Business

USPS: Why don’t we just throw another couple billion around?

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Last week, the United States Postal Service reported its latest quarterly financials — a $2.4 billion loss. Compare that result against the same quarter last year (pre-stock market dive), when the USPS lost only a mere $1.1 billion …

But what the heck? Why doesn’t the government throw a few more billions of dollars around? That’s probably in the cards, because Postmaster General Jack Potter has let it be known that the USPS may be on track for losing as much as $7 billion for the year … and that’s even if the USPS follows through on its plans to shutter ~3,200 post office locations (nearly 10% of the total).

Of course, one of the reasons for the sorry financials is a decline of USPS operating revenue on the order of around 9%. The most recent postal rate hike couldn’t make up for the ~14% decrease in mail volume, which dipped not just because of the recession but also because of changing communications practices, online bill-paying and the never-ending growth of e-mail.

Still, those volume declines are not as steep or as challenging as many private-industry companies have faced in their industries. Could it be that the USPS, as a government entity with all of the bureaucracy and HR/personnel strictures that entails, simply cannot be as nimble and flexible as firms in private industry? And what does this portend for us in the realm of government-managed healthcare?

Maybe the words of singer-songwriter Bobby McFerrin are applicable here: “Don’t worry. Be happy.”

Besides, what’s the alternative — clinical depression?

How “social” should your office environment be?

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In the early years of the Internet, companies worried about the loss of productivity if employees were tempted to surf online in amongst their work duties. There was also the issue of the “appropriateness” of the web content being viewed. In response, various web tracking capabilities were introduced that enable companies to monitor online activities on networked computers.

On the other hand, as the Internet became all-pervasive in daily life, many companies also adopted a policy of allowing a modest amount of web surfing during work breaks to allow employees to conduct personal business such as shopping and bill-paying.

Now, with the rise of social media, the whole issue has been brought to the fore once again. The proliferation of Facebook accounts in particular has resulted in a new spike of personal online activities at work. A recent study by Nucleus Research bears it out. Based on study findings, Nucleus deduces that companies allowing employee access to Facebook lose an average of 1.5% in total employee productivity. And in an era of cutthroat competition globally, 1.5% of productivity is no slouch amount.

To reach this conclusion, Nucleus Research found that slightly more than three-fourths of the employees surveyed have a Facebook account. Of those who do, nearly two-thirds admitted to accessing their account during working hours.

The average amount of time spent per day on Facebook on office time is about 15 minutes – although the study uncovered a few employees who spent upwards of two hours daily during work hours. (Shame on those employees … but shame on their employers, too, for being so utterly clueless about those employees’ behavior!)

Of course, some people’s activities on Facebook have a business purpose, don’t they? Well … it is true that some employees manage “fan” pages for their company as an adjunct of their personal Facebook account. But that shouldn’t represent more than a small portion of any firm’s workers – perhaps those in the marketing, sales, HR or shareholder relations departments.

And the Nucleus Research study findings reflect this as well, because nearly 90% of the respondents who access Facebook at work could not articulate a business justification for doing so.

Perhaps the study’s most surprising finding was the ~5% of respondents who never access Facebook anywhere but at work. What this may mean is that they built their entire Facebook profile on work-time as well. Chalk up some more wasted hours!

The Nucleus Research findings demonstrate that as time progresses and various social media platforms like Facebook and Twitter become even more pervasive communications tools for people at all levels in the organization, the old guidelines for balancing work and personal life must continue to evolve.

The kneejerk reaction is to simply block access to Facebook on all office computers. But there will always be some employees who have a legitimate business reason to be on Facebook. And then there are the the ever-growing ranks of telecommuters working offsite, who surely have access to alternate laptops or PDAs even if their company-issued equipment blocks access.

As is usually the case with situations like this, the easiest fix is sometimes not the best one. And at the end of the day, “big brotherism” could reduce employee morale even further — hardly the result one would hope for in the current difficult business climate where “improving company morale” is far more just an abstract concept in an HR textbook.

Surprise! Deep down, we actually like the 24/7/365 work environment.

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It’s a common gripe you hear among business professionals: The proliferation of laptop computers and mobile communication devices has contributed to a “24/7/365” work culture, making it more difficult than ever to disengage from the office and putting bigger stresses on work-life balance.

The irony, people claim, is that laptops, PDAs and other equipment which promise to improve productivity and make daily work tasks easier, have actually created more work and resulted in longer hours devoted to the job. And you can’t escape it — at home, on vacation, or wherever you are.

But now, along comes a research study that gives the lie to these assertions. Manpower firm Kelly Services has just released the results of a massive worldwide survey of ~100,000 people in the workplace. Among the survey’s findings: Three-fourths of respondents appreciate the opportunity to remain in constant contact with work – even though one-third of them report working more hours each week as a result.

And among the North American survey respondents, 64% say they’re happy with their current work-life balance, and more than half claim their productivity at work is “much better” as a result of utilizing the new technologies.

So how do we explain the difference between all the negative “cocktail chatter” we hear … and the far more positive survey responses provided when no one’s looking?

It might be because people tend to exaggerate negative opinions – especially when surrounded by spouses and friends who are more than eager to lend moral support – all the while murmuring protestations of disapproval about the “big, bad organization.”

But I think the reason for the incongruity is more basic. On a theoretical level, most of us want to preserve the boundaries between our work life and our personal life. It just seems like it’s the correct position to take on the issue. But another part of us feels a need to stay connected … to be continually “in the know” and not miss a beat — even for an hour.

Moreover, in today’s challenging employment environment, being hyper-connected and super-clued in with the company is more crucial than ever, for self-preservation if for no other reason.

Besides, when it comes to being in control, most people just like that feeling — a lot.

The single most important success factor in e-mail marketing …

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Marketers are continually looking for ways to tweak e-mail campaigns to improve their success. From direct mail tradition, we know the “list” and the “offer” are highly important success factors, followed by the creativity and appearance of the promotional piece itself.

But what’s different about e-mail marketing campaigns? Doesn’t a compelling and informative “Subject” line in the inbox also have a lot to do with their success?

Well … yes. But in field research conducted recently by Epsilon, a leading direct marketing agency and consulting firm that queried more than 600 North American respondents, the findings revealed that there’s another factor that is far more important than the “Subject” line. It’s the “From” line on the e-mail.

In fact, nearly 70% of the respondents cited the “From” line as the single most important factor determining whether or not they’ll open an e-mail message. And this figure is up from 60% in Epsilon’s 2002 survey, so the trend is clear.

By contrast, the “Subject” line is the most important factor for only about a quarter of the respondents.

What this means is that people are looking to see if they know (and trust) the sender before they do anything else … even before reading the subject line of the e-mail. Thus, a poorly performing e-mail campaign might have less to do with the campaign’s specific marketing elements than it does with the sender’s familiarity and reputation.

With groaning e-mail inboxes, is it any wonder that people are inclined to eyeball the “From” column, quickly scanning for the (few) e-mails they’ll open as opposed to the scads of other messages they’ll delete without a second thought?

In short, the “From” line offers comfort. It’s the familiarity of people they know … companies with which they have a relationship … brands that they trust.

That’s also why it’s so important for marketers to send “welcome” or “thank you” e-mails to new registrants without delay. Why risk having someone forget they signed up, and then hitting the unsubscribe button (or worse, lodging a spam complaint) when your messages hit their inbox later? That’s snatching defeat from the jaws of victory.

Where are B-to-B buyers these days? Online, of course.

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Everyone knows that online consumer sales have exploded over the past five years. But what about B-to-B customers? Where are they going when it comes to buying the products they need?

Recent market research reveals that they’re going online, too … and they’re migrating there in a hurry.

In a survey sponsored by MarketingSherpa and ZoomInfo and conducted by Enquiro, a search engine marketing and research firm, a cross-section of B-to-B respondents was asked how they prefer purchasing the items they order all the time for their businesses.

The results were a blowout: nearly two-thirds (63%) prefer to order online. The remaining respondents are divided between preferring to order over the phone and ordering in-person from a sales representative.

Faced with such an overwhelming preference for online buying, the logical follow-up question is whether B-to-B firms are focusing their tactics and allocating resources to online sales in the same proportional effort. In many cases, it’s not even close.

As often as not, B-to-B firms have treated online not as the core of their sales engine, but more like an incremental revenue channel. Frequently, e-business is treated as a separate silo. This makes it less likely for online to interfere (or otherwise cause “issues”) with traditional sales channels. But it also makes it a lot harder for online to be treated with the critical importance that it clearly deserves in today’s sales environment.

And even if B-to-B firms don’t sell directly to end-users but rely on reps, distributors or dealers instead, they need to make sure that their marketing partners are making the necessary investments in online sales functions to support those end-users.

Consider how quickly B-to-B customers have moved online — not only to research products but also to purchase them. By moving too cautiously, B-to-B firms risk being outflanked by Internet “pure plays” — some of which seemingly spring out of nowhere to achieve prominence in only a few short months or years.

To quote a phrase from a nursery rhyme, “Jack be nimble, Jack be quick …” Hopefully, you have a Jack (or Jill) in your marketing department already. Now, give them the tools and the resources to succeed.

A word of advice to customer call centers: Location matters.

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In the drive to become low-cost producers in their industry categories and to be price-competitive in a down economy, many companies are looking into every corner of their business to wring out excess costs wherever they can.

And with business as soft as it is right now, one would think that telephone customer contact centers are a prime target for outsourcing and offshoring. After all, it’s one of the more labor-intensive operations. And relying on resources in English-speaking Second and Third World countries is far cheaper than employing American workers — 50% to 75% less costly by some estimates.

But instead of migrating offshore, evidence is mounting that some companies are beginning to bring their call center operations back into the United States instead.

Why is this happening? Well, when one considers that the purpose of a call center is to promote customer satisfaction, placing these functions offshore hasn’t exactly accomplished that. It’s a topic I’ve addressed before in this blog.

And now, we have new survey data that prove it. A recently-published survey conducted by CFI Group (Claes Fornell International) covers 2,200 respondents who rated telephone customer contact centers run for retailing firms, cable/satellite TV providers, cellular phone service providers, financial service firms, computer equipment manufacturers and government agencies.

The annual survey uses the University of Michigan’s American Customer Satisfaction Index to rate overall satisfaction. In this year’s study, that satisfaction index stands at 74 on a 100-point scale. Not a great score by any stretch; in fact, most companies would surely want to score better.

But when comparing the ratings for domestic call centers versus offshore ones, the differences are stark. The domestic satisfaction index was 84, while the offshore index was only 62.

Moreover, the survey respondents were nearly twice as likely to recommend a company or product to others if they thought the customer contact center reps are in the United States … and three times more likely to abandon the brand if the call center is located offshore.

Is this disparity in results simply the result of American nativism or chauvinism? Perhaps. But it becomes a lot harder to discount the differences when we see that respondents reported that U.S. call center reps resolved their problems 68% of the time during the first contact — “first-call resolution” in industry jargon — as compared to only 42% of the time for contact centers located offshore. That’s a difference that can’t be ignored.

Looking into every corner of a business to find ways to drive down costs certainly makes sense. But in the case of customer call centers, there’s clearly a danger of being “penny-wise, pound-foolish” … and risking a customer backlash that ends up negating any cost savings you might have realized – or worse.

Mag Drag: The midyear report on magazine closings says it all.

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The “gone for good” list has been compiled for the first half of 2009 … and it looks pretty grim for the magazine industry. In fact, Oxbridge Communications’ Media Finder, a database that tracks U.S. and Canadian periodicals, reports that a record 279 magazine titles ceased publication during the first half of the year.

The news that 187 new magazines were actually launched over the same period is little consolation. The net loss of 92 magazines is more than ever, and demonstrates all too clearly how the recession has hit key market sectors particularly hard – finance, automotive, fashion and several others that have traditionally been major contributors of advertising revenue to print publications.

Which categories of magazines fared worst over the past six months? Media Finder’s data show that “regional interest” publications suffered the most casualties, with 27 magazines in that category folding. “Lifestyle” publications were also hurt, with 14 titles biting the dust. And magazines catering to the construction business and related segments were also hit hard, no doubt reflecting the depressed real estate and housing market.

What’s particularly interesting about the YTD 2009 list of shuttered magazines is that many of them were well known in their category and boasted significant circulation. Certainly, periodicals like Country Home, PR Week, Portfolio, Nickelodeon, Hallmark Magazine and Teen weren’t slouch publications by any means.

What can we expect for the rest of 2009? Is the worst over? Seeing as how the economic recovery is (optimistically) still months away, you’d have to bet on additional magazine titles folding during the second half of the year – including a few more of the big ones.

And we’re certain to see editorial format and other changes being made to some of the more famous publications (such as Newsweek’s recent makeover) in a bid to reestablish their relevance and maintain their financial viability.

Twitter’s Law of Unintended Consequences

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As I’ve outlined in a recent blog post, where Twitter has shown it has “legs” isn’t in the area most hyped by its founders.

As it turns out, “What are you doing?” hasn’t been much of a foundation for building a money-making social media platform. And in fact, the inevitable media backlash has now set in — even as the number of new Twitter users have begun to plateau and the majority of current members use the service hardly at all.

But hard on the heels of the Iranian and Moldovan unrest, in which Twitter played an important role facilitating the organizing of anti-government public demonstrations, comes another use of Twitter that few could have foreseen.

A recent article by Steven Sears in Barron’s Magazine outlines how Twitter is being used to affect the share price of stocks. According to Sears, “Before the market opens and throughout the trading day, Twitter lets you tap into market-moving news .. and link through attached URLs to more detailed analysis … You can control your information streams by deciding who to follow, and who can follow you.”

That’s hardly revolutionary behavior. But here’s the interesting part: By law, brokers must save instant messages and e-mail correspondence, but no such mandate exists for tweets on Twitter.

What this means is that some of the more sensitive information or speculation about a company makes it onto Twitter long before it’s broached elsewhere.

One example noted in the Sears article was Matrixx Initiatives, the manufacturer of Zicam nasel spray. Speculation that using Zicam might damage people’s sense of smell started to circulate on Twitter. The result? The stock price fell dramatically from $19 to $13 … and those following the news about Matrixx on Twitter were “in the know” a lot sooner than others.

So here we have yet another example of the unintended consequences of adopting new communications techniques. Twitter is effectively replacing instant messaging capabiliites — without the attendent legal paper-trail requirements.

I wonder what’s next?

Spam-a-lot? You Bet-a-lot.

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It’s no secret that corporate inboxes are stuffed with e-mail messages that are – let’s be kind here – unneeded or unwanted. And the latest report from anti-virus software maker Symantec Corporation confirms this in spades.

The report, covering April activity, claims that unsolicited e-mail makes up nearly 91% of messages on corporate networks. And it turns out this is nothing unusual, as earlier surveys have shown that spam makes up anywhere from 80% to 95% of all e-mail volume on the Internet.

So when you look at your own inbox, you might be pleased if your spam volume isn’t that high. And probably it isn’t, because corporate spam filters are blocking a big volume of e-messages before they ever hit your own inbox.

So where is all of this spam coming from? Symantec reports that nearly 60% of it comes from botnets, which are networks of hacked computers that can do all sorts of mischief – not only e-mailing spam, but also swiping financial information or launching cyber attacks. The “worst of the worst” are donbot spammers, which are computers that are available for rent on the black market. According to Symantec, those represent more than 18% of all spam e-mail volume.

But of course, nothing stays the same for long in the cyber environment. A new, even more alarming trend is being noted with an increase of non bot-driven spam. In those cases, spammers are renting legitimate network services (usually located offshore) and blasting huge amounts of spam at large individual Internet service providers. The objective is to push as many messages as possible onto the network before the ISP’s filtering software is able to detect it.

How much of this is going on? Hundreds of thousands of messages each day, and getting greater all the time.

And if that wasn’t enough, just like flies at a Fourth of July picnic, spammers have now discovered social networks, taking over an alarming number of Facebook and Twitter accounts and phishing for user passwords. These swiped passwords are then used to spam the friends of victims with obnoxious unwanted promotional mail about various products let’s just refer to euphemistically as “personal” or “intimate.” Experts say these types of attacks are particularly effective because they can’t be filtered at a corporate firewall level, and because any such message looks like it’s been sent by a friend of the recipient.

So if you’re on any of these social networking platforms, despite their apparent safety, the watchword should still be: “Caution.”

Robert lays down the gauntlet. Would anyone care to pick it up?

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My recent post on U.S. airlines’ sorry consumer ratings led Robert, one of this blog’s faithful readers, to make a broader comment about America’s standing in the world today compared to years past. Here, in part, is what he wrote:

“… people are more or less brainwashed to think that the USA is #1 in everything. I think some people in the USA (the smarter ones) are now slowing waking up to discover that the rest of the world has really moved on since the early 80s — and at a very past pace … Where the USA was clearly leading the world in the 50s and 60s, the last 30 years are very, very different in that respect. An interesting topic [for your blog]?”

Robert is a true citizen of the world. He lives in the Far East currently, but his business activities have had him a resident in the U.S. and in Europe also. He’s brought up an interesting, perhaps controversial point to ponder.

Agree? Disagree? Somewhere in between? Feel free to contribute your own thoughts by posting your comment below!