John Caddell's blog

What do BPL, municipal WiFi and WiMax have in common? Besides being three more acronyms inscrutable to most of the population, they also represent US consumers’ best hope to get more bang for their broadband dollar.

The US is woefully behind much of the rest of the world in broadband price-performance. (According to the OECD, New Zealand, for one, is worse.) The following table demonstrates the vast disparity in megabits/second delivered per dollar in different countries.

Clearly, we in the US have a long way to go. And, let’s face it, two broadband providers are not a competitive market–but an oligopoly. Now, with three vibrant competitors, maybe we have something. Four would be even better.

So, electric utilities, municipalities, advanced wireless spectrum license holders–let’s get busy! Tens of millions are waiting.

innovation, broadband, internet, pricing

It’s not enough that Procter & Gamble is studying hotel chambermaids’ work habits to learn how to sell more industrial-strength Spic ‘n’ Span–now, in order to market their heartburn medicine Prilosec OTC, they’ve cornered the game of Bunco.

A dice game played regularly by 21 million American women, according to the Wall Street Journal, bunco is an excuse to socialize, often a weekly affair complete with rich food, drinks… and heartburn.

The Journal, which broke the story (or was tipped off to it by P&G PR) credits an enterprising product manager, Clarissa Niese, with discovering the vital link between Prilosec and Bunco. She found a P&G employee whose wife played regularly, and got invited to a game. Said Ms. Niese: “I could immediately see the relevancy to heartburn.”

Now Prilosec is the exclusive sponsor of the Bunco World Tour.

This is getting downright creepy. Is there no activity or pastime which cannot be tied to some consumer product? Not if P&G has anything to do with it. It’s enough to give you a stomach ache.

marketing, market research, health care, Wall Street Journal

Economist Greg Mankiw, former member of Pres. Bush’s Council of Economic Advisors and now a professor at Harvard, has been patiently advocating for a simple increase in the gas tax as the best, most efficient means of increasing the US’ energy self-sufficiency. (His consistently interesting blog is required reading if you’re at all curious about economics.) He’s dubbed the people who’ve signed onto this approach the Pigou Club, for reasons explained here.

My main objection to a tax rise has been that a pork-addicted Congress and an administration lacking in financial discipline would squander these newfound billions.

But alternatives (such as the Rube Goldbergian Bush administration proposal recently announced), full of side effects and unintended consequences as they will be, would be worse, in my view.

So, while gas prices are relatively low, let’s start phasing in a new gas tax, to perhaps $1.00 or $1.50 a gallon, and commit the revenue raised toward deficit reduction.

My two cents.

(Picture from bubbels via stock.xchng)

environment, economics, taxation, government

Today I had to go to the store to buy a new toilet seat and a portable electric heater. I brought along Charlie, my almost-4-year-old.

As we neared the store, Charlie started saying, “Orange or blue. Orange or blue. Orange or blue.” (Like a good marketer, Charlie knows the value of repetition.)

I told him, “We are going to Home Depot.” (For non-US readers, the two predominant DIY stores in the US are Home Depot, the orange store, and Lowe’s, which is blue.)

“Orange or blue?”

“Home Depot is the orange one.”

“I like the blue one better.”

And there, in a nutshell, is the power of great brands. Charlie knew that we were going to Home Depot or Lowe’s. He can’t read more than a few words, hasn’t ever bought anything at these stores himself, and probably hasn’t even seen a commercial for them. Yet he knows that Lowe’s is the blue store and Home Depot is the orange store. More than that, the color is his shorthand for the entire store and the experience of shopping there.

When I asked him why he liked the blue store better, he said, “I don’t know.” But something about the decor, or the lighting, or the shopping carts, or the signage made a difference to him, and made him place the Lowe’s brand at the top.

Brands are elemental.

retail, brands, marketing

In today’s Wall Street Journal, columnist David Wessel highlights the role prizes have played, and continue to play, in fostering innovation.

From the Longitude Prize memorialized in Dava Sobel’s book to the Ansari X Prize, awarded in 2004 to SpaceShipOne for reaching space first as a private venture, R&D contests continue to provide a valuable supplement to corporate, government and university research.

Here’s the most interesting point in the article. According to a study by Harvard professor Karim Lakhani of solutions contributed to scientific research bazaar InnoCentive, “outsiders,” that is, people whose expertise was remote from the problem domain, were more likely to solve a problem than domain experts.

Apparently their distance and beginner’s mindset (should we say foolishness?) aided their ability to solve the problem, while experts struggled to set aside their existing knowledge to find a truly new answer.

innovation, research, problem solving, foolishness, Wall Street Journal

Wal-Mart recently announced a marketing push to encourage consumers to install energy-saving compact fluorescent bulbs (”CFs”) to replace old-fashioned incandescents. Wal-Mart’s sales target for 2007 is 100 million bulbs, compared to 40 million sold in the twelve months through August 2006. And we’re gonna need the help, because the profit incentive for the lighting companies is to keep CFs a niche product and continue to sell large volumes of incandescents.

Why? Despite their overwhelming environmental benefits (CFs use 75% less electricity), each compact fluorescent sold costs the lighting company $0.29 of profit compared to selling incandescents. CFs have a higher sale price, but last eight times as long as an incandescent. Wal-Mart reaching its goal of 100 million CFs sold could cost General Electric, the largest lighting manufacturer, $10.5 million in lost profit–and that doesn’t anticipate the further cost reductions in CF’s that Wal-Mart will ask for. Please download my analysis and make your own assessment. You’re welcome to point out errors, suggest changes or replace assumptions with data.

So, we’ll have to see if the lighting manufacturers are a willing participant in this experiment–or a reluctant one–and if that has any bearing on Wal-Mart reaching its goal.

(Picture from ievaG via stock.xchng)

environment, marketing, lighting, innovation

One of my New Year’s resolutions is to stop giving lousy presentations. While I’ve never gotten terrible feedback on a presentation I’ve done, I know I’ve gotten lazy and fallen into the habit of throwing up a few powerpoint slides with text too small and talking over them, just like 99% of all presenters.

I don’t like watching those presentations, and I feel worse giving them.

Thankfully, I stumbled onto a blog that is loaded with advice, tools, reviews and dialogue about presentations. It’s called Presentation Zen–and, if you haven’t read it yet, you should.

The author, Garr Reynolds, offers suggestions for how to use fewer words and more pictures, how to deal with handouts, using graphs, etc. He reviews Steve Jobs’ Macworld presentation (thumbs up), and Cingular’s Stan Sigman’s (thumbs down). At no extra charge, he provides peeks into Japanese culture, like this. (He currently works in Japan.)

Presentation Zen is already quite widely-read, so I may be late to the party. So be it. I resolve to put its lessons to use in all the presentations I give from this day forward.

(Picture: an effective powerpoint slide from Garr Reynolds’ website.)

presenting, narrative, business, blogs, business blogs

Dave Stein of ES Research recently interviewed yours truly on sales channel segmentation. You can find the resulting post here.

I met Dave almost ten years ago when he conducted a sales and marketing training program for Alltel, where I worked at the time. I was impressed by his matter-of-fact approach and ability to distill the issues around sales and marketing so they didn’t seem so difficult to solve.

ES Research provides information and research on sales methodologies and training programs–kind of a Gartner for sales education. They offer by subscription white papers, process methodologies, etc., for companies looking to improve their sales effectiveness. Check them out if you’re looking to adopt a new methodology or want to investigate alternatives to your current one.

channels, alliances, sales, marketing

Harvard Business School’s Working Knowledge site has just republished a fascinating piece from 2004 in which HBS marketing professor John Gourville tells us something we should already know, but don’t:

Consumer products companies “raise prices” on us constantly by reducing the quantity of product they sell for a certain price. (Examples: coffee, breakfast cereal, ice cream.)

Prof. Gourville maintains that these companies have found that reducing quantity while retaining the price point works better than keeping quantity constant and increasing price.

Companies selling technology services to businesses face similar issues–underlying costs (typically labor and benefits) rise, yet customers don’t want to pay more. It’s even more of a challenge, since tech buyers have come to expect prices to decline for the products and services they buy.

One way to implement the sneaky price increase in business is to reduce the service level of an offering (say, the maintenance response times or the hours tech support is available) and keeping the same price. Yet these items are frequently contracted and not able to be altered freely. Also, the people pushing back on price (procurement or finance) are typically different from the people using the service (IT or operations).

As opposed to the sneaky price increase, many services companies would be better off using a tool that they already have at their disposal–the regular, small, price increase. Many contracts allow the supplier to change price at certain periods of time (often yearly), yet many companies don’t use this tool. As a result, prices don’t change for years–and then, when a price increase is unavoidable, it’s surprising and painful to the customer.

So, negotiate the ability to raise price into your services contracts. And then, use that ability regularly, in small doses. Your customer relationships will be better for it, as well as your bottom line.

(Picture: the former 1-lb. tin of Maxwell House coffee from homegrocer.com)

pricing, services, marketing, contracts