Category Archives: Business – Opinion

Panic at the AP Disco

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I wonder if the folks at the Associated Press are having some sort of weird contest to see who can do the dumbest stuff possible.  First they steal every losing play of the recording industry's playbook circa 2005 and then they start attacking their own affiliates for embedding videos from the official AP YouTube channel.  I'm really not sure what's funnier, that they went after their own affiliate for embedding their content or that the AP exec handling the matter didn't even know that there was an official AP YouTube channel.  And of course he wouldn't have known that AP could turn off the embed function themselves and the problem would have been solved.  You can read/hear/see all about it here.

What Mark Said

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Mark Cuban has written an excellent blog post about executive compensation and layoffs.  In a nutshell he's simply asking why we don't reward executives who bust their butts to avoid laying people off.  It's a good read, and love him or hate him, I think you have to admit he makes a great point.  The first paragraph gives you a taste:

I have a simple question.  Why are profitable companies laying off people ?  I can see if a company’s survival is at stake.  If payroll can’t be met. If debt can’t be paid. Then layoffs are a necessary evil. Even if companies have created cash flow deficits through their own mistakes, that’s the nature of business. Mistakes are made.  What I have a problem with is that discussion of executive pay never includes whether or not the executive has been good enough to pre empt or prevent layoffs.

Time Warner Lit a Fire

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Well my post about the Time Warner's move to charge variable rates for high speed internet garnered more comments in a few minutes than I ever typically get on any post.  Lots of good points were made and questions asked in those comments, the most obvious of which is how customers are supposed to tell how much data they're pushing through Time Warner's "tubes".  Ben offers some excellent tips for how to track your internet usage here.  I'm sure there will be much more on this story to follow.

Time Warner Cable Goes All Cell Phoney

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Time Warner announced that they're going to start charging customers for high speed internet access based on the amount of data they transfer each month and if customers exceed their designated amount of data they'll be charged extra.  From the piece on WXII's website:

Customers will select from plans that cost between $29.95 to $54.90 a month and will be charged overage fees when they exceed their monthly allotted amount, according to an article in BusinessWeek.
The company is planning to offer four levels at 5, 10, 20 and 40 gigabytes (GB) respectively. Time Warner said customers will be charged $1 for each gigabyte downloaded that exceeds their plan's cap.

Sounds like a Verizon Wireless plan doesn't it?

Today’s Retail Rundown

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Two completely unrelated events from yesterday have me thinking a lot about local retail experiences this morning.

  1. Esbee's had it with OfficeMax.  She wrote a post yesterday about how on multiple occassions she's taken clearance items to the register only to be told that she can't buy them because they'd already been sold back to the vendor.  She reasonably asks why the items are still on the floor.  She also relates an unsatisfying experience with the manager there.  Me thinks the folks at OfficeMax have a wee issue with their systems and management that they might want to clean up, and if the comments on Esbee's post are any indication I'd say that lots of folks here in Winston-Salem share the sentiment.  I wonder if the manager is getting a call from corporate asking him why his dissed a woman who has about a bazillion readers?
  2. Celeste was in Costco yesterday and paid cash for our items.  The cashier didn't have change in his till so he called the manager to get some.  The manager came by the register and said that he was sorry but he didn't have any cash for change because the bank had not made its daily cash delivery for the third day in a row and he also wasn't able to get any from the nearby Home Depot or Lowes.  I'm not sure which bank Costco uses, but I find it a little disturbing that the bank is letting down what has to be one of its more prominent customers.  It causes me to wonder if there's a problem with deposits at the bank or if it's just poor management. Or is there a problem with Costco's credit?  Normally I wouldn't think much of it, but in this day and age every little signal causes me to wonder if there's something more ominous going on behind the scenes.  Oh, and in case you're curious Celeste was able to get her change when the customer behind her also paid cash and gave the cashier enough small bills to make change.

Don’t Sell Me a Recession

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So, raise your hand if you aren't aware that we're in the midst of a recession of epic scale.  If you raised your hand then please let me know what cave you've been living in so I can move there with my family.  My point is that we all know there's a recession on and we're not likely to forget any time soon.

I confess to a morbid fascination myself, as is abundantly evidenced by my posts about the economy, real estate, etc.  I've watched with fascination as people started pointing fingers at each other in blame.  "It's the bankers' fault" some say.  Others blame homeowners, the media, the government, the…well, almost everyone.  Basically the recession is the most significant event since at least since 9/11 and it has had arguably a greater impact on our daily lives than any event for a couple of generations.  As much as we'd like to we can't escape it.

All this has me wondering: why is every company out there playing off the recession to sell their services.  Many seem to be using gimicky plays on the 'stimulus plan', as in "Come shop at ACME shoe store and take advantage of our toe stimulus plan!"  Or they come across with messages like "We know times are tough, that your budget's tight, so we're offering deep, deep discounts on…"  My problem with this approach is:
  • I hear enough about the recession on the news, at the water cooler, etc.  I don't need to be reminded of it by every merchant out there.
  • How is it effective marketing to remind me that I'm broke as you try to sell me your discounted wares?  The reality is that if I'm broke and if your product isn't a staple (milk, bread, eggs, Nintendo Wii) then I'm not going to be swayed by your discount.  In effect your discount is going to woo people who have money and still have their jobs so why create a negative association with the recession? 
  • If everyone else is doing it how are you separating yourself from the herd? 

My advice?  Go back to the basics and play up your strengths.  Better quality, better service, customers are treated like family, etc.  Unless you're Wal-Mart the likelihood that you'll win on price is pretty low, and who really wants to be known as the cheapest shop in town?

So merchants of the Piedmont Triad please, please, please do me a favor.  Don't sell me a recession, sell me what you've got.

One More Reason to Love Costco: The Clif Bar Recall

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I'm an avowed fan of Costco.  I absolutely love shopping there and it is a sign of my adoration that I think my fraternity brother Kirk is a rock star because he's a buyer for Costco.  Another of our fraternity brothers is an actor with a recurring role on the original CSI (he's Archie in the lab), but I honestly think I'd ask Kirk for an autograph first.  If nothing else I'd ask to trade jobs with him before anyone else I know.  So yes I love Costco.

Today we received a robo-call from Costco, but unlike the calls I got from John McCain this one was welcome.  Their records showed that we'd purchased Clif Bars in a certain time period and they wanted to inform us that Clif Bars were being voluntarily recalled in connection with the peanut butter salmonella scare.  In other words they'd scoured their database and found any members who had purchased Clif Bars from them and then called them to let them know that they should dump those Cliff Bars.  They also provided a way to get information directly from Clif Bars about the recall.

Obviously not all retailers can do something like this.  They don't all have a membership database like Costco, but what's interesting to me is that many of them do have loyalty programs like Food Lion's MVP program.  I'm wondering if they have the capacity to mine their MVP data and see if any members have purchased tainted products and then contact those customers?  I doubt it, but even if they did I don't know that they'd actually think to do what Costco has done.  

Did I mention I love Costco?

Dead Pool

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Esbee's post about various states of local small businesses, some moving and some gone out of business, coincided with my discovery that the Back Yard Burgers in Lewisville has been closed since last month. Given that the Back Yard Burger website says "Under construction" I'm wondering if the whole chain went under.  After seeing that I'm tempted to start a "Dead Pool" for area businesses, but considering how depressing most of the economic news is these days it just feels too "icky."  

I will go so far as to say that my personal feeling is that the bloodletting in retail has just begun, and it hurts me to say that.  I love and respect entrepreneurs.  To me they're the true heroes in business, far more so than the titans who run the mammoth corporations.  Entrepreneurs put their financial lives on the line every day, while the corporate chieftains merely face public failure and perhaps losing their jobs.  Sure that's hard, but at the end of the day they still have their golden portfolios and they probably aren't facing the loss of their homes since they didn't have to put them up for collateral to finance their companies.

So let me say this loud and clear: Save the entrepreneurs and shop local.

Cost Cutting for the Masses

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There's an article in the Wall Street Journal about cost cutting measures at General Motors, and some of the highlights include clocks that no longer work because the company stopped paying to replace the batteries, cheaper towels for clean up, and no air travel for employees without written approval from a manager.  Of course the article points to the kerfluffle over the CEO's flying in a private corporate jet to Washington to beg for a bailout from Congress, which points out the obvious: in corporate America cost cutting is for the working masses, not the C-level suite.

When my brother worked in a large, Fortune 500 company, he became highly disillusioned when he and the rest of the workforce were asked to accept salary freezes, no bonuses and the loss of small perks like free orange juice and then when the next quarterly reports were released they found that the C-level execs had gotten raises and bonuses and not one of the company's jets had been sold.

And just today there's a story about 10 senior Wachovia managers who are eligible to get $98 million in severance if the Wells Fargo deal is completed by December 31. So you screw the pooch and you walk away more than a little wealthier, while thousands who worked for you get to enter the Christmas season wondering if there will be pink slips in their stockings.  Nice.

I love capitalism, but when risk and reward are so obviously divorced in business's upper echelons something needs to seriously be changed.  I'm fine with executives being paid handsomely if they run a business well, as long as it's not at the expense of thousands of others' jobs, but I'm not fine with executives being paid handsomely in return for abject failure.  There's something seriously wrong with that picture.