Today is Day #2 of our review of French marketing trend notes for 2008.

(This whole translation business is actually not bad at all. I think I'm getting the hang of it.)

Read the original interview here.

Interesting how in some ways, the French are a bit behind the US in terms of user content, realizing that the balance of power has shifted, and the use of the internet (hey, the French government held on to the minitel for so long that French adoption of PC's and access to the internet was delayed for almost a decade)... yet their sophistication when it comes to a) product labeling and the role it plays in helping consumers make purchasing decisions, and b) ecological responsibility, is decades ahead of the US.

The carbon footprint of a ribeye steak? Really? In the US? I'd buy that for a dollar!



Have a great weekend, everyone. :)


Photo by NASA.

Labels: buzz marketing, marketing communications, strategy, trends, user generating content

For the next three days, I will be bringing you interesting bits of insight from the other side of the big pond. Because I want you to be able to read and understand these posts, I will translate everything into English (yes, free of charge.)

How about that!

(If you want to read the meat of this post in its original French, the link go here.)

Jean-Noël Kapferer (HEC).

2007 was characterized by the success of extremes: Low cost and luxury brands in mass market like Apple, H&M or Nespresso. We observed a polarization phenomenon in the market.

On the one hand, certain brands positioned in the value-priced corner further discounted their products, like Ikea and Easyjet for example. The Logan, which was Europe's cheapest car, will soon be dethroned by a vehicle costing only $2.500 euros born of a partnership between Renault and an Indian manufacturer.

On the other hand, middle-of-the road brands which not so long ago were known for producing mass consumption products are now becoming premium brands.

(...)

Apple isn't technically a luxury brand but it employs luxury brand strategies. This is the case with iPhone: A single distribution partner, a premium price, an exclusive service package, messaging centered on living an ideal lifestyle… all of this to develop a unique experience aesthetic and a strong sense of community. The process is the same when Nespresso launches a boutique on the Champs Elysées.

Likewise, Air France is bringing back First Class in response to its Tempo Class being challenged by low cost operators. (The advantage of business class resides in that businesses, not individual passengers foot the bill.)

(...)

Sofitel is also following this model by repositioning half of its operations as luxury properties, under its Pullman brand. This tendency by mid-market brands to restructure "up" their existing stores, properties and product lines is important.

Indeed.

While many companies still remain in the soft, mushy center, the ones with a bit more insight into how the world has changed in the last couple of decades are taking steps to a) differentiate themselves from their competitors and b) stand for something. This is driving brand... or rather value proposition polarization.

As a brand manager, you really need to routinely ask yourself two basic questions:

1) Why should anyone do business with you instead of the guy across the street? Name 3 things. You have thirty seconds.

2) What's your value prop? Are you primarily value (volume) or are you primarily luxury (margin)? (Yes, even if you want to be both, you have to choose one.)


Some brands do manage to cross the volume/margin barrier, but they are few and far between. They are the Starbucks, Nike, Apple and other mass-market relative lovebrands of the world. (I say relative because being a lovebrand is neither here nor there: Nike may not be the lovebrand it once was, and Starbucks' star may not be shining as brightly a year or two from now as it did three or four years ago. Here today, gone tomorrow... Consumers, after all, are fickle.)

How to build a Lovebrand, in 5 simple (albeit major) steps:

Step 1) Start with a luxury value prop foundation.
Step 2) Develop volume-friendly products.
Step 3) Create a distribution channel that focuses on both breadth and depth.
Step 4) Love your customers even more than they love you.
Step 5) Keep your eye on the ball (Step 1)

Of course, the devil is in the details, but you have to start somewhere. ;)

Is there a future for middle-of-the road brands? Sure. Why not? For companies more concerned about maintaining a certain level of revenue this year - these are generally companies that take a "if it isn't broken, don't fix it" approach and don't put much stake in innovation or growth strategies. I don't see these types of companies disappearing anytime soon, but they should already be seeing a downturn in their market share, profit margins and new customer acquisitions. At best, they can expect to sustain perhaps up to 6% growth for another year or two - assuming they are already there now - before that growth suddenly slows and becomes negative.

Mark my words: that downturn will not be gradual. It will happen within a quarter or two at the most. Not good.

The soft middle may seem like a safe place to be if you're either too dumb or too scared to read the writing on the wall... but hey, some execs are happy to just show up and collect a paycheck until it's time to float their resume to the next flunkie status-quo company. That is the reality of this world. The tendency for proactive brands to clearly and deliberately realign their value propositition along the line of either value/commodity or its polar opposite (luxury/premium products) is as clear an indicator as I've ever seen of the impending doom of the soft middle's "business as usual" model - at least when it comes to mass-market products.

There is simply a) too much information available to consumers and b) there are too many convenient channels through which consumers can purchase products from a variety of pricepoints for middle-of-the-road companies to have a fighting chance against brands with clear and polarized value props.

Have a great Thursday, everyone. We'll be back with Part 2 tomorrow.

Labels: lovebrand, luxury, value

From this post by Seth Godin:

Labels: engagement, motivation, passion, passionate staffers

So, this weekend, the family and I decide to have lunch at a local Asian fusion restaurant, and because I have a cold, I order some green tea with my meal.

As the tea arrives, I pour myself a cup and notice that a strange greasy substance is beading all across the surface. A strange... bright yellow greasy substance. Kind of like... chicken grease, only thicker and shinier. Hmmm. Weird.

I lift the filter cap off the tea pot, and notice that the tea inside the pot also has a lot of the weird yellow stuff floating around. Perplexed, I stir the pot a bit, and that's when I realize what the yellow stuff is. There's something floating around in the tea. A rectangular piece of paper. No, a YELLOW rectangular piece of paper. No... a yellow rectangular piece of paper with letters printed on it: CRAYOLA.

The waiter brings us our food, and politely I jokingly ask him if he can please bring me a pot of tea without a dissolved Crayola marker inside. At first, he thinks it's a joke, but he looks inside and starts to freak out. Apologies start flying. He takes the teapot to the kitchen, and the manager gets involved. From what we can hear where our table sits, the teapot incident is now the topic of discussion in the kitchen, and the manager is NOT happy. Minutes later, the waiter emerges with a fresh pot of tea, apologizes a half dozen times, and tells us that our entire meal has been comped.

The poor kid got a good tip, and we'll be eating there again.

I would tell you what the restaurant is, but I don't want to give them bad publicity. The Crayola marker in the teapot thing is not the sort of thing that a restaurant wants to be known for. It's unfortunate, because they responded to the crisis perfectly, and I would love to give them their well-deserved props.

And Crayola markers are non-toxic.

The point of this post is this: Sometimes, businesses make mistakes. How they react when these mistakes pop up is perhaps more telling about them than the fact that someone in their organization made a mistake in the first place.

This business made a mistake, but corrected it immediately. The manager enacted new mandatory tea pot inspections within minutes of the incident. The kitchen was immediately briefed. The restaurant didn't only apologize, it also paid for our entire meal. We didn't have to argue. We didn't have to act angry. We didn't have to threaten... not that we would have. I wasn't all that bothered by the Crayola marker. I would have been happy with a fresh pot of tea and an apology. Frankly, the free meal was unnecessary... but not everyone is as laid back as yours truly.

Perhaps out of pure professionalism or out of fear that a customer could sue them or give them the kind of publicity that could gravely damage them, they didn't try to blow it off. They didn't try to pass the buck. They didn't offer us a free dessert. They didn't give us 25% OFF coupons for our next visit. They took care of the problem right away, and treated us like valued customers.

Well played.

If only more businesses did damage control and customer service as well as this restaurant, the world would be a better place.

Labels: customer experience, customer service, foodservice

This is pretty cool. Waste five minutes today playing with it. Why? Because it's fun, quick, and it'll tell you a thing or two about brand you.

Could this possibly the shortest brandbuilder post ever?

Maybe.


To leave comments (and read previous, related posts) hit the brandbuilder's main page.

Labels: brand you, imagery, test

In 1970, the average CEO in the US made 28 times more than the average worker. 35 years later, that number had increased to 465 times. Nice visual/interactive presentation over at Business Interactive.

I haven't done the math yet, but I suspect there might be a direct correlation between CEO compensation and the increase in CO2 levels in Al Gore's inconvenient presentation.

465 times the salary of the average worker. Wow. That would buy a lot of $0.99 junior Whoppers.

What does this post have to do with building brands? When the gap between CEO pay and their average workers' pay gets this wide, people start getting cynical about their company. Especially when benefits get cut every year. Especially when more jobs start getting outsourced. Especially when layoffs become common. Especially when the company's products, customer service and innovation quotient are suffering. Inequity doesn't exactly sell brands. Fatcat loser CEOs are seen as merchants of exploitation, and no one wants to be a part of that.

As the asian stock markets start to crash again today (hopefully, things will get back to normal in a day or two), I thought it might be fun to look at who won't be hitting the bread lines when the fit eventually hits the shan.

Wages 465 times greater than the average worker - in many cases, for playing a lot of golf. Brioches, anyone?




To leave comments (and read previous, related posts) hit the brandbuilder's main page.

Labels: CEO, compensation, Inequity, salary

Labels: blogs, brandbuilder, copyright, photography, rant

Three words: Incredible.

Don't read about this movie. Don't look for teasers or spoilers. Just go see it.

Does Cloverfield live up to the hype? Let me just say this: I was on the edge of my seat for most of the movie, and some of the scenes just blew me away. As for the monster, you will see it in all its glory many times,so no worries. In many ways, the way that the movie doesn't focus on the monster the way you would expect a Godzilla movie to... but still allows you to get your fill is one of its greatest achievements.

This is a hundred times better than a Godzilla movie, by the way. Seriously. From the monster to the characters to the way it is filmed to the way the camera seems to shy away from the brilliant special effects, you will feel like you are in the streets of New York City as it is being inexorably taken apart by a giant sea monster and the US military, and yes, your heart will pound pretty fast at times.

Unlike Snakes on a Plane - which was a case of killer marketing tied to a terrible waste of a movie - Cloverfield concludes months of very effective buzz-making by delivering on its promise. It was actually better than I expected.

So put down that old issue of Fast Company, turn off the TV, and check out local times here. Time for a dinner and a date to a good old monster movie. Good to see they still know how to make them. ;)

Labels: cloverfield, entertainment, monster, movies

Via Jennifer Rice's What's Your Brand Mantra, Mark Hurst's brilliant little primer on the difference between Customer Service and Customer Experience:


Go read the rest here and here.

Update: Marc points us to a cool little site called measuredup.com, where you can write and read reviews (positive and negative) about businesses, customer service experiences, etc. Great stuff.

Have a great weekend. :)


(As always, to leave a comment, go to the main page.)


Image by The Pack.

Labels: customer experience, customer service

Here's another reason why Tom Asacker has been one of my favorite bloggers these last few years:

If the truth hurts, well... sorry.

Click here to read his 2-page mini-manifesto.

Labels: clarity, marketing, noise

Evan mentioned this to me a few weeks ago, and I finally took the time to go check it out. If you're in the design field (or your work occasionally touches design) I recommend you do the same. You'll get a kick out of it.

From the official site:

Helvetica is a feature-length independent film about typography, graphic design and global visual culture. It looks at the proliferation of one typeface (which will celebrate its 50th birthday in 2007) as part of a larger conversation about the way type affects our lives. The film is an exploration of urban spaces in major cities and the type that inhabits them, and a fluid discussion with renowned designers about their work, the creative process, and the choices and aesthetics behind their use of type.

Helvetica encompasses the worlds of design, advertising, psychology, and communication, and invites us to take a second look at the thousands of words we see every day.

The film was shot in high-definition on location in the United States, England, the Netherlands, Germany, Switzerland, France and Belgium. It is currently screening at film festivals and special events worldwide.

Interviewees in Helvetica include some of the most illustrious and innovative names in the design world, including Erik Spiekermann, Matthew Carter, Massimo Vignelli, Wim Crouwel, Hermann Zapf, Neville Brody, Stefan Sagmeister, Michael Bierut, David Carson, Paula Scher, Jonathan Hoefler, Tobias Frere-Jones, Experimental Jetset, Michael C. Place, Norm, Alfred Hoffmann, Mike Parker, Bruno Steinert, Otmar Hoefer, Leslie Savan, Rick Poynor, Lars Müller, and many more.

Helvetica was developed by Max Miedinger with Eduard Hoffmann in 1957 for the Haas Type Foundry in Münchenstein, Switzerland. In the late 1950s, the European design world saw a revival of older sans-serif typefaces such as the German face Akzidenz Grotesk. Haas' director Hoffmann commissioned Miedinger, a former employee and freelance designer, to draw an updated sans-serif typeface to add to their line. The result was called Neue Haas Grotesk, but its name was later changed to Helvetica, derived from Helvetia, the Latin name for Switzerland, when Haas' German parent companies Stempel and Linotype began marketing the font internationally in 1961.

Introduced amidst a wave of popularity of Swiss design, and fueled by advertising agencies selling this new design style to their clients, Helvetica quickly appeared in corporate logos, signage for transportation systems, fine art prints, and myriad other uses worldwide. Inclusion of the font in home computer systems such as the Apple Macintosh in 1984 only further cemented its ubiquity.

It sounds a bit geeky, but trust me, you'll love it.

(I'm waiting for the sequel - "Helvetica II: Comic Sans Strikes Back".)



To leave comments (and read previous, related posts) hit the brandbuilder's main page.

Labels: design, fonts, typefonts

If like me, you're fanatical about a) access to relevant (dare I say actionable) data and b) new ways of communicating or presenting this data, then you will love this site.

I was trying to explain to a few colleagues the other day that I needs tools to visualize data and business processes in 3D. I'll bet that if I dig deep enough, this site will have what I am looking for. (Please please please?)

Eye candy for data brainiacs everywhere to be sure. Hopefully, you will never look at a lame little black and white line graph the same way again. (Shake things up a little!) Here are some cool examples:

Labels: visual data modeling

Mike Bawden (who was kind enough to quote me on his blog a while back) once wrote one of the simplest yet most astute observations about leadership that I have ever read:

Well said.

Management is static. Management fosters a predictable business-as-usual , don't-rock-the-boat, status-quo, bureaucratic environment.

Leadership is dynamic. It drives a business forward. It is unstoppable. You either commit to it and get on the train, or you get left behind.

Managers can become leaders, but managing and leading are far from the same thing.

There is no middle-ground.

Labels: leaders, leadership, management

Excellent post by Mack Collier over at Viral Garden (via Customers Rock):

Labels: conversation, customer communities, customer relationship, happy customers

Here's some context for you (and some culture too, while we're at it):

Labels: bad ideas, design, fashion, haute couture, marketing

These were some of the pertinent questions posed by Brains On Fire's resident firestarter Spike Jones some time ago.

This is too big a topic to try to cover in only one post, but the least I can do is to try and get the discussion started. Here is a short list of what you might call purple cow killers. These business diseases can strike a perfectly cool little company with quasi-infinite potential, and turn it into a bumbling corporate flunkie faster than you can say "I.P.O.":

1) Routine

People lose their passion for things they love when those things become routine. Think about it. Your first day at a new job. Your first drive in a new car. The first time you see a good movie. A first kiss. Everything is exciting at first... but then you eventually get jaded. The excitement wanes. You lose some of your passion. Details become someone else's problem. So do your products. So do your customers. Deny it all you want, it's true... and it's inevitable unless you do something about it.

The trick is to keep the fire burning by keeping things fresh. If routine is a passion-killer, then build a corporate ecosystem that actively fights routine. Easier said than done? Nope. Quite the contrary. (But that's a topic for another day.)

2) Bureaucracy

The bigger you get, the more you start to rely on procedures. The more you start to say things like "no" and "can't" and "we'll have to charge you extra for that". The harder it becomes for the people at the top of your organization to stay in direct contact with their customers. That's bad. It shouldn't take thirty minutes for a customer to get a return authorization. It shouldn't take seven transfers to get a product manager on the phone. Nobody should ever get the runaround. Ever.

Bureaucracies slow things down and build walls between employees and between you and your customers. As you grow, take the time to develop systems that overcome this problem. Again, this isn't hard, but you can't let these things fall to chance. You have to be just as proactive in building your company's structure as you are in building its markets.

Don't lose sight of the fact that a company isn't a building or a logo or a set of rules. A company is always, first and foremost, a group of people united to pursue a common interest. And while you may not think of it that way, this applies to your employees as well as your customers. As a business leader, one of your jobs is to make sure these people are all connected. If your organization disconnects them from one another, you are majorly shooting yourself in the foot.

3) Comfort

If you've only worked on the agency side of the business, chances are that you've never heard these dreaded words: "We've been doing things this way for ____ years, and we've been successful at it, so there's no reason to change."

(Nails on a chalkboard.)

Yeah, well, in the wise words of Jack Spade, "Never believe anything you've done is successful." The minute you do, you're dead. End of story. In business, getting comfortable = getting lazy.

Reality check: Markets change. Technologies and tastes change. People grow old and younger ones take their place. Renewal = relevance. Even old-school luxury houses like Bentley and Cartier have adapted to new markets. (If you don't believe me, watch MTV sometime.)

If you don't constantly question what you could do better or where you might go next, you're done. Period.

4) Nepotism

It's natural to want to surround yourself with people you know and trust. It's another thing altogether to promote buddies and family members to positions they are neither qualified for, nor passionate about.

Furthermore, while surrounding yourself with people who won't ever challenge you might be a nice ego boost, it is certainly no way to keep your company moving in any kind of direction.

If all your key managers are passionate about are their 401K plans and their annual retreats to Tahiti, then it's no surprise that your company has lost its focus.

5) Fear

"Show me a guy who's afraid to look bad, and I'll show you a guy you can beat every time." (Lou Brock)

Yep.

The older you get, the less chances you are likely to take with your career. The larger your company is, the less likely you are to risk screwing something up.

Too much to lose, you see.

So you stop taking chances. You start worrying about what your "competitors" are doing. Instead of leading them, you let them lead you. Next thing you know, you've exported all of your production power overseas, your quality takes a dive, your customer service is anything but, every bit of talent you ever managed to hire has walked out on you, and you find yourself on the losing end of a price war. Other than just plain dishonesty, that's how great companies fail.

Well, bollocks. Playing it "safe" is the fastest way to screw yourself over. (And your customers.)

If you don't have the huevos to stretch the boundaries now and again, to be an innovator, a pioneer, and to sometimes be okay with making some people really hate your latest product, then you need to find another occupation. Being a leader isn't about staying put. It's about... well, leading.

6) Denial

Most companies who don't get it think that they do get it. That's the tragedy. Once your distribution channels are well-developed, once you have thousands of active accounts, once you've been a market leader for twenty, thirty, forty years, the sheer momentum of your growth can carry you into another decade or two. As long as your growth closely matches whatever opportune economic indicator you are following, things might look pretty decent.

Labels: bureaucracy, denial, fear, nepotism, routine

Continuing the discussion from the previous post...

God bless our economy, but this very quick presentation by Chris Jordan (on Business Interactive) will make you wonder just how long we can sustain this kind of nonsense:

People in the US uses 60 thousand plastic bags every five seconds.

The US uses 200,000 plastic bottles every five minutes. (That's OVER TWO MILLION PLASTIC BOTTLES EVERY HOUR!)

US prisons currently house 2.5 MILLION prisoners. (That's almost the entire population of Chicago, by the way.)

200,000 Americans die from smoking every six months.

9 MILLION children in the US did not have health insurance in 2007.

The US spends $12.5 Million of taxpayer dollars every hour in Iraq.

I'm not sure what this says about brand "America" but it doesn't exactly spell two thumbs up.

The presentation is pretty intense as it uses incredibly large images to put these numbers in the proper context/scale.



To leave comments (and read previous, related posts) hit the brandbuilder's main page.

Labels: excess

For Chris:



Interesting and sobering article published back in May on yournewreality.com. (Yeah, I'm behind in my reading a bit.) We'll get to it in a minute.

Note: Because I am a worthless echo chamber (isn't that what we bloggers are?) I won't bother to fact-check, but feel free to do so at your leisure.

About this article, I will just say this: Alarmist vernacular aside, if you ignore the doomsday predictions and just focus on the numbers, our nation's current financial situation isn't good. Worse yet, our nation's financial future is not looking good at all. There might be a reason why so many CEOs are negotiating ridiculously high compensation packages and bouncing from job to job as often as they possibly can.Maybe they saw the writing on the wall long before the rest of us did.

Okay look, I know we all want to live in big houses, drive cool cars and dress like movie stars without having to work all that hard for it - and worry about the costs later- but there comes a point when you kind of have to wake up and accept that a) credit has its limits and b) financial responsibility isn't something you can put off. This applies to banks a whole lot more than it applies to consumers, but it does start with individual responsibility when it comes to our attitude towards borrowing. Without debtors' prisons around anymore to remind us that credit isn't infinite, we need to start giving some thought to how and why we buy the things we buy.

What does this have to do with branding? Two words: "Brand USA."

This has to do with future foreign investment in the US economy, in the fate of the US' workforce, and in the viability of its buying power twenty years from now - as opposed to say, Asia and Europe.

Put yourself in the shoes of an investor with a finite amount of money to invest, and do your homework. Then ask yourself this: Right now, are the US economy and the US Dollar really your best bets for a strong return on investment? Is the dollar doing well? Is the US creating more jobs than it is losing? Are the new jobs being created as good for taxpayers as the ones they are "replacing?"

The rub is that economic pressures tend to work as circular cause-and-effect cycles. Lack of confidence in US markets by foreign-owned banks can trigger the kind of economic downturn that our current overconsumptive lifestyles might not jive well with. Downturns shatter investor confidence. Low investor & consumer confidence means more slowdown.

It isn't brain surgery.

In the past, a good way to kick the economy into high gear was to get involved in a good war. War always stimulated economies... But in the global marketplace we live in today, we're more likely to stimulate China's economy by going to war than our own. What was true of the 1940's isn't applicable to the world we live in today.

For all the "reality" TV we consume daily, we're painfully out of touch with reality.

Brand USA could really use a big boost over the next 6-12 months... and neither the Huckabee-Clinton-Obama-McCain race to the White House nor the current state of things in Iraq nor the endless stream of bonehead "news" stories about Britney, Paris, Lindsay or whatever politician got busted doing something embarrassing in airport bathrooms is really helping.

Now news about the exciting research that American Universities and labs are moving forward with in fields like advanced robotics, superconductors, fuel efficiency, AI, smart materials, etc., about exciting emerging technologies and how they can be incorporated into our everyday lives, and how successful grassroots social programs could be used as templates for large scale federal programs in coming years might serve our interests as a nation a bit better.

As a nation and cluster of business communities, we really need to raise the level of the conversation just a tad.

Read this, and I'll let you figure out the rest.

Americans, on average, spend more money than they earn. How do they manage to do this? Easy credit, low interest debt.

Thanks to their magnificent consumption, soaking up the goods produced by tens of thousands of Chinese factories, Asia keeps offering Americans easily accessible credit and buys up the monumental debt wracked up daily by the American government in the form of Treasury bonds. Without Asia both offering credit, and buying up debt, the average American lifestyle as they now know it would cease exist.

But even though the US government, and federal reserve, freely admits to shocking levels of debt and losses, the true scale of America's extremely fragile economic situation is lost behind illusionary accounting practices, the kind that no corporation is allowed to get away with.

The true scale of America's extremely fragile economic situations has now been exposed :

The federal government recorded a $1.3 trillion loss last year — far more than the official $248 billion deficit — when corporate-style accounting standards are used, a USA TODAY analysis shows.

The loss reflects a continued deterioration in the finances of Social Security and government retirement programs for civil servants and military personnel. The loss — equal to $11,434 per household — is more than Americans paid in income taxes in 2006.

"We're on an unsustainable path and doing a great disservice to future generations," says Chris Chocola, a former Republican member of Congress from Indiana and corporate chief executive who is pushing for more accurate federal accounting.

Modern accounting requires that corporations, state governments and local governments count expenses immediately when a transaction occurs, even if the payment will be made later.

The federal government does not follow the rule, so promises for Social Security and Medicare don't show up when the government reports its financial condition.

Bottom line: Taxpayers are now on the hook for a record $59.1 trillion in liabilities, a 2.3% increase from 2006. That amount is equal to $516,348 for every U.S. household. By comparison, U.S. households owe an average of $112,043 for mortgages, car loans, credit cards and all other debt combined.

Unfunded promises made for Medicare, Social Security and federal retirement programs account for 85% of taxpayer liabilities. State and local government retirement plans account for much of the rest.

This hidden debt is the amount taxpayers would have to pay immediately to cover government's financial obligations. Like a mortgage, it will cost more to repay the debt over time. Every U.S. household would have to pay about $31,000 a year to do so in 75 years.

It would seem almost impossible for the American economy to be facing disaster when the stock market is roaring past 13400 points, but most of this growth comes from the availability of extremely cheap debt. Get a big fat low interest loan and pour the money into stocks and bonds, and watch the stock market climb.

Mike Whitney is not alone in claiming the strength of the American stock mark is but an illusion, a simple con aimed at propping up the American dollar and holding back the financial devastation that will eventually break out across the nation.

The illusion, he claims, is shattered when you take a look at what's happening to American real estate, and it's not a pretty picture. When the real estate market completely disintegrates, so will most of the rest of the American economy :

The real estate market is crashing faster than anyone had anticipated. Housing prices have fallen in 17 of 20 of the nation's largest cities and the trend lines indicate that the worst is yet to come.

March sales of new homes plummeted by a record 23.5% (year over year) removing all hope for a quick rebound. Problems in the subprime and Alt-A loans are mushrooming in previously "hot markets" resulting in an unprecedented number of foreclosures.

The defaults have slowed demand for new homes and increased the glut of houses already on the market. This is putting additional downward pressure on prices and profits. More and more builders are struggling just to keep their heads above water.

This isn't your typical 1980s-type "correction"; it's a full-blown real estate cyclone smashing everything in its path.

Tremors from the real estate earthquake won't be limited to housing--they will rumble through all areas of the economy including the stock market, financial sector and currency trading. There is simply no way to minimize the effects of a bursting $4.5 trillion equity bubble.

The next shoe to drop will be the stock market which is still flying-high from increases in the money supply. The Federal Reserve has printed up enough fiat-cash to keep overpriced equities jumping for joy for a few months longer. But it won't last.

Wall Street's credit bubble is even bigger than the housing bubble---a monstrous, lumbering dirigible that's headed for a crash-landing. The Dow is like a drunk atop a 13,000 ft cliff; inebriated on the Fed's cheap "low-interest" liquor. One wrong step and he'll plunge headlong into the ether.

The stock market cheerleaders are ooooing and ahhing the Dow's climb to 13,000, but it's all a sham. Wall Street is just enjoying the last wisps of Greenspan's low interest helium swirling into the largest credit bubble in history. But there are big changes on the way.

In fact, the storm clouds have already formed over the housing market. The subprime albatross has lashed itself to everything in the economy ---dragging down consumer confidence, GDP and (eventually) the stock market, too. The real damage is just beginning to materialize.

The entire thing house of cards is propped up by confidence. The confidence that says property prices will recover. The confidence that claims the stock market will stay strong. The confidence wishes, dreams, hopes, that jobs will grow, that exports will rise, that the inevitable crash and burn will never come.

Perhaps spending more state and federal money on education, infrastructure, healthcare networks, and research might yield better ROI than supporting the Halliburtons and Blackwaters of the world. We just can't keep borrowing trillions of dollars from foreign banks to fund little more than day to day war-driven government services, an ill-managed federal budget and our purchasing power... and expect the bubble to keep growing and growing and growing without ever bursting.

Unlike the other olivier blanchard, I am not an economist, but as a guy who has worked for fifteen long years to finally get out from under a pretty decent amount of debt, this seems pretty obvious: Debt doesn't just go away when you ignore it. Sooner or later, you have to pay the piper. Yes you, not the next guy.

No one is going to bail us out of this mess. No one is going to come along to magically rebuild confidence in our economy or our government. Democracy only works if people take their civic, financial and professional responsibilities seriously. As a nation, we could be doing a whole lot better.

US Economy Overtaken By EU And Japan

Whitney : Doomsday For The Greenback

Chinese Taking Out Unsecured Loans To Invest In Stock Market

China's Stock Market Plunges 6.5%, Losses Continue Into Second Day



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Image source: China Economics Blog.

Labels: business, credit, debt, deficit, economy, growth

I found this perfectly timed gem over on Buzzoodle today:

When a client, especially a new client, does not get what they are expecting, you are breaking an implied promise. Once you break that first promise, they will be calulating in their head how much more they will take before letting you go.

Here are 10 ways you may have broken a promise to a client.

1. Return a phone call when you said you would.
2. Proposal or contract arrives the day you said it would.
3. Reported back progress when stipulated.
4. Delivered exactly what is expected.
5. Clear pricing that does not go up for this and that.
6. Built an ongoing, valueable relationship
7. Failed to thank client for referral
8. Did not follow up after delivery
9. Miss a scheduled meeting or lunch
10. Back-peddle on promises after sale

You cannot create buzz when you are creating regret.

I love that post.

Labels: brand promise, customer experience, expectations

Hop on over to Kathy Sierra's blog for her post on bravery, confidence, and getting past the paralysis of uncertainty. Very cool stuff, as always:

"If your new Big Idea doesn't scare the hell out of you, it's probably not a new Big Idea. If it doesn't scare other people, it might be because you allowed the consensus (or what you imagined as the consensus) to smooth the pointy bits, buffing and polishing the idea into a nice safe state that displeases nobody and delights nobody."
(...)
"But--if we let the critics (or fear of criticism) talk us out of an idea we still believe in, the world will be more homogeneous. Smoother. Less interesting. Imagine where we'd be if people throughout history had always given in to the critics (or fear of critics). Imagine the ideas that would have beenlost if others hadn't been brave enough to stand up against smart people who disagreed. Nature needs change and diversity, but humans tend to favor the status quo."

... Well, not all humans. Some of us are wired a little bit differently. It isn't so much that we're difficult. We really aren't. It's just in our DNA to a) figure out ways to make things better for people around us, and b) to find ways to take these ideas and actually make them happen.

We just want faster wheels. Safer helmets. Sharper pictures. Easier web interfaces. Cleaner fuels. Smarter workspaces. Softer beds. Fun retail spaces. Cheaper orbiters. More powerful telescopes. Tastier drive-thru coffee. Food, clean water and medicine for every human being on the planet. Better advertising. Put simply, we have the skills to make these things happen, and don't feel like waiting for someone else to get around to it.

Kathy posted a link to the very cool ode to "The Crazy Ones", from Apple. Remember the ad? If not, maybe this will refresh your memory:

Here's to the crazy ones.

The misfits.
The rebels.
The troublemakers.
The round pegs in the square holes.

The ones who see things differently.
They're not fond of rules.
And they have no respect for the status quo.

You can praise them, disagree with them, quote them,
disbelieve them, glorify or vilify them.
About the only thing you can't do is ignore them.
Because they change things.

They invent. They imagine. They heal.
They explore. They create. They inspire.
They push the human race forward.

Maybe they have to be crazy.
How else can you stare at an empty canvas and see a work of art? Or sit in silence and hear a song that's never been written? Or gaze at a red planet and see a laboratory on wheels?
We make tools for these kinds of people.

While some see them as the crazy ones, we see genius.
Because the people who are crazy enough to think they can change the world, are the ones who do.

Amen.

Related post: Fear Is Irrelevant.

Check this out. ;)

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Image by Goldmember

Labels: courage, fear, ideas, ideation

From infosthetics.com:

Research at the University of NSW, Sydney, Australia, claims the human brain processes & retains more information if it is digested in either its verbal or written form, but not both at the same time. more of the passages would be understood & retained if heard or read separately. "The use of the PowerPoint presentation has been a disaster," Professor Sweller said. "It should be ditched."

"It is effective to speak to a diagram, because it presents information in a different form. But it is not effective to speak the same words that are written, because it is putting too much load on the mind & decreases your ability to understand what is being presented."

This new insight clearly puts the recent report about using Powerpoint in Parliament speeches in a new perspective.

Interesting.

Some of the best powerpoint presentations I've seen so far have been extremely simple. They tended to focus on images, words and data so iconic, so clear, so easily understood in seconds that they a) almost required no input from the presenter and b) could have been framed and use as artwork. Slides with ten bullet-points and sub bullet points just put me to sleep. Bleh bleh bleh... bleh... blehhhhhhhhhh...

Do yourselves a favor and go to presentationzen.com. Learn something today... like ways to a) communicate better with ppt. and b) stop boring your audience to death. (Thank you.)

Related reading: The PDF, smh.com

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Labels: communication, language, powerpoint