New Qwest Ads breaking through the clutter

The new Qwest are not only breaking through the clutter but also are effective in repositioning Qwest as the broadband solutions provider. The Ads do not talk about features like speed and GHz but rather talk about customer pain points and Qwest's benefits.  Great work by the new marketing chief who brings his experience marketing consumer brands like Sonic.
See the videos here, and  here 
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Pay What You Can Pricing - Early Results from Sensorielle

Facing falling customer traffic due to recession, Sensorielle spa in Boulder, CO decided to go for a pay-what-you-can pricing scheme. As previously reported, they had posted fixed prices but asked their patrons to pay for the services what they value/afford. The goal was to reduce pricing as a concern for customers and to encourage their regulars to return to the Spa. Recently the owner of Sensorielle spa, Ms. Jewl Pettaway, a Boulder Net member, posted early results from her pricing experiment. Here is the full text of her posting in the Boulder Net discussion group (posted with permission).

At Sensorielle, we love our new concept, and would like to hear from clients, colleagues, and the general public about how you feel about it. Below I have expressed some of what we are experiencing.

Some clients feel guilty if they don't pay the full price. We certainly don't want that! The idea is to allow everyone to care for themselves regardless of their situation. So, if you come less because you feel like you need to pay 100%, it sort of defeats the purpose. We know this is something very new, and may be hard to swallow at first. We hope that people will get use to it and really come as much as they can and pay all they can truly afford.

Other clients have expressed a concern that we will not make it because people will take advantage. I can tell you, people taking advantage is the tiniest minority of what we are experiencing so far!

Since our launch on February 1, we have found a great balance in people coming weekly but paying a little under the suggested pricing, people coming less frequently and paying full price or more, and those paying a bare minimum. They seem to be the minority, and do not come as often for whatever reason.

Most clients we see give us a full range of "5's" on their feedback cards, and many express how grateful we are to be doing this for our community even (and especially) if they are paying full price or more. It has been really rewarding for us, the entire staff of Sensorielle, to see this idea manifest in the best possible way we could have imagined.

So far, our cash flow the is better than last year with full pricing, and our average service ticket has only gone down by about $15-$20! We estimated it would reduce by about $40. It is amazing what can happen when you launch yourself fully into a passionate idea with no research available!

What are your thoughts?

Namaste,
Jewl

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Longevity of Crocs Brand in Question?

24/7 Wall Street analyzed 100 brands and makes a prediction that 12 brands will not survive after 2010. The third on in the list? Crocs, the footwear company in Niwot, Colorado.

Two weeks before the credit extension, the company’s auditors gave the firm a “going concern” letter, an indication that there would be reasonable chance that Crocs would make it another year. In the fourth quarter of 2008, Crocs lost $43 million after making $55 million in the same period the year before. Revenue fell from $225 million in the last quarter of 2007 to $126 million. Crocs won’t make it through the year.

The stock did fall from its highs last year of $72 and I wrote about it in the Boulder Net blog. The Wall Street Journal reported that the trend does not favor Crocs. In that article an analyst with Wedbush Morgan Securities was quoted saying,

"Crocs's problems have less to do with the recession than with fading public interest in its signature footwear. Their problems started earlier."

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Analyze this - Who is writing the Boulder Net Blog?

There is a neat website called Typealyzer, that can take a blog URL and tell the rest of the world something about the person who is writing the blog.
So what does it say about this blog's author?  "Scientist".

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Boulder - Paradise or Not Discussion

I would like to point you to the discussions going on in other, extremely well written, blogs. The discussion started with Megan Soto of LaunchSquad stating in her blog, Boulder, I’m Lookin’ And I’m Likin’,

What is it about the Boulder scene that makes me yearn so to be a part of it? My curiosity-turned-fascination-turned-safe-distance (I swear)-obsession was probably fueled by the fact that I can’t be part of it. My location prevents it and they just don’t seem interested in pursuing me as a remote member of their clan, though, granted, no overt outreach was established from my end.

Her fascination with Boulder is understandable. I am not however fully convinced about the startup scene, especially given the tough economy.

In response to Megan, Boulder Blogger Brian says, Boulder is Nice, but No Paradise:

Rather, my point is to try and paint a more realistic picture of the city. Because frankly, while Boulder is nice, it’s no paradise.

There are dirty people here. There are too many bikes, and they run too many stop signs. There are mountain lions, and they eat humans. There are college students, and they don’t act like humans. There are 12,00 foot peaks, but they’re far away. And fuck, there’s not much water here. Or nice trees.

What do you think?

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The High Cost of News Reporting - Rocky Mountain News

From tomorrow Denver will have only one newspaper. The Rocky Mountain News said that it will cease publication after tomorrow. They are not talking just about stopping the print edition, they will cease news reporting, print or online.
The story reported in Rocky Mountain News website says why they decided not to go to online only version:

Mark Contreras, vice president of newspapers for Scripps, said the math simply didn't work.
"If you cut both newsrooms in half, fired half the people in each newsroom, you'd be down to where other market newsrooms are today. And they're struggling," he said.
As for online revenues, he said if they were to grow 40 percent a year for the next five years, they still would be equal to the cost of one newsroom today.

It goes to show that news media is a high fixed cost operation. The fact that online version has a marginal cost of $0.00 is immaterial, they still need the news room to report news.
Can they go to a fee version? Not at this juncture. Once you give away  a service for free, customers are not going to value it enough to pay for it at a later stage. According to their cost estimates the total revenue (subscription plus Ad ) has to be at least $100 to break even. A tall order.
So can free work for all the other Web2.0 services?

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Crocs Signaling Its Focus On Brand Value With New CEO Pick

Crocs saw its shareholder value fall by close to 96% from its highs in 2007. Crocs stock has fallen to $1.45, a downfall that is twice as steep as the rest of the market. Crocs announced that Mr.John Duerden will become the new CEO of the Niwot, Colorado based company. Crocs footwear may have few takers these days, as evidenced by the fall in revenues (to $126.1 million, half of previous year number), but its brand still has some equity that quite possibly some "brand elasticity" that can be transferred to other related items.

The economy and its current product line does not bode well for Crox. Mr. Duerden's appointment signals a possible Crocs' plan to leverage this brand equity, possibly with line extensions. The new CEO used to run another big brand in footwear, Reebok. Most recently, Mr.Duerden was with the Chrysallis Group, a brand development and renewal consulting group that he founded in 2006. We should expect him to be more brand focused and rebuild shareholder value through products with higher premium rather than increasing sales with lower priced items. Crox cannot win by  going  after market share by competing purely on price, profit should be the number focus.

Of course for all those coming to this post from Yahoo Finance Crox message board, this is just my opinion. Mr. Duerden's resume is verifable and it is true. I am not making any recommendation here. You should not make your stock decisions based on this or any other opinions. Look at my previous post on Crox  from last year here.

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Valuing Free - What will you pay for something you always received for free?

Many web based free services, including from market leaders like Google, are shutting down. From Boulder, recently Andrew Hyde called R.I.P magnolia a Boulder based startup. Is there a problem in giving away a service that adds value for free? I believe there is. Most web services focus on building user base with the hope of Ad supported business model. While free is never a good business model, the dependence on Ad is coming under severe threat more now than ever in the past.
Can't these services simply start charging their subscribers for the service? The problem is if your users never paid for it and if alternatives are available their reference price for the service is $0.00 even though they may get great value from the service.

For a related article on increasing reference price from $0.00, see my article in my Unbundled Pricing blog.

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Applying to Job Postings in Craigslist

Craigslist has no advertisements. It makes its money from job postings by employees. So are all the job postings in Craigslist real and worth applying for? One of the Boulder Net Professional (a LinkedIn based Colorado Networking Group) posed a question to the Boulder Net, whether anyone got a job by applying to one of those Craigslist postings. Another member said that she had applied to several but never got any response and doubted whether or not the postings are real. There is a really nice article in today's Wall Street Journal that asks "Is it a real job behind the job posting".

If you're launching an online job hunt for the first time in a while; take caution. What may look like an ad for employment may lead to something entirely different, like a hard sell for career services or job-training manuals. Or worse, it might be a plan by identity thieves to get you to share sensitive personal information via "phishing" expeditions. Some of the job postings -- sometimes for positions long filled -- also could be from recruiting agencies looking to collect résumés.

Definitely a advice we should all take to heart and follow. It may be a better idea to send a resume that only has an email address rather than the home address. But as the article points out, applying for these online postings may only have zero to low response rates.

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Using LinkedIn Endorsements

Sometime back I wrote a blog post on LinkedIn Endorsements. The post was discussed within the Boulder Net LinkedIn group (Boulder Colorado Networking Group for Professionals in LinkedIn).
One member pointed out information from Ladders.com tips on job search that stated that recommendations do help. I do agree but claim that LinkedIn endorsements alone cannot be a differentiating factor. Since everyone can get endorsed, it only helps if people are competing against do not have any. It is also very difficult for a reviewer of a profile to see the nuances between the endorsements of two different candidates. It also means that if you ask for LinkedIn endorsements you work with your colleague to get an authentic and nuanced text rather than platitudes.

Do you write recommendations for your colleagues? What do you think?

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Growing Faster Than Most Colorado LinkedIn Groups

Boulder Net is growing faster than the top five Colorado networking groups. Will you join us?

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Level 3 - Managing in Turbulent Times

Broomfield, Colorado based Level 3 Communications is profiled in today's Wall Street Journal. The article talks about how the company managed to survive not one but two financial storms. As the playing field in telecommunications and credit market shifted and became too uneven for many of the telecom players, Level 3 managed to fund its operations and save jobs.
How did they do it? The management convinced the original investors to do more and bought back some of their old debts for cents on the dollar.

"These guys pull rabbits out of the hat," says Jefferies & Co. Inc. credit analyst Romeo Reyes. "They've been shrewd about taking advantage of what the market offers."

The company did not report positive earnings since 1999 and saw its market capitalization shrink to $1.6 billion, almost half of its value in from the highs of June 2008. What is the prognosis?

At this point in the crisis, however, survival is victory. And that should offer some inspiration for managers rebuffed by the banks: If Level 3 can stay in the game, there just may be hope yet.

Saving jobs in this economy is indeed truly inspirational act.

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Searching for the right opportunity?

One of the responses to the recent Boulder Net employment survey was regarding a job with fewer responsibilities, at lower pay, than one was laid off from. The commenter said that it was better to have a decent employment while continuing to search for the right opportunity. I think there is no right or wrong answer here and the approach heavily depends not only personal situation but also on the overall market prospects.

Recently in the Wall Street Journal Career section a similar question was raised regarding taking on part-time or hourly jobs while searching for the right opportunity.

To decide whether to hold out -- and for how long -- your husband needs to look at the overall health of his chosen career path. Is it getting better or worse? Will there be other, better offers down the line? "If employment prospects in his prior industry or occupation are poor, it might be wise for him to go back to work as soon as possible and start building new experience on a job that will result in higher future wages,"

The one key point is the risk of allowing oneself to be overwhelmed by the current job leaving no time for career development. When taking a part-time or other jobs one has to conscientiously allocate time for their networking and career search.

What do you think?
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Boulder Small Business Fighting Effects of Recession

The Rocky Mountain news featured Colorado small businesses in the front line of recession battle. There are two businesses and their approach particularly stood out. They are, Wheatridge based Vibrant Solar and Boulder based, Boulder Ice Cream. Vibrant stands out for its marketing strategy and Boulder Ice Cream for its operational efficiency.

In times of recession it is all the more important to invest in marketing and develop customers and that is exactly what Vibrant Solar is doing:

"When things are tight, you need to work harder to find customers," said Mark Simmons, Vibrant Solar's vice president of sales and marketing. "This is the time to increase marketing costs, not decrease them."

The company has virtually doubled its marketing budget. It is mailing postcards with personalized messages to potential customers, asking them to contact the company online.

Operational efficiency is no something to achieve just for the recessionary times. It is about keeping the costs down and continuously driving them downwards to keep more of the revenue the business brings in. Boulder Ice Cream has been focused on keeping their fixed costs, costs that are incurred regardless of the sales volume, down. This helps them to manage the low sales volume without making further cuts:

Boulder Ice Cream was careful to not increase its overhead along with its sales. The company doesn't provide health or retirement benefits and uses contract workers to ramp up production during peak selling season, allowing the company to hold steady with six full-time production workers.

What do you think?
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What is your Willingness to Pay?

I recently wrote about a new pricing scheme, "Pay all you can afford" adopted by a Boulder Spa, Sensorielle. The underlying premise is customers will disclose (willingly) how much they are willing to pay for a service. In the case of Sensorielle spa, they will disclose it after they have had a chance to consume the service. Getting everyone to pay their maximum willingness to pay is every marketer's dream. The hard part is, a rational customer has no incentive to disclose their willingness to pay and would want to pay as low as possible. For a longer discussion on this topic see this article I wrote awhile back.

While the consumer behavior could be acting to maximize their benefit when making a product purchase with no possibility of repeat interaction and with comparatively less human touch, their behavior is bound to be different in a high touch (no pun) service exchange environment like in a Spa. In a spa after a hour or so of interaction with the service provider people will feel less inclined to capture all the value for themselves. When the services they received is effective and useful the customers are also bound to use them again in the future. Paying a token amount for the service makes no sense as they know they may not receive the same value from the service provider in the future.

The main question, will such pricing schemes bring back customers who decided to cut down on spa expenses due to economic downturn? I will talk more on this in future posts.

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Social Networking Within The Organization

Broomfield Colorado based engineering firm MWH is profiled in The Wall Street Journal on its use of Social networking to map out the relationship between employees.

To boost productivity at engineering firm MWH, executive Victor Gulas asks employees which colleagues they talk to, and whom they turn to for help. Then he draws a "map" of the connections, which reveals dark patches around employees who work closely with others and lighter areas where there's little interaction.

Mr. Gulas says the map shows communication gaps, information bottlenecks and underutilized employees. "It's making the invisible visible," he says.

I wonder if the density of connections alone indicate the state of the social map and the informal network with the organization. The questions I have with these social maps are

1. Do these maps indicate direction of information flow?
2. Is the information flow even in both direction?
   
3. Are the links graded based on frequencies of interactions?

Boulder Layoffs Near 30% in the past six months

In our continuing discussion of the recently concluded poll on Boulder Employment, close to 40% reported a change in their status in the past six months. The margin of error is 9%. Even then this is a high number. If we look closely at the reason for the status change

30% of the Boulder professionals reported being laid off in the past six months

This explains to an extent the high number of people , 25%, reporting unemployed. The breakdown of 30% shows that 19% laid off and still looking, 8% found a job already and 3% became self employed.

Another nagging data point is 7% reporting they expect their business to do layoffs in the next six months.

Pricing Experiment by a Boulder Spa Sensorielle

One of the Boulder Net member, Jewl Petteway owns and operates Sensorielle spa in Boulder. As Jewl describes it,

We have been around for 4 years. We are a natural/organic holistic, wellbeing spa... Our treatments are based in nature. Our spa was built with non-toxic paints, and sustainable materials whenever possible.

What is interesting this time and differentiates this spa from others is their introduction of new pricing. Starting February 1st of 2009 Sensorielle is starting a daring pricing experiment they call, Pay-all-you-can pricing. In the recently conducted Boulder Employment Poll, around 25% reported as being unemployed. As the economic conditions deteriorates people starting to cut back on their spending. Even the de facto necessities like cable and Internet are getting cut, so it is no wonder that people will be cutting back on personal grooming and other spa expenses.

In the recent New York Times article it was stated that more of the tasks that are typically outsourced like coloring your hair and walking your dog are coming back home. While the upshot is people saving money on these tasks, every such service people do it themselves it takes away contribution to economic output.

All of these consumers could praise themselves for their newfound frugality in the midst of an economic downturn. But every step they take toward self-reliance — each shrub they prune themselves, each cupcake they bake from scratch — hurts the people and small businesses that have long provided these services professionally.

Sensorielle's Jewl says she realized that people will cut back on spa and related expenses. So she is trying to entice customers to come back by asking them to pay for the service what they value and what they can instead of the posted prices.
Let us help you feel great by offering our loving sanctuary to you.

We[Sensorielle] offer you professional, quality therapists and estheticians at a price you can afford. We offer a healing sanctuary where you can relax, get stress-relief, upliftment, beauty, happiness, and feel a great sense of overall well being. We ask in return that you pay what you truly can for our services.

It is a tricky pricing scheme but it is better than lowering prices to attract customers, because from what I see and read Sensorielle is a premium service and hence it should be offered at a premium price. Any price reduction now will not only signal inferior quality but also will make it very difficult to return to normal prices when the economy turns around.

We understand that a rational person, as defined by Microeconomics, will pay nothing more than the absolute minimum they have to. But as the field of behavioral economics show, people are not rational, they are Predictably Irrational. If the pricing and promotions brings about customers to the Spa, I bet that most will still pay closer to the list price.

What do you think? What will you pay when you visit their spa?

When 50% in Boulder say they are looking for new job

In the recently conducted poll of Boulder professionals, more than 50% were reported to be searching for new jobs and 25% reported unemployed. For one thing it indicates that even those with a job are not sitting safely and believe a change is needed. This makes the job search more difficult for those who are unemployed. Not only do they have to compete among themselves but also with those who are trying to switch jobs. Macroeconomics says that those who are already employed stand a better chance of getting jobs because of many reasons including the networking opportunities. This competition is not different from any other time but what makes it difficult is the high numbers of both groups.
What is your take?

How do handle requests from LinkedIn members with 0 connections?

I see a new class of LinkedIn members who send requests to join the Boulder Net group. Their profile say, their location is Greater Denver area. Most time their profile is empty but other times has few parts filled out. One thing that stand out however is their number of connections. It is 0.
I wonder if some create a different profile with different location.

In any case I do not see a fit for those in the group. I think I have been meticulous in looking at new member requests but if you see any 0 connection members let me know.

High Unemployment Rate Among Boulder LinkedIn Members

I recently posted the complete results and preliminary analysis of the poll results. One data that stood out is the 25% of the people reporting as unemployed. The US Bureau of Labor Statistics numbers are far below this for Boulder MCA, a about 4.6%. So why one in four in LinkedIn reported unemployed?

There are two possible reasons

1. People more actively use LinkedIn when they are searching for jobs, especially in between jobs.
2. Since respondents self selected the poll is over represented by unemployed

So we cannot say that LinkedIn members who work and live and Boulder area have a higher unemployment rate than the rest of the population.

Boulder Metro Employment Status Poll Results

Please use full screen mode to view the details.

Lower Unemployment Rate Than The Rest of the Country

The United States Bureau of Labor Statistics (BLS) reported the November 2008 unemployment numbers for US cities. The overall number stands at 6.2%, but the number for Boulder is significantly lower at 4.8%

Targeting the Right Segment for Boulder Net

In one of my previous post I analyzed the membership information of Colorado related groups in LinkedIn. I defined the the total addressable market for Boulder Net group as professionals within LinkedIn who work within 50 mile radius of Boulder. The top ranked group has less than 1% of membership. One way to increase Boulder Net's membership could be to target these members of top ranked groups but the most the Boulder Net group can achieve is to be the same as those. Besides what is the unique value add from this group if the people in this group are already in another Colorado group.

The right approach I believe is to target the rest of the market, those who are not in any of the groups, which is about 94% of the market. That is the target segment. If this is the only group that has members who cannot be found in other groups, then that is an attractive value proposition for other members to join this group. In addition this group has a popular blog and significant web search engine presence. But I am looking for more ideas to improve the value add to the members. Please send your ideas to my email or post as comment.

LinkedIn Recommendations - It is not how many you have that counts

LinkedIn signals us that without recommendations our profiles are incomplete. It tells us to add two more recommendations to make it go from 95% to 100%. There is no obvious math behind this. Why 95%? If having 2 more recommendations will make make us go to 100%, why not keep adding more? Will adding more make our profile more than complete?

Many jobs posted on LinkedIn also state that the poster wants to hear only from applicants who have recommendations. Why would they base their decision to look at applicants based on whether or not they have been recommended? Probably if someone has not convinced anyone to write a glowing recommendation for them the it could be an indication of their influencing skills? Not really.

Do recommendations signal anything at all? Since LinkedIn requires the recommended to approve the recommendation before adding to their profile, any recommendation you see is only going to be positive.

In the movie Wizard of Oz, near the end the wizard would say to Tin Man, "Remember my sentimental friend, your heart is not measured by how much you love but how much you are loved by others".
Flipping that a bit,

" Your professional status and influencing skills are not measured by how many recommendations you have but how many have sought yours"

If you are nobody and your evaluation and opinion of others does not matter and hence no one sought your recommendation, then what does that say about you?

The Boulder Net Growth Chart

Does this growth chart point to the left tail of the growth curve with big jump waiting to happen? The total addressable market is 350,000 LinkedIn members who are stated to be within 50 mile radius of Boulder, CO.

Tom Peters on Is Your Job Safe

Here is an article I found through FT.com blog in Tom Peter's blog. The blog post is by author Raj Shetty. I do not agree with this approach of questioning yourself, more on that later. But now here is the link to the article and some of the questions

1.   Is your job core to what the company stands for?
2.  What will the company/department lose by eliminating your job?
3.  What is the assessment of your "value" in the eyes of the stakeholders?
4.  Is your job "offshorable?" 
5.  Can you handle office politics well?
   

Membership Information for Colorado Based Groups In LinkedIn

The total addressable market size if 350,000 people who are within 50 mile radius of Boulder. Here is the information on membership of top 5 groups and of course the Boulder Net group. You can see that this group has just over 1/10 of 1% of addressable market. But compared to other groups it is 12% of top ranked group. That said, the Boulder Net group is not open enrollment and I still take the time to verify that there is some Colorado connection before accepting members.

Networking Before The Hard Times Hit

As the official unemployment rate hitting a sixteen year high of 7.2% there is concern in the minds of everyone, even those who have a relatively secure job. The Government numbers on job less count are an understatement of the real unemployment count which the Barrons editorial this week says is around 750,000 as opposed to 560,000.  Many businesses have announced layoffs but have not carried them out yet, as the layoffs roll in, typically the week before or after Super Bowl, the numbers will increase.

Naturally  people are joining networking sites and groups at a higher rate. But joining these sites and having 300+ connections is not an assured way to get jobs in a short period. Networking should be more about establishing a genuine conversation with the peers in your professional circle or in your locale. You may have to invest more in your network, tending it, helping others before you can make a withdrawal. That means the time to network is not when the layoff rumors float in your office corridors but long time before that. Building your network cannot be done in an on-demand basis but rather as a continuous process.

The members of Boulder Net LinkedIn group are connected by the locale. The group brings together diverse professionals. If you have not considered connecting with people in Boulder Net group for a professional conversation it is time now.

The Next Milestone 400 Members

The Boulder Net LinkedIn group has now reached 400 members milestone. Join the group to collaborate with professionals who are local to you. If you are thinking of relocating to Boulder, network now with local professionals to ease your move.