Is a network of niches the answer to business survival?

With the latest economic crisis, the phrase “too big to fail” has been bandied about as a mantra of justification for a businesses right to exist (or be “saved”) yet, something is starting to sound inherently wrong about “economies of scale” in today’s networked market.
If there is one thing that is clear from The Long Tail, it’s that focused, niche products and services can find their customers easier and more efficiently today than ever before. Communities can pop-up almost anywhere, where like-minded consumers can meet and discuss their passions, without any intervention or support by business (such a community has popped up on this site for fans of WMMS, a rock radio station that dominated the Cleveland market in the late 70’s).
So, as we watch big banks, big car companies, the titans of Wall Street falter, the question of what will survive isn’t as important as what is the business model of the future. I’m starting to think it’s not WalMart, Best Buy, or even Target- although Target has done a better job of finding a target to market to.
It’s pretty obvious that deregulation came along with a total disregard for anti-trust as well. It was deemed anti-business to try to make sure that there was true choice in the marketplace.
The first place to really see the failures of this policy have been the very companies that fought regulation the hardest: the media giants. With deregulated markets we saw the elimination of competition in newspapers and the dumbing down of the press at the exact same time as we moved to an information economy. The answers of big business were to give us less info- at a time when people were virtually drowning in it. The same happened in TV and Radio broadcast, with an appetite for bigger audiences, the money believed the answers were bigger broad market programming, when audiences were increasingly able to pick and choose what fit them best.
The same has happened to mass-market retailers, who can easily be out-maneuvered by niche internet retailers, as long as the shipping costs aren’t too high, or the need to experience first hand a big part of the buying experience.
Even preferences in shopping experiences have changed from big malls to lifestyle centers, with big box “power centers” losing some of their appeal.
All of this points to a future that probably isn’t in the hands of the giants anymore- but to the most adroit marketers who have built a network of other symbiotic businesses to support each other. Working together as a loose network to promote unique experiences, products, services are going to not only be keys to business survival, but of communities, who can’t afford to trust those companies that are “too big to fail” yet still do.
The survival of social networks and open source development depends on the number of users/size of community that adopts the service and contributes. In business, the number of connections that are built, and the sharing of support functions like marketing- will work the same way.
The answer to success in this new economy is less about getting big, but in getting connected. Relationships are more important than ever and the best way to build your business may be by helping someone else build theirs as long as there is reciprocal behavior. Networks of independent businesses are part of the model of Amazon and EBay, two of the most successful online marketers. Google is making inroads by giving away services, software and social connections in return for relationships that can be exploited softly as time goes by.
While we’ve been teaching and preaching the benefits of Web 2.0 for several years, we’re just starting to push our clients to reach out and work together with other similar small businesses. If Goliath is going to fall, it’s because either he’s gotten so big as to miss opportunity- or that the guerrilla’s have organized to out network and out maneuver him.
Just as the transfer of electrons at almost no cost and high speed has changed the media markets, over time, some of our big cities may find that they are having a hard time competing with smaller walkable communities as gas prices rise, as people’s time becomes more valuable and our love of big loses its luster.
Yes, too big to fail now, may be the kiss of death very soon.
It’s time to think of your network and working on your niche.

Is there a Kindle in your future?

Picture of the Kindle from Amazon’s page.Remember, people scoffed at the first iPod, $500 for an MP3 player. They ridiculed the video iPod- “Who is going to watch a movie on that small screen, and pay $1.99 for a tv show I could watch the night before for free- puhlleeezeeeeee”

Well, we know what happened there. And remember, Apple wasn’t the first mover.

Today the news broke on the Kindle, Amazons entry into e-readers. E-readers haven’t exactly taken off, but then again- Sony has been hitting a bunch of singles lately, and they are behind the most successful e-book to date.

Amazon has taken the e-book to a new level, with constant connectivity via the Sprint high speed cell network, but, there are some hidden gotcha’s that make this book worth passing on – mostly, the fact that Amazon wants to charge you to upload your own data, or to subscribe to blogs. Eh, better luck next time.

Here is a brief description of the reader from the lengthy Newsweek article, which is well worth reading:

Amazon: Reinventing the Book | Newsweek.com
First, it must project an aura of bookishness; it should be less of a whizzy gizmo than an austere vessel of culture. Therefore the Kindle (named to evoke the crackling ignition of knowledge) has the dimensions of a paperback, with a tapering of its width that emulates the bulge toward a book’s binding. It weighs but 10.3 ounces, and unlike a laptop computer it does not run hot or make intrusive beeps. A reading device must be sharp and durable, Bezos says, and with the use of E Ink, a breakthrough technology of several years ago that mimes the clarity of a printed book, the Kindle’s six-inch screen posts readable pages. The battery has to last for a while, he adds, since there’s nothing sadder than a book you can’t read because of electile dysfunction. (The Kindle gets as many as 30 hours of reading on a charge, and recharges in two hours.) And, to soothe the anxieties of print-culture stalwarts, in sleep mode the Kindle displays retro images of ancient texts, early printing presses and beloved authors like Emily Dickinson and Jane Austen.

But then comes the features that your mom’s copy of “Gone With the Wind” can’t match. E-book devices like the Kindle allow you to change the font size: aging baby boomers will appreciate that every book can instantly be a large-type edition. The handheld device can also hold several shelves’ worth of books: 200 of them onboard, hundreds more on a memory card and a limitless amount in virtual library stacks maintained by Amazon. Also, the Kindle allows you to search within the book for a phrase or name.

My bet would still be on Apple- with a tablet style iPod Touch, or tablet Mac. Combined with the iTunes store, you have an integration that’s already proven- plus an Apple device would be able to play video- a key media tool that can’t be ignored. And hopefully, Apple won’t try to gouge you on uploading your own content- after all, it’s an Open Source world- shouldn’t you be able to upload anything you want that’s yours to your own device without paying the piper?

The big question is when does this device become cheap enough that it becomes cheaper for a newspaper to give you a reader instead of a printed newspaper? When does your choice of reading materials start serving up targeted ads? Amazon will have suggestions, no doubt- but, how will this help their partners move the sales needle?

Watch and see?

In the mean time- what do you think? And, do you want one? Even if it is butt-fugly?

Sprint: Great advertising can't make up for customer service failures

Last Friday I ended a 9 year relationship with Sprint. It didn’t have to be that way, but failed customer service policy made it inevitable- and also, made it unlikely that I’ll ever say anything nice about Sprint ever again.

So, today when the CEO resigned- and they announced a major loss of customers, I wasn’t surprised. I’m sure my story is repeated every other minute- and it’s not the advertising that’s at fault, it’s bad customer service.

First, here’s what Ad Age said about the churn at the top- and then I’ll share my story and how Sprint could reverse it’s fortune:

Sprint CEO Resigns; Carrier Announces Major Loss of Customers – Advertising Age – News
SAN FRANCISCO (Adage.com) — Despite $1.78 billion in ad spending, and its hiring of one of the leading ad agencies in the nation, Sprint Nextel continued to bleed customers in the most recent quarter, leading to the resignation today of Gary Forsee as chairman and president-CEO.

In a statement regarding the resignation, Sprint also said it will announce that during the third quarter it lost some 340,000 postpaid wireless customers, that is, customers who pay a bill each month instead of those who pay in advance for a limited number of minutes. (more…)

Sprint: Great advertising can’t make up for customer service failures

Last Friday I ended a 9 year relationship with Sprint. It didn’t have to be that way, but failed customer service policy made it inevitable- and also, made it unlikely that I’ll ever say anything nice about Sprint ever again.

So, today when the CEO resigned- and they announced a major loss of customers, I wasn’t surprised. I’m sure my story is repeated every other minute- and it’s not the advertising that’s at fault, it’s bad customer service.

First, here’s what Ad Age said about the churn at the top- and then I’ll share my story and how Sprint could reverse it’s fortune:

Sprint CEO Resigns; Carrier Announces Major Loss of Customers – Advertising Age – News
SAN FRANCISCO (Adage.com) — Despite $1.78 billion in ad spending, and its hiring of one of the leading ad agencies in the nation, Sprint Nextel continued to bleed customers in the most recent quarter, leading to the resignation today of Gary Forsee as chairman and president-CEO.

In a statement regarding the resignation, Sprint also said it will announce that during the third quarter it lost some 340,000 postpaid wireless customers, that is, customers who pay a bill each month instead of those who pay in advance for a limited number of minutes. (more…)

How to make a bad impression.

Roti LogoThe line was too long for our rushed lunch in Chicago to eat at Roti. But the place was so cool, we decided to stop in and take a look after the rush was over.

Very cool- looked like it was worth the wait, nice design, fascinating menu (which I picked up to bring home to Dayton) and so I thought I’d snap a few pictures for my mental library of things I like-

that’s when the owner rushed up and told me “No pictures” and gave me the third degree on why I might want to take pictures. Well, I was going to say something wonderful about his place, but now, I’d rather just share this story on how to make a really crappy first impression.

roti – chicago, illinois

Roti was founded as a collaboration between friends with a vision to bring Mediterranean food to the casual restaurant marketplace, with an emphasis and focus on healthy alternatives, freshness and superior quality.

Since I wasn’t allowed to take pictures- I’ll have to share the ones from their site. Readily available- to everyone.

Roti interior photos

In a networked world you are not in control- your customers are, and good or bad, they tell everyone.

Which is what I just did.

Dayton OH car dealers would do well to follow these rules

 Ad Age Small Agency Diary had a post from Doug Zanger who hails from Portland Ore. It seems bad car dealer ads run from coast to coast.

He gives us 5 (give or take) rules for local car dealers to have better commercials. I doubt any car dealer in Dayton Ohio would bother to read this- or follow the rules, since everyone of them believes they are über creative and smart with their ad dollars.

See if you can figure out what car dealers fit which commandment. My choice list of egregious offenders would include (in no particular order):

Frank Z Chevrolet, Hidy Honda (and now Hidy Ford), Key Chrysler, Prestige Ford, Chuck George Chevrolet, White Allen, Jeff Schmidt, Dave Dennis Dodge- and that’s just for starters.

Advertising Age
Sadly, there are plenty of dealers who still pollute every possible breath of air with that used-car smell. For those egregious offenders, I propose some local-car-advertising commandments. I’ll start with five-ish and invite you to contribute your suggestions to complete the list.

1) Thou Shalt Stop Yelling
This isn’t an air raid. The world won’t come screeching to a halt because the factory authorized an incentive. We know you have to sell cars, but just talk with us about it for goodness sake. Rick Dalbey, creative director at Livengood/Nowack, in Portland, put it best when he said this about auto dealer radio ads: “Think about someone sitting next to you in the car. If they started yelling at you, you would tell them to shut up, wouldn’t you?” Good point.

2) Thou Shalt Stop Using Some Kind of Mascot
OK, Trunk Monkey from R-west in Portland for Suburban Auto Group doesn’t count. That campaign was just flat-out funny. What I’m talking about is an untrained goat, Pickles the family kitty or some college intern dressed as a lobster, all designed to sell cars. Worse yet is animated clip art or a creepy, superimposed mouth on an animal. Unless it’s a dog with opposable thumbs that can actually drive the car, argue with the cop after being pulled over for going 12 miles an hour on the freeway and fight the ticket in court, please stay away from it.

3) Thou Shalt Stay Away from Humor and Your Own Commercials (Unless You Can Pull it Off)
You might fancy yourself funny. Your inner haberdasher may think you’re a riot. That joke about the penguin and the bale of hay always kills at the local watering hole, but we prefer you keep it to yourself. You may also be great in front of a crowd after a few samples of Novortsky Prospekt’s finest, but a fair number of people freeze up like Charlie Brown in a spelling bee when the little red light on the camera blazes up.

4) Thou Shalt Stay Away From 40-Second Disclaimers
I know, you have to use them. But can’t we just keep asking the attorneys general in our states to cut us all some slack and allow you to put all of that crap somewhere other than a radio spot? You hate it. We hate it. If I want to hear someone talk that fast, I can dial up my former intern, my cousin Abby or go to Aqueduct and listen to the call of the fifth race.

5) Thou Shalt Be Proud of Customer Service
If you’ve won an award, cool. Tell us why you won. Those things aren’t easy to win and they shouldn’t be bungled in with the rest of your message. Take pride in the achievement and make that the main point of your message if this is the route you choose. Anyone can find the car they want, but finding honest, good service is another issue. Parker Johnstone, CART driver and owner of a Honda dealership in Wilsonville, Ore., put it best when he once explained to a group of us: “We’re in the service business. We just happen to sell cars.” Johnstone’s shop backs up its claim every time I bring my (paid-for) ’92 Accord in for service. It’s not “just about the deal,” fellas. We’re human. We like to be treated well.

5.5) Thou Shalt Give Us a Shot
Most of us like cars. Most of us are pretty good at advertising and marketing. Let us help you, the dealer, come up with something mind-blowing. There’s some remarkable work out there. (RPA’s work for Honda Element in L.A. is a personal favorite.) It can be done just as well locally if you let us try for you. Ask yourself if what you’re doing is working. If it’s not, give us a call or read “Purple Cow” as fast as possible.

5.75) Thou Shalt Turn Off the Grill
A friggin’ hot dog never sold a car. Neither did popcorn nor balloon animals. Clowns are creepy. A petting zoo may interest me as long as the local health department clears it and there is an ample amount of hand sanitizer for everyone.

The good news is there are a few dealers who don’t break any of these rules- but could still use a more sophisticated, or interesting message.

Face it- the car industry has enough problems foisted upon it by the great “CEO” leaders who remember to pay themselves crazy well- while producing crap cars and flooding the market with dealers and me-too variations. Bad local advertising shouldn’t be adding to the problems.

There are some other commandments in the comments- with a chance to win prizes- so I recommend you head over to the link and see what other creatives add. By the way- I wrote about the Trunk Monkey ads and how local dealers could learn from them long ago here: A car dealer that gets it.