by Peter H Frank | Oct 30, 2015 | Business |
Earlier this month, I gave a lecture on critical thinking to an association of Hungarian economists in Targu Mures. At the end of the conversation, I was asked two questions: what was my first impression of business in Romania when I arrived here six years ago? And, what advice do I have for a young person looking to start a business?
As occurs all too frequently, it was not until after I gave my answers and sat down that I realized I wished I had answered them differently. After only a few minutes of reflection did I see how the two answers were perfectly related and how important they both are now as much as ever. Here is how I wish I had answered:
My first impression upon coming to Romania was of a reality that unfortunately remains as true today as when I arrived. Actually, I noticed it even before I arrived. After changing planes in Italy, I was on a Tarom flight to Bucharest looking through the in-flight magazine when I saw an advertisement for a Bancpost-American Express-Tarom credit card.
Having spent 12 years at the world’s largest credit card issuer and the pioneer of affinity/cobranded cards (and then several years after that teaching and writing on the topic), I immediately shook my head and saw what a financial failure that product was likely to be. I knew firsthand that this type of three-branded arrangement existed in other places, but replicating what you see from outside – without understanding the very challenging particulars that lay beneath – was a recipe for disaster. And from what I was reading, this was not going to work.
It was not until after I landed and began to live here that I found more and more examples of exactly this syndrome, whether in banking, in media, at retailers, in restaurants, or even inside American-inspired bars and cafes. Yes, the veneer looked the same – the products and logos and menus and concepts – sometimes, in fact, they were even more American than they were in America.
But it didn’t take long to discover that the product and messaging and service and flavors were but superficial in appearance and misunderstood. Indeed, there was generally a lack of any deeper understanding of the structure and of the strategy within the businesses and products that are required for success.
Six years later, unfortunately, I see little improvement. There still remain too many examples of this fundamentally wrong approach. And too many companies, from banks to newspapers to retailers to restaurants, still fail to understand. Most of them, especially Bucharest newspapers, seem to have no concept as to why they’re in business.
As I know the credit card and loyalty businesses rather well, let me give you a few examples I observe from that sector. In the several years after my introduction to that Tarom credit card (which, by the way, has moved to another bank), I came across the BCR Zambet card, a confused and expensive product that I’ve criticized before for not knowing what it was or why it existed. And after obtaining the bank’s internal presentation some time later, I could see the confusion. There were lots of superficial benefits, but little recognition of the challenges.
Then I noticed Raiffeisen’s cobranded SMURD MasterCard, which I confess led to a sad laugh. The demographics might be good, but clearly the basics of card affinity are not well understood. And then there’s a Steaua card – again, a good idea in other places, but a seriously dubious product here.
Or look at the other big banks and the hundreds of things that were copied and brought here: a credit card for doctors, for small businesses, for entrepreneurs, for students, for shoppers. Discount cards. No-interest borrowing. Points and rewards. Elaborate cash-backs. In each case, I guess, someone saw them in other countries, or read about them somewhere.
But also in each case I can tell you it doesn’t take long to see that too much is wrong – from ineffective benefits to badly constructed messaging to misconceived positioning to card designs without purpose to descriptions intended more for bankers than consumers – overall creating dozens of different products either virtually indistinguishable from each other or giving potential customers no good reason to want them.
And while I don’t know their profitability, these card programs must be attractive to issuers. Some banks are now willing to effectively pay you 100 lei to sign up or some other amount if you bring them your friends. But that’s not likely to work either as short-term acquisition does not necessarily translate to long-term utilization – not with the customer marketing that you find here at the banks.
In fact, of all the bonus and loyalty cards being offered here (whether from banks or any of the retailers), not one that I’ve seen is truly conceived and structured as anything but a product – not a program – and loyalty, to succeed, is not a product to be sold. No. Paying cash for new customers is not a way to build loyalty.
The fact is these could be tremendously successful if done correctly in this market. But there is not a bank or retailer here that seems to fully understand how to correctly position these loyalty, advantage, bonus points, or affinity programs – whatever you want to call them. Instead, it appears they have merely designed card products to look the way they think they should and they are probably wondering why none of them succeed as well as they do in other places.
In other words, what I found when I got here – and still find all too often – is that Romania has businesses that do everything done elsewhere. But all too often, they throw products on the shelves and compete mostly with price and waste a lot of money on new customer acquisition. And when all is said and done, it appears they lack the essential understanding of why these products exist or where they’re headed in the future.
One of the more common excuses I hear is that this or that product was already tried and it didn’t work. Or times have changed and the product won’t sell. Or it’s only been 20 years – you have to give it more time. What this typically means is the person has failed to understand. My guess is they did try that product as they saw it someplace else with the attitude that “I’m a smart person, I can see how it’s done.” But the truth is, they cannot. They never tried the product the way it actually exists someplace else. So they never tried the product the way it needs to succeed.
And that, very simply, takes me to the answer to the second question I was asked.
What advice do I have for young people and entrepreneurs looking to launch a new business? It sounds so obvious, yet it’s so often overlooked. Understand your business – better than anyone. Because once you truly understand what goes into a successful product and then design it accordingly, what you’ll be offering is precisely what your customer wants – not only what you’ve seen without understanding from a distance.
Your business does nothing without customers. And the best type of customers are the ones who like you. Customers who value you. Customers who like doing business with you no matter your industry or the flavor of your product.
And how do you create that? Through the design of your products, the delivery of your services, the internal procedures of your business, and the treatment of your employees. Everything aligned to satisfy your customers.
Whether you are a bank or a newspaper or a shop or a neighborhood restaurant, it’s not enough to offer your product and then pay for new customers. You must inspire your employees, create a business that others enjoy and be a good neighbor (whether you’re local or on the web). Your customers will feel it and the profits will come.
And never forget that it all starts with you.
Yes, the opportunities are out there. Others’ lack of understanding is like a gift made for you.
That’s how I wish I had answered those questions.
by Peter H Frank | Sep 9, 2015 | Business, Life in Romania, Literature |
In business and in life, it’s the small things we take for granted that generally cause our mistakes. After all, you might wonder, what’s so hard about putting a book on a shelf?
Many years ago, I was driving through the suburbs of Dallas on a quiet weekend when I saw a big sign announcing a book sale under a large white tent in a parking lot. It was a fundraiser of some sort and they had rows and rows and rows of books that were no longer wanted from some library or school or someplace else I don’t remember.
![Georg Brandes (1842-1927) [Source: http://denmark.dk/en/meet-the-danes/great-danes/scientists/georg-brandes/]](https://peterhfrank.com/wp-content/uploads/2015/08/Georg_Brandes_by_Szacinski580.jpg)
Georg Brandes (1842-1927)
entury who had been an acquaintance of Ibsen and probably most of the Scandinavian and German intellectuals of the time. He had also corresponded with Nietzsche and introduced his philosophy to much of Europe. In fact, Brandes was probably the first guy who suggested to Nietzsche that he become familiar with someone named Soren Kierkegaard. He was also the person to whom Nietzsche wrote one of the greatest letters of all time. One of the so-called “madness letters” that Nietzsche composed in Turin during a brief period in early January 1889 and never mailed, the unstamped letter to Brandes said:
“To the friend Georg,
“When once you had discovered me, it was easy enough to find me: the difficulty now is to get rid of me…
[Signed] The Crucified.”
So how did this treasure, apparently the first English edition, sit there unnoticed and sell for just a few dollars? Because someone (who might want to try reading their own books a bit more) had placed this fine edition in the section about Education. That’s right. Where else would you put a book titled What Nietzsche Taught?
Now before I go on, let me absolutely assure you that I’m not suggesting any parallels between Friedrich Nietzsche and me. He had a lot more hair. And, I’m told, he successfully completed his “Introduction to German” course. But that said, not since that day in Dallas have I noticed a book so misplaced, so oddly juxtaposed with unrelated subjects, until recently when I saw my own published scribblings about critical thinking in business in a Carturesti bookstore placed between a book on how to quit smoking and one by the Dalai Lama. That’s right. Snuggled together. Like best friends hanging out with no place to go.
The Myth of the Eternal Return
I’m not sure about you, but when I think about me (or my writing), only seldom does the Dalai Lama come to mind (though it does frequently make me want to quit quit smoking). In fact, I would guess that the Dalai Lama (Note to Editor: is he known as just Lama on second reference?) and I have about as much in common as Nietzsche and I. Yes, we each have written a few things. But I would hardly expect that single similarity to warrant our being put on the same shelf – or even in the same store.
Frog and Toad Together
You can’t really blame the bookstores and I’m not complaining. I’m just glad my book exists. But I do feel sorry for the retailers and their clerks who are confronted by the dozens of books that are published here every single day. Who has time to sort them all out? Just because you sell them doesn’t mean you read them. (I mean, I’ve served Sautéed Cerveaux and I’ll be damned if I’d eat one.)
some other book
So why don’t publishers here bother telling anyone what their books are about? For the same reason, I suppose, employees in restaurants and the places we shop are not taught by their managers to say “Hello,” “I’ll be right there,” and “Ok, I’m back from my nap. Did any of you want another drink?” I guess they take for granted that we know that’s what they’re thinking. Understand, it’s not just my book and it’s not just one publisher that believes it unnecessary to tell others the secret topic that’s hidden within their pages. Maybe they just take for granted that the bookstores will figure it out. They think it’s the other guy’s job. Perhaps they do this because they don’t like them. I’m told publishers here don’t bother communicating much with bookstores – except when they try unsuccessfully to get paid. But that’s the great thing about print, whether selling or writing. You don’t actually have to talk to anyone.
Now for those of you who don’t read English, let me tell you that it’s almost impossible to find a book printed in English, whether in the UK or the US, that doesn’t somewhere on the jacket or flaps list the category of the subject of what’s written inside. Even the Bible, I suspect, has “Religion” printed somewhere on the back. (Yes, ok, some might suggest “Fiction,” but that’s the subject for someone else’s completely different blog.)
Indeed, I’m told that somewhere between 90 and 120 percent of all books published here are imported and translated from English. So the obvious question is: why not import this idea from the cover as well?
An Anxious Age
So this little curiosity got me paying attention. And what fun it has been. There is the Dictionary of Sociology directly under a sign for Economics. The autobiography of Jung is in Philosophy with Kant and Aristotle while the other books by Jung are five feet away in the Psychology section. In Sociology, of course, are put all of the books no one knows where else to put them (sort of what happens in the real world also). I had the feeling that if I kept looking, I’d probably find Who Moved My Cheese? in the Cooking section. Or Zen and the Art of Motorcycle Maintenance under Do-It-Yourself. Maybe The Magic Mountain in Tourism with other books about Disneyland.
?
Instead, though, I concentrated on my book. (After all, if I don’t, who will?) That book I’ve found in Practical Psychology. Sometimes Self-Help. Other times safely placed under a section dedicated to the publisher. For a while it was placed generally in New Books. Other times, it’s on some table that’s completely unmarked. And my favorite is when the manager says they have it, but no one knows where.
The sad fact is that I originally worried I would have to convince people my book was not only about business. Now I find I need to convince them it is.
Finally, though, I did find it in the Business section. Oddly, it was also at a Carturesti, but a different one in town. This time, it was placed between Sheryl Sandberg’s Lean In and James Carville and Paul Begala’s book titled Pupa-I In Bot Si Papa-I Tot. Manual De Marketing Politic (which means something like Kiss His Mouth And Eat All Of Him. A Manual Of Political Marketing).
What?!?!! On second thought, nevermind. Could you please put it back next to my friend, Mr. Lama?
by Peter H Frank | Aug 20, 2015 | Politics |
Otter
Logical fallacies are great fun. Ok, they’re not very instructive in learning how to think critically. Like driving down a street filled with potholes, it’s a good idea to avoid them, but that’s not enough to become an F1 champion. Still, they’re fun.
And when thinking of fallacies, there’s no place like politics to find the best ones – or at least, the most ones. Just as the business world is our richest font of stupidity, the world of politics sprouts fallacies like fungus on a wet log. The only game as an observer is to decide whether the tortured argument put forward was intentionally fallacious (hoping they’re fooling all of the people all of the time) or whether it fairly represents the candidate’s energy-saving IQ.
Hillary
Now, I usually avoid any discussion of politics when outside a small group of friends (which you might say is a fair description of my blog’s typical readership). But after hearing our former Secretary of State, former Senator, former First Lady, and former likely Democratic nominee Hillary Clinton defend herself against her indefensible use of a private email server while she was broadcasting state secrets, I knew I had heard her tactic before.
For those of you unfamiliar with the greatest college movie of all time, I share a scene from it here.
So the two defenses are not precisely parallel, but see if you don’t suspect that Otter (whether pre-med or pre-law) has been hired somewhere on her campaign committee. And no matter your politics, you are certain to agree that it is a sad time for American politics when one of the Clintons, the most practiced dissemblers of our political generation, starts resorting to the same old tired politics of the Delta Tau Chi fraternity.
Clip #1:
Otter from Animal House HERE
Clip #2:
Hillary Clinton from Las Vegas HERE
