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Paying with Your Personal Brand

3/23/2019

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

It was shocking to hear the news: TV’s beloved “Aunt Becky” charged with fraud in “the biggest college admissions scam ever prosecuted in the U.S.” Most people understand that a business model based on bribery is wrong, but there’s another angle to this story that's relevant to each of us, as marketers of ourselves.

To summarize the scandal, Lori Loughlin, who played Rebecca Donaldson-Katsopolis on the classic ABC sitcom Full House and the Netflix sequel Fuller House, and starred in the Hallmark's When the Heart Calls, was one of fifty people implicated in the admissions scandal that also netted actress Felicity Huffman, known for her role in ABC’s Desperate Housewives. The mastermind of the manipulation was Rick Singer, CEO of The Key, which promised to help “the wealthiest families in the US” get their children into some of the country’s most prestigious colleges.

Many tutors, SAT prep courses, and other admissions aids honestly and legally help students improve their chances of acceptance to their preferred colleges. So, how did Singer run afoul of the law? He allegedly helped his clients’ children cheat on ACT and SAT tests, and he bribed college athletic department personnel so they would claim that certain students were recruits for their teams, even when some never played the sport in question.

However, perhaps the most devious thing Singer did was create “The Key Worldwide Foundation,” which was supposedly a charity that funded programs for underprivileged children in the U.S. and abroad. In reality, the Foundation served as a front for money-laundering, or a way for the wealthy to pay Singer who then channeled bribes to accomplices on college campus that included USC, Yale, and New York University, among other prestigious schools.

As someone who works in higher education, has one child who recently graduated from college, and has another who is currently making his college decision, the admissions scandal hit close to home. However, the scandal is even more unsettling to me as a marketer.

No, I’m not just talking about what Singer did. His bad decisions to build a business based on cheating and bribery and to operate a fake foundation were certainly appalling and surprising. What was even more amazing to me was the apparent ease in which he secured willing parties to the schemes, not just from the general population but from those representing high society and higher education—people who stereotypically ‘should know better.’

In addition to accomplished actresses Loughlin and Huffman, alleged scandal participants include an array of elite professionals from business, academia, and other fields. Some of the specific individuals implicated, along with their current or former positions, are:

Rudolph Meredith, head women’s soccer coach at Yale University
John Vandemoer, sailing coach at Stanford University
Igor Dvorskiy, director of West Hollywood College Preparatory School
Gordon Ernst, head tennis coach at Georgetown
Donna Heinel, a senior associate athletic director at USC
Jorge Salcedo, the head coach of UCLA men’s soccer
Gordon Caplan, New York attorney and co-chairman of the law firm Willkie Farr & Gallagher
Gregory Colburn, a radiation oncologist in Palo Alto
Robert Flaxman, chief executive and co-founder of Crown Realty & Development, and a Beverly Hills resident
Homayoun Zadeh, associate professor at USC’s Herman Ostrow School of Dentistry and director of the school’s Advanced Program in Periodontology

Why would so many smart and talented people risk their reputations and/or careers to associate with Singer. The motives were likely mixed. Of course, many of the participants were parents who may have been willing to do anything to see their children succeed. Those who accepted bribes, probably wanted the money. Some may have felt pressure to assist for the good of their institution. Maybe some saw or heard of others doing similar things and rationalized ‘there’s safety in numbers.’

Whatever the motive, I doubt that many of the participants, if any, seriously thought that they would get caught. If they did, they probably wouldn’t have participated. Instead, they operated under the delusion that what could be hidden from public view didn’t matter.

That misconception is one of the biggest fallacies of marketing, in general, and personal branding, specifically. In an article I wrote a couple of years ago, I aimed to debunk that myth by suggesting that a personal brand consists of three elements: character, competencies, and communication. I likened the first two components to the layers of a cake and the last one to its icing.

Some individuals erroneously act as if they can overcome flawed character and inferior skills by spreading on a thick layer of overly flattering or even disingenuous communication. Besides being dishonest, this approach only works for so long. Eventually cracks in ‘the cake’ show through the communication. Unfortunately for them and others impacted by their indiscretions, those involved in the college admissions scandal seemed to subscribe to this hollow approach to personal branding.

As I was writing this blog post, my wife shared with me some very sad news. A good friend of ours from early in our marriage had passed away suddenly at home, at the age of 58. Mark Sneff was someone who built his personal brand the right way. Even as he developed his competencies to rise to the top of the HR profession, his character exuded integrity. Mark also was uniquely gifted at communicating “the truth in love”: He could offer an honest critique that felt like a high compliment.

As the outpouring of fond remembrances on his LinkedIn page suggests, Mark was a widely loved individual who many held in high regard. I’m not sure he thought much about personal branding. I am very confident, though, that he never would have resorted to a ruse to advance the educations or careers of his two children, who he loved greatly. Interestingly, Mark was the first person I ever invited to speak to my college classes.

It’s so nice to know people who ‘market themselves’ the right way. The recent college admissions scandal should be a reminder that it only take a moment to destroy a personal brand that took decades to build. Unfortunately, that fact means that Loughlin and all who participated in Singer’s schemes, not only injured themselves and others, they’re also guilty of “Mindless Marketing.”

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How a Blind Marketing Student Sees a Smart Cane

3/8/2019

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by Jason Polansky, Marketing Major at Messiah College

I enjoy each day without something that many take for granted—eyesight. To safely navigate a sight-friendly word, a blind person develops other aptitudes, like a keener sense of hearing, and learns to use technology, such as a smartphone with GPS. Now one company has developed a hi-tech version of a tool blind folks have used forever—the cane. The thought of a ‘smart cane’ is intriguing, but is it Mindful Marketing?

A few years ago, members of Turkey’s Young Guru Academy (YGA), a nonprofit organization aimed at assisting disadvantaged members of society, began to develop WeWALK, a smart cane that uses ultrasonic sensors, microphones, and speakers to help individuals with visual impairments “see obstacles.” More specifically, a WeWALK hardware unit attaches to the handle of a blind person's cane, allowing him/her to more easily navigate outdoor environments.

Despite its recent start, the company has rapidly gained a social media following on Facebook, Twitter, and YouTube. The firm also has been featured on CNN International, NowThis, Forbes, Dr. Oz, and certain New York City television outlets.

What features and benefits does WeWALK offer that have spurred its rapid rise? The following list summarizes key parts of the new product’s value proposition:

vibration and an ultrasonic sensor to detect overhead and chest-level obstacles, such as hanging tree branches and telephone poles
a compass, accelerometer, and gyroscope for GPS technology and Google Maps integration
Bluetooth connectivity, to be paired with an iOS or Android smartphone and integration with apps such as Google Maps
touch controls that allow users to access their smart phone via the device itself, without having to remove the phone from a pocket, purse, or backpack
a microphone and speaker for voice control and Amazon Alexa integration
support for Turkish and English languages
approximately five hours of battery life
charging via a micro USB port
weight of 430 grams
length of approximately one foot
open platform for app developers to add integrations with the device
purchase price of $349 through Indiegogo

I applaud the idea and the innovation behind WeWALK and appreciate several of its strengths. For instance, overhead obstacle detection is a feature that I would find helpful. Oftentimes when I go hiking, or even when I am just walking down the sidewalk in a residential area, I never know when I am going to encounter an overhead object like a tree branch or some low-hanging sign.

In addition, the ability to connect to a smartphone via Bluetooth could save time and provide convenience by not having to hold a phone in one hand and a cane in the other. Allowing a free hand is a plus.

However, WeWALK also has some significant limitations. First, it does not attach to all types of canes that blind people use. I personally prefer a light-weight, rigid, National Federation of the Blind white cane with a metal tip, but WeWALK does not currently attach to this type of cane. Most of the canes that the device attaches to are much heavier and bulkier in nature. However, AppleVis does say that the firm has a goal of attaching to every popular cane in the world.

Another concern is how well the product can withstand the elements. Due to it being an outdoor product filled with many electronic components, one must be aware of rain during all seasons, as well as winter snow and summer heat. A useful addition to the product would be a protective case of some sort that would not muffle the sound from the speaker.

Speaking of the speaker, I would be interested in knowing how much volume can be produced. Outdoor environments can be quite noisy, due to traffic, construction, and other noises that may prevent the user from being able to hear its audio feedback while holding the cane at arm’s length.

It’s also worth noting that a five-hour battery life may not be enough to get someone through an entire day of traveling, especially while on vacation or otherwise being a tourist. Maybe this deficiency could be remedied by charging through an extra external battery that the user could carry in his or her backpack or purse. However, that power supplement would mean a rather long cord attaching the battery to the device, as well as extra weight.

One also must acknowledge the limitations inherent in any GPS product for the Blind. A GPS won’t tell a pedestrian when it’s safe to cross the street, the path to take through construction, nor will GPS directly lead the user across a large parking lot. Just about any blind person who is an experienced traveler would say that possessing strong mobility skills and knowing how to travel safely is essential before attempting to use any GPS product.

Just as when driving a car, a GPS will tell the driver how to get to the desired destination most of the time, but it does not know the rules of the road. It does not tell the driver to stop at a stop sign or obey the speed limit. Thus, I would not recommend this product to a blind person who does not possess adequate cane travel skills in the first place or who is fearful of traveling in unfamiliar environments.

Beyond the preceding limitations, a big turn-off for me is some of the language used on the firm’s about page. The first line says “WeWALK is the world's most revolutionary smart cane developed for the visually impaired people.” Using the word “the” before “visually impaired people” is a rather patronizing way of describing the target market, just as it is insensitive to use “the” before the name of a racial group. Furthermore, I don’t believe “blind” is a negative word, and I feel it’s fine to use “blind” when describing people who are not completely blind.

A better way to phrase the webpage phrase may be:

“WeWALK is the world's most revolutionary smart cane developed for blind and visually impaired individuals, allowing for greater independence and mobility through innovative technology,” or

“WeWALK is the world's most revolutionary smart cane, strategically built with the blind in mind, combining the white cane that you have known and loved for decades with ground-breaking technological advancements.”

In any case, the company should seriously rethink this use of language as it moves forward.

Overall, WeWALK is a decent and well-intentioned product that shouldn’t cause any serious harm. Still, at a price of $349, there are plenty of ways in which the product must improve before it can truly compete within the marketplace of technology and other tools targeted for blind and visually impaired individuals. Sometime in the future, WeWALK may be Mindful, but at this point I see the smart cane as “Simple-Minded Marketing.”

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Mailing Away Your DNA

12/14/2018

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

Looking for a unique gift for a family member this holiday season? Have you thought of surprising them with the ‘gift of ancestry’? DNA testing has become increasingly easy, popular, and affordable, but do the benefits of sending one's saliva for genetic analysis outweigh the costs?

The market for genetic testing exploded in 2017, and it keeps growing. Some predict sales of over $22 billion by 2024, driven by top competitors like 23andMe, AncestryDNA, Family Tree DNA, MyHeritage DNA, and Living DNA. Over 12 million people already have had their DNA tested.

What exactly does DNA testing do? It depends on the test, of which there are three main types:

Autosomal: Both men and women can take this test, which estimates an individual’s ethnicity and cousin matches on both maternal and fraternal sides over about 5 to 6 generations.
YDNA: Only men can take this test, which tracks Y chromosomes passed from fathers to sons over many generations.
mtDNA: Both genders can take this test, which examines genetic markers only along mothers’ material lines, and also provides the user’s haplogroup.

Autosomal tests appear to be the most popular of the three, as they’re the ones we most often see advertised, with consumer-friendly price points between $49 and $99. These tests are good at helping users fill out their family trees. AncestryDNA, for instance, claims it can search for relatives of the test taker among its 10 million-person database and promises to “confirm ethnicity percentages and close relationships with a high level of accuracy.”

AncestryDNA is also able to help users see migratory patterns through its Migrations tool. This feature identifies a subject’s ancestors “associated with one of more than 300 genetically based communities in the years between 1750 and 1850” to determine migration paths in the U.S. and overseas.

Some autosomal tests have pushed the information envelope even further by providing health reports. For example, 23andMe’s Health+Ancestry test informs users of whether they appear to be a carrier for more than 40 genetic conditions, it provides insights on genetic-related wellness indicators such as lactose intolerance, and it identifies genetic risks for things such as Parkinson’s, late-onset Alzheimer’s and Celiac disease.

People who purchase DNA tests certainly receive unique information that’s at a minimum entertaining, if not educational and possibly helpful in addressing potential health problems. Considering how much many consumers spend on a dinner out, a concert, or a ballgame, a genetic test seems like a pretty good deal. However, there are potential costs for DNA testing beyond the initial cash outlay.

Perhaps the biggest nonfinancial cost is the risk of lost privacy. Genetic testing companies seem to have safeguarded customer information so far—there’s yet to be a major data breach—but the potential risk from carelessness or maleficence is considerable according to New York Senator Chuck Schumer (D), who contends: “Now, this is sensitive information, and what those companies can do with all that data, our sensitive and deepest information, your genetics, is not clear and in some cases not fair and not right.”

The Federal Trade Commission (FTC) appears to share Schumer’s apprehension as evidenced by its investigation of the data policies of 23andMe and Ancestry and by the following statement: “A major concern for consumers should be who else could have access to information about your heritage and your health.”

What exactly are the risks of misappropriated DNA data? One possibility is that some organizations may conduct controversial research such as looking for connections between race and intelligence. Although such risks for entire people groups are probably few, there are many risks that could impact specific individuals.

This past spring, California detectives revealed that they tapped a public genealogy database to break the longstanding case of the Golden State Killer, identifying suspect Joseph James DeAngelo. Although few may object to the use of public DNA data to catch a serial killer, the possibility of government accessing such information for other reasons gives many people pause.

For instance, what if police were to use genetic information to predict those likely to commit crime, along the lines of the 2002 sci-fi thriller Minority Report? Such use is farfetched, but it’s not unreasonable to imagine public officials employing DNA data to identify government protestors or others who reject their policies.

Perhaps even more realistic is the possibility of businesses leveraging DNA data for profitability purposes. Life insurance companies, for example, might analyze genetic information in order to determine if someone is a good policy risk. Likewise, any company could take a similar tack in deciding whether to hire a prospective employee.

But, do these risks really exist if companies safeguard users’ data and only share it in anonymous form? First, an endless series of high-profile data breaches suggests that hackers are capable of penetrating the defenses of the largest and seemingly most secure organizations. Second, when people submit genetic tests, they often provide information that allows for individual identification, e.g., age, gender, address. Third, police and government might pressure companies to share their DNA data.

Why, then, do people continue in droves to mail their DNA to genetic testing companies and why do most of those users agree to share their DNA with the firms’ research partners. Maybe consumers don’t have a good understanding of the risks. More likely, they recognize that the potential risks are very remote, while the benefits they receive are very real and meaningful, for instance:

Knowing one’s family history: It can be deeply satisfying to learn things about one’s ancestors and the places from which they came. That kind of information often helps us better understand ourselves.
Realizing potential health risks: Of course, it’s important not to obsess about such risks; however, such knowledge can be a very helpful lens through which to view our bodies and perhaps take preventative steps
Reuniting with lost family members: This benefit doesn't apply to most genetic test takers, but some have discovered lost siblings and other relatives through the process.

Life is full of risks—much of what we do to survive and thrive involves deciding which risks are worth taking. Perhaps the risks of DNA testing will increase over the coming years. Right now, though, the risks seem remote while the benefits are real, which makes it easy to understand why so many people take genetic tests. It also makes it reasonable to suggest that the firms offering the tests are responsible for “Mindful Marketing.”

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Businesses that Bury the Hatchet

9/21/2018

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

What’s a fun night out with friends for you? Maybe it’s dinner at a favorite restaurant or a trip to the movies to see a new release. How about throwing axes? Thanks to some adventurous entrepreneurs, more and more people are participating in the pastime once reserved for lumberjacks. Hurling hatchets undoubtedly offers an adrenalin rush, but does it hit the mark for Mindful Marketing?

You can count me among those who had no idea that axe throwing is now in vogue. However, like the return of plaid, the trend is becoming harder to miss, as axe throwing sites pop up in cities such as Austin, Baltimore, Denver, Detroit, and Philadelphia and as news media like USA Today, NBC, and the Washington Post cover the craze.

The name is self-explanatory, but what exactly does axe throwing involve? Participants hoist a 14-inch hatchet over their heads and chuck it at a piece of plywood 12-15 feet away. They earn points based on where their axe sticks in the target, e.g., outer ring, inner ring, bullseye, or blue dot (kill shot).

An axe throwing outing can last anywhere from 60 minutes to several hours, depending on who’s throwing and for what reason, for instance, an individual taking in some target practice or a team competing in a tournament league.

The cost of axe throwing also varies, but Backyard Axe Throwing League’s pricing offers a ballpark: about $20/hr. for walk-ins, $36 per person for parties, and $120 per player for eight-week leagues. The businesses usually supply the axes.

Are there really enough consumers willing to pay that kind of money to throw some hardware at some hard wood? Also, do many people have the physical strength and stamina to endure an evening of axe throwing? Apparently the answer to both questions is ‘Yes.’

First, axe throwing hits the sweet spot for American’s largest age demographic, Millennials, who value experiences (often the wilder the better) over things. These young people have a bad case of FOMO (fear of missing out). Also, many of them likely recognize their antisocial tendencies involving digital devices and want reasons to put them down so they can interact in person with real humans.

Such consumer desires have undoubtedly spurred the rapid spread of axe throwing and the success of businesses such as Bad Axe Throwing, Bury the Hatchet, and Generation Axe. Backyard Axe Throwing League, which began in 2006, now has over a dozen locations in the U.S. and Canada and claims to have served over a million people.

Second, as the growth suggests, axe throwing is not just for the big and burly. The axes are fairly light (usually less than 2 lbs.), so success depends more on proper form than brute strength. Women and men of all sizes can excel at the craft.

That sounds good, but isn’t axe throwing dangerous? After all, axes have been used for millennia to chop things, including people. Furthermore, many axe throwing establishments also serve alcohol, which seems like a precarious, if not perilous, combination.

Axe throwing businesses, however, suggest that the activity is completely safe, and they provide some convincing support for that claim. For instance, patrons at Bury the Hatchet receive a “safety briefing and training session before they are allowed to participate.” Like many others, this business also uses cordoned off throwing lanes that are “a cross between a batting cage and a bowling alley.”

Bad Axe Throwing, which claims to be “the biggest urban axe throwing club in the world” says that it has never had a single injury. Apparently that track record is due to safety protocol such as inspecting each axe before every event, making sure blades are sharp enough to stick in wood but not sharp to the touch, and requiring that participants “throw and retrieve their axes in sync with one another.”

Also, while not all axe throwing businesses serve alcohol, for those that do, intoxication doesn’t seem to be an issue. Maybe it’s because people go to these places to throw first and drink second, so their desire to perform well acts a restraint on their drinking.

Meanwhile, axe throwing establishments claim some tangible benefits, namely exercise (a person can get a good workout throwing axes as well as bending to pick them up) and relationship building (fewer things bond people together more than competition and/or shared embarrassment). Bury the Hatchet also says that participants can experience stress relief and get an ego boost, as social media contacts can’t help but like pictures and videos of their friends throwing axes.

Despite these benefits, some may suggest that spending a few hours hurling hatchets is a waste of time and money. Of course, we don’t all have the same tastes in recreation. For some it’s an opera and for others it’s a minor league baseball game that refreshes the mind and reenergizes the spirit. Still, for others it’s axes.

It’s hard to say how long axe throwing will remain the rage, but many more people will likely channel their inner lumberjack and experience the primal trend. Voice assistants and virtual reality may make it seem risky and passé, but axe throwing for fun is “Mindful Marketing.”

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L.L. Bean's Still Happy Returns

2/23/2018

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

There were three certain things in life: death, taxes, and L.L. Bean’s return policy. We’re now back to two. The iconic outdoor retailer’s decision to rescind its legendary product guarantee has ignited a social media firestorm, but who’s really responsible for the return policy retraction?

Leon Leonwood Bean founded L.L. Bean in Freeport, ME in 1912 to provide a single product: a duck boot called the Maine Hunting Shoe. Over the next 100+ years, the company expanded considerably, both in scale and scope. Despite the great growth, the firm maintained an unwavering focus on quality, backed by a virtually unequaled product return policy.

For more than a century, L.L Bean made a practice of “accepting any return, at any time, in any condition, regardless of the origin of the item.” However, that very liberal largesse came to an end just a few weeks ago when the company announced it would rein in its return policy. L.L. Bean now guarantees its products as follows:

“We stand behind all our products and are confident that they will perform as designed. If you are not 100% satisfied with one of our products, you may return it within one year of purchase for a refund. After one year, we will consider any items for return that are defective due to materials or craftsmanship.”

The company adds that it requires proof of purchase for any refund or exchange, but if customers provide their information at checkout, L.L. Bean will usually have record of the purchase. If not, a physical receipt is needed. In the case of gifts or other returns without receipts, the firm will offer merchandise credit in the amount of the last known selling price, provided that the product is “unused and unworn with the original packaging.”

So, why the change of heart after so many years? According to Forbes, abuse of L.L. Bean’s very generous return policy has been happening for decades; however, the exploitation reached a tipping point in recent years thanks to some particularly obnoxious behavior.

Some people, for instance, found that they could pick-up well-used L.L. Bean items at yard sales and second-hand stores and return them to the retailer for a full-price refund. With the expansion of ecommerce, such unscrupulous behavior has only increased as returns now can be made from anywhere without having to “look a company representative in the eye” when making an appeal.

It’s likely that L.L. Bean’s decision also has something to do with the pressure that so many retailers are now under, especially from Amazon, which has led to many Chapter 11 bankruptcy filings and the promise of even more store closings. Regardless of the specific reasons, L.L. Bean finally decided enough was enough.

Not surprising, many consumers have had a hard time swallowing L.L. Bean’s policy change and no problem voicing their displeasure. For example, one disgruntled customer complained, “Your return policy was the only reason I shopped at #LLBean! I shared your amazing service with friends, colleagues, and more. Now, I'll be sure to suggest they avoid like the plague!”

Others are even more adamant in their claim of personal harm, so much so that they’ve decided to pursue legal action. Victor Bondi recently filed a complaint in Chicago federal court seeking class-action status for a lawsuit against L.L. Bean. The suit alleges that the company is now depriving customers of benefits they had been promised by virtue of the long-standing and heavily-promoted warranty, which had ‘no conditions’ and ‘no end date.’

L.L. Bean likely anticipated that revising its return policy would not be popular, but did it anticipate this kind of backlash? Perhaps it should have, and maybe it could have taken a different tact and/or timeline in communicating and implementing the change. However, was the change itself wrong? As with every Mindful Marketing analysis, there are two filters for answering that question: economics and ethics.

According to Bloomberg, L.L. Bean has seen its rate of “abusive” returns double in the past five so that they now account for a full 15% of all returns. Over that timeframe, those abusive returns cost the company about $250 million.

Against annual revenue of around $1.6 billion, $250 million may not seem like much, but successful companies don’t concede hundreds of millions of dollars unnecessarily, especially when their sales have been “flat for a second straight year” and the retail landscape is increasingly competitive. Furthermore, L.L. Bean had to do something to stem the rapid increase of illegitimate returns, lest even more dishonest consumers try to defraud the company.

But doesn’t the new policy penalize honest customers who bought products with a certain understanding, only to have those terms of purchase changed without their consent or compensation? That’s a fair concern; however, two key factors diminish the argument:

First, L.L. Bean’s original guarantee was not a promise of lifetime replenishment. In other words, there was no reasonable way to interpret that the policy meant customers could buy a product, use it for years and years, then ask for a new one.

Every product wears out eventually. No clothing retailer is responsible for keeping its customers outfitted in pants, hiking shoes, or whatever, just because they once bought a pair from them. If people are looking for an “All you can . . .” option, they should go to a buffet. Interestingly, even such restaurants have restrictions, e.g., you can’t stay in the building indefinitely, and you can’t take food with you when you leave.

Secondly, even with the change, L.L. Bean’s policy is still far better than industry standards. Most retailers allow a couple of weeks or maybe a month to make a return. A few graciously give three months. I can’t think of another retailer that allows a full refund for a full year for no more reason than “I’m not completely satisfied.”

Furthermore, even after a year, L.L. Bean will still allow returns of products that “are defective due to materials or craftsmanship.” So, the company continues to have its customers’ back. Of course, this caveat means that consumers also must show good faith and make a compelling case for the return, not just “I wore it out over 15 years, now I want a new one.”

To use an analogy, many consumers have acted like horrible house guests who have taken advantage of their host’s generosity. L.L. Bean gave some special privileges to those guests, but in return they ransacked the refrigerator, beat up the furniture, and long overstayed their welcome. That bad behavior has forced L.L. Bean to enact some more restrictive but still very reasonable boundaries.

Individuals often react negatively to change, especially when it doesn’t seem to be in their favor. Rationale people, however, can understand why L.L. Bean’s policy change was warranted and how it’s still far better than industry standards. As a result, there should be very little loss in long-term business for the retailer.

In this instance, those guilty of single-mindedness are consumers. L.L. Bean’s new approach to returns checks out as “Mindful Marketing.”

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Beer Belly Briefcase

12/1/2017

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

Wondering what to get for that guy on your holiday shopping list who doesn’t need anything? How about buying him some belly fat? I’m not talking about a giant box of chocolates or gift cards for his favorite fast food—they would take too long. There’s a much quicker way to give him the perfect paunch.

As the newest edition to the series ‘I can’t believe somebody would make that,’ British art designer Albert Pukies has created a fanny pack called the “Dadbag” that looks exactly like a middle-aged man’s beer belly. It even has hair.

What’s the point of these paunches? In terms of functionality, Pukies says they’re a great place to store “typical dad items, like beer, medicine, a sandwich, wallet, sunglasses, keys.” That’s right, a beer belly that can hold a couple cans of Budweiser, literally.

While the Dadbag is outwardly a practical product, Pukies purpose in creating it was apparently more about image. He claims he was “desperate to have a dad bod” but didn’t want to assume the associated health risks. What’s a “dad bod?” The designer says it’s a term a college student coined a few years ago in describing coeds going crazy over guys with “a nice balance between a beer gut and working out.”

Pukies admits that the Dadbag is “a pretty silly product,” which he originally had no intent to mass produce; however, given the interest the fanny pack has found, he’s decided to explore production partnerships with the idea of retailing the Dadbag for about $30.

If offered, there would be different versions of the bag, as Pukies has prototyped six separate styles featuring a range of skin tones and quantities of belly hair--qualities that caused one potential user to praise the product’s inclusivity. The designer has also demonstrated his marketing savvy by giving each style a distinct name: the Allen, the Derek, the Magnus, the Bobby, the Sherman, and even the sunburned Wolfgang.

So, what should we make of the Dadbag? Obviously, it’s an item to be taken with a grain of salt, not with complete seriousness—Some products are meant to be fun. However, at $30 a pop, it’s not like buying a whoopee cushion, dribble glass, or some other cheap gag gift. Besides the significant cash outlay, there are other factors that just make the Dadbag wrong :

1. Looks Disgusting: Yes, beauty is in the eye of the beholder, but I bet most initial reactions to the Dadbag are a similar “Gross!” Such repulsiveness wouldn’t matter as much were it not for the facts that fanny packs are typically used in public and the hairy belly looks extremely real. So, wearing a Dadbag is like actual inappropriate exposure (e.g., a visible but crack) that no one should have to see.

2. Impractical: I suppose there are still some individuals who buy fanny packs, but it seems that most people prefer other means of carrying their valuables, e.g., pockets, purses, backpacks, etc. Plus, putting a couple of beer cans inside the Dadbag would make for a pretty heavy paunch. All that to say that producing Dadbags is probably not the best use of materials and time, i.e., it’s bad stewardship.

3. Denigrating Dads: As described above, the pack is objectionable for other reasons, but the fact that it’s called the Dadbag makes the offense even worse. Dads have taken exceptional abuse over recent years, including in advertising. They don’t need any more unflattering stereotypes. Yes, I’m a dad, so maybe I’m overly critical, but can you imagine a firm offering a similar product called a “Mombag”? The backlash would be brutal, and rightly so. Dads’ bodies deserve the same respect.

4. In Poor Taste: The Dadbag not only unfairly ridicules fathers, it also makes fun of something else that should be taken very seriously: fat. Many nations, like the United States, battle obesity epidemics that add billions of dollars to healthcare and cost millions of individuals their lives. What makes matters worse is that some other countries can’t get enough food, as many of their citizens live and die undernourished. In sum, belly fat is no laughing matter.

If there’s one potential virtue of the Dadbag, it’s that probably no one will try to steal anything from it. Beyond that benefit, the novelty fanny pack is interesting to talk about but unlikely to achieve significant demand. With that prediction and the pack’s associated social issues, the Dadbag is an unfortunate example of “Mindless Marketing.”

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Silencing the Slurp

11/17/2017

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

What do you like most about your favorite food: the enticing appearance, the alluring smell, the delicious taste? How about the intriguing noise? Of course, most foods don’t make significant sounds when eaten, and if they do, they’re generally not pleasing ones. Such a sound problem, however, is exactly what a Japanese company has purposed to fix for one of its nation’s staple foods.

Japan is a country of great cuisine that includes sushi, tempura seafood, miso soup, and ramen noodles. So, what Japanese fare is responsible for emitting unpleasant sounds? The noise is in the noodles.

The world is home to all kinds of pasta and noodle-eating techniques from twirling, to stabbing, to scooping. In Japan, the preferred method is slurping, which basically means using chopsticks to start the noodles into one’s mouth, then inhaling.

That approach works well, both in terms of eating efficiency and enjoyment—many Japanese believe slurping is the best way to appreciate the full flavor of the noodles. With slurping, however, comes sounds that some people, namely Westerners, find unsavory. That’s where Nissin’s “noise-cancelling” fork comes in.

That’s right, this Japanese company has developed a piece of flatware, called Otohiko, that aims to eliminate the noise of slurping noodles. How is it possible to silence such a sound? Well, the fork has a highly directional microphone inside its electric toothbrush-looking handle that senses the slurping, then signals an app-connected smartphone to play “a loud, electronic noise that sounds like waves washing ashore combined with futuristic space sounds.”

But, does this technique really eliminate the slurping noise, or does it just cover it up, the way some people try to mask their post-workout pungency with a few swipes of a deodorant stick? As Nissin’s video shows, it’s a little bit of both. Apparently, the company has conducted extensive research of slurps, which has led to the creation of the aforementioned sounds that strategically conceal the slurping beneath the louder swooshes and swishes of the app.

It’s not surprising that a firm found in a nation known for its technological leadership would identify an electronic answer to an ancient eating issue. One might wonder, though, whether the problem is significant enough to warrant such a sophisticated and expensive solution, not to mention whether it really works.

Nissin expects each utensil to retail for 14,800 yen, or $130, which certainly isn’t cheap compared to most flatware. The fork will not be found in any stores, however, unless the company hits a goal of 5,000 pre-orders. Only then will manufacturing begin.

On one hand, Nissin can be commended for its broad cultural sensitivity. Here’s a Japanese company that’s trying to respect the sound sensibilities of Westerners, while allowing its own citizens to enjoy one of their favorite foods to the fullest. The intentions seem noble.

Of course, we also know “the road to . . . is paved with . . .” That’s not to suggest that anything about Nissin’s product is immoral, but rather that consumers’ response to the fork may not be as favorable as the company would hope. Here are three questions that suggest concern about the product’s mass market potential:

1) Will users of the fork be satisfied with a sound cover-up? True, those within earshot, will no longer discern the slurping, but they’ll hear other noises that may also be irritating. Plus, if one connects the new noises to the slurping, ala Pavlov’s classical conditioning, suddenly the manufactured sounds carry the same negative associations.

2) Is the fork a practical solution? Most people don’t want to carry around their own utensils, especially one as big as an electronic toothbrush, to restaurants, etc. Transporting becomes an even greater inconvenience after the fork has been used. Where do you stash a dirty fork? There’s also the issue that if the user’s phone, which generates the camouflaging sounds, is going to be heard, it needs to be placed in the open, with volume turned up, which adds unexpected phone calls and text messages to the list of possible dining distractions.

3) Is the product worth the price? One hundred and thirty dollars is considerable cash to plunk down on an implement that may get very little use. Along those lines, one also might suspect that the same Japanese consumers who prefer to slurp their noodles may want to eat them with chopsticks, not a fork. Maybe, then, Nissin should make noise-cancelling chopsticks instead.

It’s great when people care enough about others to alter their own behavior in order to make someone from another culture feel more comfortable. Nissin certainly seems to have that intent, but unfortunately it’s unlikely that its innovative flatware with find significant success. For that reason, the firm’s noise-canceling fork should be considered “Simple-Minded Marketing.”

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Hurricane Heist?

9/15/2017

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

As Hurricane Irma turned toward Florida, an angry consumer shared a screen shot of a 24-pack of 16.9 ounce bottled water that Best Source Office Supplies was selling on Amazon for $99.99. Inflating the prices of necessities ahead of an impending natural disaster is a tactic that most people find deplorable, but not everyone. Of course, companies taking that tack rationalize their actions, but certain others also make a compelling case for such price hikes.

Price gouging is "the practice of raising prices on certain types of goods and services to an unfair level, especially during a state of emergency." Although it’s not uncommon for companies to increase prices on goods and services to levels that consumers think are too high, price gouging is different.

Consumers are price gouged when the item in question is something they must have (e.g., food, water), but the product’s supply is severely restricted, often to a single seller, so consumers have no choice but to pay the exorbitant price. In contrast, although the new iPhone X starts at a staggering $999, Apple is not guilty of price gouging because it’s possible to survive without the newest iPhone.

In the case of Hurricane Irma, certain sellers reportedly gouged consumers for water, ice, food, and fuel. One Orlando Shell station supposedly sold regular grade gas for $5.99/gallon and premium for $6.99. Even Disney got into the act: A Twitter user posted pictures from Disney’s Art of Animation Resort, which offered small bottles of water for $2 and juice boxes for $2.69 each. A Disney spokesperson later said that the situation was an isolated incident that had been rectified.

To document such abuse, Florida’s attorney general Pam Bondi set up a hotline that received over 8,000 calls about price gouging, which violates Florida law and is subject to “civil penalties of $1,000 for each violation, and up to $25,000 for several violations within a 24-hour period.” Beyond the legal penalties, Bondi promised violators personal retribution: “I will be saying your name all over national television and telling people not to go to your business ever again if you’re stealing from Floridians and taking advantage of Floridians in a time of need.”

Despite the fact that certain states have made price gouging illegal and most people consider it immoral, some claim that capping prices actually makes situations, like those surrounding hurricanes, worse. Writing for Forbes, Adam Millsap argues that pricing gouging laws are what empty store shelves, not natural disasters. The best thing, Millsap contends, is to let supply and demand determine prices like they normally do.

Similarly, in a New York Times article, Andrew Ross Sorkin states that “several respected economists from the Milton Friedman school of free-market theory” support the argument against price gouging laws because artificially low prices “remove the incentive for consumers to conserve essential supplies,” and they discourage sellers from increasing stock.

So, maybe Adam Smith’s “invisible hand” is the best way to determine supply when natural disasters strike. That belief aligns well with an increasingly popular pricing strategy, dynamic pricing, in which firms like airlines use algorithms to quickly increase prices to whatever level the market will bear. Unfortunately, such approaches also tend to have some very undesirable side effects.

For one thing, higher prices naturally favor the wealthy. That advantage is understandable under normal circumstances: People with more money should be able to buy higher-priced items. In the case of natural disasters, however, it doesn’t seem right to price anyone out of the market for food, water, or other basic survival needs.

Also, there’s no reason retailers can’t impose limits on how much or how many of an item customers can buy. Stores successfully ration items all the time. For instance, a grocery store runs a sale on granola and dictates: “Limit, two boxes per customer.” Likewise, arguments against price gouging laws don’t give people much credit. When asked to conserve, most individuals will limit their consumption for the sake of others.

In addition, the notion that businesses should maximize profits at their customers’ expense is both antiquated and short-sighted. Sure, people may have no choice but to pay ridiculously high prices when they’re put between a rock and a hard place, but they won’t soon forget what it felt like to be treated as a means to an end. Firms that price gouge run a great risk of alienating consumers and ruining their reputations.

On the other hand, companies that show restraint and price “to create shared value,” generate considerable goodwill, especially in the face of a natural disaster. A few firms that bolstered their brands by taking this more enlightened and socially responsible approach when Irma struck were JetBlue, Airbnb, AT&T Wireless, and Martin’s Famous Pastry Shoppe.

It’s hard for most people to know how they will react in the face of life-threatening natural disasters like hurricanes Harvey and Irma. Businesses, however, should know not to take advantage of people in such vulnerable states. Companies that do are guilty of various offenses, and one of them is “Mindless Marketing.”

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E*Trade Encourages Envy

7/14/2017

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

People often point to advertising as the main influence on individuals’ buying decisions. Certainly ads can be effective, otherwise there wouldn’t be so many of them; however, another major influence on what we buy is other people, e.g., "keeping up with the Jones." E*Trade’s new ad campaign leverages the persuasive power of peers, but is the firm’s two-pronged promotion effective and ethical?

E*Trade bills itself as “the original place to invest online” and “the first to give Main Street the chance to trade like Wall Street.” The company has become well-known for empowering ordinary people to trade like professional stockbrokers. Instead of paying costly commissions, individuals who open E*Trade accounts put down just $6.95 per trade of stocks, bonds, and exchange-traded funds (ETFs), and that fee drops to just $4.95 after 30 trades in a given quarter.

Do E*Trade and similar on-line trading platforms (e.g., Ameritrade and Scott Trade) work? They can, if you know what you’re doing. Online trading is much like do-it-yourself (DIY) home projects. Getting the tools to renovate your own kitchen is easy; using them properly is the hard part. Some, however, have been very successful using online trading tools, like the New Jersey high school student who turned $10,000 into $300,000 in about a year, by buying and selling on E*Trade.

This information provides an important backdrop for E*Trade’s new advertising campaign, as each spot features an unambiguous attempt to pit poor against wealthy. The commercials entice the “have nots” to long for the lifestyle of the “haves.”

For instance, in one commercial a young cubicle-dweller gets blown-off by his much more affluent boss, which launches the young office worker into imagining the extraordinary lives of the exceptionally well-to-do: lounging around lavish pools, hitting golf balls off yachts, doing donuts in super cars, feeding exotic pets, waterskiing behind helicopters, having food fights with expensive edibles. A music bed of “If I were a rich man” from Fiddler on the Roof plays beneath these and several similar clips, all culminating with an arousing call to action: “Don’t get mad, get E*Trade.”

The campaign’s other spots feature different video footage and music but suggest the same problem/solution: Your life is lacking because you don’t have what the rich have, but you can get it all with E*Trade.

What’s been the reaction to E*Trade’s campaign? Adweek gave it the designation of “Ad of the Day” for June 19, 2017, describing the ads as “remarkable,” while adding that the company “stokes rage at the 1%.”

Fast Company’s take was more critical: “By using opulence to sell its investment services, the online broker patches together a plutocratic vision of the American dream, ignoring how entrenched inequality is–and how much more difficult it is to overcome.”

In addition, CNET succinctly summarized the campaign’s ironic prescription: “The rich are awful, so use ETrade to become one of them. That seems to be the logic behind the company's new ad campaign.”

I tend to agree with these analyses and draw my own conclusion about the campaign’s mindfulness through a combination of these points and several new ones. Here are the five unfortunate outcomes I believe E*Trade’s ads inspire:

1. Unrealistic expectations. Certainly people can go from rags to riches by trading stocks, but how likely is it to happen? Making a fortune in the stock market requires considerable skill and some luck—much more than just opening an online account.

2. Envy: Benchmarking helps businesses get better by showing them how they might improve their products and processes. Personal comparisons, however, are often problematic, especially when they involve wishing for what others have.

3. Terminal Materialism: Money isn’t inherently bad; it depends on what one does with it. Many of its uses in the E*Trade ads, however, suggest owning for the sake of owning, vs. buying practical things (instrumental materialism), or using money to help others, e.g., paying for education, creating jobs.

4. Poor Stewardship: Beyond being impractical, much of the behavior the campaign glamorizes is overindulgent and outright wasteful.

5. Inaccurate Perceptions: While some extremely rich people live lives of ridiculous luxury, most are not so crass and careless with their spending. The way they became wealthy was not by being frivolous but frugal. Also, many use their money in ways that benefit others.

Against these points, some may argue that the ads are puffery, i.e., extreme exaggerations meant to be funny and not taken seriously. While some of the scenes are over-the-top, e.g., the all-out food fight among elites, most of the cuts are realistic and certainly could happen, if they haven’t already. For instance, a Google search of “helicopter water skiing” produces over a million hits, including a variety of real pictures and the story of a father who towed his son on water skis with a copter, to the chagrin of others.

Will the E*Trade ads be effective? Probably. As mentioned at the onset, the desire to emulate others, especially in terms of their possessions, is a very powerful one. Consequently, E*Trade’s appeal to become one of the very rich will strike a nerve with many, and the oversimplification of achieving the dream will help induce people to try online trading. As suggested above, however, the campaign rests on a foundation of deception, disrespect, and excess, among other indiscretions, which results in E*Trade earning this return: “Single-Minded Marketing.”

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Is Amazon Bribing Buyers?

6/16/2017

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

There are many different ways to get people to do things, e.g., ask them nicely, argue it’s in their best interest, or just pay them! There’s not necessarily anything wrong with the last option, unless it’s a bribe, which is what a popular news portal has accused Amazon of offering.

Jason Kastrenakes, news editor for the Verge, chose an intriguing title for his June 13, 2017 article about the enormous etailer: “Amazon is now bribing Prime members to avoid credit card fees.” Bribery is a pretty serious indictment to make of anyone, let alone America’s most prolific ecommerce company. In some situations bribery is illegal (e.g., when it involves foreign officials), and in virtually any context it’s considered unethical. So, what exactly is Amazon up to that has invited such a charge?

Amazon has introduced a new payment option called “Prime Reload” that enables Amazon Prime members to earn 2% Amazon rewards credit each time they transfer money from their checking account to their Amazon Gift Card Balance. To process these payments, Amazon requires a U.S. bank account and routing number, which is to be expected. The program also demands a debit card in order to allow Amazon to “fulfill your reload faster.” Users’, then, receive their 2% bonus whenever they reload their Gift Card balance.

Given there’s no such thing as ‘free money,’ especially in the increasingly-competitive retail sector, it’s reasonable to question Amazon’ motives: Why would a super-savvy, profit-minded company like Amazon, suddenly want to giveaway 2% of every purchase? In 2016, Amazon had sales of $135.9 billion, which means if Prime Reload had been used for every purchase, the firm would have forfeited $2.7 billion for the fiscal year. Relinquishing that kind of revenue doesn’t seem financially sound.

Amazon knows, however, what it’s doing. A key part of the company’s strategy is to avoid costly credit card fees, which average between 2.3% and 2.5% for online businesses where the consumer’s credit card is not present. However, given its size and buyer power, Amazon’s effective processing rate is likely lower, so there probably are advantages beyond avoiding credit card fees.

Another benefit Amazon enjoys via Prime Reload is the temporary use of customers’ deposits in their Amazon gift card accounts. Yahoo Finance suggests that Prime Reload “may encourage people to load large lump sums into their Amazon Balance, in order to ensure they never accidentally pay for an item through their debit or credit card directly,” which would cause them to miss-out on the cash-back bonus. Amazon, then, can act like a bank, earning interest income on this “float,” from the time consumers deposit the money until they spend the excess funds.

There’s at least one other advantage likely to accrue to Amazon through Prime Reload. Yahoo Finance predicts that users of the program will be more likely to make impromptu purchases since “they won't have to do the math as to whether the item is something they can afford. Effectively, it feels the same as having a Gift Card balance ready to be used.” Therefore, Prime Reload might ultimately encourage more purchases from Amazon.

So, Prime Reload seems like a wise financial move for Amazon, but what about the original issue: Does the 2% bonus constitute bribery? This question is particularly relevant to the third/last point—the possibility that customers who participate in Prime Reload will end up purchasing more from Amazon.

The short answer is “no,” that’s not bribery. The main reason is that bribery requires three parties and an agent/principal relationship. Perpetrators offer bribes to agents (e.g., employees) with the hope that they will take actions that are probably not in the best interest of their principals (e.g., employers). For instance, someone says to a purchasing agent, “Here’s $1,000, just for you. I hope your company will sign a contract with our firm to buy its new __________.”

The bribe-brandishing supplier may be offering products that are not the best quality or price; however, the purchasing agent might choose them anyway because of the self-enriching incentive. As such, a bribe pits the interest of an agent against that of his/her principal, thereby compromising the agent’s fiduciary responsibility.

In the case of Prime Reload, there are only two parties (the consumer and Amazon), with no agent/principal relationship—the consumer is both agent and principal. As such, the customer is free to negotiate whatever product-price combination best meets their needs. If the consumer wants to accept a special discount or some other deal from the seller, he/she has the authority to do so, owing no accountability to an employer or any other principal.

Does Kastrenakes really believe that Amazon is trying to bribe Amazon Prime members? Probably not. Beyond the heading, he makes no other mention of bribery, and at the end of the article he says, “[Amazon] is both making a savings and passing some of it along to customers.” So, using “bribing” in the title was likely a somewhat misleading attempt to call more attention to the piece.

The bottom-line is that Prime Reload represents a win-win scenario in which both buyer and seller come out ahead. Furthermore, encouraging more people to use debit cards instead of credit cards may also be good, given that 65% of Americans carry a balance on their credit cards that averages $4,717. In sum, Amazon is helping itself by helping others, which is a key foundation for “Mindful Marketing.”