fairly impressive ROI, at least compared with other CPG companies whose results weren’t nearly as measurable. More importantly, after reading the blog posts, I felt as if the message was genuine. The bloggers were open with the fact that they were trying something new and they didn’t know if it really made sense to focus on niche markets segments for a mass market product. They also addressed customers questions, such as “Is there really a difference between this and the regular cream cheese?” Although I’m sure there was several elements they would change if they were to do this again, I thought their strategy was interesting and their new media elements generated excitement around as unexciting a product as cream cheese.

Starbucks- I love their mystarbucksidea.com site, for the simple reason that it connects with consumers on a personal level and customers can easily see which ideas are being suggested and executed by Starbucks. Incidentally, Starbucks has an interesting brand in the fact that their community revolves around not only product development, but also community impact and supporting growers and artisans around the world. For instance, recently there was a blog post about how Starbucks will be selling reusable bags that are made from tribes in rural Africa, which will provide income for poor communities. As a fairly frequent Starbucks shopper, I think that’s pretty cool; and although it’s not something I would likely purchase, it helps justify spending $5 on a cup of coffee.

Dell- The company which created the customizable PC has been involved in social media for three years and has seen pretty good success from their blogs, which covers areas from software to social responsibility. I find their site too generic and bland (much like a pc in general), but it seems to do a good job at addressing customer issues and showing how Dell is implementing customer ideas. I will say there is a lot of valuable information on their site, and it’s definitely a place I would frequent if I owned  a Dell.

To recap, I think all of these examples represent new media strategies that reflect the brand, particularly Starbucks. By not simply replicating what others are doing, your company can create new and exciting ways to promote products, interact and form relationships with customers, and attract new customers. Customers today need to feel as if they are part of or involved with a brand to perceive it as credible, and new media is a great medium to accomplish that goal.

The time for change is now!

In the latest issue of BusinessWeek, Jack Welch’s weekly column focused on how companies will have to win back employees after the economy has stabilized because of how hard this recession has hit people with regards to financial security and emotional stability. With a 9.5% unemployment rate, pay being slashed and hours cut across many industries and uncertainty in the air for many companies, the doubt is understandable. Jack predicts that many people will be (if not already are) fed up working for “the man” and ready to start their own businesses.

While I agreed with Jack on this, I found it interesting that he didn’t mention recent college grads who either can’t find work or have been laid off because they are the “new guy”. To me, this is the segment that companies really need to convince because if the future snubs their nose at big business, that will clearly have dire consequences down the road. Not too long ago, a college degree almost guaranteed a choice of entry level positions and a fast track to promotions. Today, a degree is the cost of entry, with no real benefit in terms of job security or a competitive advantage in the hiring process.

Therein lies the problems for companies, young people realize that nothing is guaranteed and the only way to succeed is to take care of number one. I think Gen Y is a somewhat fearless and cynical generation because we have grown up with traumatic events, ranging from 9/11 to the collapse of the financial system. That being said, I believe Gen Y brings a large amount of optimism to the table, with the belief that we can all impart change in the world.

Unfortunately for many corporations, incremental change seems all that is possible in a world of layered beaurocracy and autonomy that is ever more constricted due to heightened fiscal demands. So how do companies win Gen Y employees over? To me, an important change is creating horizontal teams. The difference I see in working in groups at school and work is at school, our groups never have a leader. Mass chaos and disorganization right? Wrong! The most effective teams I have worked in have everyone contributing ideas, and the best idea wins the day, regardless of it’s origin. It’s fast, it’s fair and it creates authentic conversations. Plus, you get open communication and everyone moving in the same direction.

Secondly, give employees autonomy. One of Gen Y’s biggest complaints about corporations is the hoops and layers even the most simple decision has to run through. By the time an idea travels through every layer of an organization, the opportunity to be proactive is gone, replaced instead by a watered down (and likely far more complicated) solution to appease the needs of a board of directors or stockholders. The passion is gone, and this once great idea turns into a chore instead of an opportunity. Sound familiar?

Lastly, be authentic! Great leaders and companies ooze authenticity and their respect is earned because of it. People constantly talk about how Gen Y has difficulty working with older generations and is spoiled and narcissistic, and there is certainly truth to these allegations. However, I would argue they arise in a business context primarily because Gen Y doesn’t want to conform to the ways of traditional business. And why would we? If you had grown up witnessing your parents unhappily staying in their jobs because they made good money, endless financial scandals, excessive greed by executives who manage losing companies and the collapse of the entire American economy and financial system, you’d probably be looking for a better way as well!

Jack Welch was absolutely correct in saying that companies will have their work cut out for them during the economic upswing, he just didn’t put enough emphasis on the effect it will have on younger workers. It seems to me that if companies want to attract quality young people and retain the stars of their current workforce in the long term, these are serious issues that need to be addressed today, not tomorrow.

How to choose a college today, and why the formula has changed

Over the past decade, tuition has spiraled out of control while the benefits of a degree have greatly diminished. A degree today is simply the cost of entry, providing no real competitive advantage in the hiring process because college has been turned into a commodity.

Why does this matter? Because it fundamentally changes the way students should select colleges. Any parent reading this has likely gone (or will go through) their son or daughter wanting  to go to some expensive, out of state school. In fact, they will probably say they need to go to Harvard, Northeastern, Princeton or Yale to have any shot at landing a good job; but they’re wrong. The real advantage in going to these schools is that they help students network to have a better chance of landing a first job. That’s it. After that, nobody cares where your degree is from or what your GPA was, they care about results. I’ll also say that your school experience is what you make of it, not what your school does for you. If you don’t take the initiative to network and meet people, get an internship and set yourself up for success post graduation, it doesn’t matter what school you go to.

For many students, the prestige of going out of state or to a fancy school is too much to pass up. Only when it comes senior year and students realize they have to start paying back their $80,000 in debt does the realization set in. I was fortunate in the sense that my parents sat me down and essentially said they were giving me a certain amount of money and I go wherever I wanted with it. My dad did say “You can go in-state and get the same education as most other schools and buy a Mercedes when you graduate, or go out-of-state and have a Mercedes size car payment with no car for thirty years.” I’ll be honest, that really put it in perspective for me. During my senior year of high school, my choices were narrowed down to UNH and USM, USM costing $15,000 and UNH over $30,000 with a small scholarship. The choice was easy for me to make, I chose USM and will graduate debt free.

When your children are looking at schools, let them know they have to take control of their life once they graduate high school. If they have some idea of what they want to be, have them research what starting and mid level salaries are in the industry and have them look at the price of their top five schools with payments spread out over a twenty year period. Also, where do they want to end up living? I live in Portland, ME and knew that I wanted to live there after graduation, so USM was a good choice to network with Portland area businesses. Plan to live out-of state? Take your first two years of classes in-state, save money and then transfer to a more expensive school, you will save thousands and get the fancy degree.

For most people, it just doesn’t make any sense to go to an expensive school. If you have the passion to work in a typically low paying industry, why would you go to a $40,000 per year school? Even a Marketing degree, which I will have, is typically not a six-figure industry, which is what I would need to make to justify an expensive school. The bottom line here, and the current state of the economy accentuates this, is young people need to have as many options as possible, and starting out with heavy debt severely constricts those options. Expensive schools are great, and worth it depending on your goals and industry, but make sure your kids realize what the long term consequences of their decisions will be.

I just love Sarah Palin stories

http://news.yahoo.com/s/politico/20090102/pl_politico/27687

I don’t usually write political posts, but I couldn’t stop laughing when I read this article. I can’t believe people actually think Sarah Palin is putting her daughter’s future ahead of her own career. I also thought it was hilarious Palin said that by implying they are not graduates  “harms Bristol’s reputation and Levi’s reputation and their chances for good work opportunities.”  I’m sure it will be tough for them to get a job at the local McDonalds with high school dropout on their resume. Although, with the baby debacle, it may be difficult for either of them to get hired by the local church…

Seven things you don’t learn in college

As college students, we sometimes feel as if we know everything, only to quickly discover upon entering the real world that we don’t know much of anything. Here are eight things I feel many college students don’t grasp until they get an internship or job. I’m curious to hear your thoughts.

1. Meeting expectations is no longer enough- Remember the days when you could ace a class by completing the required work? If you want an A in the workplace, going above and beyond to provide deeper insight, compile more research, or initiate a project is what it takes.

2. Concepts are pretty much useless-  Throughout school, a significant portion of class time is dedicated to understanding  models and concepts which are mostly theoretical. In the real world, nobody cares about  theoretical information if it’s not going to help you become better at your job. Say good-bye to most of your college education…

3. It’s not about you- Throughout school, your grades are directly correlated to your achievement as an indvidual. Although this is true at work as well, your “grade” also likely has a lot to do with how well you interact with others and what you contribute to the team.

4. A degree doesn’t mean much anymore- Sure, you need it to get into a company, but once you’re in, it’s all about results. Nobody is impressed with your Harvard degree if you can’t help your company win.

5. Dress the part- Coming into work dressed in shorts and flip flops makes you look like an arrogant asshole. If you don’t agree with corporate dress code, talk to HR, don’t shoot yourself in the foot at the beginning of your career by being an immature idiot.

6. Keep the PowerPoint slides to a minimum- One thing you definitely don’t learn in college, or at least I haven’t yet, is how to create a great presentation. Most presentations should consist of a few charts or graphs higlighting important data or trends, not your entire outline. Everyone should read Bill Lane’s book Jacked Up to learn how to present. (Bill Lane was Jack Welch’s speechwriter for nearly two decades)

7. Keep the writing to a minimum- These fourteen page papers we write for school are great for expanding on ideas, developing sentence structure, etc., but horrible for most business situations. Employees receive so many emails and memos throughout the day that learning to say less with more is a much needed skill.

To Standardize or Localize?

When companies enter emerging markets, or foreign markets in general, they are faced with deciding whether to standardize, regionalize, or localize their product and marketing strategy. Global companies like  McDonalds and Marlboro may try to emulate the American experience to foreign consumers, but most companies probably can’t effectively win with this strategy due to cultural differences.

So what do many companies do? They may change their messaging, advertising and product packaging to form credibility with consumers from different parts of the world. Even large companies like Kelloggs do this. For instance, I was recently looking at some older Corn Flakes ads, and the Japanese version had a family sitting around a table. The same cereal box in the Netherlands has a vintage look to it, almost like the words “Corn Flakes” were written in graffiti, and no family on the box. The U.S. version had the words “Kellogg’s Corn Flakes” take up nearly half the front of the box, while the Mexican version only took up about a quarter. It’s also interesting to note how the rooster on the box changes from country to country. In Mexico, the rooster’s body is multi-colored and prominently featured, while the Japanese version has the rooster singularly colored green and barely displayed, almost like an afterthought. Kellogg’s obviously found the need to adapt even though they probably had pretty good global brand awareness, and the adaptations were significant! Personally, I’m fascinated by how companies adapt strategies, and can only imagine the challenges international marketers face with changing consumer demands, product life cycles, and economic instabilities; not to mention the battle for market share with quick moving, low priced local competitors.