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Betting on Sports Gambling

12/28/2018

by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

What skills did your parents teach you when you were growing up? Maybe they showed you how to throw a baseball, ride a bike, or drive a car. If Buffalo Wild Wings launches a major initiative it’s considering, moms and dads might start teaching their kids a whole new set of skills, like how to place bets on teams that will cover spreads in big games.

On May 14, 2018, the U.S. Supreme Court struck down a 1992 federal law that largely outlawed sports betting, thereby giving states authority over such gambling. Several states, like Delaware and New Jersey, quickly legalized sports betting, and many others are poised to follow suit. It’s hard to imagine policymakers resisting the revenue potential sports gambling represents, which is the same reason Buffalo Wild Wings is considering adding gambling to its menu.

There’s certainly nothing wrong with businesses, including those in the highly-competitive restaurant space, looking for other sources of sales. Furthermore, some restaurants, like Dave and Buster’s, have become successful by marketing experiences alongside entrées. But, is playing arcade games the same as putting down money on NFL games?

Leisure is in many ways a personal preference. Everyone needs to relax and refresh at times, in ways that work for them, so who’s to say someone is wrong to spend his/her free time and money reading books, riding bikes, watching movies, or wagering on the outcomes of soccer games? If done in excess, most leisure activities could potentially be harmful, but gambling appears to carry a unique set of risks for the gambler and others:

Financial Risks: Problem gamblers can easily fall into a downward spiral of debt, leading them to max out credit cards, fail to make mortgage payments, or even declare bankruptcy.
Relationship Risks: Compulsive gambling can lead to neglect of children, fights with spouses, and divorce.
Health Risks: Problem gamblers often suffer from stress, anxiety, low self-esteem, and depression, as well as related physical symptoms such as insomnia, high blood pressure, migraines, and heart disease. Such individuals also are likely to use alcohol and drugs as coping mechanisms, or even commit suicide.
Job Risks: Individuals with gambling problems are frequently absent from work and less productive when they are on the job, often because of their misuse of company time.

While most leisure activities tend not to become obsessions, gambling addiction is very real. Studies have shown that those addicted to gambling exhibit many of the same behavioral and neurological symptoms that drug addicts experience. What’s more, bookstores and bicycle shops don’t need to run disclaimers in their ads, “Have a reading addiction?” or “Biking problem? Call . . .”, but casinos put disclaimers like this one on their websites: “Gambling Problem? Call 1-800-GAMBLER for help.”

The following statistics from Addiction Tips help put problem gambling into even clearer perspective:

Around 80 percent of the American population gambles in a given year.
About five out of 100 gamblers have a gambling addiction.
Of those age 14-21, 750,000 are addicted to gambling.
Most of those addicted to gambling are between the ages of 20 and 30.
Over 6% of students in U.S. colleges gamble regularly.
Gambling addiction is positively correlated with criminal activity, including violent crimes.

Gambling is a widespread and risky activity; however, the National Council on Problem Gambling acknowledges that “most adults who choose to gamble are able to do responsibly.” With the legalization of sports betting, gambling activity is likely to explode, so why shouldn’t Buffalo Wild Wings add sports gambling to its menu? That’s the question longtime ESPN host Mike Greenberg asked during an August 18, 2018 broadcast of his daily sports talk program Get Up!:

“This doesn’t seem that complicated, unless I’m missing something . . . It seems like a lot more people will come [to Buffalo Wild Wings, if it adds gambling]. I don’t see any reason not to and I see every reason to . . . I am one who is in favor of gambling in a significant way, so I don’t see any downside to this. Tell me what I’m missing if there is something.”

Here are some things that Greenberg may be overlooking about sports, gambling, and Buffalo Wild Wings:

Sports are extremely widespread: There are over 440 internationally recognized sports and more than 8,000 indigenous sports, not necessarily recognized internationally. That pervasiveness means a virtually endless stream of easily-found betting opportunities.
Sports inspire passion among a very wide range of people: Few things stir as much interest and excitement as sports, or enjoy such broad demographic appeal: men and women from toddlers to senior citizens love sports. The 2018 Super Bowl drew over 103 million viewers in the U.S. alone, which provides some specific support of that extensive popularity.
Gambling can be destructive and addictive: Several paragraphs above have already detailed many risks associated with gambling as well as its potential for addiction.
Buffalo Wild Wings is really big: It’s the largest sports bar chain and the 17th largest restaurant chain in the U.S. In 2017, it had sales of over $3.9 billion across 1,206 stores, which means Buffalo Wild Wings could expand sports betting across the country about as fast as any company could.
Buffalo Wild Wings targets families: The firm’s website suggests “Wednesday is for Family,” while promoting $2.99 kids’ meals from 4:00 pm - 8:00 pm from its seven-item, customizable kids’ menu. Customers also perceive the restaurant as family-friendly, posting online comments like “Yes, this place [is] definitely suited [for] families,” “Fun sports environment with fun bar atmosphere and family restaurant at the same time,” and “an awesome family friendly restaurant.”
Buffalo Wild Wings targets college students: The chain currently offers special promotions with 16 different universities, including the University of Alabama where football fans can get a free order of snack-size wings if Alabama records three or more sacks in a game. A Google search of “Buffalo Wild Wings student discount” returns numerous hits of other college and universities that have negotiated special student discounts, such as one giving students at Northern Michigan University 10% off food items on Thursdays. Also, the website Student Discount Program calls Buffalo Wild Wings “the ultimate place to get together with your friends, watch sports, drink beer and eat wings.”

Certainly, there are many people who gamble without causing serious harm to themselves or others. Unfortunately, there also are 5 -7 million Americans, according to the National Council on Problem Gambling, who meet one or more of the diagnostic criteria for pathological gambling, thus experiencing at least some of the undesirable outcomes mentioned above. These numbers are likely to increase dramatically, as more states legalize betting on activities that have some of the broadest and most impassioned followings—sports. People who don’t already gamble are probably more likely to start if they can bet on something they enjoy and understand. For many people, that something is sports.

Because of its size and influence with sports fans, Buffalo Wild Wings would accelerate the growth of sports betting like few other companies could, should it choose to move forward with gambling. However, that probability is only one concern. Another is the impact Buffalo Wilds Wings would likely have on young people and their betting behavior.

As described earlier, Buffalo Wild Wings targets college students, many of whom love sports and already gamble. These coeds will be easily won over to sports betting, although they can ill-afford it, both because of time (many should study more) and money (many college students have considerable debt). However, an even younger demographic is at risk, should Buffalo Wild Wings begin sports betting.

As mentioned above, the chain also targets families with young children. While it’s unlikely that any kids would place wagers at the restaurant, children do carefully observe and emulate the behavior of adults. It’s sad to imagine so many children, most of whom love sports for the pure joy of playing or watching, being socialized into gambling on games. Greenberg's Get Up! co-host Jalen Rose aptly expressed this sentiment as he said, "I don't want my grandpa teaching me about gambling at [age] seven."

It will be hard for Buffalo Wild Wings or any organization to resist the revenue that can come from entering the growing market for sports gambling. Hopefully, however, the restaurant chain will recognize the unique influence it wields, especially on the lives of young people, and avoid betting on a strategy that can be considered “Single-Minded Marketing.”

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Starbuck's Learns Sign Language

11/16/2018

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by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

If you’ve gone to a really loud concert, gotten a bad ear infection, or had a clogged ear canal, you know a little about hearing loss. Over five percent of the world’s population has permanent “disabling hearing loss,” yet few organizations consider those consumers’ special needs. One multinational corporation, however, has embraced this unique group of customers in a way that should make every company listen.

A few weeks ago, Starbuck’s opened its first Signing Store in the United States. Located at 6th and H Street in Washington, D.C., the store first appears to be a typical Starbuck’s, but a closer look reveals a unique coffee house, specially designed for those who are deaf or hard of hearing.

For instance, the store features a more open layout and low-glare surfaces in order to facilitate visual communication. Store employees, 20-25 of whom are themselves deaf or hard of hearing, are fluent in American Sign Language (ASL). Deaf baristas wear “ASL aprons embroidered by a Deaf supplier,” while those who can hear sport “I Sign” pins. The store also contains some high-tech advancements to ease ordering, such as “digital notepads and a console with two-way keyboards for back-and-forth typed conversations.”

Those adaptations sound nice, but should a global icon do so much to accommodate a relatively small number of people who tend to be scattered throughout the population? With over 28,000 retail stores, Starbuck’s is by far the “largest coffeehouse company in the world,” as well as the third largest fast food restaurant, behind only McDonald’s and Subway. The firm employs about 277,000 people and has annual revenues of over $24 billion. In light of such scale, isn’t it an unnecessary distraction to design and operate a solitary store that’s so specialized?

First, it’s important to note that Starbuck’s Signing Store is strategically located near Gallaudet University, “a federally chartered private university for the education of the deaf and hard of hearing.” Gallaudet enrolls over 1,100 students, and if they are like other college students, which they undoubtedly are, most probably love to drink coffee. So, Starbuck’s has a ready-made, geographically concentrated target market, within a short walk of its store.

A second consideration is that a customized coffee shop is something that’s replicable. In fact, the Washington, D.C. outlet is Starbuck’s second Signing Store. The company opened the first one in Kuala Lumpur, Malaysia in 2016. Perhaps there are suitable spots for similar stores in other parts of the U.S. or the world. In American alone, there are nearly 50 residential schools for the deaf.

Likewise, there may be opportunities to develop customized stores for individuals with other special needs. For instance, there are nearly 40 schools for the blind in the U.S. It also may be possible to tailor stores for certain fields of study, e.g., music or visual arts.

Third, Starbuck’s Signing store has produced some very positive PR for the company. A Google search of “Starbuck’s Signing store” returns over 8 million hits, including many complimentary news pieces in major media like USA TODAY, CBS News, Fortune, and the Washington Post. The National Association for the Deaf also has praised the company's efforts to educate and enrich the lives of its constituents and many others.

Fourth, and perhaps most important, the Signing Store fits squarely within Starbuck’s mission, values, and goals. The company claims an “ongoing commitment to inclusion, accessibility and diversity,” which is broadly reflected in its mission statement: “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time." More specifically, the first of Starbuck’s four core values encourages “Creating a culture of warmth and belonging, where everyone is welcome.” This value is evident in the company’s 2018 goals, which include ongoing global social responsibility that creates “meaningful impact in the communities it serves.”

Although it’s unlikely that customized stores will ever be profitable on the scale of its traditional outlets, Starbuck’s should still be able to leverage the specialized model for meaningful growth. Moreover, with every store opened to serve disadvantaged people groups, the company builds tremendous community goodwill and gains very positive global publicity. For all these reasons, Starbuck’s Signing store is an emblem of “Mindful Marketing.”

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Smile, You're on Social Media

8/9/2018

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by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

"When it's least expected - you're elected. You're the star today. Smile! You're on Candid Camera!” It used to be that a hidden camera TV show was the only way others might see our most embarrassing or intimate moments. Thanks to cellphones and social media, millions can now easily watch outtakes from our lives, whether we like it or not, which is what one unsuspecting airline traveler recently experienced.

A few weeks ago, Helen (last name unknown) was settling into an Alaskan Airlines flight from New York to Dallas when another passenger, Rosey Blair, asked if she’d switch seats. Blair wanted to sit next to her boyfriend, Houston Hardaway, who was in the row behind her. Helen obliged, which put her in front of Blair and Hardaway, and next to an attractive stranger, who later identified himself as Euan Holden, a former professional soccer player.

As the plane took off, so did an apparent romance between Helen and Holden. The unexpected seatmates’ casual conversation turned flirtatious and eventually the two were touching elbows on that ambiguous middle armrest. When the flight landed and passengers deplaned, the two could be seen strolling through the terminal together.

Given 40,000+ flights in the United States each day, how do we know so much about the interaction between two ordinary air travelers? We’re privy because Blair chronicled everything about the blossoming relationship from the row behind them.

Around 15 times, Blair tweeted about things she saw and overheard such as the couple discovering that they were both personal trainers and vegetarians. Pictures and videos accompanied some of the tweets, as well as the hashtags #PrettyPlaneGirl and #PlaneBae. In very little time, Blair’s tweets amassed 630,000 likes and 250,000 retweets, then mainstream news media began to share the touching tale.

Sounds like a relationship and social media success story, right? Not quite. Helen was unaware of Blair’s inflight antics and was very unhappy to be flung into the national media spotlight, especially after the attention led to online harassment and the need to delete her social media accounts. Helen issued a statement through an attorney that included: “I did not ask for and do not seek attention. #PlaneBae is not a romance - it is a digital-age cautionary tale about privacy, identity, ethics and consent.”

Wow. That’s a strong reaction, but did Blair do anything wrong? After all, it’s legal to photograph people in public places where there is no “reasonable expectation of privacy.” The incident occurred on a commercial airliner, apparently in coach, where hundreds of people are packed like sardines. It’s hard to get much less private.

“Reasonable expectation of privacy,” however, is subject to interpretation. Yes, a commercial airliner is a rather pubic place, but most passengers wouldn’t expect the people behind them to be eavesdropping on them throughout an entire flight or photographing them from above and between the seats.

An even bigger issue involves Blair’s occupation. According to her Twitter page, she a plus-size fashion, lifestyle, and travel blogger, which means her livelihood depends on sharing content on social media. Gaining likes, shares, and followers is key to her success, and to have a post go viral is golden.

Blair’s profession matters because it reframes her motives and recontexualizes her actions. She’s no longer just a person sharing with friends a few photos she took of strangers. She’s an entrepreneur employing visual and verbal accounts of others to advance her business interests. She’s a marketer using Helen and Holden, without recompense, to build her brand. Jayson DeMers describes such situations in a 2014 Forbes article:

“The danger in using photos of individuals for your online marketing purposes is that your efforts could be seen as commercial. The rules when it comes to using photos for commercial purposes differ from when you’re merely sharing vacation photos with your buddies. Even if you aren’t directly making money off of the usage, a photo in a social media campaign can easily be seen as similar to using a photo in a print brochure or billboard ad.”

What Blair did was not clearly illegal, but her actions could easily land her on the losing end of a lawsuit, as DeMers continues to explain: “If your subject believes his likeness was used to sell a product without his permission, you may find yourself on the losing side of an argument in front of a judge.”

Ethics, however, is not simply a matter of ‘legal’ or ‘illegal.’ It’s about doing the right thing no matter what the law says. In that light, a good question for Blair or anyone in a similar situation to ask is “Would I want someone else to eavesdrop on my conversation, take pictures of me without my knowledge or permission, and share those things on social media?”

Most of us would say, “Of course not.” So, if that’s the kind of consideration we’d like for our own privacy, we should obey the Golden Rule and show the same respect to others.

Everyone makes mistakes, and Blair seems to recognize that her social media sharing of two strangers’ personal interactions was wrong. She has offered an apology; although, she failed to delete most of her tweets about the incident. For this reason and all of the above, Blair’s creation and promotion of “Plane bae” should be considered “Single-Minded Marketing.”

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Churches for Men Who Don’t Like Church

7/7/2018

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by Michael Zigarelli, professor of leadership and strategy at Messiah College
mzigarelli@messiah.edu

“Jake” is not his real name, but he’s a real guy experiencing real change. Jake is 37 with three kids, married for 13 years, many of them unhappy. His life and his work are uninspiring, but it’s a living.

Gradually, his living is becoming a life, and it’s happening in the last place he’d expect: a church.

Jake’s making friends there, his first since becoming a parent. The chronic loneliness of his life—he didn’t even know how bad it was—is subsiding. There’s more peace in his household, too, probably because there’s more peace in Jake. The kids notice that dad’s different; Jake and his wife have turned back the clock 10 years. The aquifer of anger just beneath the surface has dried up.

Gone as well is Jake’s misperception of God. He’s learning that God really does love him. That’s changed everything, giving Jake a new identity—his real identity.

Now multiply Jake’s experience by a hundred thousand. Maybe more. Research I’m conducting across the United States reveals that there are countless Jakes out there because a few innovative churches have figured out how to reach them.

Why Some Churches Target Men

The concept of a “target market” is Business 101, just as the analogous concept of a “target people group” is Missions 101. It’s axiomatic. It works. From a theological perspective, it’s good stewardship.

So consider the logic of “adult men,” or some subset, being a church’s primary target. First, a scant one in five men attends religious services weekly in the United States. Second, there’s the longstanding gender gap: Sit in the back pew this Sunday and you can count 50 percent more women than men. And third, targeting men seems to accelerate church growth. Consider these strikingly-consistent perspectives from senior pastors I interviewed:

“It’s a very simple argument: You reach the man, you reach the family.”
“If the men are respected and feel comfortable in your church, the families will follow.”
“We stumbled into this strategy: If you get the man, you often get everyone in his circle.”
“We asked ‘how do we reach the most people?’ and it seemed that if we could reach the husband or the dad, then we had a good shot at reaching the rest.”

The churches in my study do not appear to be part of some masculinity movement. Rather, they’ve simply adopted an efficient and catalytic strategy: Get the man, get the family. The approach not only reaches a vast and underserved “people group,” it has the byproduct effect of bringing in women and children by the vanload.

Perhaps that’s why most of these churches have gone from start-up to thousands in weekly attendance in a mere decade or two. One, in fact, now attracts 10,000 visitors a week system-wide. Another attracts 27,000.

As a strategy professor, I can’t say I’m surprised by the growth. These churches are pursuing what’s known in my world as a “blue ocean strategy,” the disproportionately powerful decision to go where the “non-customers” are—that is, to serve an ignored segment of the market that would buy your product under the right conditions. The pastors have simply provided the right conditions, enabling their churches to claim, again, to use the business language, “uncontested market space” (i.e., the men who would not be in any church otherwise).

Hence the metaphor of operating in an undisturbed “blue ocean.” No competition there, only demand. It’s the same approach that propelled Henry Ford, Milton Hershey, Sam Walton, and Steve Jobs. Many others as well: Southwest Air, CNN, Home Depot, Airbnb, Cirque du Soleil, Starbucks, Nintendo, Netflix, Quicken—all have soared by serving those formerly on the sidelines.

My emerging sense is that there is plenty of room in that blue ocean for churches beyond those in this study. In other words, there seems to be a wide-open space for more effective evangelism and discipleship of men, and by extension, those in their sphere of influence. Let me introduce you to a few exemplars.

Seven Man-Friendly Churches

For this project, I found seven churches overflowing with men. They’re not that way by chance. Rather, they’ve been intentional, even relentless, about pursuing men as their primary “target people group.” In alphabetical order, the churches in this study are:

121 Community Church, Grapevine TX, Founding Pastor Ross Sawyers
Christ’s Church of the Valley (CCV), Peoria AZ, Founding Pastor Don Wilson
Coastal Church, Daphne AL, Founding Pastor Chad Stafford
Mecklenburg Community Church, Charlotte NC, Founding Pastor Jim White
Northwood Church, Summerville SC, Founding Pastor Fred Richard
Revolution Church, Tucson AZ, Founding Pastor Josh Reich
Wheatland Salem United Methodist Church, Naperville IL, Pastor Jennifer Wilson

Each is man-friendly at its core, designed to reach the unreached. Their goals and strategies make that plain. So do these quotes from some of the senior pastors I interviewed:

“I have the Biblically-illiterate, f-bomb-dropping guy in my head with every talk I write.”

“The person we’re trying to connect with is the 20- to 40-year-old guy who comes in, probably late, sits in the back row, folds his arms and says ‘God, this is your last shot.’”

“Our target is the young dad who was in a fraternity, went to church and hated it, is now working 60 hours a week. He’s more in need of community than he’s ever been in his life; he’s so disconnected from God.”

One pastor summed it up straightforwardly for them all: “I go after guys who were raised Christian, but who haven’t been to church in a while.” Simple. Focused. The classic hedgehog technique from Good to Great.

How do they do it? Their implementation weaves its way through the music, the messages, the staffing choices, the platforming and promotions, even the colors and decor. They’ve replaced flowers and pastels with earth tones and lobby screens tuned to ESPN. They avoid love songs to Jesus and other language that makes guys feel weird. They keep the service to an hour, the messages to a half-hour, and the content intensely practical.

And they do so much more. You can find the details in this Christianity Today article or these more in-depth pieces on LinkedIn and on YouTube.

Women and Children Love These Churches, Too

While it’s possible to become a man-friendly church at the expense of others, the leaders I interviewed seem better than that, seeking win-wins. Most, for example, have gone big with children’s ministry—huge, in fact—not just to serve the kids, but because guys who won’t come to church for themselves will attend if their kids love it.

Women are also enthusiastic about these churches, according to the leadership. Ecstatic in many cases. This quote from one of the pastors echoes what I heard from several of them: “No lady has ever said we’re too masculine. But I’ve had dozens of them come to me with tears in their eyes, saying ‘I’ve been trying to get my husband to go to church for 20 years and this is the only church he will ever go to. Thank you so much!’”

While this research is ongoing, my preliminary conclusion is that these church leaders have found an approach that is working for everyone, reaching thousands who would otherwise remain alienated from God, and offering us a novel, nonprofit example of “Mindful Marketing.”

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For Lives, For Profit

5/16/2018

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by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

Childbirth can be dangerous—Claudine Ndayishime found out firsthand when a C-section complication caused her to lose blood and slip into a coma. Tragically, the hospital didn’t have her blood type in stock. As her life hung in the balance, help came from above.

Flying in from many miles away, a small and very fast drone delivered the blood she desperately needed. Thankfully, Ndayishime and her daughter are alive and doing well today. The drone that made the life-saving delivery wasn’t from who you might expect, e.g., the hospital system or the Red Cross. It came from Zipline, a for-profit startup company whose mission is about “life-saving delivery by drone.”

Ndayishime’s story of death defiance is not unique. Since launching in Rwanda in October 2016, Zipline’s innovative approach to delivering critical medical supplies has “logged more than 186,000 miles and over 4,000 deliveries,” often for cases of critical need. Rwanda’s Minister of Health Dr. Diane Gashumba suggests that many lives have been saved as a result.

Aerial drones are increasingly common. A simple search on Walmart.com returns over eighty drones that end-consumers can buy. So, why are Zipline’s drones special, and how does a small start-up deliver life-saving service on a national scale? For a clear and quick understanding of Zipline, watch the following three-minute video: https://youtu.be/6wBeXIgD4sY

One big difference from other drones is that Zipline’s have fixed wings, i.e., they’re like airplanes not helicopters. Zipline uses fixed-wing aircraft for the same reasons commercial airlines do—they can fly farther and faster. While Amazon’s delivery drones hit top speeds of 50 mph, Zipline’s drones travel as fast as 80 mph, making its technology “the fastest commercial delivery drone on earth.”

In critical situations when every minute matters, that speed saves lives, as does the reach of Zipline’s drones. The firm’s fixed-wing craft are more efficient than typical drones, allowing them to fly for nearly 100 miles round trip, or about 200 times further than the average quad-copter. Zipline’s drones also are cable of “flying over tall mountains, and even through high winds and downpours"--something most drones could never do.

However, Zipline’s success stems from more than just the type of drones it uses. The company employs comprehensive logistics that include strategically-located distribution centers for medical supplies, a text message-based ordering system, and “military-grade GPS” that guides the drone to the appropriate destination, where the valuable cargo is dropped softly by parachute.

Another important feature of Zipline’s drones is that they don’t take off and land like typical fixed-wing aircraft. Instead, the “zips” fly more like jets on and off an aircraft carrier. The drones are catapulted into flight for take-off, and they are tail-hooked out of the air upon returning to the distribution center, all of which adds to speed of service and location flexibility.

At this point, Zipline’s operations are restricted to Rwanda, but the company has plans to place distribution centers in many other countries around the world, including in the United States. Zipline has raised over $41 million in capital, which will help fuel the expansion.

That last piece of information may make some people uncomfortable: Zipline is a for-profit firm. As such, the company not only needs net income, it must produce a big enough return on investment to satisfy existing investors and to encourage future ones to buy into the business model. The average rate of return venture capitalists expect is 25%.

So, Zipline’s motivation is based on more than a selfless desire to do good. If your life were on the line, would you want the outcome to rest on the wings of a for-profit company? Wouldn’t you want aid from an organization that was more purely altruistic?

It would be helpful to ask these questions of Ndayishime and others in Rwanda who Zipline’s fast-moving drones have saved. My guess is they would have no problem with a for-profit firm being in the business of saving lives.

It’s a fallacy to think that individuals and organizations cannot hold different motives concurrently. Most of us do that kind of balancing in several areas of our lives. For instance, we’re employees who want to help the people our organization serves, but we also want to get paid. Those motives are different but complementary: the better we serve others, the more likely it is that we'll keep our jobs and perhaps receive a raise.

A similar relationship exists for Zipline. The better it serves hospitals and their patients, the more likely it is to retain their business and gain new accounts from other institutions. In the case of Zipline and many other companies, profit serves as an added incentive to innovate and to deliver their products/services more efficiently and effectively, which benefits others.

At a time when many say that technology is taking jobs and that business is bad for society, Zipline offers an excellent example of the opposite: Its work saves lives, provides employment, and ultimately makes our world a better place. It’s a company that can be commended for its “Mindful Marketing.”

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Does 'Amazon Go' Mean Goodbye to Jobs?

1/27/2018

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by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

Imagine walking into a store, taking whatever you want, and walking out. What sounds like a shoplifter’s fantasy, Amazon has made a reality, of sorts, in its one-of-a-kind Seattle store. Customers still need to pay, but the entire process is automated electronically, which may lead some to ask, ‘Is Amazon’s cashier-less concept endangering employment?’

It may seem strange that the king of ecommerce is bothering at all with old-school, brick-and-mortar retail, let alone a self-checkout store. Many online retailers, however, have found that the secret to long-term success involves a combination of “bricks and clicks,” i.e., both a traditional and a virtual market presence.

Of course, this is not Amazon’s first foray into physical retail. The company already has a handful of retail stores. A main reason for these tangible outlets is that, as convenient as ecommerce may be, there are certain things that people want NOW, and they’re not willing to wait overnight or even a few hours, if same-day delivery happens to be possible. In sum, Amazon doesn’t want to miss out on the market for immediacy.

With its new “Amazon Go” store the company has taken ‘fast’ a big step further by eliminating the checkout line. Here’s how the “Just Walk Out Technology” works. Amazon account holders download the free Amazon Go app and scan their smartphones when entering the store. Every item they choose from store shelves, then, is automatically placed in their virtual shopping cart by means of “the same types of technologies used in self-driving cars: computer vision, sensor fusion, and deep learning.” When customers exit the store, the system charges their Amazon accounts and sends them receipts for their purchases, all without them ever entering a checkout line.

What can people buy at this one-of-a-kind store that claims “The world’s most advanced shopping technology”? At this point, the options are mainly grocery items, including Amazon Meal Kits. It makes sense for Amazon Go to focus on food because edibles are what people most often want to get quickly; they certainly don’t want to wait the days or weeks it takes to receive some goods from Amazon.com.

But, a cashier-less store is a potential cause for concern, for at least a few reasons. First and foremost, it seems like the technology could be taking workers’ jobs. People get paid to run cash registers and otherwise help check others out of stores. Granted, Amazon isn’t a big brick-and-mortar retailer now, but that seems to be changing. After opening its first Amazon Books store in Seattle in November 2015, the company now operates in a dozen more locations scattered throughout the U.S., with plans to open several more soon.

Even if Amazon doesn’t implement cashier-less checkout in its Books stores, or it fails to make its Go stores as ubiquitous as McDonald’s restaurants, the employment impact of the technology will still spread. It’s likely that other retailers and technology companies are already working on their own versions of Just Walk Out Technology that one or more of them will pilot in the near future. Then, after fixing the flaws, the technology will likely penetrate more and more retail sectors, just like self-checkout spread from grocery stores to big box retailers and beyond.

So, there’s potential that not just a few dozen, but thousands, tens of thousands, or more cashiers could be displaced. For instance, there are over 154,000 convenience stores in the United States. If just 10% of those stores adopted something akin to Amazon’s Just Walk Out Technology, and each store employed four cashiers, there would be over 61,000 people out of work.

Such projections make cashier-less shopping or any technology that replaces human labor sound bad, but is it really? Just a century or so ago, many people were employed in basic manual tasks, like digging holes, ditches, etc. If you’ve ever dug a hole of a significant size in solid ground, you know it’s a very strenuous task.

Thankfully, ingenious individuals invented machines like the bulldozer and backhoe that dig far more effectively than even a hoard of humans with shovels. Did that technology take jobs away from people who could dig? Yes. But that displacement was ultimately for their own good, as well as the good of society. Few people want to make a living digging holes by hand. It’s much less strenuous and more stimulating to operate the machinery that does the digging, or to plan where the digging should be done, or to build the homes, highways, etc. that use the holes and help drive the economy.

Of course, being a cashier demands a broader range of skills than digging a hole; yet, most cashiers probably would welcome the opportunity to do work with more variety or challenge, maybe after receiving some additional training or education. Regardless, we all must recognize that technological advancements have changed the way people have worked for millennia, and they will continue to do so. What’s more, that rate of change may be increasing when one considers recent innovations in areas such as robotics, virtual reality, and artificial intelligence.

Someone who knows something about technology and job creation is Microsoft founder and philanthropist, Bill Gates. The software that Gates developed decades ago and the advancements it supported, inevitably led to the displacement of workers whose job skills were passé.

However, that technology also created thousands upon thousands of new and more engaging employment opportunities for individuals who learned to leverage that technology. In an interview with Fox Business, Gates suggested that the same cycle of economic growth and job reassignment will continue in the wake of the latest applications of new tech.

Amazon Go is a ‘prime’ example of technological advance sparking job skill evolution and likely economic growth. Although the store doesn’t have cashiers, it employs a variety of other individuals in meaningful work that includes making the retailer’s ready-to-eat food and offering customers product recommendations. What's more, people are needed to build, install, and maintain the Just Walk Out systems.

Amazon isn’t guilty of eliminating jobs; rather it’s created new and more interesting opportunities for individuals, particularly for ones who embrace technology and invest in their own professional development. In sum, Amazon Go checks out as “Mindful Marketing.”

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Fixing iPhones

8/10/2017

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by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

One rainy morning many years ago, I was driving to work (my first career position after college) when a car hit me from behind and pushed me into another vehicle. It was a relatively slow-speed collision so the damage to my car wasn’t extensive, but the insurance adjuster called it “totaled” since the repair estimate exceeded the car’s low value. My car wasn’t worth fixing; I needed to get a new one.

That experience reminds me of the many products we use each day but seldom repair when they break. For instance, most of us don’t think of fixing a broken toaster; we look for a new one. This tendency to replace instead of repair places significant strain on our environment, but the practice becomes even more troubling when talking about expensive and easily ‘injured’ items like our ever-present smartphones.

If you own a smartphone and haven’t dropped it or had some other mishap, you’re either extremely careful or very lucky because, “Each year millions of cell phone owner’s drop, sit on, flush, swim with and even throw their phone, which normally results in some sort of damage.” After such an unfortunate occurrence, the question becomes whether to repair or replace the indispensable device, which probably cost at least a couple of hundred dollars, or several hundred-plus if you’re packing a newer iPhone or the latest Samsung Galaxy.

Fortunately, a variety of online outlets will repair broken phones, for example:

However, using an online organization for repairs requires a major sacrifice of time. Many people can’t be without their smartphone for a few hours, let alone several days or more. And, there’s the issue of trust: We don’t know these companies well and can’t watch them make the repair. How can we be sure they’re respecting our privacy when so much of our lives literally rests in their hands?

Also, again, there’s the issue of cost. Is it worth $100 or more to repair even a relatively new device when technology is changing so quickly? As a result, it’s easy to rationalize spending a few hundred more to have a new one.

You may be wondering, "Where are the smartphone manufacturers? Why don’t the cellphone companies have our backs when their products so easily and often get broken?" In the U.S., that criticism has hit especially hard at Apple, which has a whopping 44.6% share of the smartphone market.

For years, the only place iPhone users could get their cracked screens ‘officially’ replaced was at an Apple store. Unauthorized repair centers, like the three listed above, might be able to fix the phones, but if Apple later detected their work on the device, the warranty would be voided.

Apple would suggest that the reason it has kept a tight rein on screen repairs is that it wants them done right, especially “to ensure that the new screen is properly calibrated – and in particular to allow the Touch ID sensor to be replaced without bricking the phone or losing use of the sensor.” Those more cynical about the tech leader’s motives might suggest that Apple wants to drive business to its own stores in order to capture the repair revenue or, even better, to sell users new iPhones and other items, i.e, to replace, not repair.

In any case, there are currently about 270 Apple stores in the U.S. That number may seem high, but it’s not when you consider, for instance, that Illinois and Pennsylvania, the fifth and sixth most populous states in the nation have 12.8 million and 12.7 million residents, respectively, but only nine Apple stores each. Such ratios can mean a loooong time waiting at a Genius Bar.

The good news is that Apple has recently eased its repair site exclusivity. The firm has finally authorized a few select retailers to fix broken iPhone screens. How can Apple guarantee the quality of those third-party repairs? Well, the company has not conceded control completely.

Apple is giving each authorized repair center a highly-specialized and proprietary machine that not only replaces the screens but also tells “the iPhone’s processor, its silicon brain, to recognize a replacement sensor. Without it, the iPhone won’t unlock with the touch of a finger. Banking apps that require a fingerprint won’t work either, including the Apple Pay digital wallet.” Pictures of the closely guarded apparatus can be found on 9 to 5 Mac website.

Currently only a couple of Best Buy stores in California and Florida have these machines that are capable of making same-day screen repairs. However, by the end of this year it’s expected that the equipment will be present in “about 400 authorized third-party repair centers in 25 countries.”

So, the future is looking brighter for all of us clumsy iPhone users, but won’t the delegation of this service take a bite out of Apple’s business? What about its revenue from repairs, the loss of traffic in Apple stores, and the sale of new iPhones? All of the above are real considerations but they pale in comparison to one meta-goal for Apple: maintaining its strong brand.

Apple has become the most valuable brand in the world for a variety of reasons, but the overarching one is strong customer satisfaction. People who use Apple products are almost always delighted because of their look, their performance, and the aura around them. Apple smartly wants to avoid tainting that stellar reputation, which could occur if people become disenfranchised from inconvenient and lengthy repairs.

However, averting a negative product experience is probably only part of Apple’s plan. The company also needs to increasingly position itself as a good steward of resources and as an organization that cares about the natural environment. Allowing smartphones that still have significant useful life to prematurely become paper weights or other waste does not accomplish those objectives.

Likewise, as the market for smartphones becomes more and more saturated and competitors’ product features converge, factors like repair service and social responsibility will likely gain weight as decision-making criteria. Every point of difference matters in a mature market.

Apple’s decision to outsource and broaden its repair network will be very helpful for consumers. The strategy also will prove very beneficial for the firm. As it’s done many times before, Apple has made an adept move that can be called “Mindful Marketing.”

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Scary Good Marketing

6/23/2017

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by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

Parents of young children face many challenges as they try to get their kids to do things they don’t want to do, like pick up their toys, take a bath, and go to sleep! Perhaps the biggest battle involves having them eat healthy food, especially vegetables. Is it possible that better vegetable marketing can make this age-old impasse a thing of the past?

When I first saw The Wall Street Journal (WSJ) article titled, “How Schools can get Children to Eat their Vegetables,” I was skeptical. Generations of very capable moms and dads have tried for decades to push produce with relatively little success. How could school districts suddenly crack the code?

What’s more, I’ve spoken to groups about the simplistic approaches that some marketers take, trying to sell vegetables to young people. For example, several years ago an alliance of carrot farmers led by Bolthouse Farms spent a couple of million dollars on a marketing initiative aimed at positioning baby carrots as junk food.

The strategy relied heavily on promotion, including over-the-top television commercials and “extreme” packaging, but it did nothing to make the product itself more appealing to young people. Although media embraced the campaign and suggested it was successful in two test markets, several years later I still haven’t come across the rebranded carrots in supermarkets or seen anyone eating them.

Marketing aimed specifically at kids also can be a concern. Compared to adults, children have less developed cognitive skills and more limited life experience, which makes them more susceptible to marketing tactics based on deception, coercion, and manipulation.

So, I started reading the WSJ article about kids and vegetables with more than a little disbelief. The article did a good job, however, highlighting and synthesizing research results that in general found that kids were more likely to eat vegetables when schools employed several specific strategies. I’ve summarized those strategies here and categorized each (in parenthesis) using the traditional 4Pmarketing mix:

1. Putting vegetables at the front of the cafeteria: When children saw vegetables first, they were more likely to take them, as primacy effect would predict. (Place)

2. Offering vegetables as snacks: Another study found that timing mattered in as much as kids were likely to take vegetables when they were the only thing offered as snacks outside of regular meals. (Place)

3. Making food easy to eat: Children, especially those with braces, were more likely to eat fruit that was sliced into pieces, rather than try to eat a whole apple. (Product)

4. Creating an appealing presentation: Like adults, kids ‘eat with their eyes,’ which explains why children took more healthy food when it was placed in colorful bowls instead of in gray industrial tubs. (Product)

5. Using enticing promotion: Similarly, researchers at Cornell found that kids ate more fruits and vegetables when those items were promoted via attractive signage and brands (e.g., an Elmo sticker on an apple). (Promotion)

6. Tracking purchases: Two elementary schools in Chicago used digital technology to track the food kids took from the cafeteria line and what they threw away. As in a business environment, this kind of data proved valuable for deciding which menu items to keep and which to cut. (Product)

7. Hiring professional chefs: A key factor in making food taste good is its preparation. So, it’s not surprising that when experts were brought in either to cook the food or design menus, the vegetables tasted better and kids ate more of them. (Product)

8. Educating about vegetables: For many people, food will not make it into their mouth unless they know what it is. That’s why children who were taught about vegetables in their classrooms or on field trips were more likely to try them. (Promotion)

It’s worth noting that out of the eight strategies just described, two involved putting vegetables where and when it was most convenient for kids to eat them (i.e., Place) and four involved enhancing the vegetables themselves or their presentation (i.e., Product). Meanwhile only two of the strategies involved messaging designed to put a good spin on produce (i.e., Promotion). In contrast, promotion was by far the main focus of the ultimately ineffective baby carrots campaign described above.

So there’s empirical evidence to support that more systematic, serious marketing strategies can be effective in getting kids to eat vegetables, but what about the issue of marketing directly to children? Is it fair to use such tactics to target impressionable young people who are not seasoned consumers?

If that question were asked about many other, less edifying goods and services, the answer would be “no, it’s not right.” A society needs to protect people who might easily be taken advantage of by unscrupulous others. However, it’s hard to imagine anything but good coming from increased vegetable consumption, especially when the ones eating them are growing children.

There’s also a greater societal good here. The United States is suffering an obesity epidemic in which one in three adults is obese and another third is overweight. Meanwhile, about one in five school-age children (6-19 years old) is obese, which represents a threefold increase since 1970.

Of course, obesity poses serious health risks for individuals, e.g., high blood pressure, diabetes, heart disease, stroke, and certain cancers. Aggregated across the population, such sickness presents a great strain on health systems and comes with considerable financial cost. In 2008, the medical costs of obesity were estimated at about $147 billion, while obesity-related absenteeism was believed to be responsible for lost productivity costing between $3.38 billion and $6.38 billion.

Furthermore, there is the social estrangement the comes with being obese. “Overweight and obese individuals are often targets of bias and stigma, and they are vulnerable to negative attitudes in multiple domains of living including places of employment, educational institutions, medical facilities, the mass media, and interpersonal relationships.” Add to this the unfortunate fact that kids are now experiencing body shaming at younger ages than ever.

Are vegetables the cure for obesity? No, but eating more of them and less of other food, especially simple carbohydrates, definitely helps. Likewise, marketing that is effective in getting kids to eat more vegetables is good because it is in the best interest of the children and society on-whole. In short, strategies that work to get young people to pick produce represent “Mindful Marketing.”

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Eating Out at IKEA

4/21/2017

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by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

“It’s a big country. Someone’s got to furnish it.” If you remember that slogan, you’re either an advertising geek, a big fan of IKEA, or both. Recently the Sweden-born company known for its simple-design furniture, sold in airport-hanger-sized stores, made a surprising announcement—It’s considering opening standalone restaurants. Add a new slogan: “It’s a big country. Someone’s got to feed it.”

Seventeen-year-old Ingvar Kamprad founded IKEA in Sweden in 1943, as a mail-order business. He began selling furniture in 1948, opening his first physical store ten years later. The company, now headquartered in the Netherlands, owns and operates nearly 400 stores in 48 countries and has annual sales of about $39 billion, making it the world’s largest furniture retailer.

With so much experience in furniture over the company’s 74-year history, why would it now want to start focusing on food? Yes, people use some kinds of furniture to store food, and we often sit on furniture while we’re eating, but beyond those things, what’s the connection?

In his classic business book, In Search of Excellence, Tom Peters (1982) concluded that companies should “stick to the knitting,” or focus on doing what they know best and not become too far flung in their operations. Perhaps IKEA execs never read Peters.

However, IKEA already has restaurants in its stores, which are pretty popular. In fact, some people go to IKEA just to eat, which almost sounds like going to a baseball game to get a couple of hotdogs. Actually, it’s quite different.

IKEA’s restaurants are popular for some good reasons. While the menu is understandably small, it offers a nice selection of Swedish-inspired, yet American-friendly, dishes that are apparently very tasty. I’ve never eaten at IKEA, but I’ve often been tempted by the enticing pictures and smells.

Equally important, IKEA prices its restaurant fare very reasonably, just as it does its furniture. For instance, one can buy a plate of Swedish meatballs with lingonberries, seasonal vegetables, mashed potatoes and cream sauce for just $4.99, hot smoked salmon for $6.99, and Swedish waffles for only $1.99. There’s also a kid’s menu with a variety of options for $2.49 each.

“So, the furniture retailer sells some meatballs”—not exactly. According to Fortune, 650 million people in 48 countries ate at IKEA in 2016, generating revenue of $1.8 billion. For comparison sake, that’s about the same as T.G.I. Friday’s total sales U.S. in 2011. In addition, IKEA already has some standalone restaurant experience via pop-up stores it has temporarily run in London, Paris, and Oslo.

The reason IKEA would want to sell food within its furniture stores is fairly obvious. The longer people stay in a store, the more they buy, and a café located inside the store keeps them from leaving when they get hungry. Or, as Gerd Deiwald, head of food operations for IKEA’s U.S.A., says, "We’ve always called the meatballs ‘the best sofa-seller.”

But, why would an expert sofa-seller want to take the risk of peddling food in standalone restaurants? The short answer is “because it can.” More specifically, the company has the wherewithal to do food service well, so it can capitalize on the market opportunity, which will provide another source of revenue and profit.

The move also would help diversify the firm’s product portfolio somewhat, giving it a valuable buffer in the competitive retail furniture market. Globally, much growth in that market is likely to come in China and India—two countries that are often difficult for foreign retailers to penetrate.

Another advantage that IKEA might realize in running standalone restaurants is cross-promotion. It would be shocking if the furniture retailer didn’t use its own tables, chairs, and other dining accessories in its restaurants. So, as you’re eating Swedish meatballs you’re imaging your home with a new IKEA kitchen table set.

But isn’t that a sneaky way of selling furniture—get people to try it out, so they’ll want to buy it? No. That kind of trial is exactly what helps consumers make informed buying decisions. What better way to decide if you’ll like a particular chair than to sit in it for a couple of hours. People aren’t going to buy any furniture they don’t really want, and the restaurants are a good way for customers to get a better idea of what will work well for them.

Should IKEA, then, open a hotel chain so people can try out its bedroom sets? Probably not—at least not until it gets some experience accommodating customers overnight. In the meantime, the company’s significant food service experience and strong brand equity should give it confidence to jump with both feet into the restaurant industry.

It won’t be easy for IKEA. There’s much more culinary competition outside the walls of a big box furniture store. The company also likely will need to make its menu broader and continually update it. Still, if IKEA does open standalone restaurants, they’ll stand a good chance of success, and offer a fine example of “Mindful Marketing.”

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Divided Over Shopping

11/18/2016

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by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

Before and since the election, our nation has gone through trying times. Thanksgiving should cause people to put aside political differences and seek common ground, but even the upcoming holiday has elicited polarized opinions: whether or not to shop on Thanksgiving Day.

The open-or-closed Thanksgiving Day decision continues to be a hot-button issue in retail. While some consumers appreciate companies that allow them to get an early start on their holiday shopping, others, bemoan store hour creep, which invades special times that should be shared at home with family and friends, not with strangers in department stores.

As might be expected, there are retailers supporting both sides of the consumer debate. Some of the stores that will be open for business this Thanksgiving are: JCPenney, Best Buy, Walmart, Walgreens, Bass Pro Shops, Sears, Dollar General, Macy’s, Toys R Us, Target, Kohl’s, Kmart, Dick’s Sporting Goods, and Fossil. The hours these store will keep varies. For instance, Bass Pro Shops will be open from 8 am to 6 pm, but Best Buy won’t open until 5 pm and will stay open until 1 am Friday morning.

Meanwhile, there’s a growing list of retailers that have decided to remain closed on Thanksgiving Day, which the New York Times suggests is the most recent trend. Among those taking Thanksgiving off this time are Nordstrom, Lowes, Staples, Sam’s Club, Game Stop, Costco, Home Depot, Marshalls, Barnes & Noble, Home Goods, Ikea, Patagonia, PetSmart, Publix, HH Gregg, Bed Bath and Beyond, and Cabela’s. Even the Mall of America will be closed on Thanksgiving Day.

So, who’s right about Thanksgiving Day shopping? With ‘A-List’ retailers supporting both sides of the debate, it appears that compelling arguments can be made for each case.

For instance, those in favor of being open on Thanksgiving can argue that retailers are in business to meet consumers’ needs. So, if people want to shop on the holiday, it’s fitting for companies to help satisfy that desire. Businesses also need to make money in order to remain viable, which an extra day of sales should help, especially at the height of the holiday shopping season.

On the other hand, perhaps the retailers that are open on Thanksgiving need to work smarter not longer. The companies closed for Thanksgiving are making a go of it, maybe by more effective promotion or more efficient operations. Furthermore, there are examples like Chick-fil-A, which is closed not just one day a year, but one day each week. Taking off every Sunday hasn’t seemed to hurt the restaurant; in fact, it probably has contributed to its success. When it comes to the bottom-line, maybe less is more.

Still, one shouldn’t evaluate Thanksgiving Day shopping only through an economic lens. There’s also the relational impact. Sure, shopping can be a social activity, but what’s the likelihood of shopping strengthening relationships versus a variety of other things people can be doing with family and friends on Thanksgiving Day? Often when families go together to stores they scatter, each to his/her area of interest. Ultimately products take priority over people.

The preceding argument also fails to consider another very important group of people—employees. I was talking recently about the holiday shopping season with one of my marketing classes, when a student spoke up to say that a friend of his resented being forced by his employer, a large and well-known retail store, to work on Thanksgiving Day. The young man wanted to spend that special time with his family, but he couldn’t, short of quitting his job.

One can only imagine how many times similar scenarios play out in households across America. Such situations tear at the fabric of families. Here’s where the economic and social rationales for staying closed reconvene. If the retailers that stay open on Thanksgiving are actually doing a disservice to consumers and jeopardizing their employees’ well-being, they’re also not doing any long-term favors for their bottom-lines.

Two years ago, I wrote a brief blog titled “A Time for Shopping” about stores being open on Thanksgiving Day, and I argued it was “Mindful” for retailers to remain closed. Last year, however, I shared the story of George’s Senate & Coney Island Restaurant, which is not only open on Thanksgiving, it also offers a free meal to anyone who is alone. So, which Mindful Matters blog was right? I’d like to think they both were, for the following reasons.

Some people simply have to work on Thanksgiving Day and other holidays, for example, police officers, nurses, and firefighters. Our lives are too dependent on their services to risk being without them for even one day. Some other occupations are not as critical, but are still very important, especially on and around holidays, for instance, hotel and restaurant workers. Not everyone can be at home and cook for themselves, so these individuals give up some of their holiday so many others can enjoy theirs. George’s Restaurant represents this second category.

One can argue, therefore, that the work of people in pubic safety and the hospitality industry is critical, or at least very important, on holidays. No one’s life or well-being is on the line, however, if Best Buy, Dick’s Sporting Goods, and Fossil fail to open their doors on Thanksgiving Day. However, their employees, like the young man mentioned above, realize that they are sacrificing their holiday for less-than-compelling reasons, which doesn’t bode well for these retailers in the long-run.

As more retail moves on-line, the effect of Thanksgiving Day shopping on employees should decrease, but it won’t go away. What’s more, there will continue to be the impact that holiday commercialization has on consumers wherever they are, particularly as digital connectedness grows and retailers reach them even more frequently through those virtual avenues. Taking a break from buying and selling once in a while, especially on a holiday like Thanksgiving is a good thing. Being grateful for what we already have and putting people ahead of products is always “Mindful Marketing.”