Archive for February, 2009

Are newspapers becoming synonymous to buggy whips?

Sally Saville Hodge

reading the news...I stopped my subscription to the Chicago Tribune a year ago. After about 20 years or more of faithful home delivery. And despite twinges of guilt over the loyalty thing. I did, after all, work there for a few years back in the ‘80s.

I don’t really miss it. (With a rueful apology to all my old buds there who haven’t yet been laid off.) See, I don’t have time to do a leisurely daily read in my garden with a cup of coffee or tea. I can get my news fix on the Web, weaving my scans into my workday. And it gives me access to a wealth of voices, not just the Trib’s.

My hands stay a lot cleaner, too.

Even though my decision was one of a million or more nails that have been pounded in the daily newspaper business’ coffin, I still fret over what can be done to save it, and, ultimately, what’s a proud and (mainly) honorable calling. So it was with no small degree of excitement that I read the cover headline on Time magazine a few weeks ago: “How to Save Your Newspaper.”

Great, I thought. Smarter people than I have come up with a solution. Must read!

Alas. I’m sure the author is smarter than I, but the proposed solution? To charge for content. Just a small amount – micro-payments – following the same approach that Apple took in building up its iTunes business. The problem is that it’s too late. That horse has left the gate.

I do wish that he was right in his argument. That people are willing to pay for well-written content. But the reality is that he overestimates how discerning most people are. Convenience trumps quality in most instances. I did a decidedly non-scientific poll of the 20-somethings I work with along with many of the 30-somethings I know, and only one of the 15 preferred the hard copy newspaper. None was willing to pay for online content. “Why, when I can go to a different site and get the same news for free?” asked one.

They did, however, cite exceptions, notably of one of the strongest brands in the business: the Wall Street Journal. Its quality was deemed worth paying for.

And quality is a critical component of brand equity that continues to erode in the newspaper industry each time another round of editorial layoffs is announced. Last week, the Tribune laid off another round of reporters, including Pulitzer Prize winner Don Terry and two of my favorites, Susan Chandler in business and Jeff Lyons with the Sunday magazine.

With each round of cuts – at the Tribune, and at scores of other newspapers across the nation, you see more wire copy being used to fill the dwindling news hole, and it becomes increasingly difficult to differentiate one news source from any other. We no longer have much of a reason to choose one over another – much less pay for whatever delivery mode.

The newspaper business is fast becoming an anachronism. I’m beginning to think the new model will be found less in micro-payments for content and more in solutions like that devised by the Christian Science Monitor. Survivors will be those that find ways to embrace their online selves – profitably – as the “paper” part becomes synonymous to buggy whips. Hopefully, they can do it before the voice that makes them distinctive is totally lost.

February 20, 2009 at 6:17 pm Leave a comment

A modest proposal to help the financial industry’s tattered brand

Sally Saville Hodge

pigs_troughThink about it. You and I and every other U.S. taxpayer have recently taken on the additional financial burden of $5,073 each to help keep Wall Street afloat. That’s how the $700 billion Troubled Asset Relief Program translates in an up close and personal way.

Am I willing to help out to this extent? Well, sure. I guess. Though I don’t recall anyone asking me and, even if they had, I would have said I had certain expectations tied to my generosity.

See, it’s actually a sacrifice for me to be doing this. I have plenty of other debt, personally and for my business, and really don’t need to be shouldering anybody else’s. Plus, mine is a small business and, yup, we’ve been feeling the pinch of the spiraling economy for awhile now. I’m already sacrificing, and so, for that matter, are my employees. Nobody’s gotten any raises in a long time. Bonuses? What a concept.

So I am more than mildly irked that the hotshots who played a major role in getting us into this mess a) haven’t turned the lending spigot back on; b) have not accounted for the uses to which they’ve put our money (because they weren’t required to); and c) have had the absolute and utter gall to keep bonuses and exorbitant salary structures in place for many, many executives – not to mention others further down on the business’ totem poles.

It’s all been delved into this week in Congressional testimony that has had a decidedly defensive tone. As Wells Fargo’s John Stumpf told lawmakers: “We are frugal. We’re Americans first. We’re bankers second.”

Really? The latest issue of Vanity Fair outlines in fascinating, if painful, detail how the sector has continued to line its own pockets even in the face of cascading red ink and the government rescue.

Consider Morgan Stanley. Its CEO, John Mack, and his top two lieutenants didn’t take bonuses for 2008. It was the second bonus-less year for Mack. Other senior managers in the firm saw their compensation cut by 60 to 75 percent. That didn’t mean bonuses were eliminated, though. The pool was just cut – all the way down to $5 billion.

How much did Morgan get in TARP money? Ten billion dollars. What makes it okay to put half the bailout total into bonuses? Well, the bonus and TARP monies were not the same money! Never mind, as one noted gadfly said, that “if the government hadn’t bailed these people out they would have gone bankrupt and … no one [would have gotten a bonus]!”

It’s not just Morgan Stanley. AIG had its secret “retention” awards of between $92,500 and $4 million to as many as 7,000 employees, bestowed to keep them from jumping ship during the sale of assets. One Citigroup trader took home a bonus of $125 million. Two lieutenants of Merrill Lynch’s John Thain, who departed with him last month after the firm’s acquisition by Bank of America, were lucky enough to carry home with them about $100 million in contractually agreed-upon pay and bonuses.

What’s clear through all of this is that the idea – much less the practice – of reputation management seems to have gone down the drain in this sector at a time when proactive measures have never been more needed. The financial industry is getting thoroughly tarred, and ironically enough, the hand that’s holding the brush is its own.

Here’s a modest proposal that might help restore badly needed trust and confidence. The leaders of these businesses – actually, any business that’s being forced to lay off thousands in the wake of a down economy – should consider foregoing not just bonuses, but their salaries until sales and profits begin to come back.

Unlike many who have been hardest hit by the recession, it’s not like they don’t have other assets to fall back on in the interim. And I think at this stage, the public wants more than lip service that the beneficiaries of our largesse actually do feel our pain.

February 12, 2009 at 5:13 pm Leave a comment

Bad customer service: Don’t get mad. Get even.

Sally Saville Hodge

Many years ago, I shocked my then-doctor’s officious nurse when I told her, in setting up my next appointment, that I’d be sending a bill for my time if I was kept waiting for over an hour again. And…by the way…my hourly fee was $200.

After she finished sputtering, she thought about it for a minute. “Okay, let’s get you in first thing in the morning, then, before he has a chance to get backed up.”

I never had to wait again.

Good customer service is, arguably, perhaps one of the most important contributors to a strong brand. It’s integral to the total customer experience that really defines a business’, professional’s or individual’s brand. But this fact must not be getting through. Why else do so many botch it?

We, as consumers, have many, many options on ways to spend the time allotted to us. An hour wasted waiting for the doctor to fit you in, on hold while questioning a bill, or trying to figure out where that order placed three weeks ago has disappeared to is lost forever.

For those that don’t care about their reputation, perhaps hitting them in the pocketbook is action they will appreciate.

It worked for Howard Schaffer. This Colonie, NY publicist found himself without phone service for a full month after moving offices last fall. He used stop-gap measures (borrowing a phone line from his landlord and having employees use their cells) while putting up with promises and excuses. It took an article by the consumer advocacy columnist of the local Times-Union to eventually shame his carrier, One Communications, into fixing it.

Nine apologies, however, were really not sufficient for lost time and, one can assume, lost business. Smartly, he kept careful track of the time and money he expended in trying to resolve the problem. He sent them an itemized bill for $5,481. Incredibly, One Communications paid.

You ask me, they got off cheap. And the rest of us learned how tenacity and moxie (with some help from the media) can pay off.

February 5, 2009 at 10:45 pm Leave a comment

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