Have you ever had anything in your life that you really liked – loved, even – and so when it went bad you raged, you beat your fists, you cried out in angst?!?

Then at some point, finally, you had to accept that whatever was to be, would be. As with the 7 stages of mourning, you had no choice but to find acceptance?

Well that it what I am trying to do, as a coffee-drinker and long-time sales and marketing executive, with respect to:


Yes, Starbucks. I give up. I do. Seriously. I started writing about Starbuck’s travails on a whole other blog, for cryin’ out loud, and things have only deteriorated.

Yes yes, I can hear you counter with a reminder that I like the Pike Place and the oatmeal, or that maybe the $4 breakfast combo isn’t too bad. Neither could balance a series of seemingly endless missteps that I did not think could get any worse. Then Howard Schultz rode back into town on his “You ‘executives’ need help; I’m back to bring this place back to its roots” horse and the place went entirely over the edge.

Seriously – I am like this because I love Starbucks coffee.

The problem with Schultz’s naked arrogance is that the world around this company has changed forever. The “roots” from which this company originally drew sustenance are long gone. We can all see that the company over-extended itself with respect to both its geographic footprint and prices… but where is the leadership?? Schultz has been back in that seat for nearly 2 years.

Just as I can’t blame Obama for AIG’s 2008 bonuses, I’m not going to pin firings and store closings on Schultz. He had to clean up a mess that he found upon his return. But beyond that… he spent part of his comeback interview in last July’s Portfolio magazine lavishing praise on a “magical” blended drink from Italy that was “going to be the next Frappuccino.”

Meanwhile, I can’t get a cup of coffee in under 15 minutes in the morning and have to wait for the milk to be refilled.

Since the Portfolio interview last summer, the company’s made a number of “puzzling” moves, including:stephanie-fierman-costco-starbucks.jpg
– launching the new Vivanno (starting at $2.79)
– reversing its decision to kill the breakfast sandwiches that were difficult for staff and smelly for customers
– maintaining prices despite the worst recession in living memory
laying off staff with no accompanying attempts to address the stores’ painfully long lines
– creating a new rewards program that was minimally rewarding (Costco had a better deal)
– promising to eliminate the music program that remains in full swing in New York (where the music rack is often neater and more stocked than the condiments counter)
– announcing a new instant coffee

Earlier this week, I cut to the middle of a WSJ article about Starbucks in which I spotted a quote from Schultz: “The issue at hand… is the cost of losing your core customer. It’s very hard to get them back.” I saw a spark of hope – at last, maybe the chain was going back the basics. Was it possible??

Nope.  Instead, the article says that Frappuccinos will come off the menu boards altogether, only to be hand-sold by a salesperson in what will undoubtedly be a lengthier, more harried transaction.  And in a world headed toward greater transparency, where restaurants are being forced to post calorie counts on their menu boards, Starbucks is headed in the other direction with a plan to remove prices (prices!) from their menu boards.  If you want to know what your order actually costs, a staff member will have to stock and point you to a new paper menu somewhere on the jammed counter next to the CDs. 

Ironically, Schultz’s response to all this is to start running a new ad campaign that counters the “myth” (his word) that Starbucks coffee is too expensive.  Unfortunately, nothing reinforces an existing impression that your products are probably too expensive than you deciding to hide your prices from me.

But, hey: new, “more sophisticated” test stores will have wood decor and a big wood table.

Saving core customers, making a store feel “more like a coffeehouse” – these are worthy ideas rooted in the company’s past that should remain. The thing is, a brand must sometimes re-envision its execution of such fundamental values based on the contemporary circumstances surrounding it.  Let’s say Ford had “Get a customer safely from here to there” as one of its original tenets.  Back then, that might have involved horses and buggy whips.  Today? Same concept, updated execution.

Starbucks is unquestionably struggling to see its external circumstances in a clear and honest light.  If it did, it would understand that it has so weakened its own brand that it must re-earn its customers’ trust by truly going back to square one: a good cup of coffee, at a decent price, delivered in a timely fashion. Hold the wood table. Period. The company must remind us that it is first capable of delivering on this primal promise before it can have our psychic “permission” to explore any of these pet projects (e.g. fruit drinks made from powder).

Until then, all these Vivanno-like moves will not only deepen the company’s failure, they’ll also remind us every day that the company cares more about itself than it does about its customers.

As for the 7 stages of mourning, I am trying to get my head around the possibility of reaching the final stage – Acceptance – while standing in a Dunkin Donuts, holding a latte.

Despite a massive media focus on the event, there’s not a lot one can one say about a photograph of Michael Phelps smoking marijuana from a bong.

Did he do so on his own time?  Definitely.  And is there a near-100% likelihood that Phelps’ was and is entirely in control of his athletic performance?  Absolutely.  Will this matter to some people? Not at all. 

South Carolina, after all, is pondering filing criminal charges.  

Putting aside the criminality of smoking marijuana… there is no question that this is a hit to Phelps as a revenue-producing business. Whether fair or not, Phelp’s representation and sponsors are placed in a tough spot: kid-focused McDonald’s and Kellogg’s Frosted Flakes, for example, have both counted on Phelps to project a wholesome, healthy All-American image.  Yes that’s right kids, your gold-medal idol is smoking grass. Weed. Ganja. He’s inhaled. And it looks like he’s done it before, too. Yikes.phelps-frosted-flakes.jpg

Phelps has issued a statement and apology using the “I’m young and dumb” approach and, as Fox Sports has already reported, this event is likely to fade in the memory of the public. The question is whether sponsors will stick with him and help mend his reputation permanently.

The Mojo believes that Phelps’ fortunes are likely to survive long-term if this side of him never sees daylight again. But if there’s more to come – if this episode turns out to be only Strike 2 following his arrest for drunk driving in 2004 – his sponsorship potential may not recover for decades, if ever.


UPDATE:  A version of this post is available on www.reputationgarage.com, where a frustrated fan imagines a hypothetical “Dear America” letter from Phelps: “I work my a** off 10 months a year. It’s that hard work that gave you all those gooey feelings of patriotism last summer. If during my brief window of down time I want to relax… you can spare me the lecture.” 

The Mojo could definitely understand, even sympathize, with Phelps if he’s having these thoughts.  There are, however, two relevant concepts here: (1) When the “institution” in question is an individual, it can be challenging to separate the person from his or her behavior.  As a matter of cold, hard cash, Phelps damaged his sponsorship machine.  It doesn’t mean he is a “bad person.” (2) Life is not fair.  The bank bailout debacle has, in particular, brought out the fact that how society measures behavior whether it be personal indulgement or taking “deserving” bank executives to Vegas is not always rational or fair. If there is heat around an issue (like illegal drugs), people may vote in a way that is not entirely logical.  An institution can subsequently correct its behavior, or continue on and accept the consequences.

As my readers know, I’ve been fixated on the concept of value for quite some time. Any random post may not seem to fit this theme, but just about all of them do: turning store returns into a great shopping experience; Visa offering upscale bathrooms to attendees at a festival; a company that lets you leave a voicemail for a person without running the risk of actually having to speak to the person (eww!).  All of these are examples of real, observable value.

money-tree.jpgFor all intents and purposes, this is my first post on the general state of marketing since the US economy imploded. I haven’t said a whole lot because I’m still forming my own opinion on what brands need to do to survive and maintain consumer loyalty. What I am ready to say is that the key is value.

I believe the key distinction now, however, is between real and perceived value. Perceived value is what I talked about when I happily acknowledge(d) buying $250 Gucci sunglasses. I am fully aware that I could derive the same amount of real value from $10 shades bought on Canal Street.  Shield eyes from sun? Check.  but I saw a level of psychic value in the brand for which I was willing to pay an enormous premium. I measured that psychic value by how the world around me recognized that value. Looking at myself in the mirror wearing Gucci sunglasses gets old quickly. But having people reinforce my purchase – every day – as I walk around the city? Priceless. Value has two ingredients: (1) the real value that delivers functionality, and (2) the “psychic premium” I’m willing to pile on top so that the world sees me (and I see myself) in a certain way.

It turns out that it is not just beauty – but also value – that is in the eye of the beholder.

This is why even people “with money” have slowed their spending… why even luxury goods are seeing a decline in sales. It’s no longer fashionable to display the same brand names that only months ago were a mark of prosperity. Those marks are now seen as an indication of greed, of phony superiority, of foolishness. It’s not cool to show you have lots of discretionary income when everyone else is suffering. That’s why Mrs. Dick Fuld is still shopping at Hermes but now demands the store place her purchases in a plain white bag. It’s why Danny Meyer says his restaurants are actually selling the same amount of wine (as before the crash) but fewer bottles, his supposition being that people have decided that a bottle sitting on the table is an unwanted signal of wealth. It’s why DeBeers’ new ad campaign attempts to position diamonds as something to be kept forever in a world filled with “disposable distractions.”cutting-credit-card-debt.jpg

Don’t get me wrong: there will always be rich people who wear big big diamonds in environments where everyone else is doing the same. That’s not going to change, but that’s also not what fueled the success of Coach and Vuitton and even Starbucks in the US: what did was millions more not-so-rich people over-extending themselves to buy that Vuitton bag (or Gucci sunglasses) because they liked the world’s reaction. These behaviors are at the heart of the “trading up” phenomenon in America. Take away both (a) the people who couldn’t afford their purchases in the first place, and (b) those who can afford expensive things but who will no longer get the thrill of everyone else’s desire, and you’ve got major, major problems. Products and services that run on perceived value need to make a new plan, Stan, and fast.

This will not happen overnight. As I said, some people who can still afford to buy status-driven things will continue to do so. Others will wean themselves off instead of going cold turkey. Read the Wall Street Journal editorial, “I Once was Chic, But Now I’m Cheap,” written by an Apple buyer who vows that his family’s next computer purchases will be PCs. The piece reads like a therapy session. The writer’s preparing for the DT’s.

I’m also not particularly convinced that this is some sort of seismic global shift in values; the current economic situation may simply repress luxury consumption for awhile. But until that happens, consumers will either live without or discover products and services that deliver more real value: and once a shopper discovers that a store brand whitens his teeth as well as your brand, he may never come back.

stephanie-fierman-treat-customers-right1.jpgDraw your loyal customers closer, now.  Add value, if you can.  Remind your customers why they buy from you.  Get them to tell others, and you may just be able to stay flat (which is, after all, the new up).  The water level is going down, gentle readers, and all that’s underneath are the brands that deliver enough usefulness to hang tough until the next tide comes in. And that could take quite some time.

Wow, Chuck E. Cheese has a problem.

The Wall Street Journal ran a half-page story in Section A yesterday that would cause any parent to run for the hills.  While CEC describes itself as a place “where a kid can be a kid,” and the cover of its 2007 Annual Report boasts “The Evolution of Fun,” it appears that the actual stores have become a nexus of bad behavior and danger.  Police all over the U.S. have been dealing with fights, guests carrying weapons and boozed-up brawls.chuck-e-cheese-stephanie-fierman.jpg

When a public official describes his local Chuck E. Cheese as “something out of a Quentin Tarantino film,” you have a serious problem.  The picture at right shows the CEC in said politician’s Milwaukee neighborhood – with an armed guard out front.

A simple glance at Google tells the Web 2.0 tale.  Of 9 front-page search results for “Chuck E. Cheese,” 5 are negative.  Of 10 front-page results for “McDonalds,” 0 are negative.

So where is the crisis management and what is the company doing about this problem?  While the company’s head of marketing describes the fights and problems as “atypical,” the risk to a corporation is not always volume-based.  Only one child or parent needs to die in one of these melees for CEC to get sued into the ether. 

Not only is (a) taking aggressive action and then (b) broadly communicating your plan the “right thing to do,” it ultimately protects the bottom line and shareholder value.  Take the saddest, most base scenario: if the company gets sued over a child’s death, it will be in far better stead with the court if it can show an active, consistent and good-faith effort to address this problem.  Such a good-faith effort could very well include suffering a short-term revenue hit by closing the most troubled locations in the near 500-location chain.  And continuing to serve alcohol in most stores is a recipe for disaster.  What percentage of revenue coming from alcohol sales – at children’s birthday parties – is worth a legal disaster that effectively cripples the company?

I frequently refer to the Tylenol poisonings in 1982 and J&J’s decision to pull all U.S. product off the shelves even after the company had been determined to have no involvement in the tragedy.  This may well be the best example of a company taking the long view in memory.

There is a range of choices CEC can take.  At the lower end of the range, management needs to take action in its own backyard to resolve these issues.  At the higher end, welcome Alderman Zielinski in as a valued advisor.  Hold a press conference with him in Milwaukee where he ceremoniously padlocks his neighborhood location while you rightfully announce that no amount of money is worth putting people’s lives in danger.  Ask Zielinski to help you create a national “Having Fun Can Be Safe” campaign nationwide. 

Wherever CEC lands on this spectrum, it had better land quickly.  Or ol’ Chuck may be toast.

Chuck E. Cheese    

Stephanie Fierman Prefers Tylenol

September 9th, 2008

More than 25 years ago, Tylenol changed the “crisis management” business forever by taking decisive action to compromise profitability based on something that was not its fault.

In the fall of 1982, seven people in Chicago died after taking Extra Strength Tylenol capsules laced with potassium cyanide.  A 12-year old girl was reportedly the first to die.  Panic ensued.  Police cars roved the streets in and around the Chicago area blasting warnings from PA systems.  When it was determined that the poisoned bottles had come from different factories, the possibility that Johnson & Johnson (Tylenol’s ultimate parent) was somehow to blame was decisively ruled out.  Officials came to believe that one or multiple criminals had instead removed bottles from stores, tampered with the contents and then surreptitiously returned the bottles to store shelves.

And yet, responsibility never entered into the decision-making process underway at J&J:  only public safety did.  The company stopped all Tylenol production and promotion.  It issued a national recall not after the episode was over, but while it was still very much underway.  The bottles returned to J&J as a result of the recall had a retail value of more than $100 million.  I shouldn’t say that J&J stopped all Tylenol promotion:  it paid for and issued new national advertising instructing individuals to avoid taking any products that contained Tylenol, and offering to reimburse anyone who sent in an existing bottle of Tylenol capsules.

Once both the crisis and J&J’s action plan were in full force, Tylenol’s market share dropped like a rock from 35% to 8%.  To be expected.  What was not expected was that share rebounded in less than one year:  a return widely credited to J&J’s immediate and decisive action to sacrifice its own well being for the health of – really – the entire country.   Since then, J&J’s response is widely considered to be the gold standard in crisis management.  Act now.  Ask later.

I cannot overemphasize how I feel today about J&J’s behavior that long-ago autumn when I was still a kid.  It made an impression that has lasted my entire career:  one that influences how I measure companies and my own conduct as a business executive to this very day. 

So when I see a company disregard such a lesson for no other reason than financial gain, I am not just nonplussed – I’m disgusted.[Bassinet Recall]

SFCA Inc. purchased the assets of Simplicity Inc., a baby bassinet manufacturer, earlier this year after Simplicity went out of business.  SFCA is an affiliate of the private equity firm, Blackstreet Capital.  Two weeks ago, fifteen retailers – including Target, Wal-Mart, Toys R Us, Amazon and Kmart – halted the sale of certain Simplicity bassinets that the U.S. Consumer Product Safety Commission said could be hazardous to babies after two baby girls died (from strangulation in their bassinets).  The Wall Street Journal reported that Toys R Us were selling eight of the 66 models affected by the warning; the chain pulled the products anyway.  And all the retailers affected agreed to permit consumers to return the bassinets for a refund or store credit, regardless of how long ago the product had been purchased. 
These retailers heeded the lessons learned from the shining example set by Johnson & Johnson.  Act now. 

SFCA, on the other hand, is doing nothing, holding fast to its claim that it bears no legal responsibility for the hazardous bassinets.  The USCPC couldn’t even issue a product recall, because SFCA would not cooperate.  Rick Locker, a lawyer representing SFCA has declared the company unwilling to recall  “a product that it did not make and sell.”  The blog Daddy Types reports that – while SFCA may have hired Locker to assist with this matter – Locker is also paid as counsel for the Juvenile Product Manufacturers Association:  the lobbying organization that helps protect the makers of children’s products.  

Ironically, the JPMA’s website is currently heralding September as “Baby Safety Month.” In July, the association tooted its own horn for “reaffirm[ing] its commitment of safety.”  The communications contact on the July press release isn’t someone at a real PR or crisis management firm:  it’s a woman at Association Headquarters, Inc., an organization whose lone means of support is selling services to organizations such as… JPMA.  You can’t make this stuff up.

dilbert-business-ethics2.jpgHenceforth, SFCA has taken a “Who, me?” approach to its products killing children.  The company claims that it might go out of business if it took all the offending bassinets back.  I find this particularly ironic and outdated in our Web 2.o world.  If SFCA came out on the Web and announced a recall (even though they were not legally responsible), the company’s future would be far more secure.  The company would be a hero.  Parents would rave and remember the company when they went shopping the next time.  They would tell one another, at a time in history when spreading the word is easier than ever.  Their marketing folks would get college and business school cases written. 

Isn’t this exactly what Tylenol did and exactly what happened as a result (in a decidedly Web 0.0 world)?  But then again, it’s not hard to imagine those meetings in 1982 where well-meaning lawyers warned that a recall could take down the company and J&J’s top management said, So be it.  We’re not going to stand by and let people die.  Short-sighted greed and bad lawyering are in full control at SFCA. 
The drawbridge is up.  SFCA is not legally required to take back the affected bassinets, there are no mandatory standards for safety in the category and the USCPSC cannot bring legal charges against SFCA.

No matter.  There is a higher standard for working and living on this planet that J&J set and by which all corporations should live.  As an aside, I’ll say once again that it’s just good business: (a) the positive halo effect for J&J post-crisis was and still is phenomenal, and (b) not doing the right thing will get you in the end.  You can expect boycotts and bad press at minimum: perhaps a crazed parent manufacturing a terrible happening to take you down if you’re really unlucky.  Permanently disastrous online search results.  But aside from it being good business, it’s about acting human, like someone whose own child or grandchild was killed by your product.

There is no exception – and if there is, I haven’t heard about it and SFCA most definitely does not qualify.  This is capitalism run right into the ground, taking humanity and business ethics down with it.

SFCA  Simplicity bassinets   Blackstreet Capital  JPMA 
Johnson & Johnson 1982 Tylenol   Rick Locker  

The teenage jury is in: Abercrombie & Fitch’s cross-channel marketing/ hype machine leaves just about everyone else in the dust.  Launched in 1892, I suspect that former shoppers Teddy Roosevelt, Ernest Hemingway, Amelia Earhart and Clark Gable would scarcely recognize the clothier whose soft-core porn advertising/experience that has turned the chain into a cultural icon (well, maybe Gable would feel at home…).

Since rebooting the brand in 1988, A&F has broken from the teen pack by courting controversy everywhere it goes.  Let us count the ways…

Because just about every retailer has a catalog and everyone’s catalog is free (ho-hum), A&F created a separate lifestyle magazine full of black-and-white photographs taken by Bruce Weber, the photographer best known for highlighting “the beauty of youth in male nude photography” (as taken verbatim from his own website).   There were so many protests over A&F Quarterly (which the company sells – further stoking desire among teens)  that the company suspended publication for awhile; it’s hard to say whether it was the magalog’s porn star interviews or the b&w shots of Santa and Mrs. Santa Claus in flagrante that pushed thousands of parents and a few governors and attorneys general over the edge… who’s to say?

Such outrage, of course, only pushed the Quarterly to greater, more mythical heights, stoking the company’s good-but-bad-boy (emphasis on “boy”) reputation.  Go online right now to witness the hysteria it generated in 2003. Totally un-cool Bill O’Reilly, a series of religious organizations and others called for boycotts, and articles concerned with “cultural decay” screamed out with headlines like “Abercrombie & Fitch Stops Selling Porn.”  Parental boycotts? Porn?  Thongs for pre-teens, according to Bill O’Reilly? [Don’t think too much about that one.]  All like catnip to your underage kitty.  Meee-ow!

A&F Quarterly has recently been reintroduced (in Europe, not the US) with a promise from the company that it would no longer be sold to individuals under the age of 18 and that there would be less of everything that made it hot in the first place.  Nevertheless, I wouldn’t expect any A&F articles on the virtues of abstinence anytime soon.

On the ground, it appears that the company used the Quarterly‘s hiatus period to begin focusing on customer service and the stores.  A new CEO was brought in from Gucci which – at 46,000 feet – now boasts the largest luxury store in the world right here on New York’s Fifth Avenue.  Gucci knows how to push the rags.  The CEO beefed up store staffing and there are now greeters at the front of every store, in addition to at least one employee inside covering each sales section.  But what is A&F’s spin?  A&F hires male models as greeters, who may literally be standing out on the sideway, stirring up – whatever.  The company further inflates the aspiration by “casting” for such greeters on its website, where the pages pulsate with club music accompanying a video of store events where the models are decidedly half-naked and the customers are clearly under 18.  If you are interested in becoming a model for A&F, you’re asked for a photo, your height, your weight… and the name of the mall nearest you.   ‘Cuz you may be pretty, but don’t ever forget why you’re here.

A&F’s been knocking around in my head for some time, but the impetus for this post was an experience this past Labor Day weekend.  Marketing Mojo was merrily cruising down NYC’s Fifth Avenue until running headlong into a case of gridlock at 57th Street.  What could it be?  Celebrities (pretty typical in these here parts…)?  No, it was a huge mass of people standing in front of A&F’s flagship store, waiting to get in and taking pictures of what definitely seemed to be a highlight of their day.  There were two beautiful young male models standing at the door controlling entry, and a line of people behind a velvet rope that snaked around the corner.  A velvet rope.  2008’s version of Studio 54/Limelight/China Club (all of which the Mojo’s under-18 friends snuck into) is… Abercrombie & Fitch. 

There is no question that A&F has made some wrong moves, particularly in the area of diversity.  Several years ago, the company made t-shirts that it considered fun and tongue-in-cheek.  Just about everyone else, including many college student organizations, considered them racist.  And in 2004, the company settled a $50 million class action lawsuit brought by former employees who claimed that the company was happy to hire African-Americans, Asians, Filipinos and other minorities… as long as they worked in the stores’ stockrooms and not out on the selling floor.   

Ergo, the stupid, screwed up (and illegal) side of presenting the “Caucasian, football-looking, blonde-hair, blue-eyed, skinny, tall male” as everyone’s ideal.  

Fast forward to 2008, and the company is making progress.  Today, the company claims that minorities make up 32% of its sales staff.  It also has a  huge “Diversity” section on its website.  Of course this is A&F, so the section plays a video loop that features Asians, Latinos and African-Americans – all of whom are gorgeous and (most of whom are) in some state of undress.  The company can’t give up everything!

[Nota bene: An employee recently claimed that A&F has simply shifted its discriminatory ways toward not hiring “ugly” people, with the company’s “hierarchy of hotness” dictating just about everything.  And not hiring unattractive people (across all ethnic groups) is very hard to outlaw, according to a lawyer who represented the plaintiffs in the original 2004 case.] 

Based on 20 years of business experience, the Mojo has absolutely no doubt that A&F’s lawyers and senior management are fully cognizant of what they’re doing, and believe that a nuisance lawsuit or two is worth preserving the highly profitable fantasy world they’ve created.  And by doing so, A&F taps into its target consumer’s impressionable zeitgeist like few others do – or have the nerve to do.

Abercrombie & Fitch  back to school shopping  clothing retail

dov-charney-stephanie-fierman1.jpgI’ve written at least one post on corporate blogging before, but I gave them a little more thought this week.

This was because I ran a break-out group at this week’s CMO Club summit on PR 2.0, which I would loosely define as the new practices, policies and opportunities available to individuals and companies based on the digital innovations we all fondly call Web 2.0.

So I created a hand-out, which included such items such as how to track blogs, monitor Twitter tweets, figure out when to social(ly) network and so on.

One of the more active conversations focused on the topic of corporate blogs – notably, when should a company consider creating one? My top rules are that a corporation might consider a corporate blog when:

1. Two-way, honest conversations between senior management and both employees as well as consumers are already part of the company culture (think Sun and Stonyfield Farm)

2. Roles and responsibilities for the blog are clear and there is genuine commitment to (a) constant maintenance and (b) responding immediately (or at least promptly) to a problem

3. The company is prepared – both short-term and long-term – for what Kathy Sierra calls “the physics of passion.”

[NOTE: The famous corporate blogger Robert Scoble delivers the corporate blog manifesto here]

I guess I neglected what should be Rule #4: Your CEO isn’t a looney tune or, at minimum, far to colorful for public consumption.

Case in point: Dov Charney, Founder and CEO of American Apparel. Today’s WSJ includes an article on how American Apparel’s CFO has resigned after Charney called him “a complete loser” while sitting for a WSJ interview in March. Now that’s a bad performance appraisal!

In the past, Charney has gotten into hot water for engaging in completely inappropriate behavior during magazine interviews, having inappropriate (there’s that word again) encounters with company employee, hiring models from local strip bars, having scantily-clad employees serve him meals (at home), running around the office in his underwear and referring to women in ways that even he says he wouldn’t use with his mother.  His claim to fame (that, in my opinion, unfortunately outshines his philanthropy and US manufacturing-centric ethos) is that he’s been sued for sexual harassment more times than Joe Francis.

The photo is from an American Apparel “Apres Ski” advertisement. That’s Dov on the left.

It remains to be seen how he does once several quarters as a public company sinks in. In the meantime: no corporate blogs, please!

There is an article in today’s WSJ highlighting the difficulty of maintaining charitable giving in a challenging economic environment. This particular piece highlights Arpad Busson’s ARK, or Absolute Return For Kids, and its upcoming annual dinner. Tables sell for as much as $200,000 apiece and sold out several weeks in advance. Still, Busson is concerned.

He should be. A recent US-based study of 30,000 families indicated that a reduction in annual income leads to an equivalent or higher reduction in giving.

I’ve always been curious as to why non-profits don’t get more creative when it comes to holding events that could demonstrate the true value of every dollar donated: my thesis being that the rich will give no matter what (or certainly would not give less), and the average person would be inclined to give more if she could really see and feel what her contribution means to recipients.

The example I’d offer is one that I personally experienced several years ago when volunteering for an arts organization. This organization has intensely loyal grant recipients and a devoted community, but its fundraising efforts were/are challenged (particularly after 2001). This non-profit holds events of the standard variety: dinners, galas, etc.

But this non-profit creates unique, palpable value in that its grants are literally perceived as sustenance by its recipients. Artist after artist told me (along with a pro-bono brand strategy team I organized) that the money meant he could pay his rent on his studio for x number of months – so he could create something and sell it – or that the cash let her buy food that she could not have otherwise afforded. Many artists, in fact, mentioned that they used the grant to eat: often at McDonald’s, in order to make their dollars go further. These were not hoity-toidy “let’s-hold-a-dinner-at-the-Waldorf stories: they were tales of real life – human life – and the difference this non-profit was making for artists.

As a result, we made a somewhat unorthodox recommendation to the non-profit’s board: hold your next “gala” at a McDonald’s. Approach McDonald’s as a partner. Close down the biggest, nicest McD’s in Manhattan for one night and host a fanciful black-tie party there. Serve McDonald’s food: food that represented the true value the non-profit was delivering. Have artists/grant recipients tell the crowd what the extra money meant to them – and how intimately familiar they’d become with the dollar and extra value menus…

And we proposed, by the way, that – done right – this would be the “it” event of the season in New York.   The local news coverage alone would have been hugely valuable to raise the organization’s profile in a unique and intriguing way.

In other words: show the enormous impact every dollar makes. The following year? Hold the party at a big paint/art supply store – because in addition to food, we heard a lot of stories about how the money was the only way the artist could buy supplies.

This recommendation was not approved by the board – a little too avant-garde (and, in hindsight, not adequately pre-sold prior to the presentation!). But the idea is still as real as ever – the worse the economy, the more a non-profit must go out of its way to demonstrate value in a way that touches people:  whether they give $5 or $5 million.

 Readers:  please check out my new blog at http://www.stephaniefiermanmarketingdaily.blogspot.com.

I can’t believe I haven’t written about Mona Shaw before, because she’s become a hero to frustrated consumers everywhere who must cope with companies that have a virtual monopoly on some corner of our lives, such as the providers of trash pick-up, energy, phone and cable service – companies that hold you practically hostage (or at least it can feel that way), because you have nowhere else to go.

I had my own experience with one of these companies in the past week – Time Warner Cable – and once again I was reminded that all the marketing in the universe cannot make up for one customer service representative who treats me like I just fell off the turnip truck.

The short version is that, for over a week, I had intermittent high-speed cable service. Do you understand? No Internet connection. I mean, didn’t I come out of the womb with an Internet connection? No? Inconceivable!

I spoke to many representatives. Those that treated me like an idiot made me angry – not at the CSR, necessarily, but at Time Warner Cable. Then the second representative who had to come to my apartment in person restored my belief in humanity by fixing the problem, cleaning up after himself, validating my feelings of frustration and wishing me a good day.

Why do consumers have wild “mood swings” like this? How can one person in a call center destroy years of corporate spending and goodwill?

It’s because it’s not about the product. It’s about a much deeper human need for respect, understanding and honesty.  Too many marketers think that marketing is “the fun stuff” – advertising, PR and whatnot.   Not true.  Marketing must become a student of the entire customer lifecyle, including – maybe most importantly, in many cases – the touchpoint at which the customer and company make contact. 

If you don’t put Customer Service up on a pedestal – push them, but provide solutions, too – you’re dead.

So back to Mona “The Hammer” Shaw of Bristow, VA. Certainly Mona was reacting to a particular seriess of prior events with Comcast when she entered a local office and began bashing phones, keyboards and monitors with a hammer, but her words indicate that what really made her angry was how she and her husband were treated: “[Comcast] thought [that] just because we’re old enough to get Social Security that we lack both brains and backbone.” In other words, a little respect goes a long way. Tara Hunt writes a great post on this very topic, triggered by a recent experience she had with a rental car company.

What’s most interesting to me is that the traits Tara assigns to companies that make customers happy vs. those that make them crazy once again have nothing to do with product quality. In old direct marketing-speak, decent product execution is almost “hygiene,” and consumers do understand that a product or service may not work sometimes. No one takes a hammer to your phone because your product failed: they do so because (a) you put them in a corner with no choice, (b) you duped them (Mona and her husband waited two hours in Comcast’s local office only to be told that the person for whom they were waiting had left) and (c) you treated them poorly.

Companies in these one-choice industries are exactly the ones who have the opportunity to delight customers right into buying additional services. So why is the reality too often the opposite? Where is the rest of the organization when a CSR takes a call?  Is that person adequately trained and ready? If not (and that’s an enterprise-wide responsibility),  treating a customer poorly will overwhelm a new-and-improved widget or ad campaign every time.

If CMOs and CEOs don’t focus on “experience delivery” and include relationship-oriented customer service metrics when they calculate marketing ROI, they’re missing a vital part of the success equation.

Please check out my new daily blog at http://www.stephaniefiermanmarketingdaily.blogspot.com, and consider subscribing for quick takes on news and trends of the day.

An article posted today on CNN is horrifying – but not surprising, at least not to readers of this blog.

Juicycampus.com (which at the time of this writing is at the URL of the same name) is a well-trafficked online destination on the campuses of nearly 60 colleges in the US.  A little digging reveals that a number of posts have been viewed “hundreds and even thousands” of times.

Juicycampus.com is a site where anyone can say anything about anyone anonymously, and they do. Boy do they ever. Racism, sexism, religious discrimination and homophobia run rampant on the site, as do specific anonymous accusations targeting individual students regarding their behavior in and out of class, their sexual habits, etc. A Loyola student openly threatened to shoot up the campus, encouraged by the site’s free-for-all environment. The site has proven so “poisonous” there have been calls to have it taken down.

Others have tried to take legal action. Two Yale Law students are pursuing autoAdmit.com – an online discussion forum for those applying to law school – for what they say are libelous comments added to the site in 2006 and 2007.

Good luck. Under U.S. law, sites generally bear no responsibility for what users post, and content is protected as free speech. Juicycampus.com goes so far as to direct users to free online services that cloak IP addresses, so one’s comments can never be tracked back. Its privacy policy explains that the site logs users’ IP addresses but does not associate them with specific posts. This policy is out of the mainstream but perfectly permissable and legal.

In other words: if you write a letter or sue – and therefore are willing to draw even more attention to a problematic situation than the original content did – a Court may be literally unable to force a site to reveal the identity of a poster even if it wanted to do so.

The article says that many schools consider the site to be “poisonous” and that students are worried about the effect the site might have on their job prospects. They should be. According to Execunet, 77% of recruiters use search engines to find out about job candidates, and 35% have eliminated a candidate based on information found on the web. And a useful working assumption is that – unless the content is removed from the site – it will be searchable (and findable) forever.

This topic gets Marketing Mojo worked up, as readers well know – particularly because there are things every person can do to proactively build his or her own “personal brand” reputation online. Doing so not only communicates your authentic story to the world, but – if negative content should appear – will act as a crucial counterpoint that, nurtured properly and over a long period of time, can and will prevail.

I was recently invited by the International Association of Business Communicators (IABC.com) to write a piece on this topic. The article is available only to IABC members. Below is the article in its entirety, available outside the IABC only to Marketing Mojo readers.

by Stephanie Fierman

Low Trust Sets The Stage
It would not surprise you to know that we are operating in a low-trust world, and that both companies and individual executives are vulnerable. In 2005, a worldwide Gallup poll found that 40% of people believe company leaders are “largely dishonest,” and a 2006 WatsonWyatt study says that only 56% of company employees believe their top management acts with honesty and integrity.

These are worrisome figures, given that senior executives worry a great deal about their companies’ reputations but may spend little time on their own. I, for one, am a highly-educated and successful Chief Marketing Officer, known for delivering stellar results for Citicorp, JPMorgan Chase, Time Warner and others. I figured my “rep” would take care of itself, and this non-strategy worked for nearly 20 years. Then an industry gossip blogger decided to make me his latest meal, and turned lies and innuendo into what became the top Google search results for my name. For months, I took what I thought was the high road and did nothing. Everyone who knew me said to ignore the Internet’s equivalent of “graffiti on a bathroom wall.” So I did. But when I began to get questions about this “graffiti,” I realized I was wrong.

The New High Road
The Internet has changed reputation management forever. Where information used to flow slowly and in one direction (that is, from “us” to “them”), we now live in an age where anyone with an Internet connection can post anything they like, and that information will be available on millions of screens in an instant. And not only can truth be a mere afterthought, but the Google algorithm actually rewards popularity – so the more sensational the information, the better.

Changed rules means a changed game. Anyone with an interested constituency – whether it be shareholders, employers, competitors, an exclusive pre-school you’re just dying to get your toddler into or a even potential date – must take control of his or her own reputation online. Because if you’re not offering up honest, straight-forward information about yourself, you not only do yourself a disservice but you’re also depriving these audiences of an authentic picture of who you are and what you stand for. Speaking out IS “the new high road.”

10 Tips for Building Your Reputation Online
Like any blood sport, building your online reputation is a combination of offense and defense. Offense is the best way to go: build up content about yourself before you are put in a position to have to respond to negative and/or untrue information. Here are some key steps you can take now:

1. Monitor your online reputation. Create alerts at Google and Yahoo so the search engines will send you an email whenever new content has appeared that includes your name. Additionally, use RSS to sign up for subscriptions to sites that are most likely to mention you.

2. Create a blog (or a frequently updated and optimized website). Post to the blog religiously: at least once a week.

3. Videos get high search engine rankings. If you speak at an event, or can make a presentation, have it filmed and posted on YouTube. Make sure your name is part of the video’s title.

4. Ask allies and partners to post content about you on their own websites, and consider becoming a regular contributor to someone else’s website (e.g. an industry news site). Your byline will be picked up by the search engines.

5. Consider creating multiple sites if you have enough information to divide into several topics.

6. Maintain a friendly and frequent presence on industry blogs and message boards: you most certainly have something to add that will enrich the conversation. Plus, you are more likely to be welcomed into such a forum if there comes a time when you do wish to respond to something that’s been posted about you.

If inaccurate or troublesome information is posted to the Web and you or your representatives are free to respond (e.g. you are not in an SEC quiet period or your counsel advises restraint), here’s how:

7. Analyze the content and its source. Make a determination as to whether you feel the need to respond immediately or prefer to monitor the situation.

8. Build up content. Proactively create or add content to your own website and make sure it is search-engine-friendly: consumers are more likely to use search engines first in a crisis, before they go to your website for “your” side of the story.

9. Assuming you’ve maintained a positive presence on key blogs and message boards, these communities are likely to be open to listening to you. Post information there. Let others be your ambassadors.

10. Where possible and appropriate, post a notice that you are more than willing to attempt to resolve the crisis personally and without delay. Then try to take the first phase of the conversations offline.

Life (On The Internet) Is Unfair. Get Over It.
If any part of your brain is thinking (a) this won’t happen to me, and/or (b) it’s ludicrous to respond to malicious or false information I empathize, but can offer only my own experience – and those of the executives and companies I now advise on the art and science of Online Reputation Management.

It does happen, and your life will be infinitely more comfortable if you have already taken the simple steps toward creating your own authentic presence online. In a world where you are whatever comes up on the first page of Google, you’ve got to take charge – don’t leave the telling of your own story to any blogger, writer or media outlet having a slow news day.

NB: As of June 2009, Juicycampus is out of business.  Unfortunately, its URL boasts a farewell message that redirects to yet another site that supports anonymous college posting.