Opinion: What’s wrong with investment firms?

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Do they really need more public money?

Over the weekend, I was quite disappointed to find the fourth largest investment firm, Lehman Brothers collapse. There had been plenty of speculation on companies that could bail out Lehman, and with Barclays walking out late Sunday evening, Lehman had no option but to file for bankruptcy. As far as my memory recollects, even last year, Lehman had posted above average net profits, despite the volatility in the market. Filing for a chapter 11 bankruptcy protection comes as a huge surprise. Arguably, it is one of the biggest collapses of the century. With a little over £300 billion bankruptcy, is the largest company ever to file for a Chapter 11 Bankruptcy protection, sending the world markets into a turmoil. A Chapter 11 Bankruptcy protection allows businesses to continue trading while they restructure and reorganise their sick units. This could also spell thousands of job losses around the world for a company which employs over 25000 people.

In essence, the public feel the pinch for Lehman’s failed fortunes. The repercussions may be varied affecting economies all around the world. A situation which even Adam Smith wouldn’t be proud of to theorise his learning. Yesterday, one of the employees of Lehman brothers was quoted in a leading national daily about how there were no jobs in the economy and how he had managed to save enough to last the gloom without seeking employment. Despite the economic gloom in the last couple of years, finance executives have paid themselves unimaginable and envious bonuses, for investing in financial instruments which are incomprehensible to the common man. Shares, bonds, yields, derivatives, mortgages, swaps, futures and all other complicated jargon you could find in a finance text book. But in the end, who shoulders the burden of a failure? Many companies have been bailed out recently. From Northern Rock in the UK to Bear Sterns, Fannie Mae and Freddie Mac in the US. With Merill Lynch selling itself to avoid a similar situation and a troubled insurer AIG facing a similar collapse, are we prepared for another bailout?

Firstly, a collapse of such magnitude could potentially wipe out other valued businesses. Since the announcement yesterday, markets world over have nearly lost one third of their values. It is hard to unravel Lehman’s investments as it literally works with every major entity worldwide from Governments to businesses and financial institutions. It manages funds and investments for these entities. So a collapse would mean the credit in the market has evaporated. Which again means no 0% finance on anything, from credit cards to housing, macbooks to automobiles, iphones to holidays, everything on credit will be seen as a risk. When there is such apprehension in the market, the consumer spending power reduces drastically, resulting in a severe economic crisis. Moreover, such failures will result in lower capital inflows to developing countries leading to a slower investing growth. End of the India Shining story unless the Government intervenes to relax regulations for businesses to borrow from overseas. For individuals, bridging the rich and poor divide becomes much more harder as banks tighten their policies towards mortgages. There was a nice illustration by an Indian TV news channel when Bear Sterns went bust. “Mr. India cannot afford a house because, Mr. America had defaulted on his mortgage payments”.

It all started with one mismanagement – that of Bear Sterns which has had a Domino affect on the world financial industry. Inadequate regulation, which in effect, allowed financial firms to risk investments should have been tightened earlier to avoid such crisis. This would have encouraged financial firms to spread their bets evenly rather than exposing investments to a high degree of risk.

Economics is indeed a complicated subject!

Crafting a Green Business Strategy

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Going green seems to be the industry buzz word these days. Everyday I get many emails announcing the launch of eco-friendly, ethical, green websites and services. Clearly, green seems to be selling. Businesses are trying to cash in on this phenomenon. Not the Arena Flowers is lagging in terms of being green. From the beginning we have shaped a green, ethical outlook to our business. We are trying to differentiate our USP by being a green florist. However, there are still many areas where we could improve and we are working on this.

In the recent years, a company’s environmental emphasis has become one of the most important issues. Businesses across various sectors have discovered that a certain section of consumers will buy products, or avoid their purchase, based on the firm’s environmental performance. These consumers are more ethically aware and reach out to seek information on how a business responds to their environmental concerns. As this segment of environmentally aware, green consumers amplify in numbers, a green strategy beyond doubt becomes the way forward for businesses. Government legislation, reaction to competition and other dynamics within the industry is also driving organistions to etch a green commitment.

Businesses are being constantly monitored for their environmental performance by their stakeholders, more so in the flowers business as the industry has invited severe criticism for sourcing air freighted flowers from third world countries. Air freighted flowers in refrigerated units spells a heightened environmental concern due to the high level of CO2 emissions involved in the process. Also, the exploitation of workers in third world countries is another cause of worry although this seems to have been mitigated in the recent years through the presence of organisations such as Fair Trade which monitors the human as well as environmental concerns. However, there is a perennial debate about the ethical benefits of fair trade affiliation as a majority of producers governed by the Fair Trade code of conduct tend to be larger organisations relying on cheap labour.

Also, despite the popularity of green initiatives and a willingness by a section of environmentally motivated consumers to pay a premium for green products, such strategies might not yield the desired results yet. There is still a higher proportion of demographics which inspite of showing an ethical commitment, might place their self interests above the environment. After all, the fundamental principle businesses thrive on is to address consumer needs by creating a valued offering. There are a variety of aspects which could create these valued offerings and going green is one of them. Under these circumstances, it becomes comfusing to pursue a line of green strategy which is beneficial to organisations as well as the stakeholders and the environment.

There are many reasons for a business to think green. The external business environment in which a business operates in offers plenty of leads to begin with. The big retailers in the UK are a good example. Taking cue from each other, all big retailers are treading the green path. Waitrose, Marks and Spencer, Tesco, Asda etc have all adapted green initiatives. A good green marketing strategy could form the basis of a competitive advantage. Also, a business seeking to leverage a competitive advantage through a green strategy should be confident that such a strategy could be ingrained into the ethos of the company. Also, there are plenty of hurdles if a business adapts a green. I guess green businesses are subject to closer scrutiny by the public and media and the shortcomings are easily picked.

At Arena Flowers, we have realised that by being transparent with regard to our environmental policies including our production, packaging and disposal, we seem to evoke a higher interest among our customers, while we have strong foundations to contribute towards a clean and green environment. We believe that if given access to the right information, customers often make the right choice. For this reason, from the very beginning we have placed a special weight on how we respond to the environment.

The Power of Email Communication – How to Win People

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For a marketing professional, I am rather quiet and reserved, though I am aware that I need to be bit more outgoing to nudge ahead of my career. So for the past few days, I have been reading a few self-development books and one of the first ones I picked was the much celebrated self-help classic by Dale Carnegie, “How to Win Friends and Influence People“. Although I believe that soft skills are often intrinsic, this book certainly has the right ingredients to change your approach towards people. Not that I have been conscious of how I have interacted with people, but it certainly is an interesting read. What makes it interesting is that I relate to the book more often now, particularly when people around me approach others.

A couple of days back, I got an email from an individual selling a affiliate services. Though I was least interested in pursuing it further, the email was so compelling that I decided to respond with a polite refusal. A couple of days later I got a reply pushing the service further without being imposing. The first section of Carnegie’s book which speaks about “Fundamental Techniques of Handling People” encourages readers to use a similar language which is sure to win people. In Carnegie’s terms it is important to “arouse in people an eager want”. Had it not been for our previous experience with companies offering similar services with a slightly different marketing language, his emails are extremely convincing.

Here’s our correspondence:

I hope that you don’t mind me emailing out of the blue – I have just ordered my second bunch of flowers from Arena, I love the quality of the products, and thus I sought out your contact details to see if my company could help you grow online sales even further.

I’m sure that you’re using an affiliate network at present, but my company “XXXX” is the “XXXX XXXX XXXX” and we have been winning many clients from the UK over the past 2 years.  I would love to have a quick conversation with you when you have 5 minutes to highlight a couple of differences that we can make, and also our experience in the flower sector.

Best number is always my mobile and I’ll look forward to hearing from you Adarsh.

For which I had replied that it isn’t feasible for us to join another network as it adds little value in terms of incremental sales. And I got another reply highlighting how the network could improve our sales. Also, there’s a catch. He wants us to consolidate our services with other companies to his company, which means that we have to terminate our existing contracts with the networks we already participate in.

Thanks for your reply, and I am indeed not surprised to hear that your additional networks have not provided an incremental increase in sales to warrant the additional resource.

This unfortunately is standard across affiliate networks in the UK market, and something that our clients experience before joining “XXXX”

We work very differently for our clients and being the XXXX XXXX XXXX XXXX XXXX XXXX, our experience in the online florist sector I believe will interest you.  Perhaps though only if you were willing to consider consolidating your other two networks into “XXX”, I could showcase the strategy to provide the missing incremental increase in sales.

Is there a number that I can reach you on Adarsh, or a meeting that we can schedule for next week with your colleagues and co-decision makers to propose a solution?  I can only reiterate that I am a firm believer in the Arena service and see a clear opportunity to help you grow sales further.

On a personal note, the email is certainly baiting the recipient and I find it to be an incredible example for email marketing. It certainly livens Carnegie’s fundamental principles.

Google Adds Fuel to the Browser War

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When Will asked me to do a post on a website trying clone Arena Flowers, it coincided with Google’s launch of the Chrome web browser. I had related the two and was about to hit the publish button, when I realized it makes little sense to tie in a search behemoth to a little known flower website based in Australia. So abandoned the post and decide to port it to my blog instead.

Over the years we have seen many successes being replicated and at times these imitations have gone on to do better than their predecessors. Take the issue of Internet browsers for example. Internet Explorer has ruled the roost for years despite constant threats from other better, feature rich browsers. But in the last few years, browsers are technically superior, less resource intensive and feature filled. Firefox is the best example. Year on year, IE’s usage has been declining by 7-8%, primarily due to a similar increase of Firefox users. Following the success of Firefox, which in essence is bankrolled by a company which dominates the web world, Google, the very firm has announced the launch of Chrome, a next generation web browser which represents a technological shift in the browser market.

Google’s entry to the browser market raises several interesting questions to the search marketing industry. Following the recent launch of Internet Explorer 8, which packs in advanced privacy settings preventing search engines, Google in particular from collecting user centric information related to ad performance, a nifty search bar and several other features which are predominantly inclined towards Microsoft’s services including Live Maps, Encarta and Live Spaces etc.

In any case, retreading the history of Internet browsers is quite laborious, but what spurs the interest is how the search industry reacts to chrome in the coming days. The blogosphere is abuzz with Chrome’s launch and the first screen shots have started trickling in along with a detailed technical view on the browser through the official comic book by Scott McCloud. It’s a pity that there’s no news of Chrome for Mac, but knowing Google it should be on the way soon. In any case, whenever it is available, you can download chrome from here.

Social Media Marketing at Dell: Strategies for Success

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After a long hiatus owing to a few personal commitments which has kept me busy for a while, I have come back to continue my infrequent updating on the blog. It’s ironical that in the age of Social Media Marketing, actively pursued by individuals and corporates alike, Longhop has such long gaps between posts. Strangely, the current post focuses on highlighting how Social Media can contribute to the success of a business. Obviously, the inspiration to post on Social Media surges from the recent Online Marketing & Media event I attended at the Business Design Centre in Islington.

Dell LogoWe have had many opportunities in the past to attend marketing events, but owing to resources we have only managed to attend a few. Each event is a great experience and offers great insightful learning from businesses who share their experiences in such events. One such learning comes from arguably one of the biggest ecommerce businesses in the World, Dell. Internet, as with many online organizations is a part of Dell’s infrastructure. Dell has fully embraced the participatory phase of Social Media Marketing by being actively involved as a listening company. It has firmly believed that messages need to be dynamic and co-created rather than the company being the mouthpiece for all its products. Part of Dell’s initiatives comes from its previous experience of dealing with customers. Jeff Jarvis, a disgruntled Dell Customer and an American journalist launched a crusade against Dell terming his experience as “Dell Hell” and extensively chronicled his communication on his blog Buzzmachine here. Jeff’s outbursts resulted in spreading the negative word about Dell’s customer service and impacting its overall corporate reputation. True, there were hundreds of peevish customers who had experienced Dell Hell before, but it took one influencer like Jeff Jarvis to coalesce into a crowd. The collaborative influence of bloggers in denting Dell’s stronghold launched the company into frenzy and Dell responded by identifying the shift in power and began listening to customers.

So what exactly has Dell been doing? Head to Dell’s Community Website here, which provides a glimpse of Dell’s pursuits in the social marketing arena. It is evident that the company actively engages in an ongoing conversation with customers to learn their perceptions, and to ingrain those perceptions into Dell’s outreach.

  • Dell IdeaStorm LogoIdeaStorm: Dell launched IdeaStorm in 2007 to engage with customers and to understand their needs and preferences to develop products. It is an incredible market research initiative with an added personal touch. Users are invited to share their ideas and collaborate with each other. This gives a clear idea to Dell about what their potential customers seek and to share these ideas throughout the organization to gain further thoughts to translate these ideas into products. In essence, Dell has converted its customers, non-customers and potential customers into a massive product development team.

“The name is a take-off on the word “brainstorm” and it is our way of building an online community that brings all of us closer to the creative side of technology by allowing you to share ideas and collaborate with one another. The goal is for you, the customer, to tell Dell what new products or services you’d like to see Dell develop. We hope this site fosters a candid and robust conversation about your ideas

Our commitment is to listen to your input and ideas to improve our products and services, and the way we do business. We will do our best to keep you posted on how Dell brings customer ideas to life.”

  • Direct2Dell: Direct2Dell is Dell’s corporate blog; it’s a wire service about Dell to the world.
  • Dell Forums: As the name suggests, it’s the community forum where users share their thoughts and
  • experiences with others.
  • Studio Dell: Dell uses videos and podcasts to educate users on various emerging technologies and also offers tips, tricks and support to get the best out of a Dell product. Studio Dell is an interactive communication tool, which also encourages users to post videos of them using Dell products.
  • Smart Business 360: A resource center for small businesses offering product support and advice
  • ReGeneration & Dell Earth: Websites on sustainable living to emphasize Dell’s environmental commitment, identified as a key strategy to future growth.

These are some of the prominent community initiatives at Dell. The company participates in other popular social media tools such as Facebook, Twitter, Second Life, etc., etc. Customers are no longer interested in a company’s business structure. They seek experiences. They want to be a part of the business, they want to be heard, understanding which can benefit the business itself. Through Dell’s Community Networking initiatives, the company responds positively to customer needs fomenting strong relationships.

Business FocusOne of the perennial debates in the ongoing marketing world is how does a company leverage commercial benefits by participating in social media marketing and how can such campaigns be measured? Dell employs about 40 individuals working on the community network, which includes hundreds of interactions with customers through blogging, forum posting, Yahoo answers, twittering, facebook etc. Is it really worthwhile? How does it benefit the company? Isn’t social media marketing hard to quantify? Firstly, Dell argues that it doesn’t put a cost on social media. Secondly, Dell has gained significant confidence with regard to customer service and customer satisfaction. Here’s a metric then. Dell claims half a million of sales came from Twitter participation last year. That’s just a spoonful in a bucket of water, but it counts nevertheless. Furthermore, traditional metrics such as traffic, click through rates and conversion rates give a skewed image of social media marketing. The best metrics are often those which show how many people are talking about the company positively in the blogosphere, the number of people who subscribe to the site’s content, the number of positive reviews of the companies products or services etc. The best metrics derive on how social media evolves and what companies seek from it. In traditional marketing sense you could call this brand building.

Social MediaSo should all businesses participate in social media? While participation is essential particularly for online businesses, it entirely depends on the organizational objectives as well. If sales and not brand is the driving factor, then social media marketing can be time consuming and resource heavy. This is particularly true for smaller organizations. It’s more like a long term vs. short term strategy. Social media is clearly long term as it helps in creating an everlasting brand awareness which is extremely important to the success and longevity of a business. However, there is a note of caution. Social media is here to stay and it is essential for businesses, small or large, to realign their marketing initiatives to create the fine balance to leverage success.

Trademark Bidding – Winners & Losers!!!

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It’s finally here! A few years after trialling in the US, Google has extended the controversial trademark bidding by opening up the auctioning process to all entities in the sponsored links space. While Google reaps the benefits of a new open space bidding process, this move could fundamentally shift the Search Marketing landscape.

Previously advertisers and brand owners had some sort of insulation to protect and limit their brand related keywords from being auctioned. However, since May 5th 2008, Google has radically changed its trademark policies to encourage competitors to bid on the keywords. The new policy, mirroring the Google’s trademark policy in the US, is certain to rake in plenty of moolah to the world’s biggest search engine.

However, it is the businesses which will suffer owing to inflated CPC prices for their own brand terms. Also, businesses which had previously kept away from internet marketing will be forced to allocate a budget to ensure that their customers aren’t wooed away by the competitors. At the same time, they also have to ensure that the competitors do not take complete liberty of promoting themselves at the cost of their business.

Your Ad HereIn the UK, some of the larger online businesses like Lastminute, Teletext etc., have already taken up the cause by filing a suit against Google. A few of the smaller companies which are benefiting from Google’s new policies are being bulldozed by their larger counter parts with legal threats.

It’s quite interesting to see how the search marketing industry pans out in the next few weeks.

Royal Challengers off to a Flyer

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Are they!?!? Finally, the cricketing world’s biggest event, The DLF IPL Twenty20 is scheduled for a launch today. The biggest names in cricket will battle for pride, honour and of course money in an event spread across 44 days. The Cash rich BCCI, is squeezing out every penny it could get from every source, the media in particular which has come down hard on the administrators over the last few days. Though, most issues are sorted with the media now, it is a bit disappointing to know that websites will not be allowed to cover the event. This is a major setback as major cricketing news sites like Cricinfo, Cricket 365 etc will not be able to delivery up-to-date information on the event to a large community of cricket fans. Anyway, just happened to check the Royal Challengers website prior to the tournament…I was taken aback to see that a match is already in progress and the Royal challengers are on the verge of victory with Rahul Dravid scoring a belligerent 78 off 28 deliveries. Wasim Jaffer’s managed 54 off 46 and the Royal challengers have set a target of 190 to win. In reply, CSS (Not sure which team that is, but has Kumar Sangakkara batting at No.9) have scored 90/9 in 19.5 overs.

Royal Challengers off to a FlyerWow…that’s interesting. Further on the right hand side is the points table, which pegs Royal Challengers as the leading team with a Points tally of 16 from 6 matches, ahead of Mumbai Indians by 2 points. Only problem though, none of this actually clicks through to a detailed page. This is the Demo site for Royal Challengers created by some smart developers…I managed to grab the screen before it’s replaced by real information…here you go (Click on image to enlarge)!

By the way, Royal Challengers have appointed the Washington Redskins Cheerleaders, the professional cheer leading team to cheer for the inaugural matches and to train and develop a professional cheer leading team…interesting indeed!!!

Waiting for my Blackberry Pearl

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Blackberry Pearl 8110The prospect of balmy, sunny days around the corner makes April one of the exciting months of the year. But there’s another reason which adds to my excitement, for in April every year it’s time to renew my mobile phone contract. I have been with Vodafone for three years now and was contemplating leaving Vodafone for exciting offers on O2 or Tmobile. I am after a Blackberry Pearl 8110 with the Blackberry Internet Solution™ and the added functionality of a GPS. Not that I drive, but a GPS is quite handy even while walking point to point (Sounds funny using GPS for Pedestrians, it’s more of a “it’s there, try it” thing). And of course, a Blackberry is no good without the Emails and Internet.

Vodafone LogoAfter much thought and deliberation, I rang Vodafone last week to find out about my options of owning a Pearl with the same network. Vodafone doesn’t advertise Blackberry Pearl for individual users…I wonder why!? As Pearl is one of the hottest selling Blackberry devices. However, for business users, they do have attractive tariff. After speaking to their customer services, I was quite convinced that Tmobile is a better option until I stumbled upon the offers by O2. Both the networks offer decent tariff for a Blackberry along with the voice and data plan. I finally decided to call it quits with Vodafone and informed them of leaving and requested for my PAC code. I was assured that the PAC code would be sent within 4-5 days. To my surprise, instead of the PAC code, I got a call from Vodafone retentions department with an offer which not only matched the other two networks but also bettered them. But the only hitch, no GPS subscription with Vodafone as it costs an additional fee!

Vodafone TelpmapVodafone certainly offers free GPS Subsription for Blackberry customers, but I was told that they have stopped including this as a package from the day before they called me. A big lie! Just checked their site this morning on the GPS is still free for 12 months. In any case, Vodafone is offering the GPS service in association with Telmap and it’s possible to buy this service for a one off £39.99 Annual Fee or a £4.99 monthly fee. Sounds good! I took the bait and the device should be delivered anytime soon.

Also, today is the day I complete exactly one year as a Marketing Analyst at ArenaFlowers.com. A year has passed so quickly!

Bose Triport Headphones & the Flower Forums

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Bose Triport HeadphonesIt is amazing how many thoughts and ideas emerge in a forum discussion offering interesting insights into many aspects of a particular topic. I find forums quite useful for many everyday issues I come across where I lack the necessary knowledge or approach to get out of it. Recently, I was gifted a Bose Triport headphones to go with my iPod and though it is an incredible product with brilliant noise amplifying abilities, it does have a major setback. Bose ships these earphones with three pairs of detachable eartips. No matter how careful you are, you end up loosing these eartips very quickly…at least I did. The earphones never stick to your ears and most Triport users are constantly seen holding the earphones closer to their ears to ensure it doesn’t fall off. It is extremely frustrating and you never get to enjoy the music peacefully. And within two weeks of receiving this as a gift, I had lost all my eartips. And the Bose earphone is designed in such a way that you cannot use it without the eartips. How annoying!?!?!

Anyway, my quest to find replace ear tips lead me to find other Bose users who have experienced similar difficulties. Most of these customers have vented their frustrations on forums and I not only found a good number tips from where to get them but also that I could order the eartips directly from Bose free of charge. And of course I found all these on forums. Basically, forums are a great way to connect with like minded people and it makes perfect sense for businesses to host a forum to interact with customers.

The dearth of online forums and message boards in the florist industry is a bit surprising considering that its such a huge market. Of course forums and message boards do not belong to the same age as blogging, social bookmarking and networking, as they are the predecessors of the existing mediums. But forums are great resources where a community of like minded individuals share there knowledge and ideas. Also, it provides a firm base for businesses such as ours to build customer relationships. However, starting and managing a forum is an arduous and time consuming task. Nevertheless, we are convinced that we should be starting a forum to connect with our customers and suppliers. Thanks to Bose’s problematic headphones!

If any of you are experiencing similar issues with Bose Triport Headphones, call their Customer Services on 0800-085-9021. It’s been a few weeks since I complained and am yet to receive mine. I contacted them last week to check the status and was told that they have run out of stock until end of April. Though the headphones are good, I would give a big Thumbs Down for the product unless they come out with an enhanced version. Sad that many of us owning the older versions feel cheated. Sennheiser has better ones!

Combating Content Theft

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Recently we have noticed quite a few websites and blogs using fresh flower images from the Arena Flowers site without permission. While we feel privileged to see our flowers on multiple mediums, particularly blogs as they seldom benefit commercially by using our flower images, it is the systematic disregard of commercial websites which is worrying. Controlling the use of content and images of an online medium has been problematic for their owners as an average blogger or a web publisher has little or no idea of copyright laws.

Since the launch of Arena Flowers website, we have seen a couple of sites offering flower delivery services clone our web layouts. However, in the recent past, we were slightly put off by a publisher when he started passing our images as his own to woo customers to his business. When we contacted him to advise him of the potential consequences, he started playing the hardball by arguing that he copied the images as he believed that he was not in violating by taking it from a website which allowed him to save the images on his computer. Of course imitation is a compliment, but copying is not. Either people have a rudimentary knowledge of copyright and trademarks or they they turn a blind eye. For small businesses, when information and digital content is widely available, it is a great temptation to choose the easy path of passing others images as their own to gain access to customers. But they seldom realise the costs of such ignorance.