DECEMBER 24, 2008

When purchasing those last minute gifts, consider the fact that consumers today expect products, messages, and even time itself to center around their unique desires and needs. An article in US News and World Report says purchasing personalized products is also a form of frugality well-suited to the current economic downturn. By customizing, shoppers can get the most out of less frequent splurges. And the trend is not restricted to those with money—it spans all ages, income groups, and regions.

People not only want products that express individuality, but also they also want the sense of luxury that comes with a one-of-a-kind product. But as customization becomes more commonplace, is it losing its luxury appeal? Companies are working hard to make sure this isn’t the case by creating customized products that truly go above and beyond. So for gift-givers looking to make a statement, here are a few of the more unique personalized products that caught my eye this year:

• Personalized Warhol - make your picture a work of art
• Name Your Porsche - Porsche owners rejoice
• Replica Houses - if you already live in your dream house, make a mini one to admire while you’re inside
• Personalized Bobble Heads - for the bobble head collector who has everything

Happy shopping!

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NOVEMBER 20, 2008

Warren Buffett once said, “My favorite holding period is forever.”  Apparently, James Altucher, President and founder of Stockpickr, agrees with him. He wrote a book called “THE FOREVER PORTFOLIO: How To Pick Stocks That You Can Hold for the Long Run“, and during an interview on CNBC yesterday, Altucher suggested investing in companies providing services in the following areas:

• Obesity: 33 billion dollars are spent each year on services for the obese.

• Dirty Water: Developing countries are finding it much harder to deliver clean water to their growing populations, and companies that sell clean water treatment technologies will thrive.

• Luxury: The rich are recession-proof, and the stocks of luxury producers make a great hedge against any slowdown in the global economy.

Now I’m no financier, that’s for sure, but from a New Persuasion point of view, his advice makes perfect sense. The future looks a lot more predictable when you actually take the time to pay attention and study the trends/issues that are presently hidden in plain view.

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NOVEMBER 13, 2008

I’ve always been fascinated by the habits of shoppers in the United States.  What we buy, and how we buy, tells us a lot more than the latest fashion trends; it gives us a glimpse into what we value and how we prioritize.  However, lately, it seems as if Americans have been forced to take a “back to basics” approach, buying only what is needed and not necessarily what is wanted.  We are no longer living with the mindset that we can simply “charge it” and worry about it later. Instead, we have been forced to live in the moment and buy only what we can afford, or suffer the consequences. 

I was shocked to read an article in USA Today last month about the massive shift in buying habits at Wal-Mart stores in the U.S.  According to the October 22 article, Wal-Mart has noticed that there has been an increase in sales at the beginning and middle of the months (paydays), which they’ve never noticed before.  The double-digit decline in credit card usage among consumers also reveals that consumers are maxing out their credit cards and are now being forced to resort to “living within their means” - a concept that many Americans have departed from over the years.  Now I’ve never had to live through a recession, but wonder whether our tough economic times will be a good wake-up call to consumers about the importance of living within their means. Will we, as a society, ressurect old habits and start a “back to basics” trend?

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OCTOBER 29, 2008

  Wedding planning – a topic that currently consumes my life.  My fiancé, Chris, and I have been engaged for a few years but recently set a wedding date for next summer and have been devoted to wedding details ever since.

I’m not the type of girl who’s been dreaming of and planning her wedding day since birth.  Honestly, I never gave it a single thought until someone got down on one knee and handed me a diamond ring.  And then, it was like the flood gates opened.  I looked through every magazine, scanned every web site, and watched every TV show having anything to do with getting married (I’ve linked to a few favorites).  Little did I know there were so many shades of white, so many types of flowers, and so many variations of favors.

With the overwhelming number of choices a bride has to make, which products actually break through?  Wedding purchases are slightly unique in that they are decided upon most times by emotionally-driven people who are willing to sacrifice a lot (including money) in order to get what they want.  That being said, I’ve personally been trying to take a more reasonable approach.  I don’t have an unlimited budget and I’ve come to terms with the fact that while our wedding day is important, it’s still just one day and going overboard isn’t necessary. 

These economic and environment-minded times have made me downsize from an SUV limo to a sedan limo.  I won’t be overdressing the Church or carrying a bouquet of orchids or using two foot tall flower table centerpieces.

So, how do I decide?  I separate extras from necessities and determine what Chris and I can’t do without, then I apply our budget.  A vendor or product that’s going to stand out is one that seems sensible and legitimately serves a purpose – one that ultimately I find value in. 

Today, consumers are saturated with choices and information.  Consumers have adapted to this overload and now, for example, I can effectively flip through a 150 page bridal magazine in less than half an hour and earmark a handful of items or styles I like without letting the nonsense of other ads or articles distract me.  A careful understanding of what appeals to a consumer will surely breed success.

What product or service have you been consumed by lately and what ultimately gets you to open your wallet?

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OCTOBER 22, 2008

People seem to be most concerned about two things right now - the economy and the upcoming election.  But what many don’t realize is that both could be risky to their health.

For instance, did you know that there are more traffic-related deaths on presidential election days than on the day of the Super Bowl, according to a recent report in The Journal of the American Medical Association? Using a national database, the study counted the number of driving deaths on every presidential election day from 1976 to 2004.  An average of 158 people died in crashes each election day, compared with 134 crashes on the Tuesdays before.

Why? It is hard to say, but clearly there are more people on the road, and they may be distracted looking around to find their polling place.  This increase in car deaths could be even more significant in a heavy turnout year like this one. Researchers recommend that get-out-the-vote campaigners emphasize safe driving tips when urging people to vote.

Second, the ailing economy may be causing fewer visits to doctors.  A recent survey found that more than 80 million Americans - insured or not - are cutting back on their health care to save money. Another survey shows that young adults that have been hit the hardest. Nearly 70 percent say the downturn has made it more difficult in the last year to pay for medical expenses.

Even though skimping on health care can have serious consequences, it’s hard for folks in tough economic times to think long term. Unless a risk is imminent or high, we tend to roll the dice and hope for the best.  It is even more clear why this election is so focused on the need for health care reform in this country.

So, putting risk into perspective, it is important to be aware of how major events on the national stage can trickle down to impact us. We can then take steps to minimize the risks they may impose, like driving more carefully to the polls or sticking with our medical checkups even when our pocketbooks are tight. At least that gives us some control in this topsy-turvy world.

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OCTOBER 3, 2008

In case it hasn’t been obvious in my previous posts, I like to write about innovations in public policy. The idea that small changes in rules and practices can produce big benefits for society is fascinating to me.

For awhile now, I’ve been meaning to pick up Cass Sunstein and Richard Thaler’s Nudge, a book about simple policy changes that can be made by governments and employers to encourage people to make better choices. The book is based on two papers authored by the pair in 2003 (sorry, you’ve got to pay for the second one!).

Backtracking a little bit: traditional economics - you know, the Adam Smith stuff - infers that people in general are “rational actors” - that we collectively make decisions based on our own personal interest. That makes sense in a lot of ways, and many think it’s the basis of how human beings act. For instance, I made a rational decision to come to work this morning because I know that: a) I won’t get paid otherwise; and b) I like what I do.

But in the past few decades, a new field has emerged called behavioral economics that investigates people’s irrational desires and actions, and how they affect the larger economy. Some examples of this can be seen in the poor understanding we human beings have of risk - a concept Kelly Stepno works on here at TMG - as well as the current economic crisis, which some believe was caused by an asset bubble driven by media hype rather than actual value.

The goal of Sunstein and Thaler’s work is to change people’s “choice architecture” by introducing policies that gently correct our tendencies toward irrational behavior. For instance, the authors identify savings rates as one area in which humans do not act rationally, and did a study of ways employers could help their employees save more money. They found that businesses who automatically enrolled their employees in 401(k) plans and offered an opt-out provision had dramatically higher savings rates than employers who had opt-in 401(k) plans. Thaler also experimented with a plan called “Save More Tomorrow” that allows employees to set aside parts of their pay raises toward their savings. The principle here is that people are irrationally loathe to give up any of their current income, but don’t have as much of a problem forgoing future gains. In this program, too, he saw the savings rates of participating employees more than triple.

The authors also discuss smaller policy changes, like removing key lime pie from a buffet line, that could help all sorts of pressing issues like obesity, indebtedness, and global warming. The basic theme is that changing people’s “choice architecture” is a way to deal with the irrational aspects of our behavior.

Like I said, I haven’t read the book yet, but I find a lot of the themes very intriguing. Of course, there are objections to this philosophy - who are you to tell me I shouldn’t have key lime pie? - but it’s refreshing to see people thinking outside left-right paradigms when it comes to public policy.

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AUGUST 15, 2008

According to Charles Murray, the W.H. Brady Scholar at the conservative think tank American Enterprise Institute, that’s exactly what it is. In an op-ed in the August 13th issue of The Wall Street Journal, Murray poses a hypothetical question:

Imagine that America had no system of post-secondary education, and you were a member of a task force assigned to create one from scratch. One of your colleagues submits this proposal:

First, we will set up a single goal to represent educational success, which will take four years to achieve no matter what is being taught. We will attach an economic reward to it that seldom has anything to do with what has been learned. We will urge large numbers of people who do not possess adequate ability to try to achieve the goal, wait until they have spent a lot of time and money, and then deny it to them. We will stigmatize everyone who doesn’t meet the goal. We will call the goal a “BA.”

You would conclude that your colleague was cruel, not to say insane. But that’s the system we have in place.

Murray argues instead for a system of standardized certification tests specific to a person’s chosen career field:

The solution is not better degrees, but no degrees. Young people entering the job market should have a known, trusted measure of their qualifications they can carry into job interviews. That measure should express what they know, not where they learned it or how long it took them. They need a certification, not a degree.

The model is the CPA exam that qualifies certified public accountants. The same test is used nationwide. It is thorough — four sections, timed, totaling 14 hours. A passing score indicates authentic competence (the pass rate is below 50%). Actual scores are reported in addition to pass/fail, so that employers can assess where the applicant falls in the distribution of accounting competence. You may have learned accounting at an anonymous online university, but your CPA score gives you a way to show employers you’re a stronger applicant than someone from an Ivy League school.

My first thought upon reading all this is that education can’t be reduced to training. I’m of the opinion that well-rounded individuals tend to think more clearly and contextually and show a capacity for breadth of interest. Murray attempts to answer this:

Certification tests need not undermine the incentives to get a traditional liberal-arts education. If professional and graduate schools want students who have acquired one, all they need do is require certification scores in the appropriate disciplines. Students facing such requirements are likely to get a much better liberal education than even our most elite schools require now.

The problem I see here is that it makes a broad, liberal arts education contingent on utility. If your employer wants it, or your grad school wants it, only then do you make the effort to get it.

I’m not a fan of the idea that whether I want to be a marketing executive or a systems engineer, taking a course on Dante Alighieri’s Divine Comedy  or possessing a half-dozen college credits on the development of Western Civilization is considered essentially superfluous to my career path. Knowledge is edifying for its own sake, and understanding the world is a key to being successful in any endeavor. It also gives us something to fall back on in the event that we find ourselves in an industry that is in decline and we need to branch out or start over on a new path. I couldn’t tell you how many times a day I fall back on my liberal arts education (if for no other reason than to reference something I learned while writing a blog post about education).

On the other hand, I agree with Murray that the post-secondary educational system can be overly bureaucratic and ossified.  I like the idea of convenience and self-study, and universal standards for admission to the workplace that test knowledge rather than diplomas. Student loans are prohibitively expensive for many individuals, and college (and other) debt is on the rise. Worse, those seeking to go back to school after starting out on a career path often find that the time required is extremely prohibitive, and would be much better spent pursuing the credentials needed in as expeditiously and inexpensively as is possible.

As opportunities to participate in distance education become more widely available, and industries become more specialized, I think Murray’s vision is the more likely outcome. I just hope we don’t lose sight of the fact that there are things worth knowing that transcend the specific skills we want to put on our resumes.

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JULY 14, 2008

It’s easy in tough economic times like these to flip on CNBC and just watch everything collapse - connecting the dots from housing crisis to credit crunch to energy prices to food and material costs and wonder exactly how our country plans to get itself out of this mess. It’s also easy to feel powerless before a torrent of awful news streaming to your computer, television, and Blackberry 24 hours a day. We talk a lot about saturation here at TMG - but what role has it played in the economic run-up and subsequent correction?

Robert Shiller, professor and author of the bestselling Irrational Exuberance, argues that the first economy-wide “bubble” - the tech stock run-up of the late 90’s - was fueled in part by real-time stock prices and 24/7 business networks. The constant availability of information, as well as the economic cheerleading encouraged by the networks themselves, made it easier for investors to focus on minutae like price fluctuations and ignore big-picture variables like actual earnings. The irrational decisions made on the basis of too much irrelevant information helped fuel the unsustainable rise in stock prices.

Now that the financial networks are blasting bad news through every conceivable media, how many investors and business leaders are irrationally spooked about the unsteady market? How many have taken a fatalistic attitude towards their business, willing to simply ride the market conditions out to their end - whatever that end may be? What’s more, how many are listening to half-cocked pundits suggesting nice-sounding but potentially disastrous courses for their sector? My guess is quite a few.

I think we, as communications professionals, have two roles to play here:

1) We must find new angles to sell stories to an increasingly-skeptical marketplace. Exuberance for new products will be in short supply for the next few years, and to serve our clients well we must be on top of trends before everyone else and help them capitalize accordingly.

2) We must act internally, and use media monitoring to help our clients cut through the noise surrounding their business. As outsiders, we should be the ones absorbing the torrent of news and passing on what’s important, while clients should be focused on creating solid products and services. Helping our clients maintain perspective on the fundamentals amid swirling economic bad news is key to keeping morale high and eyes focused on the prize.  

I’d really like to start a dialogue here on Undercurrents about how communicators can help companies weather what may be a transformational economic crisis. If you’ve got thoughts, please comment below. If you’ve got a longer thought, e-mail me and I’d be happy to post it on this blog.

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JULY 10, 2008

In an economic downturn, it’s not surprising that many American households and businesses are hitting the brakes on consumption and expansion.  I’ve gone cold turkey on my daily morning Starbucks run, and I always try to pack my lunch.  On a larger scale, Starbucks announced that it will be closing 600 stores in the U.S., American Airlines is cutting nearly 7,000 jobs, and the domestic auto industry is temporarily laying off almost 25,000 employees.  But as industries weaken and purse strings tighten, it’s easy to lose sight of what else is being threatened by our financial situation.

This New York Times article by David Leonhardt brought to my attention something potentially alarming.  It states:

Gross job gains – the new jobs created – have fallen more sharply than job losses.  Companies have gone on a ‘hiring strike’, notes Ed McKelvey, a Goldman Sachs economist.  Existing firms aren’t expanding much, and not enough new firms are starting.  The country is suffering from an innovation deficit.

An innovation deficit?  Gasp!

Amidst an economic recession, job losses, housing, food, and global energy crises, now is not the time to crawl into a hole and hibernate until it all passes.  I agree with Leonhardt when he says that “the long-term solution can’t revolve around efforts to slow globalization, technological change and other forms of economic churn.  We need more churn, not less.”

This is our time to innovate, America!  Perhaps our economic struggles are blessings in disguise.  If we’re facing an innovation deficit, what better way to reach a surplus than by taking on challenges in areas of alternative energy and adapting technologies like the combustion engine and gas stations that we’ve used and depended on for decades.  We need research and development for the plethora of potential energy solutions that will spur education and employment in highly innovative fields.  Any mass production of these technologies or the infrastructures needed to use them will also spark major boosts in innovation and employment. 

In a time of uncertainty and doubt it seems that instead of disengaging from the marketplace, we need to fully engage, roll up our sleeves, and embrace this time in our history to innovate ourselves out of disparity and into the future.

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