Finance and Marketing

Communicating Across Generations and Sensibilities

2022-06-04T15:33:00.003-04:00

Communicating in today’s work environment is complicated by generational styles and preferences. But the real challenge actually begins with identifying and controlling your own perspective. Effective communication may sound burdensome; but with mastery it becomes second nature, and the benefits far outweigh the effort. This presentation distills studies of human behavior down to core practical steps you can take to achieve successful communication.

Meaningful Metrics

2021-11-08T09:00:00.033-05:00

Data is everywhere. You can literally create a data set out of any observation. But data is meaningless unless it’s relevant to your objective; only considered in relation to other strongly correlated data; and measured across a significant period of time, options, and scenarios. The following presentation will walk you through the four critical steps to ensuring that your organizational metrics are always meaningful.

5 Keys: Effective Social Media Programs

2021-09-06T10:00:00.008-04:00

Most brand communications are viewed as positive interactions; however, a significant error can be embarrassing, at minimum, and generate negative publicity, at maximum. To avoid critical errors, business owners that choose to engage on social media should be vigilant and implement measures that help them to effectively monitor and control their brand image. The following presentation discusses five key requirements for an effective social media program.

Strategic Disruption

2014-06-07T09:23:00.014-04:00

(updated 2021)

All bets are off and it’s all because of technology. Technology has the uncanny ability to simultaneously lend itself to severely divergent lines of thought. Technology increases efficiency, decreases the ideological shelf-life and, in general, annihilates breathing room. It sounds like a destructive force; but, if you successfully employ its genius, technology promises to be the most constructive tool in your tool belt. It’s our modern fire, giving rise to limitless unforeseen necessities and novelties, alike.

What Was
Recently, I attended a capital markets conference. Here, speakers discussed historical trends and premises that “we all knew to be true,” but more importantly, economist posed a problem set: if GDP has rebounded, why don’t we feel like we’ve rebounded from the great recession? Why don’t the indicators reflect what “we all knew to be true?” The underlying problem is that what “we all knew to be true” was never the pure unfettered truth, it was simply an assumption prevalent in every financial and economic model. We were so busy relying on faulty assumptions and dissecting our models that we never foresaw the arrival of “the new truth” – blindsided.

What Is
In the past, we simply dug ourselves out of the proverbial depression/recession hole. The philosophy: if we simply employed human capital, (physical and intellectual), we give our best honest effort; and who could ask for anything more? The problem: our best is no longer good enough, we’ve been disrupted. For the very first time in human history, simple human effort is no longer the driver of productivity. Capital/Resources are neither scarce nor limited. We’re effectively living outside of the box, where the problem set is more complex. Technology is the new driver of productivity,

and it’s everywhere.

The current truth is that our old models, assumptions, and expectations don't work for today. There’s no “new truth” playbook, and the schools of thought and infrastructure for employing capital/resources effectively in this new environment are tentative, at best. The time is ripe for exploring different approaches and radical alternatives.

When disrupted, disrupt.

To disrupt, think outside of your box; way outside.

"Not only did we theorize about creativity and innovation we walked away with real and practical tools to use in our organizations."

- The Power of Creativity

What Will Be
Strategic planning usually involves the exploration of trends and developments in one decisive industry. The technological, financial, and operational impacts are considered with this industry specific filter. The challenge is to not only think cross-functional, but to also think cross-industry/cross-channel. What are the possible intersections and points of divergence? What may a small nimble and unencumbered start-up explore that paradoxically an established organization cannot risk exploring? Here’s the blind spot(s) for the incumbent and opportunity for the entrant.

This isn’t new. It should be part of the SWOT analysis that feeds into the strategic plan. What’s new is expanding the analysis beyond consideration of the usual players. Disrupt the strategy as usual and get outside of the box. The HBR article Big Bang Disruption discusses how producers of portable navigation units failed to foresee the impact of smartphones and free navigation apps. Products from popular producers, like Garmin and TomTom, literally became irrelevant overnight. Become your own best competitor; do the thinking for them and mitigate the potential threat through adoption, adaption, or acquisition.

No, this is not entirely new, and I’m not suggesting that I’ve stumbled upon some magic formula. However, there’s certainly room for us to expand our strategic considerations and to think more dynamically. If we’re not periodically stretching ourselves to peer outside of our box, to assess the current environment, to consider a wide range of possibilities, and to prepare for the worst-case scenario, we risk being yanked outside of the box, against our will, unprepared, and clueless. Your choice.

Six Basic Rules of Branding

2013-08-24T09:14:00.022-04:00

(updated 2021)

A dictionary will tell you that branding is the act of promoting a product or service by associating it with a particular brand, and “a brand” is a characteristic that identifies a particular product. Circular reference aside, it doesn’t really lend itself to translation from a definition on a page to the actual act of branding. Is it enough to simply choose a name, products, and services? Will customers then connect the dots between their need and a name, a product, and a logo? Absolutely not. Business owners must execute branding efforts to help customers connect those dots.

Definitions of branding do not belie the fact that branding is truly an action word. So, here are six rules that will help you overcome the shortcomings of lackluster dictionary explanations:

A Better Explanation
Branding can be thought of as the introduction to your organization as well as a reminder of the sales and marketing objectives. It conveys what the organization is about, and with each interaction it becomes the internalized billboard for what stakeholders can expect from you.

Branding includes the simplest business facets, such as a purpose statement, to more complex experiences, such as an experience at a sales center. A sales experience is typically referred to as a different area of marketing, such as customer service; however, we should be cognizant that these are “particular characteristics that will serve to identify a particular product” and thus they are also acts of branding. Branding is an action word, threaded throughout the strategic marketing process.

The Message
At minimum, branding will provide the consumer with answers to two questions:

Who are you; and
What can you do for me

Answers to these questions are essentially your mission statement – the reason why you exist. The next critical part of your message is the branding refinement:

Why you (the consumer) should care

Which can be further refined to two questions:

Why I can do it better than my competitors
Why I am the best choice for you

These questions are closely related; but, they are succinctly different. The first addresses your competitive advantage in comparison to other organizations. Perhaps you have economies of scope or scale that enable you to offer a better quality or lower cost product than your competitor. The second question connects your competitive advantage directly to your consumer’s need – what does industry and market data tell you about preferences and current expectations, and how are you meeting these preferences? Your message conveys why your product is the best option available.

”What may initially feel like a “fail” could indeed be the beginning of the next big win.”

- Five Branding Mistakes to Avoid

The Connection
Now that you've been introduced, what keeps you at the forefront, with your customers? Yes, your product may be available on a shelf at local grocery stores waiting to be discovered, and perhaps customers report positive initial experiences; but, what will encourage a repeat performance? We are constantly bombarded with the claims of competing products and services, and we are easily influenced by the opinions of friends, family, and acquaintances. There’s not much that can be done to prohibit exposure to competitive influence; but, you can assert influence of your own.

If you make a connection to the consumer, as opposed to passively sitting on a store shelf, you’re more-likely to keep an engaged, and less easily led away customer. People listen to their friends, family and acquaintances because they care for the individual’s well-being. Distant corporate entities do not convey the same intimacy. But, there are big brands that connect with their consumers very successfully. How are you going to accomplish this and become the brand your customer recommends to their networks – annihilating the competition, instead of the other way around?

Can you show your customers that you’ve considered their changing needs? How is your product or service serving their needs better, or differently than your competitor? What’s your commitment to social values? Are you environmentally conscious in material sourcing? What’s your slant? What’s important to your customers, and how are you striving to meet their needs, desires, and values? Evidence of consideration provides consumers a basis for buy-in, because they can see themselves reflected in your brand. It also provides talking points for them to gain buy-in with their friends and family. Essentially becoming brand ambassadors.

Customization, real or perceived, helps to bridge the gap between the corporate entity and the consumer. A company cannot connect with consumers on the same level as a best friend; but, you can definitely “reach out to the consumer,” establish a connection, and influence them to provide positive word-of-mouth to their networks.

The Visual Cue
The logo, color schemes, packaging, and slogans are what we most often see and associate with branding efforts. They serve to maintain the connection that you've worked hard to establish.

It could be weeks, months, or even years before the next buy-decision is made by the customer. So the visual cues help to remind the consumer about their experience during their last encounter with your brand:

Does the strong font and bold colors of the branding make consumers feel confident in your capabilities;
Does the curly font and softer colors of the branding make consumers feel you’re sensitive to their needs;
Do the crisp lines and simplicity of the branding remind consumers of the elegance of the service environment;
Does the color green or brown elicit sentiments of sustainability;
Does the color black or purple convey elegance and luxury; etc.

Colors, fonts, and slogans are not meant to be a purely subliminal exercise. Visual cues are meant to be an overt trigger to a memory - a reminder of your product or service.

The Online Component
The internet and social media is here to stay. We have our email, social networks, written content, video content, and multi-media explosion. We cross-connect social with our work purposes on LinkedIn, Facebook, Twitter, Pinterest, Instagram, and beyond. We’re defining parameters for measurement, we're bench-marking, we're correcting, and we're improving our online marketing efforts. This is a space that’s changing the manner in which we interact with one another, changing our perception, and changing our expectations.

This online component makes it’s easier to engage with customers; and businesses take their branding efforts to this space because it is the new expectation. Unless you are doing commercials, traditional marketing efforts are infrequent, static, and fairly devoid of personality, e.g. the occasional postcard. Online communications are more frequent and more fluid. They tend to reveal more of the brand’s personality, especially on social networks. Online, or digital, communications are an amazing opportunity to connect with current and new customers.

The Modus Operandi
Ultimately, we want consumers to think of our product or service as the best solution to their problem. Verbal and visual cues assist in establishing a brand, building consumer recognition, creating consumer expectation, and encouraging customer loyalty. The effort is ongoing, serving as a constant reminder of your brand and your desire to serve the changing needs of your target market.

Three Fundamentals of Good Stewardship

2013-06-16T10:22:00.015-04:00

(updated 2021)

The mission statement is the very first proclamation of any organization. It serves as the central purpose for the organization’s existence, and it is the initial attraction point for employees and customers, alike. But as years pass, the mission ages, it fades in memory, and mission delivery strays from the initial intent. In addition, the organization begins to face new challenges, as the consumer's needs, wants, and desires evolve. Whether the mission ages into a fine wine or a stale ale depends on the care and attention of the leadership, because an organization can only be as good as the stewardship it receives:

Refresh
Memories are short, so it's always a good idea to create “refresh moments” for both internal and external stakeholders. These are moments when we reconnect the dots, in new and creative manners. It’s a mission update that maintains the integrity of the initial underlying meaning. It's also an opportunity to incorporate new ideas, technologies, and approaches to add elements of flexibility and adaptability to keep stakeholders invested.

Everyone changes over time, so when the product or service changes with them they are more likely to feel that what you offer is still relevant. Look at Coke and Pepsi, for example. Every now and then they introduce a new product or marketing campaign. They’re new, innovative, interesting, weird, etc. Beauty is in the eye of the beholder. Nonetheless, the product or campaign is bound to grab your attention and beg for new consideration. Despite all of these changes, the mission always remains the same, “To create value and make a difference; to be the best consumer products company,” they’ve lost nothing by branching out and adapting. These campaigns are important to all stakeholders. An internal meeting will certainly look different from the 30 second commercial; but, it’s important to reconnect with all stakeholders in new and fresh manners.

Feedback
Feedback is the lifeblood of greatness. Formal or informal, solicited or unsolicited, known or anonymous, it can provide valuable insight into the organization’s perceived and real performance. Soliciting feedback also helps stakeholders feel connected and part of the process. Again, it works for both internal and external stakeholders. Incorporating feedback into future operations lets stakeholders know that their voice is heard and that their vote, suggestion, idea, and concern matters.

Reluctance to receive and incorporate feedback will likely foster a negative perception. There’s always room for improvement. An Olympian does not achieve prime performance without coaching, so how can an organization improve without feedback? Keeping an open-mind and fostering the feedback loop increases the chances of receiving helpful insight from stakeholders.

Mid-Term
In business, we tend to speak in terms of short and long. But, the rest of the world does not necessarily understand or operate according to these terms. So, as we make our short-term and long-term goals, don’t forget to relay the “mid-term” direction that ties one to the other - translate our terms into something meaningful to the whole.

”In order to achieve and sustain a balance of complicated and often conflicting concepts, decision makers must actively cultivate critical thought as a mode of being. Ultimately, it is mutual openness - a collaboration of perspectives – that yields sound decisions.”

- The Key to Sound Decision Making

This translation may take the form of regular communications, a conference, a promotion, etc. Whatever the mode, the goal is to translate the mission for our stakeholders so that they can relay it properly to current and potential customers. It’s neither short-term nor long-term, it is perpetual.

The more we enable our stakeholders to take ownership of the mission, the more they become advocates for us, and the more we are likely to meet our goals and age into something valuable, endeared, and loved, like a fine wine.

9 Behaviors Small Business Owners Should Avoid

2013-03-15T15:09:00.014-04:00

(updated 2021)

Small business owners have a lot on their plate, and they don't usually have a lot of resources to get it all done, including time, money, and staff. These conditions make it tempting to take short cuts, which isn't necessarily a bad thing. But, there's some things that always deserve your full attention:

Skip Due Diligence

Implementing a quick solution to an un-vetted problem may seem like a great idea, initially; but in the long-run, a well thought out plan of action is much better. Establish processes and procedures that provide for objectivity, such as an independent review or committee, to ensure that you consider a broad spectrum of perspectives, to choose the most effective solution, and to avoid unforeseen consequences.

Assign responsibility for each phase of the project/program/event, track the progress, and hold team members accountable for their performance. This way your client gets the best possible product/service – avoiding disappointment or confusion.

Over-commit/Over-promise
Be realistic about what you can and cannot accomplish. Take stock of your resources, (human, materials, networks, suppliers, etc.), work within those confines, and allow for an appropriate margin for error. You’ll never wow a customer by being stretched too thin. When resources are spread thin the product quality may become sub-par, and an obvious turn-off for customers.

Under-commit and over-deliver. The goal is to win the customer's approval, to garner respect and admiration, and to ignite the desire to recommend your organization to their networks. You'll accomplish this by providing a quality product/service that meets or exceeds your customers expectations.

Lose Focus of the Mission
There’s nothing worse than dealing with a confused organization. And if the organization is confused, then so too are the potential customers.

If you’re flying by the seat of your pants, you're not making time to be reflective: Is your organization in alignment with your original intent? Or does the original intent need to be refined? All healthy organizations have robust internal communication systems. Employees need the organization’s leaders to show them how the mission translates into current and future initiatives. Without a clear understanding of the purpose and direction, employees cannot advocate and relay the desired image to current and potential customers.

Forget About the Customer
It’s a cardinal sin to forget about the customer. Really. They are the cornerstone of your organization. If you don't solve a problem for the consumer, why does your organization exist? There’s a lot of moving parts in business, and it can become easy to allow other concerns to cloud the focus. You must fight against this constantly.

The second part of this battle is the customer has an ever changing face, need, want, and desire. If you don’t stay up-to-date concerning the changes, your competitor is likely to successfully arbitrage your efforts. This doesn't mean that you give away the bank trying to make your customers happy. There are limits to the adage that "The customer is always right.” But never forget that they are the reason you exist, without demand, there's no need for your supply.

Listen to your market's opinion to work towards an understanding or agreeable solutions. In any case, as a going concern, the customer should simply never be disregarded.

Become Inflexible
Those that survive the storm are not unyielding nor are they too lenient. When presented with new information, we have to be willing give new consideration and change strategy, policy, and behaviors as required.

The only thing that’s certain is change. Accept it and deal with it to the best of your capabilities. Otherwise you risk missing new opportunities by being stuck on obsolete technology, theories, and consumer needs.

Forget the Earth’s True Trajectory
The world does not revolve around you. Everyone else knows it, and you should know it too.

Be patient in your endeavors, especially at work. Everyone has commitments, responsibilities, etc. Be understanding and work with others to accomplish goals. The world has its own idea about things and a mind and will of its own. You may or may not be a part of the equation from one day to the next…be patient. We are all interdependent and although it may be “easier” if everyone bent their will to yours it is unlikely, and makes for a miserable workforce. World domination requires people who are willingly bought into an idea. That tends to occur when individuals are appreciated in their own right.

Fail to Maintain Branding Efforts
Don’t underestimate the power of communicating with your audience simply by showing consumers what you want associated with your brand, including name, design, symbol, and slogan.

Approximately 90% of communication is non-verbal cues. Perhaps this is because extensive verbal language is much newer human development than non-verbal communication. Visual and emotional cues still dominate our landscape of understanding: colors, shapes, and short and sweet slogans. These are easy to grasp cues – the ones that stick with us – but only if you remind us, periodically.

“Embracing the spirit of creativity does not guarantee a win. In fact, it could open a door to failure. But as the saying goes, "You never know unless you try." We do not have to wait for an incubator or an economic crisis to capitalize on creativity. Any organization can create a sustainable environment that allows for exploration and norm divergence without judgment or punishment for perceived failures.”

- Embrace Creative Failure to Realize Your Best

Over Complicate Matters
Communications, processes, and procedures tend to be inherently complex, so it’s helpful to clarify and to streamline processes to arrive at a more basic and easily understood conclusion. Complexity does not equal intelligence, a good challenge, or superiority; it simply causes confusion and frustration. When consumers encounter a clear barrier to understanding, they’re not intrigued. They’re usually annoyed, frustrated, and reticent to continue with your organization. Besides, I bet someone else wants their business and is willing make it very easy for them.

Forget to Breathe
Remember to take a break when necessary. You’re only human and everyone will be happier if you get the rest and personal attention that you need. No one likes cranky adults - Really.

Embrace Creative Failure to Realize Your Best

2013-02-11T10:40:00.008-05:00

(updated 2021)

We’ve been “institutionalized”: creativity is seen as not required, the rare versus the norm, and a luxury that few can afford.

Since industrialism we were taught to suppress our creative selves to become learned worker bees, pooling resources to accomplish a shared goal. We learn a trade, skill, or concept and are siloed off to hone, explore, perfect, and conquer our craft. Exploit it for monetary gain, no extra thought, consideration, or care required. Without concern for our creative selves we have an existence that’s one sided and lacking.

Embracing our creative selves is often the first thing to dissipate when times are hard. I came face-to-face with this cold hard fact when I learned that the PA Governor’s School for the Arts no longer exists – no longer funded as of 2009. I competed for and won a place in this program. It was an amazing time of exploration of fine arts and the intersection of writing, music, acting, dance, and society as a whole. Then suddenly, after 30 years of exploration, amplification, and support the arts were no longer appreciated. How does this happen when creativity is such an important part of who we are?

“There’s certainly room for us to expand our strategic considerations and to think more dynamically. If we’re not periodically stretching ourselves to peer outside of our box, to assess the current environment, to consider a wide range of possibilities, and to prepare for the worst-case scenario, we risk being yanked outside of the box, against our will, unprepared, and clueless.”

- Strategic Disruption

The Boomerang Effect
Conversely, when times are hard it is also the most creative period as we venture to re-invent ourselves and to discover new ways of doing business. What we did before is evidently not enough; thinking outside of the box becomes more readily accepted.

Creative Failure
Embracing the spirit of creativity does not guarantee a win. In fact, it could open a door to failure. But as the saying goes, “You never know unless you try.” We don’t have to wait for an incubator or an economic crisis to capitalize on creativity. Any organization can create a sustainable environment that allows for exploration and norm divergence without judgment or punishment for perceived “failures.” In fact, it’s beneficial to engage creatively to stay in-touch with the competitive environment.

‘AHA!’ moments are often in a place you weren’t expecting – like a mistake. It does not happen on demand, it's a process. It begins with an idea – a spark; and the best creative moments occur at the most unexpected intersections – where we did not look – “outside-of-the-box.” However, creativity has a fragile ego. It must be rewarded for existing and not penalized, as punishment leads to quick dissipation. Success finds those who are accepting, nimble, flexible, adaptable, and resilient. Rigidity closes off the the creative spark and lanes of communication; you may miss that 'AHA!' moment as others become less willing to be vulnerable.

We can't color inside of the lines all of the time. We’re all human and we all fail. Embrace the humanness of our humanity and find the silver lining, because it is at this intersection of leadership, understanding, compassion, and creativity that we find the best in ourselves and others.

The Power of Creativity

2012-12-15T12:27:00.009-05:00

(updated 2021)

I recently attended a course that explored creativity and innovation in the workplace. Creativity is arguably the spark of brilliance that ignites change and spurs progress. But where does it belong in the workplace? And if it belongs in every organization how do we foster it, especially when employees have different backgrounds, different organizational functions, and different levels of autonomy? We learned close to 20 different methods for facilitating creativity; but, the following are the seven techniques that resonated with me as the most effective and adaptable to a wide variety creative purposes and organizations:

Why? Why Else?
As a manner of identifying the true problem statement this method simply requires answering the question, “Why?” and asking “Why else might this be an issue, a solution, etc.?” This exercise can be completed alone; however, it’s better to have a team so that one person records the response and another can restate your answer and ask the “why else”: I see why…now why else? This method helps to ensure that you are not too narrow in the problem statement. I probably like this method as it reminds me of the 5 Whys method that I learned for root-cause analysis. However, the Why, Why Else methodology is an expansion methodology versus the drill-down methodology of the 5 Whys.

” The best way to ensure your message is not misunderstood, is to simply remain willing to communicate, until an understanding is reached. Don’t assume your message was clearly received, be prepared to re-tool the communication, and be willing to apologize for the misunderstanding – even if it is mother nature’s fault – if you take ownership you get to be the hero.”

- Five Actions for Success

Fishbone Diagrams
For more complex issues, it’s nice to have a pre-set structure so that you worry less about the organization of information and focus more on solving the problem. The fishbone diagram illustrates the cause and effect relationship: the equipment, process, people, materials, environment, and management, (the causes), to the problem (the effect). Primary and secondary causes are identified for each cause area which helps to provide a robust image of the problem.

Brainstorming
Brainstorming is a staple, and when done right it can be lots of fun. Brainstorming is meant to be a time free from criticism, assessment, and evaluation where members of the team offer up any idea, no matter how far-fetched it may sound. The purpose is to think outside-of-the-box, and the goal is to generate as many ideas as possible. A significant period of time should be provided between the brainstorming session and the evaluation of the ideas that are generated, (days or weeks), so that ample time is provided to accept divergent opinions or to review idea viability.

Brainwriting
Brainwriting is like Brainstorming, but differs slightly, in that it ensures that everyone on the team is equally involved. Everyone writes down their ideas and then passes them to the next person, who builds upon the idea or uses the idea as a trigger for another idea. The cycle continues until everyone has ideated on everyone else’s idea. This method eliminates social loafing and reduces the evaluation apprehension that may occur during traditional brainstorming methods.

SCAMPER
This technique requires you to substitute, combine, adapt, magnify or minimize, put-to-other-use, eliminate, and rearrange or reverse to spark creativity. As illustrated by Josh Linkner in “Disciplined Dreaming: A Proven System to Drive Breakthrough Creativity" in the cereal market, SCAMPER looks something like the following:

Substitute – Corn Flakes led to Bran Flakes (substitute ingredient).
Combine – Raisin Bran was born from combining bran flakes with raisins.
Adapt – Cinnamon Toast Crunch borrowed the flavor of cinnamon toast and then adapted it into a cereal recipe.
Magnify or minimize – Frosted Wheat became Frosted Mini Wheat.
Put to other use – Rice Krispy Treats are now packaged in separate units and sold as a competitor to the candy bar.

…etc. you wind up with a completely new product by simply looking at the current product in a new and different manner.

Squirrel Box
A free association exercise, the squirrel box involves a box filled with small random items. Participants are asked to choose one of the items and then brainstorm around the item and its possible relationship to the problem statement. The items may be included because the facilitator had a few ideas about a possible connection to the problem statement, or the facilitator may not have any preconceived notions about the items. Participants should be asked to generate a significant number of ideas, e.g. 10-15 to be sufficiently expansive.

Morphological Analysis
Also referred to as an “idea box,” this technique requires that you establish parameters and then list variations for each parameter. The list should be relatively robust in order for the exercise to be effective, such as a set of four parameters and list a of ten variations for each parameter. When you combine at least one variation from each parameter you end up with 10,000 possible combinations to explore! An idea box for publishing may include parameters such as type (fiction, textbook, mystery), properties (sound, shape, texture), processes (manufacture, marketing, design), and forms (hardback, magazine, software).

After careful consideration is given to the parameters and variations, this exercise has the potential to maximize creativity and innovation in the shortest period of time. All it requires is that you look at the grid and make a choice. Not bad.

I had a blast in this course. Not only did we theorize about creativity and innovation we walked away with real and practical tools to use in our organizations.

The Return-on-Investment of Search Engine Optimization

2012-11-03T09:33:00.012-04:00

(updated 2021)

Website owners may hear that search engine optimization is a foundational requirement, if you want to generate positive return on your efforts. Unless you are technically savvy, an expert, or otherwise interested in the internet of things, the advice is typically generalized and without much instruction. This leaves most of us passing it off to an expert. Even so, you should know the value of your investment, and the trade-offs of outsourcing over developing in-house talent. For these decisions, you may need something a little more concrete than a passing understanding of SEO, including the SEO-ROI connection.

Search Engine Optimization (“SEO”)
SEO encompasses all facets of making a website or a brand visible and readily accessible to the consumer through unpaid search engine tactics. A website’s SEO components may include the following:

• Metadata
• Strategic Keywords
• Internal Links
• Reputable Outbound Links
• Inbound Links
• Anchor Text
• Site Map
• Content Structure
• Load Time
• Comment Management
• Paid Advertisement Links
• Web Crawler Management

Branding SEO components may include the following:

• A Facebook status update that connects the consumer to a product promotion page

• A tweet that connects followers to a new blog post
• A LinkedIn post that connects job seekers to a career site

This communication type appears in search results independent of the originating social network.1

Additionally, search results are also impacted by the number of shares and the amount of traffic generated, so it would be remiss not to include these results as a part of the SEO landscape.

”Acquiring new customers is important; but maintaining current loyal customers is arguably even more important: It costs less to market to and to maintain loyal customers, a 5% increase in retention increases profits by at least 25%, and loyal customers contribute up to ten times more to the bottom line than irregular customers.”

- Lifetime Value of a Customer

Return on Investment (“ROI”)
Whether you hire a professional or assign an internal resource, it’s easier to gain buy-in from stakeholders when the added monetary value can be conveyed.

If you are a non-web based business, with only occasional SEO needs, the choice between outsourcing and developing the talent internally, may be fairly easy decision. In the long-run, it will cost less to outsource and get occasional maintenance, than to pay a salaried specialist. Also, the cost to implement would be so nominal, you probably would not concern yourself with the nuances of deriving an estimate of the expected profit generated by SEO, versus the expected future cost for SEO. But, if you're a web dependent business, the choice to outsource versus develop talent, is not as evident. You'll need SEO updates as industry changes, and you'll want to know what to expect, and how to determine the value of the SEO efforts. In addition, if you are product based business with frequent website updates, you will want more regular monitoring to ensure that SEO settings remain optimal.

Fortunately, ROI is a measure that explicitly captures a project’s value. It's flexible enough to use as an initial indicator of value, as well as for ongoing analysis. ROI will also provide a basis for comparing the value of several projects, such as the expected benefits of implementation compared to the cost to outsource and the cost to develop in-house talent.

SEO-ROI METRICS
There are four key areas to assessing the ROI of SEO, no matter who executes the technical or branding SEO efforts:

• Pagerank is the value that search engine algorithms assign to your webpages. Monitor ranking by site, page, or link and see if you hit your target, e.g. top 10 search results.
• Traffic patterns can be monitored by referring site as well as geographic location. For branding and promotional efforts, the success of a specific link should be monitored concerning the volume of visits generated, which triggers consideration of link/site popularity.
• Keyword searches should be performed regularly for the top five keywords. Monitor the results and note the changes in position, positive or negative, for each keyword. Furthermore, track the search terms used by visitors. Note which are used most and note the trends for favored keywords that diverge from your organization’s current top five.
• Bounce Rate: Always scrub against the bounce rate data. It will help to determine if a chosen keyword association is detracting from SEO-ROI. It will also help to pinpoint the degree of effectiveness of traffic generated by branding and promotional links.

Monitoring performance is never an easy task, and is subject to the organization’s structure, goals, tactics, budget, etc. However, the exercise is well worth the headache. Establishing value puts the organization on the right track and helps to get the needed stakeholder buy-in.

---

1. "Although this has not traditionally been considered a part of the SEO landscape."

This text was removed, because eight years later, this is commonly considered for SEO. A long time ago, I was ahead of the curve on this stuff!

The Lifetime Value of a Customer

2012-10-20T09:35:00.112-04:00

(updated 2021)

Many American women begin wearing makeup daily, once they enter the workforce. The amount of make-up worn varies from a simple lip gloss to full makeup (e.g., foundation, mascara, blush, lip liner, lipstick, eye shadow, nail polish, etc.). For women entering into a professional or corporate arena, the likelihood of wearing full makeup increases.

Thanks to Max Factor and Elizabeth Arden, makeup has been ingrained in the western social fabric as an essential part of a woman’s routine. This expectation is enforced by friends, family, female role models, and advertisements. Because grooming is an inextricable part of human socialization, there exists a very profitable market for these very essential cosmetics.

The Rise of M·A·C
MAC, an acronym for Makeup Artist Cosmetics, began in the entertainment industry and was made available to the public in 1995. It emerged as the third upscale makeup line that catered to women of color, after Fashion Fair and Iman; and the first to embrace the entire spectrum of skin colors. MAC offers its customers a portfolio of looks, gifts, and how-tos for weddings and special occasions. Their products can only be found in their own specialty shops or high-end departments stores such as Nordstrom and Macy’s where personnel provide one-on-one attention. Despite their industry clout, the products are competitively priced, making it unnecessary to compromise style for cost. All of these factors have made MAC especially attractive to women, and one of the top selling brands.

MAC continues to honor its roots with a Pro Membership program that connects artists with a worldwide community that shares a passion for makeup artistry. This program is available to those who use makeup as a primary part of their work, as well as industry professionals who work directly with artists. It’s endorsed by professional makeup artists everywhere, as well as “fashionable” entertainers, such as Taraji P. Henson, Ariana Grande, and Lady Gaga.

Calculating One Customer’s Value
A woman will use makeup for approximately 40 years of her life. We can assume a brand loyalty of eight years for the industry. At one time I would have assumed 10 years, as historically, new brands were not introduced often; however, in recent history, new brands have been introduced more frequently. For the sake of making the calculations simple, we’ll assume the following:

Continuous referrals from each new customer.
Referral from any one individual limited to an eight year period.
An average Return on Sales of 12.17%; based on parent company financials (Estee Lauder 12/2019 pre-crisis).¹
One annual purchase; although some many customers will obviously purchase more frequently.

Purchase price of ~$279.00, based on a study of the average expenditure at Sephora and Ulta.² The calculation considers that cosmetics is lumped into a general category of beauty products, which includes lotions, cleansers, masks, scrubs, etc., and that these venues are not likely the primary source of other beauty products: (((($33.17 Sephora + $28.78 Ulta)/2)*12 months)*0.75 makeup's share of beauty purchase =$279).

Year	# Cutomers Beginning	Referrals	# Customers End
1	1	5	6
2	6	30	36
3	36	180	216
4	216	1,080	1,296
5	1,296	6,480	7,776
6	7,776	38,880	46,656
7	46,656	233,280	279,936
8	279,936	1,399,680	1,679,616

Metric	Equation	Result
Annual Individual Value	(1year * $279 annual expenditure)	$279
Lifetime Individual Value	(8 years * $279 annual expenditure)	$2,232
Lifetime Network Value	(Lifetime Individual Value * Network of 1.7 million)	$3,748,902,912
Profit Generated	(Lifetime Network Value * 12.17% Return on Sales)	$456,241,484

Calculating the lifetime value of a singular customer, illustrates how one singular customer is potentially worth hundreds of millions of dollars.

Focusing on the lifetime value of a customer converts them from a transaction into a potential relationship; and quantifying the value can serve as a great rallying point for employees. Anyone who has ever visited a MAC store knows they do a fairly good job of creating a physical environment conducive for relationship building. To personalize your visit, they ensure that there is an exchange of names, and they assign a singular associate to you, for the duration of the visit. When customer service representatives are stable, consistent, and focused on meeting the customer’s needs it reduces the likelihood of customer-employee friction. MAC is a good example of successful execution. They make the effort to provide service beyond a simple purchase of cosmetics, ensuring satisfaction and building customer loyalty, maybe for a lifetime.

The Implicit Value
Acquiring new customers is important; but, maintaining current loyal customers is arguably even more important. Moreover, it costs less to market to and to maintain loyal customers, than it costs to acquire new customers. With current customers, you've already paid the acquisition costs; and happy customers are reluctant to change vendors not just because they're satisfied, but they also avoid switching costs.3 4 According to consultants Bain & Company, current customers are also more profitable.5 A 5% increase in retention increases profits by at least 25%. Additionally, over the relationship lifetime, loyal customers contribute up to ten times more to the bottom line than irregular customers.

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1 Mactrends: Estee Lauder Profit Margin

2 Coresight Research: Going Head to Head in Beauty Retailing

3 Investopedia: Acquisition Costs

4 Investopedia: Switching Costs

5 Bain & Company: Prescription for Cutting Costs

Five Branding Mistakes to Avoid

2012-10-06T09:09:00.244-04:00

(updated 2021)

Branding can be one of the most fun and creative efforts you embark on. It can also be very challenging, especially as your brand matures and may need to diverge from its original path to remain relevant. Either way, here are five mistakes that all business should avoid:

Imagine there's an End to Branding Efforts

Memories are short. Brands that have staying power work hard to maintain their brand at the forefront of our memories. The thing that everyone loves about sports, and brands that seem to stay on top, is their hustle and evident team spirit. The expertise and precision performance that shines through is evidence of that hard work. And we admire those who are willing to go the extra mile, to ensure team success. The sports analogy is applicable to almost any other endeavor. Your customers will stick around if you continue to work hard for them.

”Branding should be thought of as the introduction to your organization as well as a reminder of the sales and marketing objectives of your organization. It conveys what your organization is about, and with each interaction it becomes the internalized billboard for what the stakeholders should expect from your company.”

- Six Basic Rules of Branding

Fail to Embrace Feedback
If feedback indicates there is a perception contrary to your intent, and the source is reputable, accept, apologize, and change the behavior if necessary. There's no sense in arguing or deflecting. Your brand’s perception, communication, and buzz are your responsibility. In addition, you want to appeal to a broad array of individuals in your target market. It doesn't help your cause to diminish an opinion that others in your market may also think, but have not expressed.

Implementing measures such as press releases, advertisements, and social network profiles that proactively perpetuate the desired brand image, and reactive measures, such as statement issuance, can help to control damage to your brand's image. These measures cannot resolve all challenges you may face from dissenting opinions. For the times when control measures are insufficient, taking ownership and listening will let your entire consumer base know that they are important, that their opinion matters, and that you are willing to serve them and their needs.

Fail to Connect with the Target Market
Just as beauty is in the eye of the beholder, truth can be subjective. If your truth does not seem to connect to your market, the problem may be two fold. It could be your message that is tone deaf, trending towards obsolescence, or slightly ahead of the curve. It could also be that your target market is misaligned and needs to be adjusted. Either way, the issue should be addressed, as your brand will lose credibility pushing a message to a disinterested audience.

Fail to be Flexible

In real life nothing ever goes as planned. This is an inevitability that all successful companies will face; and those that survive economic and business cycle turmoil, remain flexible. They can change, pivot, and adapt their strategic direction, or even their business model to maximize their likelihood of success. In branding, it's important to remember that not only does the business environment change, but people’s taste, desires, and needs also change. If you remain flexible enough to allow for the evolution of your brand through your markets' creative synergies, it may actually help your organization to flourish.

Fail to Quantify Branding Efforts
Numbers are not everything; but monitoring, analyzing, and synthesizing data can help you identify the most value added activities of your organization. It may seem like a daunting task, but it's actually fairly easy, and new tools are developed all of the time to help organizations readily assess the value of their branding efforts. Tools such as GoogleAnalytics and Salesforce Social Listening help to identify your consumer’s likes and dislikes.1,2 They also help you to set alerts and monitor trends, so that you can identify when a methodology or strategic tactic is no longer effective.

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1 Google Analytics

2 Salesforce Social Listening

The Key to Sound Decision Making

2012-06-12T07:14:00.008-04:00

(updated 2021)

"Is it the shoes? It’s got to be the shoes."

Maybe I'm dating myself, but I remember this Nike commercial and catch phrase, in reference to Michael Jordan, master and summa cum lade of indoor flight! When you have someone that’s really good at what they do we usually wonder “What’s their secret to success?” When it comes to leadership and decision-making there are many factors to consider, such as training, experience, capacity, desire, etc. However, I can guarantee you that a primary factor in their success is their ability to make sound decisions, or their ability to think critically.

What is Critical Thought?
Critical thought can be defined as logical reasoning; and the ability to evaluate the merits of an argument or opinion. A good decision maker possesses a high aptitude for logical reasoning and deduction. Decision making presupposes the author’s capacity for conceptualizing, applying, analyzing, synthesizing, and evaluating information to make a precise assessment. A critical thinker draws upon a breadth of knowledge, and listens for cues and clues from others and the environment, to synthesize an educated opinion or decision.

In order to achieve and sustain a balance of complicated and often conflicting concepts decision makers must actively cultivate critical thought as a mode of being. Ultimately, it is mutual openness – a collaboration of perspectives – that yields sound decisions.

The Value of Critical Thought
An important leadership responsibility is dealing with complexity and providing direction during times of uncertainty. Many times, the complexity of issues and vastness of the impact may seem overwhelming, which is why we put our best eyes on the issue at hand. Like a computer with the ability to satisfactorily consider the human condition, we expect leadership to accurately assess the situation and to provide a most-likely outcome scenario, as well as the steps that we must take to achieve the desired results. Leadership implies the application of our best minds and most appropriate skill sets.

Effective Leadership
The thought process must be critical to be effective. Thinking for thinking’s sake is insufficient, and a waste of good meeting time. We can all pretend to be leaders by holding the requisite meeting, but if the meeting content is awry then so too is the meeting’s output.

”I think it’s time for us to develop new lines of thought, to observe new insightful correlations and interactions, and to incorporate what we may not have ever considered previously. We can't have an accurate measure of economic development without consideration of societal developments, including changes in attitudes, values, and expectations. It may be “fuzzy logic,” but our pursuit of happiness may in fact be a stronger driver than previously recognized.”

- Undeniable Inextricability of the Entrepreneurial Spirit

Critical thinking refers to the quality of thought, and includes the ability to consider differing perspectives to draw fair and accurate conclusions. Critical thinking also requires the personal capacity for vision and innovation, as well as its anti-thesis, practicality.

Many Boards of Directors use assessments to help choose the right CEO and self-assessments to ensure continued Board effectiveness; however, most other organizational committees are not required to use any type of assessment measures. Organizations are only as good as their leadership and the translation of their message into effective actions. When organizations take care to ensure that proper leadership is in place across all levels of the organization, organizational effectiveness can be realized.

Greatest Risks Posed by Social Media

2012-05-08T07:29:00.006-04:00

(updated 2021)

Companies of all types and sizes are adopting the use of social media for their marketing campaigns, but many are forgetting to consider the risks inherent in having a social media presence. There are platforms and widely known metrics that help management to measure the organizational value of social media marketing, but I rarely see a qualitative or quantitative framework that helps management to control their risk exposure. Although social media began as a personal tool for networking, it quickly lent itself as a marketing tool. As such, the potential effects of social media marketing efforts should not be underestimated; it should be fully vetted in the same manner that other organizational strategies are reviewed.

Strategic Risk
According to Pew Research, 93% of Americans use the internet. In just 20 years, the use of the internet has increased by 40% and the saturation is such that businesses are almost forced to engage in business online.¹ Most organizations have embraced the shift to digital engagement with their customers. Ninety-two percent use some form of social media marketing, but only 44% of Chief Marketing Officers say they can quantify the impact of their efforts.² Sixty-three percent of marketing professionals believe social media marketing is a valuable strategy; however, 67% struggle with strategy design and data analysis.³ Although the ability to value social media marketing is still a work in progress, businesses have at least acknowledged the potential strategic risk: the risk arising from the failure to implement appropriate business decisions in a manner that is consistent with the institution’s strategic goals.

”Acquiring new customers is certainly an important consideration, but maintaining current loyal customers is arguably even more important.”

- Lifetime Value of a Customer

To effectively address strategic risk, organizations should recognize that social media usage is about more than establishing a social media presence. There are both pros and cons to usage, and appropriate expectations, parameters, and targets should be established and adhered to. In addition, the strategy should be implemented in alignment with the organization's needs and goals including human capital, marketing, technology, and financial considerations. The results of social media marketing efforts should also be reviewed regularly, as an errant marketing effort can potentially alienate your core customers.

Reputation Risk
Reputation risk refers to risk arising from negative public opinion including dissatisfied customers, interactions inconsistent with policies, security breaches, and exposures caused by third-party relationships. Many organizations underestimate this risk because social media is free. However, free does not mean without value, expectation, or risk:

Value: A disgruntled customer, using a free service as a means to communicate, may reduce their time expenditure by typing 280 characters instead of a 300 word email or letter. They may also have reduced the organization’s expense for staffing a 1-800 contact number.
Expectation: But this customer may also expect a faster response.
Risk: And their inquiry could result in widespread negative sentiment about the organization, especially if the communication is shared/retweeted/upvoted/etc.

In recent years, companies have gotten better at responding to customer complaints on social media.
According to a Harvard Business Review study, 48% of US consumers use social media to evaluate an organization's interactions with customers.⁴ Responding to complaints and inquiries should help to control negative word-of-mouth and potential loss of revenue.

”…the most successful companies in our sample generally responded to complaints with a public message inviting the customer to continue the conversation using a private channel.”

- Harvard Business Review

Social Media is about engaging the consumer, which implies active involvement from both the organization and the consumer. Many reputational risks can be overcome relatively painlessly:

Create and communicate the organization’s philosophy concerning social media to all employees.
Respond promptly and effectively to consumer complaints, no matter the form.
Give the social media marketing responsibility to someone who can recognize the importance of responding to consumer complaints as well as the importance of disseminating a message that is consistent with the organization’s intent.
Have your processes reviewed regularly by an independent third party who can provide objective insight into the effectiveness of your process.

Operational Risk
Operational risk refers to the risk of loss resulting from inadequate internal processes, people, and systems or from external events. Mistakes happen, and most are forgivable; but it only takes one major misstep to cause significant damage. Errors can never be eliminated; however, the risk exposure can be effectively reduced by the following:

Ensure that the person that delivers organization’s message understands the mission, branding strategy, and desired outcomes so that they can effectively manage the organization’s social media presence and mitigate potential risk exposure.
Check the social and political environments daily and ensure that planned communications remain appropriate, to avoid appearing offensive or tone deaf.
Ensure that planned communications are proofread prior to distribution.
Have your processes reviewed regularly by an independent third party who can provide objective insight into the effectiveness of your process.

One of the largest disadvantages of communicating via social media is that the art of communication can be lost in translation. The receiver cannot see the sender’s face or body language for the emotional and behavioral cues that add meaning. This can leave the communication open to interpretation. Implementing controls that maintain your message in alignment with the organization’s mission and appropriate for the current environment should reduce the organization’s risk exposure.

Strategic, reputational, and organizational risks are the greatest risks of social media marketing. However, the risk analysis should not stop with these considerations. In addition, the solution set to address these risks should be expanded as necessary to remain commensurate with the level of risk. More complex marketing programs and issues may require retention of a lawyer, retention of a publicist, employment of a public relations representative, or employment of other specialists to handle the risk.

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1 Pew Research Center: Internet/Broadband Factsheet

2 MDG Advertising: The ROI of Social Media [Infographic]

3 Statista: Usage Trends of Social Media Platforms in Marketing

4 Harvard Business Review: Why You Shouldn't Engage with Customer Complaints on Twitter

Capital Budgeting Across Business Units

2012-05-01T07:35:00.006-04:00

(updated 2021)

To gain perspective on the choices of a large corporation, their budgeting process, and how (or if) they manage to avoid various measurement pitfalls, an interview was completed with the Facilities Manager of one Strategic Business Unit (SBU) of a Fortune 500 Corporation.

The Interview
His Capital Budgeting responsibility begins with a presentation of the site's needs assessment and a “wish list.” His responsibility terminates with the actual conclusion of the various projects’ execution. At this level, the Capital Budget is split into two categories, Major Capital Projects and Local Capital Budgeting.

Major Capital projects (over .5 million) are decided as a SBU. Individual sites compete with one another for funding of these projects and the decision criteria for funding are 1) business needs and 2) Return on Investment.

For Local Capital Budgeting, each site receives funding for improvements based on a certain percentage of the site’s value. Individual projects are prioritized by the greatest need. These projects are further broken down into two more categories, Infrastructure and Process Improvement. An infrastructure project includes safety, environmental, capital replacements, and energy saving projects while process improvements are primarily cost reductions. Infrastructure projects may take precedence over Process Improvement if it is a question of compliance.

Net Present Value (NPV) analysis is performed, and the Internal Rate of Return (IRR) is also examined.

Observations
In analyzing Company X’s methodologies, there are four areas we found of particular interest:

The use of a hierarchy in the decision-making for projects over .5 million.
The competitive element of the decision-making process.
The use of a percentage of site value as a determinant for the Local Capital Budget.
The use of the NPV method in conjunction with IRR for judgment of project attractiveness.

The fact that there is a hierarchal decision-making process for projects that cost more than .5 million is of benefit to the company. In this manner the risk of mis-management is reduced. The problems of conflict of interest, empire building, entrenching investment, and risk avoidance are reduced within the organization. Utilizing a competitive element in the process encourages management to put their best foot forward, and further reducing the potential for agency costs.

By utilizing a percentage of site value as a factor for Local Capital Budgeting it would seem that older sites are at a disadvantage, thereby leading to less funding. For infrastructure purposes in particular, an older site may require the most funding. The following clarification was provided:

“The factor that’s used is ERV (estimated replacement value)”. That levels the playing field in that it allows each site to get about the same percentage based on what it would cost to replace the site in total, in today’s dollars, with today’s technology. It’s not a good practical measuring stick as much as it is a good comparison tool. Being a financial tool and not an engineering or construction value measuring tool, the actual value of a site would be much more than what is provided using ERV. Older sites that have not kept up with year-to-year infrastructure needs are at a disadvantage. That’s why from day one of a facility’s existence it is important to plan for and to initiate modernization and renewal activities.”

From this statement it is interesting to note that although the use of ERV fulfills the need to provide an equitable financial measure, from the perspective of the Facilities Manager the tool does not provide an accurate measure of site value.

Like many organizations, Company X recognizes that NPV analysis provides an unbiased way to evaluate projects by taking into account both the time value of money and the opportunity cost of capital. By discounting anticipated cash flows at an appropriate hurdle rate, the site can objectively consider multiple projects side-by-side. This is especially important for mutually exclusive investments where the site must choose between competing projects.

With NPV as the key driver for project acceptability it is a constructive methodology to utilize IRR after NPV analysis. Although IRR can be misleading in the evaluation of mutually exclusive projects, it provides the percentage return on each dollar invested in a project. Employing IRR in this manner, giving it secondary consideration, avoids the associated problems and adds value to the decision- making process.

”Although the statement, “the psychology of financial matters,” will feel like an oxymoron, it’s actually a fairly accurate reflection of reality. At first assumption, finance seems as if it should be an objective and logical science. But, derivatives of mathematics do not necessarily retain all of the same characteristics as the parent. Like most derivatives, the ultimate behavior is inextricably tied to human behaviors.”

- Psychology of Finance

Conclusion
Categorically splitting the Capital Budget and utilizing a hierarchy in the decision-making for Major Capital Projects is a sound method for ensuring reduction in agency costs. The competitive element of the process further enforces diminished agency costs. Utilizing ERV as a determinant for the Local Capital Budget is a useful financial tool that ensures all sites receive equal valuation. However, it is not necessarily an adequate method for deciding actual project implementation. The use of NPV in conjunction with IRR is an appropriate method. NPV allows the site to determine in absolute terms the value in today’s dollars of a given project. By utilizing IRR on a project-by-project basis and not as a comparison tool across projects, common pitfalls are avoided and the greatest benefit is attained.

Finding the Right Channels

2012-04-24T07:45:00.008-04:00

(updated 2021)

Promotion of a brand, product, or service isn't complicated; but, it does require tact and diplomacy to send the right message to the right audience. And as if that isn't complicated enough, marketing communication channels continue to multiply: print media, televised commercials, search advertisements, social networks, email, and mobile applications. But, not all traditional marketing channels are viable options, and all new channels are not the right choice for every company.

Traditional
Some traditional modes of communication are antiquated (tele-marketing), some are expensive (television), and then some are always a good choice when feasible (face-to-face) but non-intrusive (door-to-door). Studies also show that both old and young continue to respond positively to direct mail, as it is the old standard with implicit credibility. A lot has changed in the last 50 years, only tele-marketing and door-to-door marketing can be considered completely obsolete and avoided entirely.

As for radio, commercials, DJ recommendations, and “shout outs” are beneficial. Even with the introduction of commercial free satellite radio, internet radio, and mp3 vehicle capability, traditional radio remains a viable channel.

Source: Pew Research1

Newer streaming options are becoming increasingly attractive as barriers to access decline.

Source: Pew Research1

With YouTube and other options with sponsored advertisement, streaming is no longer limited to costly satellite radio. Less restriction has driven usage up.

Social Networks
Social networking is another area of exponential growth that can complicate the communication channel choice. There is no right answer or proven formula, although there are ongoing studies that attempt to “nail it down” to a science. Despite the uncertainty, there are a few emerging trends:

If you are a niche type company you may benefit from engaging in established forums for that niche. However, if your company is not so defined and serves overlapping markets your choices increase exponentially and it may not be feasible to engage in every possible social network.
The solution for the multi-dynamic organization is to engage in at least one of the big-4: Facebook, Twitter, LinkedIn, and Instagram.
Preliminary studies suggest that B2C (business to community and business to consumer) do well on Facebook and Twitter. Facebook is great for service focused businesses. People of all ages use the platform; but the largest audience is between 25 and 49 years old.

B2B (business to business) do well on Twitter and LinkedIn. Twitter is perfect for news, politics, and entertainment oriented businesses and individuals. LinkedIn is great for networking, as ninety-five percent of businesses and recruiters include LinkedIn in their social media mix.
For Instagram, B2C influencers, coaches, products, and services do well. The audience is youngish, (e.g. ≤ 35), and split ~ 50/50 between male and female audiences.

Email
Email is a step between traditional and non-traditional methods, and a solid channel for sending special messages to your audience. A coupon, an event, or an update are all good reasons to send a fancy yet informative email to customers willing to receive it, open it, and perhaps respond in some matter. Email has been around for approximately 50 years, and although Generation Z may not favor this channel, Generations X and Y grew up with it, and Baby Boomers are the pioneers that made it a corporate staple. Since it appears to be a happy medium that is well suited for business, email is likely to remain viable for the foreseeable future.

Email is a welcomed replacement for tele-marketing and door-to-door sales. Customers can scan their email and get the best deals, without the potential annoyance or intrusion elicited by the older methods. Platforms such as mailchimp and constant contact require customers to “opt in” to prohibit spamming. They also encourage customers to report abuse, so that emailed marketing campaigns are more welcomed due to “pre-screening”.2,3 The ability to tailor preferences, to prohibit undesirable behaviors, and to accommodate any business type helps to maintains the credibility and desirability of email as a channel for communication.

Mobile
Mobile is the newest communication channel and the most integrative mode since email, as it includes phone, networks, text, email, books, music, games, and transactions. For many organizations the mobile explosion is not really a direct concern because unrelated platforms provide consumers access to social networks and email via their mobile device. But, for organizations that offer electronic based services, the mobile app offers a great opportunity to provide customers specialized mobile services.

The cost to develop an app continues to decline, and some companies allow you to begin building an app for free or at a low cost, such as appypie and appsheet. Hiring a developer will still require a significant sum of money for the initial investment.4,5 But, transaction intensive business should recoup those costs quickly.

Achieving the Goal
The problem with being technically savvy is two-fold, first the right mix is a constant moving target and second the art of communication is often lost in translation. The first issue can be addressed readily by staying current on industry news, the second issue is often more difficult to discern.

With technology, the receiver of a message cannot see the sender’s face or body language for the emotional or behavioral cues that add meaning to communication. This leaves the communication open to interpretation and dependent on the viewer’s mood and comprehension. I could write a whole post on this point alone. So let's suffice it to say that no matter the channel of choice, we must create succinct messages, remember the receiver's disadvantage, and be willing to communicate to understanding. If we complete this with a little compassion we'll deliver a memorable service or product, make a customer happy, or successfully expand brand awareness - all of which are admirable business goals.

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1 Pew Research: https://www.pewresearch.org/journalism/chart/sotnm-radio-online-radio-listenership/iframe/#chart

2 Mailchimp: https://mailchimp.com

3 Constant Contact: https://www.constantcontact.com

4 Appypie: https://www.appypie.com/app-builder/pricing-plan

5 Appsheet: https://www.appsheet.com

Web Analytics

2012-04-17T07:53:00.130-04:00

(updated 2021)

Metrics used for management oversight can vary drastically from one organization to the next, but there are usually a core set of metrics that emerge as vital to monitoring efforts, within a particular industry. Those metrics become the industry standard that enable equitable comparison across all organizations that operate within the industry. The same is true for measuring and monitoring social media efforts.

The initial development and implementation of a comprehensive monitoring program can be time intensive, but it's usually a worthwhile endeavor. Although vast, social media is not rocket science. If you have ever put together a piece of IKEA furniture, you can implement a successful system for measuring and monitoring your efforts. The mechanics are fairly straightforward, and there are tools available that simplify the process, such as Google Analytics.1 These platforms make it easy to capture the data from your social engagement efforts, and translate it into meaningful information.

1. Characteristics
1a. Demographics

Age
Gender
Interests

Observe the segments that value your product/service the most.

Segmented data provides valuable insight so you can focus efforts on the most profitable customers. It also aids in diagnosing failed efforts, as you can observe correlations between the gender, age group, and interests, such as technology, sports, or cooking. Having this information provides context for strategy shifts, such as discontinuing a marketing effort, or revising a failed strategy.

1b. Traffic Source
Learn the geographic location of your customers, immediately prior to engaging with your site.

With location insights you can not only identify which regions provide the most traffic to your sites, you can also determine what people tend to like about your product/service, based on region. Given this information, you can create region specific campaigns to maximize the effectiveness of your efforts.

2. Behavior
2a. Visitors and Unique Visitors
Learn about your repeat customers, and the level of new interest your efforts have generated.

Instead of knowing general information, such as the total number of site visitors, you are armed with specific visitor details: how many are repeat customers, how many are new customers, and how this compares to prior periods. This is a key to monitoring the effectiveness of your efforts to reach and grow your target audience.

2b.Bounce Rate
Observe how many visitors land on your site, and find it engaging enough to stick around.

The bounce rate measures how many visitors landed on one page, and did not complete any other action on your site. Analytic tools capture this data and enable you to compare results against prior periods, so that you can determine if marketing campaigns are successful, or if efforts to improve site engagement are necessary. It's important to note that for this metric, resolution of poor performance can involve more technical elements such as site metadata and keyword selection, (see 5. Keywords).

2c. Conversion
Learn how many visitors went beyond just visiting your page, and became an actual customer.

This provides proof of the value of your social media campaign efforts to convert visitors into customers. This metric can track any additional action you value, including newsletter sign ups, advertisements, and purchases. This is particularly helpful for e-commerce sites and advertising campaigns, as it provides a direct correlation between revenue and consumer actions, and allows you to determine the degree of success with precision.

3. Revenue
Observe the revenue generated by each individual visitor or target segment.

Google Analytics refers to this as “Lifetime Value.” They enable you to view total revenue figures for a selected time period for individual customers, or acquisition channels, (e.g. email, social media, or search results). This enables ready identification of the most profitable customers, so that you can adjust marketing efforts, as necessary.

4. Benchmarking
Establish acceptable performance parameters.

Google Analytics has performance data for more than 1600 industry categories across email, social, referral, organic search, paid search, and display advertisement channels. You can compare the number of total visits, the number of new visitors, and the bounce rates to observe industry trends and to establish performance targets.

” Fortunately, ROI is a measure that explicitly captures a project’s value. It's flexible enough to use as an initial indicator of value, as well as for ongoing analysis. It also provides a basis for comparing the value of several projects, such as the expected benefits of implementation compared to the cost to outsource and the cost to develop in-house talent.”

- The Return-on-Investment of Search Engine Optimization

5. Keywords
Learn the key terms that potential customers use, and align your organization’s meta data accordingly.

This factor is closely related to search engine optimization, and if you have misaligned your meta data, your keywords are useless. Useless keywords increase the likelihood that you will experience increased bounce rates, which negatively impact your search ranking. Beyond the numbers and percentages, misaligned keywords can frustrate current and potential customers, which may mean reduced positive word-of-mouth.

C-Suite Value
Web Analytic platforms enable management to set daily, weekly, or monthly alerts so that they can be responsive to the positive or negative impacts of social media communications and campaigns. Platforms typically offer a free version that can help small businesses maintain expenses low, and offer a paid version that's robust enough to handle the needs of mature organizations.

The output of analytics platforms provides proof of the value for your outreach and campaign efforts via social media. They help management to keep marketing efforts on the right track, to better target and align their efforts, and to use social media as a driver of organizational growth. The capability, potential benefits, and reasonable price of these analytic tools should make for a harmonious adoption of social media analytics by the C-Suite.

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1 Google Analytics is used an an example of an analytics tool, and to illustrate the benefits of using an analytics tool. This article does not represent an endorsement of the Google Analytics platform, nor has the author been paid to use the platform as the primary example.

The Undeniable Inextricability of the Entrepreneurial Spirit

2012-04-03T07:57:00.009-04:00

(updated 2021)

According to the SBA, there are 31 million small businesses in the United States, which represents approximately 99.9 percent of all businesses. Almost half of all employees in the U.S. work for a small firm, and small businesses accounted for more than 60 percent of all new jobs created. Small businesses are also the first line of employment or the initial “training ground” for the workforce.

Although the Small Business Act was passed in 1953 as a means of leveling the playing field for returning veterans, and the shift from war production to familial focus, the wing span of the SBA continues to change with our economic requirements. This is evidenced by our continued reliance on the small business for ingenuity, growth, and development, beyond the baseline competition.

Too Important to Ignore
The need to nurture the entrepreneurial spirit does not qualify as “too big to fail,” but it's obviously “too important to ignore.” During the COVID-19 pandemic, the government certainly recognized this, and sent the SBA to the front lines of Main Street with the Paycheck Protection Program to keep the economy afloat.

The SBA found that across the 16 years from 1998 to 2014, the small business share of GDP fell from 48.0 percent to 43.5 percent. Over the same period, the amount of small business GDP has grown by about 1.4 annually, while GDP for large businesses has grown faster, at 2.5 percent annually.1

”Integrity is one of those things that make our country desirable. In a free world, you worship as you please and move about at will; however, there are ground rules: we have morals and they are upheld. Without the promise to uphold our agreed upon morals society disintegrates into barbarism.”

- They Underestimate Integrity

There's no solid conclusions yet concerning the driver of the decline; but I'm sure the driver is multi-faceted, with the availability of capital to startup and to grow playing a small role.

Traditionally, workers at large corporations were expected to fit a mold. But we are indeed human - complex one-of-a-kind originals. Trying to fit us all into a few specific molds simply makes for an oppressed and unfulfilled workforce. In recent years, large corporations made changes to recognize individuality and to make room for creativity, so that they could retain their highly specialized talent. This may also be a factor in the decline in small business GDP share.

However, I doubt that it's a primary driver, as seasoned workers are choosing entrepreneurship over Corporate America. Generation X has opted for fulltime entrepreneurship, and Baby Boomers are choosing early retirement from Corporate America in pursuit of their entrepreneurial happiness.2

Recognizing the Happiness Quotient
Economic development refers to the enhancement of our productive capacity. It can be defined as the concerted actions of policymakers and communities to promote the standard of living and economic health. Economic development can also be considered as the quantitative and qualitative changes in the economy. As our old economic models become obsolete, or undergo revision due to their proven irrelevance, I think it’s time for us to develop new lines of thought, to observe new insightful correlations and interactions, and to incorporate what we may not have ever considered previously. We can't have an accurate measure of economic development without consideration of societal developments, including changes in attitudes, values, and expectations. It may be “fuzzy logic,” but our pursuit of happiness may in fact be a stronger driver than previously recognized.

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1 Small Business Administration: Small Business GDP 1998-2014

2 Kauffman Foundation: The Kauffman Index Startup Activity National Trends

The Economic Evolution of Our Future Selves

2012-03-27T08:07:00.011-04:00

(updated 2021)

The Industrial Revolution transitioned the US from agriculture to manufacturing. Three technological revolutions latter, the US is now a service based economy. Approximately 70% of the US labor force is in the services sector; some sources say it’s closer to 80%. So, we’ve evolved from the procurement of raw materials for the production of goods, to the management of the processes to procure, produce, and create goods and services. And the more time that passes, the better we become at improving these processes. For example, Nike created a process that reduces the number of hand sewn sneaker pieces from 37 pieces to two pieces. The shoe is “knit” by a machine and weighs only 55% as much as the typical hand sewn Nike running shoe. Instead of factory workers, Nike employed computer programmers and engineers, effectively reducing factory labor by 96%.¹

All About Quality
Concepts such as the International Standardization and Six Sigma are taught to executives globally, and are well established as standards by which we work; improving upon predecessor concepts of Total Quality Management and Just-in-Time quality and delivery systems. Labor Unions have screamed about this for years – jobs leaving the US. But, it’s a catch 22. Americans simply will not work for the pennies on the dollar paid to foreign laborers. Given little other choice, Americans have become more highly educated and apply their skills to the ever growing services based economy.

The impact of this change is two-fold, ramping down physical labor intensity and ramping up brain power. Intensive thought processes and collaborative efforts to innovate and streamline mundane processes enable us to focus on more theoretical nuances, and should eventually evolve us into a better quality of life.

No Man Left Behind
As Big Brother obtains the latest and greatest technology to enhance the quality of life for his residents, he passes back the baton of older technology; now affordable by the advent of newer technology. Now, underdeveloped siblings can also continue their quest for an improved quality of life. Thus we witness the advancement of not one country or one people, but of the entire human race.

”Since humans created the economic and financial systems, it should be no surprise that psychology plays a significant role.”

- The Psychology of Finance

Our Future Selves
Demand for innovation requires that we not just learn, but that we actively apply our knowledge. We’ve adapted to the information age where knowledge is power and the “power” is more widely distributed via electronic means. Fewer are factory workers, working long hours on their feet, under poor conditions; and more sit at a desk, in a cubicle, at a laboratory, etc. and ideate solutions to problems. We organize information, we analyze data, we assess, we draw conclusions, we tweak processes, and we offer perspective. We evolve.

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1 Bloomberg: Is Nike's Flyknit the Swoosh of the Future?

They Underestimate Integrity

2012-03-20T08:07:00.014-04:00

(updated 2020)

Integrity is defined as adherence to moral and ethical principles; soundness of moral character; honesty or the state of being whole and undiminished. It is an underlying principle required since the founding of America and remains our lifeblood. It generates the world’s expectation of an industry leader, an incubator for innovation, and center of respect. Who are we without integrity?

Crisis and The Lack of Integrity
The 2008 financial crisis was most unusual in that markets that were previously thought to be stable, crashed for the first time. Also, a fully interdependent global economy meant an extensive global impact. This was perhaps the most embarrassing crisis in recent history as executive after executive revealed a lack of standards, a lack of morals, a lack of forethought, a lack of competence, or a lack of concern as one of the major reasons for the role that they or their company played in the system failure.

Integrity is one of those things that make our country desirable. In a free world, you worship as you please and move about at will; but there are ground rules: we have morals and they are upheld.

Without the promise to uphold our agreed upon morals, society disintegrates into barbarism. So we found a pattern of loopholes that were exploited as opposed to closed or avoided:

The highly-regulated banking industry agrees not to misinform the public and to deal fairly when lending; so the non-regulated mortgage brokers did the dirty work, mis-informed borrowers, lent beyond the borrower’s repayment capacity, and created unsound mortgages. What happened to the promise?
Let’s not forget the derivatives brokers who had not taken responsibility to consider nor monitor the risks of each underlying instrument and the potential interactive risks created by a derivative instrument. Where was the standard to be upheld?

Culture and Integrity

Despite our differences, as a consumer we generally agree that we want a fair representation of the politician, the product, the service, or the system that we are buying into. It is our right-to-know and we are given the option to say no. If we expect this in our personal lives, why does this not necessarily translate to our work lives? The moral is: do unto others as you wish done unto you. Religion is an option; moral behavior is not.

As Greg Smith, former employee of Goldman Sachs explained:

“It might sound surprising to a skeptical public, but culture was always a vital part of Goldman Sachs’s success. It revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients. The culture was the secret sauce that made this place great and allowed us to earn our clients’ trust for 143 years. It wasn’t just about making money; this alone will not sustain a firm for so long. It had something to do with pride and belief in the organization.”

Somewhere along the line integrity was lost. For a civilized culture to persist integrity must be sustained.

”The negative energy of one individual’s interpretation of the solution can be the driver of negative results. Likewise, the positive actions of one optimistic person can drive positive results.”

- Five Actions for Success

ROE: No Banks Allowed

2012-02-07T07:14:00.007-05:00

(updated 2021)

In graduate school, one of the topmost measures used to measure the strength of a business entity was Return on Equity (ROE). However, when I began work in the world of banking regulation, I was surprised to discover that ROE is generally discarded. Instead, Return on Assets (ROA) and Return on Average Assets (ROAA) are more important. I was also delighted when Robert Jenkins, a former Audit and Risk Committee Chair of the CFA Institute, not only confirmed this difference in his interview ROE: The Wrong Performance Measure for Banks, but he also explained the dichotomy in a manner that anyone can understand.1

The Evils
According to Mr. Jenkins, the use of ROE encouraged banks to maintain equity low and leverage high, which destabilizes the banking system. Although ROE is a measure shareholders are trained to monitor, it is meaningless for year over year performance comparison. When ROE is measured and monitored, the true test is for long-term

value. Therefore, the value in assessing the institution’s performance in relation to a ROE target does not exist prior to ~15 years. Unfortunately, institutions often misuse this measure and manipulate results to gain misguided shareholder buy-in.

BASEL III
Robert Jenkins believed that the right targets should be established to encourage maintenance of elevated levels of equity. His cause is helped by the research and development of new rules made effective by Basel III.²

Previously, financial institutions were required to measure the risk to capital; however, the system was not comprehensive. As we discovered during the 2008 financial crisis, the mortgage brokers that originated and sold bad assets to the banks were unregulated, and the rating agencies really had no way of identifying and rating the characteristics of complex mortgage derivatives. This disconnect created significant inaccuracies in the risk weighting of assets, leaving banks blind to the true level of risk on their balance sheets.

For a system to be effective, the right hand must know what the left hand is doing, and the same definitions must be used to create a common understanding. With Basel III the financial system is recognized as a system, so that systemic risks can be appropriately and sufficiently identified, measured, monitored, and controlled.

”Since humans created the economic and financial systems, it should be no surprise that psychology plays a significant role.”

- The Psychology of Finance

An Alternative
Mr. Jenkins further discussed the plausibility of a Return on Risk Weighted Assets (RORWA). Although RWA is utilized in capital calculations, (e.g. total risk adjusted capital to RWA), RORWA is a new concept, in considering profitability in relation to risk adjusted assets. I like the concept. It's a painless yet significant change; it works to shift the executive mindset, so that adjustments for risk become inherent in the business process; and as management utilizes a risk adjusted short-term measure, projections should converge toward the mean, becoming more reasonable and reliable.

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1 CFA Institute: The Wrong Performance Measure for Banks

2 Basel Committee on Banking Supervision: BASEL III

Your Competitive Environment

2012-01-17T07:30:00.008-05:00

(updated 2021)

Awareness
Any leadership book worth reading will tell you that awareness is essential. Whether it’s self-awareness for the sake of self or self-awareness for the sake of others, (e.g. emotional intelligence), being aware and prepared to respond appropriately to both normal and unusual stimuli is a cornerstone of leadership.

Often times our peers “test” our knowledge of current events and controversial topics; the test is not necessarily for the sake of testing, but in the interest of holding a friendly conversation. Inevitably that conversation is processed, and their perception of the conversation is what that co-worker, friend, family member, or acquaintance shares with other peers: if this was this an average conversation there's probably no need to share the experience; was it an abnormally arduous conversation they will likely feel compelled to share a negative report; and if it was a fun and enlightening conversation they will likely share the good news.

We are social animals that share our experiences; it’s a normal expected occurrence. This very human interaction is the same reason why business owners should be vigilant in maintaining an awareness of their environment. Remaining alert and ready to provide an appropriate response sends the signal to industry peers, employees, and customers that you’re serious about your business, you’re reliable, and you’re ready to serve. Additionally, the environment is constantly sending feedback about the health of your company. Is the report average, negative, or positive, and are you aware enough to pick up on the signals?

Competitive Analysis
A competitive analysis entails the collection of data on competitors and factors that effect your competitive advantage, such as market share, pricing, and anticipated events. Most business owners complete an initial analysis of their company’s environment, as part of a business plan. They identify their competitors and they carve out their niche in the market based on the analysis. Often the Strengths, Weaknesses, Opportunities, or Threats (SWOT) technique is applied:

SWOT	Question	Examples
Strengths	What is your competitive advantage?	more variety lower cost structure proprietary technology
Weaknesses	What do you need to improve?	increase brand recognition reduce overhead improve customer service
Opportunities	What events could improve your competitive advantage?	acquisition of a competitor new products/services favorable changes in laws or regulations
Threats	What events could derail your competitive advantage?	new market entrant higher costs for raw materials unfavorable changes in laws or regulations

This framework helps to ensure that owners view the organization from a 360 degree perspective.

As the rigors of running a business set in, it can be a challenge to revisit the business plan and reassess the competitive environment through an objective lens. Ideally, a competitive analysis is an on-going process that engages diverse perspectives to avoid myopic decision-making. Our competitive environment is constantly changing; if you operate based on old information, you may actually work against your cause - giving your competition the advantage.

Trend Identification
Maintaining awareness of the company’s environment on a regular monthly, quarterly, and annual basis helps business owners identify relevant changes in current trends, as well as new emerging trends and issues. This is especially important during turbulent economic times, and times of industry uncertainty. Proactive monitoring enables proactive action and decision-making, versus reactive emergency response.

Businesses are impacted by global, national, regional, local, and industry specific events; therefore, identification of macro and micro environmental trends is valuable, no matter the size of the business. Identifying trends may also provide an edge over a competitor that lacks relevant competitive intelligence.

”The negative energy of one individual’s interpretation of the solution can be the driver of negative results. Likewise, the positive actions of one optimistic person can drive positive results.”

- Five Actions for Success

Demographics
Much like competition, demographics are constantly changing. Not necessarily every year; but, you cannot know when a significant shift occurs unless you monitor the landscape.

Relevant demographics may include age, gender, race, employment level, salary level, education level, location, home ownership, births, deaths, and industry concentrations. Noting significant shifts in demographics, and any correlations to consumer preferences, helps business owners to make informed decisions about product placement, new product introduction, product retirement, and company expansion or contraction in local markets.

Strategic Direction
All of the aforementioned factors help to ensure that your business maintains a relevant strategic direction. How can you possibly know how many units you can expect to sell without having a real sense of your market? What happened last year is not sufficient for projecting this year’s growth and revenue. Is there increased competition? Is there readily available market share to capture due to the exit of a competitor? Is there a market opportunity due to the increased buying power of a market segment? Are you in position to capitalize? Or has the industry experienced a reduced barrier to entry that could threaten your market share?

These are not difficult questions. But they do require leadership that completes thorough and objective analyses on a regular basis, to remain alert and aware of the competitive environment in which they operate.

Five Actions for Success

2011-09-29T07:00:00.010-04:00

(updated 2021)

Success is generically defined as, "The favorable or prosperous termination of attempts or endeavors; the attainment of wealth, position, honors, or the like." The "or the like" part suggests an elusiveness and reluctance to confine - as success, much like beauty, is in the eye of the beholder. In practice, there are many ways to define success, but I also think there are a few standard signals we can all agree are indicators of success.

Have a Positive Attitude
I once worked in a retail environment where, "The Customer is Always Right," took precedence over employees. Damages, theft, and returns reduced management bonuses; however, management was typically disallowed from refusing returns, stolen or not. At this particular site, the manager chose to hold customers accountable for her possible bonus reduction. Even good citizens became suspects.

During a return, the manager would approach the cash register, approve the transaction, with a cocked head and smirk; she would thank the customer and immediately walk away, sometimes slamming the office door as her exit. Eventually, customers ceased to patronize the store, and the site was eventually closed.

The negative energy of one individual’s interpretation of the solution can be the driver of negative results. Likewise, the positive actions of one optimistic person can drive positive results.

”Did you know that a simple smile has a measurable effect on your overall well-being?”

- The Hidden Power of Smiling

Communicate to Understanding
Someone once told me that, "communication is the root of all evil." I don’t necessarily agree with that assessment; but, I do think that communication methodology/delivery can create misunderstandings. Language is one of "those things" where people may hear or perceive your message differently than what you intended.

According to human communication theorists,words account for 7% of understanding, tone accounts for 38% of understanding, and 55% of understanding is body language. So, we pick up several cues at once before making an assessment of the speaker’s message. On the flip side, your message must get through the receiver’s personal filters, and their interpretation, before they actually "hear" what you said.

The best way to ensure your message is not misunderstood, is to simply remain willing to communicate, until an understanding is reached. Don’t assume your message was clearly received, be prepared to re-tool the communication, and be willing to apologize for the misunderstanding – even if it is mother nature’s fault – if you take ownership, you get to be the hero.

Value Differences
To get anything accomplished, it takes two people, at minimum. Remember this and it becomes easier to "bear with," "tolerate," or "permit," others to diverge from your norm to get a job done. Of course, this does not mean let go of your integrity, or accept sub-par results. It simply means that not everyone is you, and you may have to allow people to approach a problem in a manner that differs from your approach.

Value the differences of your team, find the benefit of their perspective, and amplify the strengths of their perspective while minimizing subjective weaknesses.

Embracing the spirit of creativity does not guarantee a win. In fact, it could open a door to failure. But as the saying goes, “You never know unless you try.”

- Embrace Creative Failure to Realize Your Best

Focus on the Goal
There’s nothing wrong with being people oriented or people centric. But, to achieve maximum effectiveness, it is crucial to focus on the common goal and to look beyond personality differences, methodology differences, and differences in learning or perception.

Maintaining focus on goal achievement helps team members to make the goal their priority in lieu of a preoccupation with personal dislikes. Continued refocus on the goal not only helps the team to be efficient; but, it also provides an opportunity for team members to appreciate one another’s contribution.

Be Accountable
Have you ever been a part of a project team and one, or several members, failed to make an acceptable contribution? Those team members may get to share the grade; but, they don’t get to share the long-term respect. Those individuals eventually gain notoriety as poor performers. Don’t be like them, always do your part, at minimum. And if you're ambitious, go the extra mile and do it before you’re asked, then ask if there is more you can do to help the team meet its goals and objectives.

Being a valuable team player should pay off in the end through position, honors, wealth, or some other form of recognizable success.

The Psychology of Finance

2011-09-27T07:00:00.101-04:00

(updated 2020)

To some, the statement, “the psychology of financial matters,” will feel like an oxymoron. But, it’s actually a fairly accurate reflection of reality. At first assumption, finance seems as if it should be an objective and logical science. But, derivatives of mathematics do not necessarily retain all of the same characteristics as the parent. Like most derivatives, the ultimate behavior is inextricably tied to human behaviors.

We may rule the world, but we are still vulnerable to nature, each other, and unknowns. We’re more optimistic when we are secure and confident in knowing what comes next in our story. We’re arguably much more pessimistic when we cannot be certain as to how our story ends. And when there are threats, and the magnitude of the impact from those threats cannot be known, fear will persist.

Banking
On October 14, 2008, the Treasury implemented the Troubled Assets Relief Program (TARP), which infused cash into institutions by purchasing illiquid assets, and the Capital Purchase Program, a subprogram, that provided a capital injection by way of the purchase of preferred stock.^1,2 These efforts were intended to help financial institutions to stabilize their balance sheet, and to become willing to lend again to prime borrowers, and stimulate the economy. Many banks took the money, ($300 billion total); but, they hoarded the funds, and the goal of increased systemic liquidity was never realized. Recipients feared they may need the money later, for themselves; that additional assets might deteriorate, and that regulators would require yet more capital to cover fresh losses. Granted, the fear was not entirely unfounded; but, by this time, the systemic problems had been identified. It was after the March 2008 sell-off of Bear Sterns, the July 2008 IndyMac Bank failure, the September 2008 Lehman Brothers failure, the September 2008 Washington Mutual Bank failure, and the September 2008 AIG Bailout. The issues at these institutions were well known before it became a public disaster. That's the nature of bank regulation. Regulators are on the front lines identifying the weaknesses, and management's plan for resolution. When management can't figure it out, regulators step in; bankers know this. So, when the Federal Reserve devised a plan for aid, they were offering more than just a temporary bandaid; they were providing a substantial life raft to help ensure institutions could weather the storm.

Other financial institutions refused receipt of TARP funds for fear that shareholders would perceive them as weak or undisciplined for needing government funds for continuing operations. The problem was systemic and not necessarily indicative of risky behavior, at least not for the majority of institutions. Nonetheless, machismo prevented many from accepting much needed help. Descartes once said, “I think therefore, I am,” however, sometimes, we think too much.

Neither ideology concerning TARP really served the intended purpose. Fear ruled the day, and we effectively “psyched” ourselves out.

Amazingly, during the 2020 COVID-19 Crisis, the exact opposite phenomenon was witnessed as banks flocked to government programs to demonstrate to stakeholders that they had sufficient liquidity. But, then a lot of lessons were learned from the 2008 Financial Crisis, and the Federal Reserve stepped in immediately with a plethora of new and different programs to avert a liquidity crisis.

Wall Street
On Wall Street, pricing is more than just a simple function of reward or punishment for actual performance. Pricing incorporates a degree of speculation concerning future performance, based on current sentiment: do we “feel good” about the prospects, and to what degree of certainty can we say our feeling is accurate? Is it an inevitable plausibility, or a faint and distant marginal possibility? Yes, statistics, probability, calculus, and maybe even a little algebra can be in these considerations, when you are trying to arrive at the conclusion. But, the outcome is being driven by a qualitative wet finger in the air trying to gauge which way the wind is blowing, and how much fear may be warranted.

We have witnessed huge swings in the stock market, for no real apparent reason. A great example are the swings throughout the later half of 2011 when in August, October, and December large changes were likely triggered by the August 8, 2011 downgrade of sovereign debt from AAA to AA+. Still high quality investment grade debt, and likely the ratings agencies attempt to rectify some past wrongs. But, the response was as if the debt quality had fallen to BBB+. Fear permeated the air, and the ensuing volatile market schizophrenia was a direct reflection of our global sentiment. Other swings are more predictable and warranted, such as the March 2009 and March 2020 declines that directly correspond to cataclysmic events, e.g. the Financial Crisis and COVID-19. At these times, it probably seemed like the sky was falling. When the masses feel like this, stocks fall, and security blankets rise, in the form of gold prices and bank deposits.

In May 2012, CNN Money built a model to capture sentiment, as a measure of fear vs. greed. Their Fear & Greed Index includes seven equally weighted indicators to arrive at an overall sentiment:

Stock Price Momentum: The S&P 500 versus its 125-day moving average
Stock Price Strength: The number of stocks hitting 52-week highs and lows on the New York Stock Exchange
Stock Price Breadth: The volume of shares trading in stocks on the rise versus those declining.
Put and Call Options: The trading volume of bullish call options / trading volume of bearish put options
Junk Bond Demand: The spread between yields on investment grade bonds and junk bonds
Market Volatility: The VIX which measures volatility
Safe Haven Demand: The difference in returns for stocks versus Treasuries

This model is not intended to be not an indicator to buy or sell assets, but as a general indicator of market sentiment.

Consumers
At 70% of GDP consumer spending drives the economy. But, all purchases are not equal - some drive our emotions, while others are driven by our emotions.

Sixty-nine percent of Americans shop online at least yearly, 25% shop online at least monthly, 16% shop online at least weekly, and 2% shop online daily. And despite the convenience of online shopping, 56% of Americans still prefer to shop at brick-and-mortar stores.3 Visits to brick and mortar establishments will be a hard habit to break, as shopping remains one of America’s favorite pastimes. It’s often a social outing, a fun excursion with friends and family, promising to culminate in the fulfillment of a need, want, or desire. Happy social activities flood your system with feel good endorphins, so why would you give that up?

We may experience stress and anxiety when faced with a critical purchase, such as one that requires a long-term commitment, (e.g. a house), or one that will make the difference between abundance or scarcity, (e.g. groceries before a winter storm, or a pandemic). Stress releases a not so feel-good hormone, cortisol, to regulate your fight-or-flight response.

Then there are times that we make purchases specifically to relieve stress, those impulse buys - the splurge on the junk food or designer handbag that we don’t need. Or maybe you engage in retail therapy. If so, you’re not alone. Depending on which study you believe, approximately 65% of shoppers say they’ve also shopped to relieve stress. I googled “retail therapy” and arrived at an theory at Psychology Today, an advisory at Experian, and referenced psychological studies on Forbes. So it’s definitely a thing.^4,5,6

Our emotions are inextricably tied to money, directly and indirectly, for business and personal reasons. As much as we like to imagine ourselves as completely logical beings, it’s not factual; we are also very emotional organisms. Since humans created our economic and financial systems, it really should be no big surprise that psychology makes a guest appearance.

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1 Investopedia: Troubled Asset Relief Program

2 Investopedia: Capital Purchase Program

3 NPR: NPR/Marist Poll

4 Psychology Today: Why Retail Therapy Works

5 Experian: How to Deal (and Prevent) Retail Therapy

6 Forbes: Retail Therapy, Does it Help?

SEO Matters

2011-09-15T07:00:00.010-04:00

(updated 2025)

Website owners may hear that search engine optimization (SEO) is a foundational requirement, if you want to generate positive return on your efforts. Unless you are technically savvy, an expert, or otherwise interested in the internet of things, the requirements may sound like something that’s better left to the experts. Whether you hire someone to implement your SEO strategy or choose to do-it-yourself, you should know the value of your investment, and the trade-offs of outsourcing over developing in-house talent. For these decisions, you may need something a little more concrete than a passing understanding of SEO, especially the SEO-Return-on-Investment (ROI) connection.

Simple SEO Definition

SEO enables search engines to find your website quickly, and helps to provide an enjoyable experience for the consumer, throughout their visit. It entails using commands that instruct crawlers to provide the desired consumer experience. These commands can also maximize the visibility of your website, and maximize the credibility of your website.

The SEO Umbrella

SEO encompasses all facets of making a website or a brand visible and readily accessible to the consumer through unpaid search engine tactics, include the following:

• Strategic Keywords
• Metadata
• Internal Links
• Reputable Outbound Links
• Inbound Links
• Anchor Text
• Site Map
• Content Structure
• Load Time
• Comment Management
• Paid Advertisement Links
• Web Crawler Management

Branding SEO components may include the following:

• A Facebook status update that connects the consumer to a product promotion page
• A tweet that connects followers to a new blog post
• A LinkedIn post that connects job seekers to a career site

This communication type appears in search results independent of the originating social network.

Additionally, search results are also impacted by the number of shares and the amount of traffic generated, so it would be remiss not to include these results as a part of the SEO landscape.

”Acquiring new customers is important; but maintaining current loyal customers is arguably even more important: It costs less to market to and to maintain loyal customers, a 5% increase in retention increases profits by at least 25%, and loyal customers contribute up to ten times more to the bottom line than irregular customers.”

– Lifetime Value of a Customer

Why You Should Care

Each search engine, (Google, Safari, Microsoft Edge, etc.), has its own algorithm and user interface, complicating the process of getting your business recognized online.

Current research shows that 90% of us use search engines, and over 6 billion searches are completed each day. Approximately 80% of people say they research online, before making a large purchase, and 85% of search engine users say they found what they needed during their search. So, there is too much business to be procured online to ignore any major search engine, and any major SEO strategy. Paying for search is an option; but, it isn’t necessary, as most people still have an aversion to advertisements.

Only 15% of search is generated via paid advertisements; 50% of search traffic is generated via organic search, and 10% is generated via social media.

Keywords and Position Matter

The top factors that impact the likelihood of a consumer finding your page are a function of keywords and your site’s bounce rate. A keyword helps the consumer match their need to your offering, and the bounce rate is indicative of how often the consumer could not accurately match their need to your product or service. The right keyword(s) and lower bounce rates encourage search engines to place your site in the top ten search results.

Sites listed in the top five search results receive over 60% of all click-through traffic, and the first ten search results receive 70% of all click-through traffic.

Obtaining a search result position ahead of your competition improves the likelihood that the consumer purchases the good or service they need from you versus your competitor.

Choose keywords that provide an accurate description of your product or service, and use them as often as possible on your site, within reason – without becoming spam-like. Maximize the relevancy of your keyword by identifying the most sought after verbiage across search engines, and optimize your keyword positioning by using them in unique combinations, to distinguish yourself from the competition. The keyword planning function of Google Ads is free.

”Feedback is the lifeblood of greatness. Formal or informal, solicited or unsolicited, known or anonymous, it can provide valuable insight into the organization’s perceived and real performance.”

– Fundamentals of Good Stewardship

Metadata

Metadata is another important factor. It’s found in your site’s header, pages, photos, products, services, and blog posts, and provides explicit instruction on how your site should be presented to the public, and other crawler actions:

No-index identifies pages that should not be crawled and available in browser search results.
Nofollow identifies links that should not be considered in the ranking of your site; this is especially good for blog posts that may include links to outside sources that you do not necessarily endorse.
Sponsored should be used to identify paid links or content.
User-generated Content (UCG) is specific to blogs and publishers and should be used in the comments section of the website.
Noarchive forces web crawlers not to cache your site and to maintain the most current version of your site available. This is especially important if you make frequent changes to your website.
Adding a caption to photos is metadata that can serve as a strategic keyword opportunity.
Including searchable tags or categories to your product or service, such as #pink #sweatshirt, or #financial #advisor, is metadata that helps consumers match their needs to your company.

Many platforms provide quick methods of adding metadata, especially tags/categories. Metadata such as no-index and noarchive are typically placed in the <head> of your website or page. Metadata such as nofollow, sponsored, and ucg are specific and should be used at each occurrence of a link or comments section. Providing metadata instructions to web crawlers directs search engines to focus only where you specify, and also helps to disassociate potentially harmful information that can reduce your ranking and search result visibility.

ROI

Whether you hire a professional or assign an internal resource, it’s easier to gain buy-in from stakeholders when the added monetary value can be conveyed.

If you are a non-web based business, with only occasional SEO needs, the choice between outsourcing and developing the talent internally, may be fairly easy decision. In the long-run, it will cost less to outsource and get occasional maintenance, than to pay a salaried specialist. Also, the cost to implement would be so nominal, you probably would not concern yourself with the nuances of deriving an estimate of the expected profit generated by SEO, versus the expected future cost for SEO. But, if you’re a web dependent business, the choice to outsource versus develop talent, is not as evident. You’ll need SEO updates as industry changes, and you’ll want to know what to expect, and how to determine the value of the SEO efforts. In addition, if you are product-based business with frequent website updates, you will want more regular monitoring to ensure that SEO settings remain optimal.

Fortunately, ROI is a measure that explicitly captures a project’s value. It’s flexible enough to use as an initial indicator of value, as well as for ongoing analysis. ROI will also provide a basis for comparing the value of several projects, such as the expected benefits of implementation compared to the cost to outsource and the cost to develop in-house talent.

SEO-ROI Metrics

If you’re running a campaign, it’s easy to identify the total dollar return of campaign and divide it by the total campaign expenditure to arrive at the campaign’s ROI. But when you’re not running a specific campaign, determining the ROI of SEO efforts can be more complicated. The following are four key areas in assessing the ROI of SEO:

• Pagerank is the value that search engine algorithms assign to your webpages. Monitor ranking by site, page, or link and see if you hit your target, e.g. top 10 search results.
• Traffic patterns can be monitored by referring site as well as geographic location. For branding and promotional efforts, the success of a specific link should be monitored concerning the volume of visits generated, which triggers consideration of link/site popularity.
• Keyword searches should be performed regularly for the top five keywords. Monitor the results and note the changes in position, positive or negative, for each keyword. Furthermore, track the search terms used by visitors. Note which are used most and note the trends for favored keywords that diverge from your organization’s current top five.
• Bounce Rate: Always scrub against the bounce rate data. It will help to determine if a chosen keyword association is detracting from SEO-ROI. It will also help to pinpoint the degree of effectiveness of traffic generated by branding and promotional links.

Changes in the aforementioned can be divided by the number of hours dedicated to SEO, the salary of committed employees, the money paid to third parties, etc., to arrive at a ROI.

Monitoring performance is never an easy task, and is subject to the organization’s structure, goals, tactics, budget, etc. However, the exercise is well worth the headache. Establishing value puts the organization on the right track and helps to get the needed stakeholder buy-in. In addition, SEO can help to optimize the organization’s visibility, especially when a wide an array of SEO tactics are implemented, (e.g., a establishing a social media presence, a blog, a podcast, a newsletter, white papers, and business listings). However, it’s not necessary to have a presence on every social media outlet or to implement every SEO tactic; it’s more important to choose the mix that best suits the organization, and to make that presence the absolute best representation. The goal of SEO is to enhance your online retail space by making it both customer and search engine friendly. In the end, you’ll reap the rewards of increased awareness and visibility.