Category: Price5d70aa2269

Marketing Giving

11/29/2019

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

Black Friday, Small Business Saturday, Cyber Monday . . . the biggest shopping season of the year can excite even the most apathetic shopper. Some, however, would have us believe that we should do something different with our money, instead of buying things for ourselves or others. But, isn’t shopping a key to holiday happiness?

Over the last few years, you’ve probably heard of an initiative that seems contrary to the capitalism often associated with holiday shopping. In contrast to the plethora of promotion persuading us to buy more, “GivingTuesday” boldly encourages people to give to others. The day targeted for philanthropy is typically the Tuesday after Thanksgiving; this year it’s December 3.

GivingTuesday’s website describes the initiative, which began in 2012, as “a global generosity movement” that “inspires hundreds of millions of people to give, collaborate, and celebrate generosity,” “unleashing the power of people and organizations to transform their communities and the world.”

Those are admirable and far-reaching claims, but is it really possible to market giving?

For many people, marketing is inextricably linked to buying and selling products, so much so that ‘marketing giving’ seems like an oxymoron, along the lines of jumbo shrimp and civil war. If people give their money, they’re not spending it, which may seem antithetical to marketing.

However, marketing concepts can be applied to virtually any endeavor. Besides marketing physical goods, like food, and intangible services, like haircuts, organizations and individuals can market ideas like “Don’t drink and drive” and mindsets like “Do well in school.”

So, there’s no reason that giving can’t be marketed, but effective marketing must include more than just a simple message like “give!” Most of us have seen similar appeals in social media and elsewhere. GivingTuesday, however, has created what many would consider to be a full-fledged marketing plan, incorporating each of the iconic Four Ps:

- Product: Unlike receiving something tangible in return when one shops, GivingTuesday promises intrinsic rewards like satisfaction from providing greater dignity and opportunity for others and helping to build “a more just and generous world.”

- Price: The cost of GivingTuesday is up to the organization and individual. While some might give millions, the average online gift is $105.55, but money isn’t the only thing that can be given. Participants also can donate goods or volunteer their time to serve others.

- Place: As the previous P implied, GivingTuesday can occur virtually anywhere in the physical world or in the virtual realm in a variety of ways. Meanwhile, having a specific date, the first Tuesday after Thanksgiving, helps build consistency, as well as create some sense of urgency, which is often needed in order to encourage consumers to act.

- Promotion: “GivingTuesday” is a memorable moniker that likely builds brand recognition and supports understanding of the initiative through paid and earned media. GivingTuesday’s website also offers a variety of helpful resources for organizations and individuals inclined to participate, e.g., “Ideas and Case Studies” and a “GivingTuesday Toolkit.”

Those are strong inputs, but what matters ultimately for marketing are outcomes, and at least one person believes GivingTuesday isn’t effective for many organizations.

In an article in the Fundraising Authority, Joe Garecht praises GivingTuesday as “a noble effort,” yet he discourages nonprofits from participating in the initiative, particularly small and mid-sized ones. His rationale includes reasons such as an overabundance of organizations asking for gifts at the same time and the encouragement of one-time “spot giving” versus building long-term donor relationships.

Garecht raises some valid concerns, particularly related to potential return on investment; however, if his two arguments mentioned above were applied to organizations marketing traditional products, companies wouldn’t participate in the holiday shopping season because: 1) their promotions would be lost among those of other companies advertising at the same time, and 2) first-time transactions wouldn’t lead to future purchases. Clearly that rationale doesn’t apply to most for-profit firms during the holidays, and it probably isn’t relevant for many nonprofits either.

Instead, GivingTuesday appears to be an initiative that keeps gaining momentum. Among nonprofit participants who seem to find the program productive are World Vision, the American Red Cross, and St. Jude. All together, GivingTuesday saw 3.6 million gifts given in 2018, including $400 million online. In the U.S. alone, GivingTuesday has raised over $1 billion since 2012.

In his 1789 sermon titled “The Use of Money,” English cleric and theologian John Wesley famously urged listeners to “earn all you can, save all you can, and give all you can.” In a 21st century sense, Wesley was ‘marketing’ giving. Marketers today have many more tools at their disposal, yet any tactics that encourage organizations or individuals to give of their money or time to help others in need can be considered “Mindful Marketing.”

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Pay to Pray

11/16/2019

9 Comments

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

“The best things in life are free,” for instance, an evening with family, a walk on a sunny morning, a conversation with a friend. For many people, going to God is another 'free'dom they cherish. Why, then, does one religion appear to be putting a paywall between its people and God?

The Catholic Church recently surprised many of its parishioners and others by introducing an eRosary, “a wearable device connected to a mobile app that's activated by making the sign of the cross.” While paying homage to traditional rosary bracelets, the new product’s black agate and hematite beads, paired with a “carefully finished” gunmetal-color cross, make the modern version appear very ‘apple-esque.’

Many have heard of people praying with rosary beads, but if you’re not familiar with Catholicism, here’s a quick primer. The Holy Rosary, or Dominican Rosary, is a very important prayer for Catholics that is arranged in sets of prayers called decades. Holding a rosary bracelet or chain in one’s hand and feeling each individual bead helps followers recite the prayer’s Hail Marys and other specific petitions in the proper sequence.

The Rosary is a central part of many Catholics’ spiritual lives, as praying it guards against trials and temptations and serves as a buffer against all types of evil. Pope John Paul II declared that the Rosary was “among the finest and most praiseworthy traditions of Christian contemplation.”

The Vatican’s eRosary offers much more functionality than just feeling beads with one’s fingers. Working with an app, the digitally-designed bracelet lets users choose the specific rosary they would like to recite (e.g., standard or thematic), then charts the devotee’s prayer progress and tracks completion with “the guide of special audiovisual contents.”

The Vatican suggests the device serves as “a meeting point between technology and spirituality” that “unites daily life and prayer,” helps one “pray deeply,” and unites people around the challenges that confront humanity and the mission of the Church.

The eRosary also touches the physical realm, acting as a “personal health assistant” by recording fitness data and providing wellness information. In doing so, the device encourages people to live healthier lives.

However, wearable technology can’t just do things; it also needs to look good on those wearing it. Fortunately, the eRosary marries form and function. The Pope’s Worldwide Prayer Network suggests that the device lies where “simplicity meets elegance” thanks to its stylish black and silver colors and its “simple lines and curves.”

So, why is the Vatican marketing a ‘faith-based fashionable Fitbit’? Engadget suggests the Catholic Church is “hoping to attract tech-savvy youngsters.” It’s true that Gen Zs increasing expect digitally connected experiences. Also, any organization that wants to stay in existence must remain relevant to the next generation of ‘consumers.’

Still, we’re talking about the Church and faith. Doesn’t technology distract from meaningful spiritual experiences? Or, perhaps even more important, is it right for the Catholic Church, which has about 1.28 billion adherents, many in countries with low per capita income, to sell a product that costs 99€ (about $110) on Amazon?

First, it’s helpful to remember that technology influencing faith isn’t just a recent phenomenon; it’s interface dates back as least many hundreds of years. In 1452, Johannes Gutenberg printed 180 copies of the now famous Gutenberg Bible. In many ways, the use of moveable type technology to mass print the Bible and other religious books democratized Christianity and formed the foundation for a revolution in the Church.

Over the years, other new technologies also have impacted people’s spiritual lives in, often in positive ways. For instance, radio and television have allowed people to share religious information with others thousands of miles away. Advances in construction have enabled the building of larger and more functional places of worship. And, automobiles are what many people use to travel to those worship centers.

However, when one arrives at a church, synagogue, or mosque, there’s usually not a fee at the door. The notion is that religion should be free to all. ‘Growing closer to God shouldn’t be based on one’s ability to pay.’

Fortunately, there’s nothing to stop even the poorest person from offering prayers of petition and gratitude to the Divine. And, if people are mobile, they might walk or share a ride with other believers to a place of worship where they can venerate God and learn together for free.

Some religions also make copies of their key texts available to others for free. For instance, Wycliffe Bible Translators, a nonprofit mission organization, has translated the Bible into hundreds of different languages since its founding in 1942. Likewise, the Gideons International gives away thousands of Bibles a year in most of the world’s countries.

Then, how do eRosaries, iPhones with Bible apps, and other faith-related merchandise fit with the notion that religion should be free? All of the items that cost money to aid reverence are optional. They may be helpful to those who can afford them, but they’re not essential for a relationship with God.

A useful metaphor might be a social medium like LinkedIn. Some people who have needs for more advanced features pay for LinkedIn Premium. In contrast, for many years I’ve used the free version of the platform, which meets all of my professional networking needs and more. Just as I’m not precluded from enjoying LinkedIn because I don’t pay, people who don’t buy eRosaries or similar religious products are not prevented from relationships with God.

It is possible to live without digital devices. Also, sometimes when we have them, we let them get in the way of fruitful living. Used properly, however, it’s not hard to see how technology can benefit religious practice, much as it enhances other areas of life. It’s great to be able to share prayer requests via email, send text messages of encouragement to others, study the Bible on an iPad, and listen to podcasts of sermons online.

Because I’m not Catholic, I’ve never experienced confirmation, gone to confession, or prayed the Rosary. It appears, though, that an eRosary can help those participating in one of Catholicism’s central religious practices. For people of faith, digital devices that enrich their spiritual lives and bring them into closer relationship with God and others, seem to be “Mindful Marketing.”

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Is it Too Risky for Kids to Rideshare Alone?

7/12/2019

1 Comment

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

Among a parent’s worst nightmares is this: Your child climbs into a car alone with a stranger. Just the thought of that scenario strikes fear into the heart of any mother or father. So, why would a company create a business model based on that situation?

A few months ago, ride-sharing icons Uber and Lyft grabbed headlines and goodwill by saying that they do not allow those under age 18 to use their services. Like others who heard the news, I applauded it: “That’s great—two for-profit firms forgoing income in order to protect young people.”

At the same time, the news made me wonder if there are other ride-sharing companies that don’t hold the same convictions and, instead, are willing to put kids into cars with whomever might be driving them. That’s when I came across a company that doesn’t just transport minors occasionally, it specializes in chauffeuring them.

In 2014, three southern California moms who were struggling “to get their busy kids to and from school and all their activities,” founded HopSkipDrive, a transportation service specifically designed for those age six and up. Just five years later, the firm has a staff of 50+ people, a presence in large metropolitan markets like Los Angeles and Washington D.C., and contracts with over 150 school districts.

How did a small, unconventional startup not only grow so quickly but even more importantly, persuade so many parents and others to trust the company with their most “precious cargo”? HopSkipDrive has achieved this rapid success through a combination of clear mission-focus and strict attention to detail.

Yes, busy parents who need to get their children to afterschool practices, lessons, etc., want to be sure that their kids arrive on-time, but their main concern, as mentioned above, is safety. If someone else is driving, who is the person who will be alone with their child in a car? Of course, the individual should be a skilled driver, but more importantly, can he/she be trusted?

Unfortunately, even with ridesharing companies that vet their drivers, you can’t always be sure ‘who you’re getting.’ Many of us have heard of rare but horrific incidents in which unstable drivers have harassed, raped, and even killed their passengers.

Nothing bad has happened to me while ridesharing, but my own recent experience caused me to question driver-screening. Our family had been staying at a resort for a few days and needed to get to a certain rental car center in order to continue our vacation. Using the Uber app, I requested a ride and watched on my phone for several minutes as the driver made his way toward the resort. Then, when he was only a minute away, he dropped the ride!

I can’t be sure what happened, but here’s my guess: A minute from where I was waiting, the resort had a gate where those entering the grounds via private vehicle needed to stop and show identification, i.e., a driver’s license. It may not be the reason he bailed at the last moment, but it’s sobering to think that the person who was going to give me a ride either didn’t have a valid driver’s license or wasn’t responsible enough to bring it with him.

It’s one thing to imagine a questionable driver chauffeuring an adult, it’s another thing to think of a young child confined in that vehicle. How could any company eliminate the risk inherent in such a situation?

When I first heard of HopSkipDrive, I was skeptical, not about demand for the service, but about the firm’s ability to ensure children’s safety in such an offering. As a working dad who helped drive his busy kids for years to/from school and practices and who commiserated with parents in similar predicaments, I knew there was a need. I wasn’t sure, though, how a company might manage the business model in a way that would give parents the confidence to say, “I’ll let my daughter or son ride with you.”

In light of such significant reservations, the main way HopSkipDrive maintains the trust of thousands of parents and schools each day is by painstakingly picking its drivers. In fact, the company uses an exhaustive 15-point certification process that requires the following of each applicant:

Worked with children and has at least 5 years of caregiving experience
No criminal record
Fingerprinted
No sex offender record
Valid driver’s license
Good driving record
Age 23 or older
Owns or leases a vehicle not more than 10 years old seating 4-7 passengers
Passes a 19-point vehicle inspection by a certified mechanic
In-person meeting
Completes in-person driver orientation
Has personal auto insurance coverage
Adopts the HopSkipRules
Adopts our zero tolerance policy for smoking, drugs, and alcohol while driving
Adopts the zero tolerance policy for illegal mobile device usage while a rider is in the car

Because of the meticulous selection process and the exceptionally kind and positive rapport those hired are expected to have with their passengers, HopSkipDrive doesn’t just call its personnel “drivers” but “CareDrivers.”

Special care and concern for safety begins as soon as CareDrivers arrive for a pickup. They wear bright orange HopSkipDrive t-shirts and verify their identity by confirming their passenger’s code word and birthday. Customers also can review CareDrivers’ profiles before pickup in order to know “who they are, what they look like, and the kind of car they drive.”

Throughout the ride, the company continues to leverage technology in order to ensure security. Dedicated HopSkipDrive staff members monitor each ride remotely through its duration, and parents can do the same. They also can receive alerts when their child has been picked up and dropped off.

As good as all of these systems are for onboarding employees and overseeing operations, they probably wouldn’t be effective if the company didn’t do something else very well: Embrace a compelling mission.

HopSkipDrive doesn’t just see itself as a provider of transportation service, i.e., getting kids from point A to point B, or even as an alleviator of parental stress, which it certainly does. Instead, this front-and-center statement on the company’s homepage communicates its mission: “Success starts by showing up. We help get them there.”

HopSkipDrive takes kids to school, piano lessons, basketball practice, and countless other developmental activities that are vital for children’s intellectual, social, and emotional growth. Those formative in-person experiences help them thrive now and contribute to their success in life for years to come. However, children can’t enjoy those activities unless someone ‘gets them there.’

In an interview with Yahoo Finance, HopSkipDrive’s CEO Joanna McFarland affirms that mission, saying “Oftentimes mobility is a huge barrier simply to access to education, and that’s something we’re helping to solve.”

It’s also confirming that employees appear to embrace the same purpose, such as one CareDriver who says “I feel really empowered being part of the greater good, getting kids safely where they need to go.”

As you might expect from the exacting service standards described above, “the greater good” does come at a higher cost. McFarland acknowledges that HopSkipDrive is a “premium service” that has “much different economics” than those of Uber and Lyft. Rides reportedly start at about $20.

However, the rates are comparable to what one would pay a caregiver. McFarland suggests the same in saying, “We think about [HopSkipDrive] much more as a substitute to a babysitter that drives than a comparison to an Uber and Lyft.”

The bottom-line is whether a substantial number of consumers (families and schools) find value in HopSkipDrive’s services. Apparently they do, as evidenced by the facts that the company is in seven markets and growing rapidly, has served over 6,000 schools, and has transported more than 650,000 children.

The most important validation, however, comes directly from those children—the actual riders—such as one young passenger who says, “They know my passcode, they talk to me, they make me feel very welcome. I’m never like, nervous to get in. In fact, I usually look forward to it because it’s a lot of fun.” Her experience is the best evidence that HopSkipDrive’s ridesharing for kids is “Mindful Marketing.”

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Pizza Protection

6/29/2019

4 Comments

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

Unfortunately, there are accidents in life. Cars collide. Homes flood. People break bones. Insurance lessens the impact of such events, but what about damage to pizza? Well, Domino’s now offers protection for even that unexpected occurrence.

The nation’s pizza deliver leader is very good at getting its products from its stores to our doors, but it seems less confident about our ability to do the same. For that reason, the company recently introduced “carryout insurance.”

Domino’s now promises: “If damage occurs to your carryout order after you leave the store, just bring it back and we’ll remake it for free.” The firm lists a few reasonable provisos: The order must be uneaten, with nothing missing, in its original packaging, and accompanied by a receipt. The firm also offers examples of accidents that qualify for a claim like slipping and falling, "my kid sat on it," and "a stranger sneezed on it." In other words, it seems like the company will cover just about any claim consumers make.

How much does the pizza insurance cost? According to Domino’s it’s “free for all customers.” Some may be thinking, “But, there are no free [pizza] lunches,”—customers must be paying for the insurance indirectly. That may be true; however, Domino’s doesn’t appear to have increased its prices. The company needs to be careful that the costs of its pies stay in-line with those of Papa John’s and Pizza Hut in the highly competitive pizza market.

It’s also likely that pizza insurance claims haven’t taken a significant bite out of the firm’s bottom-line, which raises a key question, “Do people really need pizza insurance?”

Let’s say that someone spends $30 on a pizza pickup order, then drops it while taking it out of their car. The accident may ruin their day, but it probably wouldn’t pose any significant financial hardship. People who can afford to spend $30 on takeout food generally can afford to lose $30 worth of takeout food.

Contrast that loss to a serious car accident, a home fire, or the death of a family’s primary breadwinner. Those events could prove financially devastating, if not insured.

Such scenarios remind me of advice my dad once gave me: Insure the big things that could break you; don’t bother to insure littler things like electronics and lawn mowers. Even though they may be somewhat costly to replace, it’s worth the risk because replacement wouldn’t be financial catastrophic. I also liked the line my Dad said to salespeople who tried to pressure him to insure small items: “All your talk of insurance is making me wonder about the quality of this product and whether I should be buying it.”

My father’s insurance advice is similar to that of Todd Erkis, a professor of finance and risk management at Saint Joseph’s University, who says that “Insurance is key to protecting yourself against financial ruin.” Consistent with that view, Erkis suggests that new college graduates should buy just four types of insurance in order to hedge against possible financial hardship: health, long-term disability, renter’s, and car insurance.

Writing for Mint Life, Nicholas Pell adds just two other types of insurance to buy: home owner’s, which is analogous to renter’s, and life insurance. New college graduates often don’t have dependents and, therefore, don’t really need life insurance, but those who do should use insurance to protect their survivors from poverty.

All this to say, people don’t need pizza insurance, even if it’s “free.” So, what is Domino’s doing? In the very crowded market for restaurant pizza, Domino’s is probably trying to gain a little bit of perceptual separation from its closest competitors. Papa John’s and Pizza Hut don’t offer carryout insurance, which makes Domino’s distinct.

However, while Domino’s may have created a difference, the insurance doesn't deliver any real competitive advantage. Again, people don’t need the insurance, so it probably won’t sway many purchase decisions. Furthermore, who ever thinks they might drop their pizzas? In sum, the insurance just doesn’t offer any measurable improvement to Domino ’s value proposition.

Still, Domino’s has savvy marketers. The company wouldn’t be so successful if it didn’t. The firm’s marketing team probably intends carryout insurance as more of a promotional strategy than a product enhancement. In other words, it doesn’t matter if the insurance causes people to buy more pizzas, as long as publicity and word-of-mouth about the unusual offering helps keep Domino’s top-of-mind. That added exposure, in turn, should lead to more pizza purchases.

But would the firm really go to such lengths just for promotion? It's done so before.

Prior to carryout insurance, the company’s “Paving for Pizza” campaign represented a similar strategy. Domino’s promised to patch potholes around the country so the road hazards wouldn’t wreck pizza deliveries. Of course, a company as far-flung as Domino’s could never repair enough roads to actually make a significant delivery difference in most of its locations. However, the notion of a pizza company patching roads was so novel it captured press attention, as well as created some community goodwill. In short, the program seemed to be a very effective, albeit unconventional, means of pizza promotion.

Will carryout insurance, work as well for Domino’s? I doubt it. Despite the fact that I’m writing about it now and you’re reading about it, I don’t believe the company’s newest ploy will capture the interest or hearts of people like the paving program did.

There’s nothing wrong with Domino’s promising extra protection for pizzas; in fact, it’s a nice extra benefit, if anyone ever needs it. However, that lack of real consumer value, teamed with minimal promotional impact, places carryout insurance in the box of “Simple-Minded Marketing.”

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Dynamic Pricing or Discrimination?

6/14/2019

0 Comments

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

Eric, a friend of mine who happens to be a CPA, realized he was running low on string for his grass trimmer, so he went shopping where he’d purchased the product before—Amazon. Finding what seemed like a good price ($18.94) for the same 3-pack of spools he bought a few years earlier, he placed the item in his cart. Then he discovered something that might make all of us question the prices we pay for products.

Eric decided to check the price for the same Amazon item, using a different web browser—one he had never used before to order from Amazon. Entering the website, he navigated anonymously to the item page, where his suspicion was confirmed: The price he saw was just $16.89, i.e., $2.05 lower than the price for the same item he had placed in his shopping cart minutes before.

Although most of us haven’t been so clever as to catch an ecommerce giant in apparent pricing hypocrisy, many of us probably have wondered whether Amazon and other online retailers were somehow taking advantage of us through increasingly-sophisticated pricing strategies. Responses to Eric’s Facebook post about the incident confirmed such concerns:

“I wonder if the price is also because you're a logged in Prime user in one and they compensate for some of the free shipping.”

“I’ve worked with some sellers on Amazon. They are a beast to deal with and it can really wreck a small business. And there is nothing the business owner can really do to combat their practices. They are the 8 million pound gorilla in the room.”

“I read [your post] out loud to my daughters, I thought it was so significant.”

“The exact same thing happened to me just recently. I was going to protest the increase in price over a year's time. What can we do?”

Frustration over similar experiences may lead to accusations of “price discrimination,” i.e., when a seller changes the price of the same product for different consumers. Generally speaking, it’s not fair to charge people different prices for the same item, but there are some seemingly legitimate exceptions, for example:

Quantity discounts: Buying a 36-pack of bottled water should be cheaper per bottle than buying a single bottle of the same water.

Good credit ratings: Individuals with better credit scores deserve lower interest rates on loans compared to those with weaker credit ratings.

New customers: The risk of trying a new business or products may warrant giving a discount to first-time buyers.

In reality, none of the preceding truly represents price discrimination because people can, if they choose, put themselves in the more favorable pricing position. For instance, they could: buy more bottles of water and store them, follow sound financial practices to improve their credit scores, or assume the risk of purchasing from a new company.

If Eric’s experience falls into any of these three categories, it might represent the last one. Perhaps because of his lack of history with the second web browser, Amazon pegged his subsequent shopping visit as that of a new customer and wanted to offer him an extra incentive for making a first-time purchase.

That explanation may be right, but it has some flaws, namely that companies tend to clearly communicate when they’re offering discounts for new customers; otherwise, loyal customers may locate the discrepancy, as Eric did, question the companies’ motives, and even become resentful: “I’ve given them my business for all these years; if anyone deserves a discount, I do.”

Chances are, Amazon wasn’t practicing any form of price discrimination. It’s more likely that Eric’s experience was a result of the strategy that many online retailers increasingly apply: dynamic pricing.

Dynamic pricing involves changing prices continually, based on prevailing market conditions, which includes factors such as consumer demand, purchase intent, and competitors’ prices, as well as company goals for customer acquisition, retention, and brand-switching.

If you’re thinking that dynamic pricing is a new phenomenon, you’re partially right. Sellers have lowered and raised product prices on the spot for millennia, based on factors as simple as weather conditions and buyers’ apparent interest.

Over the past 30 years or so, airlines probably have been the most common users of dynamic pricing, as they’ve perpetually adjusted prices to keep flights at or near capacity. To a lesser extent, those selling hotel rooms and tickets to popular entertainment events have done the same. Frequent historic fluctuations in gasoline prices also suggest dynamic pricing.

However, recent advances in digital technologies have really enabled dynamic pricing to thrive. For instance, from 2008 to 2010, the average time between regular price changes was 6.7 months. In the time period from 2014 to 2017, that average fell to 3.7 months.

Today, to implement far-reaching price change is no more difficult than a few computer key strokes, and it’s as easy as allowing a third-party software program, like an algorithmic repricer, determine when to make price adjustments and how big they should be.

Although Amazon, which reportedly makes millions of prices changes a day, is probably the greatest single user of dynamic pricing, it is far from the only retailer employing the strategy. Walmart, the biggest retailer in the world, has taken a remarkable step away from its long-standing ‘everyday low pricing’ strategy and embraced repricing software for its online sales.

Most other e-tailers are following suit. In fact, some predict that within 5-10 years, dynamic pricing will become so fine-tuned that “everything you buy will be based on personalized offers.”

So far this discussion has been about what has happened and will continue to happen with dynamic pricing. However, at the core of Eric’s experience is an ethical question: Should Amazon or anyone be pricing products this way? Or, as Nick Saunders, director of GlobalData Retail has said, just because something is technologically feasible “doesn’t mean it’s socially desirable.”

On one hand, it does seem like dynamic pricing puts purchasers at an added disadvantage. Companies already have a natural information-advantage over consumers since “knowledge is power” and every business knows more about its products and its industry than does the average consumer.

What’s more, sellers have always known more than buyers about when prices will change, so with dynamic pricing dramatically increasing the frequency of those deviations, consumers experience even more uncertainty while sellers gain greater leverage.

But, the digital age also has been a significant boon to consumers. For much of human history, sellers only had to compete on price with competitors physically close to them. Sears, Roebuck & Co. and other catalog retailers changed that situation somewhat. The Internet and ecommerce have turned traditional retail on its head.

Now people sitting in their living rooms use shopping bots to search products from retailers around the world, while shoppers in brick-and-mortar stores pull out their smartphones and ask for price matches in checkout aisles.

In addition, dynamic pricing itself has produced some benefits for consumers. As described above, the strategy does favor individual sellers in specific transactions; however, the fact that all sellers can easily alter their prices means they must compete more against each other on price.

In short, buyers and sellers both enjoy advantages in the digital age with dynamic pricing—a phenomenon that Eric recognizes, as he astutely reflects:

“This [experience] strikes me as another example of the free market and competition driving markets and pricing. As much as I might not like it, in my opinion Amazon as the seller has every right to offer its goods to me, their customer, at whatever price point they desire. And I, in turn, have every right to buy it or not!”

“Furthermore, there are times when I might willingly pay a higher price from Amazon because of other factors such as shipping speed or knowing that Amazon customer service is incredible for dealing with product issues or returns. From Amazon’s perspective, if they do the hard work of building loyalty with me, their customer, then it’s their privilege to offer me goods at a price point which might, at times, be higher than necessary.”

“The risk they take is that if I conclude that Amazon is no longer competitively priced, they might experience a decline in my loyalty. Which undoubtedly is another data point Amazon tracks about me! If they sense my purchasing loyalty is deteriorating, I suspect their pricing algorithms will work to win back my loyalty!”

Although I haven’t asked Eric directly, I think we both agree that frequent price changes don’t necessarily mean price discrimination. In fact, dynamic pricing can be an example of “Mindful Marketing.”

Eric Wenger is managing partner at RKL, LLP in Lancaster, PA.

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Paying with Your Personal Brand

3/23/2019

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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.”