Business

The employment cunundrum: “Workers, workers everywhere … and ‘nary one to hire.”

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Labor shortage in the midst of high unemploymentThese days, conservative estimates are that ~13 million Americans are seeking employment. And yet, more U.S. companies are reporting that they can’t find qualified workers to fill their open positions.

In fact, more than half of American employers surveyed by Manpower Group, a leading staffing group, report that they’re having trouble hiring qualified workers. That’s nearly 40% higher than what was reported in the company’s 2010 survey.

The most obvious reason for the incongruity is the disconnect between the background and capabilities of available workers and the skill sets companies are seeking.

But there may be a few other factors at work as well. Spokespersons for Manpower Group suspect the following:

 The 2009 recession made it very easy for companies to find qualified candidates … but those days are now over.

 Employers are less willing to invest the time or dollar resources to train new employees for specialized or unique work.

 Employers may be less willing to hire candidates from outside their area so as to avoid incurring relocation expenses … even as job candidates may also be less willing to consider moving because of the soft housing market.

Melanie Holmes, a Manpower vice president, puts it this way: “Employers are getting pickier and pickier. We want the perfect person to walk through the door.” She and other specialists contend that companies need to get more realistic about the situation and react accordingly.

The Manpower survey results were part of a large global research study of ~40,000 employers worldwide. The trends it sees of greater difficulties in hiring were clearly evident in several other countries, besides just the U.S. (India, U.K. and Germany), whereas in China the trend was just the opposite.

More results from the 2011 Manpower Group survey can be found here.

Internet advertising: Blue smoke and mirrors?

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Online advertising spurious claimsIn today’s online world, marketers can’t afford to do advertising the old fashioned way. They need to rely on automated programs that serve ads to the right audiences in cyberspace.

One question I hear often from business leaders is to what degree of confidence should they place in these automated programs to actually deliver what is promised. There’s a nagging concern that some of the promises might be a bit more like “blue smoke and mirrors.”

As it turns out, some of that concern may be well-placed. Here’s one recent example of problems along these lines. And Trust Metrics, an online media rating firm, has studied more than 500,000 unique web domains – in effect, “taking inventory of the ad inventory.” And what it’s found is pretty sobering.

For starters, the online ad inventory supply is marked by dynamic change and constant evolution. Approximately 20% of the domains studied by Trust Metrics in late 2010 don’t even exist anymore as of the end of 2011. Tens of thousands of sites that may have once been vetted by agencies or networks are gone. There is no content at these domains … or they’re simply “ad farms.”

Trust Metrics claims that never have so many marketers purchased so much online ad inventory in an environment that is so degraded, a significant portion of the domains might not even be around a few months from now.

Moreover, approximately 10% of the domains Trust Metric evaluated that sell ad impressions in scaled buying environments (e.g., exchanges and networks) are actually non-English language sites – hardly valuable places to advertise. Plus, that represents more domain names than those identified as pornographic, or containing significant profanity or hate speech.

Trust Metrics’ evaluation also found that well over half of the sites available in large ad networks are what it classifies as “substandard environments which don’t adhere to even the barest minimum in publishing or editorial principles.

The bottom line on this is that of for 1 million domains that sell ads … most advertisers wouldn’t want to be on ~600,00 of them!

Of course, the flip side of this is that there are thousands of sites that do perform for advertisers – and those “good” sites drive valuable clickthroughs, sales and brand building.

But clearly, advertisers would be well advised to adopt a “buyer beware” stance in the current online advertising environment.

Jobless Americans and Gallows Humor …

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Jobless AmericansThere’s a funny-yet-sobering ditty bounding about cyberspace that chronicles a day in the life of an unemployed American looking for work.

Whether it’s the alarm clock, the coffee pot, clothing, appliances, the car and the gasoline it takes to run it, everything with which this person interfaces during the course of the day comes from overseas – especially China or some other East Asian country.

For those of you who haven’t encountered this satirical little piece yet, you can read it here.

Dana Bales, an industry colleague of mine who is a managing partner at Dayton, OH-based NEO Marketing Communications, reacted to this joke by noting a few key points about China. He writes:

I’m a free trade advocate. I absolutely support NAFTA. But for the life of me, I don’t get our trade relationship with China. Let me get this straight:

 China imposes trade barriers to many of our goods and services.

 China allows its industries to pollute with impunity, keeping its costs for manufactured goods lower while adding to atmospheric and oceanic pollution.

 China allows its citizens and companies to rip off non-Chinese patents.

 Although experts may disagree on the degree of impact, China manipulates its currency to benefit its own export goods.

 China actively supports efforts to hack into U.S. corporate and defense systems, stealing untold billions of dollars’ worth of technology.

 China uses American dollars to subsidize its own industries.

Food for thought, indeed – even if you don’t agree with every single one of Bales’ statements.

It would be nice, too, if our government and trade officials could focus on coming up with some workable solutions to these issues. I think we’d all be happier if we could relegate this sort of gallows humor to the literary trash can!

What’s the Latest in Content Creation for B-to-B Marketers?

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Content creationThere’s an interesting new study just published that gives us interesting clues about what B-to-B marketers are doing in content creation.

The B2B Content Marketing: 2012 Benchmarks, Budgets & Trends study is a joint research effort of the Content Marketing Institute and marketing information resources firm MarketingProfs. The survey found that nine out of ten B-to-B marketers are using some form of content marketing activities to achieve their business goals.

[For this survey, content marketing (also known as custom publishing or branded content) is defined as “the creation and distribution of educational and/or compelling content in multiple formats to attract and/or retain customers.”]

The research found that usage of several content tactics is now quite widespread:

 News articles: ~79% of respondents are using
 Social media (excluding blogs): ~74%
 Blogs: ~65%
 e-Newsletters: ~63%
 Case studies: ~58%
 In-person events: ~56%
 Videos: ~52%
 White papers: ~51%
 Webinars or webcasts: ~46%

When queried as to how effective marketers believe these tactics to be, a combination of traditional and “new” ones were cited with high effectiveness scores:

 In-person events: ~78% view as an “effective” tactic
 Case studies: ~70
 Webinars or webcasts: ~70%
 e-Newsletters: ~60%
 White papers: ~60%
 Blogs: ~58%
 Web microsites: ~56%
 Articles: ~51%
 Social media: ~51%
 Videos: ~51%

The survey also investigated how content tactics are being measured for success. Tracking web traffic stats is the most popular measurement tool:

 Web traffic: ~58% use to measure success
 Sales lead quality: ~49% use
 Direct sales figures: ~41% use
 Sales lead quantity: ~41% use
 Qualitative feedback from customers: ~40% use
 Search engine rankings: ~40% use
 Inbound weblinks: ~30% use

And what is the biggest challenge these marketers see in content creation? It’s the age-old problem of coming up with interesting topics to write about.

More than four in ten respondents cited “producing the kind of content that engages prospects and customers” as their biggest challenge.

Some of the comments heard from survey respondents on this topic sound all-too-familiar:

 “Finding people within my organization to contribute their expertise … nobody outside of marketing seems to see the value in sharing our expertise with the market via content.”

 “Having the discipline and being able to assign sufficient resources to create and manage the right content for the target audience, in a sustainable manner.”

 “The ideas are all there; it’s just a matter of finding time to create and write copy.”

 “Management patience: Management needs to understand that in today’s B-to-B environment, it takes time to engage prospects.”

What about your situation? Are your content management issues the same ones as reported in this study … or are you facing different challenges?

Convention centers: Where the laws of supply and demand don’t seem to matter.

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McCormick Place, Chicago, IL

For those of us in the business world, it comes as no surprise that conventions and trade shows are in significant decline. While they’re not exactly on life support, we’ve witnessed convention attendance drop pretty significantly over the past decade.

In fact, the decline in the United States has been more than 30% — from 125 million attendees in 2000 to just 86 million in 2010.

It’s not hard to understand why. The “shocks and hard knocks” of the economy have contributed, of course. But in addition to this, the ways people communicate have been changed forever by the online/interactive revolution.

With lean staffing — who has time anymore to take four days away from the office? – plus the ability to congregate easily online in virtual forums and meetings, the need for face-to-face interaction just isn’t the same as it once was.

With such a steep decline in trade show attendance, one wouldn’t expect that investment in new or updated convention centers would be high on the agenda, correct?

Think again. Even as cities and their convention centers are competing for a shrinking pool of convention-goers, they’ve continued on an expansion binge – paid for by hapless taxpayers.

You don’t have to look hard to see example after example of initiatives that make essentially no economic sense, being undertaken by cities in a form of one-upsmanship that is reminiscent of that famous Irving Berlin song, “Anything you can do, I can do better.”

At McCormick Place in Chicago – the convention venue everyone loves to hate – the city has invested heavily in expansions and upgrades in recent years. In 2007, a new $900 million expansion was completed … and today McCormick Center is running at 55% capacity. Swell, fellas.

Closer to where I live, Baltimore City built a brand new, city-owned hotel to the tune of $300 million, thinking it would improve the sagging fortunes of its convention center. Opened in 2008, the hotel has managed to lose money in every successive year – as much as ~$11 million in 2010.

So what is Baltimore’s reaction? It’s now considering putting together a new public-private initiative that will add an arena, yet another convention hotel, plus an additional ~400,000 square feet of convention space. The cost in public money? “Only” about $400 million.

From Boston to Austin and from Columbus to Phoenix, public officials dupe themselves into believing that if only they upgrade or expand their convention facilities, they’ll see robust growth that meets or exceeds optimistic projections of increased hotel bookings and other ancillary economic activity.

Time and again, they’re wrong. And not just because of the economy or changing business practices. When every other city is expanding right along with you, no one is going to attract more than their fair share of any additional business potential that may be out there.

I love what Jeff Jacoby, an op-ed columnist for the Boston Globe, had to say about the newest efforts to expand Boston’s convention center (along with a ~$200 million price tag in new public subsidies), even after a less-than-stellar 2004 improvement initiative fell woefully short of the predicted new convention activity.

“The whole thing is a racket,” Jacoby stated. “Once again, the politicos will expand their empire. Once again, crony capitalism will enrich a handful of wired business operators. And once again, ‘Joe and Jane Taxpayer’ will pay through the nose. How many times must we see this movie before we finally shut it off?”

How many times, indeed.

Dealing with a Deluge of Marketing Data

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Marketing analytics in the era of social mediaBelieve it or not, there was a time not so long ago when marketing professionals actually complained about a lack of data when it came to determining the success of sales, advertising or promotional initiatives.

Clearly, those days are long past. With the inexorable rise of digital and social media, many marketing managers now believe they can’t analyze and react to the sheer volumes of data that are now available.

That view comes through loud and clear in IBM’s Global Chief Marketing Officer Study, released in October 2011. In this large survey, IBM interviewed nearly 1,750 CMOs across nearly 20 industries in more than 50 countries … and ~70% of them revealed that they felt incapable of analyzing and responding to all of the data available to them.

For example, only about one in four CMOs in the survey reported that they are tracking blog content.

On the other hand, only ~36% reported that they still focus primarily on traditional sources of marketing information. Even so, ~80% continue to use certain forms of traditional management techniques to measure their success, such as competitive benchmarking and market research surveys.

As the newest activity – and perhaps the thorniest to measure – social media is a particular struggle, according to these CMOs. While just over 55% believe that social platforms represent a “key engagement channel,” an equal percentage say they’re not prepared to be held accountable for social media ROI.

Calculating the return on investment for acquiring Facebook fans, YouTube followers or LinkedIn company connections is really challenging, these respondents report. Instead, metrics that are typically tracked are new account signups, exits and cross-selling activity. For now at least, the commitment is to engage customers using social platforms without agonizing over ROI factors.

Thankfully, the hard-dollar advertising costs of using social platforms are modest … even though marketing departments must devote significant personnel resources to support the effort properly.

Monitoring social discussions, product reviews and other anecdotal information — and then compiling the data into actionable reports — requires daily focus and attention. But those actions are key to triggering timely alerts if something is amiss or there’s a change in the competitive picture.

What’s the prognosis for marketing data in the future? (Much) more of the same. For companies, the deluge – if not the fun – is just beginning.

Are Mobile Communications Taking Over the World?

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Mobile communications taking over the worldHow hot is mobile communications these days? Extremely, according to Internet marketing über-specialist Aaron Goldman, who recently cited a number of information factoids to back up his contention:

 There will be ~5 billion mobile devices in use by 2012. That’s the equivalent of ~70% of the world’s entire population.

 Penetration of smartphones has now reached ~38% in the United States … and higher in Europe and Asia.

 The average smartphone user in the U.S. and U.K. has 23 mobile apps on his or her phone. (In Japan, it’s even higher at 45 apps.)

 Four out of five smartphone users use their phone to shop or research purchases while they’re in the store.

 Even more interestingly, ~43% of mobile Internet usage actually happens at home. Evidently, the desktop being mere steps away isn’t as convenient as whipping out the phone to get the needed information..

 Mobile makes up ~20% of all searches on Yahoo, which translates into ~528 million Yahoo searches on mobile devices every month. (Google isn’t far behind, with ~15% of its searches on mobile.)

 Mobile is clearly making strides in the local market; just under 30% of all mobile search queries are ones with “local intent.” For desktops and laptop PCs, only about half of that proportion are “local.”

And Goldman has another interesting stat to share: Nearly 40% of smartphone users access the Internet while using the lavatory.

Now, when Internet surfing takes over from bathroom reading … that’s proof above all else that mobile has definitely arrived!

Airlines Continue to Struggle with Customer Relations

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Virgin America AirlinerI’ve blogged before on commercial airlines and their penchant for treating customers in a careless fashion. Everyone understands that the air travel industry is a challenging business – and a far cry from the halcyon days of yesteryear when traveling by air was an enjoyably memorable experience. Sure, tickets were pricey. But crowds were few, the atmosphere pleasant, and people felt pampered and special.

Now, commercial airline travel is more like a trip on an overcrowded city bus or, worse yet, being in the middle of a cattle call.

On top of this, it seems that airlines are their own worst enemies when it comes to customer service.

Take Virgin America, for example. It’s only the most recent example of airline customer relations that are essentially in the toilet. Recently when the airline changed over to the Sabre reservation system – no doubt to save money as much as for any reasons pertaining to improved operational accuracy – it did so in a way that left consumer satisfaction completely out of the mix.

When the switch was flipped over to the new Sabre system, many customers couldn’t access the website … and many of those who did were provided wrong boarding passes or other inaccurate information.

Even the airline’s own crew members were given incorrect information about when to show up for work.

Billing procedures? They were equally compromised. Some customers found themselves being invoiced multiple times for the same flight; the most egregious example was one woman who ended up with nine separate charges for the same flight.

The phone system was totally overwhelmed, as would be understandable. With the crush of customers attempting to call the airline to work out scheduling snafus, people found themselves being placed on hold for hours at a time – then mysteriously cut off.

Wouldn’t interfacing with customers be a situation tailor-made for harnessing the power of social media? In the abstract, yes. But in the case of Virgin America, they bombed on this score as badly as everything else.

To begin with, the company’s PR posture was that customers were experiencing only minimal problems with a “smooth transition” to the Sabre reservation system. But consumers were telling a completely different story on Twitter and Facebook.

When things like this occur, smart companies monitor social media platforms diligently and jump in to respond to individual and group concerns immediately. They understand that a disgruntled customer can be turned into a brand evangelist if “service recovery” is done effectively.

Doing this well means two fundamental things:

 Validating customers’ concerns by acknowledging that the problem exists, and taking responsibility.

 Providing real relief. Refunds, discounts, rewards, additional air miles – it’s all part of the arsenal of offerings that Virgin America could use to “turn lemons into lemonade.”

It’s wise to take social media seriously. That means assigning people with brains and a sincere interest in customer care to take charge of social media, and also giving them the authority to respond with honesty, integrity and empathy.

From the looks of things, it appears Virgin America did it all wrong. It quickly became apparent that the true details of the Sabre conversion were at major odds with the “happy face” posture and the company’s claims.

But what happened to customers who voiced their real concerns via social media? They found their posts being deleted. Failing to address customer complaints, while dissing them by kicking them off your Facebook page: How is that a recipe for success?

Consumer research tells us again and again that when companies lose customers, it’s because of what happens “on the ground.” Like Virgin American, they may spend millions on advertising, but those ad dollars are often better spent to improve customers’ personal experience.

Satmetrix, a San Mateo, CA customer experience research and software company, found recently that consumers stop doing business with a company for a variety of reasons … but product or service quality concerns represent a distinct minority of the cases:

 Rudeness or dishonesty: ~34% cited for stopping relationship
 Unexpected charges or fees: ~20%
 Product or service quality: ~20%
 Unfavorable return or refund policies: ~3%

But back to Virgin American. When the airline was first announcing its shift to the Sabre reservation system, it came up with a catchy, irreverent tagline: We’re shaping up our back end. How ironic does that all-too-cute messaging sound now?

Online coupon deals: Take those “whopping” discounts with a grain of salt.

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Online daily deals save you less than you might think.
That "big discount" you think you're getting? Chances are, it's based on inflating the regular price.
In the world of retail, while the way people buy goods and services may be evolving at a rapid clip, it turns out that some aspects have changed nary a bit.

Take online couponing. Groupon and LivingSocial are the two big players in this segment, which enables consumers to take advantage of deep discounts on products or services providing enough people sign up for the offer. They’ve been proliferating in retail markets all over the country.

But think back to the “bad old days” of brick-and-mortar retail. Often, you might encounter a “deep discount” at a grocery store or big box store, only to realize later that the discount was calculated off of an unrealistically high list price for the item.

While not illegal, such practices are certainly deceptive, in that the product was rarely if ever sold at the “standard” price.

Well, guess what? When looking at online coupon deals, we’re now finding the very same practices at work.

Recently, local local services online directory Thumbtack contacted vendors offering daily deals from Groupon or LivingSocial. Vendors were “shopped” in metro markets all across the country that included a variety of services ranging from home cleaning and maid services to interior painting, handyman services and studio photography.

In eight out of ten cases, Thumbtack found that it was quoted a price over the phone that was lower than the advertised “regular” price cited in the supposedly “great” deals being offered.

Two examples:

 On September 19, 2011, Groupon offered two hours of home cleaning services in Phoenix, AZ for $49 … an amount it claimed was 67% off of the “regular” price of $150. When contacted by phone, the non-discounted price for the exact same cleaning services was $80. So the consumer was still getting a discount … but hardly the 67% as breathlessly claimed.

 On August 24, 2011, Groupon offered carpet cleaning services for a 200 sq. ft. area in San Francisco, CA for $45 — purportedly a 78% discount from the regular price of $200. The price quoted over the phone for similar square footage? Just $106. No doubt, Groupon, LivingSocial and their participating vendors realize that one way to make an offer more attractive is to make sure the percentage discount is huge – and thus unlikely to be offered again.

It’s really no different from practices we’ve seen used in retail over many years. But as more consumers become more savvy to the ways of online deals, it’s quite likely that we’ll find fewer people choosing to participate in them based on the “whopping” discounts claimed.

The Consequences of Alabama’s New Immigration Law: Welcome to Economics 101

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Alabama's tough new immigration law (2011)Since the passing of Alabama’s tough new immigration law several months ago, two major things have happened:

1. Many immigrant workers have left the workforce.

2. Employers – especially agricultural operations – have found it nearly impossible to replace the lost workers.

In retrospect, neither development seems particularly surprising. Many immigrant workers, whether they’re here in the United States legally or not, fear the heavy hand of government and will opt to find a more inviting environment than the one in Alabama today. For now at least, that environment is better in nearly all of the other 49 states.

And while the jobs no longer being done by immigrants may now be sought by American citizens – after all, the ~9.9% unemployment rate in Alabama is higher than the overall U.S. rate – the appetite for doing many of these jobs dissipates quickly when people are confronted by the reality of what is required to perform them.

Alicia Caldwell, an Associated Press reporter, spoke last week with some Alabama farmers to find out what has happened since Americans were hired to replace immigrant workers.

“Most show up late, work slower than seasoned farm hands and are ready to call it a day after lunch or by mid-afternoon. Some quit after a single day,” Caldwell reported in her AP article published last week.

As a result, farmers are opting to leave crops in the field rather than harvesting them.

What we have here is a classic Economics 101 lesson. If workers aren’t willing to do the jobs at a labor cost that will enable the products to be sold at a competitive price, the crops won’t be brought to market.

If agricultural operations in the whole world faced the same situation as Alabama farmers, it’s possible that a new labor/price equilibrium could be established. But not only is Alabama competing against other states where immigrant labor continues to be used, it’s also competing against other countries that produce the same crops.

The result? No one is winning. Not the farmers … not the immigrant workers … nor the unemployed Americans who have decided that ramaining unemployed is preferable to working a difficult or unpleasant job.

The Alabama state government is attempting to support the transition away from immigrant workers. A program started recently seeks to pair Alabamians interested in jobs with the state’s farming operations that need replacement labor.

So far, the results of this effort haven’t been encouraging, with only ~260 people registering interest in temporary agricultural jobs.

Out in the field, reporter Caldwell has found ample anecdotal evidence that underscores the disconnect between the “theory” versus “practical reality” of unemployed Americans taking advantage of these new job opportunities:

Tomato farmer Wayne Smith said he has never been able to keep a staff of American workers in his 25 years of farming.

“People in Alabama are not going to do this,” said Smith, who grows about 75 acres of tomatoes in the northeast part of the state. “They’d work one day and then just wouldn’t show up again.”

At this farm, field workers get $2 for every 25-pound box of tomatoes they fill. Skilled pickers can make anywhere from $200 to $300 a day, he said. Unskilled workers make much less.

A crew of four Hispanics can earn about $150 each by picking 250-300 boxes of tomatoes in a day, said Jerry Spencer of Grow Alabama, which purchases and sells locally owned produce. A crew of 25 Americans recently picked 200 boxes – giving them each $24 for the day.

Years ago, an old Russian emigré professor of Slavic history and literature at Vanderbilt University advised us students, “As you grow older and wiser, you’ll come to realize that the great issues of the day can’t be debated in black and white. Because the two sides aren’t black and white; they’re really shades of gray.”

Those words could well be applied to the immigration debate and its socioeconomic consequences. Certainly, one “black and white” issue that should be banished from the discussion is the notion that if all of the jobs done by illegal immigrants were to become available to Americans, our unemployment problem would be magically solved.