LaserMonks: The Next Amazon.com?

There was a great article today in the LA Times about 5 monks in Wisconsin that started an online store called LaserMonks to sell printer ink cartridges to help support their cause. This is not a completely unique happening... a few years back there was a best-selling CD called Chant by a group of Benedictine monks and I remember reading a story about a convent of nuns in California who were having success making olive oil, not to mention the fact that Belgian Trappist monks have been making some of the best beer in the world for about 700 years.

However, the thing that struck me was how big a business these monks had built. Starting in 2002 with $2,000 of revenue, they hit $4 million last year and are estimating $7 million this year. Whoa! That's not bad for 5 guys with day jobs (albeit, they probably have a bit more available time than your average working Joe).

What you're seeing here is the same type of shift I spoke of yesterday. In the 20th century, manufacturers and retailers were innovating and driving consumer demand, but in the 21st century it's consumers who are reinventing themselves and driving business. With a "long tail" of products and suppliers now available in the digital world, consumers are free to express themselves in more and more ways. For those who care about what happens to the profits from their purchases (a growing segment of the population), the monks' marketing message resonates...

COMMERCE WITH COMPASSION: Given the same product at comparable pricing, wouldn't you rather purchase from the company whose proceeds support our communities?

This shift in consumer behavior is creating many opportunities for businesses. Companies like Zlio, that provide the capability for anyone to set up an online store in a matter of minutes, will help to create a long tail of stores that will allow any individual or group to quickly become a retailer and leverage their own particularly unique positioning, whether that's being an abbey of monks or an expert on hot sauce. That's pretty exciting stuff.

Obviously, there's still a place for the large retailers (and a big place for retailers like Nordstrom who understand how to build customer loyalty and value through great experiences), but these types of niche businesses with unique positioning will take some of their revenue... they are meeting a demand of the 21st century consumer.

P.S. I just love the top nav on LaserMonks...

... on what other eCommerce website do you see an option for "Prayer Requests"!

The Unreal is More Powerful than the Real

A few marketing blogs that I read (The Rouge Marketer and The Marketing Maven) have written a thing or two about experiential marketing lately. The Rouge highlights an excerpt of a new book by Joseph Pine & James Gilmore, the leading authors in this space. Their classic book, The Experience Economy, is a must read for any marketer. The Maven wrote about Abercrombie & Fitch having live models in their flagship store creating a unique shopping experience.

Another great read about this subject is Building Great Customer Experiences by Colin Shaw. Colin, who spent 20 years managing customer relationships for BT and now runs Beyond Philosophy marketing consultancy in London, talks about managing and measuring the experience and the resulting emotions created by the experience.

“In the late 20th century, businesses reinvented themselves; in the 21st century it is customers who will reinvent themselves. And the companies who can help them do it will be taking the bows in the new transformational economy.”

Understanding that the experiences customers have with your product or service is just as important, if not more important, than the physical features of your product is key to successful marketing in the 21st century. Your product or service always run the risk of becoming a commodity, but the experience a customer has with your brand is something that will remain a differentiating factor. This is how you build customer loyalty, brand power, and long-term value.

My favorite quote on this comes from a very strange source... Choke by Chuck Palahniuk, author of Fight Club. Palahniuk has a screw loose, but he definitely understands pop culture and customer experience.

“People had been working for so many years to make the world a safe, organized place. Nobody realized how boring it would become… The laws that keep us safe, these same laws condemn us to boredom. Without access to true chaos, we’ll never have true peace. Unless everything can get worse, it won’t get any better…

The only frontier you have left is the world of intangibles… the Internet, movies, music, stories, art, rumours, computer programs, anything that isn’t real. Virtual realities. Make-believe stuff. The culture.

The unreal is more powerful than the real. Because nothing is as perfect as you can imagine it. Because it’s only intangible ideas, concepts, beliefs, fantasies that last. Stone crumbles. Wood rots. People, well, they die. But things as fragile as a thought, a dream, a legend, they can go on and on.

If you can change the way people think. The way they see themselves. The way they see the world. If you do that, you can change the way people live their lives. And that’s the only thing lasting you can create.”

X Marks the Spot

While I was attending the last few LA Galaxy games and looking at the giant half-pipe they'd built in the Home Depot Center parking lot, I knew I was going to write something about the X Games. I thought it might be something about how this event, now in its 13th year, had established and legitimized a whole new set of fringe sports (leading to inclusion in the Olympics). Or, maybe it would be about how this event had provided a more traditional marketing opportunity to reach the teen and post-teen demographic groups that are so difficult to reach through traditional methods. However, after the first 2 days of competition, there is only one image I have of the X Games and I can't get it out of my mind... Jake Brown's shoes "exploding" off his feet after his spectacular wipe out on Thursday night.

First of all, if you haven't seen the video, you have to watch it (and if you're like me and have seen it a dozen times, you'll probably watch it a few more times)...

Wow! I'm not sure what's so appealing about seeing that guy free fall 50 feet, but I can't stop watching. I think it has something to do with why we watch daredevils like Evil Knievel, NASCAR crashes and NHL fights. It's the extreme end of the sporting world, where guys who are talented enough, brave enough, or stupid enough, risk personal injury and push the edge of the envelope (while we watch from the safety of an armchair).

But what does any of this have to do with business? How do we interpret this? Beth Shuster, an LA Times staff writer, wrote about it from the perspective of a mother, and her lesson was "be careful, be really careful." I think the same lesson can be said for business. Jake Brown was trying a trick that was never done before in competition, but he was completely out of control. If you watched the BMX Bike Big Air competition on Friday, you saw several competitors back out before the final leap if they were losing control, or Mat Hoffman, a legend in the sport, decide to take his licks and limit his losses by falling on top of the quarter pipe (making it a 20-foot fall onto padding rather than duplicate Brown's 50-foot fall to the bottom of the ramp).

You need to take risks and you need to innovate in the business world, but you must know your limitations and measure and manage the consequences. Risking it all may make for compelling viewing, but it's just plain stupid as a management philosophy.

It's not personal, Sonny. It's strictly business.

Bud Selig, Major League Baseball's commissioner, has been under some pressure lately regarding whether he'd try to attend Barry Bonds' record tying and breaking home run games. It's no secret that Bud doesn't like Barry for all the steroid hullabaloo. However, Bud made a move last week for the good of the game he's responsible for leading & selling... he said he was going to start attending Barry's games in the hope of seeing him break the record. That was the right thing to do. It was a good PR move and in line with his responsibilities as MLB's chief executive.

Unfortunately, Barry's struggling in another slump, and now, after 8 days of following Barry, Bud's had enough. He described his arduous journey (spending a week in SF and 2 days in LA) as a "Herculean effort". Watching 8 baseball games was Herculean??? This coming from the guy responsible for leading baseball??? You want your employees to be open and honest, so you don't want him to lie, but wouldn't you expect that the MLB commish should be singing a different tune? He should be saying "I'm happy this has given me the opportunity to get out of the office and to the ballpark" and he shouldn't need a PR person to tell him that.

Bud has let his personal opinions get in the way of doing his job, and that's something that no professional can ever let happen.

Strategy and Execution... Which is More Important?

Bill Walsh, Hall of Fame football coach, passed away this week. Walsh is one of my favorite examples to use from the sports world when talking about business. Yes, he was a strategic genius, responsible for inventing the West Coast offense. But the three things I'll always remember Walsh for are...

1. His demeanor. He was quiet and thoughtful, not a blowhard like so many other coaches. There's more than one way to skin a cat, and there's certainly more than one way to teach and motivate your employees.
2. His coaching legacy. Not only was he a great coach, he was a great mentor. There have been 28 other head coaches in the NFL and college who were his assistant coaches, and they have won 8 Super Bowls.
3. His ability to be a strategic innovator who could lead world class execution. My favorite story about Walsh is the fact that he used to "script" the first 10-15 plays of the game on offense. The strategic options were endless, and he and his coaches would spend many, many hours preparing strategically for a game. But when the time came, he made a decision and had his team practice and perfect 10-15 plays that were going to be run to start the game. This commitment and focus on excellence in execution resulted in his teams getting off to fast starts, and building momentum that was almost impossible for opponents to overcome.

AEG & The Home Depot Center: A case study of synergy and excellence

When I attended the David Beckham unveiling I spoke of a well coordinated marketing effort by AEG, owner of the LA Galaxy, but that's selling them short. It's a lot more than a well coordinated marketing effort, AEG is demonstrating that they are a well coordinated organization, utilizing all their assets and capabilities, and optimizing their commercial opportunities. That was clear when going to see David Beckham's debut against Chelsea this past weekend.

To understand AEG, you have to first take a look at how AEG describes itself... The Ultimate Fan Experience. Although AEG does many things in the sports and entertainment world, including owning sports teams, promoting concerts, and producing movies, it's primary focus is on the fan experience, and therefore, on the venue. Their list of venues is growing, but two of their most prominent are located here in LA so I've had a chance to experience them firsthand. The Staples Center is home to the NBA's LA Lakers and LA Clippers, as well as the NHL's LA Kings. The Home Depot Center is home to MLS' LA Galaxy and Chivas USA.

The HDC certainly put its best foot forward on Saturday. Beckham's debut was part of a doubleheader called the World Series of Football. It's not often that the Galaxy sell out, but as you can imagine, it was absolutely packed for Beckham. And like everything else that AEG has done around his arrival, it was another well executed day on all fronts. Here are a few examples...

The signing and participation of top flight sponsors such as Samsung & Best Buy...

...and adidas was there in full force as well with a strong presence outside the stadium.

Inside the stadium there were tents that allowed the 27,000 attendees to interact with the sponsors.

And perhaps my favorite... getting LA Sheriffs to hand out Simpson's masks that were used for an in-game promotion for tickets to The Simpson's Movie premier.

Special room was made for the extraordinary amount of media, with ESPN's broadcast studio out in full view.

The outer concourse of the stadium is filled with food and beverage concessions, and is more than adequate to service a sell out...

...oh, and they had a few Beckham shirts available for purchase (both inside and outside the stadium).

There was even a celebrity or two (or twenty) on hand to add to the media buzz.

AEG has designed a superb stadium complex in the HDC. It's perfectly sized and laid out for soccer (though they host other events, such as the X Games, HBO Boxing and concerts, and the adjoining tennis center host a WTA event while the track & field center is home to a Major League Lacrosse team), and it's operated in a way that reeks of class. They truly are delivering an "ultimate fan experience" by utilizing all their assets and executing with excellence. Heck, the day even won over curmudgeon sports writer Bill Plaschke!

Padraig Harrington - Character trumps talent

In stark contrast to the Michael Vick affair, Padraig Harrington demonstrated what a strong character can accomplish. After almost throwing away his first major title at The Open this past weekend with an 18th hole reminiscent of Jean Van de Velde, he prevailed in a playoff. During an interview after the victory the announcer suggested it was destiny that he win, to which Padraig quickly corrected him by saying something like "it wasn't destiny, it was hard work... years of hard work and and a hard path traveled."

Yes, Harrington is talented, but so are the many golfers he's competing against. But, this is a man that doesn't take his talent for granted. He's a grinder, and there's a lot to be said for grinders in all walks of life.

You can talk the talk, but do you walk the walk?

I really didn't want to post about this again because the Michael Vick story disgusts me, but I'm finding some of the reaction by the media to be so idiotic that I just had to speak up.

Most high profile sports writers, including Bill Plaschke and Michael Wilbon, are saying that Michael Vick should be given a paid leave of absence to focus on his legal issues. Wow! I like the way this works... get indicted on federal charges and get a paid vacation (and at $6m per year, that's a pretty good boondoggle). I wonder if their opinion would be the same if the same type of past behavior and current allegations were made against a star member of their staff. Would they want to be associated with this type of story?

Arthur Blank, founder of Home Depot and owner of the Atlanta Falcons, is at least saying the right things.

"Given the differing perspectives and strong feelings around this issue, we probably won't make everyone happy, but we are committed to doing the right thing. As the owner of this club, that's ultimately my responsibility. In the meantime, know that I'm saddened and distressed about this."

This issue goes far beyond good and bad PR. A talented workforce is an absolute requirement to a successful team, whether it be in business or sport. However, a team's performance is reliant on more than just functional talent. No employee is irreplaceable, and values, character and chemistry are just as important as talent when crafting a winning team.

Now that he's talking the talk, let's see if he walks the walk and treats Michael Vick the same as he would any other employee. You can't have two sets of standards and values when building a team.

PR Survival Handbook - #318

Lesson #318 - What to do when your top employee is indicted for staging dogfights

I can't tell you how many times I've seen it happen... business is cruising along and then your top employee gets caught staging dogfights. No, that hasn't happened in your business? OK, well maybe Michael Vick's situation is a bit odd, but what isn't strange about it is the issue of getting negative press as the result of actions of your employees. Just take a look at what happened last week with Whole Foods CEO John Mackey or with Don Imus and the Rutgers Women's BBall team.

The NFL has been struggling with a ton of negative PR issues lately, and only in case of the Chicago Bears releasing Tank Johnson did a team take action that was more severe than the league. In Michael Vick's case, I'm wondering what everyone is waiting for. Will Arthur Blank, owner of the Atlanta Falcons and founder of Home Depot, treat Michael Vick like any of Home Depot employees? Will he live by the values that built Home Depot into an American success story, one of which states "We exercise good judgement by "doing the right thing" instead of just "doing things right." We strive to understand the impact of our decisions, and we accept responsibility for our actions"?

Any organization with a strong set of values is able to deal with these issues quickly, without emotion, and ultimately, correctly for the long-term health of the business. However, if profit is the only value of your company, you'll remained flummoxed when bad things happen. This is not a case of guilt or innocence, but rather one of professionalism. If actions and associations of employees embarrass the organization and destroy value then you need to take action (the quicker, the better). At the very least, the Falcons need to suspend Vick without pay until this situation is resolved. However, if they live by their values, they'd just fire Vick and move on.

Harry Potter and B & N

Harry is everywhere nowadays. His latest movie was released last week, and the last in the series of books will be released this Friday night. At some point I'll probably go into a lot more detail around the marketing of this product/series, but for now, one thing that struck me was the marketing that Barnes & Noble is doing around the book launch.

On Monday I got an e-mail invite telling me it was "5 days to Harry". Not just your average "come to http://www.bn.com/ to buy the book" piece of spam, it was first an invite to one of their stores for Friday's Harry Potter's Midnight Magic party. B & N is doing a great job of utilizing every communication channel available to build customer loyalty and generate revenue. Even if you can't attend a party, you can watch a live video stream of the party from NYC. I'm a big fan of Amazon.com, but a well-executed multi-channel marketing campaign by a company with a brick & mortar presence can be so much more powerful than a pure online-only eTailer. They may have been slow to the online game, but they are now leveraging all their assets to create a competive advantage both online and offline.

UPDATE: A recent study by Carlson Marketing states that Barnes & Noble has one of the highest levels of customer relationship strength.

"It's exhausting being fabulous" - Posh Spice

I lived in London from 2000 through 2004, and David & Victoria Beckham were like royalty there... they were loved by the people, but they remained distant. After watching Victoria's Coming to America special tonight, I'm convinced that she and David are going to be bigger than ever. She was smart, genuine, clever and quick, and America is going to adore her. David always impressed me as being a very good public speaker in interviews, but he's gotten much better. His performances during and after the press conference last week were superb. Keep an eye on these two (and their manager, Simon Fuller) because there are many lessons to be learned about speaking, PR, branding, and marketing in general, in the things that they do.

UPDATE: The show got trashed in the reviews, but that's probably a positive sign (not surprising that the US press doesn't understand a bit of Brit humour)... everyone that I've spoken with loved it.

Goooooooal!!!!

Is this great marketing of a so-so product, or what?














As an LA Galaxy season ticket holder, I was at the David Beckham "unveiling" this past week (when sports teams make a big free agent signing they hold press conferences, however, when they acquire a world icon, they have unveilings). Look behind the scenes and you'll find two of the very best marketers on the planet and some great lessons. Philip Anschutz and his AEG, owners of the Galaxy and the Home Depot Center that they play in (as well as numerous other sports teams and venues), were the people with the vision and guts to pull this move off. It's a move they laid the ground work for several years ago when they partnered with Becks to open up his David Beckham Soccer Academy here in LA. On the other side of the table was David's representation, 19 Entertainment. Unless you're in the entertainment industry, you probably haven't heard of them, however, just about everyone knows who the brains are behind 19... none other than Simon Fuller, creator of American Idol and manager of the Spice Girls.

Every step of his arrival to America has been orchestrated and executed with unbelievable precision. It started as soon as the deal was signed several months ago. Although David was still under contract with Real Madrid until June 30th, Victoria started making high profile appearances such as lunching with Katie Holmes at The Ivy in Hollywood, throwing out the first pitch at Dodger Stadium, and appearing at the MTV music awards. And, it's culminating in a well coordinated roll out that began with the arrival of David, Victoria and their kids on Thursday night at LAX in front of close to 1,000 people and just about every important outlet of the world press.

The press conference on Friday morning was again, superbly executed. His wife, Victoria Beckham (aka Posh Spice), was the first to appear, dressed to the nines in a stunning fuchsia dress, striking a perfect pose for the hordes of photographers. The conference itself was flawless, with everyone saying just the right things (they also had the right people speaking as well... Galaxy GM Alexi Lalas, AEG Prez Tim Leiweke, Galaxy Coach Frank Yallop, MLS Commisioner Don Garber and LA Mayor Antonio Villaraigosa). The arrival festivities continue with Victoria's reality show tonight on NBC, and then wrap up with Beckham's first game on Saturday against English powerhouse Chelsea (which will be broadcast on ESPN).

The crowd of 3,000 season ticket holders was buzzing (not bad, that's about 20% of the season ticket holders showing up for 10am Friday event), singing songs and chanting "There's only one David Beckham". More importantly, the fans were buying the newly released LA Galaxy jersey (a release that was delayed from the beginning of the season to coincide with Beckham's arrival). Tim Leiweke has said that they've already sold 250,000 shirts. At $80 a pop, that's $20 million in revenue before Becks has even put on one those of shirts. And that's just the tip of the iceberg. Real Madrid claim that they sold 1 million shirts within the first 6 months of Beckham's arrival in 2003, and that total merchandising income for the 4 years he was with them was in excess of £300 million.

So, although there may be much debate over the subject of David Beckham's soccer skills and whether his arrival is the beginning of a new era for US soccer and the MLS (or the beginning of the end, like when Pele arrived), there can be no debate over a few things here...

• So-so footballer... maybe; so-so soccer league... maybe; but David Beckham is a first class product being managed by first class marketers. He's in a class of marketable people that includes maybe only 2 or 3 athletes and 2 or 3 actors. He is one of the most recognizable faces on the planet, with a following that has demostrated their willingness and ability to support his commercial partners. The financial reward to AEG, 19 Entertainment and the Beckhams will be significant.
• The introduction and rollout of David and Victoria in America has been handled superbly. They've gotten major exposure, but, and this is hard to believe, they have not been over-exposed. There are still many significant opportunities to continue building the brand and reaping the reward. The Spice Girls have already announced a reunion tour (at AEG venues), and, regardless of whether the LA Galaxy win or not (Real Madrid, the most famous and most successful soccer team in the world, didn't win a thing with Beckham until this past month), the team will continue to be a financial winner through increased ticket & merchandise sales and sponsorship/partnership opportunities.
• This rollout is a great example of a perfectly timed and coordinated marketing activity. Months of preparation and focus are resulting in maximized promotion that is tied to commercial opportunities. There has been no waste in this marketing effort, as the opportunity available is optimized and seized.

As a Galaxy fan I'll be watching the wins and losses (in my nice new Beckham jersey), but as a marketer I've already seen a win.

Update: The Marketing Maven: THE MARKETING PHENOM - DAVID BECKHAM has a great post on this subject.

What's this blog all about?

Hmmm, that's a good question. The tag line above says it's about business, marketing, sport and life. Well, that could be just about anything... and who the heck wants to read a blog about everything (which means it's also about nothing). That may work for Seinfeld, but I don't think it's going to work for this blog, so let me explain a bit more about the tag line.

First and foremost, this is a blog about a subject that I love... business. Great businesses and business people tend to have a few things in common. One, they're often great marketers. Great marketing of a so-so product almost always trumps so-so marketing of a great product. That's why marketing is also a subject of this blog.

Second, great businesses usually have great people and cultures... people who are talented and driven, and cultures which support and encourage them. In that respect, great businesses share a common trait with the sports world, and it's one reason that I find sports so compelling. Competitiveness and the concept of "excellence" are things that get exaggerated in sport, but are often very hard to identify in other parts of society. These are critical components of success in business, and therefore, sports provide wonderful examples to anyone interested in winning in the business world. Also, since the sports world has now collided with the business world in a big way, it doubles my interest in the space.

Finally, great businesses usually have a great understanding of the environment... both the environment in which they operate, as well as the external environments which can impact their business. That means they're great at seeing what's going on in the world in general and understanding the impact on today and tomorrow. They're great observers and great interpreters. They gather lots of information, develop insights, determine implications, and take action. And, in order to do that, my lens on the business world is widened to see what's happening in life in general and determine how that might impact business.

So, that's my focus on this blog... talking about business. But, I intend to do that by talking about more than just business. Then again, that may all change. Any great business person listens to the market and makes adjustments. I encourage you to participate in the discussion and make this blog a community of great ideas.

Cheers!

The Big Egghead story

Believe it or not, the name of this blog has nothing to do with the fact that I actually do have an egghead. It comes from my time living in China, and the direct translation of my actual name... Dan Dato.

Dato is an Italian surname and, although we pronounce it DAY-TOE in the US, in Italy (and most other places around the world) they pronounce it DA-TOE. When I moved to China in 1997 I needed to choose a Chinese name for my green card. Usually this is done by making a direct phonetic translation of one's name. Sometimes this has a very appropriate outcome. For example, America is called "Mei Guo" (pronounced MAY-GWO), which translated means "beautiful land". Isn't that nice? :-)

Unfortunately for me, my name didn't come out quite so elegantly...

"Dan" means "egg"
"Da" means "big"
"Toe" means "head"

That's right, my last name literally translates to "Big Head" in Chinese (explaining the subtle chuckles everytime I'm introduced to a Chinese person). I've had a lot of nicknames in my life (The Dan, Dan-O, Danimal, Double-D, Triple, Triple-D, Scamper and CouchPoDato to name but a few), but The Big Egghead is the one that always makes me laugh.

What fun is life if you can't laugh at yourself?