Beyond Carrots and Sticks

What motivates creative problem solving and innovation in the workplace? Enjoy this TED talk featuring social scientist Dan Pink. Dan Pink argues the case that present day thinking around managerial approaches and incentive based performance actually stifle performance, especially when more out-of-the-box approaches are needed to tackle a problem. He cites research from universities such as MIT, Carnegie Mellon, LSE to name a few to support this fact.

So what drives performance? Intrinsic motivators. People want to feel that what they do is part of something larger than themselves. They want to feel engaged, not by being told what to do but by being self-directed. Carrots and sticks don’t work in the new economy. Dan Pink posits that too many companies are still focusing on old world thinking about driving results and can learn from 21st century companies like Google, IDEO and Atlassian where new approaches like devoting specific time to non-work projects are driving results and employee satisfaction. At Google in particular, at least half of the innovative new products, including Gmail, have been created during this think and play-time.

What does the new operating system look like? It satisfies these human desires:

• Autonomy – the urge to direct our own lives

• Mastery – the desire to get better and better at something we have a passion for

• Purpose – the yearning to do something of value in the service of something bigger than ourselves

Enjoy!

Trends to watch in 2010 - Embedded Generosity

Now that we're over the "best of" lists that look nostalgically at 2009, it's on to thinking strategically about the consumer trends that will impact the new decade we've entered and what it will mean for the brands we're working on.

One of the most inspiring trends to me as a marketer is the Generation of Generosity. This trend reflects a wide array of thinking - from companies that share everything they know for free - to bloggers and tweeters that share stories and information to help others. A great example of the former is Hubspot, a B2B company based in Cambridge Mass. that publishes all its methodology and even holds free "university" webinar classes so that people can learn new insights and technology in order to become better internet marketers. And of the latter, some of my favorite sites include presentation zen and harvard business where I'm always learning new information on topics that interest me or following #tags on twitter to be part of a larger converstion on a specific topic.

In the spirit of generosity, trendwatching.com (another favourite site) predicts that we'll see more of something they term EMBEDDED GENEROSITY. This trend ..."incorporates all giving initiatives that make giving and donating painless, if not automatic (after all, pragmatism is the new religion ;-). On top of that, with collaboration being such an integral part of the zeitgeist, expect lots of innovative corporate giving schemes that involve customers by letting them co-donate and/or co-decide".

This idea is not new - Starbucks has adopted EMBEDDED GENEROSITY as a way of doing business for years, especially around its Cafe Practices coffee sourcing program and most recently, in conjunction with Starbucks RED.

So does this feel like an evolution of "cause marketing"? Perhaps so. The point here for marketers is that EMBEDDED GENEROSITY works when its authentic and transparent. Done well, it provides a rich landscape for storytelling providing the consumer with the opportunity for more meaningful involvement. And if you're not doing it, well you might very well be standing apart from your competition.

Here is the list of examples from trendwatching.com from 2009, one of which (Campbell's) is a favorite that I've already featured on The Orange. Some ideas to spark inspiration for brands as we begin 2010.

• Australian Baby Teresa manufactures and sells a variety of 100% cotton onesies for babies, and, for each one purchased, donates another to a baby in need somewhere in the world.

• IKEA’s SUNNAN LED desk lamp is powered by solar cells. The product retails for USD 19.99, and for every unit sold in IKEA stores worldwide, another one will be donated to UNICEF to give to children without electricity in refugee camps and villages in remote areas.

• Still going strong, Procter & Gamble and UNICEF have joined forces for the fourth year running, in an effort to raise money for tetanus vaccines. Each time a pack of the Pampers or Fairy brands bearing a "1 Pack = 1 Life-Saving Vaccine" logo is purchased, P&G will donate the cost of one vaccine to UNICEF.

• TOMS Shoes donates a pair of shoes to a child in need for every pair they sell online. As of August 2009, TOMS has given over 150,000 pairs of shoes to children in need. TOMS shoes plans to give 1 million shoes by 2012.

• Sage Hospitality is encouraging consumers to complete 8 hours of volunteer service in exchange for 50% - 100% off published room rates in their 52 hotels. To take advantage of the 'Give a Day, Get a Night' scheme, customers must present a letter from the organization they worked for.

• Give a Day, Get a Disney Day aims to celebrate and inspire volunteerism. Disney is working with HandsOn Network to highlight a variety of volunteer opportunities with participating organizations across the United States, Puerto Rico and Canada. Starting this month (January 2010), those who contribute their time can have it verified by HandsOn and they'll receive a voucher from Disney for one day admission to a Walt Disney World or Disneyland theme park.

• Servus, a Canadian credit union, began handing out CDN 200,000 in ten-dollar bills, giving 20,000 people the opportunity to create a Feel Good Ripple by spending the money on someone else. By pledging CDN 200,00 to the effort, the company hopes to start a ' kindness movement' that will positively affect at least 20,000 people. Servus is distributing the bills through its branches throughout Alberta, and asking participants to write up stories of their kindness online.

• Campbell's Help Grow Your Soup campaign aimed to raise money to maintain farm buildings in need of refurbishment. The campaign asked consumers to vote for one of ten barns in need of work, and for every vote until January 2010, Campbell donated 1 USD to restore the five barns which receive the most votes.

• In October 2009, Twitter’s owners announced that they will begin selling wine through their label, called Fledgling Wine. The wine will be bottled from August 2010 and USD 5 of every bottle sold will go to Room to Read, a charity that organizes literacy programs for children around the world.

• Chicago's Hotel Burnham launched the charity based initiative 'Casual Blue' in 2009. A USD 10 room credit is given to patrons who leave a pair of (old) jeans, which are then donated to local charities.

If you have other favourites you'd like to add to the list, let me know!


Source: www.trendwatching.com. One of the world's leading trend firms, trendwatching.com sends out its free, monthly Trend Briefings to more than 160,000 subscribers worldwide.

There's no biz like Shoe Biz

I have a great appreciation for the art and science of visual merchandising. I also have a weakness for beautiful shoes (and boots). How wonderful that Cool Hunter has assembled a nice collection of retailers that combines the two. In these photos, you can see how the shoe buying experience is elevated to resemble that of visiting a gallery. Each shoe feels bespoke. And we're not just talking Jimmy Choo or Manolo Blahnik here. Many of these "galleries" feature sneakers. Effective brand building experiences for both the manufacturer and the boutique.

Inspiration to begin The New Year

Happy New Year!
I wanted to share this wonderful Ted Talk given by Benjamin Zander in 2008. Mr. Zander is on a mission to ignite the love for classical music in people around the world. It seems that only 4% of the world is passionate about classical music. It's wonderful to listen to his stories. I think there's a great leadership lesson here when he says "My job is to awaken possibilities in others; to make everybody else powerful". He knows he's successful when he sees his audiences' eyes shining.

Here's to a shiny and bright 2010.

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Reaching the LOHAS Consumer

Here are some interesting demographics regarding the size, media habits and location of Americans concerned with issues of sustainability and health. The all important LOHAS segment (acronym for Lifestyles of Health and Sustainability) represents a $200 billion rapidly growing market for goods and services that appeal to consumers who have a meaningful sense of environmental and social responsibility and incorporate those values into their purchase decisions. According to Ad Age, the nation's shelves will be stocked with more than 1,500 new products featuring green messages by the end of this year.

This is what the consumer environment, based on environmental values looks like*:

• LOHAS (19% of U.S. adults): LOHAS consumers are dedicated to personal and planetary health. Not only do they make environmentally friendly purchases, they are active stewards of the environment.

• NATURALITES (15% of U.S. adults): This segment has a strong personal health focus through consumables. NATURALITES are not, however, as committed to the environment nor driven to purchase eco-friendly durable goods.

• DRIFTERS (25% of U.S. adults): These consumers have good intentions, but factors other than the environment influence their actual behavior. They are, however, driven to sustainability based on the trendiness of the topic.

• CONVENTIONALS (24% of U.S. adults): This very practical segment doesn‟t have far-reaching green attitudes, but they do have environmental behaviors such as recycling and energy conservation.

• UNCONCERNED (17% of U.S. adults): Simply put, the environment is not a priority to consumers in this segment.

The NATURALITES are an interesting niche - a group that has a strong personal health focus but are not driven to purchase eco-friendly products. This is likely a group we’ll see more and more products targeted at with messaging around simplicity and transparency of ingredients. For example, in March 2009, Haagen-Dazs launched a new premium product line called Five. Five was developed with fewer, more recognizable ingredients (the name reflects the number of ingredients in the product: milk, cream, sugar, eggs and a natural flavor such as vanilla bean.) In just eight months, Five sales have grown to account for 10% of Haagen-Dazs business.

In terms of targeted media vehicles, it is interesting to note that the LOHAS segment are heavy users of both magazine and the Internet, while NATURALITES under-index in heavy usage of the internet but are heavy TV users.

Profile of LOHAS Consumers Heavy Media Usage
	% more likely to be a heavy media user
	LOHAS	NATURALITES
Heavy Magazine User	+16%	+6%
Heavy TV User	-23%	+6%
Heavy Internet User	+21%	-10%
Source: MRI 2009 Survey of the American Consumer

And if you ever wonder what the top DMAs for buying organic food are, here they are:

Top 10 DMAs in which reside adults who buy foods labeled natural or organic:

1. San Diego, Calif.

2. Seattle/ Tacoma

3. Philadelphia

4. San Francisco/ Oakland/ San Jose

5. Washington, D.C. (Hagerstown, Md.)

6. Portland, Ore.

7. Denver

8. Baltimore

9. Sacramento/ Stockton/ Modesto, Calif.

10. Colorado Springs/ Pueblo, Colo.


* source: MRI

Gilt by Association

Today in Ad Age, the magazine honours some 20 brands, some new, some established that have done well despite the recession. These are brands that are innovative in their thinking and marketing approach.

One of the brands that caught my attention was Gilt Groupe. It’s a member only website that offers sample sales on luxury women’s, men’s, & children’s clothing brands and now home furnishings. It was established in late 2007 by two long time girlfriends Alexis Maybank (who was at eBay during the early days) and Alexander Wilkis Wilson.

The sample sale is a cherished ritual of the urban fashionista. Luxury brands hold these events, usually by invitation only, to unload inventory at discounts of 50% to 70%. In Paris they call it the vente privée. In New York the semiannual Barneys Warehouse Sale has them lined up around the block. Sales are always final, so shoppers strip down to their knickers between the racks to make sure a $3,000 dress is a good fit at $600.

The brand promise of the Gilt Groupe is to find the very best brands, for unbeatable prices and remove the stress of NY sample sale shopping. “No lines... No getting strip searched... No crazy women grabbing shoes out of your hands... No sneaking out of work and faking a doctor's appointment. No being forced to pay with cash and running frantically to ATMs across the garment center... No nastiness... No damaged or shopworn merchandise”.

And what a great brand name - I love the play on words. They have grown the brand primarily through word-of-mouth, offering a $25 credit offered to members who bring in a friend that ends up making a purchase. When Alexandra and Alexis first launched the brand, invitations to join Gilt Groupe were sent to every single person the two had ever met. They were aiming to create a viral business model, but it depended on getting an initial critical mass of loyal style mavens to become members of Gilt. Smart thinking – they would be key in spreading the word to their network of fashionistas on tight budgets.

Their target and group of friends -- fashionable, highly educated and tech savvy -- were the perfect demographic for Gilt Groupe, so it took almost no convincing to get them to link to the website and join as members. Membership is free but still gives the brand cache and a sense of exclusivity. Right now, for instance, you are wait-listed and only a couple of new members are accepted each day.

While there are a number of sample sales or luxury brand outlets on the internet, what really makes this site stand out is the sophisticated nature of the site and its blog on “what’s hot” written by the principals that reads like a copy of Vogue magazine with high quality photography.

Gilt counts 1.5 million members in the U.S. as well as 250,000 members in Japan. The retailer is on track to ring up $400 million in sales for fiscal 2010. Not bad for an e- retailer that’s less than two years old.

The success of Gilt is its innovative thinking, highly targeted concept and quality execution that delivers on its brand promise.

The Grove School takes root

Last week marked the launch of The Grove School, a “fresh new pre-school” grounded in the philosophy of healthy mind, healthy body, and healthy planet. This is a place where children will learn about the importance of sustainability and conservation, along with reading and math skills. While at play, they’ll spend part of the day practicing downward dogs or planting seeds in the garden. The Grove School is a place where children will learn and grow in creative ways and be prepared for the world they will inherit.

As a brand, what makes The Grove School unique is that the development of the concept has been rooted in an experience versus a product. Burt Rosen who oversees all things digital at The Grove School writes, the…” experience is driven from a top down strategy and everything aligns with the strategy. For example, The Grove School is about healthy body, healthy mind and healthy planet so everything follows those filters. The food is healthy, the curriculum is designed to spur creativity and curiosity, and materials and sensibilities are all focused on what’s good for the planet and instilling those values in our kids and our families”.

Another unique aspect of the brand is its community-based platform. The Grove School utilizes social media tools such as blogging, Twitter, YouTube and Flickr to connect families, school activities, and teachers together. Groveschool.com is a vital piece of how the school communicates through building a community organically in an environment that nurtures ideas and relationships to support the families and children.

The brand personality of The Grove School has been beautifully brought to life by Tether, the Seattle-based agency who worked with Knowledge Universe in developing the concept. The images, look and feel are very playful and engaging while reflecting the core values of community, wellness and authenticity.

If you happen to live in Cary, NC or in Plano TX and have pre-school children, this is where the first two locations are opening in January 2010.