August 14, 2010

“GM Deal Helps Bad-Credit Buyers”

The facts:
- GM fails. Heads for bankruptcy as a result of years and years of failed leadership and inability to create inspiration for their customers.
- They file for protection.
- Enter President Obama with $45 Billion in financial help in return for a 60% equity position in the company.
- GM is reported to have $30 Billion in cash at the moment. Hmmmmm what to do?
- GM buys Americredit for $3.5 Billion cash. Why? To offer financing for “sub-prime” car buyers. (Seriously, this is a critical piece of their growth strategy!)
- The winners: Americredit and credit risky car buyers
- The losers: taxpayers, GM employees and the few loyal customers GM has left.

What is the CEO Mr. Whitacre thinking? What are the new owners thinking? Take taxpayers money and enter the financial risk business? Too much cash creating illusionary thinking. Too much cash looking for a place to park.

If you need a financing capability for the sub-prime buyers (making the stretch assumption that this segment is worth chasing), why not partner with someone to share the risk? Or sub-contract it out to another company who is already in the business and let them take ALL the risk? In fact I don’t understand why target this segment at all.

Are these the people Ford and others don’t want to serve? How do credit risky people contribute to the Company’s bottom line as compared to “good” customers? How big is the segment relative to the other less credit-risky groups? How fast is it growing? How much Shareholder Value does it add? Does it give a better return on investment that taking the $3.5 Billion and investing it in other customer segments? I just don’t get it.

An Industry pundit is quoted to say “If managed properly, lending to non-prime and sub-prime customers can be a source of profitability for automakers, retailers and lenders.” The operative words here are ”... If managed properly…”Isn’t mis-management what got GM into the mess in the first place? Why should I believe they will get it right this time? Oh ya, I forgot. A new CEO and lots of cash.

Heads up people. I smell another fiasco on its way. This could be a good case study for the importance of WHO to SERVE.

Cheers, Roy
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Posted 8.14.10 at 07:00 am by Roy Osing | Permalink | Comments (0)

August 11, 2010

Broadcasting: A Fertile Ground to BE DiFFERENT

I recently spoke to the Annual Conference of the BC Association of Broadcaster in Victoria BC. The topic of my presentation was “BE DiFFERENT: The Key to Stayin’ Alive”.

This was my advice:
- embrace the digital revolution. Opportunities abound if you are open to them.
- ignore the competitor hordes at your door. Spend your time focusing on how you intend to keep your audience from leaving as opposed to keeping the competitors from entering. Create Barriers to Audience Exit.
- stop thinking that you need to ‘reach ears’. It assumes that a specific advertising message will appeal to everyone. Not the case. Everyone is DiFFERENT with special tastes and interests. The challenge is to define small audience clusters of interested maniacal raving fans and target the appropriate message to them.
- mass markets are gone. In fact they have never existed.
- long live the emergence (in our minds) of differentiated customer clusters of interested, caring and connected people.
- advertisers are moving away from traditional media for two reasons: one, they look at ‘old’ media spend as an expense. Difficult to measure the ROI. Second, many are moving to on-line advertising. On-line ad expenditures will grow from $17 Billion in 2006 to $70 Billion in 2011. Reason? On-line advertising results be measured. On-line allows advertisers to treat their spend as a investment and justify it.
- if you can’t measure the ROI why are you spending the money? Traditional media needs to get on the ‘measure-the-results’ bandwagon.
- the ‘passive’ media product is under attack! Interactivity is more in demand. The Oscars this past year were actually viewed more than in prior years because viewers were watching with their computer in their lap. Exchanging Tweets with their friends. Reading live blogs from Entertainment experts. Using mobile devices.
- interactivity creates a DiFFERENT experience for media consumers. They like Experiences. Experiences require interaction.
- interaction should be the strategic theme of any media plan going forward.
- move from flogging passive programs to producing personalized Packages of Interactive Experiences. Target them to the raving fans that covet them. They are NOT for the mass of ears.
- covet the competencies you need to deliver the above. Many are going to on-line. If you don’t have the right people you don’t have a business.
- SEGMENT your audience. SEGMENT it again, and again and again until you are able to define audiences with special unique interests. Demographics don’t cut it. Discover the Secrets of people; use them to define your marketing approach.

The parallels between the challenges facing traditional media and the Telecom business (I spent 30+ years in it) some 20 years ago are staggering. I trust they will learn from our successes and mistakes.

Click here to view my presentation

Cheers, Roy
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Posted 8.11.10 at 08:00 am by Roy Osing | Permalink | Comments (1)

June 18, 2010

Reader Dialogue: Value-Based Offers and No Discounting

I enjoy having conversations with people who want to implement my BE DiFFERENT Practices. Jordan owns CJS Music, an on-line music lesson business. He is looking for advice on how to create a package without having to price discount. Here’s our latest exchange…

“Roy, We discussed a few weeks ago about how I could add more value into my services instead of discounting. I came up with a 25 lesson package that will include printed music flash
cards, a monthly report card from the teacher (me) and a free admission to one of our masterclasses during their studies with us. What are your thoughts on this?
Best, Jordan
PS I really like the twitter posts you are making very informative.”

My reply: Jordan, You are definitely on the right track. Make sure the attributes of your Package (i.e. the music cards etc.) are highly valued by your target customers. If not, you will have a clever Package that won’t resonate with customers. Test it . Do some Market Research to make sure the design is right.

The other point here is that if customers are not impressed with the overall value of the Package, they will not be terribly willing to pay you a Premium Price, right? Remember we don’t want to discount. Set your price and again do some testing with your target customer group for feedback. Once you are happy that your price point is ‘just about right’ then introduce the Package.

Be prepared to tweak it though if the market surprises you. Keep me posted.

Jordan is thinking about this the right way. Nicely done. Oh, by the way check out his ONLY Statement. Great job!

Cheers,
Roy
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Posted 6.18.10 at 07:00 am by Roy Osing | Permalink | Comments (0)

June 17, 2010

Amazing Maui: Service Excellence is Alive and Well

Two restaurants created happiness (the mantra of Zappos’ CEO Tony Hsieh) for me and my family during our recent stay in Kaanapali, Maui. They deserve mention in a culinary world where some choose to impose a TAX on dining groups, dis-empowering people from any right to tip on the basis of service value they receive.

Cheese Burger in Paradise, Front St. Lahaina welcomes groups to their establishment! Punitive automatic tipping isn’t in play there. Servers like Lucie from Montreal create an amazing adult and child hapiness experience (and probably the most ‘user-friendly’ upselling technique I have seen in quite a while) that made us hunger for more. We returned for this experience several times during the month we were there. Definitely a 10/10 on the BE DiFFERENT Service Scale.

Dukes on Kaanapali Beach is another ‘Welcome-to-our-place-we-are-delighted-and-honored-you-chose-us’ dining spot which we loved. They are part of the TS Restaurant chain which owns properties in Hawaii ans California. And yet unlike some of their larger peers like the Tropica at The Westin, they don’t apply the Tip Tax for groups. People make the difference, and Holly is no exception. She made us feel like we were the only ones in the world for a moment or two… awesome stuff. Another solid 10/10.

Specialness Attributes:
> policies that empower people.
> employees that care about you and love to serve you.
> you are made to feel special for the moment.
> spunky employees with sparkling personalities.
> people with a desire to CONNECT

A prescription for success and loyalty. Catch an experience at these spots if you have a chance.

Cheers, Roy

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Posted 6.17.10 at 08:00 am by Roy Osing | Permalink | Comments (0)