Darden's Dean Bruner: Job Hopping is a Bad Idea

Photo: University of Virginia

Robert F. Bruner, the dean of the Darden School of Business at the University of Virginia, recently shared some interesting advice with this year's graduating class: plan for a minimum four-year commitment to your first post-graduate job.

Bruner made this thought-provoking comment during his commencement remarks, and reiterated them  recently on his blog. Four years is "barely enough time to learn the nuances of a complicated position, such as a leader or general manager," he wrote.

To read Bruner's complete blog, click here.

It Takes More Than Luck to Lift a TV Station

Photo: WFMY News 2

If you live around Greensboro, N.C., you are getting really familiar with Julie Luck, the new evening anchor for WFMY, a local CBS affiliate. That's because the station decided to lease a number of highway billboards to tout its new addition.

By playing off catchy sayings – "As Luck Would Have It" for instance – and displaying super-sized images of the anchor's smiling face, the station is hoping to build awareness of the overhaul of its evening lineup. Last fall, Luck left Fox 8 WGHP after more than seven years, leaving a station where she had anchored several afternoon and evening newscasts.

By my estimates, WFMY must have invested a handsome sum on the Julie Luck promotion.

I have counted roughly 10 billboards, both traditional and digital, on major thoroughfares across Greensboro. Based on an estimated price of $2,500 per month for traditional signage and $3,500 for a digital bulletin, the station may have spent $25,000 or more to promote Luck.

(If anyone has a better estimate, please feel free to post in the comments section below.)

"Julie Luck has received no small amount of promotion," Larry Audas, WFMY's president and general manager stated in a recent Facebook post. That may actually be an understatement.

This is evolving into a fascinating intersection between marketing and organizational behavior, where you have to balance a desire to build a brand around a new addition with maintaining a healthy workplace built around a news team.

It makes me wonder if WFMY will be able to get a solid and sustainable return on its investment. Having worked in the radio industry, I generally understand how the system works. The billboards draw attention to Luck and/or stories she is working on. That awareness prompts people switch from Fox 8 to WFMY. Those viewers help the station in the periodic Nielsen sweeps, which are then used by sales teams to encourage businesses to advertise.

But, as the title of this post states, it takes more than Luck to lift a TV station. This strategy would have been a no brainer a decade ago, but the rise of cable news and Internet programming is changing the math. Ad spending on broadcast networks is projected to drop 2% this year compared to a year earlier, according to Bloomberg. Total TV advertising, including cable, is on a pace to increase nearly 3% compared to 2012.

Technology such as tablets and smartphones make it easier to access online news, possibly deemphasizing the relevance of traditional local newscasts. Still, as my significant other Vaishali Shah puts it, having a marketing campaign built around a single personality could help WFMY differentiate from other TV stations, newspapers and other groups putting video online. It could help with Internet searches; typing "Julie Luck" into Google points people to WFMY much better than a generic search for "local Greensboro news."

WFMY is also taking a risk putting so much marketing behind Luck. Most, but not all, of the billboards around Greensboro feature her exclusively. That could upset other members of the team. It could give Luck undue influence in negotiating future contracts, salaries, etc.

An overreliance on one individual could also create a ratings vacuum for the station should she leave, another point that Vaishali made as we passed several billboards this afternoon. If people are willing to switch to WFMY to watch Julie Luck, they are equally apt to switch off if she exits. Brand loyalty in television isn't the same as it was back in the 1960's to 1980's when people were accustomed to Walter Cronkite, Tom Brokaw and the local anchors who were on a half hour before the national broadcasts.

What about the OB perspective? This campaign can also influence WFMY's ability to building a strong team. They must make sure that the ads do not upset the delicate balance of such a team. In the sports world, GMs must be mindful about hiring free agents who fit into the system rather than those that clash and cause distractions. I'm not saying that Julie Luck will purposefully cause a distraction, though there is a serious risk that a highly leveraged billboard campaign could chip away at an intended level of cohesiveness.

To his credit, I think Audas seems mindful of that. Luck "asked for none of" the promotion, Audas writes in his Facebook post.

"That's our doing," Audas adds. "What she has asked for, over and again, is a collective station commitment to see that Frank (Mickens), Tanya (Rivera) and the whole WFMY News 2 team win by serving. She has it. They have it."

Still, I will be curious to see how the team chemistry holds up over time. I believe this will serve as an interesting case study in the months to come.

Starbucks Loyalty Program Adds Negative Consequences

blogs.starbucks.com

I recently blogged about the subtle changes that Starbucks had made to its Gold Card reward program, noting how the company had quietly eliminated many of the program's perks.

Things just keep getting worse for the Starbucks marketing team. The company has decided to incorporate negative consequences into its loyalty program. That's right, the Seattle coffee giant has now found a way to thump customers who, for whatever reason, have reduced the frequency of their treks for java.

I just received an email from Starbucks notifying me that my card status was sent "back to Green for now" and that the company had reset my accumulated points "to zero." It is punitive enough to take away somebody's privileges but it is excessively harsh to negate all the points someone had accrued in order to earn rewards.

This is an eye-opening experience that doesn't require an ounce of caffeine!

The best loyalty programs reward loyalty, making people feel a sense of accomplish when they reach a certain level. Negative reinforcement is an ill-advised direction to take with a loyalty program. I was always taught that negativity breeds more negativity ... or in this case animosity.

Given an abundance of options, and even the healthy choice of avoiding fatty specialty beverages, people already have an incentive to ditch Starbucks. The company seems intent on giving people yet another reason to seek a coffee alternative.

Teaching Entrepreneurship to Kids

A Star is Born

It is never too early to encourage and foster entrepreneurship.

A few months ago, it was a rainy day and the girls were bored. They had just finished another game of Monopoly and they were desperate to find something else to do. That's when my significant other's 7-year-old daughter remembered that she had a collection of Perler Beads in a craft box, and she suggested that we try our hand at that.

To the uninformed, the craft involved carefully placing small cylinder-shaped plastic beads on a pattern, then using an iron to fuse them together. It is quite fascinating to see just how creative kids can be with something so simple.

After a while, we had several stars, peace sign circles and hearts to show for our efforts. That's when my 10-year-old daughter, who is always eager to cook up money making schemes, asked if they could go door to door selling the bead creations. Both girls, who are participating in the Bank of Dad concept, were ecstatic about the idea of making some extra spending money.

The parents agreed, feeling quite impressed with their initiative. My significant other, who also has an MBA, had the bright idea to use this endeavor to teach the girls about being entrepreneurs. This is one of the rewards of being in a relationship with another business school graduate (she was also the catalyst for our highly successful Bank of Dad initiative).

Let's begin with a basic understanding of what it takes to be an entrepreneur. The Merriam-Webster Dictionary defines an entrepreneuras "one who organizes, manages, and assumes the risks of a business or enterprise."

We decided to involve the girls in all the aspects associated with starting up a business. The girls were allowed to use the initial beads to make their first items for sale. After that, however, we made it clear that any additional beads or patterns would have to come out of their revenue. Thus, the girls would be assuming any future risk for the enterprise.

What about organization and management? We asked the girls how much they wanted to charge for the hand-made crafts. They collectively shrugged their shoulders. "Maybe a dollar or two?" one of the girls responded with some hesitancy. So we got out a notepad and began making calculations, getting both the girls involved in the math.

A starter kit costs about $5 and includes 2,000 beads. A standard star-shaped pattern, as seen above, requires roughly 150 beads. So our aspiring entrepreneurs would be equipped to make about 13 crafts with that kit, more or less. Based on those numbers, it was going to cost about 39 cents in materials to make one item. They girls decided to charge $1 for each craft, netting 61 cents profit for each sale. Even if they got bored and only sold half of the crafts, they realized that they would come out slightly ahead.

To quickly placate finance and econ students, we realized that our daughters were also devoting time and labor to the business. We opted against getting into the concept of opportunity costs, given their limited options to raise money elsewhere (and playing Monopoly unfortunately deals in fake cash). So we'll save the discussion on opportunity costs for their next venture.

Let It Snow!

Finally, we encouraged the girls to brainstorm about any practical uses for their bead creations. Sure, they're cute home-made crafts, but we thought the girls might have better luck with sales if people found use for them.

The girls experimented with making "sets," or a collection of similar themed items to sell as a group. My significant other glued magnets on the back of their crafts to display on the refrigerator, but she was quick to note that magnets are expensive and would have put a major dent in profits.

Another idea that eventually proved useful: tying strings to the top of the star-shaped crafts to make Christmas ornaments, which were sold at a premium during the holidays.

To recap; it is easy to teach kids how to be thoughtful entrepreneurs. Using the definition of an entrepreneur and our own personal experience, there are three key takeaways.

• Assuming Risk: Get your kid involved in the actual funding of the project. Make it clear that he or she will use revenue from the endeavor to buy new materials, advertise, etc.
• Organization: Have them build a business model. Help them gain an understanding of fixed and variable costs, and use those projections to develop a reasonable pricing structure.
• Management: Teach your kid to always look to innovate. Find new uses for old products. Sometimes it can expand the customer base. It can also help the entrepreneur justify a slight higher price, and thus higher revenue/profit.

Managing Changes to Customer Loyalty Programs

Photo: Starbucks.com

The prolonged economic slump has businesses of all shapes and sizes rethinking, and retooling, customer loyalty programs.

I recently stopped into a nearby Starbucks for coffee. Admittedly, it had been a while since my last visit but, in my prime, I was feeding a pretty heavy caffeine habit. I asked the barrista for a seasonal syrup and soy milk, whipped out my gold card and got ready to pay.

It was only then that I found out that Starbucks had dropped free soy milk and syrups from its reward program. I stood there open mouthed (figuratively), let out a sigh and walked to the other side of the counter to pick up my considerably higher priced beverage. It was a small hit in the grand scheme of things, but it got me thinking about how to effectively manage customer loyalty.

Starbucks did officially announce the change, though it did so in a rather ill-advised way. In a September blog post, the company touted how it was "revamping" the rewards program. But the emphasis was clearly on what the coffee giant was adding ... the subtractions seemed a mere afterthought.

In fact, I went home and went online to double check the change. One of the first hits on Google was another blog post, but this one clearly singled out the company's deletions. There was even talk about the retracted benefit equating to a "tax on vegans." Yikes!

This isn't the first time I have found out (too late) that a business has ended a customer benefit. There is a winery that I enjoy visiting from time to time. It has a great view, decent wines and a now-defunct enticement to keep coming back - a free tasting if you brought your branded wine glass with you.

I showed up at the winery a couple of weekends ago, glass in hand, and walked up to the counter, only to be told that the promotion was longer in effect. I never asked why, but I would surmise that the increasing need to lathe expenses had to factor into the decision.

So here are a few suggestions to companies that are considering starting, or changing, their loyalty programs.

• When you are developing a program, try to come up with incentives that you can offer regardless of where the country is in the economic cycle. Forecast the cost of the program over years of promotion.  Picking your reward wisely could keep you from taking them away if times get tough.
• Make sure you clearly communicate changes well in advance of the effective date. Starbucks made its announcement one month before it ended free syrups and soy (the company also axed a reward where customers got a free coffee if they bought beans). Make sure people sign up for email notices and make sure both additions and subtractions are clearly outlined.
• If you issued rewards cards, punch cards, etc., consider a grandfather provision that lets people complete the card they are working on but stop handing out new cards. This allows for a phase out approach that lets you eliminate an incentive over time.
• Get feedback in advance. Planning to take away a reward? Ask people well in advance to choose from a list of potential replacements. Getting consumer participation could help you in the psychological battle of keeping them happy!

I am certainly interested to hear what other people have to say on this issue. Businesses rely on loyal customers, and word of mouth, to grow, so managing these programs is a very critical component for success!

Greensboro Group Planning TEDx Conference

Following in the footsteps of Wake Forest University, Greensboro is preparing to host an upcoming TEDx conference.

TED is an acronym that stands for Technology, Entertainment and Design

Skip Moore, the president of the Weaver Foundation and a member of Action Greensboro, is reportedly behind the event, according to an online report from the Triad Business Journal. Moore's group is still exploring topics, which will help them sort through presentations. 

The article said that the event will likely take place in late March or early April, and will likely be held in downtown Greensboro.

Wake Forest hosted a TEDx event in February, called TEDxWakeForestU, after chemistry student Lucy Lan organized the forum. Attendees heard presentations from Anthony Attala, the director of the Wake Forest University Institute for Regenerative Medicine, and Don deBethizy, the former CEO of Targacept.

Indoor Trout Fishing Could Be U.S. First

We recently posted about an event this Friday where Campus Recreation will stock the pool at Reynolds Gym with rainbow trout, allowing people to fish for $15/person.

The posting quickly - and easily - became the most read item we have ever posted on this site.

So we reached out to Jessica Finnerty, the assistant director of campus recreation who oversees aquatics, to find out more about this unique event.

"This is something I thought of a few years ago but have finally been able to pull off," Finnerty wrote in an email sent Thursday. "As far as I can tell, this will be the first trout fishing even the U.S. in an indoor pool."

Finnerty added that she has roughly 90 people registered to fish for about 130 trout that will be added to the pool. How many of our readers are signed up to compete? We'd love to hear from you after the event wraps up by posting in our comment section below this post.