Reveries: Cool News of the Day - marketing people, insights, innovation, ideas

Warranty Psychology

Tim Manners — Tue, 10 Nov 2009 10:43:04 +0000

It turns out that the happier you are while shopping, the more likely you are to spring for an extended warranty, reports Damon Darlin in the New York Times (11/9/09). Retailers know this, of course, and price the warranties accordingly: "For instance, a four-year warranty on the Nikon D3000 camera at Best Buy is $150, or more than 27 percent of the $550 price. The warranty on a Hewlett-Packard N270 netbook is $130, or just short of a third of the computer's $400 price."

However, Consumer Reports says that overall failure rate of 10 brands of cameras over a three-year period is just 10 percent. For televisions, it is just three percent. For laptops it is 43 percent, "but that includes accidents and keyboard spills (which often aren't covered by basic extended warranties)." Meanwhile, "washing machines, which typically have a far higher failure rate than television sets, carry extended warranties that are about eight percent of the product's price)."

Apparently, this is because it's harder to sell a shopper on a warranty for a product that they're just not all that excited about. A study by the Journal of Consumer Research (link) "found that people were more likely to buy warranties on products that brought them pleasure ... than on ones that were merely useful." The study "also found that people were more likely to buy an extended warranty if they received a discount on the product, especially an unexpected one. The windfall makes people feel good. And a positive mood makes people more risk-averse because they are afraid of losing that good feeling, which makes potential losses look greater."

Shoptimism

Tim Manners — Tue, 10 Nov 2009 10:42:38 +0000

A new book by Lee Eisenberg takes a look at why Americans just can't quit shopping, even when times are bad, reports Laura Vanderkam in the Wall Street Journal (11/2/09). Lee's last book, The Number, offered "a new way of looking at retirement." This new one, Shoptimism, "aims to offer a similarly novel view on the big idea of buying and selling." As Laura notes, "There is a coincidental affinity between the subjects: One of the reasons we have such trouble saving for retirement is that merchandisers are so good at getting us to part with our money."

She also observes that much of what Lee has to say on the subject has been covered before, by the likes of Paco Underhill (Why We Buy) and Martin Lindstrom (Buyology). But she says "it's entertaining to have it compiled in one big-box store of a book." And while she thinks Lee "misses opportunities to create a more compelling narrative," he does come up with some interesting observations. For example: "Black Friday shoppers, just after Thanksgiving, say that they're battling the crowds on behalf of themselves rather than shopping for loved ones."

But Laura thinks the book gets bogged down in "endless taxonomies of shoppers (e.g., Bring-Back Queens and Friends of Faux"). But she does give him props for "the overarching argument inherent in his title: Shopping, in modern America, is fundamentally an optimistic activity. While our shopping habits are easily manipulated, they are not quite as irrational as critics like us to believe ... we buy because 'buying is fun, sociable and diverting, an escape from a boring, predictable existence'." And, ultimately, that's why, "recession or not, it's hard to keep Americans out of the stores."

High Fidelity

Tim Manners — Mon, 09 Nov 2009 10:43:05 +0000

A roundtable with Richard McDonald of Fender, Steve Rotterdam of DC Comics, Peter O'Reilly of the NFL, Joe Dobrow of Sprouts and Spencer Hapoienu of Insight Out of Chaos. (more)

Whole Trees

Tim Manners — Mon, 09 Nov 2009 10:42:39 +0000

"... A whole, unmilled tree can support 50 percent more weight than the largest piece of lumber milled from the same tree," reports Anne Raver in the New York Times (11/5/09). That's according to research by the Forest Products Laboratory, and it is the organizing principle of Whole Trees Architecture and Construction, which uses whole, small-diameter trees -- those too small to mill -- to build homes, commercial buildings as well as greenhouses. "Curves are stronger than straight lines," says Roald Gundersen, who runs Whole Trees with his "life and business partner," Amelia Baxter.

"A single arch supporting a roof can laterally brace the building in all directions," says Roald. It's also both cost-efficient and environmentally-friendly, he continues: "It's eminently more frugal and sustainable than milling trees ... These are weed trees, so when you take them out, you improve the forest stand and get a building out of it. You haven't stripped an entire hillside out west to build it, or used a lot of oil to transport the lumber." The designs are pretty cool-looking, too (images). Typically Roald uses "small-diameter trees as rafters and framing ... and big trees felled by wind, disease or insects as powerful columns and curving beams."

"It almost feels like we're in a forest, the trees have such presence," says Marcia Halligan, a client. Roald's designs are also passive-solar, with "double-paned glass, positioned to optimize the low-angle winter light," facing south. The concept is especially useful for Roald's solar greenhouses, which "can extend the growing season through the winter, even in a place where temperatures can drop 30 or 40 below." Cost to build a home is "as low as $100 a square foot," and Roald says demand is growing, especially for smaller homes. "I've taken 20 trees per year off one acre, for 12 buildings," says Roald. "You can never tell that we've taken that much wood."

Here/Nau/NYC

Tim Manners — Mon, 09 Nov 2009 10:41:55 +0000

Jean-Pierre Veillet is creating a pop-up boutique "using materials ... almost entirely rooted in New York City's waste stream," reports Eric Wilson in the New York Times (11/5/09). This includes "fallen tree limbs found on the street, timber and metal pipes from derelict Brooklyn factories and piles of discarded cardboard boxes -- so that when the store closes, at least the garbage won't be new."

The boutique will be called Here/Nau/NYC and naturally "will carry products from several environmentally minded companies, including shoes from Timberland and Toms, organic dresses and sweaters from Stewart + Brown, bags made of recycled truck tarps from Freitag and the sleek, athletic designs of Nau." And so Jean-Pierre is busy fashioning displays out of cardboard and trying to turn bubble-wrap into lampshades.

So far, he's got clothes "hanging from a rolling rack made of old pipes, timber and mismatched wagon wheels." His main worry, he says, "is that it could end up looking clunky and cheap." Gordon Seabury, who owns Nau, refers to Jean-Pierre's approach as "dumpster-diving" but is "confident that the resulting decor would ultimately reflect the company's approach to considered design." Here/Nau/NYC is set to open November 12th at 69 Mercer Street for a six-week run.

Acrostic Politics

Tim Manners — Fri, 06 Nov 2009 12:24:00 +0000

Arnold Schwarzenegger may or may not have intended to send a coded message to a political adversary, but he definitely sparked interest in mathematics, reports Carl Bialik in the Wall Street Journal (11/5/09). Maybe you've heard about the acrostic message the Governator sent his legislature when he vetoed a bill recently. If you read the first letter of each of the message's seven lines, it spells out "a profane rebuke that starts with 'F' and ends with 'you'" (link). Arnold's people say the message was just a coincidence, but that seems unlikely for a number of reasons.

First, it happens that the bill's sponsor, Tom Ammiano, yelled "You lie!" as Arnold began to speak at recent Democratic Party event in San Francisco. And second, it seems like something Arnold would do. Even Tom thought it was "pretty funny." But most of all, it's the mathematicians who say the odds that the message was a coincidence are pretty slim no matter how you do the math. For instance, if you calculate that there's a 1-in-26 chance of each letter starting each line, that works out a 1 in 8.03 billion chance of coincidence.

Of course, some letters of the 26-character alphabet are used more often than others, so if you assume that Arnold's opening letters are "particularly common word openers," and assign each a 1-in-10 chance, that reduces the odds of an accident to "one in 10 million." Steven Piantadosi, an M.I.T. grad student, meanwhile, has analyzed texts "comprising 17.9 million words," and puts the odds of coincidence "at slightly less than one in one trillion." None of these calculations accounts for Arnold's personal patterns of use, but one mathematician, Edward Burger, thinks we should cut him some slack because," If nothing else, he's encouraging math education."

Bottle Puzzles

Tim Manners — Fri, 06 Nov 2009 10:38:17 +0000

Chad Pregracke finds all kinds of things while cleaning America's waterways, but is most excited when he finds messages in bottles, reports Lauren Ashburn in USA Today (11/5/09). Chad runs a not-for-profit called Living Lands & Waters, which "has trawled hundreds of miles of rivers from the Mississippi to the Potomac, picking up trash and piling it onto four barges he operates." He's found more than 12,322 balls, 587 milk crates, 775 refrigerators and 55,301 tires, among other things. But what he treasures most are the 70 messages in bottles he's found.

The bottled messages he and his crew have collected are sometimes poignant, such as one from a mother to her dead child. Sometimes the bottles contain fake treasure maps. One read: "I'm a blonde-haired, blue-eyed river girl looking for Mr. Right..." Unfortunately, the phone number was illegible. Another read: "I'm 8 years old and I live on a farm in Nebraska ..." Chad's favorite message is one he found "five or six years ago on the Ohio River, near Paducah, Ky," which contained a song, called "Lavender for You," written for guitar.

Chad had someone play it for him and muses, "Someday I'll retire on this music. It will be my hit song." Sometimes the messages are from people who simply want to know if their message is found. Says Chad: "I called one guy who was a truck driver and said, 'I think you threw this off a bridge in Burlington.' He was so pumped to hear from me." Usually, the phone numbers are no longer working, though. Chad saves all the bottled messages he finds, explaining, "It's somebody's story. It must have meant a lot for them to write it and send it out there. To throw it away wouldn't be right."

Subscriptions

Tim Manners — Thu, 05 Nov 2009 10:43:12 +0000

Thinking of purchases as subscriptions can be just as good for consumers as it is for marketers, suggests Damon Darlin in the New York Times (9/11/09). The beauty of subscriptions from a marketer's perspective is well known, of course: "Convince someone to take a subscription, and the revenue flows in for months to come ... Anyone who has signed up for a gym membership that is paid for but not used understands the genius behind subscriptions." Same for anyone who has rationalized paying $30 a month with Netflix without ordering any movies.

"It is amazing how inertia takes over," says Peter S. Fader of the University of Pennsylvania. But sometimes we adopt a subscription mentality even when there's no subscription involved. During the housing bubble, some people bought homes "with little or no money down, with the intention of holding onto it for two or three years before upgrading to a better home ... They were treating an investment in real estate as though it were just another consumable product, to be disposed of with the same emotion one shows in recycling a monthly magazine." That idea worked for some, for a while.

But Erica Mina Okada of the University of Hawaii sees some benefits to viewing purchases as if they were subscriptions, because frequent upgrades make us more efficient. For example, "upgrading to a more fuel-efficient car or ... buying a computer that crashes less often or boots more quickly" are tangible benefits. "People don't upgrade as frequently as they should if they were acting rationally," she says. Of course, this attitude would also "expand our disposal society." However, it might also provide a solution for web publishers seeking an escape hatch from "the free business model." As Professor Fader comments," It's hard to initiate subscriptions ... But once you get them over that hurdle, great things happen."

Truth, Lies & Loyalty

Tim Manners — Thu, 05 Nov 2009 10:42:22 +0000

Let’s just get this straight once and for all: There is no such thing as brand loyalty. Each of us likes certain brands and may even love them. We may buy them most of the time, or perhaps even every time. But the idea that we have a true bond with any brand, like the kind of commitment we have in real life with our friends and family, is a farce. This doesn't mean we shouldn't try to create that kind of loyalty; most of us tell ourselves that's the end game and it's always important to aim high.

What it does mean is that we should take a harder look at how we go about creating what we call loyalty. We need to admit that coupons, discounts, points and prizes are just beanbags. We ought to spend more time thinking about the stuff that really matters to people, and serve that up each and every day.

That means products and services that really and truly solve problems and help people live happier lives. Providing a helping hand when someone really needs it, and smiling because we truly mean it. It's not because the customer is always right (nobody's perfect). It's because it's up to us to make it right. We may not get the same kind of loyalty we enjoy with our family and friends, but we'll have more fun, and so will everyone else. Loyalty is what we make it. Your thoughts?

Roger McGuinn Folk Den

Tim Manners — Wed, 04 Nov 2009 10:30:14 +0000

This is a funny song written by James Stevens, the man who made Paul Bunyan famous, says Roger McGuinn in The Folk Den. (listen)