Situational American Morality

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A new study from the University of Illinois at Chicago has implications for both politicians and advertisers — and should scare anyone who cares about ethics.

The study involved having consumers

. . . read a political monologue about federal funding for Planned Parenthood that they believed was previously aired over public radio.

Respondents were randomly assigned one of two feedback conditions where upon completion they were informed that the monologue they had just read was either true or false.

Consumers were then asked whether they felt the monologue was justified. The bottom line:

  1. If the consumer agreed with the monologue, they were less critical of it, regardless of whether they were told it was true or false.
  2. If the consumer disagreed with the monologue, they were more critical of it regardless of whether they were told it was true or false.

In other words, in today’s America, it doesn’t matter if someone is telling the truth or lying as long as the consumer agrees with what they are saying. Functionally, that’s a blank check for a politician or advertiser to say anything as long as it includes something the consumer wants to hear.

Unfortunately, this “culture of lying” has consequences. It affects where people want to live, work and spend their money.

As an Airbnb host, we’ve been getting an earful from foreign travelers who don’t want to live here as well as workers who are asking for transfer back to their home countries. We have a doctor who views the level of medical errors in the US as unacceptable and disgusting. We have the Irani who says that, if she becomes ill, she will return to Iran for treatment rather than seek treatment in the US. We have a mother from Europe who is leaving so her daughter won’t become “Americanized”. We have the black teacher who grew up in the US and now works in Saudi Arabia, and says that her quality of life is better there than it ever was in the US.

We have the realtor from Kansas who lives in an American enclave near Mexico City and has seen a 41% increase in sales to Americans moving south this year. Mexico claims that it has 2 million Yanquis living there, most undocumented immigrants. South Korea has close to 1 million Yankee civilians; there are other large pockets in UK, Saudi Arabia, Costa Rica, Australia and other countries. The US Government itself is mum on the number of Americans leaving the country. (All of these numbers exclude military and government personnel stationed outside the US.)

A primary complaint among expats is that they want to escape what the US political culture has become. That brings us back to our topic — the moral acceptability of lying.

For some of us, lying remains unacceptable regardless of the excuse.


Sources:

  1. Allison B. Mueller, Linda J. Skitka. Liars, Damned Liars, and Zealots. Social Psychological and Personality Science, 2017; 194855061772027 DOI: 10.1177/1948550617720272
  2. University of Illinois at Chicago. “We tolerate political lies for shared views, study suggests.” ScienceDaily. ScienceDaily, 3 August 2017. <www.sciencedaily.com/releases/2017/08/170803145640.htm>

Fashion: Something New and Genuine

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It is extremely rare that I find something in fashion that I feel is really worth comment.  I suppose that if I’d been alive when the bikini was introduced, that event would have qualified.  (Hey, I’m a guy, but the Internet didn’t exist back then and I came along several years later.  No, granddaughter, I’m not older than dirt.)

An online survey introduced me to one this morning.  It’s a boutique firm into green manufacturing that uses recycled flowers to make clothing dyes.  The company is called Calyx, http://www.calyxnyc.com/#about.

My initial reactions:

  • Elegant, even sexy in an understated way
  • Something a woman would be very comfortable wearing
  • Probably feels as good as it looks
  • Quality
  • The woman who runs this firm is genuinely passionate about what she does

Here’s a link to a video on Huffington Post about the firm and its products.  This is genuinely worth a look.  http://origin-ads.pictela.net/rm/PXL/watermark/mocks/preroll_survey_demo.html.  Since this was put up for a survey, I don’t know how long the link will be around.

 

Virtual Walls and Reality Checks

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berlin09-1Do you have a business and wonder why customers aren’t pounding at the door to buy your great product?  Are you a high schooler and wondering why every college isn’t recruiting you?  Are you simply a person who wonders why someone doesn’t like you?

Sometimes the answer is both simple and out of your control.  Some people have odd tastes and idiosyncratic needs that you simply can’t satisfy.  That happens.  To repeat something your grandmother probably said, “you can’t please everyone.”

However, there are times when we’re at least partly responsible for the problem.  We surround ourselves with barriers that discourage others from wanting to deal with us.  Examples:

  • Language: the use of overly formal language or slang makes us seem difficult to understand or standoffish.
  • Appearance:  the initial reaction most people have to you is based on how you look, not what you say.  That’s where the Internet offers a great advantage, because it allows words to come first.
  • Word-of-mouth:  people tend to be skeptical about what you say about yourself, but they listen to what others say about you.

What they say is affected by things you’ve done in the past, some of which you may not even remember.  If you have a business, what they say is affected by what your staff do and don’t do.  However, you can’t deal with an issue if you don’t know about it.

Trust in what others say is what makes bullying so nasty.  Bullying takes a trusted information channel and fills with with lies and slander.  Victims can feel helpless, although they have things they can do.  Identifying the problem really is half the battle.

Every so often, you need a reality check.  That can take the form of a heart-to-heart conversation with people you trust or having a researcher do an audit with your customers.  You need to know what they really think and decide whether you need to make adjustments to achieve what you want.

And that brings us to another old saying inscribed in a wall at UChicago, “you shall know the truth and the truth will set you free.”

When was the last time you did a reality check?

 

Marketing and Politics in a Lying Age

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“Trust.”  That’s the fundamental building block for personal relationships and business transactions.  Without it, there’s no basis for working with a person or a company.  None.

Perhaps the worst decision in the history of advertising was acceptance of the creed that “perception is reality.”  Or worse, there’s the quote attributed to a well-known therapist that “there is no reality, only perception.”

Lost along the way is the older adage: “You can fool some of the people some of the time, but you can’t fool all of the people all of the time.”  Further, once you have  fooled a person, he or she will  mistrust what you say.  It takes years to recover credibility once you’ve lied to someone.

Ads are promises.  The (should) showcase product features, but they also promise benefits.  Sign up and you’ll receive good service.  The product will be reliable and safe.

Chevy is trashing its credibility now through a series of creative ads about the Cruz car  model.  Yes, the car has some wonderful electronic features. However, it’s not “magical.”  That word is cute, but should never have appeared in an ad.  I had occasion to rent one last week and discovered that it has horrific gas mileage and — with the A/C on max — all of the acceleration of a  cardboard box.  People who buy it based on the ads are likely to be disappointed, and disappointed customers aren’t repeat customers.  Why would any business want that?

Chevy has built inferior products in the past, and been hurt by them.  It took years to rebuild its reputation, and now the company is repeating past mistakes.  If that’s the best GM can do, short the stock.

Volkswagon learned the hard way that lying about emissions would damage sales.  The damage will take years to undo.  When you lie about software, who’s going to trust you when you say the problem is fixed?  How can you prove it?  What else might be wrong?

Comcast has a history of poor customer service.  Their current ad campaign and “service guarantees” won’t fix that.  (I’ve already cashed in on the guarantee when they failed to make a service call on time.)  It will take years of very good service before consumers believe Comcast has improved, and any slip will convince consumers that the ad campaign is a smokescreen for continued poor service.  And Comcast wonders why so many customers refuse to spend on add-on services.

Advertising has to be based on objective reality.  Tell the customer all of the good things the product does, but don’t over-promise.  Once someone buys your product and discovers it is not what you promised, not only will you have  an unhappy customer, but you will have lost the ability to communicate with that customer.  He or she won’t trust what you say.

Why are Joe Biden, Bernie Sanders and Elizabeth Warren such potent political figures?  In all of Washington, they are among the few people most voters trust. People accept their statements as honest, regardless of whether they choose to agree or disagree.

Bill Clinton remains a charismatic speaker, but his ability to influence has been diminished by loss of trust.  Donald Trump’s willingness to speak before thinking has cost him as well.

For many people, “politician” is simply a synonym for “liar.”  Lack of trust also explains the failure of the current crop of politicians to be opinion leaders.  That’s the legacy of “spin.”

The cost of lying in business is lost revenue.  The cost of lying on politics is losing the ability to lead.  Both are heavy prices to pay.

We need to refocus marketing and advertising on reality.

 

 

It’s Disposable Income, Stupid!

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Historically low interest rates have done nothing to grow economies in the US or elsewhere.  Why not?

Economists and politicians are doing everything in their power to avoid looking at the root cause of economic malaise.  They talk about “consumer confidence” as if that can be manipulated by interest rates.

They report statistics that are defined so as to skew perceptions of the reality consumers face.  Neither CPI nor the unemployment rate as reported in the US accurately represent the situation consumers face.  (I’ll talk about both of these problems in detail in future posts.)

The reality is that

(1) Western economies are based on consumer spending, and

(2) Consumers don’t have money to spend.

Consumers are tapped out because

(A) Historically low interest rates have not been passed along to most consumers.  Further, intelligent consumers are afraid of being squeezed when rates rise.  After been burned a number of times, people do learn.  (Unless they are politicians.)

(B) There has been no real effort to reform or reign in costs for healthcare, education loans or housing, and people are being told that they have to save for retirement at a much higher rate than in the past.  There’s no money left over for anything else in most households.

(C) Job downsizing is rampant, especially among those reaching the magic age of 50.  Corporations cut older workers to reduce salary and health costs, and don’t hire older workers for the same reason.  So, right when people are in the final push toward retirement, their income drops by 50% or more.  Historically, that was the age group with the most disposable income to support consumer spending, and now that’s gone.

(D) Regressive tax policies. Reductions in income taxes and increases in gasoline taxes and usage fees shift the tax burden to those who can least afford it.

The Federal Reserve can set interest rates any place it wants, and it won’t materially impact what consumers have to spend.  In this environment, the Fed has lost its ability to steer the economy.  Turn a car’s steering wheel when the car is stopped and tell me what the car does? Nothing.  Without consumer spending to push the economy forward, the Fed can do whatever it wants and nothing will happen.

What can you do?  Until Washington decides to confront reality, plan for a  stagnant economy.   Employees need to plan for what happens when they lose their current job.  In your 40s? You need to plan for a second career.  Employers are going to have to find ways to reduce costs and find growth through innovation.  The same-old, same-old isn’t going to get it done.  Mergers and layoffs simply worsen the situation.

 

 

Superficial Analysis of Affluence

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No, this isn’t a blog about the current primary elections, the sound bytes used by candidates or the less-than-brilliant reporting by the media.  That’s to obvious and there’s nothing much to learn from that disappointing experience.

No, my focus is on the business press, and why we can get wild divergences from one day to the next.  On Tuesday, the sky is falling.  On Wednesday, the markets are posed for a surge based on (possibly false) economic reports from country X.  I haven’t heard about a reader charging the financial press with a whiplash injury, but in our litigious society, I’m sure its only a matter of time.

One recent example concerns the health of the US consumer.  Who controls the wealth?  One source, Yahoo, talks about Millenials controlling over one-third of income.  Another, Pew, talks about Boomers controlling 70% of disposable income.  Both statements contain some truth, but nether is solid foundation for a business plan.

Why is that?  Simply, a dollar to a Millenial isn’t the same thing as a dollar to a Boomer.

(1) Millennials are mired in the gig economy.  Short term jobs provide  some sense of “freedom,” but also provide no benefits.  There’s no paid vacation and no healthcare.  Millennials also have student loans.  So members of the 20-30 age group face much higher expenses than their predecessors.  Their incomes haven’t grown enough to cover these additional costs.  Money available for discretionary spending is almost non-existent.  Stores focusing on sales to this group have a problem.

(2) 60 year olds have home equity,some money in the make, Social Security and Medicare.  They may not have enough for the length of time they will live, but if not, most don’t know that yet.    Those that can afford to do so are invested in annuity products that guarantee income through their lifetime.

As the tag line used by one invest2ment company in NYC years ago went, wealth is not about how much you earn, its about how much you keep.  Boomers may have lower earned incomes than Millennials, but they may have more money available to spend on what they want.  Recent reductions in inheritance taxes further distort the relationship between earned income and wealth.

Most of the evidence seems to support a focus on older consumers.  Some consumer brands are starting to notice, for example, with the introduction of hair care products for senior women.