Company e-newsletters: Much ado about … what?

One of my clients is a multinational manufacturing firm that has published its own “glossy” company magazine for years now. The multi-page periodical is published several times a year, in several regional editions including one for the North American market.

It’s a magazine that’s full of interesting customer “case histories” accompanied by large, eye-catching photos. The stories are well-written and sufficiently “breezy” in character to read quickly and without strenuous effort.  The North American edition is direct-mailed to a sizable target audience of mid-five figures.

And I wonder how many people actually read it.

The reason for my suspicion stems from the time we were asked to produce a survey asking about readers’ topic preferences for the magazine. The questionnaire was bound into one of the North American issues, including a postage-paid return envelope.  The survey was simple and brief (tick-boxes with no open-ended questions).  And there was an incentive offered.

In short, it was the kind of survey that anyone who engaged with the publication even minimally would find worthwhile, and easy to fill out and return.

Except that (practically) no one did so.

The unavoidable conclusion: people were so unengaged with the publication that they weren’t even opening the magazine to discover that there was a survey to fill out.

In the world of company e-mail newsletters, is the same dynamic is at work? One might not think so.  After all, readers must opt-in to receive them – suggesting that their engagement level would tend to be higher.

Well … no.

A just-published study titled How Audiences View Content Marketing, finds that company e-newsletters are just as “disengaging” as the printed pieces of yesteryear.

The study’s results are based on a survey conducted by digital web design firm Blue Fountain Media. Among the findings outlined in the report are these interesting nuggets:

  • One in five respondents completely ignore the e-newsletters they receive, while more than half scan headlines before deciding to read anything.
  • Two-thirds of respondents admitted that the main reason for opting in to receive e-newsletters is to take advantage of special offers or discounts, while only around 20% expressed any interest at all in receiving information about the company.
  • More than half of respondents (~52%) feel that newsletter content is too “commercial” (as in “too sales-y”). Other complaints are that the e-newsletters are “tool long” (~21%) or “boring” (~19%).

Even more alarming is this finding: Approximately one-third of the respondents fell that e-newsletter content is so lame, it actually leads them to question using the product or service.

That seems like marketing going in reverse!

What Blue Fountain has uncovered may be indicative of another challenge as well:  the diminishing allure of content marketing. Over time, readers have become cautious about accepting online content as the gospel truth; this research pegs it at two-thirds of respondents feeling this way.

At the same time, only about one-third of the respondents think that they can distinguish well between fact-based content versus content with an “agenda” behind it. And therein lies the basis for suspicion or distrust.

On the plus side, the research found that readers are more apt to engage with video content, so that may be a way for e-newsletters to fight back in the battle for relevance.  But it still seems a tall order.

I address the topic of company e-newsletters in a second blog post to follow — stay tuned …

Are 5-star online reviews really the best ones?

It would seem that the more top ratings a company or product can receive in online reviews, the better it would be for their business.

As it turns out, this isn’t exactly the case. A recent national study has concluded that businesses earning star-ratings averaging between 3.5 and 4.5 on a five-point scale earn more revenues annually than those with other ratings – higher or lower.

And even more surprising, top-rated businesses with five stars actually earn less in revenues than those whose customer ratings are two stars or lower.

What’s going on here?

It would seem that five-star ratings are considered “too good to be true.”  Seeing them, people tend to think something’s fishy about how the ratings can be so high. And if there’s something worse than getting low ratings, it’s the feeling that the ratings a company has earned aren’t “genuine.”

The analysis, conducted recently by small business SaaS supplier Womply, sought to study the correlation between online customer reviews and company revenues, and in doing so it looked at data from a large number of U.S. small businesses.

The more than 200,000 businesses studied had an average annual revenues of around $300,000. The Womply research spanned diverse industries and markets including restaurants, auto shops, retailers, medical and dental offices, hair and nail salons, etc.

While the ratings dynamics may be surprising, another Womply finding reinforces the intuitive view that attracting more reviews online is better than attracting fewer ones.

The businesses studied by Womply averaged ~82 total reviews across multiple online review sites. But for those businesses attracting more than the average number of reviews, they earned ~54% more in annual revenues than the average.  And for those with 200 reviews or more, the average annual revenues were nearly double the average revenue figure.

The propensity for companies to respond to reviews appears to boost revenue performance as well. The Womply study found that businesses that fail to interact with their customers’ reviews earn lower revenue on balance – as much as 10% less than their counterparts.

The key takeaway points from the Womply research appear to be:

  • Too many top-rating reviews risk making a company’s reputation appear less genuine, actually repelling business rather than attracting it.
  • To improve revenues, businesses should encourage their customers to post reviews online.
  • To improve revenues, businesses should engage with reviewers by responding to their comments, addressing concerns, and expressing gratitude for praise.
  • People feel more affinity with companies that acknowledge their customers and treat them like they care. It’s basically the Golden Rule in practice.

What are your thoughts? Do the findings surprise you?  Please share your perspectives with other readers.

What’s the “long-game” in the U.S.-China trade conflict?

The efforts to craft a new trade agreement with the People’s Republic of China have run into some pretty major roadblocks in recent weeks and months.

Things came to another inflection point this week when President Trump announced that new tariffs would be imposed on more Chinese goods imported into the United States. As of September 1, pretty much all categories of Chinese imports will now be subject to tariffs.

If we look at the impact the protracted impasse has had on markets, the repercussions are plain to see. One result we’ve seen is that China has dipped from making up the largest portion of trade with the United States to being in third place now, behind Mexico and Canada:

But what’s the long-term prognosis for a trade deal with China? Recent world (and USA) statistics point to softening of the economy, which could have negative consequences across the board.

When it comes to perspectives on economic and business matters involving China and the Pacific Rim, I like to check in with my brother, Nelson Nones, who has lived and worked in the Far East for more than 20 years.  He has first-hand experience working in the Chinese market and is keenly aware of the issues of intellectual property protection, which is a major bone of contention between the United States and China and is one of the factors in the trade negotiations.  (Nelson runs a software company which has chosen to forego the Chinese market because of regulations requiring software firms that set up a joint ventures with Chinese companies to disclose their source code — something his firm will never do.)

I asked Nelson to share his thoughts about what he sees happening in the coming months.  Here are his observations:

Chinese President Xi has a lot on his plate right now. It isn’t just the U.S. trade war but also the Hong Kong disturbances, U.S. arms sales to Taiwan, the U.S. sending warships through the Taiwan Strait and the South China Sea, and China’s domestic banking sector weakness, to name just some. Trump has also put President Xi in a tight spot by demanding (or getting) Xi’s assurances that China will buy more U.S. agricultural products and will enact legislation protecting foreign intellectual property.  

In spite of his very substantial power, I predict that Xi will have a very tough time ramming Trump’s conditions down the throats of his countrymen. 

I should mention that the biggest issue here is intellectual property protection. The draft agreement that China “almost” signed had assurances that IP protection laws will be enacted, but Xi apparently nixed that draft whereupon the Chinese government stated that no government can promise, when negotiating a treaty with a foreign country, to change its domestic laws.

Technically, they’re right. For example, President Trump can’t commit to changing U.S. laws because only the Congress can do that under the constitutional separation of powers. Similarly, on paper, only China’s National People’s Congress (the national legislature) can change Chinese laws, and President Xi is not a member of the National People’s Congress. (Of course, this explanation conveniently overlooks the fact that both the Presidency and the National People’s Congress are subservient to the Communist Party of China, and that Xi is the General Secretary of the Communist Party, but still it’s technically correct.)

In view of all this, the natural Chinese instinct is to wait … and in this case, wait until the 2020 U.S. election and see what happens. If Trump is defeated for re-election, then perhaps many of Xi’s problems will disappear magically. On the other hand, if Trump stays in office maybe the pain that Trump’s China trade policy is inflicting on U.S. businesses and consumers will force Trump to lighten up a bit.  

In other words, President Xi has much to gain and relatively little to lose by playing the waiting game for a while. 

As for U.S. tariffs, those are causing Chinese businesses to adapt their supply chains by routing them through other East and Southeast Asian countries which are not subject to the tariffs. For instance, instead of sending products straight to the U.S., Chinese manufacturers are sending products to Vietnam or Thailand where a tiny bit of additional work is done – just enough to qualify for a “Made in Vietnam” or “Made in Thailand” label. (This adaptation partially explains Thailand’s large trade surplus which has made the Thai Baht one of the world’s best-performing currencies this year.)  

These maneuvers actually provide a safety valve for both Xi and Trump. For Xi, it cushions the reduction in demand for Chinese exports. At the same time it puts some additional pressure on Trump because this type of safety valve does not really exist for U.S. exporters trying to evade reciprocal Chinese tariffs.  But on the plus side for Trump, it tends to dampen the impact of higher tariffs pushing up U.S. producer and consumer prices.

If you ask me to bottom-line this, the trade problems look more like a protracted siege than an episode of brinksmanship.

How the siege is resolved depends on how strong Trump’s position will be after the 2020 election. If the Democrats continue with their leftward lurch, then Xi will eventually have to cave because Trump’s position will be strong (I’d say a 65% probability of re-election). But if the Democrats come to their senses and Trump continues shooting himself in the foot, then he’s in real danger of losing the election and Xi will come up the big winner (I’d give this a 35% probability as of today). 

So there you have it: the prognosis from someone who is “on the ground” in East Asia.  What are your thoughts?  Are you in broad agreement or do you see things differently?  Please share your observations with other readers here.

Evidently, America isn’t in IKEA’s manufacturing future …

Going, going, gone …

Over the past several years, the political mantra has been that jobs are now coming back to the United States – particularly manufacturing ones.

That may well be. But this past week we’ve learned that IKEA plans to close its last remaining U.S. production facility.  The iconic home furnishings company has announced that it will be closing its manufacturing plant in Danville, Virginia by the end of the year.

The Danville plant makes wood-based furniture and furnishings for IKEA’s retail store outlets in the United States and Canada.

The reason for the plant closure, as it turns out, is a bit ironic. According to IKEA, high raw materials costs in North America are triggering the move, because those costs are actually significantly lower in Europe than they are here.  Even accounting for other input costs like labor that are higher in Europe, shifting production to Europe will keep product prices lower for U.S. retailers, IKEA claims.

So much for the notion that imports from Europe are overpriced compared to domestically produced ones!

The Danville plant isn’t even that old, either. Far from being some multi-story inefficient dinosaur left over from a half-century ago, the manufacturing facility opened only in 2008, making it only about a decade old.  At its peak the plant employed around 400 people.

IKEA made staff cuts or around 20% earlier in the year, before following up with this latest announcement that will wipe out 300 more jobs in a community that can scarcely withstand such large economic shocks.

With the closure of Danville, IKEA will still have more than 40 production plants operating around the world. It employs around 20,000 workers in those plants (out of a total workforce of ~160,000, most of which are employed in the company’s vast retail and distribution business activities).

So, it doesn’t appear that IKEA will be exiting the manufacturing sector anytime soon.  It’s just that … those manufacturing activities no longer include the United States.

As a certain well-known U.S. political leader might say, “Sad!”

DMARC’s job of demarcating: How well is it doing?

In the drive to keep the onslaught of fake e-mail communications under control, DMARC’s checks on incoming e-mail is an important weapon in the Internet police’s bag of tricks.  A core weapon of cyber felons is impersonation, which is what catches most unwitting recipients unawares.

So … how is DMARC doing?

Let’s give it a solid C or C+.

DMARC, which stands for Domain-based Message Authentication, Reporting and Conformance, is a procedure that checks on the veracity of the senders of e-mail. Nearly 80% of all inboxes – that’s almost 5.5 billion – conduct DMARC checks, and nearly 750,000 domains apply DMARC as well.

Ideally, DMARC is designed to satisfy the following requirements to ensure as few suspicious e-mails as possible make it to the inbox:

  • Minimize false positives
  • Provide robust authentication reporting
  • Assert sender policy at receivers
  • Reduce successful phishing delivery
  • Work at Internet scale
  • Minimize complexity

But the performance picture is actually rather muddy.

According to a new study by cyber-security firm Valimail, people are being served nearly 3.5 billion suspicious e-mails each day. That’s because DMARC’s success rate of ferreting out and quarantining the faux stuff runs only around 20%.  And while America has much better DMARC performance than other countries, the Unites States still accounts for nearly 40% of all suspicious e-mail that makes it through to inboxes due to the shear volume of e-mails involved.

In developing its findings, Valimail analyzed data from billions of authentication requests and nearly 20 million publicly accessible DMARC and SPF (Sender Policy Framework) records.  The Valimail findings also reveal that there’s a pretty big divergence in DMARC usage based on the type of entity. DMARC usage is highest within the U.S. federal government and large technology companies, where it exceeds 20% of penetration.  By contrast, it’s much lower in other commercial segments.

The commercial sector’s situation is mirrored in a survey of ~1,000 e-mail security and white-collar professionals conducted by GreatHorn, a cloud-native communication security platform, which found that nearly one in four respondents receive phishing or other malicious e-mails daily, and an additional ~25% receive them weekly.  These include impersonations, payload attacks, business services spoofing, wire transfer requests, W2 requests and attempts at credential theft.

The GreatHorn study contains this eyebrow-raising finding as well:  ~22% of the businesses surveyed have suffered a breach caused by malicious e-mail in the last quarter alone.  The report concludes:

“There is an alarming sense of complacency at enterprises at the same time that cybercriminals have increased the volume and sophistication of their e-mail attacks.”

Interestingly, in its study Valimail finds that the government has the highest DMARC enforcement success rate, followed by U.S. technology and healthcare firms (but those two sectors lag significantly behind). It may be one of the few examples we have of government performance outstripping private practitioners.

Either way, much work remains to be done in order to reduce faux e-mail significantly more.  We’ll have to see how things improve in the coming months and years.

Just ducky: Engineers develop robots to replace ducks in cleaning and patrolling rice paddy fields.

Aigamo ducks in a rice paddy.

It’s a common theme that we hear: Artificial intelligence and robotics are coming for many of the jobs that have traditionally been performed by humans.

But what about the fate of animals?

That prospect was raised recently by David Mantey, a writer for Thomas Publishing, in an article about what’s happening in rice paddy fields.  And it involves ducks.

More specifically, aigamo ducks, which are a cross between mallards and domestic fowl. There is a farming method, originating in Japan, that employs these creatures to clear and keep unwanted plants and parasites out of rice paddy fields.

Essentially, it’s an environmentally-friendly practice in which the ducks keep the paddies clear without the need for pesticides. As an ancillary benefit, the ducks’ own waste acts as fertilizer for the rice plants.

The centuries-old practice was revived in Japan the mid-1980s, and has since become a popular natural rice farming method beyond that country, used in places like China, Iran and France.

Broadly speaking, approximately 15 ducks can keep more than a 10,000 sq. ft. area clear of weeds and insects, while also enriching the water with oxygen via stirring up the soil beneath.

It seems like a neat and tidy solution all-around — and one that works based on decades of experience with the farming practice. But as it turns out, it’s something that a robot can accomplish, too (well, maybe not the duck waste bit) — with certain improvements on the original tradition.

A rice paddy robot doing its thing.

While ducks can be “trained” to patrol specific areas of a rice paddy, it isn’t a foolproof proposition. As for the robotic version (which looks more like a white, floating ROOMBA® than it does a duck), it utilizes wi-fi and GPS technology to stir up the soil and keep the bugs at bay.

Reportedly, the robot is more accurate and more consistent in its execution compared to the aigamo ducks.

At the moment, the rice paddy robot is in an experimental phase with beta prototypes patrolling paddies in Yamagata Prefecture in northern Japan — and it’s too soon to know if or when the robot will be deemed ready for commercialization.

But the development goes to show that robots are spreading into some very surprising corners.  Indeed, it seems that robotics technology knows no bounds.

The “creeping crisis” for newspapers seeps into yet another corner of the industry.

Newspaper revenue trend lines are problematic, to say the least.

The travails of the newspaper industry aren’t anything new or surprising. For the past decade, the business model of America’s newspapers has been under incredible pressures.  Among the major causes are these:

  • The availability of up-to-the-minute, real-time news from alternative (online) sources
  • the explosion of options people have available to find their news
  • The ability to consume news free of charge using most of these alternative sources
  • The decline of newspaper subscriptions and readership, leading to a steep decline in advertising revenues

Exacerbating these challenges is the fact that producing and disseminating a paper-based product is substantially more costly than electronic delivery of news. And with high fixed costs being spread over fewer readers, the problems become even more daunting.

But one relative bright spot in the newspaper segment — at least up until recently — has been local papers. In markets without local TV stations, such papers continued to be a way for the citizenry to read up on local news and events.  It’s been the place where they could see their friends and neighbors written about and pictured.  And let’s not forget high-school sports and local “human-interest” news items that generally couldn’t be found anywhere else.

Whatever online “community” presence there might be covering these smaller markets — towns ranging from 5,000 to 50,000 population — is all-too-often sub-standard — in some cases embarrassingly bad.

But now it seems that the same problems afflicting the newspaper segment in general have seeped into this last bastion of the business.

It’s particularly ominous in places where daily (or near-daily) newspapers are published, as compared to weekly pubs. A case in point is the local paper in Youngstown, Ohio — a town of 65,000 people.  Its daily paper, The Vindicator, has just announced that it will be shutting its doors after 150 years in business.

The same family has owned The Vindicator for four generations (since 1887).  It isn’t that the longstanding owners didn’t try mightily to keep the paper going.  In a statement to its readers, the family outlined the paper’s recent struggles to come up with a stable business model, including working with employees and unions and investing in new, more efficient presses.  Efforts to raise the price of the paper or drive revenue to the digital side of the operation failed to secure sufficient funds, either.

Quoting from management’s statement:

“In spite of our best efforts, advertising and circulation revenues have continued to decline and The Vindicator continues to operate at a loss.

Due to [these] great financial hardships, we spent the last year searching for a buyer to continue to operate The Vindicator and preserve as many jobs as possible, while maintaining the paper’s voice in the community. That search has been unsuccessful.”

Youngstown, Ohio

As a result, the paper will cease publication by the end of the summer. With it the jobs of nearly 150 employees and ~250 paper carriers will disappear.  But something else will be lost as well — the sense of community that these home-town newspapers are uncommonly able to foster and deliver.

For a city like Youngstown, which has seen its population decline with the loss of manufacturing jobs, it’s yet another whammy.

Because of the population loss dynamics, it might seem like local conditions are the cause of The Vindicator‘s situation, but some see a bigger story.  One such observer is Nieman Journalism Lab’s Joshua Benton, who writes:

“I don’t think this is just a Youngstown story. I fear we’ll look back on this someday as the beginning of an important — and negative — shift in local news in America.”

What do you think? Is this the start of a new, even more dire phase for the newspaper industry?  Is there the loss of a newspaper that has his your own community particularly hard? Please share your thoughts with other readers here.