For those unfamiliar with Wall Street’s story, stockbroker Bud Fox (played by Charlie Sheen) finally gets his big break working for ethically challenged M&A maven Gordon Gekko (played by Michael Douglas). In a rag to riches story, Bud is asked to discover then trade on insider information—which makes him wealthy and Gordon Gekko even richer. Things come crashing down as Bud Fox is cornered by the Securities and Exchange Commission (SEC) into providing state’s evidence on his former boss.

More interesting than the narrative is the impact of Stone’s Wall Street on popular culture and B-schools across the globe. In the Sept. 24, 2010, issue of the Financial Times, an article titled, “How ‘Wall Street’ Changed Main Street,” quotes several executives on how the movie unwittingly glamorized banking culture.

For example, Frank Partnoy, now a professor at University of San Diego remembers how, as a math student at the University of Kansas, he was mesmerized by the movie. “I was naïve,” he says, “but it actually inspired me. It made Wall Street seem exotic and alluring.” And former UBS banker, Ken Moelis says, “(Wall Street) became a cult phenomenon on business school campuses,” where students could often be heard reciting line and verse of key movie quotes, such as “greed is good” or “lunch is for wimps.”

In Wall Street, Olive Stone attempted to bring a harsh spotlight to an otherwise opaque industry. Jean Yves Fillion, a banker at BNP Paribas in New York, says:,“The movie was a reflection of the industry as it was at the time, but it also captured a turning point. Finance used to be about stability, values and relationships. The movie was at the opposite end of the spectrum. It showed a different side of finance that was taking hold.”

And in fact, this “different side” of finance ruled the roost for 30 years (with some minor blips) until the grand daddy of market crashes, the global meltdown of 2008, brought both markets and investors to their knees.

With Wall Street, Oliver Stone had attempted to weave a moralistic tale of the dangers of greed and change people’s behavior. However, his movie  had the opposite effect of inspiring hundreds of thousands into the industry. And considering markets around the world are still digging out of the mess created by the last global meltdown (see Greece, Portugal, Iceland, Ireland and more), it begs the question of whether society as a whole is ready to re-review Stone’s original intentions.

For example, San Diego University professor Partnoy says that for future quants and math majors, the allure of Wall Street is still there, but is now moderated. “When I show the original (Wall Street) movie in class, the ethics of students have changed 180 degrees,” he says. “In the 1990s, (the movie) was seen as inspiring; today’s students get the morality tale right away.”

And in a recent letter to editor of the Financial Times, 17  prominent City of London bankers attest that, “it is essential to restate and affirm the social purpose of financial institutions. Through work we all seek to realize ourselves as people, provide for our dependents and make a contribution to the social good.”

Ultimately, big Wall Street paychecks aren’t going away. And the industry will likely continue with its dog-eat-dog mentality. However, perhaps there’s also room in the industry for a return to customers instead of counterparts, relationships instead of transactions, and advising in place of selling.

Economies of the world, companies and individuals rely on the availability of credit, insurance, and other financial services to survive, expand, and thrive. The finance industry is necessary for economic expansion. But maybe a kinder, gentler, more constrained industry focused on its “contribution to the social good” is in order as the London bankers suggest.

In regards to his sequel, Wall Street: Money Never Sleeps, Stone says; “The issues in this film are the same as those in the last one: Is greed good? Does it work? Are human values more important than financial ones? These are all issues we face in our own ways.”

Good questions, all of which are still relevant. Perhaps it’s time for global communities to revisit them.

• In Wall Street, Stone aimed to ask important questions and motivate people to change their conduct. Instead, his movie had the opposite effect of galvanizing thousands to ape the mannerisms and bad behavior of Gordon Gekko. Can you think of instances when you attempted to influence an outcome and your efforts had a completely opposite effect?
• On the topic of “influence”, what did Stone get wrong? What did he get right?

The problem with this approach is that there’s no clear message. Sure, in the commercial, the advertisers may set up a situation/action/resolution, but when compared to the rest of their competitors, they are all doing the same thing.  So the message is diluted and muted. Forgettable. Annoying. A waste of my listening cycles. Is that a good spend of advertising dollars? To have a message that can’t really be recalled?

Other industries do this as well. Here in New England, it is common to hear automobile tire companies try out best each other on the radio.  “Buy three tires and the fourth is free!” (Really? C’mon. Just say if you buy all four, you save 25%. No one really only intends to buy three tires.) Sound effects with crashing cars. Screeches. Fathers and sons arguing about price. The list goes on. Just as annoying as the car companies.

But one stands out from the crowd. I won’t name who because I don’t necessarily endorse them (or not endorse them). But the ad was perfect.  The message was clear.

I was in the car with my wife and two kids, radio on, conversations happening, errands in progress. Our minds are all in fourth gear, doing what we’re doing. On comes this ad for tires. It’s one guy, no music, talking in a conversational voice. Like it’s him talking to me. As if he were in the car or at a coffee shop, chatting. He says the name of the company, what they sell, what they offer. He sets up his competitive differentiator (price and service). He doesn’t knock the competition. He says that his sales staff doesn’t work on commission, so there’s no pressure to buy anything (and that’s echoed in the tone of the ad). He adds more detail. He wraps the spot with a reiteration of the company name, locations, his name, and again what they do. All in what seems like 30 seconds.

The ad finished, and the radio switched to some cacophony. I paused and said to my wife, “That was a perfect ad.” She looked at me oddly and asked me why I thought so.

I answer,“There are tens of tire companies trying to get into your wallet here in Massachusetts. They all use the same tactics like the car dealers do: yelling, screaming, cheesy gimmicks. Not this company. It was a conversation. I heard his message. I heard his value proposition.  I know what they do, how to find them, and why I should go to them versus someone else.”

Isn’t that the point of successful messaging?

How is your messaging for your products? Is it cutting through the clutter and reaching—really reaching—your intended audience?

Started in the 1850s by three German immigrant brothers (Henry, Emanuel and Mayer) the Lehman’s founded the New York Cotton Exchange and eventually became huge players in the trading of equities and debt instruments.  At the time, the Lehman Brothers probably could not have imagined the firm would become one of the largest investment banks in the world, with over $46B of revenues in 2008.  Also inconceivable was mistakes the company made that ultimately led to its destruction.

In the book, “A Colossal Failure of Common Sense; the Inside Story of the Collapse of Lehman Brothers,” former Lehman Brothers vice president, Larry McDonald, chronicles the rise and fall of his company. Taking readers from the nascent beginnings of Lehman Brothers to the eventual bankruptcy of the firm, McDonald weaves a tale of good advice ignored, political snubs, and gross mismanagement of the world’s fourth largest investment bank.

This bestseller has abundant lessons learned for those seeking to understand best and worst practices in corporate governance and politics, financial management and business strategy. There are also cautionary tales for marketing professionals. Let’s start with the first:

Sometimes innovation isn’t a good thing

Innovation, for the simple sake of producing something new sometimes doesn’t increase value, and in fact may end up destroying value. A compelling example in the financial services sphere is the exotic (and sometimes toxic) derivative products produced and sold by Wall Street in the past decade.

Simply stated, derivatives are securities whose value is “derived” from an underlying asset or security. A polluted medley of derivatives during McDonald’s tenure at Lehman Brothers came to be known by names such as credit default swaps (CDS), collateralized debt obligations (CDOs) and derivatives of derivatives (CDOs squared) among others.

Instead of selling corporate or government bonds, equities and other financial instruments that customers could readily understand, companies like Lehman Brothers pushed complex financial products to hedge funds, pension funds, and institutional investors that often had higher margins.

Now, to be fair, derivatives on the whole, aren’t a bad idea, regardless if Warren Buffett labels them “financial weapons of mass destruction” or “weeds priced as flowers.” They can serve a purpose for savvy investors as a method to transfer, insure or hedge against risk. And used correctly, they can offer significant returns.

Yet, many of these derivatives sold by Lehman Brothers and other investment banks were so complex in nature; they could only be valued and priced by PhDs in physics and mathematics. Regulators and traders often didn’t understand derivatives, much less the customers buying them.

McDonald called these types of derivatives, “Wall Street’s neutron bomb.” And that’s exactly what happened in the collapse of Lehman Brothers.  Lehman’s role in CDOs was to take bundles of mortgages and “slice, dice, package and ship (these mortgage backed securities) to investors all over the world.” And it all worked out swimmingly until the market for CDOs imploded, leaving Lehman holding a bag of several billion in risky mortgages and CDOs that were un-saleable at almost any price.

Marketers understand the push for innovation all too well. Our products and services must always ‘one up’ last year’s model/edition and deliver more value for the same (or more money).  Even if there’s really nothing new to announce, the next product/service cycle often demands new features that customers may not have even asked for.

Marketers must understand and articulate the value that our products and services bring to customers. However, sometimes products and services are so complex they defy comprehension.  Ask yourself; is the “innovation” proffered really innovative? Will my customer see it this way? Can the value proposition be simplified? Can the marketing messages be recited by the everyman on the street? If not, perhaps it’s back to the drawing board.

All eggs in one basket is a recipe for disaster

Mark Twain is to have said, “Put all your eggs in one basket, and watch that basket.” And while this is a potentially sound strategy, there are times when a singular focus, a concentration on a “sure thing” can lead to disaster.

Under then CEO, Dick Fuld, Lehman Brothers became one of the largest players in the mortgage backed securities business. According to McDonald, Lehman borrowed thirty two times their worth, mostly to cover purchases of mortgages from mortgage brokers or “body shops”.  In fact, at the end of 2006, Lehman Bros was in the subprime securities market to the tune of over fifty billion dollars.

Now $50B is a lot of eggs in one basket! And sadly, this money was leveraged –or borrowed. Thus, when the CDO market slowed down, McDonald relays that, “(Lehman) had a growing mountain of these things piling up, not yet sold…potential liabilities.” Stuck with securities Lehman could not sell, any financial losses would crush their capital cushion.  Lehman went neck deep into the subprime market and when this market caught fire, Lehman was running for the theatre exits and getting trampled along the way.

A key responsibility of a well-rounded marketing executive—whether in industry, product, market communications, or the like—is to provide direction to business leaders regarding trends, white space, and best areas in which to compete or avoid. Marketers need to constantly examine the landscape and have a keen understanding of the competitive, social, governmental, and economic forces that drive new market entrants or exits.

The goal for a marketer, then, is to anticipate key obstacles to achieving a company’s objectives and identify means to circumvent them.  Don’t make the mistake of Lehman Brothers. Take a look at your overall product portfolio. How are your revenues weighted? Where have you placed your bets today and tomorrow? Are all your eggs in one basket?

I just purchased a new router and wireless network adapter to replace older technology. Admittedly, my choice of product was motivated by cost, so after doing my due diligence at the local Best Buy store, I decided on the Belkin N router and wireless adapter, both on sale.
After installation (during which the overseas Belkin rep was extremely helpful), I noticed that the Best Buy bill had a message on the bottom:
………………………………………………………………
BEST BUY VALUES YOUR FEEDBACK!!
TAKE OUR SURVEY AND ENTER FOR A CHANCE TO WIN A $5,000 BEST BUY SHOPPING SPREE!!
Visit http://www.bestbuycares.com
& enter the following codes:
……………………………………………………………….
The link takes you to a landing page with a large photo of Best Buy CEO, Brian J. Dunn. I immediately notice that he is wearing a jacket, a pale-blue, open-collar shirt and no tie. The picture doesn’t even look like a posed professional shot, but one taken in the hall of the office one day. Message: informal, relaxed, friendly, approachable.
Here’s the message that falls under the page title “Best Buy Customer Voice Survey.”
First, I’d like to thank you for shopping with us. We recognize that you have many choices about where to spend your hard-earned money and I appreciate that you have given us an opportunity to earn your business. Second, we strive to create the best possible experience for you, and I appreciate your honest feedback about what we are doing well in our stores and where we need to make improvements. Listening to our customers is very important and you can be assured that your voice will be heard. Thank you in advance for your time and input.
At the conclusion of the survey you will have the opportunity to enter a drawing for a $5,000 Best Buy shopping spree*.
Sincerely,
Brian J. Dunn
Chief Executive Officer
I really liked the message. I liked that he thanked me first before saying anything else. So, I took the survey. As a marketer, I know how important the feedback is, so I usually comply with these requests.
Mr. Dunn and his marcom people “get it.” The message appeared genuine, caring and indicative that he and his team will take the survey results seriously. The first step gets an A+. Of course, I can’t say whether they walk the talk at this juncture, but I was impressed.
What do you think? Take a look at the landing page and tell me what your impressions are? Is it genuine to you? Does it create a positive brand experience?

As much as we try, we humans forget much of what we learn.
Really, it’s not our fault–there’s a mass of daily communications, information and activities that our brains must process.

Sometimes we try hard–really hard–to memorize and retain key pieces of information. However, despite our efforts–over time–we “forget exponentially”. In fact, there’s a forgetting curve that is unique to each individual.

Assuming however, there are key facts that one wants to memorize and retain–is there an ideal method to permanently lock this information in our memories?

Scientists have discovered that information can be more readily retained when “spaced” over time through practice sessions. A recent Wired Magazine article titled, “Want to Remember Everything You’ve Learned?”, describes this “spacing effect” and one entrepreneur’s effort to build a software application to help people memorize more information.

SuperMemo is the brainchild of Piotr Wozniak. He’s designed a program that allows a user of his application to discover his or her “forgetting curve”, and program key facts into the application. Then, on a scheduled interval, the program will remind you to “re-learn” these facts.

Wozniak claims, with support from key scientists, that by using the application (which takes advantage of the spacing effect theory) people can memorize and retain more information than learning through traditional methods.
Now you’re probably wondering–what–if anything does this have to do with marketing?

I’m convinced that if marketers would take the learnings captured by scientists from the “spacing effect” and then utilize these techniques in our marketing campaigns, that overall we’d be much more effective in our communications.

As marketers we spend a lot of time crafting the perfect and dare I say most memorable marketing messages. We labor over key messages, value propositions and sometimes a single word in a marketing communication.

And maybe our communication is well crafted. It’s relevant. It has impact and is of interest to our prospects. But what often happens? We hit the send button, drop the marketing piece in the mail, and wait for the results.

Invariably, however, we’re disappointed with our efforts. And that’s because one-off communications are never going to be as effective as a programmatic approach.

A programmatic approach to marketing means creating marketing “programs” that have objectives, an overarching theme, key messages, strategies and tactics. The goal is to engage customers in a dialog–over time.

Often referred to as “rolling-thunder”, this programmatic approach architects a marketing campaign that runs over a specified timeline with multiple interactions. It flows and builds towards a specified outcome.

It’s not one or even two communications. A programmatic approach is a deliberate and conscientious attempt to communicate relevant, need-based offers at the right time to customers.

Taking advantage of the “spacing effect”, a marketer using a rolling thunder campaign realizes that every customer is unique–with different wants, needs, and buying cycles. The trick then, is understanding customers well enough to get them the right marketing message at the right time, and being patient and disciplined enough to keep dialoging–even when they don’t initially show interest.

I believe, proper utilization of the spacing effect in marketing means:
* Marketers must stay “on message” and re-engage the same customers multiple times to keep our products/services top-of-mind
* Marketers must attempt to determine the appropriate timing and sequencing of their campaigns (spacing marketing messages over time, instead of cramming interactions)
* Messages must well crafted and relevant
* Software (i.e. campaign management) can help automate follow-up interactions
* Multi-channel campaigns should also be considered to deliver the same message via preferred channels

If the “spacing effect” holds true, then one-off marketing efforts are probably not going to produce the highest return possible. Or as any student knows, cramming usually produces shoddy results.

I will confess, however, that I don’t have this concept of the “spacing effect” and its relation to marketing completely thought out. I need your help.

* Is learning research on the “spacing effect” applicable to marketing management?
* Is it possible to program marketing messages–along a customer’s forgetting curve? Or near impossible because every customer is different?
* Should marketers be taking a more programmatic approach to marketing efforts?
* How do YOU keep your key messages “top of mind” with your customers?
* Special thanks to friend and fellow marketer, Claire Ratushny, for initially helping me flesh out these ideas.

It’s also our fault. Before you move onto the next post, let’s agree on the qualities that make a good marketer today. We need to be good at (the highlights):


How many of you have put these skills to use in the course of your daily work? There is a reason why the list is ordered that way. Many of us climb the first couple of rungs of that ladder really well, yet we rarely get to the others. Why?
The problem, as I see it, is that we don’t do a good job at selling ourselves. Ladies and gentlemen, what people often see is the end result, the campaign, the ads, the program. So they come to the obvious conclusion that that’s where marketing resides. Marketing = tactics.
You’re not convinced yet. You’re thinking that rookies make that mistake; they are too inexperienced to articulate the value of what they do to senior management. Consultants do a better job at this. Their clients hire them on the strength of their being able to articulate what they bring to the table.
What if I told you a brief story that illustrates how a top-notch marketer made the classic advertising rookie mistake? The following story is extracted with slight edits for length from the book Rebuilding Brand America by Dick Martin, former VP Public Affairs at AT&T.

After 9/11, the President decided that we needed to do a better job telling the Brand America story. So who did he turn to? Charlotte Beers, the first woman to rise to the top of two agencies, Ogilvy & Mather and J. Walter Thompson …. – making her the most prominent woman in advertising.
Secretary Colin Powell turned to “the Queen of branding,” “the Queen of advertising,” or “the Queen of schmoozing,” as people called her. His idea was that we needed to sell democracy, the product of a free enterprise system …. – the American value system.

Beers went at it in earnest, doing her research, meeting with people, and working around the clock to come up with the “Shared Values” campaign, a $15MM effort. The response was good, but the campaign didn’t work. Why?
Ms. Beers gave her client what he wanted rather than what he needed. Two major forces where against her:
1. She was not familiar with the intricacies and bureaucracies of reconciling the mandate from Secretary Powell and the complex web of communication offices at the State Department and across the administration. Her sense of urgency blinded her to the fact that she needed to research and understand the dynamics of this organization.
The lesson: know the environment in which you move really well, do your due diligence, speak with key stakeholders, and find the gatekeepers and the internal network’s nodes.
2. She jumped on a running train. She sat in on conference calls where the president’s communications director, Karen Hughes, was already leading State and Defense Departments staffers in writing the message of the day and plotting political strategy.
What happens when you’re put in charge of getting a message out and someone else is already doing it? The due diligence would have uncovered that many of these decisions had already been made. How about going back to the people who put you in charge and request that the business support you as the new lead?
The lesson: your first priority should be to set strategic direction. Find those people within your organization who set the tone from the operational side and partner with them.
You may also find, as Ms. Beers did, that there aren’t enough staff and resources allocated to your department. That will need to wait for another conversation.
Repeat after me, next time someone comes to you requesting a brochure, or a web site, or an ad, what do you say?
Let’s climb that ladder, shall we?