Friday, April 30, 2010

Noise Annoys

I have not posted anything this week as I have been away and now as I break that silence I am somewhat conflicted by thought that at least for a few days I added to the silence and not the noise.

My conflict comes from the sheer deluge of information that is flowing through the LCDs of our devices, coming at us from all angles with commentary added at each stop on each digital journey - useful, valuable insights spinning into a vortex along with the midly interesting and the downright inane. The end result of course being noise and when a thousand voices chatter nobody is really heard. And naturally we need to hear that which is worthwhile and could potentially help and enrich us. All of the media and channels of communications now available to us are gifts that we should cherish and use discriminately because if we don't we risk diminishing the importance of the messages they may carry.

Tuesday, April 20, 2010

Is it time to raise your head above the parapet?

The National Bureau of Economic Research, the non-profit group of economists that decides on the official start and end date of recessions, still hasn’t reached agreement on whether it is ready to pronounce the current recession at an end. Naturally the significance of such a non-pronouncement is greater for those with a more academic interest in market cycles than to those with a more business focus who measure the end of a recession by whether their pipelines are showing signs of meaningful growth and deals are actually getting inked.

That is not to say that it wouldn’t be nice if recessions did have neat start and end dates so that you could plan accordingly. The reality is, of course, that those who are quickest to see signs of a downturn and then make the necessary business adjustments early (cost cutting being paramount among them) fare better during that downturn. Likewise those who are first to see signs of recovery and start to refocus on top-line growth early can gain real market advantage in an upturn.

The stronger than expected retail sales results that I talked about in an earlier post are obviously providing the NBER with some real recovery-supporting data, however, the more interesting story is how that sector itself is interpreting the trends.

Wednesday, April 14, 2010

Death of a Salesman 2.0

I came across some interesting questions that are contained in a Teacher’s Guide to the Penguin Edition of Arthur Miller’s Death of a Salesman - that timeless portrayal of the common man as a tragic figure. The questions that the teachers are encouraged to ask of their students before they begin studying the play are:
  • What is your definition of salesman?
  • How is a salesman different from someone in another occupation?
  • What attitudes do you think a salesman should have to be successful?
  • What attitudes would hinder him?

Monday, April 12, 2010

Puttin' on the Ritz

When the monster in Young Frankenstein began tap dancing and singing "Puttin' on the Ritz" it was the absurd contrast that made the humor. The big hulking monster trying to be Fred Astaire was a riot. Now another former behemoth is trying to put on the ritz too in the effort to turn around its fortunes.

GM has just announced that it is sending some of it Cadillac dealers to sales and customer service training at the Ritz in order to learn from the luxury hotel chain how to capture and delight high end consumers. Don Butler, Cadillac’s newly appointed marketing manager, was quoted in as saying “Think about their (Ritz Carlton's) slogan, ‘Ladies and gentlemen serving ladies and gentlemen,’” Butler says. “So we are working with them, having them help us talk to our dealer partners and emphasize the importance of how you treat your customer.”

Thursday, April 8, 2010

Retail Therapy

Given that we have almost become conditioned to bad economic news on an almost daily basis, the headlines today trumpeting the strong March results for the retail sector were a welcome departure. The Wall Street Journal reported that with about half of the retail companies on the Dow reporting earnings so far, all but one had beaten Wall Street projections. So considering that consumer spending accounts for nearly two thirds of the US economy perhaps we are seeing the first signs of the general public's inner shopper being released after nearly two years of incarceration.

This all bodes well for a resurgence of B2B spending, right? Well not so fast. The unfortunate reality remains that businesses do not return to discretionary spending as quickly as consumers do. After spending two or more painful years of downsizing, budget cutting and austerity measures in general, most organizations are reluctant to add back cost for two primary reasons. Firstly they want to see more obvious and sustained evidence of an economic turn-around and secondly they want to see how long they can maintain a greatly reduced cost base in order to maximize any profits the recovery may offer them.

Monday, April 5, 2010

In Vino Veritas

In the coming weeks wine buyers and speculators will start buying the 2009 vintage from Bordeaux but will not actually take possession of the final bottled wine for another two years. While this futures market is generally interesting only to a niche audience of wine enthusiasts and investors, there is a tradition that will be worth watching how it plays out this year. Once they set their price for their particular wine, the Bordeaux wine growers never drop the price regardless of the reaction - they will increase it if the demand is great but will never cut the price even when the demand is not there.

How many sellers of any product or service out there can claim to do the same? Given the fall in worldwide demand for wine last year due to the recession the growers will likely be especially careful in setting initial prices this year. Still, even if they end up setting them too high, in accordance with tradition, they will tough it out and hold the price. That takes some metal given that they have nurtured their product through all the variables that Mother Nature can throw at them all year.