strategy

Brand messaging and customer loyalty: why @Staples should fire Its Marketing department

I'm a long-time customer of the office supply store, Staples...or I was. Because I'm not any longer - and it's their Marketing Department's fault. There are two very specific reasons why - each of which is a laudatory tale for anyone looking at 'growing' their business at their customers' expense and without taking their customers into consideration.

The Bait and Switch Rewards Program

When Staples first established its customer loyalty program (because that's what rewards programs are supposed to be), they gave customers a 5% discount on each purchase. Immediately. At the cash register or online.

The money stayed in your pocket.

Somewhere along the line, someone (undoubtedly in the Marketing Department) got the bright and (short-term) money-saving idea that they could switch their Staples Rewards program so that instead of money, customers could get points.

Points! What an excellent idea! Customers would, I'm sure they thought, be just as excited about earning points as they were about seeing an immediate discount. And they'd just love to go through a remittance process - printing out coupons or showing their smartphones - once they got 'enough' points to warrant a reward.

Especially if the rewards were time-sensitive and the points disappeared if there weren't enough during any given rewards period.

Now that's putting the customer first, right? Yeah, right.

Which takes us to today's coup de grace:

Scaring the S**t Out of Customers That Their Credit Card Data Has Been Stolen

This one was a new one on me - and one for which they should be particularly ashamed in these days of stolen credit card information and identity theft.

Last week I made a purchase for which I undoubtedly got some points (see above) and, as part of my Rewards program 'membership,' received an email receipt. (I got a printed copy at the time, too, but we won't talk about that now.) Usually, that email marks the end of the transaction.

Not this time.

This morning, after having not made another purchase, I got an email from them with the subject line:

Thank you for your purchase! Open for More Great Products.

Their marketers may have thought they were being wise and witty, thanking me again, but they were wrong. Because when I saw that subject line, my immediate thought was, 
"Oh, s**t! Someone hacked Staples and got my credit card information. S**t! S**t!! S**t!!! Don't those f****rs know what they're doing?!?"
And I promise you, I'm not the only one who reacted that way. After all, any one of us can go through the litany of companies - from Target to Home Depot to JPMorgan - that didn't protect their customers' information adequately.

Based on that subject line, all it looked like was they joined the group.

Clearly their marketers weren't thinking about timing and what their message actually said. Otherwise, they wouldn't have sent it.

For my part, it put quite a pall on my morning - and no vendor is worth that.

For your part, it's worth taking the time to look at how you're creating and, hopefully, supporting your customers' loyalty - reward programs or not - as well as how you're communicating with them. As you can clearly see from my example, you may get one pass, but you won't get two.

And with that, I'm saying bye-bye to Staples and taking my business elsewhere. The saddest part for Staples is that I'm not at all sorry.

What Warren Buffett sees...and why Berkshire Hathaway is going local

I've been fascinated for years with Warren Buffett - but it's not his investing acumen that holds me. It's his thinking process.

Long ago, I heard Buffett say in an interview that even though he was and is great friends with Bill Gates, he didn't invest in Microsoft because he (Buffett) didn't understand what the company did. He invests in what he understands.

That's why the core of Berkshire Hathaway's companies is insurance, furniture, jewelry stores, executive jet services, manufactured (mobile) homes... All part and parcel of living your life.

Even his stock acquisitions follow suit. Coca Cola. Wells Fargo Bank. American Express. His logic remains the same.

He's also a great believer in the United States. It's only been relatively recently that he's begun looking at investments out of the country.

Back at home, a few years ago he bought a railroad. When everyone was saying that rail is as good as dead, he bought BNSF - the second largest freight railroad network in North America. It gets real things from one place to another.

In 2012, he started buying real estate agencies and put them all under the brand Berkshire Hathaway Home Services. State by state, he's buying up more agencies and putting them under the same brand.

This month, he announced that he has purchased the Van Tuyl Group of automobile dealerships. It comes complete with 79 dealerships and 100 franchises in ten states with something in the vicinity of $8bn in annual revenues. (Buffett will know, to the penny, exactly how much.) The plan is to start buying more. Then more...all branded as Berkshire Hathaway Automotive.

There are two things to learn here. The first is easy: Use your brand. Build your name and then use it to brand everything you possibly can. The more trust you've created, the more likely that people will find their way to your door - no matter what the product or service might be.

The second is more a trajectory thing. A thinking process. It's about local.

Buffett, possibly more than any other investor, knows about global. While his companies may be US-headquartered, they operate globally.

Yet, when he looks at what is coming next, what he seems to be seeing - at least based on his investments - is a hunkering down and in. A focus on an immediacy of life and its needs. On building a quality of life on a day-to-day basis.

It may be that, simply by virtue of his age (he's 84, after all), he's thinking more of home and hearth than ever before.

Possibly, but I doubt it. His filter for thinking is investments. He wouldn't be putting his or his shareholders' money toward some vanity project because he's in his 'declining' years.

Buffett sees Main Street and he sees it growing. He recognizes that there's a virtual world out there, but he, his companies and his investments aren't part of it. He sees something else. Something much closer to home.

He sees that humans have needs they want provided in a human and basic way - locally, in person, with a high quality of service, focus and attention.

At least that's what his most recent major purchases seem to be saying.

I think you should pay attention, if for no other reason than Buffett's track record. Because, realistically, if Buffett says it's worth doing, you can put your money on it...right along-side his.

Uber's tax problems: advocacy, adversity and society

Uber is having problems with its drivers and the US tax code.

Without going into too much detail, what it comes down to is that Uber wants to consider all its drivers contractors and the drivers (and IRS) want to consider them employees.

The benefit to Uber of 'their' way of looking at their business model is that they don't have direct responsibility for anybody. That keeps their costs low, their liability lower and their shareholders happy.

The benefit to the drivers and IRS to 'their' way of looking at the work that's being done is that Uber has to pay toward their taxes, provide benefits and generally give back more than simply an opportunity to make money for themselves (and even more for Uber and its shareholders).

Uber is part of what's being very prettily called the "sharing economy" - a $30+bn market that's only going to get bigger.

To be fair, this model began long before it was called the "sharing economy." In fact, it started in the late 1980s when companies started laying off their people in large, large numbers...only to hire them or others like them back as contractors.

Back then, it was the early days of "outsourcing." Standardized functions that weren't considered to need a proprietary approach (or company loyalty) all got handed off - from travel to accounting to HR.

The logic was exactly the same: The company's expenses and liabilities lower when they use contractors rather than hire employees.

And throughout that time, the same battle that Uber is fighting has been waged.

You'd think that by now - and with this level of 'sharing' being done between employers and contractors and the IRS - that someone would have realized that there's an easy fix: Modify the tax code.

All that's really needed is a means for companies to maintain their independence and manage their costs while contractor/employees get some of the benefits of being an employee with the full understanding that, as contractors, some things need to remain their responsibility.

In fact, if Uber and its sharing brethren would take some of those billions and point them toward their corporate and tax attorneys and accountants specifically to advocate for change rather than fight exclusively for the status quo, the problem would be solved quickly and easily.

This is a societal problem. We've changed the way we do business. Now it's time for businesses, their advocates and government officials to catch up with each other so that everyone - and I mean everyone - in society wins.