Month: April 2018

As marketers, there are a few seemingly basic questions that are at the core of our entire marketing strategies.

Who is our customer? How does our customer think and make decisions?

We research the demographic data, whitepapers about trends, Google Analytics, and any other data source we can think of. But many times we fail to look at our own consumer behavior – as well as that of our families, our friends, and our colleagues – to determine trends, when in fact our own behavior is probably a good indication of “the norm”.

So after thinking about my own brand-seeking habits, I realized that I either get a direct recommendation from a friend or colleague, or I consume other people’s online reviews related to the brand.

1. I find restaurants on Yelp, and sort my results by “highest rated.”

2. I run a Google search on every product, model number, and service to see their reviews.

3. I listen intently to my fellow entrepreneurs and their experiences with certain tools.

4. I listen to new artists and songs that my friends tell me about.

5. I legitimize brands by their website’s display of significant press coverage

Brand Trust Low, People Trust High

According to a 2015 Nielsen report, a majority of worldwide consumers behave in a similar fashion. In fact, the report states that 92% of worldwide consumers trust recommendations from people they know, while 70% trust consumer opinions posted online.

A 2012 Accenture survey had similar findings – 79% of consumers received their brand information via Word-of-Mouth, while 63% uses review & news sites. The survey even shows that 47% of consumers used social media and online forums to discover brand information.


Clearly, people trust the experiences and comments of other people over any direct brand advertising. These types of people experiences end up in some sort of free, customer-driven impressions called “Earned Media.”

What Is Earned Media?

According to Michael Brito of Edelman, Earned Media is…

“…the natural result of public/media relation’s efforts, ad campaigns, events and the content that you create within your owned media channels. …[It] has expanded to influencers who have popular blogs as well. When someone not associated with your brand mentions you on Twitter, Facebook or any other social media channel, it’s earned media. Other types of earned media include consumers’ social media posts, tweets, product reviews, videos, photos, and open dialogue within online communities.”

With that definition, it is clear that in order to “earn media,” a company must encourage and enable its customers and online communities to advocate for its brand in every way possible. When encouraged and enabled, customers can very easily act on their positive brand experience and create activity on social media (impressions, shares, comments), online communities (reviews & recommendations, forums, “upvotes”), and email (referrals).

Making Customers Into Evangelists

Gather Their Feedback.

There’s nothing like getting the word straight from your customers. The more you solicit their opinions, the more emotionally invested they will feel about your product. Regularly run short-but-effective surveys, using tools like SurveyMonkey, Wufoo, or Formstack. Install feedback boxes on your product, such as Qualaroo Insights or GetSatisfaction, to constantly encourage your users to tell you what’s on their mind. Then display the (positive) feedback proudly on your website using a Testimonials widget.

Impress Them With Customer Service.

When a customer reaches out with an issue, the customer’s ensuing experience with the brand goes a long way to determining the future of that relationship. Brands that are responsive, helpful, and generally awesome to their customers will have a greater chance of keeping those customers for a long time (for life??). Companies like JetBlue, Nike, Seamless, and Comcast have nailed Twitter customer service, but if you can’t have dedicated manpower on your Twitter handle you can still respond to your customer service requests within 6 hours, like the big boys do!

Make It Easy For Them To Evangelize.

Take “Word-of-mouth”, make it digital, and what do you get? Virality. If your product does not prioritize virality, you are doing yourself a disservice because you are limiting customers who want to help your mission! For starters, provide your users with tools that make it simple to email contacts and post on social media. Match those tools with a simple-yet-effective incentive for spreading your brand’s message, and watch those referrals multiply!

Just Ask.

Sometimes being direct with your customers is most effective. When customers are already excited and passionate about a brand or product, they want to contribute to that brand’s success and public perception. Lucky for you, within your customer base you have social media influencers, members of the media, people who are active on review sites, heavy networkers, and click-happy referral inviters. Find them, and ask them for online reviews, press coverage, website linkbacks, Tweets, and “Likes”. You’ll be pleasantly surprised with the results!

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A larger fraction of Americans consider their financial state to be better than it was a year ago, according to a recent Gallup poll. This is the first time in five years that the share of people who think themselves better off is higher than the amount of people thinking themselves worse off.

Improving Sentiment  

Data provided by the survey reveals that 38 percent of American participants think they are in better shape than one year ago, compared to 34 percent who think their situation has deteriorated. The fraction of people who believe things have improved is at its highest since October 2007. Comparatively, 26 percent state they their situation is unchanged.

“Right now it’s a more or less a dead heat,” Greg McBride, senior financial analyst at personal finance information website, told U.S. News and World Report. “We’ve seen some improvement given stronger stock market performance, the turn in the housing market, and better news on the job front.”

The recent Gallup poll figures represent a substantial improvement from 2008, when 54 percent of participants said that their situation had deteriorated from the prior year. The following year also created a majority of respondents who felt worse off.

Gallup provided the same survey in May 2012, when 37 percent said their situation was better.

The media outlet reports that two-thirds of consumers predict that they will be in a better place financially one year in the future than they are currently. The fraction of people with this expectation has previously declined to as low as 52 percent during the summer of 2008, as market participants were impacted by the financial crisis and widespread economic challenges.

Economic Predictions  

The U.S. economy will increase its rate of expansion to grow 2.3 percent in 2013, according to the median estimate of economists participating in a USA Today poll. A total of 48 of these market experts contributed to the survey. Their forecast for next year’s growth is higher than the 1.5 percent that was experienced during the first half of 2012.

In addition, close to two-thirds of those economists expect that the fiscal cliff will be resolved without providing the economy with significant headwinds.

The economic confidence of many market observers has been bolstered in recent weeks as central banks across the world announced plans to provide further stimulus to the global economy through monetary easing.

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Although many people want to retire comfortably, saving the funds needed to do so can be a challenge. Fortunately, there are some simple strategies that people can use to increase the odds that they will be able to save the money they need in order to retire.

Saving Is Important 

Building a cushion of savings is important so that people have a safety net, and they also need these funds if they want to invest. By using some straightforward tips to save, they will hopefully have some added motivation to put more way.

Spend More Effectively

One way to increase the fraction of your income that goes into savings is to spend more effectively. People can make improvements by reviewing their expenses and identifying alternatives that are cheaper and are not substantially different. Once these items have been identified, people can use the extra funds generated to pay for things that are more important to them.

If an individual has more than one brokerage account, he can consolidate these accounts so that the higher level of assets provides them with services that are either cheaper or better.

Don’t Wait for the Perfect Plan 

Many individuals fail to take action because they are holding out for the perfect plan. The drawback to this is that the longer they wait to improve their habits for spending and saving, the more money they will end up throwing away.

This principle also applies to investment plans, in that people fail to invest simply because they do not feel they have the perfect plan established. A lot of individuals do not invest because they are worried about making mistakes, but a plan is needed for retirement to be realized.

Continuous Refinement Is Key

Even if an individual has worked out a plan that he considers to be ideal for his situation, assets, goals and tolerance for risk, this plan can become outdated. Technological advancements provide individuals with more options over time, and new investment vehicles are always being created.

When possible, people who are saving for retirement should review their plans in order to see where improvement can be made. There are many investment mistakes that can be made, and people need discipline to ensure that their investment plans do not fall off track.

Savings are important, especially in the face of dwindling pensions and widespread concerns about the prospects for retiring. The doubts that many individuals have about their ability to retire were reflected in a recent Wells Fargo poll, in which 75 percent of respondents predicted that they would still be working during years that people usually use for retirement and an additional 25 percent said that they planned to retire no earlier than 80.

Could you retire in your 30s?

This article by Andrea Coombes for MarketWatch covers the story of a young couple who decided to retire early.  No, they did not retire at 60, or 50, or even 40.  They decided to quit work in their 30s.  Their goal was to amass roughly 25 times their annual spending.  They reasoned that if they could live simply and frugally, on roughly $25,000 a year, they could aggressively save enough to retire from their demanding jobs in the technology industry.  This would allow them to both be active in raising their 8-year-old son.

Retirement is a math problem.  How you live before and after retirement is part of the equation.  If you can live on a very small budget, you can possibly retire early.  One rule of thumb is to accumulate savings of roughly 25 times your living expenses. In their case, they paid off their home and reached the $600,000 target, so they decided to take the plunge.  They now live primarily off their investment income and temporary jobs they take, as needed or as desired, for extra income.

This story underscores that in order for people to decide when they can retire, they need to know two things– how much they realistically need in terms of living expenses and how committed they are to saving aggressively to reach their goal.

It ultimately depends on your cash flow, which is the lifeblood of the financial plan.  You need to enhance your awareness of what is coming in and what is going out.  How much money do you really need to live on in a year’s time?  How much of your salary are you saving? (My guess is that this couple was saving well over 25% of their gross salary annually.)  How motivated are you to reach your retirement goal?  Since this couple had visualized and articulated their plan to retire early they had a burning and shared desire to accomplish their goal.

Unfortunately, procrastination and a tendency to focus on current wants and needs as opposed to future plans can derail the best intentions.

Many workers think that as long as they save the maximum amount in their workplace retirement plan, it will be enough to provide sufficient income in retirement.  But it really depends on their annual spending.  For example, a professional couple spending $400,000 a year will have a hard time obtaining adequate income from a $2 million retirement plan once they retire.    Remember, too, that a $2 million IRA or 401K is not totally available for income.  You need to take the after tax amount into consideration.  Two million dollars at a 32% tax rate (federal and state) would only be equivalent to $1.4 million.

Furthermore, in order to ensure that your funds will last you 30 years, you should probably only withdraw roughly 4% of the total, which would be $80,000 before taxes and roughly $55,000 after taxes.  That is a large drop in income for someone who is used to spending several hundred thousand dollars a year.

Many of us will also need to save after tax dollars, as well as contribute to our retirement plans, in order to provide adequate income as well as flexibility regarding taxation of withdrawals in retirement.  Since this couple retired so early with significant funds, it is likely the bulk of their savings was in after tax accounts.  This helps minimize the tax impact of any withdrawals from their savings.

In the end, it all comes down to a trade-off between your lifestyle now and your lifestyle in retirement.  If we delay gratification now, we can meet our future goals.  If we want to live a simple lifestyle, it will likely be easier to retire early.  If we have large spending needs in retirement, we will need to save more or retire later in life.

It will be interesting to see how this couple continues to navigate their frugal journey, especially as expenses rise over time.  Their child will likely want to engage in sporting activities, hobbies, video games, and attend college.  The future may also bring unexpected medical and long term care expenses.

Plus, there are definitely downsides to such an early retirement.  I am not sure a life of leisure would be suitable for most young people, as achievement, socialization, and other benefits from working can be beneficial to one’s physical health and emotional well-being. Furthermore, if a worker remains out of the work force for even just a few years, his skills may become irrelevant, such that he becomes unemployable.

I admire the couple’s ability to save and reach their goal and wish them much success in their endeavor.  I hope that in the long term their “hiatus” works for them.  My guess is that this couple will eventually decide to go back to work.  Saving for 10 to 15 years so that you can live possibly the next 70 years seems like a tough math problem to solve.  But adhering to these principles can help us all manage our own retirement math a bit better.

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CNN recently published an article calling Kids Wish Network the “worst charity in America.” When trust is your stock in trade, you cannot afford to be tarred with the Scarlet Letter of the Internet. And, if you are attempting to operate as a charity, bad publicity of this sort can be a death sentence … if not managed properly.

That sort of extreme crisis PR is better managed on a one-to-one basis. Not something that can really be covered in a general blog, but what we can talk about it how to avoid that path that leads you there. And, believe me, it is a path. Very few except the truly evil wake up one day and decide to defraud children of health and happiness. However, some initially well-meaning folks end up doing some desperate or ignorant or just plain stupid things in an effort to salvage what they can from an ever-increasing mess of their own making.

There are several ways to avoid either falling into this trap or being compromised from guilt by association.

First, always consider the reality of The Percentage. Most reasonable people understand that a charity will have overhead. No matter what the figure is in your case, it should fall roughly within the perimeters of known and accepted organizations similar to yours. Too far below the line and expect to receive criticism, if not outright denigration online. In the case of Kids Wish Network, CNN said the organization “less than 3 cents on the dollar” actually helping kids. The balance goes to either the charity directors or the companies they use to compel donations. That totaled more than 100 million in the past decade, a “success” on paper that might have worked before, but cannot survive the digital age.

Pick your own name. Some shady charities choose names that sound close – very close – to those of reputable charities. While this might be tempting to avoid the long, slow slog of generating name recognition, it will eventually come back to bite you. Yes, it could work short-term, but eventually, you will learn the hard way that dynamic branding works best when people are not confused by who you are and what you are doing.

Do actual work. Yes, you need to do more than survive to do your best work, but you also have to do more than promise to make a difference if you want to survive for any length of time. You must channel funds – even if they are relatively meager – into doing some sort of good work that can be used to prove your right to exist and worthiness of continued support.

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