Mark Kolier’s Blog

Archive for November, 2011

Having been in the direct marketing business for more than twenty five years I (like nearly all of my colleagues), am all too familiar with new mover data and its value to marketers. For those unfamiliar with direct marketing – new mover data is a highly valued commodity and the names and postal and email addresses are bought and sold at premium prices.

It should not be all that surprising that contacting a new home, co-op or condominium owner gives the marketer a golden opportunity to offer the right product or service at the right moment to people that have just moved into the neighborhood. Local eateries, services such as dry cleaners and tradesmen often tap new mover data in order to reach potential new customers. Even car dealers like to use new mover data in order to drum up new sales. New movers data can be segmented rather rigorously so that marketers can better target what they hope are the most likely new customers.

So it comes as a surprise to me that in the nearly four weeks that we’ve lived in a ‘new house’, there really has not been much in the way of offers for local (or even non-local) products and services for us – new movers. We are all too familiar with the data on both new and existing home sales here in the United States. All the more reason I say that a new mover should be more highly coveted than ever before.

I remember when we had just purchased our first home a number of years ago. At one point the Welcome Wagon lady (she had to be pushing seventy-five) came to our house while I was home alone painting. I answered the door and she asked if the owner was home. Nice. We both regrouped and she offered a basket of ‘goodies’ from local businesses (hair salon, pizzeria, dentists etc.). It was nice to get that and we definitely used the coupons and began to patronize local businesses – some that we even still patronize today.

Despite the fact that I’ve spent many years in the direct response industry I am on the do not call list. I imagine that I am far from unique in this aspect even for people in the industry. So that precludes our being called at home by local businesses. Email could be a way to reach us. But email data is not as easily matched to a new mover address – at least not anywhere as seamlessly as a postal name and address and corresponding mail piece.

Mail volume is down substantially and set to continue that trend. Perhaps we don’t make the grade as a good prospect to mail. However I sincerely doubt that.

Are there any other new movers out there? If so have you been seeing offers from local business that you can tell are aimed at you because you recently moved?

Did you shop ‘til you dropped this past weekend? Apparently many Americans did something close to that. Over the past weekend retailers saw ‘record numbers’ as reported in the New York Times this Monday morning http://nyti.ms/vqWO0f . ‘The National Retail Federation said Sunday that spending per shopper surged 9.1% over 2010 increase since 2006 – to an average of almost $ 400 per customer.’

A bit sobering the article also noted that it’s possible the gains may not last. With today being Cyber Monday there is also the expectation that internet sales numbers this year will far outpace those of 2010 or any prior year. ComScore expects Cyber Monday spending to increase well beyond the $1 billion level achieved in 2010 http://bit.ly/ujX71u . Last year more than 13.7 million items were ordered on Cyber Monday – a record breaking 158 items per second.

I can’t say that I helped internet or in-store sales at all this weekend. I much preferred spending the time with my family. I did receive an Amazon Kindle Fire and have been enjoying my first tablet and am highly impressed with the functionality and features of a $ 200 device. I will review more in depth in a future post but early returns are very positive.

Global stocks have reacted positively to the early shopping numbers. The trend is likely to be followed in the U.S. markets today. But will it last? One comment that gave me pause was from Margaret Taylor, VP and senior credit officer in the corporate finance group at Moody’s Investors Service. “They could be willing to take on more credit” Mark Vitner, a senior economist at Wells Fargo Securities, said in a note to clients that he expected that “consumers will dig into savings” or “temporarily tack on a little more debt” during the holidays.

Those comments do not resonate with me as offering reasons for long term optimism. With a 9.1% reported unemployment rate (the real number is more likely between 10-13%) it’s hard for me to believe that credit based consumption is still seen as desirable.

How many of you went out after Thanksgiving dinner to hit a store opening that evening? If not, what about shopping in stores on Black Friday? What was it like? Were the savings as good as advertised? Were you jostled, pushed and elbowed trying to get the best deal?

For a country founded on taking a risk (think taking a trip to the new world on the Mayflower) it seems to me that many Americans have lost their appetite for taking chances and assuming risk. This is particularly true in business. With increasing frequency people will only invest in a ‘sure thing’. Nice work if you can get it as the saying goes but when looking for reasons why the U.S. economy is struggling, aversion to risk should be considered a key factor.

In the U.S. (and in some countries too) there are tremendous amounts of money on the sidelines unwilling to get into the game by investing in ideas and businesses. And it’s not as if there are opportunities for great returns in safe havens like money markets and fixed investments. In fact risk diversification has come to include asking the idea-people and marketers to put up their own money as part of the compensation package. That shows that the owner of the product or service lacks some confidence in its viability.

Would you agree that risk and speculation are underlying to a capitalistic economy? Is the entire business world fixated on creating something that would be too big to fail? Risk is a part of life, managing risk is even more important. There are many things people consider doing every day that involve some degree of risk. Sometimes the risk is worth taking, sometimes not. But eliminating risk entirely is a duck and cover reaction that will bypass innovation and curtail new ideas from becoming a reality.

Shared risk is not an unreasonable approach to doing business. However I am finding that companies that say they are interested in shared risk are primarily interested in hedging their investment and often are unprepared to pay the higher rate of return commensurate with a shared risk plan as opposed to a pay-for-hire model.

Starting a business is certainly a risk. But these days taking a job at a corporation is a greater risk than it has ever been. I wonder if people still understand what risks they are taking as opposed to the ones that they are not. Staying in the same dead-end job because it’s comfortable and things are tough out there could turn out to be a greater risk than leaving to start or join something that does not appear as established.

The U.S. continues to be a land of opportunity. The country was built on a ‘can-do’ and ‘let’s build it’ attitude. Yet if people are averse to taking risks to build something new and hopefully better that particular freedom is in name only.

Taking a risk does not mean everybody has to build a Groupon, Zynga or LinkedIn. I am suggesting being mindful of the risk you could be taking – by not taking a risk.

Happy Thanksgiving folks.

Thanksgiving is seen as the true start of the annual ‘Holiday season’. Certainly retailers both online and brick and mortar have been pushing the ‘buy now’ button since Halloween. As the Occupy Wall Street movement carries on into month number three, it would be easy to think that the 1% have so much to be thankful for, while the rest of us slog on in our mutual and collective despair. Well I am one of the 99%, and 2011 has been a very difficult year for me professionally, but despite that I still have much for which I can be thankful.

1) I am in good health. It is the single most important thing there can be as well as is the
overall health of the people closest to me. Remember that it could be worse folks – it could
always be worse. Being healthy (or mostly healthy) is the single most important thing isn’t
it?

2) I have people in my life that I care about and that care about me. Professional success is
uplifting but without having people around to share it with would feel hollow – agree or
disagree?

3) While the U.S. has its problems, our national spirit of innovation and can-do still make the
U.S. and its citizens a place and a people to look up to. We’re not done yet. Not by a long
shot.

4) Americans continue to use their right to complain and protest – peacefully for the most part,
that exemplifies what free speech and freedom in general are all about. This is not to be
undervalued.

5) Most Americans have flat screen TV, and iPod or digital music player and soon will also have a
smartphone. Before you laugh, keep in mind that citizens of many countries in the world cannot
say the same, but they wish they could. And in fact it’s the U.S. way of life that many people
around the world aspire to achieve.

Americans are disgruntled. Whether it is with the Wall Street folk, our political leaders, or an overall lack of good job opportunities, it seems to me that we’ve developed a culture of complaint – not complacency. As families come together this week of Thanksgiving, why don’t we think about the things for which we can be thankful instead of all the things we don’t have or wish we did?

If you can sit back after Thanksgiving dinner with a full belly and watch some meaningless football game, things could be a whole lot worse – couldn’t they?

To me the number is staggering: US $775 million sales for Modern Warfare 3 (MW3) in just 5 days. Techcrunch.com reported this on Thursday http://tcrn.ch/uGzouB. I don’t play the game but I have heard complaints from players of Modern Warfare 2 that the new game does not offer much more than an opportunity to plunk down another $60. Others feel that Activision/Blizzard the creator of the MW franchise has apparently done a good job of addressing the issues associated with MW2. Either way the success is palpitating.

Could you imagine a film release that generated even 25% of $775 million in 5 days? Granted movie tickets are less expensive than $60 (although creeping up constantly), but film producers can only dream of having the kind of connection to a franchise that Modern Warfare has managed to create.

For some reason I began to imagine what could be done with three-quarters of a billion discretionary dollars. With budget cuts for essential services being felt all around the U.S., it’s difficult (for me) to not think about what could be accomplished had people not purchased the new game and collectively combined those financial resources to address what might be considered a more pressing need. There are too many to mention all, but hunger, education, and healthcare come to mind quickly.

OK I know I am dreaming, and am not impugning or indicting those that purchased MW3. A baseball game ticket costs the same amount and is no less frivolous and may be more so. But in a time where people are struggling to make ends meet it seems a bit incongruent that more than three-quarters of a billion dollars could be spent on pure entertainment – I wonder if any of the MW3 buyers are the same people that are part of the OWS – Occupy Wall Street movement?

Video game entertainment is important as a release from everyday life and it creates jobs – a good many of them for an industry valued globally at US $65 billion (as of June 2011 from Wikipedia).

If you are a gamer how much do you spend annually on buying games?