Author Archive
Post-Katrina: Putting the human back in marketing
As I get ready for my summer vacation in the Northwest, my thoughts are in the South, specifically New Orleans and the Gulf Coast. That area is about to mark the third anniversary of Hurricane Katrina. No doubt residents fortunate enough to have homes and jobs and politicians and government officials charged with the region’s recovery will cite the many signs of progress. Others, with equal claim, will point to the vast stretches that have yet to recover, looking virtually as they did when the floodwaters receded.
My reflection is of a different sort. I only experienced the storm and its catastrophic aftermath through the media. A year after Katrina hit, I traveled along the Gulf Coast and into New Orleans. I needed to see with my own eyes what had happened. I returned to New Orleans a few months later as part of a volunteer crew that gutted and cleaned homes for a week. Needless to say, what I saw with my own eyes has left a lasting impression.
I realize now that Katrina is as responsible as anything for the shift I made in my work. I had spent 20 years in high tech marketing and was running the PR and advertising agency I co-founded in 1993 when all hell broke loose in New Orleans and the Gulf Coast. The storm and a tragically flawed response at all levels of government laid bare for the entire world to see the outrageous inequities and injustices that remain in our land of the free and home of the brave.
By coincidence, I departed my previous business and the high tech industry a year after Katrina hit. I had decided I needed to shift what I knew how to do — branding, marketing, communications — in support of businesses and organizations whose values and actions are making the world a better place. When I formed a new firm to work at the crossroads of sustainability and marketing, I wasn’t seeing sustainability through the single lens of saving the environment. As much as we humans have disregarded and damaged our natural world, we have caused no less harm to each other. Katrina was simply the most recent evidence.
Efforts to create a sustainable future must treat the Earth and all of its inhabitants as one. Sustainability isn’t saving the old growth in the Pacific Northwest forests and ignoring the rights of all humans to have their basic needs met and to live in peace. By this standard, green marketing falls short. Its preoccupation with promoting eco-friendly products is often little more than dressing up unsustainable consumption in a different color. Even more significantly, green marketing doesn’t go far enough to address the broader human and social dimensions of sustainability. If you’re a retailer touting your green product lines while paying employees low wages and no benefits, you fail the sustainability test.
Management guru Peter Drucker said the function of marketing is to create and keep a customer. In this post-Katrina world, maybe it’s worth remembering that customers are humans first. Forget that, and one day marketers will have no customers to keep.
Why marketing dashboards don’t measure up
I get invitations to attend workshops all the time. Usually, I gloss over them. But I stopped on one the other day called “Marketing Metrics and Dashboards 2.0.” Not exactly a topic I’ve been dying to learn about. But it got me thinking: There must be a business opportunity for someone willing and able to show how best to integrate “triple bottom line” metrics into marketing.
Marketing dashboards have come into vogue in recent years, although they are not in broad use because they are complex and expensive to create and maintain. They seem to have found a niche primarily among large companies whose marketing departments are under scrutiny by CEOs and CFOs to demonstrate their expenditures are adding to the bottom line — the profit bottom line, that is. The marketing firm that is leading the workshop focuses on helping its clients “determine the financial return from marketing investments.” Their tagline is: “Measure What You Should, Not Just What You Can.”
That begs the question: What “should” marketers be measuring? In recent years, marketers have been under increasing pressure to prove a positive financial impact from their programs. Dashboards are touted as one mechanism for doing so. I’m all for marketing carrying its weight financially. I also believe the possibilities, if not the responsibilities, of marketing go well beyond its impact on sales and profits.
Companies committed to sustainable business practices recognize their success can’t be achieved simply by maximizing profits. They understand that profits gained at the expense of the environment or stakeholders, such as employees, suppliers and communities, are to be avoided and indeed are not a measurement of success at all. The triple-bottom-line approach of balancing profits with people and planet acts as a check on ill-gotten financial returns.
Which brings us back to marketing measurements. I would expect companies professing a commitment to the environment and the fair treatment of all stakeholders would also ensure this commitment is reflected in how they conduct and evaluate marketing. If marketing is held to a standard of financial ROI only — even as difficult as that is to measure — there will be no incentive for marketers to sweat the social and environmental impacts (positive or negative) of their work.
Marketers can perform a vital sustainability function by understanding, monitoring and influencing how their employers or clients create and manage their supply chains, conduct fair trade practices, manufacture their products, dispose of their waste, deliver their services and encourage recycling and reuse. This should be what it means to take responsibility for what you’re marketing.
Companies fixated on the financial bottom line are telling marketers to ignore this function and putting them in position to build customer demand for unsustainable products and services. But marketers are not simply victims here. They have a choice: keep playing the game, try changing the rules in favor of sustainability or look for a new employer or client.
A marketing program devoted to sustainability would adopt and track metrics that demonstrate how and how well marketing is contributing to the financial health of its employer or client, the well-being of people the company interacts with and the protection of the environment. I know this is asking a tremendous amount from marketers, not least of which is to define the non-financial metrics to be used.
At this point, I’d be happy getting more people in business to agree the value of marketing shouldn’t be measured in dollars and cents alone. Anybody building a triple-bottom-line dashboard?
What might sustainable, local firms do with $49 mil?
In my vision of sustainable communities, I picture a thriving economy built around locally owned, independent businesses that embrace the triple bottom line: people, planet and profits. So it is that I have little patience for economic development practices prevalent in Oregon and around the country that emphasize national business recruitment over local business development.
I believe we should be doing much more to take care of the businesses that are already here putting down roots, hiring local residents, keeping their profits local and multiplying as they circulate in the local economy and being run by owners who are active in their communities — because they live here, too.
Editors at The Oregonian lost an opportunity to underscore that point in an editorial on Saturday about last week’s announcement of the Hynix semiconductor plant closure in Eugene. The decision puts 1,100 people out of work, many of them paid well above the average Eugene wage. Hynix, like any number of tech companies wooed by Oregon officials in the past several decades, was given large state and local tax credit incentives to locate in Eugene some 13 years ago.
Although the Hynix plant closure is an opportunity to question the wisdom of showering national or international businesses with tax breaks to locate in Oregon, The Oregonian editors say forget about it:
It’s not productive to second-guess the state’s wooing of Hynix and its use of tax incentives, as some in the Legislature have begun to do. A 2003 study by University of Oregon economics students Melinda Rowan and Jennifer Witt found that the $49 million in tax breaks and road enhancements used to lure Hynix resulted in a positive impact in taxes, wages and system development charges of more than $275 million over the first five years of its operation. Had the state not offered its incentives, Hynix wouldn’t have built its plant, employed 1,100 people and paid taxes.
Their argument against re-examining the Hynix recruitment strategy is hardly convincing. The editors conclude Hynix would not have come here without the $49 million incentive package, so the positive impact in taxes, wages and whatever system development charges would not have been realized. But that’s assuming the $49 million in incentives were not spent at all.
What might have happened had the state and city pledged that same $49 million in 1995 for support of locally owned, independent businesses? Hynix received the equivalent of $44,500 for each of its current 1,100 employees from state and local government. What might 1,100 locally owned, independent businesses in the Eugene area been able to do with $44,500 each? Or what might 110 of the best locally owned, independent businesses in Eugene been able to do with $445,000 each?
We’ll never know the answer, but I’m not aware of any state or local economic development group even asking those questions. Businesses based and owned in Oregon are getting the short end of the economic development stick. They can only dream of government officials coming to them and saying, “We believe in you and want you to thrive in Oregon. Here’s a half-million dollar package to help you grow your business.”
Can you imagine what a select group of Oregon’s most innovative, most environmentally and socially committed business owners and their employees could and would do to reward the citizens of this state for making a meaningful public investment in their businesses? Not all of them would succeed, of course, but I’m certain enough would to add at least the equivalent of 1,100 quality jobs.
And most important of all, those successful locally owned, independent and sustainable businesses would keep repaying Oregon’s investment long after the 13-year life span of Hynix in Eugene.
Greening junk mail? Start with junk being marketed
A group calling itself the Green Marketing Coalition is trying to produce best-practices guidelines for the direct mail business. That would be the “junk mail” business to most of us. “So far the coalition’s guidelines are long on earnestness and short on truly new ideas,” the New York Times concludes. The paper quotes one head of a nonprofit dedicated to protecting forests:
“It’s hard to argue against any well-intentioned effort to use more recycled paper, but the idea of greening junk mail is still a bit like putting lipstick on a pig.”
Ouch. I suppose the direct mail business earned that swipe. I hate junk mail as much as the next person. But not all direct mail is junk. It’s the rare individual who never responds to a single direct mailer. A generally acceptable response rate to a mailer is about 2%. That means most mailers are not junk to 2% of us. Believe it or not, that’s usually enough of a response for businesses or other organizations, including nonprofits, to keep stuffing our mail boxes.
The Green Marketing Coalition, which got its start in Seattle, is made up of both direct marketing businesses and their corporate clients. Their guidelines are aimed at reducing the environmental impact of direct mail. It’s easy to scoff at their efforts, like the nonprofit executive director quoted here. Many believe direct mail is fundamentally unsustainable, given its waste of paper and the energy used in the production, distribution and disposal of materials that so frequently get ignored by its target audience.
But direct mail continues to be used because it can be, and often is, an effective marketing tool. We probably all know admirable environmental nonprofits that are among the legions of direct mail marketers. As a former co-owner of a marketing agency that offered direct marketing among its services, I would urge organizations to move completely to electronic mail as soon as possible. Although most of us hate junk email as much as junk paper mail, at least it’s more eco-friendly.
One reason companies don’t resort to email exclusively is the anti-SPAM laws that restrict the use of commercial email to opt-in subscribers only. Traditional postal mail has no such restrictions. It’s easy to buy a postal mail list and send away. The environmentally responsible thing to do is use postal mail only when there is no alternative, such as when you’re just starting to create an opt-in email list or your target audience doesn’t have email access. Those are not problems for most major companies or organizations today.
If direct marketers really wanted to make a difference, they wouldn’t promote products or services that are not sustainably made or delivered. Period. The junk goods and services purchased as a result of successful direct mail do far greater environmental harm than junk mail itself.
I don’t think you’ll be hearing that conversation among members of the Green Marketing Coalition anytime soon.