Many marketers work overtime to confuse us about money. They take advantage of our misunderstanding of the time value of money, of our aversion to reading the fine print, of our childish need for instant gratification and most of all, our conflicted emotional connection to money.
Confusing customers about money can be quite profitable if that’s the sort of work you’re willing to do.
A few things to keep in mind:
- The amount of money you have has nothing to do with whether or not you’re a good person. Being good with money is a little like being good with cards. People who are good at playing cards aren’t better or worse than anyone else, they’re just better at playing crazy eights.
- Money spent on one thing is still the same as money spent on something else. A $500 needless fee on a million-dollar mortgage closing is just as much money as a $500 tip at McDonalds.
- If you borrow money to make money, you’ve done something magical. On the other hand, if you go into debt to pay your bills or buy something you want but don’t need, you’ve done something stupid. Stupid and short-sighted and ultimately life-changing for the worse.
- To go along with #3: getting out of debt as fast as you possibly can is the smartest thing you can do with your money. If you need proof to confirm this, ask anyone with money to show you the math. Hint: credit card companies make more profit than just about any other companies in the world.
- There’s no difference (in terms of the money you have) between spending money and not earning money, no difference between not-spending money and getting a raise (actually, because of taxes, you’re even better off not-spending). If you’ve got cable TV and a cell phone, you’re spending $4,000 a year. $6,000 before taxes.
- If money is an emotional issue for you, you’ve just put your finger on a big part of the problem. No one who is good at building houses has an emotional problem with hammers. Place your emotional problems where they belong, and focus on seeing money as a tool.
- Like many important, professional endeavors, money has its own vocabulary. It won’t take you long to learn what opportunity cost, investment, debt, leverage, basis points and sunk costs mean, but it’ll be worth your time.
- Never sign a contract or make an investment that you don’t understand at least as well as the person on the other side of the transaction.
- If you’ve got a job, a steady day job, now’s the time to figure out a way to earn extra income in your spare time. Freelancing, selling items on Etsy, building a side business–two hundred extra dollars every week for the next twenty years can create peace of mind for a lifetime.
- The chances that a small-time investor will get lucky by timing the stock market or with other opaque investments are slim, fat and none.
- The way you feel about giving money to good causes has a lot to do with the way you feel about money.
- Don’t get caught confusing money with security. There are lots of ways to build a life that’s more secure, starting with the stories you tell yourself, the people you surround yourself with and the cost of living you embrace. Money is one way to feel more secure, but money alone won’t deliver this.
- Rich guys busted for insider trading weren’t risking everything to make more money for the security that money can bring. In fact, the very opposite is starkly shown here. The insatiable need for more money is directly (and ironically) related to not being clear about what will ultimately bring security. Like many on this path, now they have neither money nor security.
- In our culture, making more money feels like winning, and winning feels like the point.
- Within very wide bands, more money doesn’t make people happier. Learning how to think about money, though, usually does.
- In the long run, doing work that’s important leads to more happiness than doing work that’s merely profitable.
In the long run, there are only two sustainable positions–you sell less for less or you sell more for more.
It's tempting to think that you can pull a Wal-mart and appear to deliver more for less, but that's far more rare than it appears. And the market is smart (and getting smarter) so delivering less for more, while apparently a great gig, doesn't last.
People are going to figure out what's on offer, and they're going to seek out real value. For some, that means getting a little less (less service, less quality, less panache) and paying less, or getting a lot more (more meaning, more insight, more joy) and paying a bit more.
Time to pick.
[After I published it, I realized that something about this post isn't quite right. Here's my take:
More or less are simple concepts to understand in the scarcity-based industrial economy. If I want to put better butter in the croissants, I need to pay more and charge more for it…
On the other hand, the connection economy isn't based on scarcity. And in an abundant world of connection (where tribes become more valuable as they scale, where vulnerability and art are valuable in and of themselves) then in fact, yes, you can have more for less. The benefits of the trusted, integrated community, the one that gives permission and seeks to be in sync–these benefits actually open the door for delivering more… in exchange for the guts and the tears it takes to do that scary work that we seek to connect over.]
With the much-heralded demise of Google Reader, millions of people are about to be left at the mercy of a blended, algorithmic mash of incoming news. Instead of picking what they'll see and when, Google seems to want people to rely on luck as well as the coral-reef like filtering of a social network.
Subscribe for free.
Find your favorite sources, pick a newsreader or rely on good old email, and subscribe. You should be the one who determines what's showing up in your inbox.
As they say in the dead-tree business: never miss an issue.
FWIW, you should definitely export your feed list from Google Reader today, as it will be gone forever soon. (more details).
Rules for treating inbound customer calls with respect:
0. Spend a lot more money on this. Hire more agents. Train them better. Treat them with respect and they'll do the same to those they interact with. Have a bright red light flash on the CEO's desk whenever anyone, anywhere, is on hold for more than 5 minutes. If it gets to seven, have the call automatically route to the mobile phone of the CEO's spouse.
1. Have a very smart and very motivated front line. "I'll connect you directly to the person who can help you if you let me know what you need…" Don't have these people pretend that they can help. It leads to long conversations and frustration.
2. 80% of your inbound calls are about the same ten things. First, eliminate those problems in future products, packaging and policies. The best way to handle these calls is to eliminate them. Second, put clear, fun and complete answers to these questions online where they are easy to find. And third, hire talented voice actors to record engaging answers to each, and offer them as a first resort as a result of #1, above.
3. Change your on-hold music to Gary Gulman and Hannibal Buress routines.
4. Whenever the wait is more than two minutes, offer a simple way to be called back, and then make sure it works.
5. If you're closed, tell us the hours you are open and the relevant websites. Make sure the information is accurate.
Even famous companies get all of these wrong… Only one of the five steps is truly expensive, and yet all six are regularly ignored by companies that don't care or act like they don't.
(NB it's just fine to make it clear that a call is not important to you. I've never built a company around amazing phone support, precisely because it's so difficult to keep the promise. As far as I'm concerned, it's fine for some industries to not do the phone well. Just be clear that this is the case by routing people off the phone or at least not lying about it).
It's nice when someone loves your brand or your restaurant or your project.
But we don't get to love without respect, first. As J Mays at Ford points out, it's important to know that this car gets 48 miles per gallon, that it's incredibly reliable, that people you admire drive one–these are sources of respect.
If you can't earn my respect, don't even bother shipping it out the door.
Respect is insufficient by itself, though. Respect doesn't get the heart to race, respect doesn't often lead to waiting in line or gushing about an idea to someone else. No, those things come from falling in love, from the ineffable and magic switch that gets flipped when we are touched by something on an emotional level.
Without respect, don't expect love. There are too many options and too much information for me to fall in love with something incomplete or incompetent. But respect just isn't enough. Meeting spec will get you respect, without a doubt, but stopping there will never earn you love.
Time to invest in magic. Time to take the risk and leap into the unmapped, unsafe and unreliable territory where love lives.
When John Cage published 4'33'', a piece of silent music, there was much consternation. Years later, it's still easy to joke about the absurdity of a piece of music consisting of four minutes and thirty three seconds of silence.
And when the first internet companies that proposed free as a business model (free email, free social networks, etc.) started to gain traction with investors, there was an even louder chorus from those that cried foul.
When (part of) your marketplace embraces a 'new' that makes no sense to you, it's essential you understand the point of view that's leading people to embrace this new idea. No, you don't have to cheer it on, collect it, support it or pretend you think it's the greatest breakthrough ever. But yes, you probably need to understand why other people were touched, inspired or found something worth talking about.
Can you explain to me why some people wait in line for that car or that new restaurant? Do you understand why this person is being talked about online or promoted at work? Does it make sense to you that this canvas sells for five times as much as that one?
Denigrating art you don't understand doesn't hurt the art–it reveals something about your willingness to learn.
Differentation by marketers has a long and obvious history. When you see competition, you differentiate.
Buy mine, I can prove it is different.
They offer X, I offer Y. They cost this, I cost that.
The thing is, differentiation is selfish. It's the act of the marketer with intense interest in his segment of the market, it's inside baseball, deeply thought through reasons why someone should buy my thing instead of their thing.
Most customers, of course, don't have the same selfish view of the market, the same obsessed knowledge of features and benefits.
Differentiation is not the purple cow. This is in fact a willful misreading of what I've been writing about, usually by people who haven't read it…
Remarkable has nothing to do with the marketer. Remarkable is in the eye of the consumer, the person who 'remarks.' If people talk about what you're doing, it's remarkable, by definition.
The goal, then, isn't to draw some positioning charts and announce that you have differentiated your product. No, the opportunity is to actually create something that people choose to talk about, regardless of what the competition is doing.
Sometimes, marketing enables a pickpocket to steal a wallet–and be thanked for it.
Marketers are responsible for what we do, it's not an activity without effects.
Last year, just one of the big fast food companies made more than $1,300,000,000 in profit (billion with a 'b'). They've also paid their CEO nearly $200 million in salary in the last five years. Sometimes, a big profit is the sign that you're doing something right, creating real value for people able to pay. Sometimes, though, it means you're exploiting a weakness in the system.
The big food companies are brilliant, relentless, focused marketers. Marketing works. It gets people to take action, to change their minds, and most of all, to do more of what they might have had an inkling to do in the first place. Sometimes a lot more. When the ideas of marketing (and the products are part of the marketing, optimized for high consumption) are weaponized like this, they are extraordinarily effective at achieving their goals.
The side effects of this marketing are obvious: both short-term satiation and long-term health degradation. Kids on little league baseball teams may smile with delight when treated to a post-game feast, simultaneously, high blood pressure, diabetes and obesity all rise dramatically over time as a result of consistently consuming vast quantities of the products that these companies market. This is beyond dispute.
In some communities, 70% of the targeted population is now obese.
The challenge doesn't come from one slice of pizza. No, the failing is in abdicating the responsibility that comes from industrial scale. Organizations at scale do far more than give people choices… they change the culture, and must accept responsibility for the changes they choose to create.
If your organization uses terms like share of stomach or hires lobbyists, you've already made a decision to market in a way that changes the culture to benefit you and your shareholders.
What's fascinating is this: the marketing is so powerful that some of the people being hurt actually are eager for it to continue. This creates a cultural feedback loop, where some aspire to have these respected marketing jobs, to do more marketing of similar items. It creates a society where the owners and leaders of these companies are celebrated as risk-taking, brave businesspeople, not as the modern robber barons that they've become.
The cultural feedback loop can't be denied. The NAACP, which represents a population that is disproportionately impacted by the health costs these products create is actually allied with marketers in the fight to sell ever more and bigger portions to its constituents.
The crime continues because the money taken by corporations that change our culture is used to fund campaigns that conflate the essential concept of 'freedom' with the not-clearly-articulated 'right' to respond to marketing and consume stuff in quantities that would have been considered literally insane just three generations ago. And we like it.
[I'll write the previous paragraph's point again here to be clear: we've decided that consumers ought to have the right be manipulated by marketers. So manipulated that we sacrifice our long-term health in the face of its power.]
We ban accounting that misleads, and we don't let engineers build bridges that endanger travelers. We monitor effluent for chemicals that can kill us as well. There's no reason in the world that market-share-fueled marketing ought to be celebrated merely because we enjoy the short-term effects it creates in the moment.
Every profession we respect has limits created and enforced by society. Doctors and undertakers and actuaries live with these limits because it's clear that building for the long run benefits all of us. Sure, it might be fun or profitable to take a shortcut, but it's not the right thing to do. The rules make it more likely we don't race to the bottom as we cut those corners or maximize our profits.
The question is this: are you responsible for the power in your hands? If so, then we need to own the results of our work. If not, someone else needs to step in before it's too late. No sustainable system can grant power without responsibility.
Just because marketing works doesn't mean we have an obligation to do it. And if we're too greedy to stop on our own, then yes, we should be stopped.
[It seems like you could make one of three objections to this line of reasoning:
1. Marketing doesn't work, it's not powerful, it can't get people to do things not in the long-term interest.
2. Marketing does work, but marketers ought to have the right to sell anything they want, and they're not responsible for what they do.
3. If we regulate the dramatically obvious bad cases, we're on a slippery slope to regulating everything.
It seems to me that all three of these straw horses don't hold up under scrutiny.]
The fearless person is well aware of the fear she faces. The fear, though, becomes a compass, not a barrier. It becomes a way to know what to do next, not an evil demon to be extinguished.
When we deny our fear, we make it stronger.
When we reassure the voice in our head by rationally reminding it of everything that will go right, we actually reinforce it.
Pushing back on fear doesn't make us brave and it doesn't make us fearless. Acknowledging fear and moving on is a very different approach, one that permits it to exist without strengthening it.
Life without fear doesn't last very long–you'll be run over by a bus (or a boss) before you know it. The fearless person, on the other hand, sees the world as it is (fear included) and then makes smart (and brave) decisions.
You work at one, or the other.
At the lab, the pressure is to keep searching for a breakthrough, a new way to do things. And it's accepted that the cost of this insight is failure, finding out what doesn't work on your way to figuring out what does. The lab doesn't worry so much about exploiting all the value of what it produces–they're too busy working on the next thing.
To work in the lab is to embrace the idea that what you're working on might not work. Not to merely tolerate this feeling, but to seek it out.
The factory, on the other hand, prizes reliability and productivity. The factory wants no surprises, it wants what it did yesterday, but faster and cheaper.
Some charities are labs, in search of the new thing, while others are factories, grinding out what's needed today. AT&T is a billing factory, in search of lower costs, while Bell Labs was the classic lab, in search of the insight that could change everything.
Hard, really hard, to do both simultaneously. Anyone who says failure is not an option has also ruled out innovation.