Financial Services, Innovation and Web 2.0

"It's not a channel; It's technology"

As a member of the ISF (Internet Strategy Forum), we’ve had some discussions of late around web governance, obstacles surrounding internet strategy development and relevance/adoption of Web2.0 technologies. I was recently engaged in a Web2.0 study by another ISF member (and CTO for IBM.com) and it got me thinking...about how it relates to my business area, the financial services industry and the key issues we face in adopting Web2.0 technologies. You can find I’m sure a thousand and one definitions for Web2.0 but here’s my high-level take coupled with thoughts pulled from the web:

Web 2.0 is the result of an internet technology movement involving multi-dimensional collaboration (social networking, open standards, b2b/b2c/c2c relationships). It's the result of a technological movement where the web replaces the PC as the platform not just from a business operating standpoint but from the consumer standpoint as well.

Due to recent progresses like pervasive Web connectivity, faster bandwidth, growing numbers of online users, increased trust of online software and general cost-to-buy difference…eventually I believe that web software will replace PC software in measurable numbers.

That said, internet strategies in this area and within the financial services sector are far from where they should be and our adoption of new web technologies trails that of most other business areas and by a long shot. In order to move forward with the times and drive efficiencies in customer-centricity we need to make some sweeping changes in how we drive the business. First stop: we need to ixnay leveraging the internet as a communication “channel” and start viewing the internet from a technology perspective so that we can maximize our offerings, visualize the opportunities that lie in those technologies, and focus on "harnessing" and "developing".

What does all this mean - simple: We need to revamp our business models to incorporate internet as technology. Period.

Obstacles we face today
Policy
- Ensuring the applications and offerings don’t expose the business to regulatory or legal action. An obvious caution that needs to be carefully addressed.
- Application access control levels: Most large financial corporations are mired in hierarchical, complex authorization schemes across data repositories and web functions (understandably to keep folks from accessing things they shouldn’t) but folks across business verticals need to be able to leverage [all] the data that's available internally and externally.
- Risk (reputational and/or business risk). The kiss of death. Have someone from legal or operations say the words “there’s risk involved” and people won’t move for boo. It’s stifling. While risk is necessary to review and measure – it shouldn’t be the roadblock that halts innovation.

Technology Strategy
- Like I said, right now the internet is viewed as “just another channel” to reach our customer base but really it should be considered from a technology perspective in that it presents a fundamental shift in how we offer financial services to our customers. It means separating Internal/industry/and functional technologies from Internet Technologies.

Performance-based Goals
- Measuring ROI, prioritizing monetary returns: The requirement to address quarterly performance targets gets in the way of strategic investment period. The Web2.0 environment centers on multi-dimensional collaboration and thus carries with it a soft ROI. When dealing with innovation and new technologies such as Web2.0…we should focus on measuring information relevancy and value prop to our customers. Measurable ROI will come in time.

Sponsorship
- The internet champion. I put this one last because I feel it’s the most important and I wanted to discuss it a bit further since it impacts corporate governance and organizational structure. The industry needs to have people at the top of the corporate ladder sponsoring internet activities so that we can realize the opportunities behind the technology.

Organizational Structure
Most large corporations have some rendition of the following governance structure: They have a CMO (Chief Marketing Officer); an IT executive (or CTO focusing primarily on internal or industry-specific technologies, network infra-structures, etc.); a Legal executive; and a Customer Service executive to manage all customer level communications and interactions (think call-centers, etc.). This list might be a missing one or two but it’s pretty much the bulk.

What the structure is missing (and what it needs) is a CIO (Chief Internet Officer) whose primary focus is to drive internet technology innovation and internet technology adoption across the business while addressing the smaller needs of other business areas as they relate to the internet. All things internet should fall under the CIO; All business areas should liaisons with functional areas within the internet department to achieve their respective business goals.

An independent block that stands on it’s own and not as a sidearm to (or blended-in with) other marketing teams creates "business focus”. Blend the internet function with all other marketing areas and you end up with what we have today – function and focus gets blurred, ideas serving different needs get thrown into the same prioritization bucket, soft ROI loses and innovation gets lost.

"Innovation and the consumer" - that's what's key here. Web2.0 means a shift of power from the business to the consumer; it means a change in the way we communicate with our customers and how we service our customers. We need to harness what’s out there and we can do that if we change the way we view the internet.

It's not a channel; It's technology. Say it again...it's not a channel; It's technology.

Now... let’s start by getting ourselves a senior sponsor. CIO’s sign here please!

M.I.T. Dean Forced to Resign: Appropriate?

She falsified her credentials and lied about it for 29 years. Yikes. In the case of a Dean of Admissions falsifying a resume are university officials wrong to ask for their resignation? Certainly not. But in Jones’ case - as Dean of Admissions the last few years and holding an exemplary service record for the last 29 years, as a positive change agent for the school and it’s students, as a mentor and respected member of the education community - her long history of accomplishments should have given M.I.T. a moment of pause when considering appropriate next-steps.

She knowingly made a choice. Was it the wrong choice? Maybe but wrong for who – M.I.T. was elevated quite a bit during her tenure, the faculty and students love her and what she's done for the university, her role in changing the face of the education community has been and continues to be highly respected among same-seat colleagues. Had she come clean about it 15 or 25 years ago for certain she would not have received accolades for her honesty - she would have been booted and booted quickly. And the state of the university, it’s future entrants and alum would have suffered. Would any of this justify her actions - no but what she should have been asked to do was give a public apology and offer her resignation if it's the will of the school and it's students. At that point, M.I.T. should have stood behind her.

My mom sent me an article from Time Magazine and I wholly agree with Kinsley’s recommendation. Instead of asking for her resignation, M.I.T. should consider giving Jones an honorary degree. Heck, Ray Romano got an honorary masters or something and he’s just a sportswriter! And a fictional character on T.V. but that’s beside the point.

M.I.T. owes a great deal to Marilee Jones and the school should have used this opportunity to show unwavering support for it's Dean while shedding light on a muddy subject – what to do when you don’t have the right credentials and the right education. M.I.T. could have turned it into a learning lesson, something most of us could take advantage of btw, and how apropo it would be coming from an institution of higher learning. The end result very well could have bolstered the university’s image for future alums, and it would have held-up the pride of current alums and the present student body. Rather than hide behind resentment and a different kind of pride and taint a long career of accomplishment and purpose, M.I.T. could have led by example – one that reached for a positive end; the right end for the school and it’s students.

She gives a public apology, accepts her honorary degree and we all move on. The school benefits, the students benefit, and the people see once again that in the end real merit is measured by accomplishment and 'action' and not their artificial substitutes: test scores, degrees and academic accreditations.

Branding the West Point Brand

The typical West Point cadet is a white male. He’s in the top decile of his high-school class; he’s a Jock. Middle-class; middle-American. He came to the academy for the free top-ranked education but he’s also patriotic on some level.

My slightly less-genius older brother (ha! sorry Jimmy) is a Captain in the army and a West Point alum, graduate of the class of ‘98’. We recently had a lengthy discussion about West Point’s student diversity numbers and their difficulties in increasing ethnic diversity and, in particular, student representation from within African-American communities.

Some have suggested that in order to attract more eligible African-American students - reducing entrant and test score criteria is a necessary first step. To this - many (myself included) say “nonsense”. West Point is among the academic elite for a reason and frankly, I think it’s a demeaning proposition for incoming students who don’t make the standard cut. The objective isn’t just to increase the African-American student base but to do it without sacrificing their quality of applicants and entrants. That said, leaders of the future don’t necessarily come from affluent backgrounds or middle-America and students might be inclined to go elsewhere if the West Point brand gets mired in the image of life-long military service.

Marketing the offering
The university world has reached it’s comeuppance and they’re realizing that the world of entrant applicants is a very competitive arena. If you want more students, you need to give more point of difference. For West Point, what better point of difference is there than providing the highest quality of education for a pretty price tag (it’s free), a notable career upon graduating (5 years required service in the military to pay back the 250,000 education - starting as an officer) and the promise of leadership excellence within and beyond the military (you’ll likely find that the greatest percentage of graduates saddling the executive-level seats in corporate America are West Point alums).

So with everything West Point has going for it, why are African-American numbers so low? Without question, internal brand management isn’t an issue – every cadet wears the brand 365 days of the year, 24-7 and USMA grads are the brand when they leave. But what about brand management outside of West Point...what's the perception? Likely the typical association is with that of uniforms, marches, up at dawn down at dusk…”yes sir” and “no sir” - the military. If the brand message doesn't engage a broader audience high-school students and/or African-American students with less patriotic affinities might not be inclined to send in an application.

The allure of the institution from an outside audience perspective has to stem not from a factual knowledge of the university's strengths, but from a received understanding of what it stands for --- its prestige, ideology and reputation. West Point needs to leverage it’s brand equity beyond the perception of being a rigorous "military" academy and beyond the traditional academic arena – particularly since most low-income communities don’t offer as rigorous an educational curriculum when compared to middle-income public schools or private schools for the more affluent families. They need to market the skills students will acquire to succeed in corporate America.

The question: How do you weed out the desireables and increase diversity without sacrificing the academic reputation of the school by resorting to modified score cuts?
1: Leverage the Prep Academy
2: Target non-traditional audiences/focus on the experience not the product
4: Market through multiple channels and consistently across all bases

The Prep Academy
To be sure, many of the cadets at West Point still come from affluent families. But thanks to the prep school and the fact that West Point is free, it's doing far better at attracting low-income students than some of its elite rivals. All prep cadets who successfully complete the program are eligible to go to West Point and typically more than half the eligible student body moves on to attend the university.

To achieve the objective, the Prep school should have a mandatory entrant cut based on income and ethnic diversity; and it’s required numbers each year need to be far higher than what they are today. High school students who typically haven’t made the grade will have one year to prove themselves.

Non-traditional audiences
Recruiters need to target their audience more effectively in reaching out to youths of all races and ethnic backgrounds from all income-areas; they need to market West Point’s brand promise in a manner that communicates and connects on an emotional level.

Giving You The Responsibility And The Opportunity To Go Out And Achieve.

This is not their tagline (and to be honest I don't even know what it is) but to attract students who may not have a strong patriotic affinity, promoting leadership skills and the bevy of skills acquired that are marketable outside of military service is a must. They need to focus on the experience, not the product. And alongside all West Point marketing communication should be information and applications for the West Point prep school.

Marketing Opportunties
MySpace – West Point could take a cue from the Marines who put up a profile on MySpace.com to attract fresh blood. This would give the academy the opportunity to reach a younger audience base freely and early-on in order to build "brand mindshare". The Marines were given sole control over what advertisements (none) that are posted to their profile and Friends are rigorously screened. Detailed information and communication is provided in the profile as is a link to apply.

Viral marketing – multiple variations should go out in circulation – all speaking the same language and sharing one voice. Giving You The Responsibility And The Opportunity To Go Out And Achieve. You can do this by having versions that emphasize patriotism and service and others that show how skills acquired at West Point are marketable in the civilian world (i.e., an ad that follows the West Point cadet of yesterday and the leader that he is today). Focus on the West Point experience and the by-product of that experience.

General marketing efforts - When was the last time you saw a marketing message for West Point? How many people have heard of West Point but don't know anything about it other than it's a military academy? I rarely see the West Point brand in or around the university towns I live near (but I’ll admit I don’t actually tootle around these places very often - it's a little under my age criteria ;-) ).

Point being - they need to increase their general marketing efforts, pull together a coherent brand message that emphasizes the marketable skills students will acquire and then market across all income communities with the objectives being to attract strong candidates, increase diversity among applicants - and in turn, increase adiversity among entrants.

To build diversity you need to go where diversity lives and breathes, and you need to be able "connect". Students have to believe that West Point offers more than just a military life - academic excellence, a deep-seeded sense of brotherhood within the West Point family, top-notch career opportunities, leadership, success, etc.. And if your audience believes - they'll apply.

Not everyone has a penchant for life-long military service and leadership "in the military" isn't the only benefit West Point delivers to it's student body.

Over the Global Warming Debate...

I’ve heard (and read) all the arguments that support (and argue against) the existence of a global warming crisis. Both sides make compelling statements and both sides have data to support their claims. But seriously... who cares? The reality is that we as human beings have a destructive nature and nuclear war will likely wipe out most of advanced civilization anyway. And what civilizations remain - probably tribal regions way down in the bush - will be our nod for keeping the global warming crisis in check. ;-)

If technological advancement doesn't wipe us out within the next 100 years well then we'll probably be embracing interstellar trips to other planets and discovering new natural resources and ways of harnessing our existing resources that change how we live in the future. But more likely than not the "advancement" of civilization will probably work it's way backward in time; back to the basics - all the result of nuclear war, a really really big metor that wipes out half the planet, or, E.T. comes..finds a democrat in the White House and kills us all. Point being - stressing change will be moot because life will bring it about anyway. Change is something you can't run away from – it’s going to happen and it’s the only thing you can count on - that includes planetary change.

As for extreme warming and cooling - it's all in the million/billion-years lifetime of our planet. Mother Earth has evolved through several cataclysmic climate shifts during it’s lifetime and it would be fair to assume that it will evolve through one or several more throughout the remainder of it's lifetime - with or without our help. With all the natural disasters (falling meteors and natural cataclysmic climate shifts) that have befallen this planet since it's inception (think, the ice age), increased fossil fuel emissions over the last 50 years won't register boo on the grand scale of things impacting it.

As for myself – I’d rather focus on the things the mean the most to me, my future kids/grandkids and to all of us in "this" lifetime: cancer, child abuse, illiteracy.. AIDS, war, starvation.. keeping a republican in the White House..

You know, the important things... ;-)

Let’s keep our eye on the ball shall we?

Finding Your Roots...

Just a few brief thoughts on the importance of family…

I was in St Louis over Easter weekend and I gotta say it was the one of the best string of days I’ve had in a long time. Sadly, it wasn’t a romantic weekend getaway but no worries – I spent it with family and had a most outstanding time. My grandmother whom I was very close with passed away not long ago and Easter weekend was her official inurnment ceremony for the family; held in St. Louis because it's the home of her family mausoleum and also the home of the Shaw family clan; She actually lived in Denver, CO. Folks came from all over for the occasion: California, Colorado, Florida, North Carolina, Missouri (and of course Pennsylvania) to honor her memory, be with family and just “be”.

Most would insert here ‘the shorter the stay the better’ but I must thankfully disagree.

I grew up an army brat so I’ve moved around 'quite' a bit in my life. After high school I pretty much just kept the tradition going, moving every year or every two years. I’ve moved as much as 3 times in one year and while the experience afforded me the opportunity to surround myself with a of variety of people, cultures, thoughts and ideas – it's very difficult to know where your roots are and it’s fairly easy to lose your ground. Reflecting on it, I think it’s important for everyone to have some ‘safe harbor’ whether it be a place or a group of people you love who constantly remind you that you are loved.

A few years ago I reconnected with another side of our Shaw clan; a side of the family whose roots go very deep and very wide in St. Louis. As soon as I met my string of other cousins, uncles and grand uncles I felt that airy sense of 'wow, we are so totally related' - primarily because we have 'the voice' that carries and a very strange sense of humor. Anyway, what a terrific feeling - accompanied by a large dose of familiarity and truth.

I could have stayed with any number of people spread out between St. Louis, Clayton and Chesterfield county. They were all so generous to offer-up rooms but there’s a unique part of the Shaw family history that I wanted to be close to; an attempt to touch another part of the past I guess. Shaw Park. A beautiful spread centered in the heart of downtown St. Louis and named after my great grandfather, Charles Shaw, who served as Clayton’s Mayor for 7 years in the 1930’s. 100% Italian and adopted at an early age - that man I tell you sprouted some strong lines...

So I booked a room instead and treated my mom to a weekend stay at the Ritz just two blocks away. By-the-by, if you ever stay at the Ritz, you must have Club Lounge status particularly for stays more than two days…free drinks, free food all day makes your stay and the price you pay all the more worth while. The treatment at the St. Louis Ritz is spectacular. The staff is wonderful, the sushi bar – fabulous. <> And if you’re ever up in the Club Lounge, say hi to Mary for me - one of the sweetest ladies you will ever meet. Before I took my mom to the airport she was kind enough to pack her an “airplane lunch to go”. Treatment du jour.

Forgot where I was going with this...

Anyway, it’s a near fifteen hour drive from my apartment to St. Louis and on my way home I was thinking about those wonderful past few days and I thought how lucky I am to have such strong family connections and such large family connections. What a peaceful thing it is to be surrounded by fun loving people who share my dry sense of humor and love for ‘storytelling’, and who reflect those same familial qualities (good and bad) that have made me who I am as a person. It’s that feeling of ‘belonging’ that I love; it’s almost like a blanket of calm that is so thick and rich it provides all the warmth I could ever need to feel safe and loved and understood. Like diving under that perfect and perfectly warm down-comforter on a cold, rainy night.

Reinventing Walmart: Why Roehm & Walmart Failed

An article was posted on Businessweek’s Brand New Day blog which included a lengthy interview excerpt with Walmart Inc. CEO Lee Scott. With all the media hoopla going on lately between the store giant and former ad chief Julie Roehm – and every trivial, less-than-interesting detail being squeezed by every trade magazine and marketing news site – reading through his very candid interview sans mention of the Roehm/Wommack/Draft FCB scandal was a huge breath of fresh air. But it also got me thinking...about Walmart's attempt to reinvent their brand image and why recent efforts failed to deliver.

Obviously Scott understands who Walmart's core audience is and he recognizes how deeply embedded the association is with more affluent customers. It doesn't require mensa-level thinking to figure out that Walmart is not synonymous with designer fashion and high-end retail (or necessarily high quality and high value). They have a large inventory of products and services that satisfy the average consumers needs and they're available at low prices.

In an attempt to draw in the affluent base they put out high-fashion and high-end retail at double or triple the price. So what happened? They couldn't move the high-end products off the shelves because their core audience wouldn't pay the higher prices and most affluent customers won't shop there because it's Walmart and Walmart = "low end" and "cheap". You can't change such rudimentary perceptions over night.

Over-hyped scandals aside, from a marketing perspective Walmart needed to cut Roehm loose. The synergy between Roehme's style and Walmart's vision was lacking from the get go - having mutual trust and sharing a passion for your belief in something is crucial for creating a unified message that connects with customers. Even in retail, customers need to be able to emotionally "connect" on some level with where they shop on a regular basis. Marketing strategies that push the envelope can be extremely effective but ultimately what ever the image you’re trying to portray your customers need to be believe it. Walmart = premium brand, high fashion, high-end retail? ha ha ha....not.


Creating value must be real, and tangible to a targeted audience.
For Roehm's part - there was a process that needed to take place in order to move Walmart’s brand image from point A to point D (and subsequently from point D to whatever point you're trying to reach). Beyond just having a strong marketing concept you need to have a well developed, "thoughtful" execution strategy that is laid out over a period of time. The period of time depends on the brand and it's target audience. Bold/edgy marketing strategies won't deliver if the brand hasn't earned the right to ask it's audience to accept such new possibilities.

Taking out a few snazzy spreads in Vogue magazine, putting on a runway show in New York, and throwing $200 bottles of wine in the isles all-the-while asking would-be customers to believe that it's any more impressive than what it's always been....is asking too much, too soon.

"A brand is a living entity - and it is enriched or undermined - cumulatively over time, the product of a thousand small gestures." [Michael Eisner, ex-CEO of Disney]

Personally, I wouldn’t be caught dead stopping on a Walmart spread while flipping through a Vogue magazine, except maybe to gasp at the intrusion. Think of the types of people who typically go to a fashion show in the city. Sure you'll have trendsetters that show up..even those that won't get the premium gifts just for being there. Attending fashion shows is, after all, a Manhattan affair. But if you think that afterwards they'll be touting those front-row seats to all of their friends and then running off to the nearest Walmart...all I can say is "life must be a wonderland inside that head". For the moderately affluent or trend-conscious, what motivation do they have to buy clothes from a store where the feel and look of the place, employees included, is so seemingly dumpy? You'd be better off taking your money to H&M, Express, Zara, and the like - at least in these places you can buy-in to the idea that you're still maintaining "coolness" without feeling like you're lying to yourself and everyone else because of where you bought your clothes.

For Walmart, marketing to the affluent with a fashion-forward approach might have been a good strategy in concept but Roehm failed to execute it "intelligently". They could learn a thing or two from the marketing team at Target who brought in designer labels at low prices for their core customers and put them up on e-bay at higher prices to attract high-end customers. Eventually some of those high-end customers starting going into the retail store to get the benefit of lower store pricing.


Walmart: the other half of a "failed formula"
Culpability for success or failure is not entirely on Roehm here. This blame-game is two-fold and Walmart's corporate governance is the other half of a failed formula.

Even if a strong ad or marketing tactic is successfull it will only provide a temporary lift if a business consistently delivers a weak personal experience factor. Brand image begins with a vision and the vision starts with the CEO and president and filters down to every employee of the company. The employees are the brand stewards if you will; they’re constantly communicating/reflecting the values of the brand to customers in one way or another. If the brand image you’re trying to portray isn’t at least moderately reflected through your brand’s constituents, good luck convincing your audience.

Unimpressive reputations nullify good marketing strategies.

After sections of New York recently shunned Walmart's attempts to build stores in the local areas, Walmart CEO Lee Scott responded with a few comments that I think a) are inappropriate from a PR-standpoint but more importantly b) give strong indication that Walmart's internal branding strategy is badly in need of an overhaul (assuming it ever existed in the first place). In this New York Times article, Scott's reaction to what he calls the snobbish elites was shall we say less than exemplary and less than what we would expect from a C-level exec. Amongst other things he says, "You have people who are just better than us and don’t want a Wal-Mart in their community". Yikes. Maybe he or the NYT forgot the words "think they are".

Still...I mentioned earlier in this post that when I read the excerpt of businessweek's interview with Scott I found his candidness to be a refreshing change. But it was also somewhat sobering and most certainly not inspiring. Note to self: Even if my previous efforts turned out to be a flop and I'm feeling dismayed by the notion that I can't change perception...what I say in public, how I say it and when I say it are all good PR opportunities to do just that. 'Be the brand'. That said, is it any wonder why Walmart's brand image is suffering? If the CEO doesn't reflect the integrity and pride of the brand, neither will the employees who interact with the brand's core customers.

Walmart thought that by bringing in a change agent they could turn things around. Note to Walmart: focus on internal brand management first. "Change management" has to start from within and it has to lead from the top down.

The Stuff of Life

Christopher Reeve once said in an interview regarding a film he made called ‘Somewhere in Time’ (I love that movie – cheesy love-story). There’s a scene at the end of the movie where the character dies and his soul leaves his body and ascends upward and into the heavens (naturally to be rejoined with the soul of his long, lost love). At the time, ascention of the soul was a notion that Reeve found "unlikely".

During Reeve’s interview (and years after the movie), he recalled having a similar experience at the time of his crippling accident which led to a change of mind. Reeve claimed that after the accident he flat-lined for 50 seconds during which time he had an out-of-body experience; He actually floated above himself, looked down at himself on the hospital table watching as doctors scrambled to revive him <> Doctors eventually gave him a massive dose of epinephrine and instantly he was back in his body.

I don’t know if it’s true but it brings up an interesting thought: if people are made up of the stuff of stars and the universe as we know ourselves to be (excluding dark matter since we don’t even know what it is) and if an out-of-body experience is possible... how does matter in the form of hydrogen and helium (and other universal matter that constitutes our make-up) produce conscious thought and translate images into visual acuity? Could an out-of-body experience suggest the existence of the human soul - a “celestial” entity that can carry our conscious selves after our bodies have “died”. And if so, would the existence of a human soul suggest the existence of a supernatural being along with heaven and hell?

Maybe not.

For everything we know about the brain and the mind, there are more things about the two and how they work that we do not know; And will likely be the case for a very long time. If the brain were at it's most fully-functioning state (and maybe there are circumstances when we die where this would happen - an eclipse of all functions all at once) perhaps we could experience peripheral existence. Given that the universe is made mostly of the “stuff” we can’t see, feel, or touch or even distinguish (i.e., dark matter) it’s possible that we as people are also made up of stuff that is not material (excluding the known universal elements; another form of energy perhaps) that cannot be seen, felt or even distinguished based on the known elements. Maybe it's this "stuff" that can carry our memories and thoughts, in the form of radio waves and frequencies, into what we consider to be a transcendental state of existence.

As for the question of sight (being able to look down at yourself), well...this may very well be far-fetched but perhaps there is a moment before the brain dies where the electrical impusles that speak to our brain and translate messages into visual images are still connected and speaking to the "stuff" carrying our thoughts and memories; And thus we maintain visual acuity for a brief period. Hey, why not? the body is a magnificent wonder of mechanical perfection. Thoughts, feelings, sight...it's all fundamentally based on electrical impulses that talk to the brain (in simplistic terms anyway). And we only use a very, small portion of our brain so at its' most fully functioning state isnt it at least, not completely implausible...?

Crazy theories - maybe - but it's fun to think about and disect.
Of course, If such a possiblity exists then where would we go after we die – dreams, memories, thoughts and all - float up into space where the rest of the “stuff” of the universe is?

Will the Real Republicans Please Stand Up...

Not so surprisingly – I’ve found that many folks who are seemingly anti-republican for this reason or that don’t really have a basic understanding of the political or economic ideology that breathes life into the republican party. What is surprising is that it’s not just anti-republicans who don't get it there are plenty of people who claim to be “life-long” republicans that to this day still can’t espouse the fundamental politics of our party base. Tsk. Tsk. They’re either in league with general republican philosophy because they were born into it (and never bothered to learn the issues they are purportedly supporting) or they’ve spent most of their lives opposing every other party because at one time or another it was considered “cool” to call yourself a republican (or maybe because so many other party leaders just suck..generally speaking).

MSM and the politicians continually bombard us with the great myths of democrat and republican stereotypes – advertising political opinions that aren’t really a variant of either liberal or conservative views. And sadly, republicans and anti-republicans believe it! In reality, the bulk of the demographic and psychographic make-up of most political parties is much closer to the center than most would have you believe but I guess politics wouldn’t be politics if our party leaders weren’t pushing their own agenda to engage independent voters.

In almost every election in the last two decades, the political dissent among voters has been characterized as “the worst it’s ever been”. MSM touts “never before have we seen the country so divided” blah blah. But when the polls are closed and election day is over – the presidential candidate wins by a relatively minor slide thanks to mainstream migration. It’s this voter “centricity” that keeps our feet on the ground and they live within the spectrum of every political party. The "liberal left" and the "conservative right" are actually the fringes of each party and represent the minority of both extremes.

Who are Republicans and what do they stand for
Well, here’s a few political philosophies that generally govern republican ideology (those that typically divide democrats and republicans) followed by a few hot-button items that are always show-cased to sway specific voter segments but, in reality, are not reflective of any “one” political ideology. [I’ll add that there is bound to be disagreement on some of these coming from individual perspectives, however, it can be said that these generally hold true across the broad republican base]

Conservatives tend to favor more economic liberalism and mainstay of social conservatism.

- Folks on the right favor less government restrictions/less government intervention on the economy: they’re for free markets, free trade; and subsidies for local businesses and large corporations. They support a larger defense budget along with a more broadly focused national defense policy. (foreign policy positions also tend to sway heavily within the party over peacetime vs. wartime resolutions)
- Most conservatives are anti-union (and with so many union workers being highly over-paid to take an 8-hour lunch break clevery disguised as an 8-hour work day...who can blame them!)
- Most conservatives are hard on illegal immigration and welfare, are against a government-mandated minimum wage and advocate more government activism on issues like imposing a military draft [a notion of patriotic duty]

That said...there are some key positions typically associated with the Republican party [i.e., anti-abortion, anti-gun control, anti-gay marriage, to name a few] that I have left out in my list of fundamental republican philosophies - and for good reason. While these are important issues in political discussions, surely, despite what some may say to sway the conservative right or liberal left, sidings on these issues represent neither the mainstream views of the liberal left or the conservative right and they yield considerable dissent within the party on both isles of the argument. Here are a few of my thoughts on each.

Abortion/Gay Marriage: The media likes to put the spotlight on folks who make the most noise so it’s no mystery why anti-repubs have the tendency to “overly” associate the Christian-right (aka the Southern belt) with the republican party - lending to the impression that to be republican is to be anti gay-marriage and pro-life. But this simply isn’t so.

In reality the Christian right, a long-time and large financial supporter of the GOP, represents "a minority within a minority" and is still only a fringe element of the party. Much like the abortion issue, the subject of Gay-rights yields considerable disagreement between party members. Many vocally support gay marriage and many vocally oppose it; a disposition of varying opinion that exists in just about every political party. The subject of gay-marriage and homosexuality in general, regardless of what party you claim, is a personal issue for many if not most americans.

Gun Control: “The lot of republicans are Gun-totin’, rifle-carryin’, free-wheelin’ southernites”... Not.
Well, maybe. ;-)

But the real divide over gun control isn't over the notion that gun control is a bad thing. Rather, republicans take the position that current and proposed solutions to resolve or noticeably impact domestic gun violence, simply put, are not at the present time supportable solutions. In other words - they don't make any sense and they wouldn't achieve the intended objective(s). Food for thought for our political leaders - if you haven't yet devised a policy that all sides agree is a viable solution - why put the weight of your party behind it (particularly when there's dissention in your own base as well). Every small step is not necessarily a step in the right direction.

Bank of America's Latest Ad Nuisance

I've got Morcheeba playing in the background, my 'leaning tower of Piza' coffee mug in one hand and the March 19th issue of BusinessWeek in the other. The March 26th weekly arrived today as well so I'm a little behind on my reading. I settle down into my comfy oversized couch-chair, pull up the ottoman, take a sip of my tasty brew and set it down onto the end table next to me. I open up my BW and flip to page 48 for the front cover story.

Flip, flip, flip…page 21. Hmmm. Let’s try this again. Flip, flip, flip…page 21. A weighted section of the magazine has annoyingly affected the flow of my flip. It’s Bank of America’s new ad spot promoting their new “Windows of Opportunity” tagline; a two-page ad on heavy-weight paper three times that of your standard magazine subscription postcard.

It was an annoyance that just wouldn’t go away. Every flip went to page 21. I couldn’t even find the front end of the magazine to get to the table of contents; all the pages seemed to just cling together easily overpowered by BofA's heavy-weight ad. Beyond frustrating. After 40 minutes of rediculous back and forth page-flipping I finally ripped it out smiling and cursing all the while. I feel this two-page nuisance has stolen my relaxing morning.

Blasted!

I take a closer look at the source of my ills. At first glance, the first ad page looks nice. You feel like you're walking toward the entrance of one of those plush corporate buildings in New York's business district near 3rd and Park. But immediately my eyes are drawn to the large cutout in the center of the page. It's Bank of America's flagscape logo which has been stenciled-out so you can see the images from the ad-page behind it. It's a pciture of an old man and...a clerk? Maybe his son, maybe a worker, maybe a total stranger. Who knows. The flagship cutout is intended to represent the "window of opportunity". The building on the front page reflects the disposition of an opportunity realized (this didn't hit me until much later); the people in the images behind it represent the opportunity seekers. Hmm.

A good concept surely but in print form – ack. First of all, portions of the flagship cutout are blocking the faces of the people behind it (minor) but more importantly, all the colors of the image blend in with the colors on the front page. How often do you look into or out of a window and everything looks the same? And since the window is supposed to reflect two different points in time - i.e., here's where we were - here's where we are now - the colors used for both points in time should contrast each other enough to convey that sense of growth through the years. Instead, my eyes just wash over all the brown and I have no desire to flip to the second page to glimpse the story of the opportunity seekers – which is also where the Bank of America tagline appears. But, since I know I’m going to write about this annoying little incident I feel I must. I flip, I look and two seconds later... I throw the pages down and eagerly return to my BW magazine.

My review...a good concept but I think the print version misses the mark entirely on delivery. On the right track but poorly captured. I didn't feel the opportunity nor the spirit of circumstance that the idea of an opportunity realized should convey. The "window of opportunity" and the image of the people behind it just melded together into one bland concept. Of course.. I'd be remiss if I didn't at least admit the possibility that my discontent with the ad's involvement in tainting my sunday morning routine has made my opinions biased. But I'll also note that I didn't even realize the image on the front page represented the "now" of the image on the second page until after I had looked over the ad several times to write this post. I didn't make the connection - probably because there wasn't enough contrast between the two images..or maybe I'm just s-l-o-w.

Whatever. It'll quickly get the kibosh if it shows up in my March 26th BW weekly.

Financial Services and Brand Differentiation

Building a successful brand in the financial services sector is less about “market” positioning than it is about differentiation - differentiating your company or offering in a way that makes you stand out from your competitors. The differentiator must be transparent to your customers.

My company has these quarterly “marketing and strategic” meetings. A topic often discussed is:

In such a highly saturated market where customers are bombarded with multiple product offers, and as the industry grows more competitive, how do we differentiate ourselves to pull away from and ahead of the competition”

Where do we need to focus our solutions?
- Diversify our communication channels?
- Develop new and even more competitive price offerings and rewards services?
- Create strategic partnerships?
- Develop new communication strategies?
- Focus on mergers and acquisitions?

Certainly all of these things are important but in today’s market it’s simply not enough (M&A aside). One of the truths of modern business is that there is almost nothing that your competitors can't duplicate in a matter of one or two months. And in light of recent senate hearings over credit card practices, all the top lenders are taking drastic strides to develop more customer-centric strategies and policies to differentiate themselves from the competition.

Citibank discontinued it’s proactive rate increase policy except at the time of card renewal and they dropped their universal default policy on payment behavior with other lenders. JPMorgan Chase began a series of mass proactive rate reductions with autopay signup and 6 months of on-time payments, new ‘spend more/pay less’ strategies and colorful mailings with “insider tips” for avoiding future rate and fee increases. Discover began sending out it’s own ‘good behavior” rewards offerings that lead to interest rate reductions, and soon other leading lenders will follow suit. Eventually customer-centricity at this level will converge on the marketplace and strategists will have to go back to the drawing board to re-differentiate themselves once again.

What tends to get sidelined during strategy development is the backend of the product/service offering beyond acquisition; customer service at the grassroots level. Probably one of the few line areas where a financial services company can truly differentiate itself is through value-added customer service that resonates and connects with customers on some emotional level.

If you’ve ever called your credit card company to make a complaint – you understand when I say that quality customer service that builds mindshare is a rare find. You can sit in the call queue for what seems like – a very long time – you run through every thoughtful detail of your situation and then you sit in silence for 10-15+ minutes while they research your information. Half of the time, advisors just don't seem to know what they're talking about. You'll likely get transferred once, twice or even three times all-the-while explaining every irksome detail of your situation over and over again. If you are really unlucky you accidentally get dropped from the call queue. Whoops.

Identity contact is the sum total of all information and experiences that a customer has with a brand

In this line of business, customer service call centers represent 75% of total ‘existing’ customer touch-points and delivering a great customer experience consistently across such a broad distribution network is all about execution, execution, execution. An advisor who fumbles through responses, drags in response time, or lacks the appropriate level of confidence to respond to an irate caller is more likely to kill a call, force costly escalations, spur multiple call-backs (doubling or even tripling unnecessary operating costs per call) or potentially even provoke a customer to close the account and we lose the business.

Whatever product or service you provide you need to have the strength in your customer service solutions to support it - from a technological perspective as well as a management and training perspective. Customer service centers need to be equipped with the best technology and data management tools to leverage customer information quickly and easily in order to handle calls more effectively. Sufficient training on the background of the business as well as in-depth and continuous credit education is essential. And equally as important is training in communication 101. These people are the voice of the Brand and our link to the customer.

Changing the way we service our customers from the ground up is a necessary next-step in pulling away from and ahead of the competition. Financial service companies that create and support customer-centric strategies AND build effective and efficient backend customer service solutions will be the ones building valuable brands and increasing long-term profitability.

Credit Card Debt: Who's to Blame?

And ‘round and ‘round we go…

Coalition groups have long criticized the policies and practices of the consumer lending industry and certainly in this type of business environment where so many details have a fine line – it’s always good to have some form of checks and balances. Until recently though most of their criticism was covered in newspaper and magazine editorials that aimed to build consumer awareness by providing educational and financial tips to avoid getting hit with penalty fees and rate increases. Well the heat just went up a notch with their recent launch of a series of aggressive print and web ads that compare the effects of “predatory” lending to natural disasters like hurricanes and floods. Yikes. The ad images depict people and families in seemingly dire circumstances – without home or possessions, holing up under patched roofs and dilapidated shacks with a tagline that advises readers of the tragedies caused by burdensome credit card debt resultant to unfair lending practices. Ouch.
Wholly unfounded? Yes, and No.

What the marketing campaign fails to address (and like most industry-bashing forums) is personal accountability. There was an editorial in the Washington Post earlier this week detailing the latest round of senate hearings that have put the nations top lenders under familiar fire and on the defensive once again about fee and pricing policies. A key witness at the hearings was a former Chase cardmember who testified that since opening the account back in 2001, the bank charged him $7,500 in fees and interest over six years in addition to early purchases he made totaling $3,200. $7500? An egregious sum surely. An apology was made to the customer and all remaining debt waived. Many I’m sure will say that Chase should never have charged so usuriously to begin with.

Quite right.

But what the article failed to do was hold the cardmember accountable in any manner. Not that he was entirely at fault but the bottom line is that over a period of five years this particular cardmember was overlimit 90% of the time and also on the "never pay on time/pay every other month/occasionally pay the minimum due" program. It's no wonder he couldn't pay down his balances. Where’s his accountability? Indeed the Bank handled this account poorly – there’s no question. This cardmember was clearly not fit to maintain a line of credit and what the bank should have done was close the account and place it in an assisted payment program where interest rates along with late and overlimit fees are not applied to the remainder of the balance. The assist program would also have negotiated a low, monthly payment amount that fit within the customer’s financial means. In some cases, the remaining balance is also negotiated down.

So there’s no arguing that improvements can and need to be made in the credit-card lending business. There are a number of customer touch points where bank service and account handling need to be better managed. But when you have a business with customers numbering in excess of 50 million - you’re going to come across some very unfortunate circumstances and poor customer experiences. Some situations are beyond a customers control - ‘they happen’; And for some of those I’m sure the resulting financial impacts could have been mitigated with better service management. But I'll also note that the total dollars going back out the door for courtesy fee refunds and interest reversals is in the not so insignificant double-digit millions.

That said, this particular cardmember (and like so many others that run into similar situations) share a HUGE portion of the blame and are equally, if not in many respects more, responsible for getting stuck with “burdensome credit card debt”. Here's a thought, if you experience a brief moment of pause before you decide not to pay your bill, or to pay less than the amount you owe or to make a purchase you know you can't afford - take heed! When you don't cuplability is on you. For people to say or even imply that they don't get it just boggles the mind. I simply cannot believe that stupidity can be that tangible.

I’m not defending the bank or condemning cardmembers – not in the least. But if people truly want to raise awareness – don’t forget to bring the facts from both sides of the relationship. Too many are too quick to place the full weight of the situation in the hands of the bank.

What If...

What if you were an omnipotent being. What would you do with all the non-ends of your days? According to true christian belief, only if you believe that Jesus Christ is your Lord and Savior will you go to Heaven. It's not a matter of being "good" in your life or necessarily how you live your life. It's a requirement. But is it really?

While my dad and I have very different opinions on the subject of religion, I agree with his take: requiring mankind to believe is vanity and of human implementation. And as I've recently discovered, asking the question makes for some interesting debate. I engaged a friend of mine in a most hearty discussion with the following scenario.

If you are an omnipotent being with all the powers of the universe - life might be kind of boring. Wouldn't it be fun to idle your time away by playing a funny little game - create man, let chaos abound, then send your “other self” in the form of man and give the little people a few thousand years to believe you really exist. Feed them controlled bits of information and at the end of it all, if you don't believe - screw you. If you do believe, well then maybe you get a prize - but it's not what you think.

Unfortunately he's religious and it only led to a spattering of heated arguments about religion, Christianity, god and the whole lot. But I still think it's a fun scenario to ponder...Besides, who said an omnipotent being was compassionate?

Democracy in the Middle East

Today on Rich Karlgaard’s Digital Rules blog the subject of discussion was “Democracy in the Middle East”. I posted a brief one-liner as my response but wanted to give my thoughts about it in greater detail so here goes..

Democracy is not the easiest form of government to establish – and the level of difficulty largely depends on what form of cultural standard you’re moving away from. At minimum, a barebones democracy requires fair elections (in representation and process as well as popular access to information of the issues), party opposition, a fair and accountable government assembly, and most importantly the desire for a democratic state. On this last point there’s every indication that it will take years or possibly decades [if ever] before the general middle eastern population finds the philosophical base to desire a democratic state. One of the real difficulties here is that democracy is not just associated with western culture; The reputed face of democracy is predominantly tied to the U.S. and our historical involvements in the middle east which, as the last decade will show, have only contributed to the enormous lingering suspicions over the nature of our intentions and political objectives. Suspicions that are entirely warranted I'll add.

The vast majority of Middle Eastern populations – while they condemn terrorism – have strongly noted that violence among and against civilians resulting from US-ordinances, US/foreign-aided revolutions and particularly use of US/foreign-supplied weapons, has been of far greater consequence. It’s also been said that the U.S. has subverted much of the regions democratic sentiments by not only supporting autocratic regimes but by publicly supporting some and publicly denouncing Arab nations that support others. A show of biased support, I'll note, resulting from US foreign policy that is heavily burdened by our economic and security interests in the Middle East (i.e., securing oil, support for counterterrorist activities, diplomatic support in the Israeli-Palestinian conflict, etc...) and particularly in those regions dominated by autocratic leadership.

The nature of the religion of Islam and the strength and support for cultural tribalism/sheikdoms existing in every nation of the Middle East - is not a small subject matter to trifle with. In our attempt to democratize Iraq, the arrogance in our belief of life-style and intellectual superiority crippled our ability to look at the economic, social and political conditions of the Middle Eastern culture with the level of respect that it deserved. In the Marketing world.. in order to acheive a measurable succuess it's imperative that your marketing strategy is based on a deep-understanding of your target audience - the people, the locality, and environmental conditions. Anything less would preempt failure. Obviously marketing and political restructuring are on two completely different planes but on a broad-level you can apply similar learnings to create a map of success.

All that said, is democracy in the Middle East possible? Maybe but it’s really a moot question until there’s a popular desire for it. On a personal level, I’m of the position that democratization of the Middle East is not an outcome that must be attained. Who said that a democratic government is the best form of government? To say it is the best form of government is not only vain but wholly irresponsible (and just plain dumb). I’ll note that the United States was intended to be founded as a Republic not a Democracy and for a reason.

Winston Churchill says it best....
“The best argument against democracy is a five-minute conversation with the average voter”

So true...so true...

Cosmology, God and the Big Bang

My fascination with the science of cosmology has grown increasingly over the last two years: the evolution of it, the study and science behind it, it’s impacts on the fundamentals of religion, the question of other intelligent life (and occasionally the question of our own intelligent life haha), and the ultimate fate of the Universe. <> Understanding the beginning and end of the cosmos (and everything in between) is for me, part of a larger effort to try and attain some personal direction for finding my faith, so to speak. I mean if heaven and hell really do exist and non-believers are doomed to live an eternity in hell – I don’t want to find myself in the wrong boat for lack of trying.

Battling the question of religion of course is such a huge undertaking – and in truth – one that might never lead anywhere. It is after all, a matter of faith at this point. I’m a details woman who likes to have the facts so naturally the concept of “blind faith” poses a bit of a problem for me. And it really is “blind” faith since the evolution of religion in the context of what we know it to be today is riddled with the stuff of legends followed by dated first/second/and third person interpretations, followed by re-writes and more interpretations (and therefore also misinterpretations), as well as blatant fabrications and half-truths intended to support the agendas of political and religious leaders of the times (think “The King James” version of the bible – a revision of an earlier translation created during a time when support for protestant reformation was in full swing and reforms were underway to change the Christian-community). After all, the teachings of "god" and "religion" are governed by man and it’s a fools notion to believe that after a 1,000 years - man never had his own agenda. Is it possible that religious and political leaders (societal roles that often intertwined back in the day) created a religious doctrine to govern the ungovernable? To create a more civilized society by dictating "the laws of man"..? Possibly. I wouldn't discount it.

In any case, I do not believe that the paths of cosmological and religious studies are mutually exclusive - they’re roots reach back to the same fundamental questions as do almost every major point of revelation thereafter. Fortunately for me, cosmology alone is such a fascinating study that even if I never find my spiritual ground, I will have found plenty else in it’s stead.

Einstein was a spiritual man who believed in the existence of a God – though not a God as a religious deity but rather a God that was, essentially, the sum of all of things in the universe.

Through observational evidence in the last few years we’ve determined that the universe as we know it has a beginning but no end. It was born from a fiery bang, with all the stuff of life and dark matter defined within ten-trillionths of a second, and it will continue to expand forever thanks to gravity giving way to the force of anti-gravity. As the universe continues to expand and the heat of matter eventually begins to cool...we know that one day in the distant, distant [distant] future the state of the universe will be a soup of lifeless, cold, dead matter. It will die an icy-death.

The idea that the universe has a beginning would seem to imply the existence of an omnipotent being who created the universe. But does it have to? Certainly not the first time someone has asked this question but a first for me.. What if the “Big Bang” was a massive explosion that began in the fabric of some other space and time – an explosion so immense that it became point zero for the creation of the universe as we know it. According to the law of energy conservation: the amount of energy that exists before any event must be the same as the amount of energy that exists after the event. It can dissipate, change forms and turn into matter but it cannot dissapear nor can it come from nowhere. If these fundamentals hold true, then isn't it possible that the energy that existed after the Big Bang came from the same amount of energy (in similar or dissimilar form) that existed before the big bang; And if that's the case then wouldn't that very notion overrule the existence of supernatural creation, meaning, the same amount of energy pre-dated the moment the universe was created...

We know that every massive particle has it's opposite twin, called an anti-matter doppelganger. When matter and it's anti-matter collide they wipe each other out of existence. Fortunately (for us) the symmetry between matter and it's antimatter isn't equal. There are subtle differences between the two that makes matter easier to create and thus after the Big Bang - when matter and it’s anti-matter annihilated each other, there was some matter left over resulting in the universe we live in.
Isn't it possible then that an “anti-universe” existed before the big bang...and the unstable “state” of this anti-universe (in that anti-matter could not easily be created to support continued expansion of the anti-universe) eventually led to a “big crunch” which was point zero for “the big bang”???

I don't know; obviously. But it brings up some interesting theory on the need for an ominpotent creator at all..

Marketing to Special Interest Groups??

Several columns of late have been written on Businessweek’s ‘Brand New Day’ blog regarding recent TV advertisements that have been attacked by special interest groups [SIG]. Those corporations coming under the most fire: GM for it’s robot/jumping off a bridge dream [under fire by MH and suicide prevention groups-according to BW] and Snickers for it’s quick/do something manly commercial [under fire by gay rights groups]. As for the GM-spot SIG-reps say that potential suiciders might be influenced by the ad and follow the tagline. Phooey I say. That sounds strikingly similar to the “condoms are a prelude to sex” argument. <>

Initially GM stated that it would run the ad as intended and would not make any changes. Less than a week later execs finally relented and edited the last frame – rather than actually show the robot jumping off the bridge, he just stands on the bridge at which point the frame changes. With this minor and seemingly meaningless edit [a reactive proposition that I feel holds zero value anyway since the implication is still the same], I was displeased with GM for folding and responded to the column with a post. But I’ve seen a number of folks that felt that the ad was thoughtless and irresponsible and I wholly disagree.

In the middle of stressed-out work day I say all the time – That’s it; I’m throwing myself out the effing window – colleagues say it, friends say it. If I’m not saying it, I’m usually holding my hand to head in a gun-like cocked manner and pulling an imaginary trigger. We’re not and I’m not advocating suicide. When watching the GM ad - the point is “we get it”.

Whether you’re overweight, a little fugly, blonde, brunette, a sexy woman or a pot-bellied guy, or you reflect one of the gazillion other circumstances in life that at the core of our cultural biases will always generate not-so-well received stereo typing – we [in the media and as a society] have to be able to draw the line between that which truly offends and is abhorrent and that which pokes fun at our own failures, insecurities and tendencies for political incorrectness.

If TV-watchers are truly offended by the content or implied meaning of an ad – they’ll let you know. Special interest groups represent the minority not the majority; And the majority are cognizant enough to make up their own minds.

As for the snickers spot, I thought it was hi-LAR-ious and was sad to hear it got the “SIG”-ax.

Credit Card Marketing to Illegal Immigrants: Stupid Smart or Just Plain Stupid?

Briefly sidelining the “marketing perspective”.. for starters, I’m infuriated by Bank of America’s latest efforts to test-market credit cards to undocumented immigrants [let’s just call it what it is – illegal aliens]. BofA’s main stand here is to provide the local Hispanic population previously unable to establish credit - a reputable, legal alternative. Nice. While I do not agree that BofA’s move is “aiding and abetting” illegal immigrants – it’s certainly fueling our immigration issues by taking advantage of a problem that already is growing exponentially. It’s rampant capitalism at it’s the best [or worst] and with zero regard for the legal niceties.

And it’s no wonder they’re not advertising it either – not really on par with Bank of America’s earlier ‘higher standards’ ad spot which as I understand was recently pulled, to be replaced by "Bank of Opportunity", and, for this population - indeed it would be.

Let’s set aside for a moment the potential backlash it will likely have on existing customers - from a marketing perspective is this a brilliant stride to tap the most rapidly growing and most widely untapped market segment (particularly for this locality) or a major marketing blunder whose financial windfall will show it’s ugly face through increased loss rates, increase charge-off balances and modified fees and interest rate triggers for the remaining card portfolio....? It’s clear that from a business perspective – these are not “illegal aliens” or “lawbreakers” what have you – they are potential customers. But should they be targeted?

Here are some things to consider:
1. Given the unavailability of US credit lenders to this target population – like many high-risk accounts – a segment of this portfolio will pay to whatever end to maintain a line of credit. They need the money and the financial security that comes with having unstable, low wage occupations. Simple lack of availability elsewhere can breed spend and pay loyalty; for all those high-risk sloppy payers the portfolio will likely benefit from an increase in late and over-limit fee revenue not to mention interest income from high interest rates that are manageable [for a while] through low credit lines.

2. By 2010, it's estimated that the hispanic population will represent a 9.2% share of the buyers market with a growth rate far surpassing that of any demographic.

3. Reaching out to such a high-risk, untargeted segment will also likely engage brand loyalty through cross-sell opportunities to the bank's retail branches, cobrand cards and other lending activities: auto and mortgage loan sectors.

From a financial risk perspective…
1. Targeting customers that have had a checking account for 3 months is simply foolish. If Bank of America wants to roll this out nationally, they’re going to have to mitigate that risk by targeting the financially “grounded” segment of this portfolio – a minimum of 12-18 months should be required. Having more stringent criteria will also likely sideline some critic’s complaints by closing the profile gap of it’s intended customers. Illegals that have been here longer and that have grounded themselves in society by establishing mortgage loans and checking accounts with reputable firms (and for a reasonable period of time) will likely be seen as more worthy customers by citizens and legal non citizens, and thus reduce some of the loyalty backlash.

2. Naturally a concern here is when the cardmember fails to make a payment for three consecutive months. If you can’t adequately track cardmembers - who pays when cardmembers default and debt collections balloon – obviously the bank and underwriters will consume those costs but don't think that the rest of the portfolio is safe from feeling the sting. When losses equal or outweigh the risk assumed, you have to force the revenue from elsewhere. Similarly to the way insurance companies raise premiums to cover claims losses – so to will BofA increase fees and beef-up the triggers that generate higher interest rates [so active card members hit them sooner and/or more often]

3. Sub prime accounts are the most high-risk category of lenders in a bank division’s portfolio – for the most part these cardmembers are high-risk at acquisition and represent the lowest income wage earners, the student population and large single-income ethnic families [typically Hispanic]. They have low FICO’s in range under 600 and have credit lines typically under $800. This segment is often either unprofitable or lends itself to a level of profitability that trends, erratically, from the profitable end of the spectrum to the losing lots of money end of the spectrum. Clearly BofA's new target audience resembles key characteristics of the general sub-prime population.

4. Some that I have spoken to point out the fact that these lines come with a $500 credit limit upon a $100 dollar deposit and thus risk is limited. Well, I’ll just say that large financial corporations tend to have multiple business areas whose business strategies are intentionally misaligned. Their functional contribution to the business’ bottom line are through very different means and often contradict one other to cover the grey financial areas resultant to risk migration. The credit risk department at some point [beit 9 months to a year after acquisition] will start granting credit line increases and that’s where the real financial risk starts to rear it’s ugly head.

There's good and bad marketing. There's good and bad execution. And there are plenty of negative case studies of companies crossing the line. Ignoring the voices of your existing customber base can only lead to bad things if their voices get loud enough.

I understand that the fundamental goal of any corporation is to serve it’s shareholders. I just hope this marketing strategy doesn’t backfire; And it very well has the potential to backfire with far greater momentum and ‘bang’ than as was advertised.

A Pity-Party for Walmart

Walmart has gotten supremely bad press over the last few years and all the signs of late seem to indicate the anti-Walmart sentiment is only growing. Given the relative lateness of the store giant’s latest efforts to quell image-critics, I’m doubtful that any last-ditch efforts to salvage their once highly esteemed brand image will produce any visible payoff.

I am neither a Walmart-hater nor a fan of Walmart. I don’t shop there but I also don’t shop with the competition either (i.e., K-Mart and Target). However, I've lived in many cities across the country and never have I found any difference in the level or manner of complaints afforded to large chain discount stores such as Walmart, Kmart and Target. Long lines, bad customer service, unclean stores, non english-speaking employees, minimum healthcare coverage for employees, low wages etc., etc.... We're talking about part-time employees working for a general store, right? I used to work in the healthcare consulting industry and healthcare coverage for part-time employees, is not a common practice. Low wages? The lowest-wage earner at Walmart makes more than the minimum wage.

How much should it cost to hire stock boys, clerks, cashiers and baggers?

Thousands of jobs requiring signifcantly more physical labor, brain power and longer hours are often paid either the same wages or, in more favorable circumstances, only slightly more. So what's so special about Walmart employees that they deserve differential treatment?

Keep in mind I am NOT advocating poor pay and poor healthcare coverage; like most I am none too fond of having to pay for someone else's healthcare. But I don't even see this level of reaction aimed at our prison systems across the country. The lowlifes piling up in these places actually did something and we have to shell out 10 times more per year to pay for their food, shelter, excercise and education. Really the question I'm driving at is this: How did Walmart get such an unfortunate claim to fame when no one else did (certainly not because they are the only ones).

So compared to the competition, is Walmart really so terrible? What started out as general consumer malcontent over poor customer experiences quickly escalated to communities battling it out with the giant to ban it from entering the locality. I recognize the inevitability of discount store giants squashing competing local businesses - a sad end for "the little-man" - but I also recognize this as being the benefit and price of capitalism. Anti-Walmart hostilities eventually escalated to the point of garnering significant political press and politicians speaking out against the Walmart movement which in turn even gave rise to Walmart-bashing on C-SPAN. My reaction to this is simply, ‘wow’.

Is Walmart really the evil empire it’s made out to be - a narcissistic slave-institution set to take over then destroy the world? Or did it’s size, and domestic and global expansion efforts make it an easy target whose occasional reports of shoddy customer satisfaction (not terribly unusual given it's size, locations and target audience) quickly snow-balled into this monolithic anti-Walmart movement with Walmart becoming the symbol for everything in the world that’s wrong....?

Blog Etiquette

I'm a regular blogger and have my usual forums. It gets the senses going; it's stimulating; it's a good outlet for my nervous energy. That said, quite frankly I am beyond fed up with people who go from site to site posting irrelevant, unintelligent BS. If I have to question whether or not you passed a 3rd grade education...maybe you ought to stick to "speaking" or go to another site.

Blog snobbery? Maybe.

Not too long ago I was on one of my regular blog forums and the discussion was whether or not the problems faced by Debroit's Big 3 Auto companies had the Unions or bad management to blame. A third of the way through the discussion, some idiot schmuck posts a completely irrelevant/sour/anti-America/anti-democracy thread and insult's the blog's host, editor in chief of Forbes magazine. Oh and btw: it was the third day in a row he posted the exact same text. You know... copy/paste... because clearly the nonresponse generated by his earlier posts wasn't response enough.

Now, there are gi-normous blog forums (i.e., Huffington Post) and what I consider "family-minded" blog forums - those that may have a lot of readers but whose regular posters remain fairly consistent and relatively in the low-digits. You've likely never met them, and you probably have only a few peeks into their background, but still you're part of a social circle made up of familar names and familiar ideas. Enter rude, irrelevant anti-everything blogger. To make a long story short - I lost my cool and posted the following thread before continuing on with the discussion:

So-and-So,
There's a thing called 'etiquette'. Maybe you've heard of it? Instead of wasting our time by posting irrevelant rhetoric, perhaps you could try sticking to the topic of discussion. When Rich posts an 'I-hate-America" blog - feel free to jump right in. Until then - here's a thought: Respect the rules of etiquette and keep to the topic or clam it and go elsewhere.

I received a couple of kudos from other regular bloggers but surprisingly an equal share of negative feedback as well - most from posters whom I've never seen post on that forum before.

So, my question.. Is there such a thing as 'Blog Etiquette'? Or is the blog forum and all it's serious bloggers relegated to sitting quietly in the corner while all the mindless jibber-jabber come pouring in? Was I in fact out of line by trying to incite some sense of structure and etiquette within the blogoshpere?

Well, some will have their opinions that differ from mine and to those I say 'what-ever' - I'm sticking to my guns on this. As far as I'm concerned there is 'absolutely' blogger etiquette. Folks, it takes time to create a thoughtful discussion, choose your words and articulate your message all the while being mindful of grammar and "readability" - my guess is the host doesn't want to see his/her comment board hoarded by irrelevant, nonsensical hate-spam and neither do the bloggers who regularly post there.

In sum: If you can't keep to the topic, clam it or take your drivel elsewhere.

Life Lessons

My girlfriend's 17 year old son will be celebrating his 18th birthday in just a few days and she's compiling a scrapbook of sorts to commemorate the first 18 years of his life with memorable milestones, some farcicle anectodes for good humor, pictures, achievements and a collection of thoughts from family friends. I was honored that she asked me to contribute especially since we've kept in touch less frequently than preferred the few years since I left sunny Santa Barbara. Well last night with e-pen and e-paper at hand, I jot down a few thoughts and came up with a list of top 10 "life-isms", both humorous and altruistic. Since it took me two hours to put the list together(!), I felt obliged to share them, so here goes:

Top 10 Life lessons, from me to you:
1. Passion is the thing that drives momentum; Regret is the thing that kills it
2. The problem is not that you attract assholes and losers, the problem is that you give them your number
3. The office for your most important job is your home
4. Some people are like blisters; They don't show up until the work is done (note to self: don't be one.)
5. Humility is the essence of love and understanding
6. If you don't know where you're going the good news is you’re not lost
7. Thinker’s of the world inspire hope; Doer’s of the world incite change
8. Be weary of the rut you choose; you may be in it for a while
9. Action will remove the doubt that questions cannot solve
10. Life’s too short to hate yourself; Life’s too long to hate others

Favorite last words of wisdom…“Inspiration is highly overrated. If you sit around and wait for the clouds to part, it’s not liable to ever happen. More often than not action is the truest form of salvation” ~ Chuck Close ~