Tuesday, July 31, 2012

The Booming Voice From Boomers:

"Hey, we're over here!"

Here’s a message that marketers aren’t accustomed to hearing: “Please advertise to us.”

But that’s exactly the message delivered by a campaign recently kicked off by AARP, intended to goad advertisers into embracing the over age 50 demographic.

“I may be gray but my money is as green as it gets,” reads one of AARP’s broadsides. “I may be creased but my money is crisp,” says another. These are not-so-subtle reminders that although Madison Avenue loves to cater to 20-somethings, those millennial youngsters aren’t exactly rife with purchasing power these days.

The AARP crowd, by contrast, is doing OK. The average annual income for baby boomers as a group now tops $70,000. Those over age 65 are among the few that saw a net increase (from $29,400 to $29,775) in the challenging years between 2008 and 2011. And Americans over the age of 50 account for more than 60% of new car sales in this country.

Older adults tend to dine out more often, take longer and more luxurious vacations, and spend as much — if not more — on consumer goods as any other group. Yet marketing in these areas tend to focus on the younger set. This perplexing misfire might be explained by an out-of-date tradition — MadAve started targeting baby boomers when they were age 18-34, and never readjusted as that generation grew older. Or maybe it’s because MadAve itself is young: 40% of the advertising workforce is under 35. 

Either way, AARP makes clear that the advertising industry spins its wheels selling to a generation that’s all but broke, while effectively ignoring one with pretty deep pockets. That’s self-defeatism at its worst, which is something marketing should never be accused of.

We’ll speak for ourselves, and hopefully for our most ambitious clients: AARP, you don’t have to tell us twice.

The C4:
  1. AARP — formerly known as the American Association of Retired Persons — is now titled solely by that four-letter acronym and represents any Americans over the age of 50, retired or not.
  2. AARP has kicked off a campaign to remind advertisers of the purchasing power of its members.
  3. Americans of AARP age buy more than 60% of new cars. They’re among the few groups that saw little or no income decrease during the Great Recession. They dine out more, travel more, and spend generously on consumer goods.
  4. These statistics haven’t exactly been kept secret, yet somehow we advertisers still treat millennials (age 18–34) like they, not the boomers, are the golden geese. It’s a shame that AARP had to remind us how to do our jobs, but now that they’ve done so we’re happy to assure them: we’re on it.

Wednesday, July 25, 2012

A Wealth of Ideas

Don’t let them go fallow.

There’s a precious business asset that is ultimately responsible for all success. It costs nothing to own, so it’s present at every startup. Amazingly, though, some businesses stop using it. They let it go fallow, forgotten.

We’re speaking of creativity, the art of ideas.

You were creative when you went into business. You must have been. You must have devised something new and untested. You thought of a new way of delivering services, or an innovative way to sell a product.

Which is laudable, of course. But how creative were you today? How creative will you be next week? You’re not sitting back and letting your earliest ideas define your future, are you?

The most creative companies — Apple, Microsoft, Amazon, and others — constantly innovate because they encourage their people to constantly create. Many set aside up to 20% of their employees’ time to work on emerging ideas. A lot of those ideas, maybe even most, go nowhere. But there’s brilliance enough in the rest to make the exercise worthwhile.

We said creativity costs nothing to own, and that’s true (hint: you were born with it, as was everyone you know). That doesn’t mean it’s free to nurture, though. It takes time and care and a loving environment. It’s rather skittish. Demand it to come forth and it’ll run and hide. Be gentle and inviting and it’ll trot right up and feed from your hand.

There’s creativity permeating your organization. Everyone for whom you sign a paycheck is teeming with ideas, ideas that have the potential of catapulting your success.

All you have to do is let it happen.

The C4:
  1. Creativity was the founding asset of every business, and it’s the cause of every future success. Some businesses forget this at their peril, thinking that first good idea was all they’ll ever need. That’s folly.
  2. Smart businesses realize that a constantly changing world calls for constant new ideas. They foster creativity as a way of eternally reinventing themselves.
  3. Creativity is free, but harnessing it for business success takes investment. Invest in the time and environment needed for a free flow of ideas, and those ideas will greatly repay you.
  4. Creativity abounds. You’re a font of ideas, so are your managers and entry-levels. So is the guy who cleans the floor. There’s a wealth of this resource all around you. Harvest it.

Monday, July 16, 2012

Predicting Gold

Let's see if statistical modeling pans out.

The 2012 Summer Olympics won’t end until August 12, but the results are already in. Team USA will be the overall medal winner, although China will win the most gold. Russia will take third place and host country Great Britain will be fourth.

Statistical modeling. It’s that accurate.

The Tuck School of Business at Dartmouth has perfected this predictor, basing their model on surprisingly few factors: population, GDP, and home-field advantage. The most successful teams come from countries with a population base large enough to produce cadres of athletes, and with economies big enough to support them. More amorphous, but historically proven, is the host-country effect. Olympians are spurred on, apparently, when performing for their own countrymen. That’s what gave Greece an outsized 16 medals in the 2004 Athens games, and Australia 58 medals in Sydney, 2000.

It’s a simple concept with some powerful math plugged in. Tuck has fine-tuned the weighting for each variable, resulting in an accuracy ratio well into the 90th percentile for the last several Olympiads. For Beijing in 2008, their numbers were 95% correct.

Those are betting odds, and they have us thinking about a lot more than Olympic gold. Statistical modeling is used throughout the business world, from insurance to financial services to macroeconomics. It’s a way of quantifying a world of possibilities, and giving startlingly precise glimpses of the future.

Chances are your business is already relying on statistics in ways you’re not even aware of. Chances are you can (and should) be using them a lot more. Statistical modeling is complex, difficult to master, and decidedly unsexy. It doesn’t even exactly deliver the gold. But as the Tuck School so ably demonstrates, it can tell you exactly where the gold is going to be.

The C4:

  1. The Tuck School of Business at Dartmouth has created a statistical model that predicts, with up to 95% accuracy, who will win the most gold, silver and bronze at the Olympics.
  2. That’s the Tuck School of BUSINESS. Clearly they’re not overly concerned with international athletic competition. They’re making a powerful point about the versatility and reliability of statistical modeling.
  3. It’s a point you should heed. Your insurers' actuaries do. So does your broker, your banker, and probably your baker. Statistical modeling is how modern businesses can see the future and control their own fates. Are you using it to its fullest potential? Statistically, probably not.
  4. OK, thanks to Tuck we already know how London will end. But Michael Phelps will still be in the water, and Kerri Walsh will still be in the sand. We won’t miss this for the world, no matter what Tuck predicts. Go Team USA!

Thursday, July 5, 2012

Caveat Emptor

The cons are pros.

The more volatile the market gets, it seems, the more the rip-offs, con games and pyramid schemes proliferate. Con men know that investors are desperate to beat the meager returns they’re seeing from their conventional investments. And they know that desperate investors are easy marks.

There are sadly too many examples to recount. Bernie Madoff’s take ran to the tens of billions. Bayou Hedge Fund out of New Orleans created its own “independent” accounting firm (going so far as to forge office stationery) to hide a $450 million Ponzi scheme. And here in Akron, three now-convicted fraudsters plundered the venerable Fair Finance Company to finance their own lavish lifestyles.

The common denominator in all these cases is that innocent investors got ripped off. And no matter how many con men go to jail, there’ll be plenty more to take their place.

So how do you protect yourself? Start with this age-old defense: If it sounds too good to be true, it is. Any investment opportunity boasting of double-digit returns should be treated with great caution. Any that “guarantee” returns should be avoided like the plague (and probably reported to the Feds).

Next, do your own research. Learn everything you can before you invest. Talk to the firm’s employees and other investors. Check the Better Business Bureau and Attorney General’s office for outstanding complaints. And if the firm or fund references outside auditors, research the history and track record of those companies to be sure they’re legit.

Perhaps most importantly, think of all of your investments as risky propositions at best. Even Federally insured instruments, and securities listed on the major stock indices carry their own risk levels. Alternative investments might bring greater potential returns but their risks are commensurately compounded.

So invest with the same attitude with which you might go to Vegas: don’t gamble with money you can’t afford to lose.

The C4:
  1. As conventional investment markets get more and more shaky, more unconventional investment opportunities present themselves. All too many of these are cons, because con men know that investors are looking for alternatives.
  2. Caveat Emptor — let the buyer beware. Protect yourself before you invest. Be skeptical of all claims, no matter who's making them. Even friends and family, with the best of intentions, can rope you into a pyramid scheme. If it sounds too good to be true, it is. The greater return that’s promised, or even hinted at, the more skeptical you should be.
  3. Do your own research. Independently verify, through multiple sources, every claim. Check out the histories of all principals and associated companies. Talk to employees and other investors. Check the Better Business Bureau and Attorney General’s office for outstanding complaints.
  4. Finally, remember that investing always means risk. Don’t invest money you can’t afford to live without.

Tuesday, July 3, 2012

America Celebrates A Birthday

Half empty or half full?

There’s much to fret over, if you’re the fretting type. Unemployment is stuck above 8%. The economy is shaky and vulnerable to ominous developments in Europe. Politically, the country has never been more divided. The recent Supreme Court decision upholding the Affordable Care Act enraged half the country, gave cause to gloat to the other half, and gave unity and closure to no one.

But if perchance you’re not the fretting type, if you prefer to see our collective glass halfway full, then there’s encouragement for you, too.

The economy is showing unmistakable signs of improvement. Housing prices are up all across the country, which is bound to boost other sectors. Eurozone leaders have just reached an agreement to protect their banks (without the growth-killing austerity that earlier agreements called for), so it looks like the worst-case European scenarios are averted.

Oh, and that Supreme Court decision? There’s cause to celebrate there, too — regardless of how you feel about the ACA.

How awesome is it that We the People willingly give final say to, and accept the judgment of, a branch of government to which we’ve granted no enforcement or budgetary powers?

On July 4, 1776, our nation broke with the ancient tradition of might makes right, of taxation without representation. Twelve years later we enshrined a radical and untested form of government: representative democracy and the rule of law.

Two hundred and twenty-four years after that, it’s still working. Not only that, it’s brought us unprecedented prosperity and has made us a model for the world.

So is the glass half empty or half full? Is our country on the right track or hopelessly off the rails? Come July 5, we say go back to being as pessimistic as you like.

But on July 4, please join us in celebrating all that’s good, hopeful, and transformative about the USA. Happy birthday, America, from all of us at Caler&Company.

The C4:
  1. If you choose to see the negative, there’s lots of that to see. The worldwide economy and our domestic politics are undeniably worrisome.
  2. But there’s cause for optimism, isn’t there? The economy isn’t breaking any recovery speed records, but it is improving. We’ve just seen a momentous Supreme Court decision and we’re moving toward a momentous election — both are testaments to the enduring strength of our Constitution.
  3. May we humbly suggest that you spend this Fourth of July setting aside pessimism, setting aside partisanship, and simply celebrating the American ideal?
  4. Oh, what the heck. Why not spend ALL of July doing that?